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WELLS FARGO & COMPANY/MN - Quarter Report: 2021 September (Form 10-Q)







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 September 30, 2021
OR
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)
DelawareNo.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 ClassTrading SymbolName 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
October 21, 2021
Common stock, $1-2/3 par value
3,987,232,567







FORM 10-Q
CROSS-REFERENCE INDEX
PART IFinancial Information
Item 1.Financial StatementsPage
Consolidated Statement of Income
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to Financial Statements
Summary of Significant Accounting Policies
Trading Activities
Available-for-Sale and Held-to-Maturity Debt Securities
Loans and Related Allowance for Credit Losses
Leasing Activity
Equity Securities
Other Assets
Securitizations and Variable Interest Entities
Mortgage Banking Activities
10 Intangible Assets
11 Guarantees and Other Commitments
12 Pledged Assets and Collateral
13 Legal Actions
14 Derivatives
15 Fair Values of Assets and Liabilities
16 Preferred Stock
17 Revenue from Contracts with Customers
18 Employee Benefits and Other Expenses
19 Restructuring Charges
20 Earnings and Dividends Per Common Share
21 Other Comprehensive Income
22 Operating Segments
23 Regulatory Capital Requirements and Other Restrictions
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations (Financial Review)
Summary Financial Data
Overview
Earnings Performance
Balance Sheet Analysis
Off-Balance Sheet Arrangements
Risk Management
Capital Management
Regulatory Matters
Critical Accounting Policies
Current Accounting Developments
Forward-Looking Statements
Risk Factors 
Glossary of Acronyms
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 4.Controls and Procedures
PART IIOther Information
Item 1.Legal Proceedings
Item 1A.Risk Factors
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Item 6.Exhibits
Signature
Wells Fargo & Company
1







FINANCIAL REVIEW
Summary Financial Data (1)
Quarter endedSep 30, 2021
% Change from
Nine months ended
($ in millions, except per share amounts)Sep 30,
2021
Jun 30,
2021
Sep 30,
2020
Jun 30,
2021
Sep 30,
2020
Sep 30,
2021
Sep 30,
2020
%
Change
Selected Income Statement Data
Total revenue$18,834 20,270 19,316 (7)%(2)$57,636 55,775 %
Noninterest expense13,303 13,341 15,229 — (13)40,633 42,828 (5)
Pre-tax pre-provision profit (PTPP) (2)5,531 6,929 4,087 (20)35 17,003 12,947 31 
Provision for credit losses(1,395)(1,260)769 (11)NM(3,703)14,308 NM
Wells Fargo net income 5,122 6,040 3,216 (15)59 15,798 286 NM
Wells Fargo net income (loss) applicable to common stock4,787 5,743 2,901 (17)65 14,786 (955)NM
Common Share Data
Diluted earnings (loss) per common share1.17 1.38 0.70 (15)67 3.57 (0.23)NM
Dividends declared per common share0.20 0.10 0.10 100 100 0.40 1.12 (64)
Common shares outstanding3,996.9 4,108.0 4,132.5 (3)(3)
Average common shares outstanding4,056.3 4,124.6 4,123.8 (2)(2)4,107.1 4,111.4 — 
Diluted average common shares outstanding (3)4,090.4 4,156.1 4,132.2 (2)(1)4,140.0 4,111.4 
Book value per common share (4)$42.47 41.74 38.91 
Tangible book value per common share (4)(5) 35.54 34.95 32.15 11 
Selected Equity Data (period-end)
Total equity191,071 193,127 181,727 (1)
Common stockholders' equity169,753 171,453 160,804 (1)
Tangible common equity (5)142,047 143,577 132,874 (1)
Performance Ratios
Return on average assets (ROA) (6)1.04 %1.25 0.66 1.09 %0.02 
Return on average equity (ROE) (7)11.1 13.6 7.2 11.7 (0.8)
Return on average tangible common equity (ROTCE) (5)13.2 16.3 8.7 14.0 (0.9)
Efficiency ratio (8)71 66 79 70 77 
Net interest margin on a taxable-equivalent basis2.03 2.02 2.13 2.03 2.32 
Selected Balance Sheet Data (average)
Loans$854,024 854,747 931,708 — (8)$860,666 955,918 (10)
Assets1,949,700 1,939,879 1,945,911 — 1,941,391 1,947,315 — 
Deposits1,450,941 1,435,824 1,399,028 1,426,956 1,374,638 
Selected Balance Sheet Data (period-end)
Debt securities542,993 533,565 476,421 14 
Loans862,827 852,300 920,082 (6)
Allowance for credit losses for loans14,705 16,391 20,471 (10)(28)
Equity securities66,526 64,547 49,348 35 
Assets1,954,901 1,945,996 1,920,399 — 
Deposits1,470,379 1,440,472 1,383,215 
Headcount (#) (period-end)253,871 259,196 274,931 (2)(8)
Capital and other metrics
Risk-based capital ratios and components (9):
Standardized Approach:
Common equity tier 1 (CET1)11.62 %12.07 11.38 
Tier 1 capital13.18 13.71 13.05 
Total capital16.21 16.84 16.35 
Risk-weighted assets (RWAs) (in billions)1,218.9 1,188.7 1,185.6 
Advanced Approach:
Common equity tier 1 (CET1)12.43 %12.73 11.51 
Tier 1 capital14.11 14.47 13.20 
Total capital16.46 16.88 15.71 
Risk-weighted assets (RWAs) (in billions)$1,138.6 1,126.5 1,172.0 (3)
Tier 1 leverage ratio8.36 %8.53 8.05 
Supplementary Leverage Ratio (SLR)6.94 7.09 7.75 
Total Loss Absorbing Capacity (TLAC) Ratio (10)23.68 25.11 25.76 
Liquidity Coverage Ratio (LCR) (11)119 123 134 
NM – Not meaningful
(1)In second quarter 2021, we elected to change our accounting method for low-income housing tax credit investments and elected to change the presentation of investment tax credits related to solar energy investments. Prior period financial statement line items have been revised to conform with the current period presentation. Prior period risk-based capital and certain other regulatory related metrics were not revised. For additional information, 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.
(3)For the nine months ended September 30, 2020, diluted average common shares outstanding equaled average common shares outstanding because our securities convertible into common shares had an anti-dilutive effect.
(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.
(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 nonmarketable equity securities, net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity 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.
(6)Represents Wells Fargo net income divided by average assets.
(7)Represents Wells Fargo net income (loss) applicable to common stock divided by average common stockholders’ equity.
(8)The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).
(9)The information presented reflects fully phased-in CET1, tier 1 capital, and RWAs, but reflects total capital in accordance with transition requirements. For additional information, see the “Capital Management” section and Note 23 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report.
(10)Represents TLAC divided by the greater of RWAs determined under the Standardized and Advanced Approaches, which is our binding TLAC ratio.
(11)Represents high-quality liquid assets divided by projected net cash outflows, as each is defined under the LCR rule.
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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, 2020 (2020 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 of 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 the leading middle market banking provider in the U.S. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. Wells Fargo ranked No. 37 on Fortune’s 2021 rankings of America’s largest corporations. We ranked fourth in assets and third in the market value of our common stock among all U.S. banks at September 30, 2021. 
Wells Fargo’s top priority remains meeting its regulatory requirements to build the right foundation for all that lies ahead. The Company is subject to a number of consent orders and other regulatory actions, which may require the Company, among other things, to undertake certain changes to its business, operations, products and services, and risk management practices. Addressing these regulatory actions is expected to take multiple years, and we are likely to experience issues or delays along the way in satisfying their requirements. Issues or delays with one regulatory action could affect our progress on others, and failure to satisfy the requirements of a regulatory action on a timely basis could result in additional penalties, enforcement actions, and other negative consequences. While we still have significant work to do, the Company is committed to devoting the resources necessary to operate with strong business practices and controls, maintain the highest level of integrity, and have an appropriate culture in place.

Federal Reserve Board Consent Order Regarding Governance Oversight and Compliance and Operational Risk Management
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. Due to the COVID-19 pandemic, on April 8, 2020, the FRB amended the consent order to allow the Company to exclude from the asset cap any on-balance sheet exposure resulting from loans made by the Company in connection with the Small Business Administration’s Paycheck Protection Program and the FRB’s Main Street Lending Program. As required under the amendment to the consent order, to the extent the Company chooses to exclude these exposures from the asset cap, certain fees and other economic benefits received by the Company from loans made in connection with these programs shall be transferred to the U.S. Treasury or to non-profit organizations approved by the FRB that support small businesses. As of September 30, 2021, the Company had not excluded these exposures from the asset cap. After removal of the asset cap, a second third-party review must also be conducted to assess the efficacy and sustainability of the enhancements and improvements.

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
Wells Fargo & Company
3


Overview (continued)
$250 million civil money penalty against the Company related to insufficient progress in addressing requirements under the OCC’s April 2018 consent order and loss mitigation activities in the Company’s Home Lending business.

Consent Order with the OCC Regarding Loss Mitigation Activities
On September 9, 2021, the Company entered into a consent order with the OCC requiring the Company to improve the execution, risk management, and oversight of loss mitigation activities in its Home Lending business. In addition, the consent order restricts the Company from acquiring certain third-party residential mortgage servicing and limits transfers of certain mortgage loans requiring customer remediation out of the Company’s mortgage servicing portfolio until remediation is provided.

Retail Sales Practices Matters
In September 2016, we announced settlements with the CFPB, the OCC, and the Office of the Los Angeles City Attorney, and entered into related consent orders with the CFPB and the OCC, in connection with allegations that some of our retail customers received products and services they did not request. As a result, it remains a top 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. Our priority of rebuilding trust has included numerous actions focused on identifying potential financial harm to customers resulting from these matters and providing remediation. On September 8, 2021, the CFPB consent order regarding retail sales practices expired.
For additional information regarding retail sales practices matters, including related legal matters, see the “Risk Factors” section in our 2020 Form 10-K and Note 13 (Legal Actions) to Financial Statements in this Report.

Other Customer Remediation Activities
Our priority of rebuilding trust has also included an effort to identify other areas or instances where customers may have experienced financial harm, provide remediation as appropriate, and implement additional operational and control procedures. We are working with our regulatory agencies in this effort. We have previously disclosed key areas of focus as part of our rebuilding trust efforts and are in the process of providing remediation for those matters. We have accrued for the probable and estimable remediation costs related to our rebuilding trust efforts, which amounts may change based on additional facts and information, as well as ongoing reviews and communications with our regulators.
As our ongoing reviews continue, it is possible that in the future we may identify additional items or areas of potential concern. To the extent issues are identified, we will continue to assess any customer harm and provide remediation as appropriate. For additional information, including related legal and regulatory risk, see the “Risk Factors” section in our 2020 Form 10-K and Note 13 (Legal Actions) to Financial Statements in this Report.

Recent Developments
COVID-19 Pandemic
In response to the COVID-19 pandemic, we have been working diligently to protect employee safety while continuing to carry out Wells Fargo’s role as a provider of essential services to the
public. We have taken comprehensive steps to help customers, employees and communities.
We have strong levels of capital and liquidity, and we remain focused on delivering for our customers and communities to get through these unprecedented times.

PAYCHECK PROTECTION PROGRAM The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) created funding for the Small Business Administration’s (SBA) loan program providing forgiveness of up to the full principal amount of qualifying loans guaranteed under a program called the Paycheck Protection Program (PPP). Since its inception, we have funded approximately 282,000 loans under the PPP totaling approximately $14.0 billion, and more than $8.8 billion of principal forgiveness has been provided on qualifying PPP loans. As of September 30, 2021, we had $4.7 billion of PPP loans outstanding. We voluntarily committed to donate all of the gross
processing fees received from PPP loans funded in 2020 and have committed to donate any net profits from processing fees
received from PPP loans funded in 2021. For additional information on the CARES Act and the PPP, see the “Overview – Recent Developments – COVID-19 Pandemic” section in our 2020 Form 10-K.

LIBOR Transition
The London Interbank Offered Rate (LIBOR) is a widely-referenced benchmark rate, which is published in five currencies and a range of tenors, and seeks to estimate the cost at which banks can borrow on an unsecured basis from other banks. On March 5, 2021, the Financial Conduct Authority and the administrator of LIBOR announced that LIBOR will no longer be published on a representative basis after December 31, 2021, with the exception of the most commonly used tenors of U.S. dollar (USD) LIBOR which will no longer be published on a representative basis after June 30, 2023. Additionally, federal banking agencies have issued guidance strongly encouraging banking organizations to cease using USD LIBOR as a reference rate in new contracts as soon as practicable and in any event by December 31, 2021. We have made significant progress in preparation for the December 31, 2021, cessation date and in response to the regulatory guidance.
We have continued to expand our product offerings using the Secured Overnight Financing Rate (SOFR) and other alternative reference rates for our commercial customers. We expect to have a suite of alternative reference rate products available for our customers prior to the end of 2021. In addition, we have continued the transition of interdealer derivative contracts to SOFR in accordance with the recommendation of the Commodity Futures Trading Commission’s Market Risk Advisory Committee.
For additional information on the initiatives undertaken by our LIBOR Transition Office in an effort to mitigate the risks associated with a transition away from LIBOR, as well as the amount of our LIBOR-linked assets and liabilities, see the “Overview – Recent Developments – LIBOR Transition” section in our 2020 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 2020 Form 10-K.

Capital Actions and Restrictions
In June 2021, the Company completed the 2021 Comprehensive Capital Analysis and Review (CCAR) stress test process. On August 5, 2021, the FRB confirmed that the Company's stress
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Wells Fargo & Company


capital buffer (SCB) for the period October 1, 2021, through September 30, 2022, is 3.10%.
For additional information about capital planning, see the “Capital Management – Capital Planning and Stress Testing” section in this Report.
In July 2021, we issued $1.25 billion of our Preferred Stock, Series DD. In September 2021, we redeemed our Preferred Stock, Series O and Series X, for an aggregate cost of $1.8 billion.
Business Divestitures
On November 1, 2021, we closed our previously announced agreement to sell our Corporate Trust Services business and our previously announced agreement to sell Wells Fargo Asset Management, which is subject to certain post-closing adjustments and earn-out provisions.
Financial Performance
Consolidated Financial Highlights
Quarter ended Sep 30,Nine months ended Sep 30,
($ in millions)20212020$ Change% Change20212020$ Change% Change
Selected income statement data
Net interest income$8,909 9,379 (470)(5)%$26,517 30,601 (4,084)(13)%
Noninterest income9,925 9,937 (12)— 31,119 25,174 5,945 24 
Total revenue18,834 19,316 (482)(2)57,636 55,775 1,861 
Net charge-offs257 731 (474)(65)1,159 2,786 (1,627)(58)
Change in the allowance for credit losses(1,652)38 (1,690)NM(4,862)11,522 (16,384)NM
Provision for credit losses(1,395)769 (2,164)NM(3,703)14,308 (18,011)NM
Noninterest expense13,303 15,229 (1,926)(13)40,633 42,828 (2,195)(5)
Income tax expense (benefit)1,521 (83)1,604 NM3,867 (1,731)5,598 NM
Wells Fargo net income5,122 3,216 1,906 5915,798 286 15,512 NM
Wells Fargo net income (loss) applicable to common stock4,787 2,901 1,886 6514,786 (955)15,741 NM
NM – Not meaningful

In third quarter 2021, we generated $5.1 billion of net income and diluted earnings per common share (EPS) of $1.17, compared with net income of $3.2 billion and diluted EPS of $0.70 in the same period a year ago. Financial performance for third quarter 2021, compared with the same period a year ago, included the following:
total revenue decreased due to lower net interest income;
provision for credit losses decreased reflecting lower net charge-offs and improvements in the economic environment;
noninterest expense decreased due to lower restructuring charges, operating losses, and professional and outside services expense;
average loans decreased due to lower residential mortgage loans driven by paydowns exceeding originations and the resecuritization of loans we purchased from Government National Mortgage Association (GNMA) loan securitization pools, lower commercial loans driven by weak demand and a reduction of PPP loans outstanding, and the reclassification of student loans to loans held for sale (LHFS) included in other consumer loans; and
average deposits increased driven by growth in the Consumer Banking and Lending, Commercial Banking, and Wealth and Investment Management (WIM) operating segments due to higher levels of liquidity and savings for consumer and commercial customers reflecting government stimulus programs and continued economic uncertainty associated with the COVID-19 pandemic, as well as the impact of payment deferral programs on consumer customers, partially offset by actions taken to manage under the asset cap which reduced deposits in the Corporate and Investment Banking operating segment and Corporate.
In the first nine months of 2021, we generated $15.8 billion of net income and diluted EPS of $3.57, compared with net income of $286 million and diluted loss per common share of $0.23 in the same period a year ago. Financial performance for the first nine months of 2021, compared with the same period a year ago, included the following:
total revenue increased due to higher net gains from equity securities, mortgage banking income, and investment advisory and other asset-based fee income, partially offset by lower net interest income;
provision for credit losses decreased reflecting lower net charge-offs due to better portfolio credit quality driven by improvements in the economic environment;
noninterest expense decreased due to lower operating losses, professional and outside services expense, and restructuring charges, partially offset by higher incentive and revenue-related compensation in personnel expense;
average loans decreased due to paydowns exceeding originations in our residential mortgage loan portfolio, weak demand for commercial loans, and the reclassification of student loans to LHFS included in other consumer loans; and
average deposits increased driven by growth in the Consumer Banking and Lending, Commercial Banking, and WIM operating segments due to higher levels of liquidity and savings for consumer and commercial customers reflecting government stimulus programs and continued economic uncertainty associated with the COVID-19 pandemic, as well as the impact of payment deferral programs on consumer customers, partially offset by actions taken to manage under the asset cap which reduced deposits in the Corporate and Investment Banking operating segment and Corporate.


Wells Fargo & Company
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Overview (continued)
Capital and Liquidity
We maintained a strong capital position in the first nine months of 2021, with total equity of $191.1 billion at September 30, 2021, compared with $185.7 billion at December 31, 2020. Our liquidity and regulatory capital ratios remained strong at September 30, 2021, including:
our liquidity coverage ratio (LCR) was 119%, which continued to exceed the regulatory minimum of 100%;
our Common Equity Tier 1 (CET1) ratio was 11.62%, which continued to exceed both the regulatory requirement of 9% and our current internal target; and
our eligible external total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was 23.68%, compared with the regulatory requirement of 21.50%.
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 improving economic environment.
The allowance for credit losses (ACL) for loans of $14.7 billion at September 30, 2021, decreased $5.0 billion from December 31, 2020.
Our provision for credit losses for loans was $(3.7) billion in the first nine months of 2021, down from $14.1 billion in the same period a year ago. The decrease in the ACL for loans
and the provision for credit losses in the first nine months of 2021, compared with the same period a year ago, reflected improvements in current and forecasted economic conditions.
The allowance coverage for total loans was 1.70% at September 30, 2021, compared with 2.22% at December 31, 2020.
Commercial portfolio net loan charge-offs were $38 million, or 3 basis points of average commercial loans, in third quarter 2021, compared with net loan charge-offs of $356 million, or 29 basis points, in the same period a year ago, predominantly driven by lower losses and higher recoveries in our commercial and industrial portfolio primarily within the oil, gas and pipelines industry, and in the real estate mortgage portfolio.
Consumer portfolio net loan charge-offs were $221 million, or 23 basis points of average consumer loans, in third quarter 2021, compared with net loan charge-offs of $327 million, or 30 basis points, in the same period a year ago, predominantly driven by lower losses in our credit card portfolio as a result of payment deferral activities and government stimulus programs instituted in response to the COVID-19 pandemic.
Nonperforming assets (NPAs) of $7.2 billion at September 30, 2021, decreased $1.7 billion, or 19%, from December 31, 2020, predominantly driven by our commercial and industrial portfolio reflecting improvements in the economic environment. NPAs represented 0.83% of total loans at September 30, 2021.
Earnings Performance
Wells Fargo net income for third quarter 2021 was $5.1 billion ($1.17 diluted EPS), compared with $3.2 billion ($0.70 diluted EPS) in the same period a year ago. Net income increased in third quarter 2021, compared with the same period a year ago, predominantly due to a $2.2 billion decrease in provision for credit losses, and a $1.9 billion decrease in noninterest expense, partially offset by a $1.6 billion increase in income tax expense and a $470 million decrease in net interest income.
Net income for the first nine months of 2021 was $15.8 billion ($3.57 diluted EPS), compared with $286 million ($0.23 diluted loss per common share) in the same period a year ago. Net income increased in the first nine months of 2021, compared with the same period a year ago, predominantly due to a $18.0 billion decrease in provision for credit losses, a $5.9 billion increase in noninterest income, and a $2.2 billion decrease in noninterest expense, partially offset by a $5.6 billion increase in income tax expense and a $4.1 billion decrease in net interest income.

Net Interest Income
Net interest income and net interest margin decreased in both the third quarter and first nine months of 2021, compared with the same periods a year ago. The third quarter 2021 decrease was due to the impact of lower loan balances reflecting soft demand and elevated prepayments, and the impact of lower yields on earning assets, partially offset by a decrease in long-term debt and lower mortgage-backed securities premium amortization. Third quarter 2021 included interest income from PPP loans of $117 million. Additionally, in third quarter 2021, we had interest income associated with loans we purchased from GNMA loan securitization pools of $212 million. For additional information about loans purchased from GNMA loan
securitization pools, see the “Risk Management – Credit Risk Management – Risks Relating to Servicing Activities” section in this Report. The first nine months of 2021 decrease was due to the impact of lower interest rates and lower loan balances reflecting soft demand, elevated prepayments and refinancing activity, as well as unfavorable hedge ineffectiveness accounting results and higher mortgage-backed securities premium amortization, partially offset by a lower cost of funding liabilities.
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 September 30, 2021 and 2020.
For additional information about net interest income and net interest margin, see the “Earnings Performance – Net Interest Income” section in our 2020 Form 10-K.
6
Wells Fargo & Company


Table 1: Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis) (1)
Quarter ended September 30,
 20212020
(in millions)Average
balance
Interest
income/
expense
Interest
rates
Average
balance
Interest
income/
expense
Interest
rates
Assets
Interest-earning deposits with banks$250,314 97 0.15 %$216,958 58 0.11 %
Federal funds sold and securities purchased under resale agreements68,912 6 0.03 80,431 0.02 
Debt securities:
Trading debt securities88,476 517 2.33 88,021 548 2.49 
Available-for-sale debt securities179,237 705 1.57 217,556 1,067 1.96 
Held-to-maturity debt securities261,182 1,223 1.87 176,384 922 2.09 
Total debt securities528,895 2,445 1.85 481,961 2,537 2.10 
Loans held for sale (2)24,490 172 2.81 31,023 239 3.07 
Loans:
Commercial loans:
Commercial and industrial – U.S.247,095 1,608 2.58 270,998 1,721 2.53 
Commercial and industrial – Non-U.S.72,331 361 1.98 64,048 344 2.14 
Real estate mortgage121,453 817 2.67 123,391 870 2.81 
Real estate construction21,794 170 3.10 22,216 175 3.13 
Lease financing15,492 171 4.45 17,091 159 3.72 
Total commercial loans478,165 3,127 2.60 497,744 3,269 2.61 
Consumer loans:
Residential mortgage – first lien243,201 1,897 3.12 290,607 2,357 3.24 
Residential mortgage – junior lien18,809 195 4.11 26,018 270 4.13 
Credit card35,407 1,023 11.47 35,965 1,057 11.70 
Auto52,370 586 4.44 48,718 600 4.90 
Other consumer26,072 243 3.70 32,656 431 5.25 
Total consumer loans375,859 3,944 4.18 433,964 4,715 4.33 
Total loans (2)854,024 7,071 3.29 931,708 7,984 3.41 
Equity securities32,790 146 1.78 25,185 100 1.61 
Other10,070 2 0.09 6,974 — (0.02)
Total interest-earning assets1,769,495 9,939 2.24 1,774,240 10,921 2.45 
Cash and due from banks24,201  21,991  
Goodwill26,192  26,388  
Other (3)129,812  123,292  
Total noninterest-earning assets180,205  171,671  
Total assets$1,949,700 9,939 1,945,911 10,921 
Liabilities
Deposits:
Demand deposits$452,301 29 0.03 %$49,608 0.07 %
Savings deposits426,201 34 0.03 803,942 157 0.08 
Time deposits34,171 25 0.28 71,728 127 0.71 
Deposits in non-U.S. offices28,341 11 0.16 33,992 22 0.25 
Total interest-bearing deposits941,014 99 0.04 959,270 314 0.13 
Short-term borrowings43,899 (7)(0.06)57,292 (12)(0.08)
Long-term debt174,643 745 1.71 222,862 1,038 1.86 
Other liabilities30,387 88 1.15 27,679 92 1.33 
Total interest-bearing liabilities1,189,943 925 0.31 1,267,103 1,432 0.45 
Noninterest-bearing demand deposits509,927  439,758  
Other noninterest-bearing liabilities55,789  57,673  
Total noninterest-bearing liabilities565,716  497,431 — 
Total liabilities1,755,659 925 1,764,534 1,432 
Total equity (3)194,041  181,377 — 
Total liabilities and equity$1,949,700 925 1,945,911 1,432 
Interest rate spread on a taxable-equivalent basis (3)1.93 %2.00 %
Net interest income and net interest margin on a taxable-equivalent basis (3)$9,014 2.03 %$9,489 2.13 %

(continued on following page)
Wells Fargo & Company
7


Earnings Performance (continued)
(continued from previous page)

Nine months ended September 30,
20212020
(in millions) Average 
balance 
Interest 
income/
expense 
Interest ratesAverage 
balance 
Interest 
income/ 
expense 
Interest rates
Assets
Interest-earning deposits with banks$243,095 224 0.12 %$174,425 490 0.37 %
Federal funds sold and securities purchased under resale agreements71,179 16 0.03 88,095 385 0.58 
Debt securities:
Trading debt securities86,828 1,552 2.38 95,018 1,981 2.78 
Available-for-sale debt securities192,765 2,232 1.54 234,125 4,293 2.45 
Held-to-maturity debt securities238,769 3,356 1.88 167,061 2,899 2.31 
Total debt securities518,362 7,140 1.84 496,204 9,173 2.47 
Loans held for sale (2)28,702 696 3.24 26,841 685 3.40 
Loans:
Commercial loans:
Commercial and industrial – U.S.249,359 4,831 2.59 289,799 6,257 2.88 
Commercial and industrial – Non-U.S.69,530 1,073 2.06 68,965 1,345 2.61 
Real estate mortgage120,907 2,452 2.71 122,903 2,987 3.25 
Real estate construction21,855 505 3.09 21,288 583 3.66 
Lease financing15,617 529 4.52 18,152 602 4.42 
Total commercial loans477,268 9,390 2.63 521,107 11,774 3.02 
Consumer loans:
Residential mortgage – first lien252,338 5,922 3.13 288,355 7,421 3.43 
Residential mortgage – junior lien20,516 634 4.13 27,535 932 4.52 
Credit card34,942 3,035 11.61 37,415 3,243 11.58 
Auto50,368 1,709 4.54 48,473 1,797 4.95 
Other consumer25,234 709 3.75 33,033 1,405 5.68 
Total consumer loans383,398 12,009 4.18 434,811 14,798 4.54 
Total loans (2)860,666 21,399 3.32 955,918 26,572 3.71 
Equity securities30,678 416 1.81 30,027 425 1.89 
Other9,559 4 0.06 7,373 14 0.24 
Total interest-earning assets 1,762,241 29,895 2.27 1,778,883 37,744 2.83 
Cash and due from banks24,377  21,266  
Goodwill26,262  26,386  
Other(3)128,511  120,780  
Total noninterest-earning assets 179,150  168,432  
Total assets $1,941,391 29,895 1,947,315 37,744 
Liabilities
Deposits:
Demand deposits$449,777 93 0.03 %$55,407 152 0.37 %
Savings deposits420,202 98 0.03 788,732 1,446 0.24 
Time deposits38,402 101 0.35 90,191 817 1.21 
Deposits in non-U.S. offices29,614 11 0.05 41,642 226 0.73 
Total interest-bearing deposits937,995 303 0.04 975,972 2,641 0.36 
Short-term borrowings50,439 (27)(0.07)74,538 263 0.47 
Long-term debt184,608 2,483 1.79 228,067 3,515 2.06 
Other liabilities28,999 298 1.37 29,270 350 1.59 
Total interest-bearing liabilities1,202,041 3,057 0.34 1,307,847 6,769 0.69 
Noninterest-bearing demand deposits488,961  398,666 — 
Other noninterest-bearing liabilities 59,010  56,367 — 
Total noninterest-bearing liabilities 547,971  455,033 — 
Total liabilities 1,750,012 3,057 1,762,880 6,769 
Total equity (3)191,379  184,435 — 
Total liabilities and equity $1,941,391 3,057 1,947,315 6,769 
Interest rate spread on a taxable-equivalent basis (3)1.93 %2.14 %
Net interest margin and net interest income on a taxable-equivalent basis (3)
$26,838 2.03 %$30,975 2.32 %
(1)The average balance amounts represent amortized costs. The interest rates are based on interest income or expense amounts for the period and are annualized. Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(2)Nonaccrual loans and any related income are included in their respective loan categories.
(3)Includes taxable-equivalent adjustments of $105 million and $110 million for the quarters ended September 30, 2021 and 2020, respectively, and $321 million and $374 million for the first nine months of 2021 and 2020, respectively, predominantly related to tax-exempt income on certain loans and securities.


8
Wells Fargo & Company


Noninterest Income

Table 2: Noninterest Income
Quarter ended Sep 30,Nine months ended Sep 30,
(in millions)20212020$ Change% Change20212020$ Change% Change
Deposit-related fees$1,416 1,299 117 %$4,013 3,888 125 %
Lending-related fees365 352 13 1,088 1,025 63 
Investment advisory and other asset-based fees 2,882 2,505 377 15 8,432 7,265 1,167 16 
Commissions and brokerage services fees 525 568 (43)(8)1,741 1,795 (54)(3)
Investment banking fees547 441 106 24 1,685 1,379 306 22 
Card fees1,078 912 166 18 3,104 2,601 503 19 
Net servicing income145 341 (196)(57)25 (77)102 132
Net gains on mortgage loan originations/sales1,114 1,249 (135)(11)3,896 2,363 1,533 65
Mortgage banking1,259 1,590 (331)(21)3,921 2,286 1,635 72
Net gains from trading activities92 361 (269)(75)461 1,232 (771)(63)
Net gains on debt securities283 264 19 434 713 (279)(39)
Net gains (losses) from equity securities869 649 220 34 3,957 (219)4,176 NM
Lease income322 333 (11)(3)950 1,021 (71)(7)
Other 287 663 (376)(57)1,333 2,188 (855)(39)
Total$9,925 9,937 (12)— $31,119 25,174 5,945 24 
NM – Not meaningful
Third quarter 2021 vs. third quarter 2020
Deposit-related fees increased driven by:
higher consumer transaction volumes compared with a third quarter 2020 that included reduced volumes due to the economic slowdown associated with the COVID-19 pandemic;
lower fee waivers and reversals compared with a third quarter 2020 that included elevated fee waivers due to our actions to support customers during the COVID-19 pandemic; and
higher treasury management fees on commercial accounts driven by an increase in transaction service volumes and repricing.

Investment advisory and other asset-based fees increased reflecting higher market valuations on client investment assets.

For additional information on certain client investment assets, see the “Earnings Performance – Operating Segment Results – Wealth and Investment Management – WIM Advisory Assets” and “Earnings Performance – Operating Segment Results – Corporate – Wells Fargo Asset Management (WFAM) Assets Under Management” sections in this Report.

Investment banking fees increased driven by higher loan syndication fees, advisory fees, and equity underwriting fees.

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

Net servicing income decreased predominantly due to lower income from mortgage servicing right (MSR) valuation changes and related hedges driven by more favorable valuation adjustments in third quarter 2020 due to improving economic conditions.
Net gains on mortgage loan originations/sales decreased
driven by:
lower residential real estate held for sale (HFS) origination volumes and margins in our retail and correspondent production channels;
partially offset by:
higher gains related to the resecuritization of loans we purchased from GNMA loan securitization pools in 2020.

For additional information on servicing income and net gains on mortgage loan originations/sales, see Note 9 (Mortgage Banking Activities) to Financial Statements in this Report.

Net gains from trading activities decreased driven by:
lower gains on equity products compared with a third quarter 2020 that reflected higher volumes and customer activity due to volatility in the equities markets;
lower client trading activity for credit products due to widening credit spreads; and
lower asset-backed finance client trading activity due to a decline in demand for commercial mortgage-backed securities (CMBS) and residential mortgage-backed securities (RMBS) products.

Net gains (losses) from equity securities increased due to higher unrealized gains on nonmarketable equity securities from our affiliated venture capital and private equity businesses.

Other income decreased due to lower equity method investment income compared with a third quarter 2020 that included $228 million of equity method investment income related to a change in the accounting measurement model for certain nonmarketable equity securities from our affiliated venture capital business.

Wells Fargo & Company
9


Earnings Performance (continued)
First nine months of 2021 vs. first nine months of 2020

Lending-related fees increased reflecting higher loan commitment fees.

Investment advisory and other asset-based fees increased reflecting higher market valuations on client investment assets.

For additional information on certain client investment assets, see the “Earnings Performance – Operating Segment Results – Wealth and Investment Management – WIM Advisory Assets” and “Earnings Performance – Operating Segment Results – Corporate – Wells Fargo Asset Management (WFAM) Assets Under Management” sections in this Report.

Investment banking fees increased driven by higher loan syndication fees, advisory fees, and equity underwriting fees.

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

Net servicing income increased reflecting negative MSR valuation adjustments in the first nine months of 2020 for higher expected servicing costs and higher prepayment estimates due to changes in economic conditions that improved in 2021.

Net gains on mortgage loan originations/sales increased
driven by:
a higher production margin in our retail production channel;
higher gains related to the resecuritization of loans we purchased from GNMA loan securitization pools in 2020; and
losses in the first nine months of 2020 driven by the impact of interest rate volatility on hedging activities associated with our residential mortgage loans held for sale portfolio and pipeline, as well as valuation losses on certain residential and commercial loans held for sale due to the impact of the COVID-19 pandemic on market conditions.

For additional information on servicing income and net gains on mortgage loan originations/sales, see Note 9 (Mortgage Banking Activities) to Financial Statements in this Report.
Net gains from trading activities decreased reflecting:
lower client trading activity for interest rate products, equities, and commodities;
partially offset by:
higher client trading activity for asset-backed finance products.

Net gains on debt securities decreased primarily due to lower gains on sales of agency MBS and municipal bonds.

Net gains (losses) from equity securities increased driven by:
higher unrealized gains on nonmarketable equity securities from our affiliated venture capital and private equity businesses;
higher realized gains on the sales of equity securities;
higher gains on deferred compensation plan investments (largely offset in personnel expense). Refer to Table 3a for the results for our deferred compensation plan and related hedges; and
lower impairment of equity securities due to the market impact of the COVID-19 pandemic in first quarter 2020.

Other income decreased due to:
lower gains on the sales of residential mortgage loans which were reclassified to held for sale in 2019; and
higher valuation losses related to the retained litigation risk, including the timing and amount of final settlement, associated with shares of Visa Class B common stock that we previously sold. For additional information, see the “Risk Management – Asset/Liability Management – Market Risk – Equity Securities” section in our 2020 Form 10-K; and
lower income from investments accounted for under the equity method;
partially offset by:
a gain on the sale of our student loan portfolio.
10
Wells Fargo & Company


Noninterest Expense

Table 3: Noninterest Expense
Quarter ended Sep 30,Nine months ended Sep 30,
(in millions)20212020$ Change% Change20212020$ Change% Change
Personnel$8,690 8,624 66 %$27,066 25,863 1,203 %
Technology, telecommunications and equipment741 791 (50)(6)2,400 2,261 139 
Occupancy738 851 (113)(13)2,243 2,437 (194)(8)
Operating losses540 1,219 (679)(56)1,056 2,902 (1,846)(64)
Professional and outside services1,417 1,760 (343)(19)4,255 5,042 (787)(16)
Leases (1)220 291 (71)(24)672 795 (123)(15)
Advertising and promotion153 144 375 462 (87)(19)
Restructuring charges1 718 (717)(100)10 718 (708)(99)
Other803 831 (28)(3)2,556 2,348 208 
Total$13,303 15,229 (1,926)(13)$40,633 42,828 (2,195)(5)
(1)Represents expenses for assets we lease to customers.
Third quarter 2021 vs. third quarter 2020

Personnel expense increased driven by:
higher incentive compensation expense; and
higher revenue-related compensation expense;
partially offset by:
lower salaries as a result of reduced headcount.

Technology, telecommunications and equipment expense decreased due to lower expense for contracts related to telecommunications, hardware, and maintenance.

Occupancy expense decreased driven by:
lower rent expense; and
lower cleaning fees, supplies, and equipment expenses compared with a third quarter 2020 that included higher expenses due to the COVID-19 pandemic.

Operating losses decreased driven by lower expense for customer remediation accruals and litigation accruals, partially offset by a $250 million operating loss associated with the September 2021 OCC enforcement action.

Professional and outside services expense decreased driven by efficiency initiatives to reduce our spending on consultants and contractors.

Restructuring charges decreased due to lower personnel-related charges related to our efficiency initiatives. For additional information on restructuring charges, see Note 19 (Restructuring Charges) to Financial Statements in this Report.
First nine months of 2021 vs. first nine months of 2020

Personnel expense increased driven by:
higher incentive compensation expense, including the impact of higher market valuations on stock-based compensation;
higher revenue-related compensation expense; and
higher deferred compensation expense;
partially offset by:
lower salaries as a result of reduced headcount.

Table 3a presents results for our deferred compensation plan and related hedges. In second quarter 2020, we entered into arrangements to transition our economic hedges of the deferred compensation plan liabilities from equity securities to derivative instruments. As a result of this transition, changes in fair value of derivatives used to economically hedge the deferred compensation plan are reported in personnel expense rather than in net gains (losses) from equity securities within noninterest income. For additional information on the derivatives used in the economic hedges, see Note 14 (Derivatives) to Financial Statements in this Report.
Table 3a: Deferred Compensation and Related Hedges
Quarter ended Sep 30,Nine months ended Sep 30,
(in millions)2021202020212020
Net interest income$ — $ 15 
Net gains (losses) from equity securities 1 (274)
Total revenue (losses) from deferred compensation plan investments 1 (259)
Decrease (increase) in deferred compensation plan liabilities42 (220)(380)(112)
Net derivative gains (losses) from economic hedges of deferred compensation(42)215 357 356 
Decrease (increase) in personnel expense (5)(23)244 
Loss before income tax expense$ (4)$(22)(15)
Wells Fargo & Company
11


Earnings Performance (continued)
Technology, telecommunications and equipment expense increased due to higher expense for technology contracts and the reversal of a software licensing liability accrual in second quarter 2020.

Occupancy expense decreased driven by:
lower rent expense; and
lower cleaning fees, supplies, and equipment expenses compared with a first nine months of 2020 that included higher expenses due to the COVID-19 pandemic.

Operating losses decreased driven by lower expense for customer remediation accruals and litigation accruals, partially offset by a $250 million operating loss associated with the September 2021 OCC enforcement action.

Professional and outside services expense decreased driven by efficiency initiatives to reduce our spending on consultants and contractors.

Leases expense decreased reflecting a reduction in the size of the operating lease asset portfolio.

Advertising and promotion expense decreased driven by a continued reduction in marketing and brand campaign volumes due to the impact of the COVID-19 pandemic.

Restructuring charges decreased due to lower personnel-related charges related to our efficiency initiatives that began in third quarter 2020. For additional information on restructuring charges, see Note 19 (Restructuring Charges) to Financial Statements in this Report.

Other expenses increased driven by:
a write-down of goodwill in the first nine months of 2021 related to the sale of our student loan portfolio; and
higher charitable donations expense driven by the donation of PPP processing fees;
partially offset by:
a reduction in business travel and company events due to the impact of the COVID-19 pandemic.
Income Tax Expense
Income tax expense was $1.5 billion in third quarter 2021, compared with an income tax benefit of $83 million in the same period a year ago. The effective income tax rate was 22.9% for third quarter 2021, compared with (2.6)% for the same period a year ago.
Income tax expense was $3.9 billion in the first nine months of 2021, compared with an income tax benefit of $1.7 billion in the same period a year ago. The effective income tax rate was 19.7% for the first nine months of 2021, compared with 119.8% for the same period a year ago.
The increase in our income tax expense for both the third quarter and first nine months of 2021, compared with the same periods a year ago, was driven by higher pre-tax income. In addition, the third quarter and first nine months of 2020 included net discrete income tax benefits primarily related to the resolution and reevaluation of prior period matters with U.S. federal and state tax authorities.
12
Wells Fargo & Company


Operating Segment Results
Our management reporting is organized into four reportable operating segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. All other business activities that are not included in the reportable operating segments have been included in Corporate. For additional information, see Table 4. We define our reportable operating segments by type of product and customer segment, and their results are based on our management reporting process. The management reporting process measures the performance of the reportable operating segments based on the Company’s management structure, and the results are regularly reviewed by our Chief Executive Officer and Operating Committee. The management reporting process is based on U.S. GAAP and includes specific adjustments, such as funds transfer pricing for asset/liability management, shared revenues and expenses, and taxable-equivalent adjustments to consistently reflect income 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. 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: 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
Wells Fargo & Company
13


Earnings Performance (continued)
Table 5 and the following discussion present our results by reportable operating segment. For additional information, see Note 22 (Operating Segments) to Financial Statements in this Report.

Table 5: Operating Segment Results – Highlights
(in millions)Consumer Banking and LendingCommercial BankingCorporate and Investment BankingWealth and Investment ManagementCorporate (1)Reconciling Items (2)Consolidated Company
Quarter ended September 30, 2021
Net interest income$5,707 1,231 1,866 637 (427)(105)8,909 
Noninterest income3,097 845 1,519 2,981 1,752 (269)9,925 
Total revenue8,804 2,076 3,385 3,618 1,325 (374)18,834 
Provision for credit losses(518)(335)(460)(73)(9) (1,395)
Noninterest expense6,053 1,396 1,797 2,917 1,140  13,303 
Income (loss) before income tax expense (benefit)3,269 1,015 2,048 774 194 (374)6,926 
Income tax expense (benefit)818 254 518 195 110 (374)1,521 
Net income before noncontrolling interests2,451 761 1,530 579 84  5,405 
Less: Net income from noncontrolling interests 2   281  283 
Net income (loss)$2,451 759 1,530 579 (197) 5,122 
Quarter ended September 30, 2020
Net interest income$5,918 1,408 1,714 717 (268)(110)9,379 
Noninterest income3,228 818 1,593 2,573 1,921 (196)9,937 
Total revenue9,146 2,226 3,307 3,290 1,653 (306)19,316 
Provision for credit losses640 339 (121)(10)(79)— 769 
Noninterest expense7,345 1,623 1,991 2,742 1,528 — 15,229 
Income (loss) before income tax expense (benefit)1,161 264 1,437 558 204 (306)3,318 
Income tax expense (benefit)290 71 355 139 (632)(306)(83)
Net income before noncontrolling interests871 193 1,082 419 836 — 3,401 
Less: Net income from noncontrolling interests— — — 184 — 185 
Net income$871 192 1,082 419 652 — 3,216 
Nine months ended September 30, 2021
Net interest income$16,940 3,687 5,428 1,904 (1,121)(321)26,517 
Noninterest income9,204 2,578 4,899 8,794 6,496 (852)31,119 
Total revenue26,144 6,265 10,327 10,698 5,375 (1,173)57,636 
Provision for credit losses(1,304)(1,116)(1,245)(92)54  (3,703)
Noninterest expense18,522 4,469 5,435 8,836 3,371  40,633 
Income (loss) before income tax expense (benefit)8,926 2,912 6,137 1,954 1,950 (1,173)20,706 
Income tax expense (benefit)2,233 727 1,531 491 58 (1,173)3,867 
Net income before noncontrolling interests6,693 2,185 4,606 1,463 1,892  16,839 
Less: Net income (loss) from noncontrolling interests 5 (2) 1,038  1,041 
Net income$6,693 2,180 4,608 1,463 854  15,798 
Nine months ended September 30, 2020
Net interest income$17,637 4,695 5,698 2,274 671 (374)30,601 
Noninterest income7,766 2,227 5,076 7,492 3,224 (611)25,174 
Total revenue25,403 6,922 10,774 9,766 3,895 (985)55,775 
Provision for credit losses5,311 3,675 4,760 253 309 — 14,308 
Noninterest expense20,535 4,776 5,905 8,142 3,470 — 42,828 
Income (loss) before income tax expense (benefit)(443)(1,529)109 1,371 116 (985)(1,361)
Income tax expense (benefit)(155)(371)48 343 (611)(985)(1,731)
Net income (loss) before noncontrolling interests(288)(1,158)61 1,028 727 — 370 
Less: Net income from noncontrolling interests— — — 81 — 84 
Net income (loss)$(288)(1,161)61 1,028 646 — 286 
(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.
14
Wells Fargo & Company


Consumer Banking and Lending offers diversified financial products and services for consumers and small businesses with annual sales generally up to $5 million. These financial products and services include checking and savings accounts, credit and
debit cards, as well as home, auto, personal, and small business lending. Table 5a and Table 5b provide additional information for Consumer Banking and Lending.
Table 5a: Consumer Banking and Lending – Income Statement and Selected Metrics
Quarter ended Sep 30,Nine months ended Sep 30,
($ in millions, unless otherwise noted)20212020$ Change% Change20212020$ Change% Change
Income Statement
Net interest income$5,707 5,918 (211)(4)%$16,940 17,637 (697)(4)%
Noninterest income:
Deposit-related fees799 708 91 13 2,192 2,162 30 
Card fees1,014 860 154 18 2,923 2,428 495 20 
Mortgage banking1,168 1,544 (376)(24)3,585 2,142 1,443 67 
Other116 116 — — 504 1,034 (530)(51)
Total noninterest income3,097 3,228 (131)(4)9,204 7,766 1,438 19 
Total revenue8,804 9,146 (342)(4)26,144 25,403 741 
Net charge-offs302 369 (67)(18)1,031 1,543 (512)(33)
Change in the allowance for credit losses(820)271 (1,091)NM(2,335)3,768 (6,103)NM
Provision for credit losses(518)640 (1,158)NM(1,304)5,311 (6,615)NM
Noninterest expense6,053 7,345 (1,292)(18)18,522 20,535 (2,013)(10)
Income (loss) before income tax expense (benefit)3,269 1,161 2,108 1828,926 (443)9,369 NM
Income tax expense (benefit)818 290 528 1822,233 (155)2,388 NM
Net income (loss)$2,451 871 1,580 181$6,693 (288)6,981 NM
Revenue by Line of Business
Consumer and Small Business Banking$4,822 4,721 101 $14,086 13,983 103 
Consumer Lending:
Home Lending2,012 2,527 (515)(20)6,311 5,880 431 
Credit Card1,399 1,345 54 4,108 3,916 192 
Auto445 404 41 10 1,263 1,172 91 
Personal Lending126 149 (23)(15)376 452 (76)(17)
Total revenue$8,804 9,146 (342)(4)$26,144 25,403 741 
Selected Metrics
Consumer Banking and Lending:
Return on allocated capital (1)19.7 %6.6 18.1 %(1.4)
Efficiency ratio (2)69 80 71 81 
Headcount (#) (period-end)114,334 131,516 (13)114,334 131,516 (13)
Retail bank branches (#)4,796 5,229 (8)4,796 5,229 (8)
Digital active customers (# in millions) (3)32.7 32.0 32.7 32.0 
Mobile active customers (# in millions) (3)27.0 25.9 27.0 25.9 
Consumer and Small Business Banking:
Deposit spread (4)1.5 %1.8 1.5 %1.9 
Debit card purchase volume ($ in billions) (5)$118.6 102.9 15.7 15 $349.1 286.6 62.5 22 
Debit card purchase transactions (# in millions) (5)2,515 2,273 11 7,285 6,495 12 

(continued on following page)

Wells Fargo & Company
15


Earnings Performance (continued)
(continued from previous page)

Quarter ended Sep 30,Nine months ended Sep 30,
($ in millions, unless otherwise noted)20212020$ Change% Change20212020$ Change% Change
Home Lending:
Mortgage banking:
Net servicing income$109 331 (222)(67)%$(90)(78)(12)(15)%
Net gains on mortgage loan originations/sales1,059 1,213 (154)(13)3,675 2,220 1,455 66 
Total mortgage banking$1,168 1,544 (376)(24)$3,585 2,142 1,443 67 
Originations ($ in billions):
Retail$35.2 32.8 2.4 $105.7 86.4 19.3 22 
Correspondent16.7 28.8 (12.1)(42)51.2 82.4 (31.2)(38)
Total originations$51.9 61.6 (9.7)(16)$156.9 168.8 (11.9)(7)
% of originations held for sale (HFS)60.6 %78.1 67.3 %73.2 
Third-party mortgage loans serviced (period-end) ($ in billions) (6)$739.5 917.6 (178.1)(19)$739.5 917.6 (178.1)(19)
Mortgage servicing rights (MSR) carrying value (period-end)6,862 6,355 507 6,862 6,355 507 
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) (6)0.93 %0.69 0.93 %0.69 
Home lending loans 30+ days or more delinquency rate (7)(8)0.45 0.56 0.45 0.56 
Credit Card:
Point of sale (POS) volume ($ in billions)$26.5 21.3 5.2 24 $73.1 58.7 14.4 25 
New accounts (# in thousands) (9)526 212 148 1,115 782 43 
Credit card loans 30+ days or more delinquency rate (8)1.40 %1.76 1.40 %1.76 
Auto:
Auto originations ($ in billions)$9.2 5.4 3.8 70 $24.5 17.5 7.0 40 
Auto loans 30+ days or more delinquency rate (8)1.46 %1.67 1.46 %1.67 
Personal Lending:
New funded balances$731 323 408 126 $1,709 1,305404 31 
NM – Not meaningful
(1)Return on allocated capital is segment net income (loss) applicable to common stock divided by segment average allocated capital. Segment net income (loss) applicable to common stock is segment net income (loss) less allocated preferred stock dividends.
(2)Efficiency ratio is segment noninterest expense divided by segment total revenue (net interest income and noninterest income).
(3)Digital and mobile active customers is the number of consumer and small business customers who have logged on via a digital or mobile device, respectively, in the prior 90 days. Digital active customers includes both online and mobile customers.
(4)Deposit spread is (i) the internal funds transfer pricing credit on segment deposits minus interest paid to customers for segment deposits, divided by (ii) average segment deposits.
(5)Debit card purchase volume and transactions reflect combined activity for both consumer and business debit card purchases.
(6)Excludes residential mortgage loans subserviced for others.
(7)Excludes residential mortgage loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) and loans held for sale.
(8)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 status.
(9)Excludes certain private label new account openings.
Third quarter 2021 vs. third quarter 2020
Revenue decreased driven by:
lower mortgage banking noninterest income due to lower HFS origination volumes and margins, as well as lower income from MSR valuation changes and related hedges, partially offset by higher gains related to the resecuritization of loans we purchased from GNMA loan securitization pools in 2020; and
lower net interest income reflecting the lower interest rate environment and lower loan balances, partially offset by higher deposit balances;
partially offset by:
higher card fees reflecting higher interchange fees, net of rewards, driven by increased purchase and transaction volumes; and
higher deposit-related fees driven by higher consumer transaction volumes compared with a third quarter 2020 that included reduced volumes due to the economic slowdown associated with the COVID-19 pandemic, and lower fee waivers and reversals compared with a third
quarter 2020 that included elevated fee waivers due to our actions to support customers during the COVID-19 pandemic.

Provision for credit losses decreased driven by an improving economic environment.

Noninterest expense decreased driven by:
lower operating losses due to lower expense for litigation accruals and customer remediation accruals;
lower personnel expense driven by lower branch staffing expense related to efficiency initiatives in Consumer and Small Business Banking;
lower occupancy expense related to lower cleaning fees, supplies, and equipment expenses compared with a third quarter 2020 that included higher expenses due to the COVID-19 pandemic; and
lower advertising and promotion expense.
16
Wells Fargo & Company


First nine months of 2021 vs. first nine months of 2020

Revenue increased driven by:
higher mortgage banking noninterest income due to a higher production margin in our retail production channel, higher gains related to the resecuritization of loans we purchased from GNMA loan securitization pools in 2020, and losses in the first nine months of 2020 driven by the impact of interest rate volatility on hedging activities and valuation losses due to the impact of the COVID-19 pandemic on market conditions; and
higher card fees reflecting higher interchange fees, net of rewards, driven by increased purchase and transaction volumes;
partially offset by:
lower net interest income reflecting the lower interest rate environment and lower loan balances, partially offset by higher deposit balances; and
lower other income driven by lower gains on the sales of residential mortgage loans which were reclassified to held for sale in 2019.

Provision for credit losses decreased driven by an improving economic environment.
Noninterest expense decreased driven by:
lower operating losses due to lower expense for litigation accruals and customer remediation accruals;
lower personnel expense reflecting additional payments made in the first nine months of 2020 to certain customer-facing and support employees and for back-up child care services, as well as lower branch staffing expense in the first nine months of 2021 related to efficiency initiatives in Consumer and Small Business Banking, partially offset by higher revenue-related compensation in Home Lending;
lower advertising and promotion expense; and
lower occupancy expense related to lower cleaning fees, supplies, and equipment expenses compared with a first nine months of 2020 that included higher expenses due to the COVID-19 pandemic;
partially offset by:
higher charitable donations expense driven by the donation of PPP processing fees.
Table 5b: Consumer Banking and Lending – Balance Sheet
Quarter ended Sep 30,Nine months ended Sep 30,
(in millions)20212020$ Change% Change20212020$ Change% Change
Selected Balance Sheet Data (average)
Loans by Line of Business:
Home Lending$217,011 270,036 (53,025)(20)%$227,663 269,692 (42,029)(16)%
Auto53,043 49,770 3,273 51,121 49,625 1,496 
Credit Card35,407 35,965 (558)(2)34,942 37,415 (2,473)(7)
Small Business15,122 18,100 (2,978)(16)17,991 14,248 3,743 26 
Personal Lending4,974 5,912 (938)(16)5,026 6,354 (1,328)(21)
Total loans$325,557 379,783 (54,226)(14)$336,743 377,334 (40,591)(11)
Total deposits848,419 756,485 91,934 12 824,752 708,288 116,464 16 
Allocated capital48,000 48,000 — — 48,000 48,000 — — 
Selected Balance Sheet Data (period-end)
Loans by Line of Business:
Home Lending$216,649 273,635 (56,986)(21)$216,649 273,635 (56,986)(21)
Auto54,472 49,442 5,030 10 54,472 49,442 5,030 10 
Credit Card36,061 36,021 40 — 36,061 36,021 40 — 
Small Business13,686 17,993 (4,307)(24)13,686 17,993 (4,307)(24)
Personal Lending5,050 5,724 (674)(12)5,050 5,724 (674)(12)
Total loans$325,918 382,815 (56,897)(15)$325,918 382,815 (56,897)(15)
Total deposits858,424 759,425 98,999 13 858,424 759,425 98,999 13 
Third quarter 2021 vs. third quarter 2020
Total loans (average) decreased as paydowns exceeded originations. Home Lending loan balances were also impacted by actions taken to temporarily curtail certain non-conforming residential mortgage originations and suspend home equity originations, as well as the resecuritization of loans we purchased from GNMA loan securitization pools. Small Business loan balances were also impacted by a decline in PPP loans.

Total deposits (average) increased driven by higher levels of liquidity and savings for consumer customers reflecting government stimulus programs and payment deferral programs,
as well as continued economic uncertainty associated with the COVID-19 pandemic.
First nine months of 2021 vs. first nine months of 2020
Total loans (average and period-end) decreased as paydowns exceeded originations. Home Lending loan balances were also impacted by actions taken to temporarily curtail certain non-conforming residential mortgage originations and suspend home equity originations. Small Business period-end loan balances were also impacted by a decline in PPP loans.

Wells Fargo & Company
17


Earnings Performance (continued)
Total deposits (average and period-end) increased driven by higher levels of liquidity and savings for consumer customers reflecting government stimulus programs and payment deferral programs, as well as continued economic uncertainty associated with the COVID-19 pandemic.

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 5c and Table 5d provide additional information for Commercial Banking.
Table 5c: Commercial Banking – Income Statement and Selected Metrics
Quarter ended Sep 30,Nine months ended Sep 30,
($ in millions)20212020$ Change% Change20212020$ Change% Change
Income Statement
Net interest income$1,231 1,408 (177)(13)%$3,687 4,695 (1,008)(21)%
Noninterest income:
Deposit-related fees323 309 14 965 908 57 
Lending-related fees132 140 (8)(6)403 393 10 
Lease income165 186 (21)(11)512 573 (61)(11)
Other225 183 42 23 698 353 345 98 
Total noninterest income845 818 27 2,578 2,227 351 16 
Total revenue2,076 2,226 (150)(7)6,265 6,922 (657)(9)
Net charge-offs16 219 (203)(93)108 509 (401)(79)
Change in the allowance for credit losses(351)120 (471)NM(1,224)3,166 (4,390)NM
Provision for credit losses(335)339 (674)NM(1,116)3,675 (4,791)NM
Noninterest expense1,396 1,623 (227)(14)4,469 4,776 (307)(6)
Income (loss) before income tax expense (benefit)1,015 264 751 284 2,912 (1,529)4,441 290 
Income tax expense (benefit)254 71 183 258 727 (371)1,098 296 
Less: Net income from noncontrolling interests2 100 5 67 
Net income (loss)$759 192 567 295 $2,180 (1,161)3,341 288 
Revenue by Line of Business
Middle Market Banking$1,165 1,196 (31)(3)$3,475 3,918 (443)(11)
Asset-Based Lending and Leasing911 1,030 (119)(12)2,790 3,004 (214)(7)
Total revenue$2,076 2,226 (150)(7)$6,265 6,922 (657)(9)
Revenue by Product
Lending and leasing$1,190 1,335 (145)(11)$3,599 4,170 (571)(14)
Treasury management and payments713 749 (36)(5)2,114 2,472 (358)(14)
Other173 142 31 22 552 280 272 97 
Total revenue$2,076 2,226 (150)(7)$6,265 6,922 (657)(9)
Selected Metrics
Return on allocated capital14.5 %2.9 14.0 %(9.0)
Efficiency ratio67 73 71 69 
Headcount (#) (period-end)18,638 21,900 (15)18,638 21,900(15)
NM – Not meaningful
Third quarter 2021 vs. third quarter 2020
Revenue decreased driven by:
lower net interest income reflecting lower loan balances and the lower interest rate environment; and
lower lease income reflecting a reduction in the size of the operating lease asset portfolio;
partially offset by:
higher income from renewable energy investments; and
higher deposit-related fees due to higher treasury management fees, driven by an increase in transaction service volumes and repricing.

Provision for credit losses decreased driven by an improving economic environment.
Noninterest expense decreased driven by:
lower spending related to efficiency initiatives, including lower personnel expense from reduced headcount;
lower lease expense reflecting a reduction in the size of the operating lease asset portfolio;
lower professional and outside services expense reflecting decreased project-related expense;
lower occupancy expense; and
lower expenses allocated from enterprise functions, including lower technology expenses.
18
Wells Fargo & Company


First nine months of 2021 vs. first nine months of 2020
Revenue decreased driven by:
lower net interest income reflecting lower loan balances and the lower interest rate environment; and
lower lease income reflecting a reduction in the size of the operating lease asset portfolio;
partially offset by:
higher other noninterest income due to gains on equity securities and higher income from renewable energy investments; and
higher deposit-related fees due to higher treasury management fees, driven by a lower earnings credit rate due to the lower interest rate environment and repricing.
Provision for credit losses decreased driven by an improving economic environment.

Noninterest expense decreased driven by:
lower spending related to efficiency initiatives, including lower personnel expense from reduced headcount;
lower lease expense reflecting a reduction in the size of the operating lease asset portfolio; and
lower professional and outside services expense reflecting decreased project-related expense;
partially offset by:
higher expenses due to lower allocations of shared expenses with other lines of business.
Table 5d: Commercial Banking – Balance Sheet
Quarter ended Sep 30,Nine months ended Sep 30,
(in millions)20212020$ Change% Change20212020$ Change% Change
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial$118,039 134,531 (16,492)(12)%$118,840 149,220 (30,380)(20)%
Commercial real estate46,576 52,017 (5,441)(10)47,444 52,818 (5,374)(10)
Lease financing and other14,007 15,345 (1,338)(9)13,812 16,293 (2,481)(15)
Total loans$178,622 201,893 (23,271)(12)$180,096 218,331 (38,235)(18)
Loans by Line of Business:
Middle Market Banking$101,523 110,289 (8,766)(8)$102,642 116,258 (13,616)(12)
Asset-Based Lending and Leasing77,099 91,604 (14,505)(16)77,454 102,073 (24,619)(24)
Total loans$178,622 201,893 (23,271)(12)$180,096 218,331 (38,235)(18)
Total deposits199,226 178,997 20,229 11 193,761 176,959 16,802 
Allocated capital19,500 19,500 — — 19,500 19,500— — 
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial$120,203 128,270 (8,067)(6)$120,203 128,270 (8,067)(6)
Commercial real estate46,318 51,297 (4,979)(10)46,318 51,297 (4,979)(10)
Lease financing and other14,018 15,180 (1,162)(8)14,018 15,180 (1,162)(8)
Total loans$180,539 194,747 (14,208)(7)$180,539 194,747 (14,208)(7)
Loans by Line of Business:
Middle Market Banking$102,279 105,851 (3,572)(3)$102,279 105,851 (3,572)(3)
Asset-Based Lending and Leasing78,260 88,896 (10,636)(12)78,260 88,896 (10,636)(12)
Total loans$180,539 194,747 (14,208)(7)$180,539 194,747 (14,208)(7)
Total deposits204,853 180,948 23,905 13 204,853 180,948 23,905 13 
Third quarter 2021 vs. third quarter 2020
Total loans (average) decreased driven by lower loan demand, including lower line utilization, and higher paydowns reflecting continued high levels of client liquidity and strength in the capital markets.

Total deposits (average) increased due to higher levels of liquidity and lower investment spending reflecting government stimulus programs and continued economic uncertainty associated with the COVID-19 pandemic.
First nine months of 2021 vs. first nine months of 2020
Total loans (average and period-end) decreased driven by lower loan demand, including lower line utilization, and higher paydowns reflecting continued high levels of client liquidity and strength in the capital markets.

Total deposits (average and period-end) increased due to higher levels of liquidity and lower investment spending reflecting government stimulus programs and continued economic uncertainty associated with the COVID-19 pandemic.

Wells Fargo & Company
19


Earnings Performance (continued)
Corporate and Investment Banking delivers a suite of capital markets, banking, and financial products and services to corporate, commercial real estate, government and institutional clients globally. Products and services include corporate banking, investment banking, treasury management, commercial real
estate lending and servicing, equity and fixed income solutions, as well as sales, trading, and research capabilities. Table 5e and Table 5f provide additional information for Corporate and Investment Banking.
Table 5e: Corporate and Investment Banking – Income Statement and Selected Metrics
Quarter ended Sep 30,Nine months ended Sep 30,
($ in millions)20212020$ Change% Change20212020$ Change% Change
Income Statement
Net interest income$1,866 1,714 152 %$5,428 5,698 (270)(5)%
Noninterest income:
Deposit-related fees286 272 14 829 790 39 
Lending-related fees196 171 25 15 569 506 63 12 
Investment banking fees536 428 108 25 1,727 1,493 234 16 
Net gains from trading activities85 374 (289)(77)446 1,218 (772)(63)
Other416 348 68 20 1,328 1,069 259 24 
Total noninterest income1,519 1,593 (74)(5)4,899 5,076 (177)(3)
Total revenue3,385 3,307 78 10,327 10,774 (447)(4)
Net charge-offs(48)117 (165)NM(30)565 (595)NM
Change in the allowance for credit losses(412)(238)(174)(73)(1,215)4,195 (5,410)NM
Provision for credit losses(460)(121)(339)NM(1,245)4,760 (6,005)NM
Noninterest expense1,797 1,991 (194)(10)5,435 5,905 (470)(8)
Income before income tax expense2,048 1,437 611 43 6,137 109 6,028 NM
Income tax expense518 355 163 46 1,531 48 1,483 NM
Less: Net loss from noncontrolling interests  — NM(2)— (2)NM
Net income$1,530 1,082 448 41 $4,608 61 4,547 NM
Revenue by Line of Business
Banking:
Lending$502 422 80 19 $1,429 1,343 86 
Treasury Management and Payments372 395 (23)(6)1,095 1,296 (201)(16)
Investment Banking367 295 72 24 1,190 1,100 90 
Total Banking1,241 1,112 129 12 3,714 3,739 (25)(1)
Commercial Real Estate942 855 87 10 2,868 2,595 273 11 
Markets:
Fixed Income, Currencies, and Commodities (FICC)884 1,005 (121)(12)2,916 3,425 (509)(15)
Equities234 312 (78)(25)692 1,010 (318)(31)
Credit Adjustment (CVA/DVA) and Other58 62 (4)(6)78 93 (15)(16)
Total Markets1,176 1,379 (203)(15)3,686 4,528 (842)(19)
Other26 (39)65 167 59 (88)147 167 
Total revenue$3,385 3,307 78 $10,327 10,774 (447)(4)
Selected Metrics
Return on allocated capital16.9 %11.6 17.2 %(0.8)
Efficiency ratio53 60 53 55 
Headcount (#) (period-end)8,459 8,205 8,459 8,205
NM – Not meaningful
Third quarter 2021 vs. third quarter 2020
Revenue increased driven by:
higher net interest income reflecting higher loan balances and higher trading assets, partially offset by lower deposit balances and margins;
higher investment banking fees due to higher loan syndication fees, advisory fees, and equity underwriting fees; and
higher other noninterest income due to higher gains from equity securities and higher mortgage banking income
related to higher servicing income and higher gains on the sales of mortgage loans;
partially offset by:
lower net gains from trading activities due to lower gains on equity products compared with a third quarter 2020 that reflected higher volumes and customer activity due to volatility in the equities markets, lower client trading activity for credit products due to widening credit spreads, and lower asset-backed finance client trading activity due to a decline in demand for CMBS and RMBS products.
20
Wells Fargo & Company


Provision for credit losses decreased driven by an improving economic environment.

Noninterest expense decreased driven by:
lower personnel expense driven by lower incentive compensation; and
lower expenses allocated from enterprise functions reflecting lower spending due to efficiency initiatives.

First nine months of 2021 vs. first nine months of 2020
Revenue decreased driven by:
lower net gains from trading activities driven by lower client trading activity for interest rate products, equities, and commodities, partially offset by higher client trading activity for asset-backed finance products; and
lower net interest income reflecting the lower interest rate environment, lower deposit balances, and lower average trading-related assets;
partially offset by:
higher investment banking fees due to higher loan syndication fees, advisory fees, and equity underwriting fees;
higher other noninterest income driven by higher mortgage banking income due to higher servicing income and gains on the sales of mortgage loans, as well as higher income from low income housing investments; and
higher lending-related fees reflecting increased loan commitment fees.
Provision for credit losses decreased driven by an improving economic environment.

Noninterest expense decreased driven by:
lower operating losses due to lower expense for litigation accruals and customer remediation accruals;
lower expenses allocated from enterprise functions reflecting lower spending due to efficiency initiatives;
lower professional and outside services expense reflecting decreased project-related expense; and
a reduction in business travel and company events due to the impact of the COVID-19 pandemic;
partially offset by:
higher personnel expense driven by higher incentive compensation.
Wells Fargo & Company
21


Earnings Performance (continued)
Table 5f: Corporate and Investment Banking – Balance Sheet
Quarter ended Sep 30,Nine months ended Sep 30,
(in millions)20212020$ Change% Change20212020$ Change% Change
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial$170,486 165,445 5,041 %$166,647 178,140 (11,493)(6)%
Commercial real estate86,809 84,408 2,401 85,349 82,382 2,967 
Total loans$257,295 249,853 7,442 $251,996 260,522 (8,526)(3)
Loans by Line of Business:
Banking$95,911 88,936 6,975 $91,130 97,224 (6,094)(6)
Commercial Real Estate110,683 109,482 1,201 109,073 108,428 645 
Markets50,701 51,435 (734)(1)51,793 54,870 (3,077)(6)
Total loans$257,295 249,853 7,442 $251,996 260,522 (8,526)(3)
Trading-related assets:
Trading account securities$112,148 100,193 11,955 12 $107,771 110,082 (2,311)(2)
Reverse repurchase agreements/securities borrowed56,758 68,818 (12,060)(18)60,903 76,069 (15,166)(20)
Derivative assets25,191 23,640 1,551 25,668 21,443 4,225 20 
Total trading-related assets$194,097 192,651 1,446 $194,342 207,594 (13,252)(6)
Total assets524,124 503,627 20,497 516,401 530,082 (13,681)(3)
Total deposits189,424 226,129 (36,705)(16)191,560 243,913 (52,353)(21)
Allocated capital34,000 34,000 — — 34,000 34,000 — — 
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial$177,002 157,193 19,809 13 $177,002 157,193 19,809 13 
Commercial real estate86,955 83,920 3,035 86,955 83,920 3,035 
Total loans$263,957 241,113 22,844 $263,957 241,113 22,844 
Loans by Line of Business:
Banking$99,683 83,128 16,555 20 $99,683 83,128 16,555 20 
Commercial Real Estate112,050 108,240 3,810 112,050 108,240 3,810 
Markets52,224 49,745 2,479 52,224 49,745 2,479 
Total loans$263,957 241,113 22,844 $263,957 241,113 22,844 
Trading-related assets:
Trading account securities$114,187 100,157 14,030 14 $114,187 100,157 14,030 14 
Reverse repurchase agreements/securities borrowed
55,123 61,027 (5,904)(10)55,123 61,027 (5,904)(10)
Derivative assets27,096 23,844 3,252 14 27,096 23,844 3,252 14 
Total trading-related assets$196,406 185,028 11,378 $196,406 185,028 11,378 
Total assets535,385 490,373 45,012 535,385 490,373 45,012 
Total deposits191,786 212,532 (20,746)(10)191,786 212,532 (20,746)(10)
Third quarter 2021 vs. third quarter 2020
Total deposits (average) decreased reflecting continued actions to manage under the asset cap.
First nine months of 2021 vs. first nine months of 2020
Total assets (period-end) increased reflecting higher loan balances driven by customer usage of lines due to increased corporate spending, and higher trading-related asset balances due to increased customer activity.

Total deposits (average and period-end) decreased reflecting continued actions to manage under the asset cap.
22
Wells Fargo & Company


Wealth and Investment Management provides personalized wealth management, investment and retirement products and services to clients across U.S.-based businesses including Wells Fargo Advisors and The Private Bank. We serve clients’
brokerage needs, and deliver financial planning, private banking, credit, and fiduciary services to high-net worth and ultra-high-net worth individuals and families. Table 5g and Table 5h provide additional information for Wealth and Investment Management.
Table 5g: Wealth and Investment Management
Quarter ended Sep 30,Nine months ended Sep 30,
($ in millions, unless otherwise noted)20212020$ Change% Change20212020$ Change% Change
Income Statement
Net interest income$637 717 (80)(11)%$1,904 2,274 (370)(16)%
Noninterest income:
Investment advisory and other asset-based fees2,457 2,043 414 20 7,145 5,951 1,194 20 
Commissions and brokerage services fees 458 497 (39)(8)1,526 1,560 (34)(2)
Other66 33 33 100 123 (19)142 747 
Total noninterest income2,981 2,573 408 16 8,794 7,492 1,302 17 
Total revenue3,618 3,290 328 10 10,698 9,766 932 10 
Net charge-offs(3)(2)(1)(50)(9)— (9)NM
Change in the allowance for credit losses(70)(8)(62)NM(83)253 (336)NM
Provision for credit losses(73)(10)(63)NM(92)253 (345)NM
Noninterest expense2,917 2,742 175 8,836 8,142 694 
Income before income tax expense774 558 216 39 1,954 1,371 583 43 
Income tax expense195 139 56 40 491 343 148 43 
Net income$579 419 160 38 $1,463 1,028 435 42 
Selected Metrics
Return on allocated capital25.7 %18.4 21.8 %15.1 
Efficiency ratio81 83 83 83 
Headcount (#) (period-end)26,112 28,996 (10)26,112 28,996 (10)
Advisory assets ($ in billions)$920 779 141 18 $920 779 141 18 
Other brokerage assets and deposits ($ in billions)1,171 1,076 95 1,171 1,076 95 
Total client assets ($ in billions)$2,091 1,855 236 13 $2,091 1,855 236 13 
Annualized revenue per advisor ($ in thousands) (1)1,141 940 201 21 1,094 916 178 19 
Total financial and wealth advisors (#) (period-end)12,552 13,793 (9)12,552 13,793 (9)
Selected Balance Sheet Data (average)
Total loans$82,785 79,001 3,784 $81,810 78,327 3,483 
Total deposits176,570 169,441 7,129 175,087 160,012 15,075 
Allocated capital8,750 8,750 — — 8,750 8,750 — — 
Selected Balance Sheet Data (period-end)
Total loans$82,824 79,472 3,352 $82,824 79,472 3,352 
Total deposits177,809 168,132 9,677 177,809 168,132 9,677 
NM – Not meaningful
(1)Represents annualized segment total revenue divided by average total financial and wealth advisors for the period.
Third quarter 2021 vs. third quarter 2020
Revenue increased driven by:
higher investment advisory and other asset-based fees due to higher market valuations on WIM advisory assets;
partially offset by:
lower net interest income reflecting the lower interest rate environment, partially offset by higher deposit balances.

Provision for credit losses decreased driven by an improving economic environment.
Noninterest expense increased due to higher personnel expense driven by higher revenue-related compensation.

Total loans (average) increased primarily due to higher securities-based lending balances.
Wells Fargo & Company
23


Earnings Performance (continued)
First nine months of 2021 vs. first nine months of 2020
Revenue increased driven by:
higher investment advisory and other asset-based fees due to higher market valuations on WIM advisory assets; and
higher deferred compensation plan investment results included in other noninterest income (largely offset by personnel expense);
partially offset by:
lower net interest income reflecting the lower interest rate environment, partially offset by higher deposit balances.

Provision for credit losses decreased driven by an improving economic environment.
Noninterest expense increased due to:
higher personnel expense driven by higher revenue-related compensation and higher deferred compensation expense; and
the reversal of a software licensing liability accrual in the first nine months of 2020;
partially offset by:
lower professional and outside services expense driven by efficiency initiatives to reduce our spending on consultants and contractors.
Total deposits (average and period-end) increased primarily due to growth in customer balances in both The Private Bank and Wells Fargo Advisors.

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 5h presents advisory assets activity by WIM line of business for the third quarter and first nine months of 2021 and 2020. 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 third quarter 2021 and 2020, the average fee rate by account type ranged from 50 to 120 basis points.
Table 5h: WIM Advisory Assets
Quarter endedNine months ended
(in billions)Balance, beginning of periodInflows (1)Outflows (2)Market impact (3)Balance, end of periodBalance, beginning of periodInflows (1)Outflows (2)Market impact (3)Balance, end of period
September 30, 2021
Client-directed (4)$201.3 9.4 (11.7)(2.1)196.9 $186.3 31.1 (33.7)13.2 196.9 
Financial advisor-directed (5)238.0 11.0 (9.0)(0.7)239.3 211.0 35.6 (28.9)21.6 239.3 
Separate accounts (6)192.9 7.5 (8.7)(0.8)190.9 174.6 24.0 (23.4)15.7 190.9 
Mutual fund advisory (7)100.1 3.9 (4.0)(0.8)99.2 91.4 12.2 (11.1)6.7 99.2 
Total Wells Fargo Advisors$732.3 31.8 (33.4)(4.4)726.3 $663.3 102.9 (97.1)57.2 726.3 
The Private Bank (8)198.4 9.6 (13.1)(1.3)193.6 189.4 27.8 (36.7)13.1 193.6 
Total WIM advisory assets$930.7 41.4 (46.5)(5.7)919.9 $852.7 130.7 (133.8)70.3 919.9 
September 30, 2020
Client directed (4)$162.2 8.8 (10.2)9.5 170.3 $169.4 26.2 (27.6)2.3 170.3 
Financial advisor directed (5)176.8 9.9 (9.0)11.6 189.3 176.3 29.0 (24.2)8.2 189.3 
Separate accounts (6)151.5 5.9 (6.0)8.0 159.4 160.1 17.7 (20.3)1.9 159.4 
Mutual fund advisory (7)78.9 2.9 (3.3)4.2 82.7 83.7 8.3 (10.5)1.2 82.7 
Total Wells Fargo Advisors$569.4 27.5 (28.5)33.3 601.7 $589.5 81.2 (82.6)13.6 601.7 
The Private Bank (8)173.2 7.0 (10.8)7.7 177.1 188.0 22.7 (33.6)— 177.1 
Total WIM advisory assets$742.6 34.5 (39.3)41.0 778.8 $777.5 103.9 (116.2)13.6 778.8 
(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 Wells Fargo Asset Management or third-party asset managers. Fees are earned based on a percentage of certain client assets.
(7)Program with portfolios constructed of load-waived, no-load and institutional share class mutual funds. Fees are earned based on a percentage of certain client assets.
(8)Discretionary and non-discretionary portfolios held in personal trusts, investment agency, or custody accounts with fees earned based on a percentage of client assets.
24
Wells Fargo & Company


Corporate includes corporate treasury and enterprise functions, net of allocations (including funds transfer pricing, capital, liquidity and certain expenses), in support of the reportable operating segments, as well as our investment portfolio and affiliated venture capital and private equity businesses. In addition, Corporate includes all restructuring charges related to our efficiency initiatives. See Note 19 (Restructuring Charges) to
Financial Statements in this Report for additional information on restructuring charges. Corporate also includes certain lines of business that management has determined are no longer consistent with the long-term strategic goals of the Company, as well as results for previously divested businesses. Table 5i,
Table 5j, and Table 5k provide additional information for Corporate.
Table 5i: Corporate – Income Statement and Selected Metrics
Quarter ended Sep 30,Nine months ended Sep 30,
($ in millions, unless otherwise noted)20212020$ Change% Change20212020$ Change% Change
Income Statement
Net interest income$(427)(268)(159)(59)%$(1,121)671 (1,792)NM
Noninterest income1,752 1,921 (169)(9)6,496 3,224 3,272 101 %
Total revenue1,325 1,653 (328)(20)5,375 3,895 1,480 38 
Net charge-offs(10)28 (38)NM59 169 (110)(65)
Change in the allowance for credit losses1 (107)108 101 (5)140 (145)NM
Provision for credit losses(9)(79)70 89 54 309 (255)(83)
Noninterest expense1,140 1,528 (388)(25)3,371 3,470 (99)(3)
Income before income tax expense (benefit)194 204 (10)(5)1,950 116 1,834 NM
Income tax expense (benefit)110 (632)742 117 58 (611)669 109 
Less: Net income from noncontrolling interests (1)281 184 97 53 1,038 81 957 NM
Net income (loss)$(197)652 (849)NM$854 646 208 32 
Selected Metrics
Headcount (#) (period-end) (2)86,328 84,314 86,328 84,314 
Wells Fargo Asset Management assets under management ($ in billions)$588 607 (19)(3)$588 607 (19)(3)
NM – Not meaningful
(1)Reflects results attributable to noncontrolling interests predominantly associated with the Company’s consolidated venture capital investments.
(2)Beginning in first quarter 2021, employees who were notified of displacement remained as headcount in their respective operating segment rather than included in Corporate.
Third quarter 2021 vs. third quarter 2020
Revenue decreased driven by:
lower equity method investment income compared with a third quarter 2020 that included $228 million of equity method investment income related to a change in the accounting measurement model for certain nonmarketable equity securities from our affiliated venture capital business;
lower net interest income driven by lower loan balances; and
lower gains on debt securities in our investment portfolio;
partially offset by:
higher realized and unrealized gains on securities in our affiliated venture capital and private equity businesses.

Noninterest expense decreased due to:
lower restructuring charges;
partially offset by:
higher incentive compensation expense; and
higher operating losses driven by a $250 million operating loss associated with the September 2021 OCC enforcement action.

First nine months of 2021 vs. first nine months of 2020
Revenue increased driven by:
higher unrealized gains on nonmarketable equity securities in our affiliated venture capital and private equity businesses, higher realized gains on the sales of equity securities, as well as impairment of equity securities in first quarter 2020 due to the market impact of the COVID-19 pandemic;
higher gains on deferred compensation plan investments (largely offset by personnel expense); and
a gain on the sale of our student loan portfolio and a modest gain on the sale of our Canadian equipment finance business;
partially offset by:
lower net interest income reflecting the lower interest rate environment, unfavorable hedge ineffectiveness accounting results, and lower loan balances;
higher valuation losses related to the retained litigation risk, including the timing and amount of final settlement, associated with shares of Visa Class B common stock that we previously sold; and
lower gains on debt securities in our investment portfolio.

Provision for credit losses decreased driven by an improving economic environment and lower provision associated with the sale of our student loan portfolio.

Noninterest expense decreased due to:
lower restructuring charges;
partially offset by:
higher incentive compensation expense, including the impact of higher market valuations on stock-based compensation;
higher deferred compensation expense; and
a write-down of goodwill in 2021 related to the sale of our student loan portfolio.

Corporate includes our rail car leasing business, which had long-lived operating lease assets (as a lessor) of $5.4 billion, which was net of $1.9 billion of accumulated depreciation, as of
Wells Fargo & Company
25


Earnings Performance (continued)
September 30, 2021. The average age of our rail cars is 21 years and the rail cars are typically leased under short-term leases of 3 to 5 years. Our three largest concentrations, which represented 55% of our rail car fleet as of September 30, 2021, were rail cars used for the transportation of agricultural grain, coal, and cement/sand products. Impairment may result in the future based on changing economic and market conditions affecting the long-term demand and utility of specific types of rail cars. Our assumptions for impairment are sensitive to estimated utilization and rental rates, as well as the estimated economic life of the leased asset. For additional information on the accounting
for impairment of operating lease assets, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2020 Form 10-K.
In addition, Corporate includes assets under management (AUM) and assets under administration (AUA) for Institutional Retirement and Trust (IRT) client assets of $20 billion and $565 billion, respectively, at September 30, 2021, which we continue to administer at the direction of the buyer pursuant to a transition services agreement. The transition services agreement terminates in February 2022.
Table 5j: Corporate – Balance Sheet
Quarter ended Sep 30,Nine months ended Sep 30,
(in millions)20212020$ Change% Change20212020$ Change% Change
Selected Balance Sheet Data (average)
Cash, cash equivalents, and restricted cash$250,414 215,342 35,072 16 %$242,853 170,682 72,171 42 %
Available-for-sale debt securities172,035 211,180 (39,145)(19)185,847 226,356 (40,509)(18)
Held-to-maturity debt securities260,167 175,748 84,419 48 238,591 166,588 72,003 43 
Equity securities13,254 12,034 1,220 10 11,894 13,198 (1,304)(10)
Total loans9,765 21,178 (11,413)(54)10,021 21,404 (11,383)(53)
Total assets762,067 702,662 59,405 748,236 662,709 85,527 13 
Total deposits37,302 67,976 (30,674)(45)41,796 85,466 (43,670)(51)
Selected Balance Sheet Data (period-end)
Cash, cash equivalents, and restricted cash$241,423 220,026 21,397 10 $241,423 220,026 21,397 10 
Available-for-sale debt securities173,237 208,543 (35,306)(17)173,237 208,543 (35,306)(17)
Held-to-maturity debt securities261,583 181,744 79,839 44 261,583 181,744 79,839 44 
Equity securities14,022 11,010 3,012 27 14,022 11,010 3,012 27 
Total loans9,589 21,935 (12,346)(56)9,589 21,935 (12,346)(56)
Total assets751,155 696,424 54,731 751,155 696,424 54,731 
Total deposits37,507 62,178 (24,671)(40)37,507 62,178 (24,671)(40)
Third quarter 2021 vs. third quarter 2020
Total assets (average) increased due to:
an increase in cash, cash equivalents, and restricted cash managed by corporate treasury as a result of an increase in deposits from the reportable operating segments;
an increase in held-to-maturity debt securities related to portfolio rebalancing to manage liquidity and interest rate risk; and
an increase in equity securities related to our affiliated venture capital business;
partially offset by:
a decline in available-for-sale debt securities related to portfolio rebalancing to manage liquidity and interest rate risk; and
a decline in loans due to the sale of our student loan portfolio.

Total deposits (average) decreased reflecting actions taken to manage under the asset cap.
First nine months of 2021 vs. first nine months of 2020
Total assets (average and period-end) increased due to:
an increase in cash, cash equivalents, and restricted cash managed by corporate treasury as a result of an increase in deposits from the reportable operating segments;
an increase in held-to-maturity debt securities related to portfolio rebalancing to manage liquidity and interest rate risk; and
in increase in period-end equity securities related to our affiliated venture capital business;
partially offset by:
a decline in available-for-sale debt securities related to portfolio rebalancing to manage liquidity and interest rate risk;
a decline in average equity securities due to the transition from equity securities to derivative instruments for economic hedges of the deferred compensation plan liabilities in second quarter 2020 and a reduction in Federal Home Loan Bank stock, partially offset by higher balances in our affiliated venture capital business; and
a decline in loans due to the sale of our student loan portfolio.

Total deposits (average and period-end) decreased reflecting actions taken to manage under the asset cap.

26
Wells Fargo & Company


Wells Fargo Asset Management (WFAM) Assets Under Management We earn investment advisory and other asset-based fees from managing and administering assets through WFAM, which offers Wells Fargo proprietary mutual funds and manages institutional separate accounts. Generally, we earn fees from AUM where we have discretionary management authority over the investments and generate fees as a percentage of the market value of the AUM. WFAM assets under management consist of equity, alternative, balanced, fixed income, money
market, and stable value, and include client assets that are managed or sub-advised on behalf of other Wells Fargo lines of business. Table 5k presents WFAM AUM activity for the third quarter and first nine months of 2021 and 2020. Management believes that AUM is a useful metric because it allows management, investors, and others to assess how changes in asset amounts may impact the generation of certain asset-based fees.

Table 5k: WFAM Assets Under Management
Quarter endedNine months ended
(in billions)Balance, beginning of periodInflows (1)Outflows (2)Market impact (3)Balance, end
of period
Balance, beginning of periodInflows (1)Outflows (2)Market impact (3)Balance, end
of period
September 30, 2021
Money market funds (4)$199.7  (6.0) 193.7 $197.4  (3.7) 193.7 
Other assets managed403.8 18.3 (26.1)(2.2)393.8 405.6 64.2 (84.9)8.9 393.8 
Total WFAM assets under management$603.5 18.3 (32.1)(2.2)587.5 $603.0 64.2 (88.6)8.9 587.5 
September 30, 2020
Money market funds (4)$201.9 19.2 — — 221.1 $130.6 90.5 — — 221.1 
Other assets managed376.4 23.2 (24.1)10.3 385.8 378.2 76.3 (79.2)10.5 385.8 
Total WFAM assets under management$578.3 42.4 (24.1)10.3 606.9 $508.8 166.8 (79.2)10.5 606.9 
(1)Inflows include new managed account assets, contributions, dividends and interest.
(2)Outflows include closed managed account assets, withdrawals and client management fees.
(3)Market impact reflects gains and losses on portfolio investments.
(4)Money Market funds activity is presented on a net inflow or net outflow basis, because the gross flows are not meaningful nor used by management as an indicator of performance.
Wells Fargo & Company
27


Balance Sheet Analysis
At September 30, 2021, our assets totaled $1.95 trillion, up $2.0 billion from December 31, 2020.
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: Available-for-Sale and Held-to-Maturity Debt Securities
September 30, 2021December 31, 2020
($ in millions)Amortized
cost, net (1)
Net
 unrealized gains
Fair valueWeighted
average expected maturity (yrs)
Amortized
cost, net (1)
Net
 unrealized gains
Fair valueWeighted average expected maturity (yrs)
Available-for-sale (2)182,699 2,858 185,557 5.1 215,533 4,859 220,392 4.5 
Held-to-maturity (3)262,493 1,529 264,022 6.4 205,720 6,587 212,307 4.5 
Total
$445,192 4,387 449,579 n/a 421,253 11,446 432,699 n/a
(1)Represents amortized cost of the securities, net of the allowance for credit losses of $21 million and $28 million related to available-for-sale debt securities and $75 million and $41 million related to held-to-maturity debt securities at September 30, 2021, and December 31, 2020.
(2)Available-for-sale debt securities are carried on the consolidated balance sheet at fair value.
(3)Held-to-maturity debt securities are carried on the consolidated balance sheet at amortized cost, net of the allowance for credit losses.
Table 6 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 2020 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, 2020. Purchases of AFS debt securities were partially offset by runoff and sales. Purchases of HTM debt securities, including securitizations of LHFS, were partially offset by runoff. In addition, we transferred $41.3 billion of AFS debt securities to HTM debt securities in the first nine months of 2021 due to actions taken to reposition the overall portfolio for capital management purposes.
The total net unrealized gains on AFS and HTM debt securities decreased from December 31, 2020, driven by higher interest rates.
At September 30, 2021, 96% 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.
Loan Portfolios
Table 7 provides a summary of total outstanding loans by portfolio segment. Commercial loans increased compared with December 31, 2020, predominantly due to an increase in the commercial and industrial loan portfolio, driven by higher loan demand resulting in increased originations and loan draws, partially offset by paydowns and PPP loan forgiveness. Consumer loans decreased from December 31, 2020, predominantly driven by a decrease in the residential mortgage – first lien portfolio due to loan paydowns as a result of the low interest rate environment and the transfer of $13.5 billion of first lien mortgage loans to loans held for sale (LHFS) substantially all of which related to the sales of loans purchased from GNMA loan securitization pools in prior periods, partially offset by originations of $51.3 billion.
Table 7: Loan Portfolios
(in millions)September 30, 2021December 31, 2020
Commercial$484,937 478,417 
Consumer377,890 409,220 
Total loans$862,827 887,637 
Change from prior year-end$(24,810)(74,628)
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 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.
See the “Balance Sheet Analysis – Loan Portfolios” section in our 2020 Form 10-K for additional information regarding contractual loan maturities and the distribution of loans to changes in interest rates.
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Deposits
Deposits increased from December 31, 2020, reflecting:
higher levels of liquidity and savings for consumer customers reflecting government stimulus programs and payment deferral programs, as well as continued economic uncertainty associated with the COVID-19 pandemic;
partially offset by:
actions taken to manage under the asset cap resulting in declines in time deposits, such as brokered certificates of
deposit (CDs), and interest-bearing deposits in non-U.S. offices.

Table 8 provides additional information regarding deposits. Information regarding the impact of deposits on net interest income and a comparison of average deposit balances is provided in the “Earnings Performance – Net Interest Income” section and Table 1 earlier in this Report.
Table 8: Deposits
($ in millions)Sep 30,
2021
% of
total
deposits
Dec 31,
2020
% of
total 
deposits 
% Change
Noninterest-bearing demand deposits$529,051 36 %$467,068 33 %13 
Interest-bearing demand deposits454,170 31 447,446 32 
Savings deposits426,535 29 404,935 29 
Time deposits32,291 2 49,775 (35)
Interest-bearing deposits in non-U.S. offices28,332 2 35,157 (19)
Total deposits$1,470,379 100 %$1,404,381 100 %
Off-Balance Sheet Arrangements
In the ordinary course of business, we engage in financial transactions that are not recorded on the consolidated balance sheet, or may be recorded on the consolidated balance sheet in amounts that are different from the full contract or notional amount of the transaction. Our off-balance sheet arrangements include commitments to lend and purchase debt and equity securities, transactions with unconsolidated entities, guarantees, derivatives, and other commitments. These transactions are designed to (1) meet the financial needs of customers, (2) manage our credit, market or liquidity risks, and/or (3) diversify our funding sources.

Commitments to Lend
We enter into commitments to lend to customers, which are usually at a stated interest rate, if funded, and for specific purposes and time periods. When we enter into commitments, we are exposed to credit risk. The maximum credit risk for these commitments will generally be lower than the contractual amount because a significant portion of these commitments are not funded. For additional information, see Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Transactions with Unconsolidated Entities
In the normal course of business, we enter into various types of on- and off-balance sheet transactions with special purpose entities (SPEs), which are corporations, trusts, limited liability companies or partnerships that are established for a limited purpose. Generally, SPEs are formed in connection with securitization transactions and are considered variable interest entities (VIEs). For additional information, see Note 8 (Securitizations and Variable Interest Entities) to Financial Statements in this Report.
Guarantees and Other Arrangements
Guarantees are contracts that contingently require us to make payments to a guaranteed party based on an event or a change in an underlying asset, liability, rate or index. Guarantees are generally in the form of standby and direct pay letters of credit, written options, recourse obligations, exchange and clearing house guarantees, indemnifications, and other types of similar arrangements. For additional information, see Note 11 (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 11 (Guarantees and Other Commitments) to Financial Statements in this Report.

Derivatives
We use derivatives to manage exposure to market risk, including interest rate risk, credit risk and foreign currency risk, and to assist customers with their risk management objectives. Derivatives are recorded on the consolidated balance sheet at fair value, and volume can be measured in terms of the notional amount, which is generally not exchanged, but is used only as the basis on which interest and other payments are determined. The notional amount is not recorded on the consolidated balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the instruments. For additional information, see Note 14 (Derivatives) to Financial Statements in this Report.
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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. For additional information about how we manage risk, see the “Risk Management” section in our 2020 Form 10-K. The discussion that follows supplements our discussion of the management of certain risks contained in the “Risk Management” section in our 2020 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 our assets and exposures such as debt security holdings, certain derivatives, and loans.
The Board’s Risk Committee has primary oversight responsibility for credit risk. A Credit Subcommittee of the Risk Committee assists the Risk Committee in providing oversight of credit risk. At the management level, Credit Risk, which is part of IRM, has oversight responsibility for credit risk. Credit Risk reports to the CRO and supports periodic reports related to credit risk provided to the Board’s Risk Committee or its Credit Subcommittee.

Loan Portfolio
Our loan portfolios represent the largest component of assets on our consolidated balance sheet for which we have credit risk. Table 9 presents our total loans outstanding by portfolio segment and class of financing receivable.

Table 9: Total Loans Outstanding by Portfolio Segment and Class of Financing Receivable
(in millions)Sep 30, 2021Dec 31, 2020
Commercial:
Commercial and industrial
$326,425 318,805 
Real estate mortgage
121,985 121,720 
Real estate construction
21,129 21,805 
Lease financing
15,398 16,087 
Total commercial
484,937 478,417 
Consumer:
Residential mortgage – first lien242,935 276,674 
Residential mortgage – junior lien18,026 23,286 
Credit card
36,061 36,664 
Auto53,827 48,187 
Other consumer27,041 24,409 
Total consumer
377,890 409,220 
Total loans
$862,827 887,637 
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.

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 quality in third quarter 2021 reflected continued improvement in the economic environment. In particular:
Nonaccrual loans were $7.0 billion at September 30, 2021, down from $8.7 billion at December 31, 2020. Commercial nonaccrual loans decreased to $3.0 billion at September 30, 2021, compared with $4.8 billion at December 31, 2020, and consumer nonaccrual loans increased slightly to $4.0 billion at September 30, 2021, compared with $3.9 billion at December 31, 2020. Nonaccrual loans represented 0.82% of total loans at September 30, 2021, compared with 0.98% at December 31, 2020.
Net loan charge-offs as a percentage of our average commercial and consumer loan portfolios were 0.03% and 0.23% in the third quarter and 0.07% and 0.31% in the first nine months of 2021, respectively, compared with 0.29% and 0.30% in the third quarter and 0.33% and 0.44% in the first nine months of 2020.
Loans that are not government insured/guaranteed and 90 days or more past due and still accruing were $121 million and $394 million in our commercial and consumer portfolios, respectively, at September 30, 2021, compared with $78 million and $612 million at December 31, 2020.
Our provision for credit losses for loans was $(1.4) billion and $(3.7) billion in the third quarter and first nine months of 2021, respectively, compared with $751 million and $14.1 billion for the same periods a year ago.
The ACL for loans decreased to $14.7 billion, or 1.70% of total loans, at September 30, 2021, compared with $19.7 billion, or 2.22%, at December 31, 2020.

Additional information on our loan portfolios and our credit quality trends follows.
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COVID-Related Lending Accommodations During 2020, we provided accommodations to customers in response to the COVID-19 pandemic, including payment deferrals, and other expanded assistance for mortgage, credit card, auto, small business, personal and commercial lending customers. With the exception of residential mortgage-related accommodation programs, the COVID-related lending accommodations instituted during 2020 were no longer offered as of December 31, 2020. Residential mortgage accommodation programs, which continued during the first nine months of 2021, offered payment deferrals for up to a total of 18 months.
Table 10 summarizes the unpaid principal balance (UPB) of consumer loans that received accommodations under loan modification programs established to assist customers with the economic impact of the COVID-19 pandemic (COVID-related modifications) and that remained in a deferral period as of September 30, 2021.
Based on guidance in the CARES Act and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised) issued by federal banking regulators in April 2020 (the Interagency Statement), both of which we elected to apply, loan modifications related to COVID-19 and that meet certain other criteria are exempt from troubled debt restructuring (TDR) classification. Additionally, our election to apply the TDR relief provided by the CARES Act and the Interagency Statement impacts our regulatory capital ratios as these loan modifications
related to COVID-19 are not adjusted to a higher risk-weighting normally required with TDR classification. At September 30, 2021, substantially all residential mortgage loans that were in a deferral period, excluding those that were government insured/guaranteed, met the criteria for TDR relief and were therefore not classified as TDRs. For additional information regarding the TDR relief provided by the CARES Act and the clarifying TDR accounting guidance from the Interagency Statement, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2020 Form 10-K.
Customer payment deferral activities instituted in response to the COVID-19 pandemic could continue to delay the recognition of charge-offs, delinquencies, and nonaccrual status for those customers who would have otherwise moved into past due or nonaccrual status. Customer loans that are not further modified upon exit from the deferral period may be placed on nonaccrual status or charged-off in accordance with our policies if customers are unable to resume making payments in accordance with the contractual terms of their agreement. As of September 30, 2021, substantially all of our consumer loans were current after exiting the deferral period. For additional information about our COVID-related modifications, see the “Risk Management – Credit Risk Management – COVID-Related Lending Accommodations” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2020 Form 10-K.
Table 10: Consumer Loan Modifications Related to COVID-19
($ in millions)
Unpaid principal
balance of modified
loans still in deferral period at Sep 30, 2021
% of loan class (1)
% current at
Sep 30, 2021 after exit from deferral period (2)
Consumer:
Residential mortgage – first lien (3)$5,042 %93 
Residential mortgage – junior lien (3)789 88 
All other consumer (4)65 *92 
Subtotal5,896 
Residential mortgage – first lien (government insured/guaranteed) (5)7,265 
Total consumer$13,161 
*Less than 1%.
(1)Based on total loans outstanding at September 30, 2021.
(2)Represents the UPB of loans that exited the deferral period and had a balance that was less than 30 days past due as of September 30, 2021.
(3)For residential mortgage loans still in active COVID-related accommodation programs as of September 30, 2021, 97% of first lien and 89% of junior lien mortgage loans had a loan-to-value ratio that was 80% or lower.
(4)Includes credit card, auto, and other consumer loans (including personal lines/loans).
(5)Represents residential mortgage – first lien loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) that were primarily repurchased from GNMA loan securitization pools. For additional information on GNMA loan securitization pools, see the “Risk Management – Credit Risk Management – Risks Relating to Servicing Activities” section in this Report. FHA/VA loans are entitled to payment deferrals of scheduled principal and interest up to a total of 18 months.
Significant Loan Portfolio Reviews  Measuring and monitoring our credit risk is an ongoing process that tracks delinquencies, collateral values, Fair Isaac Corporation (FICO) scores, economic trends by geographic areas, loan-level risk grading for certain portfolios (typically commercial) and other indications of credit risk. Our credit risk monitoring process is designed to enable early identification of developing risk and to support our determination of an appropriate allowance for credit losses. The following discussion provides additional characteristics and analysis of our significant portfolios. See Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report for more analysis and credit metric information for each of the following portfolios.

COMMERCIAL AND INDUSTRIAL LOANS AND LEASE FINANCING  For purposes of portfolio risk management, we aggregate commercial and industrial loans and lease financing according to market segmentation and standard industry codes. We
generally subject commercial and industrial loans and lease financing to individual risk assessment using our internal borrower and collateral quality ratings. Our ratings are aligned to regulatory definitions of pass and criticized categories with criticized segmented among special mention, substandard, doubtful and loss categories.
We had $13.5 billion of the commercial and industrial loans and lease financing portfolio internally classified as criticized in accordance with regulatory guidance at September 30, 2021, compared with $19.3 billion at December 31, 2020. The change was driven by decreases in the oil, gas and pipelines, retail, transportation services, and entertainment and recreation industries, as these industries continue to recover from the effects of the COVID-19 pandemic.
The 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.
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Risk Management – Credit Risk Management (continued)

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 at September 30, 2021, compared with December 31, 2020, driven by higher loan demand resulting
in increased originations and loan draws, partially offset by paydowns and PPP loan forgiveness. Table 11 provides our commercial and industrial loans and lease financing by industry. The industry categories are based on the North American Industry Classification System.
Table 11: Commercial and Industrial Loans and Lease Financing by Industry
September 30, 2021December 31, 2020
($ in millions)Nonaccrual loans Total portfolio% of total loans Total commitments (1)Nonaccrual loans Total portfolio% of total loans Total commitments (1)
Financials except banks$140 134,060 16 %$227,615 $160 117,726 13 %$206,999 
Technology, telecom and media75 21,226 2 60,607 144 23,061 56,500 
Real estate and construction87 20,900 2 51,882 133 23,113 51,526 
Equipment, machinery and parts manufacturing29 17,503 2 43,111 81 18,158 41,332 
Retail36 17,181 2 40,071 94 17,393 41,669 
Materials and commodities40 13,225 2 35,454 39 12,071 33,879 
Food and beverage manufacturing7 12,637 1 30,898 17 12,401 28,908 
Health care and pharmaceuticals28 12,821 1 29,960 145 15,322 32,154 
Oil, gas and pipelines280 8,725 1 28,988 953 10,471 30,055 
Auto related56 9,290 1 24,881 79 11,817 25,034 
Commercial services77 9,537 1 24,328 107 10,284 24,442 
Utilities67 7,025 *21,972 5,031 *18,564 
Diversified or miscellaneous4 6,792 *18,608 5,437 *14,717 
Insurance and fiduciaries1 4,071 *18,105 3,297 *14,334 
Entertainment and recreation26 8,451 *16,764 263 9,884 17,551 
Transportation services431 8,319 *15,951 573 9,236 15,531 
Banks 15,444 215,815 — 12,789 13,842 
Agribusiness51 5,333 *11,082 81 6,314 *11,642 
Government and education4 5,303 *10,941 5,464 *11,065 
Other (2)23 3,980 *19,050 68 5,623 *23,315 
Total
$1,462 341,823 40 %$746,083 $2,957 334,892 33 %$713,059 
*Less than 1%.
(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit.
(2)No other single industry had total loans in excess of $3.3 billion and $3.8 billion at September 30, 2021, and December 31, 2020, respectively.
Loans to financials except banks, our largest industry concentration, is predominantly comprised of loans to investment firms, financial vehicles, and nonbank creditors. We had $94.7 billion and $80.0 billion of loans originated by our Asset Backed Finance (ABF) and Financial Institution Group (FIG) lines of business at September 30, 2021, and December 31, 2020, respectively. These loans include: (i) loans to customers related to their subscription or capital calls, (ii) loans to nonbank lenders collateralized by commercial loans, and (iii) loans to originators or servicers of financial assets collateralized by residential real estate or other consumer loans such as credit cards, auto loans and leases, student loans and other financial assets eligible for the securitization market. These ABF and FIG loans are limited to a percentage of the value of the underlying financial assets considering underlying credit risk, asset duration, and ongoing performance. These ABF and FIG loans may also have other features to manage credit risk such as cross-collateralization, credit enhancements, and contractual re-margining of collateral supporting the loans. In addition, loans to financials except banks included collateralized loan obligations (CLOs) in loan form, all of which were rated AA or above, of $7.7 billion and $7.9 billion at September 30, 2021, and December 31, 2020, respectively.
Oil, gas and pipelines loans included $6.1 billion and $7.5 billion of senior secured loans outstanding at September 30, 2021, and December 31, 2020, respectively. Oil, gas and
pipelines nonaccrual loans decreased at September 30, 2021, compared with December 31, 2020, driven by loan paydowns.
We continue to perform escalated credit monitoring for certain industries that we consider to be directly and most adversely affected by the COVID-19 pandemic.
Our commercial and industrial loans and lease financing portfolio also includes non-U.S. loans of $74.7 billion and $63.8 billion at September 30, 2021, and December 31, 2020, respectively. Significant industry concentrations of non-U.S. loans at September 30, 2021, and December 31, 2020, respectively, included:
$45.6 billion and $36.2 billion in the financials except banks category;
$15.2 billion and $12.8 billion in the banks category; and
$1.5 billion and $1.6 billion in the oil, gas and pipelines category.
COMMERCIAL REAL ESTATE (CRE)  We generally subject CRE loans to individual risk assessment using our internal borrower and collateral quality ratings. Our ratings are aligned to regulatory definitions of pass and criticized categories with criticized segmented among special mention, substandard, doubtful and loss categories. We had $15.2 billion of CRE mortgage loans classified as criticized at September 30, 2021, compared with $12.0 billion at December 31, 2020, and $2.3 billion of CRE construction loans classified as criticized at September 30, 2021,
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compared with $1.6 billion at December 31, 2020. The increase in criticized CRE mortgage and construction loans was driven by the hotel/motel, apartment, institutional, and office property types and reflected the economic impact of the COVID-19 pandemic. Due to uncertainty in the recovery from the economic impacts of the COVID-19 pandemic, the credit quality of certain property types within our CRE loan portfolio, such as retail, hotel/motel, office buildings, and shopping centers, could continue to be adversely affected.
The total CRE loan portfolio decreased $411 million from December 31, 2020, driven by a decrease in CRE construction
loans predominantly related to hotel/motel and apartments property types, partially offset by an increase in CRE mortgage loans. The CRE loan portfolio included $8.5 billion of non-U.S. CRE loans at September 30, 2021. The portfolio is diversified both geographically and by property type. The largest geographic concentrations of CRE loans are in California, New York, Florida and Texas, which combined represented 49% of the total CRE portfolio. The largest property type concentrations are office buildings at 25% and apartments at 20% of the portfolio.
Table 12 summarizes CRE loans by state and property type with the related nonaccrual totals at September 30, 2021.

Table 12: CRE Loans by State and Property Type
September 30, 2021
Real estate mortgage Real estate construction Total % of
total
 loans
($ in millions)Nonaccrual loansTotal portfolioNonaccrual loansTotal portfolioNonaccrual loansTotal portfolio
By state:
California$239 30,706 4,158 242 34,864 %
New York156 12,903 2,106 158 15,009 
Florida117 8,790 1,582 118 10,372 
Texas305 8,628 — 1,080 305 9,708 
Washington88 3,776 1,059 93 4,835 *
Arizona52 4,259 — 320 52 4,579 *
Georgia15 4,184 — 333 15 4,517 *
North Carolina10 3,386 — 869 10 4,255 *
New Jersey47 2,643 — 1,110 47 3,753 *
Illinois16 3,155 — 460 16 3,615 *
Other (1)493 39,555 8,052 502 47,607 
Total
$1,538 121,985 20 21,129 1,558 143,114 17 %
By property:
Office buildings$166 32,987 3,219 167 36,206 %
Apartments14 21,095 — 7,853 14 28,948 
Industrial/warehouse96 16,005 1,753 97 17,758 
Retail (excluding shopping center)138 13,026 90 141 13,116 
Hotel/motel297 10,559 — 1,554 297 12,113 
Shopping center593 9,810 — 902 593 10,712 
Institutional63 4,558 2,626 64 7,184 *
Mixed use properties94 5,440 — 793 94 6,233 *
Collateral pool— 2,904 — 191 — 3,095 *
1-4 family structure— — 1,328 — 1,336 *
Other77 5,593 14 820 91 6,413 *
Total
$1,538 121,985 20 21,129 1,558 143,114 17 %
*    Less than 1%.
(1)Includes 40 states; no state in Other had loans in excess of $3.7 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 September 30, 2021, non-U.S. loans totaled $83.2 billion, representing approximately 10% of our total consolidated loans outstanding, compared with $72.9 billion, or approximately 8% of our total consolidated loans outstanding, at December 31, 2020. Non-U.S. loans were approximately 4% of our total consolidated assets at both September 30, 2021, and December 31, 2020.

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 borrower’s ability to repay, which gives consideration for allowable transfers of risk, such as guarantees and collateral, and may be different from the reporting based on the borrower’s primary address.
Our largest single country exposure outside the U.S. at September 30, 2021, was the United Kingdom, which totaled $36.4 billion, or approximately 2% of our total assets, and included $9.7 billion of sovereign claims. Our United Kingdom sovereign claims arise from deposits we have placed with the Bank of England pursuant to regulatory requirements in support of our London branch.
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Risk Management – Credit Risk Management (continued)

Table 13 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 13:
Lending and deposits exposure includes outstanding loans, unfunded credit commitments, and deposits with non-U.S. banks. These balances are presented prior to the deduction
of allowance for credit losses or collateral received under the terms of the credit agreements, if any.
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 13: Select Country Exposures
September 30, 2021
Lending and depositsSecurities Derivatives and other Total exposure
($ in millions)SovereignNon-sovereignSovereignNon-sovereignSovereignNon-sovereignSovereignNon-
sovereign (1)
Total
Top 20 country exposures:
United Kingdom$9,704 23,643 — 867 — 2,219 9,704 26,729 36,433 
Canada17,052 (8)480 715 (2)18,247 18,245 
Cayman Islands— 6,881 — — — 103 — 6,984 6,984 
Japan19 927 5,761 81 — 10 5,780 1,018 6,798 
Ireland305 5,165 — 155 — 63 305 5,383 5,688 
Luxembourg— 4,747 — 131 — 74 — 4,952 4,952 
Guernsey— 4,145 — — — 37 — 4,182 4,182 
China— 3,296 (8)443 28 (3)3,767 3,764 
Germany— 3,093 424 — 222 3,739 3,743 
Bermuda— 3,438 — 64 (1)99 (1)3,601 3,600 
South Korea— 2,105 — 252 14 2,371 2,373 
Netherlands— 1,996 54 219 — 96 54 2,311 2,365 
France128 1,876 — 256 80 10 208 2,142 2,350 
Australia— 1,178 — 302 — — 1,482 1,482 
Switzerland— 1,191 — 12 209 1,412 1,413 
Chile— 1,200 — 164 — — 1,365 1,365 
India— 1,258 — 105 — — 1,364 1,364 
Brazil— 1,313 — — 1,314 1,322 
Singapore— 958 — 54 — 99 — 1,111 1,111 
Qatar— 904 — — — — — 904 904 
Total top 20 country exposures$10,158 86,366 5,803 4,009 99 4,003 16,060 94,378 110,438 
(1)Total non-sovereign exposure comprised $51.4 billion exposure to financial institutions and $43.0 billion to non-financial corporations at September 30, 2021.
RESIDENTIAL MORTGAGE LOANS Our residential mortgage loan portfolio is comprised of 1-4 family first and junior lien mortgage loans. Residential mortgage – first lien loans comprised 93% of the total residential mortgage loan portfolio at September 30, 2021, compared with 92% at December 31, 2020.
The residential mortgage loan portfolio includes some loans with adjustable-rate features and some with an interest-only feature as part of the loan terms. Interest-only loans were approximately 3% of total loans at both September 30, 2021, and December 31, 2020. We believe our origination process appropriately addresses our adjustable-rate mortgage (ARM) reset risk across our residential mortgage loans and our ACL for loans considers this risk. We do not offer option ARM products, nor do we offer variable-rate mortgage products with fixed payment amounts, commonly referred to within the financial services industry as negative amortizing mortgage loans.
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. It is not unusual for these lines and loans to have draw periods, interest-only payments, balloon payments, adjustable rates and similar features. Junior lien loan products are primarily amortizing payment loans with fixed interest rates and repayment periods between five to 30 years. We continuously monitor the credit performance of our residential mortgage – junior lien portfolio for trends and factors that influence the frequency and severity of losses, such as junior lien performance when the first lien loan is delinquent.
Our residential mortgage lines of credit (both first and junior lien) generally have draw periods of 10, 15 or 20 years with variable interest rate and payment options available during the draw period of (1) interest-only or (2) 1.5% of outstanding principal balance plus accrued interest. As of September 30, 2021, lines of credit in a draw period primarily used the interest-only option. The lines that enter their amortization period may experience higher delinquencies and higher loss rates than the ones in their draw or term period. We have considered this increased risk in our ACL estimate.
During the draw period, the borrower has the option of converting all or a portion of the line from a variable interest rate to a fixed rate with terms including interest-only payments for a fixed period between three to seven years or a fully amortizing payment with a fixed period between five to 30 years. At the end of the draw period, a line of credit generally converts to an amortizing payment schedule with repayment terms of up to 30 years based on the balance at time of conversion. Certain lines and loans have been structured with a balloon payment, which requires full repayment of the outstanding balance at the end of the term period. The conversion of lines or loans to fully amortizing or balloon payoff may result in a significant payment increase, which can affect some borrowers’ ability to repay the outstanding balance.
In anticipation of our residential mortgage line of credit borrowers reaching the end of their contractual commitment, we have created a program to inform, educate and help these borrowers transition from interest-only to fully-amortizing payments or full repayment. We monitor the performance of the
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borrowers moving through the program in an effort to refine our ongoing program strategy.
We monitor changes in real estate values and underlying economic or market conditions for all geographic areas of our residential mortgage portfolio as part of our credit risk management process. Our underwriting and 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. Additional information about appraisals, AVMs, and our policy for their use can be found in Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report and the “Risk Management – Credit Risk Management – Residential Mortgage Loans” section in our 2020 Form 10-K.
Part of our credit monitoring includes tracking delinquency, current FICO scores and loan/combined loan to collateral values (LTV/CLTV) on the entire residential mortgage loan portfolio. CLTV represents the ratio of the total loan balance of first and junior lien mortgages (including unused line amounts for credit line products) to property collateral value. Excluding government insured/guaranteed loans, these credit risk indicators on the residential mortgage portfolio were:
Loans 30 days or more delinquent at September 30, 2021, totaled $3.5 billion, or 1% of residential mortgage loans, compared with $4.7 billion, or 2%, at December 31, 2020;
Lines of credit in their draw period that were 30 days or more past due were $329 million, or 2% of such lines, at September 30, 2021, and $381 million, or 2%, at December 31, 2020, compared with amortizing lines of credit that were 30 days or more past due of $337 million, or 6% of such lines, at September 30, 2021, and $378 million, or 5%, at December 31, 2020;
Loans with FICO scores lower than 640 totaled $4.1 billion, or 2% of residential mortgage loans, at September 30, 2021, compared with $5.6 billion, or 2%, at December 31, 2020; and
Loans with a LTV/CLTV greater than 100% totaled $583 million at September 30, 2021, or less than 1% of residential mortgage loans, compared with $1.6 billion, or 1%, at December 31, 2020.
With respect to residential mortgage – junior lien loans that had a CLTV greater than 100%:
Such loans totaled 2% of the junior lien portfolio at September 30, 2021, compared with 3% at December 31, 2020; and
3% were 30 days or more delinquent at both September 30, 2021, and December 31, 2020.
Customer payment deferral activities instituted in response to the COVID-19 pandemic could continue to delay the recognition of delinquencies. For additional information regarding credit quality indicators, see Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.
We continue to modify residential mortgage loans to assist homeowners and other borrowers experiencing financial difficulties. For additional information on our modification programs, see the “Risk Management – Credit Risk Management – Residential Mortgage Loans” section in our 2020 Form 10-K. For additional information on customer accommodations, including loan modifications, in response to the COVID-19 pandemic, see the “Risk Management – Credit Risk Management – COVID-Related Lending Accommodations” section in this Report.

Residential Mortgage – First Lien Portfolio Our residential mortgage – first lien portfolio decreased $33.7 billion from December 31, 2020, driven by loan paydowns as a result of the low interest rate environment and the transfer of $13.5 billion of first lien mortgage loans to loans held for sale (LHFS) substantially all of which related to the sales of loans purchased from GNMA loan securitization pools in prior periods, partially offset by originations of $51.3 billion.
Table 14 shows certain delinquency and loss information for the residential mortgage – first lien portfolio and lists the top five states by outstanding balance.
Table 14: Residential Mortgage – First Lien Portfolio Performance
Outstanding balance% of total loans% of loans 30 days
or more past due
Net loan charge-off rate quarter ended (1)
($ in millions)Sep 30,
2021
Dec 31,
2020
Sep 30,
2021
Dec 31,
2020
Sep 30,
2021
Dec 31,
2020
Sep 30,
2021
Dec 31,
2020
California (2)$98,513 104,260 11.42 %11.75 0.83 1.00 (0.02)(0.03)
New York29,835 31,028 3.46 3.50 1.19 1.40 (0.02)0.01
New Jersey10,315 12,073 1.20 1.36 1.79 1.92 (0.03)(0.03)
Florida9,843 10,623 1.14 1.20 1.90 2.56 (0.02)0.01
Washington8,310 9,094 0.96 1.02 0.49 0.66 (0.02)(0.01)
Other (3)68,774 79,356 7.97 8.94 1.48 1.60 (0.03)0.02
Total225,590 246,434 26.15 27.77 1.16 1.34 (0.02)
Government insured/guaranteed loans (4)17,345 30,240 2.01 3.41 
Total first lien mortgage portfolio$242,935 276,674 28.16 31.18 
(1)Quarterly net charge-offs as a percentage of average respective loans are annualized.
(2)Our residential mortgage loans to borrowers in California are located predominantly within the larger metropolitan areas, with no single California metropolitan area consisting of more than 4% of total loans.
(3)Consists of 45 states; no state in Other had loans in excess of $7.1 billion and $7.8 billion at September 30, 2021, and December 31, 2020, respectively.
(4)Represents loans, substantially all of which were repurchased from GNMA loan securitization pools, where the repayment of the loans is predominantly insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). For additional information on GNMA loan securitization pools, see the “Risk Management – Credit Risk Management – Risks Relating to Servicing Activities” section in this Report.

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Risk Management – Credit Risk Management (continued)

Residential Mortgage – Junior Lien Portfolio Our residential mortgage – junior lien portfolio decreased $5.3 billion from December 31, 2020, driven by loan paydowns.
Table 15 shows certain delinquency and loss information for the residential mortgage – junior lien portfolio and lists the top five states by outstanding balance.
Table 15: Residential Mortgage – Junior Lien Portfolio Performance
Outstanding balance % of total loans
% of loans 30 days
or more past due
Net loan charge-off rate quarter ended (1)
($ in millions)Sep 30,
2021
Dec 31,
2020
Sep 30,
2021
Dec 31,
2020
Sep 30,
2021
Dec 31,
2020
Sep 30,
2021
Dec 31,
2020
California$4,687 6,237 0.54 %0.70 2.62 2.20 (0.70)(0.46)
New Jersey1,846 2,258 0.21 0.25 2.92 2.84 (0.33)(0.06)
Florida1,634 2,119 0.19 0.24 2.69 3.06 (0.36)(0.35)
Pennsylvania1,116 1,377 0.13 0.16 2.20 2.30 (0.24)(0.62)
Virginia1,050 1,355 0.12 0.15 2.36 2.41 (0.23)(0.15)
Other (2)7,693 9,940 0.89 1.12 2.55 2.31 (0.77)(0.43)
Total junior lien mortgage portfolio
$18,026 23,286 2.08 %2.62 2.59 2.41 (0.61)(0.39)
(1)Quarterly net charge-offs as a percentage of average respective loans are annualized.
(2)Consists of 45 states; no state in Other had loans in excess of $1.1 billion and $1.3 billion at September 30, 2021, and December 31, 2020, respectively.
The outstanding balance of residential mortgage lines of credit was $24.5 billion at September 30, 2021. The unfunded credit commitments for these lines of credit totaled $47.9 billion at September 30, 2021.
On a monthly basis, we monitor the payment characteristics of borrowers in our residential mortgage – first and junior lien lines of credit portfolios. In September 2021, excluding borrowers with COVID-related loan modification payment deferrals:
Approximately 44% of these borrowers paid only the minimum amount due and approximately 51% paid more than the minimum amount due. The rest were either delinquent or paid less than the minimum amount due.
For the borrowers with an interest-only payment feature, approximately 29% paid only the minimum amount due and approximately 66% paid more than the minimum amount due.
CREDIT CARD, AUTO and OTHER CONSUMER LOANS Table 16 shows the outstanding balance of our credit card, auto and other consumer loan portfolios. For information regarding credit quality indicators for these portfolios, see Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.
Table 16: Credit Card, Auto, and Other Consumer Loans
September 30, 2021December 31, 2020
($ in millions)Outstanding
balance
% of
total
loans
Outstanding
balance
% of
total
loans
Credit card$36,061 4.18 %$36,664 4.13 %
Auto53,827 6.24 48,187 5.43 
Other consumer (1)27,041 3.13 24,409 2.75 
Total $116,929 13.55 %$109,260 12.31 %
(1)Other consumer loans primarily include securities-based loans.
Credit Card  Our credit card portfolio totaled $36.1 billion at September 30, 2021, compared with $36.7 billion at December 31, 2020.
 
Auto  Our auto portfolio totaled $53.8 billion at September 30, 2021, compared with $48.2 billion at December 31, 2020. The increase in the outstanding balance at September 30, 2021, compared with December 31, 2020, was driven by strong consumer demand for automobiles.

Other Consumer  Other consumer loans, which include revolving credit and installment loans, totaled $27.0 billion at September 30, 2021, compared with $24.4 billion at December 31, 2020, driven by an increase in margin loans.
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Wells Fargo & Company


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 2020 Form 10-K. Customer payment deferral activities instituted in response to the COVID-19 pandemic could continue to delay the recognition of nonaccrual loans for those customers who would have otherwise moved into nonaccrual status. For additional
information on customer accommodations, including loan modifications, in response to the COVID-19 pandemic, see the “Risk Management – Credit Risk Management – COVID-Related Lending Accommodations” section in this Report.
Table 17 summarizes nonperforming assets (NPAs) for each of the last four quarters.

Table 17: Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)
September 30, 2021June 30, 2021March 31, 2021December 31, 2020
($ in millions)Balance% of
total
loans
Balance% of
total
loans
Balance% of
total
loans
Balance% of
total
loans
Nonaccrual loans:
Commercial:
Commercial and industrial$1,274 0.39 %$1,691 0.53 %$2,223 0.70 %$2,698 0.85 %
Real estate mortgage1,538 1.26 1,598 1.32 1,703 1.41 1,774 1.46 
Real estate construction20 0.09 45 0.20 55 0.26 48 0.22 
Lease financing188 1.22 215 1.37 249 1.58 259 1.61 
Total commercial3,020 0.62 3,549 0.74 4,230 0.89 4,779 1.00 
Consumer:
Residential mortgage – first lien (1)3,093 1.27 2,852 1.17 2,859 1.12 2,957 1.07 
Residential mortgage – junior lien (1)702 3.89 713 3.63 747 3.51 754 3.24 
Auto206 0.38 221 0.43 181 0.37 202 0.42 
Other consumer37 0.14 36 0.14 38 0.15 36 0.15 
Total consumer4,038 1.07 3,822 1.02 3,825 1.00 3,949 0.97 
Total nonaccrual loans 7,058 0.82 7,371 0.86 8,055 0.93 8,728 0.98 
Foreclosed assets:
Government insured/guaranteed (2)15 15 16 18 
Non-government insured/guaranteed106 114 124 141 
Total foreclosed assets121 129 140 159 
Total nonperforming assets$7,179 0.83 %$7,500 0.88 %$8,195 0.95 %$8,887 1.00 %
Change in NPAs from prior quarter$(321)$(695)$(692)$709 
(1)Residential mortgage loans predominantly insured by the FHA or guaranteed by the VA are not placed on nonaccrual status because they are insured or guaranteed.
(2)Consistent with regulatory reporting requirements, foreclosed real estate resulting from government insured/guaranteed loans are classified as nonperforming. Both principal and interest related to these foreclosed real estate assets are collectible because the loans were predominantly insured by the FHA or guaranteed by the VA. Receivables related to the foreclosure of certain government guaranteed real estate mortgage loans are excluded from this table and included in Accounts Receivable in Other Assets. For additional information on foreclosed assets, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2020 Form 10-K.
Commercial nonaccrual loans decreased $1.8 billion from December 31, 2020, predominantly due to a decline in commercial and industrial nonaccrual loans, driven by a decrease in oil, gas, and pipeline nonaccrual loans, primarily as a result of paydowns. For additional information on commercial and industrial nonaccrual loans, see the “Risk Management – Credit Risk Management – Commercial and Industrial Loans and Lease Financing” section in this Report.
Consumer nonaccrual loans increased $89 million from December 31, 2020, predominantly driven by an increase in residential mortgage – first lien nonaccrual loans as customers exited from accommodation programs provided in response to the COVID-19 pandemic. Customers requiring further payment assistance after exiting from these programs may have been modified or may be eligible to receive modifications.
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Risk Management – Credit Risk Management (continued)

Table 18 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 18: Analysis of Changes in Nonaccrual Loans
Quarter ended
(in millions)Sep 30,
2021
Jun 30,
2021
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Commercial nonaccrual loans
Balance, beginning of period$3,549 4,230 4,779 4,398 4,285 
Inflows481 560 773 1,696 1,316 
Outflows:
Returned to accruing(203)(287)(177)(99)(166)
Foreclosures(4)(3)(6)(37)— 
Charge-offs(105)(145)(202)(367)(382)
Payments, sales and other (698)(806)(937)(812)(655)
Total outflows(1,010)(1,241)(1,322)(1,315)(1,203)
Balance, end of period3,020 3,549 4,230 4,779 4,398 
Consumer nonaccrual loans
Balance, beginning of period3,822 3,825 3,949 3,624 3,320 
Inflows745 563 454 792 696 
Outflows:
Returned to accruing(222)(200)(152)(208)(160)
Foreclosures(18)(16)(19)(5)(4)
Charge-offs(21)(17)(26)(36)(36)
Payments, sales and other (268)(333)(381)(218)(192)
Total outflows(529)(566)(578)(467)(392)
Balance, end of period4,038 3,822 3,825 3,949 3,624 
Total nonaccrual loans$7,058 7,371 8,055 8,728 8,022 

We believe exposure to loss on nonaccrual loans is mitigated by the following factors at September 30, 2021:
96% of total commercial nonaccrual loans and 99% of total consumer nonaccrual loans are secured. Of the consumer nonaccrual loans, 94% are secured by real estate and 95% have a combined LTV (CLTV) ratio of 80% or less.
77% of commercial nonaccrual loans were current on interest and 75% 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.
of the $1.0 billion of consumer loans in bankruptcy or discharged in bankruptcy, and classified as nonaccrual, $685 million were current.
the remaining risk of loss of all nonaccrual loans has been considered in developing our allowance for loan losses.
We continue to work with our customers experiencing financial difficulty to determine if they can qualify for a loan modification. Under our proprietary modification programs, customers may be required to provide updated documentation, and some programs require completion of payment during trial periods to demonstrate sustained performance before the loan can be removed from nonaccrual status.
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Table 19 provides a summary of foreclosed assets and an analysis of changes in foreclosed assets.



Table 19: Foreclosed Assets
Quarter ended
(in millions)Sep 30,
2021
Jun 30,
2021
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Summary by loan segment
Government insured/guaranteed$15 15 16 18 22 
Commercial61 63 64 70 39 
Consumer45 51 60 71 95 
Total foreclosed assets
$121 129 140 159 156 
Analysis of changes in foreclosed assets
Balance, beginning of period$129 140 159 156 195 
Net change in government insured/guaranteed (1)
 (1)(2)(4)(9)
Additions to foreclosed assets (2)
101 96 88 114 60 
Reductions:
Sales
(123)(104)(107)(104)(88)
Write-downs and gains (losses) on sales
14 (2)(3)(2)
Total reductions
(109)(106)(105)(107)(90)
Balance, end of period$121 129 140 159 156 
(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.

Foreclosed assets at September 30, 2021, included $47 million of foreclosed residential real estate, of which 33% is predominantly FHA insured or VA guaranteed and expected to have minimal or no loss content. The remaining amount of foreclosed assets has been written down to estimated net realizable value. Of the $121 million in foreclosed assets at September 30, 2021, 66% have been in the foreclosed assets portfolio for one year or less.
As part of our actions to support customers during the COVID-19 pandemic, we have temporarily suspended certain mortgage foreclosure activities, which has affected the amount of our foreclosed assets. 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
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Risk Management – Credit Risk Management (continued)

TROUBLED DEBT RESTRUCTURINGS (TDRs) Table 20 provides information regarding the recorded investment of loans modified in TDRs. TDRs decreased from December 31, 2020, predominantly related to commercial and industrial loans and residential mortgage – first lien loans. The decrease in commercial and industrial loans was primarily due to paydowns in the oil, gas, and pipelines industry. The decrease in residential
mortgage – first lien loans was due to paydowns and a $773 million transfer from residential mortgage – first lien loans to LHFS, substantially all of which related to the sales of loans purchased from GNMA loan securitization pools in 2020. The amount of our TDRs at September 30, 2021, would have otherwise been higher without the TDR relief provided by the CARES Act and Interagency Statement.
Table 20: TDR Balances
(in millions)Sep 30,
2021
Jun 30,
2021
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Commercial:
Commercial and industrial
$917 1,225 1,331 1,933 2,082 
Real estate mortgage
604 645 652 774 805 
Real estate construction
4 15 21 15 21 
Lease financing
11 
Total commercial TDRs
1,536 1,894 2,013 2,731 2,917 
Consumer:
Residential mortgage – first lien8,280 8,841 9,446 9,764 9,420 
Residential mortgage – junior lien1,021 1,097 1,174 1,237 1,298 
Credit card
336 368 411 458 494 
Auto182 196 156 176 156 
Other consumer60 63 67 67 190 
Trial modifications
89 77 81 90 91 
Total consumer TDRs
9,968 10,642 11,335 11,792 11,649 
Total TDRs
$11,504 12,536 13,348 14,523 14,566 
TDRs on nonaccrual status$3,233 3,711 3,800 4,456 4,163 
TDRs on accrual status:
Government insured/guaranteed3,145 3,431 3,708 3,721 3,467 
Non-government insured/guaranteed5,126 5,394 5,840 6,346 6,936 
Total TDRs
$11,504 12,536 13,348 14,523 14,566 
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Wells Fargo & Company


In those situations where principal is forgiven, the entire amount of such forgiveness is immediately charged off. When we delay the timing on the repayment of a portion of principal (principal forbearance), we charge off the amount of forbearance if that amount is not considered fully collectible. The allowance for loan losses for TDRs was $301 million and $565 million at September 30, 2021, and December 31, 2020, respectively. As part of our actions to support customers during the COVID-19 pandemic, we have provided borrowers relief in the form of loan modifications. Under the CARES Act and the Interagency Statement, loan modifications related to the COVID-19 pandemic will not be classified as TDRs if they meet certain eligibility criteria. For additional information on the CARES Act
and the Interagency Statement, see the “Risk Management – Credit Risk Management – Credit Quality Overview – COVID-Related Lending Accommodations” section in this Report.
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 2020 Form 10-K.
Table 21 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 21: Analysis of Changes in TDRs
Quarter ended
(in millions)Sep 30,
2021
Jun 30,
2021
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Commercial TDRs
Balance, beginning of period$1,894 2,013 2,731 2,917 2,629 
Inflows (1)
104 336 155 486 866 
Outflows
Charge-offs
(46)(45)(49)(72)(77)
Foreclosure
 — (5)— — 
Payments, sales and other (2)
(416)(410)(819)(600)(501)
Balance, end of period1,536 1,894 2,013 2,731 2,917 
Consumer TDRs
Balance, beginning of period10,642 11,335 11,792 11,649 9,367 
Inflows (1)
267 495 633 1,226 2,805 
Outflows
Charge-offs
(30)(36)(43)(57)(58)
Foreclosure
(17)(15)(14)(5)(7)
Payments, sales and other (2)
(906)(1,133)(1,024)(1,020)(458)
Net change in trial modifications (3)
12 (4)(9)(1)— 
Balance, end of period9,968 10,642 11,335 11,792 11,649 
Total TDRs
$11,504 12,536 13,348 14,523 14,566 
(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 held for sale. 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
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Risk Management – Credit Risk Management (continued)

LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING  Loans 90 days or more past due are still accruing if they are (1) well-secured and in the process of collection or (2) residential mortgage loans or consumer loans exempt under regulatory rules from being classified as nonaccrual until later delinquency, usually 120 days past due.
Table 22 reflects loans 90 days or more past due and still accruing by class for loans not government insured/guaranteed. For additional information on delinquencies by loan class, see Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Table 22: Loans 90 Days or More Past Due and Still Accruing
(in millions) Sep 30,
2021
Jun 30,
2021
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Total:$5,598 4,703 6,273 7,041 11,698 
Less: FHA insured/VA guaranteed (1)5,083 3,966 5,406 6,351 11,041 
Total, not government insured/guaranteed$515 737 867 690 657 
By segment and class, not government insured/guaranteed:
Commercial:
Commercial and industrial
$46 165 55 39 61 
Real estate mortgage
75 105 128 38 47 
Real estate construction
 86 — 
Total commercial
121 277 269 78 108 
Consumer:
Residential mortgage – first lien68 73 85 135 97 
Residential mortgage – junior lien13 12 15 19 28 
Credit card238 271 394 365 297 
Auto60 43 46 65 50 
Other consumer15 61 58 28 77 
Total consumer
394 460 598 612 549 
Total, not government insured/guaranteed
$515 737 867 690 657 
(1)Represents loans whose repayments are predominantly insured by the FHA or guaranteed by the VA.
Loans 90 days or more past due and still accruing, excluding government insured/guaranteed loans, at September 30, 2021, were down from December 31, 2020, due to decreases in delinquent consumer loans driven by strong payment performance, partially offset by increases in delinquent commercial real estate mortgage loans. Customer payment deferral activities instituted in response to the COVID-19 pandemic could continue to delay the recognition of delinquencies for customers who would have otherwise moved into past due status.
Loans 90 days or more past due and still accruing whose repayments are predominantly insured by the FHA or guaranteed by the VA for mortgages at September 30, 2021, were down from December 31, 2020, due to the sales of loans purchased from GNMA loan securitization pools in prior periods.

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NET CHARGE-OFFS Table 23 presents net loan charge-offs for third quarter 2021 and the previous four quarters.

Table 23: Net Loan Charge-offs
Quarter ended
Sep 30, 2021Jun 30, 2021Mar 31, 2021Dec 31, 2020Sep 30, 2020
($ in millions)Net loan
charge-
offs
% of
avg.
loans (1)
Net loan
charge-
offs
% of
avg.
loans (1)
Net loan
charge-
offs
% of
avg.
loans (1)
Net loan
charge-
offs
% of
avg.
loans (1)
Net loan
charge-
offs
% of
avg.
loans (1)
Commercial:
Commercial and industrial$46 0.06 %$81 0.10 %$88 0.11 %$111 0.14 %$274 0.33 %
Real estate mortgage(10)(0.03)(5)(0.02)46 0.16 162 0.53 56 0.18 
Real estate construction1  (1)— — — — — (2)(0.03)
Lease financing1 0.03 0.12 15 0.40 35 0.83 28 0.66 
Total commercial38 0.03 80 0.07 149 0.13 308 0.26 356 0.29 
Consumer:
Residential mortgage – first lien(14)(0.02)(19)(0.03)(24)(0.04)(3)— (1)— 
Residential mortgage – junior lien(28)(0.61)(31)(0.60)(19)(0.35)(24)(0.39)(14)(0.22)
Credit card158 1.77 256 3.01 236 2.71 190 2.09 245 2.71 
Auto26 0.20 45 0.35 52 0.44 51 0.43 31 0.25 
Other consumer79 1.22 50 0.80 119 1.97 62 0.88 66 0.80 
Total consumer221 0.23 301 0.32 364 0.37 276 0.26 327 0.30 
Total$259 0.12 %$381 0.18 %$513 0.24 %$584 0.26 %$683 0.29 %
(1)Quarterly net charge-offs as a percentage of average respective loans are annualized.

The decrease in commercial net loan charge-offs in third quarter 2021, compared with the prior quarter, was due to higher recoveries in the commercial and industrial portfolio driven by the oil, gas, and pipeline industry.
The decrease in consumer net loan charge-offs in third quarter 2021, compared with the prior quarter, was driven by lower losses in credit card and auto, partially offset by an increase in other consumer losses.
The COVID-19 pandemic may continue to impact the credit quality of our loan portfolio. Although the potential impacts were considered in our allowance for credit losses for loans, payment deferral activities instituted in response to the COVID-19 pandemic could continue to delay the recognition of loan charge-offs. For additional information on customer accommodations in response to the COVID-19 pandemic, see the “Risk Management – Credit Risk Management – COVID-Related Lending Accommodations” section in this Report.

ALLOWANCE FOR CREDIT LOSSES  We maintain an allowance for credit losses (ACL) for loans, which is management’s estimate of the expected life-time credit losses in the loan portfolio and unfunded credit commitments, at the balance sheet date, excluding loans and unfunded credit commitments carried at fair value or held for sale. Additionally, we maintain an ACL for debt securities classified as either AFS or HTM, other financial assets measured at amortized cost, net investments in leases, and other off-balance sheet credit exposures.
We apply a disciplined process and methodology to establish our ACL each quarter. The process for establishing the ACL for loans takes into consideration many factors, including historical and forecasted loss trends, loan-level credit quality ratings and loan grade-specific characteristics. The process involves subjective and complex judgments. In addition, we review a variety of credit metrics and trends. These credit metrics and trends, however, do not solely determine the amount of the allowance as we use several analytical tools. For additional information on our ACL, see the “Critical Accounting Policies – Allowance for Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2020 Form 10-K. For additional information on our ACL for loans, see Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report, and for additional information on our ACL for debt securities, see the “Balance Sheet Analysis – Available-For-Sale and Held-To-Maturity Debt Securities” section and Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report.
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43

Risk Management – Credit Risk Management (continued)

Table 24 presents the allocation of the ACL for loans by loan portfolio segment and class for the most recent quarter and last four year ends.

Table 24: Allocation of the ACL for Loans (1)
Sep 30, 2021Dec 31, 2020Dec 31, 2019Dec 31, 2018Dec 31, 2017
($ in millions)ACLLoans
as %
of total
loans
ACLLoans
as %
of total
loans
ACLLoans
as %
of total
loans
ACLLoans
as %
of total
loans
ACLLoans
as %
of total
loans
Commercial:
Commercial and industrial
$5,193 38 %$7,230 36 %$3,600 37 %$3,628 37 %$3,752 35 %
Real estate mortgage
2,422 14 3,167 14 1,236 13 1,282 13 1,374 13 
Real estate construction
470 2 410 1,079 1,200 1,238 
Lease financing
480 2 709 330 307 268 
Total commercial
8,565 56 11,516 54 6,245 54 6,417 54 6,632 53 
Consumer:
Residential mortgage – first lien1,197 29 1,600 31 692 30 750 30 1,085 30 
Residential mortgage – junior lien201 2 653 247 431 608 
Credit card
3,356 4 4,082 2,252 2,064 1,944 
Auto901 6 1,230 459 475 1,039 
Other consumer485 3 632 561 570 652 
Total consumer
6,140 44 8,197 46 4,211 46 4,290 46 5,328 47 
Total
$14,705 100 %$19,713 100 %$10,456 100 %$10,707 100 %$11,960 100 %
Components:
Allowance for loan losses
$13,51718,5169,5519,77511,004
Allowance for unfunded credit commitments
1,1881,197905932956
Allowance for credit losses
$14,70519,71310,45610,70711,960
Ratio of allowance for loan losses to total net loan charge-offs (2)13.14x5.633.463.563.76
Allowance for loan losses as a percentage of total loans
1.57 %2.09 0.99 1.03 1.15 
Allowance for credit losses for loans as a percentage of total loans1.70 2.22 1.09 1.12 1.25 
Allowance for credit losses for loans as a percentage of total nonaccrual loans 208 226 196 165 156 
(1)Disclosure is not comparative due to our adoption of Accounting Standards Update (ASU) 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (CECL) on January 1, 2020. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2020 Form 10-K.
(2)Total net loan charge-offs are annualized for the quarter ended September 30, 2021.
The ratios for the allowance for loan losses and the ACL for loans presented in Table 24 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 $5.0 billion, or 25%, from December 31, 2020, reflecting better portfolio credit quality and improvements in current and forecasted economic conditions. Total provision for credit losses for loans was $(1.4) billion in third quarter 2021, compared with $751 million in the same period a year ago, reflecting lower net charge-offs and improvements in current and forecasted economic conditions. The detail of the changes in the ACL for loans by portfolio segment (including charge-offs and recoveries by loan class) is included in Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.
We consider multiple economic scenarios to develop our estimate of the ACL for loans. The scenarios generally include a base scenario, along with an optimistic (upside) and one or more pessimistic (downside) scenarios. In our estimate of the ACL for loans at September 30, 2021, we weighted the base scenario and the downside scenarios. The base scenario assumed economic improvements in the near term with a return to normalized levels near the end of 2022. The downside scenarios assumed economic conditions ranging from a mild recession to a more
severe recession, reflecting continued economic impacts from the COVID-19 pandemic.
Additionally, we consider qualitative factors that represent risks inherent in our processes and assumptions such as economic environmental factors, modeling assumptions and performance, and other subjective factors, including industry trends and emerging risk assessments. We also considered the significant uncertainty related to the duration and severity of the economic impacts from the COVID-19 pandemic and the incremental risks to our loan portfolio.
The forecasted key economic variables used in our estimate of the ACL for loans at September 30 and June 30, 2021, are presented in Table 25.
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Wells Fargo & Company


Table 25: Forecasted Key Economic Variables
4Q 20212Q 20224Q 2022
Weighted blend of economic scenarios:
U.S. unemployment rate (1):
June 30, 20215.6 %6.2 6.9 
September 30, 20215.2 6.2 6.6 
U.S. real GDP (2):
June 30, 20211.0 (0.4)0.6 
September 30, 20213.1 (0.2)0.6 
Home price index (3):
June 30, 20212.8 (6.5)(5.2)
September 30, 202110.1 (1.2)(6.5)
Commercial real estate asset prices (3):
June 30, 20217.8 (11.9)(10.4)
September 30, 20214.1 (3.3)(7.7)
(1)Quarterly average.
(2)Percent change from the preceding period, seasonally adjusted annualized rate.
(3)Percent change year over year of national average; outlook differs by geography and property type.
Future amounts of the ACL for loans will be based on a variety of factors, including loan balance changes, portfolio credit quality and mix changes, and changes in general economic conditions and expectations (including for unemployment and GDP), among other factors. We observed economic improvements in the first nine months of 2021; however, there remained significant uncertainty related to the length and severity of the economic impact of the COVID-19 pandemic and the impact of other factors that may influence the level of eventual losses and corresponding requirements for future amounts of the ACL, including the impact of economic stimulus programs and customer accommodation activity. The COVID-19 pandemic could continue to impact the recognition of credit losses in our loan portfolios and may result in increases or decreases in our ACL.
We believe the ACL for loans of $14.7 billion at September 30, 2021, was appropriate to cover expected credit losses, including unfunded credit commitments, at that date. The entire allowance is available to absorb credit losses from the total loan portfolio. The ACL for loans is subject to change and reflects existing factors as of the date of determination, including economic or market conditions and ongoing internal and external examination processes. Due to the sensitivity of the ACL for loans to changes in the economic and business environment, it is possible that we will incur incremental credit losses not anticipated as of the balance sheet date. Our process for determining the ACL is discussed in the “Critical Accounting Policies – Allowance for Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2020 Form 10-K.

LIABILITY FOR MORTGAGE LOAN REPURCHASE LOSSES  For information on our repurchase liability, see the “Risk Management – Credit Risk Management – Liability For Mortgage Loan Repurchase Losses” section in our 2020 Form 10-K.

RISKS RELATING TO SERVICING ACTIVITIES  In addition to servicing loans in our portfolio, we act as servicer and/or master servicer of residential mortgage loans included in GSE-guaranteed mortgage securitizations, GNMA-guaranteed mortgage securitizations of FHA-insured/VA-guaranteed mortgages and private label mortgage securitizations, as well as for unsecuritized loans owned by institutional investors.
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 of advances of delinquent payments vary by investor and the applicable servicing agreements. Due to payment deferrals provided as a result of the COVID-19 pandemic, the amount of our servicing advances of principal and interest remained elevated. The amount of these advances may increase if additional payment deferrals are provided. Payment deferrals also delay the collection of contractually specified servicing fees, resulting in lower net servicing income.
Upon transfer as servicer, we retain the option to repurchase loans from GNMA loan securitization pools, which becomes exercisable when three scheduled loan payments remain unpaid by the borrower. We generally repurchase these loans for cash and as a result, our total consolidated assets do not change. As a result of the COVID-19 pandemic, our repurchases of these loans were elevated in 2020 but returned to more normalized levels in the first nine months of 2021. These repurchased loan balances were $20.4 billion and $34.8 billion at September 30, 2021, and December 31, 2020, respectively, which included $17.0 billion and $29.9 billion, respectively, in our held for investment loan portfolio, with the remainder in loans held for sale.
Repurchased loans that regain current status or are otherwise modified in accordance with applicable servicing guidelines may be included in future GNMA loan securitization pools. However, in accordance with guidance issued by GNMA, certain loans repurchased after June 30, 2020, are ineligible for inclusion in future GNMA loan securitization pools until the borrower has timely made six consecutive payments. This requirement may delay our ability to resell loans into the securitization market.
For additional information about the risks related to our servicing activities, see the “Risk Management – Credit Risk Management – Risks Relating to Servicing Activities” section in our 2020 Form 10-K. For additional information on mortgage banking activities, see Note 9 (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 2020 Form 10-K.
 
INTEREST RATE RISK Interest rate risk is created in our role as a financial intermediary for customers based on investments such as loans and other extensions of credit and debt securities. Interest rate risk can have a significant impact to our earnings. We are subject to interest rate risk because:
assets and liabilities may mature or reprice at different times. If assets reprice faster than liabilities and interest rates are generally rising, earnings will initially increase;
assets and liabilities may reprice at the same time but by different amounts;
short-term and long-term market interest rates may change by different amounts. For example, the shape of the yield curve may affect yield for new loans and funding costs differently;
the remaining maturity for various assets or liabilities may shorten or lengthen as interest rates change. For example, if long-term mortgage interest rates increase sharply, MBS held in the debt securities portfolio may pay down at a
Wells Fargo & Company
45


Risk Management – Asset/Liability Management (continued)
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 speeds on loans and debt securities, deposit flows and mix, as well as pricing strategies.
Our most recent simulations, as presented in Table 26, 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 26:
Simulations are dynamic and reflect anticipated changes to our assets and liabilities.
Other macroeconomic variables that could be correlated with the changes in interest rates are held constant.
Mortgage prepayment and origination assumptions vary across scenarios and reflect only the impact of the higher or lower interest rates.
Our base scenario deposit forecast incorporates mix changes consistent with the base interest rate trajectory. Deposit mix is modeled to be the same as in the base scenario across the alternative scenarios. In higher interest rate scenarios, customer activity that shifts balances into higher-yielding products could reduce expected net interest income.
We hold the size of the projected debt and equity securities portfolios constant across scenarios.
Table 26: Net Interest Income Sensitivity
($ in billions)Sep 30, 2021Dec 31, 2020
Parallel Shift:
+100 bps shift in interest rates$7.4 6.7 
-100 bps shift in interest rates(2.9)(2.7)
Steeper yield curve:
+50 bps shift in long-term interest rates1.2 1.3 
Flatter yield curve:
+50 bps shift in short-term interest rates2.7 2.2 
-50 bps shift in long-term interest rates(1.2)(1.4)
The interest rate sensitivity included in Table 26 indicates that we would expect to benefit from higher interest rates as our assets would reprice faster and to a greater degree than our liabilities, while in the case of lower interest rates, our assets would reprice downward and to a greater degree than our liabilities resulting in lower net interest income.
The sensitivity results above do not capture noninterest income or expense impacts. Our interest rate sensitive noninterest income and expense are predominantly driven by
mortgage banking activities, and may move in the opposite direction of our net interest income. See the “Risk Management – Asset/Liability Management – Mortgage Banking Interest Rate and Market Risk” section in our 2020 Form 10-K for additional information. For additional information on our trading assets and liabilities, see Note 2 (Trading Activities) to Financial Statements in this Report.
We use the debt securities portfolio and exchange-traded and over-the-counter (OTC) interest rate derivatives to manage our interest rate exposures. See Note 1 (Summary of Significant Accounting Policies), Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) and Note 14 (Derivatives) to Financial Statements in our 2020 Form 10-K for additional information.

MORTGAGE BANKING INTEREST RATE AND MARKET RISK  We originate, fund and service mortgage loans, which subjects us to various risks, including credit, liquidity and interest rate risks. For additional information on mortgage banking interest rate and market risk, 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 in our 2020 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, and impairment of private equity investments. For information on our oversight of market risk, see the “Risk Management – Asset/Liability Management – Market Risk” section in our 2020 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,
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Wells Fargo & Company


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 2020 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 27 shows the Company’s Trading General VaR by risk category. The decrease in average Company Trading General VaR for the quarter ended September 30, 2021, compared with the same period a year ago, was driven by a greater presence of market volatility dropping out of the 12-month historical lookback window used to calculate average Company Trading General VaR for the quarter ended September 30, 2021. Market volatility present in average Company Trading General VaR for the quarter ended September 30, 2020, was driven by the impact of the COVID-19 pandemic, in particular, changes in interest rate curves and a significant widening of credit spreads.
Table 27: Trading 1-Day 99% General VaR by Risk Category
Quarter ended
September 30, 2021June 30, 2021September 30, 2020
(in millions)Period
end
AverageLowHighPeriod
end
AverageLowHighPeriod
end
AverageLowHigh
Company Trading General VaR Risk Categories
Credit$19 18 13 26 14 21 12 30 98 85 59 104 
Interest rate12 9 5 15 22 145 155 114 201 
Equity27 28 22 39 29 37 25 56 21 17 24 
Commodity6 6 2 20 28 28 
Foreign exchange1 0 0 1 
Diversification benefit (1)(35)(28)(38)(30)(121)(110)
Company Trading General VaR
30 33 40 43 149 153 
(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 2020 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 6 (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 In the ordinary course of business, we enter into contractual obligations that may require future cash payments, including funding for customer loan requests, customer deposit maturities and withdrawals, debt service, leases for premises and equipment, and other cash commitments. The objective of effective liquidity management is to ensure that we can meet our contractual obligations and other cash commitments efficiently under both normal operating conditions and under periods of Wells Fargo-specific and/or market stress. To help achieve this objective, we monitor both
the consolidated company and the Parent on a stand-alone basis to ensure that the Parent is a source of strength for its regulated, deposit-taking banking subsidiaries. The Parent acts as a source of funding for the Company through the issuance of long-term debt and equity, and WFC Holdings, LLC, an intermediate holding company and subsidiary of the Parent (the “IHC”), provides funding support for the ongoing operational requirements of the Parent and certain of its direct and indirect subsidiaries. For additional information on liquidity risk and funding management, see the “Risk Management – Liquidity Risk and Funding” section in our 2020 Form 10-K. For additional information on the IHC, see the “Regulatory Matters – ‘Living Will’ Requirements and Related Matters” section in our 2021 Second Quarter Report on Form 10-Q.

Liquidity Standards We are subject to a rule, issued by the FRB, OCC and Federal Deposit Insurance Corporation (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.
Wells Fargo & Company
47


Risk Management – Asset/Liability Management (continued)
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 September 30, 2021, we were compliant with the NSFR requirement.
Liquidity Coverage Ratio As of September 30, 2021, the consolidated Company, Wells Fargo Bank, N.A., and Wells Fargo National Bank West exceeded the minimum LCR requirement of 100%, which is calculated as HQLA divided by projected net cash outflows, as each is defined under the LCR rule. Table 28 presents the Company’s quarterly average values for the daily-calculated LCR and its components calculated pursuant to the LCR rule requirements.
Table 28: Liquidity Coverage Ratio
Average for Quarter ended
(in millions, except ratio)Sep 30, 2021Jun 30, 2021Sep 30, 2020
HQLA (1):
Eligible cash$244,260248,404 210,715 
Eligible securities (2)138,525137,718 213,358 
Total HQLA382,785386,122 424,073 
Projected net cash outflows320,782314,678 317,064 
LCR119 %123 134 
(1)Excludes excess HQLA at certain subsidiaries that is not transferable to other Wells Fargo entities.
(2)Net of applicable haircuts required under the LCR rule.
Liquidity Sources We maintain liquidity in the form of cash, cash equivalents and unencumbered high-quality, liquid debt securities. These assets make up our primary sources of liquidity. Our primary sources of liquidity are substantially the same in composition as HQLA under the LCR rule; however, our primary sources of liquidity will generally exceed HQLA calculated under the LCR rule due to the applicable haircuts to HQLA and the exclusion of excess HQLA at our subsidiary IDIs required under the LCR rule. Our primary sources of liquidity are presented in Table 29, which also includes encumbered securities that are not included as available HQLA in the calculation of the LCR.
Our cash is predominantly on deposit with the Federal Reserve. Debt securities included as part of our primary sources of liquidity are comprised of U.S. Treasury and federal agency debt, and MBS issued by federal agencies within our debt securities portfolio. We believe these debt securities provide quick sources of liquidity through sales or by pledging to obtain financing, regardless of market conditions. Some of these debt securities are within our HTM portfolio and, as such, are not intended for sale but may be pledged to obtain financing.
Table 29: Primary Sources of Liquidity
September 30, 2021December 31, 2020
(in millions)TotalEncumberedUnencumberedTotalEncumberedUnencumbered
Interest-earning deposits with banks$241,178  241,178 236,376 — 236,376 
Debt securities of U.S. Treasury and federal agencies 62,565 3,326 59,239 70,756 5,370 65,386 
Federal agency mortgage-backed securities (1)281,492 47,348 234,144 258,668 49,156 209,512 
Total$585,235 50,674 534,561 565,800 54,526 511,274 
(1)Included in encumbered securities at September 30, 2021, were securities with a fair value of $2.0 billion, which were purchased in September 2021, but settled in October 2021.
In addition to our primary sources of liquidity shown in
Table 29, liquidity is also available through the sale or financing of other debt securities including trading and/or AFS debt securities, as well as through the sale, securitization or financing of loans, to the extent such debt securities and loans are not encumbered. As of September 30, 2021, we also maintained approximately $208.3 billion of available borrowing capacity at various Federal Home Loan Banks and the Federal Reserve Discount Window.
Deposits have historically provided a sizable source of relatively low-cost funds. Deposits were 170% and 158% of total loans at September 30, 2021, and December 31, 2020, respectively. Additional funding is provided by long-term debt and short-term borrowings. Table 30 shows selected information for short-term borrowings, which generally mature in less than 30 days. We pledge certain financial instruments that we own to collateralize repurchase agreements and other securities financings. For additional information, see the “Pledged Assets” section of Note 12 (Pledged Assets and Collateral) to Financial Statements in this Report.
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Wells Fargo & Company


Table 30: Short-Term Borrowings
Quarter ended
(in millions)Sep 30,
2021
Jun 30,
2021
Mar 31,
2021
Dec 31,
2020
Sep 30,
2020
Balance, period end
Federal funds purchased and securities sold under agreements to repurchase$29,445 33,708 46,871 46,362 44,055 
Other short-term borrowings12,535 11,927 12,049 12,637 11,169 
Total
$41,980 45,635 58,920 58,999 55,224 
Average daily balance for period
Federal funds purchased and securities sold under agreements to repurchase$32,489 36,526 47,358 46,069 46,504 
Other short-term borrowings11,410 11,979 11,724 11,235 10,788 
Total
$43,899 48,505 59,082 57,304 57,292 
Maximum month-end balance for period
Federal funds purchased and securities sold under agreements to repurchase (1)$33,247 33,708 47,050 46,879 49,148 
Other short-term borrowings (2)12,535 12,563 12,049 12,637 11,169 
(1)Maximum month-end balance in each of the last five quarters was in August, June and February 2021, and November and July 2020.
(2)Maximum month-end balance in each of the last five quarters was in September, April and March 2021, and December and September 2020.
Long-Term Debt We access domestic and international capital markets for long-term funding (generally greater than one year) through issuances of registered debt securities, private placements and asset-backed secured funding. We issue long-term debt in a variety of maturities and currencies to achieve cost-efficient funding and to maintain an appropriate maturity profile. Proceeds from securities issued were used for general corporate purposes, and, unless otherwise specified in the applicable prospectus or prospectus supplement, we expect the
proceeds from securities issued in the future will be used for the same purposes. Depending on market conditions and our liquidity position, we may redeem or repurchase, and subsequently retire, our outstanding debt securities in privately negotiated or open market transactions, by tender offer, or otherwise. Table 31 provides the aggregate carrying value of long-term debt maturities (based on contractual payment dates) for the remainder of 2021 and the following years thereafter, as of September 30, 2021.
Table 31: Maturity of Long-Term Debt
September 30, 2021
(in millions)Remaining 20212022202320242025ThereafterTotal
Wells Fargo & Company (Parent Only)
Senior notes$1,524 13,197 8,092 12,062 14,797 70,046 119,718 
Subordinated notes— — 3,689 750 1,094 22,347 27,880 
Junior subordinated notes— — — — — 1,373 1,373 
Total long-term debt – Parent
1,524 13,197 11,781 12,812 15,891 93,766 148,971 
Wells Fargo Bank, N.A. and other bank entities (Bank)
Senior notes28 189 228 453 
Subordinated notes— — 1,056 — 166 4,169 5,391 
Junior subordinated notes— — — — — 385 385 
Securitizations and other bank debt 1,211 1,553 1,088 643 146 1,468 6,109 
Total long-term debt – Bank
1,212 1,581 2,148 646 501 6,250 12,338 
Other consolidated subsidiaries
Senior notes114 189 503 106 427 334 1,673 
Total long-term debt – Other consolidated subsidiaries
114 189 503 106 427 334 1,673 
Total long-term debt$2,850 14,967 14,432 13,564 16,819 100,350 162,982 

Wells Fargo & Company
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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 July 12, 2021, Moody’s Investors Service (Moody’s) upgraded the senior debt rating of the Company to A1 from A2
as a result of revisions to its bank ratings methodology. On September 28, 2021, S&P Global Ratings affirmed the Company’s ratings and retained the stable ratings outlook.
See the “Risk Factors” section in our 2020 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 14 (Derivatives) to Financial Statements in this Report for information regarding additional collateral and funding obligations required for certain derivative instruments in the event our credit ratings were to fall below investment grade.
The credit ratings of the Parent and Wells Fargo Bank, N.A., as of September 30, 2021, are presented in Table 32.

Table 32: Credit Ratings as of September 30, 2021
Wells Fargo & Company Wells Fargo Bank, N.A. 
Senior debt 
Short-term 
borrowings 
Long-term 
deposits 
Short-term 
borrowings 
Moody’sA1P-1Aa1P-1
S&P Global RatingsBBB+A-2A+A-1
Fitch RatingsA+F1AAF1+
DBRS MorningstarAA (low)R-1 (middle)AAR-1 (high)
FEDERAL HOME LOAN BANK MEMBERSHIP The Federal Home Loan Banks (the FHLBs) are a group of cooperatives that lending institutions use to finance housing and economic development in local communities. We are a member of the FHLBs based in Dallas, Des Moines and San Francisco. FHLB members are required to maintain a minimum investment in capital stock of the applicable FHLB. The board of directors of each FHLB can increase the minimum investment requirements in the event it has concluded that additional capital is required to allow it to meet its own regulatory capital requirements. Any increase in the minimum investment requirements outside of specified ranges requires the approval of the Federal Housing Finance Agency. Because the extent of any obligation to increase our investment in any of the FHLBs depends entirely upon the occurrence of a future event, the amount of any future investment in the capital stock of the FHLBs is not determinable.
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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 September 30, 2021, increased $13.0 billion from December 31, 2020, predominantly as a result of $15.8 billion of Wells Fargo net income, partially offset by $2.6 billion of common and preferred stock dividends. During the first nine months of 2021, we issued $957 million of common stock, substantially all of which was issued in connection with employee compensation and benefits. During the first nine months of 2021, we repurchased 167 million shares of common stock at a cost of $7.5 billion. For additional information about capital planning, see the “Capital Planning and Stress Testing” section below.
In the first nine months of 2021, we issued $5.8 billion of preferred stock and redeemed $6.7 billion of preferred stock. For additional information, see Note 16 (Preferred Stock) to Financial Statements in this Report.

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. Our capital adequacy is assessed based on the lower of our risk-based capital ratios calculated under the two approaches. The Company is required to satisfy the risk-based capital ratio requirements to avoid restrictions on capital distributions and discretionary bonus payments. Table 33 and Table 34 present the risk-based capital requirements applicable to the Company on a fully phased-in basis under the Standardized Approach and Advanced Approach, respectively, as of September 30, 2021.
Table 33: Risk-Based Capital Requirements – Standardized Approach
wfc-20210930_g1.jpg

Table 34: Risk-Based Capital Requirements – Advanced Approach
wfc-20210930_g2.jpg
In addition to the risk-based capital requirements described in Table 33 and Table 34, if the FRB determines that a period of excessive credit growth is contributing to an increase in systemic risk, a countercyclical buffer of up to 2.50% could be added to the risk-based capital ratio requirements under federal banking regulations.
The capital conservation buffer is applicable to certain institutions, including Wells Fargo, under the Advanced Approach and is intended to absorb losses during times of economic or financial stress.
The stress capital buffer 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. The Company’s stress capital buffer for the period October 1, 2020, through September 30, 2021, was 2.50%. On August 5, 2021, the FRB confirmed that the Company's stress capital buffer for the period October 1, 2021, through September 30, 2022, is 3.10%.
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. We expect our G-SIB capital surcharge to decrease by 50 basis points to 1.50% beginning in first quarter 2022, subject to finalization in fourth quarter 2021.
The Basel III capital requirements for calculating CET1 and tier 1 capital, along with risk-weighted assets (RWAs), are fully phased-in. However, the requirements for determining tier 2 and total capital are still in accordance with transition requirements
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Capital Management (continued)
and are scheduled to be fully phased-in beginning January 1, 2022.
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 RWAs.
The tables that follow provide information about our risk-based capital and related ratios as calculated under Basel III capital rules. Although we report certain capital amounts and ratios in accordance with transition requirements for bank regulatory reporting purposes, we manage our capital on a fully
phased-in basis. For information about our capital requirements calculated in accordance with transition requirements, see
Note 23 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report.
Table 35 summarizes our CET1, tier 1 capital, total capital, RWAs and capital ratios on a fully phased-in basis at September 30, 2021, and December 31, 2020. Fully phased-in total capital amounts and ratios are considered non-GAAP financial measures that are used by management, bank regulatory agencies, investors and analysts to assess and monitor the Company’s capital position. See Table 36 for information regarding the calculation and components of our CET1, tier 1 capital, total capital and RWAs, as well as a corresponding reconciliation to GAAP financial measures for our fully phased-in total capital amounts.
Table 35: Capital Components and Ratios (Fully Phased-In)
September 30, 2021December 31, 2020
(in millions, except ratios)
Required
Capital
Ratios (1)
Advanced Approach
Standardized Approach
Advanced ApproachStandardized Approach
Common Equity Tier 1(A)$141,585 141,585 138,297 138,297 
Tier 1 Capital(B)160,615 160,615 158,196 158,196 
Total Capital(C)187,416 197,613 186,803 196,529 
Risk-Weighted Assets(D)1,138,635 1,218,911 1,158,355 1,193,744 
Common Equity Tier 1 Capital Ratio(A)/(D)9.00 %12.43  11.62 *11.94  11.59 *
Tier 1 Capital Ratio(B)/(D)10.50 14.11  13.18 *13.66  13.25 *
Total Capital Ratio(C)/(D)12.50 16.46  16.21 *16.14 *16.47  
*Denotes the binding ratio based on the lower calculation under the Advanced and Standardized Approaches.
(1)Represents the minimum ratios required to avoid restrictions on capital distributions and discretionary bonus payments. The required ratios were the same under both the Standardized and Advanced Approaches at September 30, 2021.
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Table 36 provides information regarding the calculation and composition of our risk-based capital under the Advanced and Standardized Approaches at September 30, 2021, and December 31, 2020.

Table 36: Risk-Based Capital Calculation and Components
September 30, 2021December 31, 2020
(in millions)Advanced ApproachStandardized ApproachAdvanced ApproachStandardized Approach
Total equity (1)$191,071 191,071 185,712 185,712 
Effect of accounting policy changes (1)  208 208 
Total equity (as reported)191,071 191,071 185,920 185,920 
Adjustments:
Preferred stock(20,270)(20,270)(21,136)(21,136)
Additional paid-in capital on preferred stock120 120 152 152 
Unearned ESOP shares875 875 875 875 
Noncontrolling interests(2,043)(2,043)(1,033)(1,033)
Total common stockholders’ equity$169,753 169,753 164,778 164,778 
Adjustments:
Goodwill(26,191)(26,191)(26,392)(26,392)
Certain identifiable intangible assets (other than MSRs)(281)(281)(342)(342)
Goodwill and other intangibles on nonmarketable equity securities (included in other assets)(2,120)(2,120)(1,965)(1,965)
Applicable deferred taxes related to goodwill and other intangible assets (2)886 886 856 856 
CECL transition provision (3)463 463 1,720 1,720 
Other(925)(925)(358)(358)
Common Equity Tier 1$141,585 141,585 138,297 138,297 
Preferred stock20,270 20,270 21,136 21,136 
Additional paid-in capital on preferred stock(120)(120)(152)(152)
Unearned ESOP shares(875)(875)(875)(875)
Other(245)(245)(210)(210)
Total Tier 1 capital(A)$160,615 160,615 158,196 158,196 
Long-term debt and other instruments qualifying as Tier 222,753 22,753 24,387 24,387 
Qualifying allowance for credit losses (4)4,368 14,565 4,408 14,134 
Other(320)(320)(188)(188)
Total Tier 2 capital (fully phased-in)(B)$26,801 36,998 28,607 38,333 
Effect of Basel III transition requirements26 26 131 131 
Total Tier 2 capital (Basel III transition requirements)$26,827 37,024 28,738 38,464 
Total qualifying capital (fully phased-in)(A)+(B)$187,416 197,613 186,803 196,529 
Total Effect of Basel III transition requirements26 26 131 131 
Total qualifying capital (Basel III transition requirements)$187,442 197,639 186,934 196,660 
Risk-Weighted Assets (RWAs)(5):
Credit risk (6)$742,147 1,164,248 752,999 1,125,813 
Market risk54,663 54,663 67,931 67,931 
Operational risk341,825  337,425 — 
Total RWAs$1,138,635 1,218,911 1,158,355 1,193,744 
(1)In second quarter 2021, we elected to change our accounting method for low-income housing tax credit investments and elected to change the presentation of investment tax credits related to solar energy investments. Prior period total equity was revised to conform with the current period presentation. Prior period risk-based capital and certain other regulatory related metrics were not revised.
(2)Determined by applying the combined federal statutory rate and composite state income tax rates to the difference between book and tax basis of the respective goodwill and intangible assets at period end.
(3)At September 30, 2021, the impact of the CECL transition provision issued by federal banking regulators on our regulatory capital was an increase in capital of $463 million, reflecting a $991 million (post-tax) increase in capital recognized upon our initial adoption of CECL, offset by 25% of the $5.8 billion increase in our ACL under CECL from January 1, 2020, through September 30, 2021.
(4)Under the Advanced Approach the allowance for credit losses that exceeds expected credit losses is eligible for inclusion in tier 2 capital, to the extent the excess allowance does not exceed 0.60% of Advanced credit RWAs, and under the Standardized Approach, the allowance for credit losses is includable in tier 2 capital up to 1.25% of Standardized credit RWAs, in each case with any excess allowance for credit losses being deducted from the respective total RWAs.
(5)RWAs calculated under the Advanced Approach utilize a risk-sensitive methodology, which relies upon the use of internal credit models based upon our experience with internal rating grades. Advanced Approach also includes an operational risk component, which reflects the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.
(6)Includes an increase of $132 million under the Standardized Approach and a decrease of $1.4 billion under the Advanced Approach related to the impact of the CECL transition provision on our excess allowance for credit losses as of September 30, 2021. See footnote (4) to this table.

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Capital Management (continued)
Table 37 presents the changes in CET1 for the nine months ended September 30, 2021.
Table 37: Analysis of Changes in Common Equity Tier 1
(in millions)
Common Equity Tier 1 at December 31, 2020$138,297 
Net income applicable to common stock14,786 
Common stock dividends(1,637)
Common stock issued, repurchased, and stock compensation-related items(6,614)
Changes in cumulative other comprehensive income(1,371)
Goodwill201 
Certain identifiable intangible assets (other than MSRs)61 
Goodwill and other intangibles on nonmarketable equity securities (included in other assets)(155)
Applicable deferred taxes related to goodwill and other intangible assets (1)30 
CECL transition provision (2)(1,257)
Other(756)
Change in Common Equity Tier 13,288 
Common Equity Tier 1 at September 30, 2021$141,585 
(1)Determined by applying the combined federal statutory rate and composite state income tax rates to the difference between book and tax basis of the respective goodwill and intangible assets at period end.
(2)At September 30, 2021, the impact of the CECL transition provision issued by federal banking regulators on our regulatory capital was an increase in capital of $463 million, reflecting a $991 million (post-tax) increase in capital recognized upon our initial adoption of CECL, offset by 25% of the $5.8 billion increase in our ACL under CECL from January 1, 2020, through September 30, 2021.
Table 38 presents net changes in the components of RWAs under the Advanced and Standardized Approaches for the nine months ended September 30, 2021.
Table 38: Analysis of Changes in RWAs
(in millions)
Advanced Approach
Standardized Approach
RWAs at December 31, 2020$1,158,355 1,193,744 
Net change in credit risk RWAs (1)
(10,852)38,435 
Net change in market risk RWAs
(13,268)(13,268)
Net change in operational risk RWAs
4,400 — 
Total change in RWAs
(19,720)25,167 
RWAs at September 30, 2021$1,138,635 1,218,911 
(1)Includes an increase of $132 million under the Standardized Approach and a decrease of $1.4 billion under the Advanced Approach related to the impact of the CECL transition provision on our excess allowance for credit losses. See Table 36 for additional information.
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TANGIBLE COMMON EQUITY We also evaluate our business based on certain ratios that utilize tangible common equity. Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, goodwill, certain identifiable intangible assets (other than MSRs) and goodwill and other intangibles on nonmarketable equity securities, net of applicable deferred taxes. The ratios are (i) tangible book value per common share, which represents tangible common equity divided by common shares outstanding; and (ii) return on average tangible common equity (ROTCE),
which represents our annualized earnings as a percentage of tangible common equity. The methodology of determining tangible common equity may differ among companies. Management believes that tangible book value per common share and return on average tangible common equity, which utilize tangible common equity, are useful financial measures because they enable management, investors, and others to assess the Company’s use of equity.
Table 39 provides a reconciliation of these non-GAAP financial measures to GAAP financial measures.
Table 39: Tangible Common Equity
Balance at period endAverage balance
Quarter endedQuarter endedNine months ended
(in millions, except ratios)Sep 30,
2021
Jun 30,
2021
Sep 30,
2020
Sep 30,
2021
Jun 30,
2021
Sep 30,
2020
Sep 30,
2021
Sep 30,
2020
Total equity $191,071 193,127 181,727 194,041190,968 181,377 191,379184,435 
Adjustments:
Preferred stock(20,270)(20,820)(21,098)(21,403)(21,108)(21,098)(21,449)(21,411)
Additional paid-in capital on preferred stock 120 136 159 145 138 158 143 145 
Unearned ESOP shares875 875 875 875 875 875 875 1,052 
Noncontrolling interests
(2,043)(1,865)(859)(1,845)(1,313)(761)(1,427)(730)
Total common stockholders’ equity
(A)169,753 171,453 160,804 171,813 169,560 160,551 169,521 163,491 
Adjustments:
Goodwill(26,191)(26,194)(26,387)(26,192)(26,213)(26,388)(26,262)(26,386)
Certain identifiable intangible assets (other than MSRs)
(281)(301)(366)(290)(310)(378)(310)(401)
Goodwill and other intangibles on nonmarketable equity securities (included in other assets)
(2,120)(2,256)(2,019)(2,169)(2,208)(2,045)(2,198)(2,040)
Applicable deferred taxes related to goodwill and other intangible
assets (1)
886 875 842 882 873 838 873 828 
Tangible common equity
(B)$142,047 143,577 132,874 144,044 141,702 132,578 141,624 135,492 
Common shares outstanding
(C)3,996.9 4,108.0 4,132.5 N/AN/AN/AN/AN/A
Net income applicable to common stock
(D)N/AN/AN/A$4,787 5,743 2,901 $14,786 (955)
Book value per common share (A)/(C)$42.47 41.74 38.91 N/AN/AN/AN/AN/A
Tangible book value per common share(B)/(C)35.54 34.95 32.15 N/AN/AN/AN/AN/A
Return on average common stockholders’ equity (ROE) (annualized)(D)/(A)N/AN/AN/A11.05 %13.59 7.19 11.66 %(0.78)
Return on average tangible common equity (ROTCE) (annualized)(D)/(B)N/AN/AN/A13.18 16.26 8.71 13.96 (0.94)
(1)Determined by applying the combined federal statutory rate and composite state income tax rates to the difference between book and tax basis of the respective goodwill and intangible assets at period end.
LEVERAGE REQUIREMENTS As a BHC, we are required to maintain a supplementary leverage ratio (SLR) to avoid restrictions on capital distributions and discretionary bonus payments and maintain a minimum tier 1 leverage ratio. Table 40 presents the leverage requirements applicable to the Company as of September 30, 2021.
Table 40: Leverage Requirements Applicable to the Companywfc-20210930_g3.jpg
In addition, our IDIs are required to maintain an SLR of at least 6.00% to be considered well capitalized under applicable regulatory capital adequacy rules and maintain a minimum tier 1 leverage ratio of 4.00%.
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 2020 Form 10-K.
At September 30, 2021, the Company’s SLR was 6.94%, and each of our IDIs exceeded their applicable SLR requirements. Table 41 presents information regarding the calculation and components of the Company’s SLR and tier 1 leverage ratio.
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Capital Management (continued)
Table 41: Leverage Ratios for the Company
(in millions, except ratios)Quarter ended September 30, 2021
Tier 1 capital(A)$160,615 
Total average assets1,950,164 
Less: Goodwill and other permitted Tier 1 capital deductions (net of deferred tax liabilities)28,814 
Total adjusted average assets1,921,350 
Plus adjustments for off-balance sheet exposures:
Derivatives (1)70,638 
Repo-style transactions (2)3,668 
Other (3)317,978 
Total off-balance sheet exposures392,284 
Total leverage exposure(B)$2,313,634 
Supplementary leverage ratio(A)/(B)6.94 %
Tier 1 leverage ratio (4)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 1 leverage ratio consists of tier 1 capital divided by total average assets, excluding goodwill and certain other items as determined under the rule.
TOTAL LOSS ABSORBING CAPACITY As a G-SIB, we are required to have a minimum amount of equity and unsecured long-term debt for purposes of resolvability and resiliency, often referred to as Total Loss Absorbing Capacity (TLAC). U.S. G-SIBs are required to have a minimum amount of TLAC (consisting of CET1 capital and additional tier 1 capital issued directly by the top-tier or covered BHC plus eligible external long-term debt) to avoid restrictions on capital distributions and discretionary bonus payments, as well as a minimum amount of eligible unsecured long-term debt. The components used to calculate our minimum TLAC and eligible unsecured long-term debt requirements as of September 30, 2021, are presented in Table 42.
Table 42: Components Used to Calculate TLAC and Eligible Unsecured Long-Term Debt Requirements
TLAC requirement

Greater of:
18.00% of RWAs7.50% 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 RWAs4.50% 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 Management – Total Loss Absorbing Capacity” section in our 2020 Form 10-K.
Table 43 provides our TLAC and eligible unsecured long-term debt and related ratios as of September 30, 2021, and December 31, 2020.
Table 43: TLAC and Eligible Unsecured Long-Term Debt
($ in millions)TLAC (1)Regulatory Minimum (2)Eligible Unsecured Long-term DebtRegulatory Minimum
September 30, 2021
Total eligible amount$288,605124,338 
Percentage of RWAs (3)23.68 %21.50 10.20 8.00 
Percentage of total leverage exposure12.47 9.50 5.37 4.50 
December 31, 2020
Total eligible amount$307,226140,703 
Percentage of RWAs (3)25.74 %22.00 11.79 8.00 
Percentage of total leverage exposure (4)15.64 9.50 7.16 4.50 
(1)TLAC ratios are calculated using the CECL transition provision issued by federal banking regulators.
(2)Represents the minimum required to avoid restrictions on capital distributions and discretionary bonus payments.
(3)Our minimum TLAC and eligible unsecured long-term debt requirements are calculated based on the greater of RWAs determined under the Standardized and Advanced Approaches.
(4)Total leverage exposure at December 31, 2020, reflected an interim final rule issued by the FRB that temporarily allowed a bank holding company to exclude on-balance sheet amounts of U.S. Treasury securities and deposits at Federal Reserve Banks from the calculation of its total leverage exposure.
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.

Capital Planning and Stress Testing
Our planned long-term capital structure is designed to meet regulatory and market expectations. We believe that our long-term targeted capital structure enables us to invest in and grow our business, satisfy our customers’ financial needs in varying environments, access markets, and maintain flexibility to return capital to our shareholders. Our long-term targeted capital structure also considers capital levels sufficient to exceed capital requirements including the G-SIB capital surcharge. Accordingly, we currently target a long-term CET1 capital ratio that is 100 basis points above our regulatory requirement plus an incremental buffer of 25 to 50 basis points. Our capital targets are subject to change based on various factors, including changes to the regulatory capital framework and expectations for large banks promulgated by bank regulatory agencies, changes to the regulatory requirements for our capital ratios, planned capital actions, changes in our risk profile and other factors.
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.
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.

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Wells Fargo & Company


Securities Repurchases
From time to time the Board authorizes the Company to repurchase shares of our common stock. Although we announce when the Board authorizes share repurchases, we typically do not give any public notice before we repurchase our shares. Various factors determine the amount of our share repurchases, including our capital requirements, the number of shares we expect to issue for employee benefit plans and acquisitions, market conditions (including the trading price of our stock), and regulatory and legal considerations, including under the FRB’s capital plan rule. Due to the various factors that may impact the
amount of our share repurchases and the fact that we tend to be in the market regularly to satisfy repurchase considerations under our capital plan, our share repurchases occur at various price levels. We may suspend share repurchase activity at any time.
At September 30, 2021, we had remaining Board authority to repurchase approximately 500 million shares, subject to regulatory and legal conditions. For additional information about share repurchases during third quarter 2021, 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. For a discussion of other significant regulations and regulatory oversight initiatives that have affected or may affect our business, see the “Regulatory Matters” and “Risk Factors” sections in our 2020 Form 10-K and the “Regulatory Matters” section in our 2021 First and Second Quarter Reports on Form 10-Q.


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Critical Accounting Policies 
Our significant accounting policies (see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2020 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 2020 Form 10-K.
Current Accounting Developments
The following significant accounting update has been issued by the Financial Accounting Standards Board (FASB) and is applicable to us, but is not yet effective:
Accounting Standards Update (ASU or Update) 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts and subsequent related updates

ASU 2018-12 See the “Current Accounting Developments” section in our 2020 Form 10-K for information on the effective date and our assessment of the expected financial statement impact upon adoption.
Other Accounting Developments
The following Updates are applicable to us but are not expected to have a material impact on our consolidated financial statements:
ASU 2020-06 – Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity
ASU 2021-05 – Leases (Topic 842): Lessors – Certain Leases with Variable Lease Payments
ASU 2021-08 – Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers
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Wells Fargo & Company


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, 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;
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, 2020.

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
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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, 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, 2020, 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.
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Wells Fargo & Company


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 2020 Form 10-K.

Wells Fargo & Company
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Controls and Procedures
Disclosure Controls and Procedures
The Company’s management evaluated the effectiveness, as of September 30, 2021, 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 September 30, 2021.
 
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 third quarter 2021 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 
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Wells Fargo & Company


Financial Statements
Wells Fargo & Company and Subsidiaries
Consolidated Statement of Income (Unaudited)
Quarter ended September 30,Nine months ended September 30,
(in millions, except per share amounts)2021202020212020
Interest income
Debt securities$2,354 2,446 $6,865 8,864 
Loans held for sale172 239 696 685 
Loans (1)7,057 7,965 21,353 26,508 
Equity securities146 101 415 423 
Other interest income105 60 244 889 
Total interest income9,834 10,811 29,573 37,369 
Interest expense
Deposits99 314 303 2,641 
Short-term borrowings(7)(12)(28)262 
Long-term debt745 1,038 2,483 3,515 
Other interest expense88 92 298 350 
Total interest expense925 1,432 3,056 6,768 
Net interest income8,909 9,379 26,517 30,601 
Noninterest income
Deposit and lending-related fees1,781 1,651 5,101 4,913 
Investment advisory and other asset-based fees (2)2,882 2,505 8,432 7,265 
Commissions and brokerage services fees (2)525 568 1,741 1,795 
Investment banking fees547 441 1,685 1,379 
Card fees1,078 912 3,104 2,601 
Mortgage banking1,259 1,590 3,921 2,286 
Net gains on trading and securities1,244 1,274 4,852 1,726 
Other (1)609 996 2,283 3,209 
Total noninterest income9,925 9,937 31,119 25,174 
Total revenue18,834 19,316 57,636 55,775 
Provision for credit losses(1,395)769 (3,703)14,308 
Noninterest expense
Personnel8,690 8,624 27,066 25,863 
Technology, telecommunications and equipment741 791 2,400 2,261 
Occupancy738 851 2,243 2,437 
Operating losses540 1,219 1,056 2,902 
Professional and outside services1,417 1,760 4,255 5,042 
Advertising and promotion153 144 375 462 
Restructuring charges1 718 10 718 
Other1,023 1,122 3,228 3,143 
Total noninterest expense13,303 15,229 40,633 42,828 
Income (loss) before income tax expense6,926 3,318 20,706 (1,361)
Income tax expense (benefit) (1)1,521 (83)3,867 (1,731)
Net income before noncontrolling interests5,405 3,401 16,839 370 
Less: Net income from noncontrolling interests283 185 1,041 84 
Wells Fargo net income (1)$5,122 3,216 $15,798 286 
Less: Preferred stock dividends and other335 315 1,012 1,241 
Wells Fargo net income (loss) applicable to common stock (1)$4,787 2,901 $14,786 (955)
Per share information (1)
Earnings (loss) per common share$1.18 0.70 $3.60 (0.23)
Diluted earnings (loss) per common share1.17 0.70 3.57 (0.23)
Average common shares outstanding4,056.3 4,123.8 4,107.1 4,111.4 
Diluted average common shares outstanding4,090.4 4,132.2 4,140.0 4,111.4 
(1)In second quarter 2021, we elected to change our accounting method for low-income housing tax credit investments and elected to change the presentation of investment tax credits related to solar energy investments. Prior period balances have been revised to conform with the current period presentation. For additional information, see Note 1 (Summary of Significant Accounting Policies).
(2)In first quarter 2021, trust and investment management fees and asset-based brokerage fees were combined into a single line item for investment advisory and other asset-based fees, and brokerage commissions and other brokerage services fees were combined into a single line item for commissions and brokerage services fees. Prior period balances have been revised to conform with the current period presentation.
The accompanying notes are an integral part of these statements.
Wells Fargo & Company
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Wells Fargo & Company and Subsidiaries
Consolidated Statement of Comprehensive Income (Unaudited)
Quarter ended September 30,Nine months ended September 30,
(in millions)2021202020212020
Net income before noncontrolling interests (1)$5,405 3,401 16,839 370 
Other comprehensive income (loss), after tax:
Net change in debt securities(468)(1,689)920 
Net change in derivatives and hedging activities38 (14)101 126 
Defined benefit plans adjustments(121)(15)248 (416)
Net change in foreign currency translation adjustments(64)72 (31)(70)
Other comprehensive income (loss), after tax(615)48 (1,371)560 
Total comprehensive income before noncontrolling interests (1)4,790 3,449 15,468 930 
Less: Other comprehensive loss from noncontrolling interests(2)—  (1)
Less: Net income from noncontrolling interests283 185 1,041 84 
Wells Fargo comprehensive income (1)$4,509 3,264 14,427 847 
(1)In second quarter 2021, we elected to change our accounting method for low-income housing tax credit investments and elected to change the presentation of investment tax credits related to solar energy investments. Prior period balances have been revised to conform with the current period presentation. For additional information, see Note 1 (Summary of Significant Accounting Policies).
The accompanying notes are an integral part of these statements.
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Wells Fargo & Company



Wells Fargo & Company and Subsidiaries
Consolidated Balance Sheet
(in millions, except shares)Sep 30,
2021
Dec 31,
2020
Assets(Unaudited)
Cash and due from banks$25,509 28,236 
Interest-earning deposits with banks 241,178 236,376 
Total cash, cash equivalents, and restricted cash266,687 264,612 
Federal funds sold and securities purchased under resale agreements 67,807 65,672 
Debt securities:
Trading, at fair value 94,943 75,095 
Available-for-sale, at fair value (includes amortized cost of $182,699 and $215,533, net of allowance for credit losses)
185,557 220,392 
Held-to-maturity, at amortized cost, net of allowance for credit losses (fair value $264,022 and $212,307)
262,493 205,720 
Loans held for sale (includes $17,781 and $18,806 carried at fair value)
24,811 36,384 
Loans862,827 887,637 
Allowance for loan losses(13,517)(18,516)
Net loans849,310 869,121 
Mortgage servicing rights (includes $6,862 and $6,125 carried at fair value)
8,148 7,437 
Premises and equipment, net8,599 8,895 
Goodwill26,191 26,392 
Derivative assets 27,060 25,846 
Equity securities (includes $35,556 and $34,009 carried at fair value)
66,526 60,008 
Other assets 66,769 87,337 
Total assets (1)$1,954,901 1,952,911 
Liabilities
Noninterest-bearing deposits$529,051 467,068 
Interest-bearing deposits941,328 937,313 
Total deposits1,470,379 1,404,381 
Short-term borrowings41,980 58,999 
Derivative liabilities12,976 16,509 
Accrued expenses and other liabilities (includes $25,524 and $22,441 carried at fair value)
75,513 74,360 
Long-term debt 162,982 212,950 
Total liabilities (2)1,763,830 1,767,199 
Equity
Wells Fargo stockholders’ equity:
Preferred stock20,270 21,136 
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 capital60,134 60,197 
Retained earnings175,709 162,683 
Cumulative other comprehensive income (loss)(1,177)194 
Treasury stock – 1,484,890,493 shares and 1,337,799,931 shares
(74,169)(67,791)
Unearned ESOP shares(875)(875)
Total Wells Fargo stockholders’ equity 189,028 184,680 
Noncontrolling interests2,043 1,032 
Total equity191,071 185,712 
Total liabilities and equity$1,954,901 1,952,911 
(1)Our consolidated assets at September 30, 2021, and December 31, 2020, included the following assets of certain variable interest entities (VIEs) that can only be used to settle the liabilities of those VIEs: Debt securities, $515 million and $967 million; Loans, $4.0 billion and $10.9 billion; All other assets, $334 million and $310 million; and Total assets, $4.9 billion and $12.1 billion, respectively.
(2)Our consolidated liabilities at September 30, 2021, and December 31, 2020, include the following VIE liabilities for which the VIE creditors do not have recourse to Wells Fargo: Long-term debt, $166 million and $203 million; All other liabilities, $589 million and $900 million; and Total liabilities, $755 million and $1.1 billion, respectively.
The accompanying notes are an integral part of these statements.
Wells Fargo & Company
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Wells Fargo & Company and Subsidiaries
Consolidated Statement of Changes in Equity – Quarter ended September 30 (Unaudited)
Wells Fargo stockholders’ equity
Preferred stockCommon stock
($ and shares in millions)SharesAmountSharesAmountAdditional
paid-in
capital
Retained
earnings
Cumulative
other
comprehensive
income (loss)
Treasury
stock
Unearned
ESOP
shares
Noncontrolling
interests
Total
equity
Balance June 30, 2021 5.6 $20,820 4,108.0 $9,136 60,018 171,765 (564)(69,038)(875)1,865 193,127 
Net income5,122 283 5,405 
Other comprehensive loss,
net of tax
(613)(2)(615)
Noncontrolling interests(103)(103)
Common stock issued3.1 (22)160 138 
Common stock repurchased(114.2)(5,291)(5,291)
Preferred stock redeemed (1)(0.1)(1,800)38 (38)(1,800)
Preferred stock issued 1,250 (23)1,227 
Common stock dividends10 (821)(811)
Preferred stock dividends(297)(297)
Stock incentive compensation
expense
139 139 
Net change in deferred compensation and related plans(48) (48)
Net change(0.1)(550)(111.1) 116 3,944 (613)(5,131) 178 (2,056)
Balance September 30, 20215.5 $20,270 3,996.9 $9,136 60,134 175,709 (1,177)(74,169)(875)2,043 191,071 
Balance June 30, 2020 (2)5.5 $21,098 4,119.6 $9,136 59,923 158,466 (798)(69,050)(875)735 178,635 
Net income (2)3,216 185 3,401 
Other comprehensive income,
net of tax
48 — 48 
Noncontrolling interests (60)(60)
Common stock issued13.0 (343)668 325 
Common stock repurchased (0.1)(3)(3)
Preferred stock redeemed— — — — — 
Preferred stock issued— — — — 
Common stock dividends (417)(414)
Preferred stock dividends (315)(315)
Stock incentive compensation
expense
136 136 
Net change in deferred compensation and related plans(27)(26)
Net change (2)— — 12.9 — 112 2,141 48 666 — 125 3,092 
Balance September 30, 2020 (2)5.5 $21,098 4,132.5 $9,136 60,035 160,607 (750)(68,384)(875)860 181,727 
(1)Represents the impact of the redemption of Preferred Stock, Series O and Series X, in third quarter 2021. For additional information, see Note 16 (Preferred Stock).
(2)In second quarter 2021, we elected to change our accounting method for low-income housing tax credit investments and elected to change the presentation of investment tax credits related to solar energy investments. Prior period balances have been revised to conform with the current period presentation. For additional information, see Note 1 (Summary of Significant Accounting Policies).

The accompanying notes are an integral part of these statements.
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Wells Fargo & Company



Wells Fargo & Company and Subsidiaries
Consolidated Statement of Changes in Equity – Nine months ended September 30 (Unaudited)
Wells Fargo stockholders’ equity
Preferred stockCommon stock
($ and shares in millions)SharesAmountSharesAmountAdditional
paid-in
capital
Retained
earnings
Cumulative
other
comprehensive
income (loss)
Treasury
stock
Unearned
ESOP
shares
Noncontrolling
interests
Total
equity
Balance December 31, 2020 (1)5.5 $21,136 4,144.0 $9,136 60,197 162,683 194 (67,791)(875)1,032 185,712 
Net income15,798 1,041 16,839 
Other comprehensive loss,
net of tax
(1,371) (1,371)
Noncontrolling interests(30)(30)
Common stock issued19.6  (103)1,060 957 
Common stock repurchased(166.7)(7,452)(7,452)
Preferred stock redeemed (2)(0.2)(6,676)86 (86)(6,676)
Preferred stock released by ESOP   
Preferred stock converted to
common shares
      
Preferred stock issued0.2 5,810 (54)5,756 
Common stock dividends20 (1,657)(1,637)
Preferred stock dividends(926)(926)
Stock incentive compensation
expense
863 863 
Net change in deferred compensation and related plans(978)14 (964)
Net change (866)(147.1) (63)13,026 (1,371)(6,378) 1,011 5,359 
Balance September 30, 20215.5 $20,270 3,996.9 $9,136 60,134 175,709 (1,177)(74,169)(875)2,043 191,071 
Balance December 31, 20197.5 $21,549 4,134.4 $9,136 61,049 166,697 (1,311)(68,831)(1,143)838 187,984 
Cumulative effect from change in accounting policies (1)708 708 
Balance January 1, 2020 (1)7.5 21,549 4,134.4 9,136 61,049 167,405 (1,311)(68,831)(1,143)838 188,692 
Net income (1)286 84 370 
Other comprehensive income (loss),
net of tax
561 (1)560 
Noncontrolling interests (61)(61)
Common stock issued63.9 207 (1,200)3,362 2,369 
Common stock repurchased (75.5)(3,412)(3,412)
Preferred stock redeemed (3)(1.9)(2,215)17 (272)(2,470)
Preferred stock released by ESOP(19)268 249 
Preferred stock converted to
common shares
(0.2)(249)9.7 (243)492 — 
Preferred stock issued0.1 2,013 (45)1,968 
Common stock dividends 41 (4,643)(4,602)
Preferred stock dividends(969)(969)
Stock incentive compensation
expense
437 437 
Net change in deferred compensation and related plans(1,409)(1,404)
Net change (1)(2.0)(451)(1.9)— (1,014)(6,798)561 447 268 22 (6,965)
Balance September 30, 2020 (1)5.5 $21,098 4,132.5 $9,136 60,035 160,607 (750)(68,384)(875)860 181,727 
(1)We adopted Accounting Standards Update (ASU) 2016-13 – Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (CECL) effective January 1, 2020. For additional information, see Note 1 (Summary of Significant Accounting Policies) in our Annual Report on Form 10-K for the year ended December 31, 2020. In second quarter 2021, we elected to change our accounting method for low-income housing tax credit investments and elected to change the presentation of investment tax credits related to solar energy investments. Prior period balances have been revised to conform with the current period presentation. For additional information, see Note 1 (Summary of Significant Accounting Policies).
(2)Represents the impact of the redemption of Preferred Stock, Series I, Series P and Series W, in first quarter 2021; Preferred Stock, Series N, in second quarter 2021; and Preferred Stock, Series O and Series X, in third quarter 2021. For additional information, see Note 16 (Preferred Stock).
(3)Represents the impact of the redemption of the remaining Preferred Stock, Series K, and partial redemption of Preferred Stock, Series T, in first quarter 2020.
The accompanying notes are an integral part of these statements.
Wells Fargo & Company
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Wells Fargo & Company and Subsidiaries
Consolidated Statement of Cash Flows (Unaudited)
Nine months ended September 30,
(in millions)20212020
Cash flows from operating activities:
Net income before noncontrolling interests (1)$16,839 370 
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses(3,703)14,308 
Changes in fair value of MSRs and LHFS carried at fair value(1,158)4,434 
Depreciation, amortization and accretion (1)6,090 6,137 
Stock-based compensation1,858 1,337 
Deferred income tax benefit (1)(2,689)(1,570)
Other net (gains) losses (2)(10,304)6,739 
Originations and purchases of loans held for sale (2)(123,983)(135,618)
Proceeds from sales of and paydowns on loans originally classified as held for sale (2)78,356 99,642 
Net change in:
Debt and equity securities, held for trading (2)7,638 47,322 
Derivative assets and liabilities(4,639)(5,823)
Other assets16,736 (9,482)
Other accrued expenses and liabilities (1)2,617 (2,980)
Net cash provided (used) by operating activities(16,342)24,816 
Cash flows from investing activities:
Net change in:
Federal funds sold and securities purchased under resale agreements
(2,135)32,836 
Available-for-sale debt securities:
Proceeds from sales14,568 40,709 
Prepayments and maturities61,080 59,393 
Purchases(84,576)(54,010)
Held-to-maturity debt securities:
Paydowns and maturities60,613 22,767 
Purchases(59,480)(41,758)
Equity securities, not held for trading:
Proceeds from sales and capital returns2,706 10,344 
Purchases(4,480)(6,518)
Loans:
Loans originated by banking subsidiaries, net of principal collected8,292 33,296 
Proceeds from sales of loans originally classified as held for investment26,388 6,828 
Purchases of loans(313)(1,036)
Principal collected on nonbank entities’ loans7,642 7,150 
Loans originated by nonbank entities(8,242)(8,703)
Proceeds from sales of foreclosed assets and short sales566 967 
Other, net1,154 (223)
Net cash provided by investing activities23,783 102,042 
Cash flows from financing activities:
Net change in:
Deposits66,482 60,589 
Short-term borrowings(17,019)(49,288)
Long-term debt:
Proceeds from issuance1,143 37,901 
Repayment(44,739)(61,151)
Preferred stock:
Proceeds from issuance5,756 1,968 
Redeemed(6,675)(2,470)
Cash dividends paid(867)(910)
Common stock:
Proceeds from issuance214 513 
Stock tendered for payment of withholding taxes(277)(326)
Repurchased(7,452)(3,412)
Cash dividends paid(1,603)(4,454)
Net change in noncontrolling interests(76)(67)
Other, net(253)(231)
Net cash used by financing activities (5,366)(21,338)
Net change in cash, cash equivalents, and restricted cash2,075 105,520 
Cash, cash equivalents, and restricted cash at beginning of period264,612 141,250 
Cash, cash equivalents, and restricted cash at end of period$266,687 246,770 
Supplemental cash flow disclosures:
Cash paid for interest$3,407 7,099 
Cash paid for income taxes, net (2)3,114 2,171 
(1)In second quarter 2021, we elected to change our accounting method for low-income housing tax credit investments and elected to change the presentation of investment tax credits related to solar energy investments. Prior period balances have been revised to conform with the current period presentation. For additional information, see Note 1 (Summary of Significant Accounting Policies).
(2)Prior period balances have been revised to conform with the current period presentation.
The accompanying notes are an integral part of these statements. See Note 1 (Summary of Significant Accounting Policies) for noncash activities.
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Notes to Financial Statements
-See the Glossary of 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, 2020 (2020 Form 10-K).
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 4 (Loans and Related Allowance for Credit Losses));
valuations of residential mortgage servicing rights (MSRs) (Note 8 (Securitizations and Variable Interest Entities) and Note 9 (Mortgage Banking Activities));
valuations of financial instruments (Note 15 (Fair Values of Assets and Liabilities));
liabilities for contingent litigation losses (Note 13 (Legal Actions));
income taxes; and
goodwill impairment (Note 10 (Intangible 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 2020 Form 10-K.
Change in Accounting Policies
In second quarter 2021, we elected to change our accounting method for low-income housing tax credit (LIHTC) investments from the equity method of accounting to the proportional amortization method. Under the proportional amortization method, the investments are carried at amortized cost and amortized in proportion to the tax credits received. The amortization of the investments and the related tax impacts are recognized in income tax expense. Previously, we recognized the amortization of the investments in other noninterest income and the related tax impacts were recognized in income tax expense. We determined that the proportional amortization method is preferable because it better aligns the financial statement presentation with the economic impact of these investments, which generate tax credits over the lives of the investments. Adoption of the proportional amortization method was applied retrospectively, to the earliest period presented, which resulted in a cumulative-effect adjustment to reduce retained earnings by $283 million as of January 1, 2020.
In second quarter 2021, we also elected to change the presentation of investment tax credits related to solar energy investments, which are accounted for under the deferral method. We reclassified the investment tax credits on our consolidated balance sheet from accrued expenses and other liabilities to a reduction of the carrying value of the investment balances. We also reclassified the investment tax credits, which are recognized over time, from income tax expense to interest income for solar energy leases or noninterest income for solar energy equity investments. We determined that this presentation is preferable because it better reflects the financial statement presentation of the investment tax credits as an integral component of the investments. The change in accounting policy was adopted retrospectively to January 1, 2020.
Table 1.1 presents the impact of the accounting policy changes for LIHTC investments and solar energy investments to our consolidated statement of income and consolidated balance sheet. There was no material impact to the consolidated statement of cash flows.
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Note 1: Summary of Significant Accounting Policies (continued)
Table 1.1: Impact of the Accounting Policy Changes for LIHTC Investments and Solar Energy Investments
Quarter ended September 30, 2020Nine months ended September 30, 2020
Effect of accounting policy changes ($)Effect of accounting policy changes ($)
($ in millions, except per share amounts)As reportedLIHTCSolarAs revisedAs reportedLIHTCSolarAs revised
Selected Income Statement Data
Interest income – loans$7,954 — 11 7,965 26,467 — 41 26,508 
Noninterest income9,494 370 73 9,937 23,855 1,109 210 25,174 
Income tax expense (benefit) (1)645 (554)(174)(83)(3,113)1,031 351 (1,731)
Net income (loss)2,035 924 257 3,216 309 79 (102)286 
Earnings (loss) per common share0.42 0.22 0.06 0.70 (0.23)0.02 (0.02)(0.23)
Diluted earnings (loss) per common share0.42 0.22 0.06 0.70 (0.23)0.02 (0.02)(0.23)
At December 31, 2020
Effect of accounting policy changes ($)
As reportedLIHTCSolarAs revised
Selected Balance Sheet Data
Equity securities$62,260 (275)(1,977)60,008 
Accrued expenses and other liabilities76,404 (62)(1,982)74,360 
Retained earnings162,890 (207)— 162,683 
(1)The quarterly income tax expense (benefit) varies based on the income (loss) before income tax expense (benefit) and the estimated annual effective income tax rate applied to each quarter.

Accounting Standards Adopted in 2021
In 2021, we adopted the following new accounting guidance:
Accounting Standards Update (ASU or Update) 2021-01 – Reference Rate Reform (Topic 848): Scope
ASU 2020-08 – Codification Improvements to Subtopic 310-20, Receivables – Nonrefundable Fees and Other Costs
ASU 2020-01 – Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Financial Accounting Standards Board (FASB) Emerging Issues Task Force)
ASU 2019-12 – Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes

ASU 2021-01 clarifies the scope of Topic 848 to include derivatives affected by changes in interest rates for margining, discounting, or contract price alignment as part of the market-wide transition to new reference rates (commonly referred to as the “discounting transition”), even if they do not reference the London Interbank Offered Rate or another rate that is expected to be discontinued as a result of reference rate reform. The Update also clarifies other aspects of the relief provided in Accounting Standards Codification (ASC) 848. We adopted this Update in first quarter 2021 on a prospective basis, and the guidance will be followed until the Update terminates on December 31, 2022. The Update did not have a material impact on our consolidated financial statements.

ASU 2020-08 clarifies the accounting for purchased callable debt securities carried at a premium and was issued to correct an unintended application of ASU 2017-08 – Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities, which requires amortization of such premiums to the earliest call date, but was not clear for the method to be used for instruments with multiple call dates. The Update now specifies that such premiums are amortized to the next call date and requires reassessment throughout the life of the instruments with multiple call dates. We adopted this Update in first quarter
2021. The Update did not have a material impact on our consolidated financial statements.

ASU 2020-01 clarifies the accounting for equity securities upon transition between the measurement alternative and equity method. The Update also clarifies for forward contracts and options to purchase equity securities an entity need not consider whether upon settlement of the forward contract or option if the equity securities would be accounted for by the equity method or the fair value option. We adopted this Update in first quarter 2021. The Update did not have a material impact on our consolidated financial statements.

ASU 2019-12 provides narrow scope simplifications and improvements to the general principles in ASC Topic 740 – Income Taxes related to intraperiod tax allocation, basis differences when there are changes in ownership of foreign investments and interim periods income tax accounting for year to date losses that exceed anticipated annual losses. We adopted this Update in first quarter 2021. The Update did not have a material impact on our consolidated financial statements.
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Supplemental Cash Flow Information
Significant noncash activities are presented in Table 1.2.

Table 1.2: Supplemental Cash Flow Information
Nine months ended September 30,
(in millions)20212020
Available-for-sale debt securities purchased from securitization of LHFS (1)$256 2,710 
Held-to-maturity debt securities purchased from securitization of LHFS (1)17,600 9,016 
Transfers from loans to LHFS (2)14,842 4,374 
Transfers from available-for-sale debt securities to held-to-maturity debt securities41,298 1,236 
(1)Predominantly represents agency mortgage-backed securities purchased upon settlement of the sale and securitization of our conforming residential mortgage loans. See Note 8 (Securitizations and Variable Interest Entities) for additional information.
(2)Prior periods have been revised to conform to the current period presentation.

Subsequent Events
On November 1, 2021, we closed our previously announced agreement to sell our Corporate Trust Services business and our previously announced agreement to sell Wells Fargo Asset Management, which is subject to certain post-closing adjustments and earn-out provisions. We have evaluated the effects of events that have occurred subsequent to September 30, 2021, and, except for the closing of the sales of our Corporate Trust Services business and Wells Fargo Asset Management, there have been no material events that would require recognition in our third quarter 2021 consolidated financial statements or disclosure in the Notes to the consolidated financial statements.
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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) Sep 30,
2021
Dec 31,
2020
Trading assets:
Debt securities$94,943 75,095 
Equity securities24,277 23,032 
Loans held for sale2,405 1,015 
Gross trading derivative assets56,191 58,767 
Netting (1)(30,603)(34,301)
Total trading derivative assets25,588 24,466 
Total trading assets147,213 123,608 
Trading liabilities:
Short sale25,524 22,441 
Gross trading derivative liabilities43,788 53,285 
Netting (1)(32,164)(39,444)
Total trading derivative liabilities11,624 13,841 
Total trading liabilities$37,148 36,282 
(1)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) on Trading Activities
Quarter ended September 30,Nine months ended September 30,
(in millions)2021202020212020
Interest income:
Debt securities$512 $546 $1,537 1,971 
Equity securities104 68 300 273 
Loans held for sale12 27 24 
Total interest income628 620 1,864 2,268 
Less: Interest expense90 93 305 350 
Net interest income538 527 1,559 1,918 
Net gains (losses) from trading activities (1):
Debt securities(284)214 (1,621)2,898 
Equity securities771 1,381 2,780 (691)
Loans held for sale9 14 48 26 
Derivatives (2)(404)(1,248)(746)(1,001)
Total net gains from trading activities92 361 461 1,232 
Total trading-related net interest and noninterest income$630 $888 $2,020 3,150 
(1)Represents realized gains (losses) from our trading activities and unrealized gains (losses) due to changes in fair value of our trading positions.
(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.

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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 other comprehensive income (OCI), 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 Assets) for additional information on accrued interest receivable. Amounts considered to be uncollectible are reversed through interest income. The interest income reversed in the third quarter and first nine months of both 2021 and 2020 was insignificant.

Table 3.1: Available-for-Sale and Held-to-Maturity Debt Securities Outstanding
(in millions)Amortized
cost, net (1)
Gross
unrealized gains 
Gross
unrealized losses
Fair value
September 30, 2021
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies$38,273 163 (58)38,378 
Non-U.S. government securities5,787   5,787 
Securities of U.S. states and political subdivisions (2)19,320 373 (54)19,639 
Federal agency mortgage-backed securities91,981 2,433 (429)93,985 
Non-agency mortgage-backed securities (3)4,366 41 (18)4,389 
Collateralized loan obligations14,450 8 (4)14,454 
Other debt securities8,522 416 (13)8,925 
Total available-for-sale debt securities182,699 3,434 (576)185,557 
Held-to-maturity debt securities:
Securities of U.S. Treasury and federal agencies23,853 748 (414)24,187 
Securities of U.S. states and political subdivisions29,358 721 (209)29,870 
Federal agency mortgage-backed securities187,048 2,510 (2,051)187,507 
Non-agency mortgage-backed securities965 45 (13)997 
Collateralized loan obligations21,269 193 (1)21,461 
Total held-to-maturity debt securities262,493 4,217 (2,688)264,022 
Total (4)$445,192 7,651 (3,264)449,579 
December 31, 2020
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies$21,954 205 — 22,159 
Non-U.S. government securities16,816 — (3)16,813 
Securities of U.S. states and political subdivisions (2)19,263 224 (81)19,406 
Federal agency mortgage-backed securities134,838 4,260 (28)139,070 
Non-agency mortgage-backed securities (3)3,745 30 (46)3,729 
Collateralized loan obligations9,058 (44)9,018 
Other debt securities9,859 399 (61)10,197 
Total available-for-sale debt securities215,533 5,122 (263)220,392 
Held-to-maturity debt securities:
Securities of U.S. Treasury and federal agencies47,295 1,472 (170)48,597 
Securities of U.S. states and political subdivisions25,860 938 (5)26,793 
Federal agency mortgage-backed securities115,437 4,182 (21)119,598 
Non-agency mortgage-backed securities890 51 (8)933 
Collateralized loan obligations16,238 148 — 16,386 
Total held-to-maturity debt securities205,720 6,791 (204)212,307 
Total (4)$421,253 11,913 (467)432,699 
(1)Represents amortized cost of the securities, net of the ACL of $21 million and $28 million related to AFS debt securities and $75 million and $41 million related to HTM debt securities at September 30, 2021, and December 31, 2020, 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 $5.2 billion at September 30, 2021, and $5.0 billion at December 31, 2020.
(3)Predominantly consists of commercial mortgage-backed securities at both September 30, 2021, and December 31, 2020.
(4)We held AFS and HTM debt securities from Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC) that each exceeded 10% of stockholders’ equity, with an amortized cost of $126.7 billion and $84.0 billion and a fair value of $128.0 billion and $84.7 billion at September 30, 2021, and an amortized cost of $99.8 billion and $88.7 billion and a fair value of $103.2 billion and $91.5 billion at December 31, 2020, respectively.
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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.

Table 3.2: Held-to-Maturity Debt Securities Purchases and Transfers
Quarter ended September 30,Nine months ended September 30,
(in millions)2021202020212020
Purchases of held-to-maturity debt securities (1):
Securities of U.S. Treasury and federal agencies
$ — $ 3,016 
Securities of U.S. states and political subdivisions
1,409 — 4,492 881 
Federal agency mortgage-backed securities14,296 23,664 64,018 46,485 
Non-agency mortgage-backed securities30 19 114 93 
Collateralized loan obligations839 — 8,177 — 
Total purchases of held-to-maturity debt securities
16,574 23,683 76,801 50,475 
Transfers from available-for-sale debt securities to held-to-maturity debt securities:
Securities of U.S. states and political subdivisions
 1,236  1,236 
Federal agency mortgage-backed securities — 41,298 — 
Total transfers from available-for-sale debt securities to held-to-maturity debt securities
$ 1,236 $41,298 1,236 
(1)Inclusive of securities purchased but not yet settled and noncash purchases from securitization of loans held for sale (LHFS).
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 September 30,Nine months ended September 30,
(in millions)2021202020212020
Interest income (1):
Available-for-sale
$676 1,009 $2,142 4,084 
Held-to-maturity
1,166 891 3,186 2,809 
Total interest income 1,842 1,900 5,328 6,893 
Provision for credit losses:
Available-for-sale
(5)12 7 140 
Held-to-maturity
(3)33 19 
Total provision for credit losses(8)18 40 159 
Realized gains and losses (2):
Gross realized gains291 264 443 768 
Gross realized losses — (1)(40)
Impairment write-downs(8)— (8)(15)
Net realized gains $283 $264 $434 713 
(1)Excludes interest income from trading debt securities, which is disclosed in Note 2 (Trading Activities).
(2)Realized gains and losses relate to AFS debt securities. There were no realized gains or losses from HTM debt securities in all periods presented.
Credit Quality
We monitor credit quality of debt securities by evaluating various attributes and utilize such information in our evaluation of the appropriateness of the ACL for debt securities. The credit quality indicators that we most closely monitor include credit ratings and delinquency status and are based on information as of our financial statement date.
CREDIT RATINGS Credit ratings express opinions about the credit quality of a debt security. We determine the credit rating of a security according to the lowest credit rating made available by national recognized statistical rating organizations (NRSROs). Debt securities rated investment grade, that is those with ratings similar to BBB-/Baa3 or above, as defined by NRSROs, are generally considered by the rating agencies and market participants to be low credit risk. Conversely, debt securities rated below investment grade, labeled as “speculative grade” by
the rating agencies, are considered to be distinctively higher credit risk than investment grade debt securities. For debt securities not rated by NRSROs, we determine an internal credit grade of the debt securities (used for credit risk management purposes) equivalent to the credit ratings assigned by major credit agencies. Substantially all of our debt securities were rated by NRSROs at September 30, 2021, and December 31, 2020.
Table 3.4 shows the percentage of fair value of AFS debt securities and amortized cost of HTM debt securities determined to be rated investment grade, inclusive of securities rated based on internal credit grades.
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Table 3.4: Investment Grade Debt Securities
Available-for-SaleHeld-to-Maturity
($ in millions)Fair value % investment gradeAmortized cost% investment grade
September 30, 2021
Total portfolio (1)$185,557 99 %262,568 99 %
Breakdown by category:
Securities of U.S. Treasury and federal agencies (2)$132,363 100 %210,901 100 %
Securities of U.S. states and political subdivisions19,639 99 29,372 100 
Collateralized loan obligations (3)14,454 100 21,309 100 
All other debt securities (4)19,101 92 986 4 
December 31, 2020
Total portfolio (1)$220,392 99 %205,761 99 %
Breakdown by category:
Securities of U.S. Treasury and federal agencies (2)$161,229 100 %162,732 100 %
Securities of U.S. states and political subdivisions19,406 99 25,870 100 
Collateralized loan obligations (3)9,018 100 16,255 100 
All other debt securities (4)30,739 93 904 
(1)96% and 92% were rated AA- and above at September 30, 2021, and December 31, 2020, respectively.
(2)Includes federal agency mortgage-backed securities.
(3)99% and 98% were rated AA- and above at September 30, 2021, and December 31, 2020, respectively.
(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 were insignificant at both September 30, 2021, and December 31, 2020. The carrying value of debt securities in nonaccrual status was insignificant at both September 30, 2021, and December 31, 2020. Charge-offs on debt securities were insignificant in the third quarter and first nine months of both 2021 and 2020.
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 third quarter and first nine months of both 2021 and 2020.
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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 
(in millions)Gross unrealized lossesFair value Gross unrealized lossesFair value Gross unrealized lossesFair value 
September 30, 2021
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies
$(58)15,082   (58)15,082 
Non-U.S. government securities      
Securities of U.S. states and political subdivisions
(45)2,326 (9)494 (54)2,820 
Federal agency mortgage-backed securities(389)28,889 (40)2,653 (429)31,542 
Non-agency mortgage-backed securities(2)356 (16)628 (18)984 
Collateralized loan obligations
(1)868 (3)1,283 (4)2,151 
Other debt securities(6)1,202 (7)685 (13)1,887 
Total available-for-sale debt securities$(501)48,723 (75)5,743 (576)54,466 
December 31, 2020
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies
$— — — — — — 
Non-U.S. government securities(3)16,812 — — (3)16,812 
Securities of U.S. states and political subdivisions
(51)3,681 (30)1,101 (81)4,782 
Federal agency mortgage-backed securities(27)11,310 (1)316 (28)11,626 
Non-agency mortgage-backed securities(28)1,366 (18)534 (46)1,900 
Collateralized loan obligations
(27)5,082 (17)1,798 (44)6,880 
Other debt securities(16)647 (45)1,604 (61)2,251 
Total available-for-sale debt securities$(152)38,898 (111)5,353 (263)44,251 
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 2020 Form 10-K.
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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) TotalWithin
one year
After
one year
through
five years
After
five years
through
ten years
After
ten years
September 30, 2021
Available-for-sale debt securities (1): 
Securities of U.S. Treasury and federal agencies
Amortized cost, net$38,273 18,925 17,381 1,962 
Fair value38,378 18,934 17,362 2,077 
Weighted average yield0.76 %2.00 0.34 1.13 1.44 
Non-U.S. government securities
Amortized cost, net$5,787 5,762 25 — — 
Fair value5,787 5,762 25 — — 
Weighted average yield(0.11 %)(0.12)0.42 — — 
Securities of U.S. states and political subdivisions
Amortized cost, net$19,320 1,207 2,472 5,329 10,312 
Fair value19,639 1,208 2,513 5,327 10,591 
Weighted average yield2.02 %1.37 1.45 1.41 2.55 
Federal agency mortgage-backed securities
Amortized cost, net$91,981 221 2,969 88,782 
Fair value93,985 235 3,074 90,667 
Weighted average yield2.62 %2.29 3.33 2.29 2.63 
Non-agency mortgage-backed securities
Amortized cost, net$4,366 — — 148 4,218 
Fair value4,389 — — 147 4,242 
Weighted average yield1.99 %— — 2.28 1.98 
Collateralized loan obligations
Amortized cost, net$14,450 — 92 7,086 7,272 
Fair value14,454 — 92 7,086 7,276 
Weighted average yield1.38 %— 2.17 1.37 1.39 
Other debt securities
Amortized cost, net$8,522 263 2,393 2,566 3,300 
Fair value8,925 264 2,478 2,606 3,577 
Weighted average yield3.08 %3.27 4.23 3.23 2.11 
Total available-for-sale debt securities
Amortized cost, net$182,699 7,246 24,128 35,479 115,846 
Fair value185,557 7,248 24,277 35,602 118,430 
Weighted average yield1.99 %0.35 0.87 1.47 2.49 
(1)Weighted average yields displayed by maturity bucket are weighted based on amortized cost without effect for any related hedging derivatives and are shown pre-tax.
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Note 3:  Available-for-Sale and Held-to-Maturity Debt Securities (continued)
Table 3.7: Contractual Maturities – Held-to-Maturity Debt Securities
By remaining contractual maturity ($ in millions) TotalWithin
one year
After
one year
through
five years
After
five years
through
ten years
After
ten years
September 30, 2021
Held-to-maturity debt securities (1): 
Securities of U.S. Treasury and federal agencies
Amortized cost, net$23,853 7,661 12,409 — 3,783 
Fair value24,187 7,688 13,077 — 3,422 
Weighted average yield
2.09 %1.91 2.37 — 1.57 
Securities of U.S. states and political subdivisions
Amortized cost, net$29,358 1,123 1,833 2,174 24,228 
Fair value29,870 1,138 1,891 2,248 24,593 
Weighted average yield
2.21 %2.37 1.80 2.60 2.20 
Federal agency mortgage-backed securities
Amortized cost, net$187,048 — — — 187,048 
Fair value187,507 — — — 187,507 
Weighted average yield
2.17 %— — — 2.17 
Non-agency mortgage-backed securities
Amortized cost, net$965 — 15 18 932 
Fair value997 — 15 20 962 
Weighted average yield
3.05 %— 1.56 3.65 3.06 
Collateralized loan obligations
Amortized cost, net$21,269 — — 9,715 11,554 
Fair value21,461 — — 9,833 11,628 
Weighted average yield
1.64 %— — 1.67 1.61 
Total held-to-maturity debt securities
Amortized cost, net$262,493 8,784 14,257 11,907 227,545 
Fair value264,022 8,826 14,983 12,101 228,112 
Weighted average yield
2.13 %1.97 2.29 1.84 2.14 
(1)Weighted average yields displayed by maturity bucket are weighted based on amortized cost and are shown pre-tax.
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Note 4:  Loans and Related Allowance for Credit Losses
Table 4.1 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 September 30, 2021, and December 31, 2020.
Outstanding balances exclude accrued interest receivable on loans, except for certain revolving loans, such as credit card loans.
See Note 7 (Other Assets) for additional information on accrued interest receivable. Amounts considered to be uncollectible are reversed through interest income. During the first nine months of 2021, we reversed accrued interest receivable of $36 million for our commercial portfolio segment and $143 million for our consumer portfolio segment, compared with $29 million and $161 million, respectively, for the same period a year ago.

Table 4.1: Loans Outstanding
(in millions) Sep 30,
2021
Dec 31,
2020
Commercial:
Commercial and industrial$326,425 318,805 
Real estate mortgage121,985 121,720 
Real estate construction21,129 21,805 
Lease financing15,398 16,087 
Total commercial484,937 478,417 
Consumer:
Residential mortgage – first lien242,935 276,674 
Residential mortgage – junior lien18,026 23,286 
Credit card36,061 36,664 
Auto53,827 48,187 
Other consumer27,041 24,409 
Total consumer377,890 409,220 
Total loans$862,827 887,637 
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 presents total non-U.S. commercial loans outstanding by class of financing receivable.

Table 4.2: Non-U.S. Commercial Loans Outstanding
(in millions)Sep 30,
2021
Dec 31,
2020
Non-U.S. commercial loans:
Commercial and industrial
$74,030 63,128 
Real estate mortgage
6,731 7,278 
Real estate construction
1,727 1,603 
Lease financing
668 629 
Total non-U.S. commercial loans
$83,156 72,638 

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Note 4: Loans and Related Allowance for Credit Losses (continued)
Loan Purchases, Sales, and Transfers
Table 4.3 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: Loan Purchases, Sales, and Transfers
20212020
(in millions)Commercial ConsumerTotalCommercialConsumerTotal
Quarter ended September 30,
Purchases$124 1 125 260 262 
Sales(621) (621)(564)— (564)
Transfers (to)/from LHFS(565)(11)(576)(170)8,990 8,820 
Nine months ended September 30,
Purchases$306 3 309 1,034 1,039 
Sales(959)(188)(1,147)(3,334)(27)(3,361)
Transfers (to)/from LHFS(1,359)(47)(1,406)(101)(1,387)(1,488)

Commitments to Lend
A commitment to lend is a legally binding agreement to lend to a customer, usually at a stated interest rate, if funded, and for specific purposes and time periods. We generally require a fee to extend such commitments. Certain commitments are subject to loan agreements with covenants regarding the financial performance of the customer or borrowing base formulas on an ongoing basis that must be met before we are required to fund the commitment. We may reduce or cancel consumer commitments, including home equity lines and credit card lines, in accordance with the contracts and applicable law. For unconditionally cancelable commitments at our discretion, we do not recognize an ACL.
We may, as a representative for other lenders, 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 $85.4 billion at September 30, 2021.
We issue commercial letters of credit to assist customers in purchasing goods or services, typically for international trade. At September 30, 2021, and December 31, 2020, we had $1.5 billion and $1.3 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. The table excludes the issued standby and commercial letters of credit and temporary advance arrangements described above.
Table 4.4: Unfunded Credit Commitments
(in millions)Sep 30,
2021
Dec 31,
2020
Commercial:
Commercial and industrial
$404,260 378,167 
Real estate mortgage
8,322 7,993 
Real estate construction
17,932 15,650 
Total commercial
430,514 401,810 
Consumer:
Residential mortgage – first lien38,872 31,530 
Residential mortgage – junior lien28,917 32,820 
Credit card
128,004 121,096 
Other consumer56,389 49,179 
Total consumer
252,182 234,625 
Total unfunded credit commitments
$682,696 636,435 
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Wells Fargo & Company



Allowance for Credit Losses
Table 4.5 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 $5.0 billion from December 31, 2020, due to improvements in current and forecasted economic conditions.

Table 4.5: Allowance for Credit Losses for Loans
Quarter ended September 30,Nine months ended September 30,
($ in millions)2021202020212020
Balance, beginning of period$16,391 20,436 19,713 10,456 
Cumulative effect from change in accounting policies (1) —  (1,337)
Allowance for purchased credit-deteriorated (PCD) loans (2) —  
Balance, beginning of period, adjusted16,391 20,436 19,713 9,127 
Provision for credit losses(1,387)751 (3,743)14,149 
Interest income on certain impaired loans (3)(35)(41)(112)(117)
Loan charge-offs:
Commercial:
Commercial and industrial(144)(327)(452)(1,260)
Real estate mortgage(5)(59)(68)(134)
Real estate construction(1)— (1)— 
Lease financing(7)(34)(38)(66)
Total commercial(157)(420)(559)(1,460)
Consumer:
Residential mortgage – first lien(10)(20)(33)(63)
Residential mortgage – junior lien(15)(22)(46)(70)
Credit card(258)(339)(950)(1,225)
Auto(107)(99)(364)(413)
Other consumer(107)(94)(333)(372)
Total consumer(497)(574)(1,726)(2,143)
Total loan charge-offs(654)(994)(2,285)(3,603)
Loan recoveries:
Commercial:
Commercial and industrial98 53 237 132 
Real estate mortgage15 37 13 
Real estate construction 1 19 
Lease financing6 17 14 
Total commercial119 64 292 178 
Consumer:
Residential mortgage – first lien24 21 90 65 
Residential mortgage – junior lien43 36 124 101 
Credit card100 94 300 276 
Auto81 68 241 194 
Other consumer28 28 85 84 
Total consumer276 247 840 720 
Total loan recoveries395 311 1,132 898 
Net loan charge-offs(259)(683)(1,153)(2,705)
Other(5) 17 
Balance, end of period$14,705 20,471 14,705 20,471 
Components:
Allowance for loan losses$13,517 19,463 13,517 19,463 
Allowance for unfunded credit commitments1,188 1,008 1,188 1,008 
Allowance for credit losses$14,705 20,471 14,705 20,471 
Net loan charge-offs (annualized) as a percentage of average total loans0.12 %0.29 0.18 0.38 
Allowance for loan losses as a percentage of total loans1.57 2.12 1.57 2.12 
Allowance for credit losses for loans as a percentage of total loans1.70 2.22 1.70 2.22 
(1)Represents the overall decrease in our ACL for loans as a result of our adoption of CECL on January 1, 2020.
(2)Represents the allowance estimated for purchased credit-impaired (PCI) loans that automatically became PCD loans with the adoption of CECL. For additional information, see Note 1 (Summary of Significant Accounting Policies) in our 2020 Form 10-K.
(3)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 changes in allowance attributable to the passage of time as interest income.
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Note 4: Loans and Related Allowance for Credit Losses (continued)
Table 4.6 summarizes the activity in the ACL by our commercial and consumer portfolio segments. 

Table 4.6: Allowance for Credit Losses for Loans Activity by Portfolio Segment
20212020
(in millions)CommercialConsumer TotalCommercial Consumer Total
Quarter ended September 30,
Balance, beginning of period$9,570 6,821 16,391 11,669 8,767 20,436 
Provision for credit losses(949)(438)(1,387)241 510 751 
Interest income on certain loans (1)(13)(22)(35)(18)(23)(41)
Loan charge-offs
(157)(497)(654)(420)(574)(994)
Loan recoveries
119 276 395 64 247 311 
Net loan charge-offs
(38)(221)(259)(356)(327)(683)
Other
(5) (5)
Balance, end of period$8,565 6,140 14,705 11,542 8,929 20,471 
Nine months ended September 30,
Balance, beginning of period$11,516 8,197 19,713 6,245 4,211 10,456 
Cumulative effect from change in accounting policies (2)   (2,861)1,524 (1,337)
Allowance for purchased credit-deteriorated (PCD) loans (3)   — 
Balance, beginning of period, adjusted11,516 8,197 19,713 3,384 5,743 9,127 
Provision for credit losses(2,637)(1,106)(3,743)9,480 4,669 14,149 
Interest income on certain loans (1)(47)(65)(112)(44)(73)(117)
Loan charge-offs
(559)(1,726)(2,285)(1,460)(2,143)(3,603)
Loan recoveries
292 840 1,132 178 720 898 
Net loan charge-offs(267)(886)(1,153)(1,282)(1,423)(2,705)
Other
   13 17 
Balance, end of period$8,565 6,140 14,705 11,542 8,929 20,471 
(1)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 changes in allowance attributable to the passage of time as interest income.
(2)Represents the overall decrease in our ACL for loans as a result of our adoption of CECL on January 1, 2020.
(3)Represents the allowance estimated for PCI loans that automatically became PCD loans with the adoption of CECL. For additional information, see Note 1 (Summary of Significant Accounting Policies) in our 2020 Form 10-K.
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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, with the exception of updated Fair Isaac Corporation (FICO) scores and updated loan-to-value (LTV)/combined LTV (CLTV). We obtain 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). Generally, the LTV and CLTV indicators are updated in the second month of each quarter, with updates no older than June 30, 2021.

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 provides the outstanding balances of our commercial loan portfolio by risk category. 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 in a troubled debt restructuring (TDR). At September 30, 2021, we had $453.9 billion and $31.1 billion of pass and criticized commercial loans, respectively.
Table 4.7: Commercial Loan Categories by Risk Categories and Vintage
Term loans by origination yearRevolving loansRevolving loans converted to term loansTotal
(in millions)20212020201920182017Prior
September 30, 2021
Commercial and industrial
Pass
$49,829 19,105 24,674 8,883 4,594 13,466 193,037 606 314,194 
Criticized
684 1,103 1,129 1,215 696 922 6,463 19 12,231 
Total commercial and industrial
50,513 20,208 25,803 10,098 5,290 14,388 199,500 625 326,425 
Real estate mortgage
Pass
23,100 18,119 20,763 13,879 8,351 17,837 4,685 3 106,737 
Criticized
2,314 2,140 3,267 2,389 1,115 3,516 507  15,248 
Total real estate mortgage
25,414 20,259 24,030 16,268 9,466 21,353 5,192 3 121,985 
Real estate construction
Pass
4,057 4,404 5,572 2,739 579 344 1,097 2 18,794 
Criticized
609 282 653 349 434 8   2,335 
Total real estate construction
4,666 4,686 6,225 3,088 1,013 352 1,097 2 21,129 
Lease financing
Pass
3,163 3,275 2,860 1,557 985 2,292   14,132 
Criticized
214 264 329 230 106 123   1,266 
Total lease financing
3,377 3,539 3,189 1,787 1,091 2,415   15,398 
Total commercial loans
$83,970 48,692 59,247 31,241 16,860 38,508 205,789 630 484,937 
Term loans by origination yearRevolving loansRevolving loans converted to term loansTotal
20202019201820172016Prior
December 31, 2020
Commercial and industrial
Pass$56,915 34,040 15,936 7,274 4,048 4,738 177,107 997 301,055 
Criticized1,404 1,327 1,357 972 672 333 11,534 151 17,750 
Total commercial and industrial58,319 35,367 17,293 8,246 4,720 5,071 188,641 1,148 318,805 
Real estate mortgage
Pass22,444 26,114 18,679 11,113 11,582 14,663 5,152 109,753 
Criticized2,133 2,544 1,817 1,287 1,625 2,082 479 — 11,967 
Total real estate mortgage24,577 28,658 20,496 12,400 13,207 16,745 5,631 121,720 
Real estate construction
Pass5,242 6,574 4,771 1,736 477 235 1,212 20,250 
Criticized449 452 527 113 10 — — 1,555 
Total real estate construction5,691 7,026 5,298 1,740 590 245 1,212 21,805 
Lease financing
Pass3,970 3,851 2,176 1,464 1,199 1,924 — — 14,584 
Criticized308 433 372 197 108 85 — — 1,503 
Total lease financing4,278 4,284 2,548 1,661 1,307 2,009 — — 16,087 
Total commercial loans$92,865 75,335 45,635 24,047 19,824 24,070 195,484 1,157 478,417 
Wells Fargo & Company
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Note 4: Loans and Related Allowance for Credit Losses (continued)
Table 4.8 provides past due information for commercial loans, which we monitor as part of our credit risk management practices; however, delinquency is not a primary credit quality indicator for commercial loans. Payment deferral activities
instituted in response to the COVID-19 pandemic could continue to delay the recognition of delinquencies for customers who otherwise would have moved into past due status.

Table 4.8: Commercial Loan Categories by Delinquency Status
(in millions)Commercial
and
industrial
Real
estate
mortgage
Real
estate
construction
Lease
financing
Total
September 30, 2021
By delinquency status:
Current-29 days past due (DPD) and still accruing
$324,702 120,112 21,079 15,067 480,960 
30-89 DPD and still accruing
403 260 30 143 836 
90+ DPD and still accruing
46 75   121 
Nonaccrual loans1,274 1,538 20 188 3,020 
Total commercial loans
$326,425 121,985 21,129 15,398 484,937 
December 31, 2020
By delinquency status:
Current-29 DPD and still accruing
$315,493 119,561 21,532 15,595 472,181 
30-89 DPD and still accruing
575 347 224 233 1,379 
90+ DPD and still accruing
39 38 — 78 
Nonaccrual loans2,698 1,774 48 259 4,779 
Total commercial loans
$318,805 121,720 21,805 16,087 478,417 

CONSUMER CREDIT QUALITY INDICATORS  We have various classes of consumer loans that present unique credit risks. Loan delinquency, FICO credit scores and 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.
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. Payment deferral activities instituted in response to the COVID-19 pandemic could continue to delay the recognition of delinquencies for customers who otherwise would have moved into past due 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 in 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.

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Table 4.9: Consumer Loan Categories by Delinquency Status and Vintage
Term loans by origination yearRevolving loansRevolving loans converted to term loans
(in millions)20212020201920182017PriorTotal
September 30, 2021
Residential mortgage – first lien
By delinquency status:
Current-29 DPD
$50,157 44,546 28,298 8,767 15,531 68,415 5,622 1,570 222,906 
30-59 DPD
66 30 41 15 27 524 16 27 746 
60-89 DPD
1 8 2 4 6 161 6 15 203 
90-119 DPD
 10 1 1 5 57 3 11 88 
120-179 DPD
1 17 5 2 2 70 7 20 124 
180+ DPD
 136 24 31 44 972 86 230 1,523 
Government insured/guaranteed
loans (1)
5 170 295 466 516 15,893   17,345 
Total residential mortgage – first lien50,230 44,917 28,666 9,286 16,131 86,092 5,740 1,873 242,935 
Residential mortgage – junior lien
By delinquency status:
Current-29 DPD
20 21 33 29 24 813 11,906 4,393 17,239 
30-59 DPD
     15 27 41 83 
60-89 DPD
     6 11 22 39 
90-119 DPD
   1  3 8 16 28 
120-179 DPD
  1   5 15 26 47 
180+ DPD     35 168 387 590 
Total residential mortgage – junior lien20 21 34 30 24 877 12,135 4,885 18,026 
Credit cards
By delinquency status:
Current-29 DPD
      35,347 208 35,555 
30-59 DPD
      156 7 163 
60-89 DPD
      100 6 106 
90-119 DPD
      86 6 92 
120-179 DPD
      144 1 145 
180+ DPD         
Total credit cards      35,833 228 36,061 
Auto
By delinquency status:
Current-29 DPD
22,161 14,105 9,816 3,914 1,829 1,123   52,948 
30-59 DPD
103 165 151 78 48 69   614 
60-89 DPD
28 54 48 24 14 23   191 
90-119 DPD
11 22 18 9 5 8   73 
120-179 DPD
  1      1 
180+ DPD         
Total auto22,303 14,346 10,034 4,025 1,896 1,223   53,827 
Other consumer
By delinquency status:
Current-29 DPD
1,581 853 841 262 129 146 23,017 138 26,967 
30-59 DPD
2 2 3 2 1 2 13 3 28 
60-89 DPD
1 1 2 1  1 5 1 12 
90-119 DPD
 1 2 1  1 4 1 10 
120-179 DPD
      6 2 8 
180+ DPD
     1 5 10 16 
Total other consumer1,584 857 848 266 130 151 23,050 155 27,041 
Total consumer loans
$74,137 60,141 39,582 13,607 18,181 88,343 76,758 7,141 377,890 



(continued on following page)
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Note 4: Loans and Related Allowance for Credit Losses (continued)
(continued from previous page)

Term loans by origination yearRevolving loansRevolving loans converted to term loans
(in millions)20202019201820172016PriorTotal
December 31, 2020
Residential mortgage – first lien
By delinquency status:
Current-29 DPD$53,298 43,297 14,761 24,619 30,533 67,960 6,762 1,719 242,949 
30-59 DPD111 76 36 67 79 750 52 66 1,237 
60-89 DPD88 10 12 13 305 56 68 558 
90-119 DPD232 11 197 26 33 519 
120-179 DPD151 17 29 213 
180+ DPD11 15 758 21 145 958 
Government insured/guaranteed
loans (1)
215 639 904 1,076 2,367 25,039 — — 30,240 
Total residential mortgage – first lien53,950 44,038 15,717 25,796 33,019 95,160 6,934 2,060 276,674 
Residential mortgage – junior lien
By delinquency status:
Current-29 DPD22 39 39 37 31 1,115 15,366 5,434 22,083 
30-59 DPD— — — 22 113 160 297 
60-89 DPD— — — — 11 154 271 437 
90-119 DPD— — — — 45 84 137 
120-179 DPD— — — — — 36 77 122 
180+ DPD— — — — 25 29 155 210 
Total residential mortgage – junior lien22 39 41 39 32 1,189 15,743 6,181 23,286 
Credit cards
By delinquency status:
Current-29 DPD— — — — — — 35,612 255 35,867 
30-59 DPD— — — — — — 243 12 255 
60-89 DPD— — — — — — 167 10 177 
90-119 DPD— — — — — — 144 10 154 
120-179 DPD— — — — — — 208 211 
180+ DPD— — — — — — — — — 
Total credit cards— — — — — — 36,374 290 36,664 
Auto
By delinquency status:
Current-29 DPD19,625 14,561 6,307 3,459 2,603 697 — — 47,252 
30-59 DPD120 183 114 80 107 46 — — 650 
60-89 DPD32 60 36 25 35 16 — — 204 
90-119 DPD13 26 14 12 — — 80 
120-179 DPD— — — — — — — 
180+ DPD— — — — — — — — — 
Total auto19,790 14,831 6,471 3,573 2,757 765 — — 48,187 
Other consumer
By delinquency status:
Current-29 DPD1,406 1,383 577 261 59 193 20,246 162 24,287 
30-59 DPD19 10 49 
60-89 DPD10 28 
90-119 DPD— 20 
120-179 DPD— — — — — — 10 14 
180+ DPD— — — — — 11 
Total other consumer1,410 1,399 587 265 61 200 20,296 191 24,409 
Total consumer loans$75,172 60,307 22,816 29,673 35,869 97,314 79,347 8,722 409,220 
(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 $6.7 billion and $11.1 billion at September 30, 2021, and December 31, 2020, respectively.
Of the $2.7 billion of consumer loans not government insured/guaranteed that are 90 days or more past due at September 30, 2021, $394 million was accruing, compared with
$2.7 billion past due and $612 million accruing at December 31, 2020.
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Table 4.10 provides the outstanding balances of our consumer loan portfolio by FICO score. Substantially all of the scored consumer portfolio has an updated FICO score of 680 and above, reflecting a strong current borrower credit profile. 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. Loans not requiring a FICO score totaled $17.3 billion and $13.2 billion at September 30, 2021, and December 31, 2020, respectively. Substantially all loans not requiring a FICO score are securities-based loans originated through retail brokerage.

Table 4.10: Consumer Loan Categories by FICO and Vintage
Term loans by origination yearRevolving loansRevolving loans converted to term loans
(in millions)20212020201920182017PriorTotal
September 30, 2021
By FICO:
Residential mortgage – first lien
800+
$24,509 28,900 18,666 5,804 10,712 41,687 2,792 442 133,512 
760-799
17,997 10,795 6,279 1,731 2,801 11,710 1,137 249 52,699 
720-759
5,792 3,649 2,243 749 1,303 6,941 707 231 21,615 
680-719
1,425 933 773 318 478 3,874 442 207 8,450 
640-679
350 271 210 100 151 1,965 204 143 3,394 
600-639
69 49 70 40 39 1,093 108 87 1,555 
< 600
4 18 26 15 41 1,229 123 132 1,588 
No FICO available79 132 104 63 90 1,700 227 382 2,777 
Government insured/guaranteed loans (1)5 170 295 466 516 15,893   17,345 
Total residential mortgage – first lien50,230 44,917 28,666 9,286 16,131 86,092 5,740 1,873 242,935 
Residential mortgage – junior lien
800+
     214 6,095 1,484 7,793 
760-799
     128 2,381 833 3,342 
720-759
     149 1,626 824 2,599 
680-719
     131 944 656 1,731 
640-679
     74 361 368 803 
600-639
     49 180 211 440 
< 600
     49 178 246 473 
No FICO available20 21 34 30 24 83 370 263 845 
Total residential mortgage – junior lien20 21 34 30 24 877 12,135 4,885 18,026 
Credit card
800+
      4,063 1 4,064 
760-799
      5,629 8 5,637 
720-759
      7,960 28 7,988 
680-719
      8,660 53 8,713 
640-679
      5,433 52 5,485 
600-639
      2,085 34 2,119 
< 600
      1,873 51 1,924 
No FICO available      130 1 131 
Total credit card      35,833 228 36,061 
Auto
800+
3,612 2,142 1,899 803 403 173   9,032 
760-799
3,721 2,393 1,840 705 304 140   9,103 
720-759
3,642 2,386 1,741 697 309 166   8,941 
680-719
3,814 2,602 1,681 639 280 173   9,189 
640-679
3,507 2,150 1,195 442 203 151   7,648 
600-639
2,349 1,319 720 285 146 136   4,955 
< 600
1,652 1,322 954 443 241 270   4,882 
No FICO available6 32 4 11 10 14   77 
Total auto22,303 14,346 10,034 4,025 1,896 1,223   53,827 
Other consumer
800+
375 201 165 44 12 52 1,583 15 2,447 
760-799
392 185 144 44 11 25 909 21 1,731 
720-759
321 156 143 50 14 21 787 21 1,513 
680-719
221 110 121 49 13 18 651 25 1,208 
640-679
100 48 65 27 8 9 347 17 621 
600-639
23 14 21 11 4 6 124 11 214 
< 600
9 12 24 13 4 6 118 12 198 
No FICO available143 131 165 28 64 14 1,236 33 1,814 
FICO not required      17,295  17,295 
Total other consumer1,584 857 848 266 130 151 23,050 155 27,041 
Total consumer loans
$74,137 60,141 39,582 13,607 18,181 88,343 76,758 7,141 377,890 

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Note 4: Loans and Related Allowance for Credit Losses (continued)
(continued from previous page)
Term loans by origination yearRevolving loansRevolving loans converted to term loans
(in millions)20202019201820172016PriorTotal
December 31, 2020
By FICO:
Residential mortgage – first lien
800+$29,365 28,652 9,911 17,416 22,215 40,440 3,391 493 151,883 
760-79917,154 9,866 2,908 4,380 4,955 10,843 1,361 274 51,741 
720-7595,274 3,290 1,189 1,829 2,106 7,001 879 265 21,833 
680-7191,361 1,084 490 678 831 4,403 520 221 9,588 
640-679376 287 148 192 226 2,385 241 154 4,009 
600-63955 56 44 56 92 1,429 127 106 1,965 
< 60014 29 36 44 66 1,789 162 175 2,315 
No FICO available136 135 87 125 161 1,831 253 372 3,100 
Government insured/guaranteed loans (1)215 639 904 1,076 2,367 25,039 — — 30,240 
Total residential mortgage – first lien53,950 44,038 15,717 25,796 33,019 95,160 6,934 2,060 276,674 
Residential mortgage – junior lien
800+— — — — — 293 7,973 1,819 10,085 
760-799— — — — — 177 3,005 1,032 4,214 
720-759— — — — — 207 2,093 1,034 3,334 
680-719— — — — — 183 1,233 854 2,270 
640-679— — — — — 103 503 493 1,099 
600-639— — — — — 67 241 299 607 
< 600— — — — — 76 254 374 704 
No FICO available22 39 41 39 32 83 441 276 973 
Total residential mortgage – junior lien22 39 41 39 32 1,189 15,743 6,181 23,286 
Credit card
800+— — — — — — 3,860 3,861 
760-799— — — — — — 5,438 5,445 
720-759— — — — — — 7,897 29 7,926 
680-719— — — — — — 8,854 60 8,914 
640-679— — — — — — 5,657 64 5,721 
600-639— — — — — — 2,242 46 2,288 
< 600— — — — — — 2,416 82 2,498 
No FICO available— — — — — — 10 11 
Total credit card— — — — — — 36,374 290 36,664 
Auto
800+2,875 2,606 1,211 731 452 104 — — 7,979 
760-7993,036 2,662 1,122 579 349 81 — — 7,829 
720-7593,162 2,514 1,095 576 395 98 — — 7,840 
680-7193,534 2,542 1,066 545 400 105 — — 8,192 
640-6793,381 1,948 763 395 334 94 — — 6,915 
600-6392,208 1,165 479 274 276 87 — — 4,489 
< 6001,581 1,357 730 463 533 186 — — 4,850 
No FICO available13 37 10 18 10 — — 93 
Total auto19,790 14,831 6,471 3,573 2,757 765 — — 48,187 
Other consumer
800+353 287 94 35 10 71 2,249 21 3,120 
760-799342 279 93 29 10 34 1,110 16 1,913 
720-759262 258 107 35 11 30 915 26 1,644 
680-719156 213 99 36 11 24 798 31 1,368 
640-67971 112 59 21 10 415 23 718 
600-63918 36 22 151 13 261 
< 60013 41 30 12 161 18 287 
No FICO available195 173 83 88 16 1,248 43 1,849 
FICO not required— — — — — — 13,249 — 13,249 
Total other consumer1,410 1,399 587 265 61 200 20,296 191 24,409 
Total consumer loans$75,172 60,307 22,816 29,673 35,869 97,314 79,347 8,722 409,220 
(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 balance to the property’s collateral value. CLTV refers to the combination of first lien mortgage and junior lien mortgage (including unused line amounts for credit line products) ratios. LTVs and CLTVs are updated quarterly 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.
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Table 4.11 shows the most updated LTV and CLTV distribution of the residential mortgage – first lien and residential mortgage – junior lien loan portfolios. We consider the trends in residential real estate markets as we monitor credit risk and establish our ACL. In the event of a default, any loss should be
limited to the portion of the loan amount in excess of the net realizable value of the underlying real estate collateral value. Certain loans do not have an LTV or CLTV due to industry data availability and portfolios acquired from or serviced by other institutions.
Table 4.11: Consumer Loan Categories by LTV/CLTV and Vintage
Term loans by origination yearRevolving loansRevolving loans converted to term loans
(in millions)20212020201920182017PriorTotal
September 30, 2021
Residential mortgage – first lien
By LTV:
0-60%
$17,470 21,545 16,381 5,544 11,914 62,715 4,558 1,586 141,713 
60.01-80%
32,587 22,365 11,153 2,967 3,407 6,618 848 208 80,153 
80.01-100%
98 695 724 250 237 520 218 51 2,793 
100.01-120% (1)2 31 27 5 9 58 47 13 192 
> 120% (1)3 12 13 6 3 42 19 4 102 
No LTV available65 99 73 48 45 246 50 11 637 
Government insured/guaranteed loans (2)5 170 295 466 516 15,893   17,345 
Total residential mortgage – first lien50,230 44,917 28,666 9,286 16,131 86,092 5,740 1,873 242,935 
Residential mortgage – junior lien
By CLTV:
0-60%
     509 8,319 3,543 12,371 
60.01-80%
     212 2,865 950 4,027 
80.01-100%
     79 735 2