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 June 30, 2022

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)

Delaware

No.

41-0449260

(State of incorporation)

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

420 Montgomery Street, San Francisco, California 94104

(Address of principal executive offices) (Zip code)

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

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

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

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

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

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

             Large accelerated filer   þ                    Accelerated filer  ¨

            Non-accelerated filer  ¨                     Smaller reporting company  ☐

                                        Emerging growth company  ☐

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

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

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

						Shares Outstanding
						July 21, 2022
Common stock, $1-2/3 par value						3,793,049,509

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FORM 10-Q
CROSS-REFERENCE INDEX
PART I			Financial Information
Item 1.			Financial Statements									Page
			Consolidated Statement of Income									61
			Consolidated Statement of Comprehensive Income									62
			Consolidated Balance Sheet									63
			Consolidated Statement of Changes in Equity									64
			Consolidated Statement of Cash Flows									66
			Notes to Financial Statements
			1			—			Summary of Significant Accounting Policies			67
			2			—			Trading Activities			69
			3			—			Available-for-Sale and Held-to-Maturity Debt Securities			70
			4			—			Loans and Related Allowance for Credit Losses			76
			5			—			Leasing Activity			92
			6			—			Equity Securities			93
			7			—			Other Assets			95
			8			—			Securitizations and Variable Interest Entities			96
			9			—			Mortgage Banking Activities			101
			10			—			Intangible Assets			103
			11			—			Guarantees and Other Commitments			104
			12			—			Pledged Assets and Collateral			106
			13			—			Legal Actions			109
			14			—			Derivatives			112
			15			—			Fair Values of Assets and Liabilities			121
			16			—			Preferred Stock			128
			17			—			Revenue from Contracts with Customers			130
			18			—			Employee Benefits and Other Expenses			132
			19			—			Restructuring Charges			133
			20			—			Earnings and Dividends Per Common Share			134
			21			—			Other Comprehensive Income			135
			22			—			Operating Segments			137
			23			—			Regulatory Capital Requirements and Other Restrictions			140
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations (Financial Review)
			Summary Financial Data									2
			Overview									3
			Earnings Performance									6
			Balance Sheet Analysis									25
			Off-Balance Sheet Arrangements									28
			Risk Management									29
			Capital Management									48
			Regulatory Matters									54
			Critical Accounting Policies									55
			Current Accounting Developments									56
			Forward-Looking Statements									57
			Risk Factors									59
			Glossary of Acronyms									142
Item 3.			Quantitative and Qualitative Disclosures About Market Risk									42
Item 4.			Controls and Procedures									60
PART II			Other Information
Item 1.			Legal Proceedings									143
Item 1A.			Risk Factors									143
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds									143
Item 6.			Exhibits									144
Signature												145

			Wells Fargo & Company			1

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FINANCIAL REVIEW

Summary Financial Data
			Quarter ended																		Jun 30, 2022 % Change from												Six months ended
($ in millions, except per share amounts)			Jun 30, 2022						Mar 31, 2022						Jun 30, 2021						Mar 31, 2022						Jun 30, 2021						Jun 30, 2022						Jun 30, 2021						% Change
Selected Income Statement Data
Total revenue			$	17,028					17,592						20,270						(3)		%				(16)						$	34,620					38,802						(11)		%
Noninterest expense			12,883						13,870						13,341						(7)						(3)						26,753						27,330						(2)
Pre-tax pre-provision profit (PTPP) (1)			4,145						3,722						6,929						11						(40)						7,867						11,472						(31)
Provision for credit losses			580						(787)						(1,260)						174						146						(207)						(2,308)						(91)
Wells Fargo net income			3,119						3,671						6,040						(15)						(48)						6,790						10,676						(36)
Wells Fargo net income applicable to common stock			2,839						3,393						5,743						(16)						(51)						6,232						9,999						(38)
Common Share Data
Diluted earnings per common share			0.74						0.88						1.38						(16)						(46)						1.62						2.40						(33)
Dividends declared per common share			0.25						0.25						0.10						—						150						0.50						0.20						150
Common shares outstanding			3,793.0						3,789.9						4,108.0						—						(8)
Average common shares outstanding			3,793.8						3,831.1						4,124.6						(1)						(8)						3,812.3						4,132.9						(8)
Diluted average common shares outstanding			3,819.6						3,868.9						4,156.1						(1)						(8)						3,845.0						4,164.6						(8)
Book value per common share (2)			$	41.72					42.21						41.74						(1)						—
Tangible book value per common share (2)(3)			34.66						35.13						34.95						(1)						(1)
Selected Equity Data (period-end)
Total equity			179,793						181,689						193,127						(1)						(7)
Common stockholders’ equity			158,256						159,968						171,453						(1)						(8)
Tangible common equity (3)			131,460						133,144						143,577						(1)						(8)
Performance Ratios
Return on average assets (ROA) (4)			0.66		%				0.78						1.25																		0.72		%				1.11
Return on average equity (ROE) (5)			7.1						8.4						13.6																		7.8						12.0
Return on average tangible common equity (ROTCE) (3)			8.6						10.0						16.3																		9.3						14.4
Efficiency ratio (6)			76						79						66																		77						70
Net interest margin on a taxable-equivalent basis			2.39						2.16						2.02																		2.27						2.04
Selected Balance Sheet Data (average)
Loans			$	926,567					898,005						854,747						3						8						$	912,365					864,041						6
Assets			1,902,571						1,919,392						1,939,879						(1)						(2)						1,910,935						1,937,167						(1)
Deposits			1,445,793						1,464,072						1,435,824						(1)						1						1,454,882						1,414,765						3
Selected Balance Sheet Data (period-end)
Debt securities			516,772						535,916						533,565						(4)						(3)
Loans			943,734						911,807						852,300						4						11
Allowance for credit losses for loans			12,884						12,681						16,391						2						(21)
Equity securities			61,774						70,755						64,547						(13)						(4)
Assets			1,881,142						1,939,709						1,945,996						(3)						(3)
Deposits			1,425,153						1,481,354						1,440,472						(4)						(1)
Headcount (#) (period-end)			243,674						246,577						259,196						(1)						(6)
Capital and other metrics
Risk-based capital ratios and components (7):
Standardized Approach:
Common equity tier 1 (CET1)			10.38		%				10.45						12.07
Tier 1 capital			11.89						11.96						13.71
Total capital			14.65						14.72						16.84
Risk-weighted assets (RWAs) (in billions)			$	1,253.6					1,265.5						1,188.7						(1)						5
Advanced Approach:
Common equity tier 1 (CET1)			11.60		%				11.82						12.73
Tier 1 capital			13.30						13.52						14.47
Total capital			15.58						15.87						16.88
Risk-weighted assets (RWAs) (in billions)			$	1,121.6					1,119.5						1,126.5						—						—
Tier 1 leverage ratio			7.96		%				8.00						8.53
Supplementary Leverage Ratio (SLR)			6.63						6.61						7.09
Total Loss Absorbing Capacity (TLAC) Ratio (8)			22.72						22.31						25.11
Liquidity Coverage Ratio (LCR) (9)			121						119						123

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

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

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

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

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

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

(7)For additional information, see the “Capital Management” section and Note 23 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report.

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

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

2			Wells Fargo & Company

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This Quarterly Report, including the Financial Review and the Financial Statements and related Notes, contains forward-looking statements, which may include forecasts of our financial results and condition, expectations for our operations and business, and our assumptions for those forecasts and expectations. Do not unduly rely on forward-looking statements. Actual results may differ materially from our forward-looking statements due to several factors. Factors that could cause our actual results to differ materially from our forward-looking statements are described in this Report, including in the “Forward-Looking Statements” section, and in the “Risk Factors” and “Regulation and Supervision” sections of our Annual Report on Form 10-K for the year ended December 31, 2021 (2021 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 a leading middle market banking provider in the U.S. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. Wells Fargo ranked No. 41 on Fortune’s 2022 rankings of America’s largest corporations. We ranked fourth in assets and third in the market value of our common stock among all U.S. banks at June 30, 2022. 

Wells Fargo’s top priority remains building a risk and control infrastructure appropriate for its size and complexity. The Company is subject to a number of consent orders and other regulatory actions, which may require the Company, among other things, to undertake certain changes to its business, operations, products and services, and risk management practices. Addressing these regulatory actions is expected to take multiple years, and we are likely to experience issues or delays along the way in satisfying their requirements. Issues or delays with one regulatory action could affect our progress on others, and failure to satisfy the requirements of a regulatory action on a timely basis could result in additional penalties, enforcement actions, and other negative consequences, which could be significant. While we still have significant work to do, the Company is committed to devoting the resources necessary to operate with strong business practices and controls, maintain the highest level of integrity, and have an appropriate culture in place.

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

On February 2, 2018, the Company entered into a consent order with the Board of Governors of the Federal Reserve System (FRB). As required by the consent order, the Company’s Board of Directors (Board) submitted to the FRB a plan to further enhance the Board’s governance and oversight of the Company, and the Company submitted to the FRB a plan to further improve the Company’s compliance and operational risk management program. The Company continues to engage with the FRB as the Company works to address the consent order provisions. The consent order also requires the Company, following the FRB’s acceptance and approval of the plans and the Company’s adoption and implementation of the plans, to complete an initial third-party review of the enhancements and improvements provided for in the plans. Until this third-party review is complete

and the plans are approved and implemented to the satisfaction of the FRB, the Company’s total consolidated assets as defined under the consent order will be limited to the level as of December 31, 2017. Compliance with this asset cap is measured on a two-quarter daily average basis to allow for management of temporary fluctuations. After removal of the asset cap, a second third-party review must also be conducted to assess the efficacy and sustainability of the enhancements and improvements.

Consent Orders with the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency Regarding Compliance Risk Management Program, Automobile Collateral Protection Insurance Policies, and Mortgage Interest Rate Lock Extensions

On April 20, 2018, the Company entered into consent orders with the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) to pay an aggregate of $1 billion in civil money penalties to resolve matters regarding the Company’s compliance risk management program and past practices involving certain automobile collateral protection insurance (CPI) policies and certain mortgage interest rate lock extensions. As required by the consent orders, the Company submitted to the CFPB and OCC an enterprise-wide compliance risk management plan and a plan to enhance the Company’s internal audit program with respect to federal consumer financial law and the terms of the consent orders. In addition, as required by the consent orders, the Company submitted for non-objection plans to remediate customers affected by the automobile collateral protection insurance and mortgage interest rate lock matters, as well as a plan for the management of remediation activities conducted by the Company. The Company continues to work to address the provisions of the consent orders. The Company has not yet satisfied certain aspects of the consent orders, and as a result, we believe regulators may impose additional penalties or take other enforcement actions. On September 9, 2021, the OCC assessed a $250 million civil money penalty against the Company related to insufficient progress in addressing requirements under the OCC’s April 2018 consent order and loss mitigation activities in the Company’s Home Lending business.

Consent Order with the OCC Regarding Loss Mitigation Activities

On September 9, 2021, the Company entered into a consent order with the OCC requiring the Company to improve the execution, risk management, and oversight of loss mitigation activities in its Home Lending business. In addition, the consent order restricts the Company from acquiring certain third-party

			Wells Fargo & Company			3

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Overview (continued)

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 and Other Customer Remediation Activities

In September 2016, we announced settlements with the CFPB, the OCC, and the Office of the Los Angeles City Attorney, and entered into related consent orders with the CFPB and the OCC, in connection with allegations that some of our retail customers received products and services they did not request. As a result, it remains a priority to rebuild trust through a comprehensive action plan that includes making things right for our customers, employees, and other stakeholders, and building a better Company for the future. On September 8, 2021, the CFPB consent order regarding retail sales practices expired.

Our priority of rebuilding trust has also included an effort to identify other areas or instances where customers may have experienced financial harm, provide remediation as appropriate, and implement additional operational and control procedures. We are working with our regulatory agencies in this effort. We have previously disclosed key areas of focus as part of our rebuilding trust efforts and are in the process of providing remediation for those matters. We have accrued for the probable and estimable remediation costs related to our rebuilding trust efforts, which amounts may change based on additional facts and information, as well as ongoing reviews and communications with our regulators. As our ongoing reviews continue and as we continue to strengthen our risk and control infrastructure, we have identified and may in the future identify additional items or areas of potential concern. To the extent issues are identified, we will continue to assess any customer harm and provide remediation as appropriate.

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

Recent Developments

LIBOR Transition

The London Interbank Offered Rate (LIBOR) is a widely referenced benchmark rate that seeks to estimate the cost at which banks can borrow on an unsecured basis from other banks. On March 5, 2021, the United Kingdom’s Financial Conduct Authority and ICE Benchmark Administration, the administrator of LIBOR, announced that certain settings of LIBOR would no longer be published on a representative basis after December 31, 2021, and the most commonly used U.S. dollar (USD) LIBOR settings would no longer be published on a representative basis after June 30, 2023. Central banks in various jurisdictions convened committees to identify replacement rates to facilitate the transition away from LIBOR. The committee convened by the Federal Reserve in the United States, the Alternative Reference Rates Committee (ARRC), recommended the Secured Overnight Financing Rate (SOFR) as the replacement rate for USD LIBOR. Additionally, the Federal Reserve, the OCC and the Federal Deposit Insurance Corporation (FDIC) have issued guidance strongly encouraging banking organizations to cease using USD LIBOR as a reference rate in new contracts.

In preparation for the cessation of the various LIBOR settings, we have undertaken a variety of activities. Among other things, we proactively implemented internal “stop-sell” dates to discontinue offering products referencing LIBOR except pursuant to limited exceptions consistent with regulatory guidance. At the same time, we expanded our suite of product offerings that are indexed to alternative reference rates.

We also continue to transition our legacy LIBOR contracts to alternative reference rates. We transitioned substantially all of our legacy contracts with LIBOR settings impacted by the December 31, 2021, cessation date to alternative reference rates, and we will continue to address contracts with LIBOR settings that are impacted by the June 30, 2023, cessation date.

In first quarter 2022, the Adjustable Interest Rate Act (the LIBOR Act) was enacted to provide a statutory framework to replace LIBOR with a benchmark rate based on SOFR in contracts that do not have fallback provisions or that have fallback provisions resulting in a replacement rate based on LIBOR. We expect that the LIBOR Act will allow for the transition of certain of our commercial credit facilities and other contracts that do not have appropriate fallback provisions to replace LIBOR.

For additional information on the amounts of certain of our LIBOR-linked contracts, as well as our transition plans for these contracts, see the “Overview – Recent Developments – LIBOR Transition” section in our 2021 Form 10-K. For information regarding the risks and potential impact of LIBOR or any other referenced financial metric being significantly changed, replaced or discontinued, see the “Risk Factors” section in our 2021 Form 10-K.

Capital Matters

In June 2022, the Company completed the annual Comprehensive Capital Analysis and Review (CCAR) stress test process. We expect our stress capital buffer for the period October 1, 2022, through September 30, 2023, to increase 10 basis points to 3.20%. The FRB has indicated it will publish our final stress capital buffer by August 31, 2022.

On July 26, 2022, the Board approved an increase to the Company’s third quarter 2022 common stock dividend to $0.30 per share.

For additional information about capital planning, see the “Capital Management – Capital Planning and Stress Testing” section in this Report.

4			Wells Fargo & Company

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Financial Performance

Consolidated Financial Highlights
			Quarter ended Jun 30,																								Six months ended Jun 30,
($ in millions)			2022						2021						$ Change						% Change						2022						2021						$ Change						% Change
Selected income statement data
Net interest income			$	10,198					8,800						1,398						16		%				$	19,419					17,608						1,811						10		%
Noninterest income			6,830						11,470						(4,640)						(40)						15,201						21,194						(5,993)						(28)
Total revenue			17,028						20,270						(3,242)						(16)						34,620						38,802						(4,182)						(11)
Net charge-offs			345						379						(34)						(9)						650						902						(252)						(28)
Change in the allowance for credit losses			235						(1,639)						1,874						114						(857)						(3,210)						2,353						73
Provision for credit losses			580						(1,260)						1,840						146						(207)						(2,308)						2,101						91
Noninterest expense			12,883						13,341						(458)						(3)						26,753						27,330						(577)						(2)
Income tax expense			613						1,445						(832)						(58)						1,320						2,346						(1,026)						(44)
Wells Fargo net income			3,119						6,040						(2,921)						(48)						6,790						10,676						(3,886)						(36)
Wells Fargo net income applicable to common stock			2,839						5,743						(2,904)						(51)						6,232						9,999						(3,767)						(38)

In second quarter 2022, we generated $3.1 billion of net income and diluted earnings per common share (EPS) of $0.74, compared with $6.0 billion of net income and diluted EPS of $1.38 in the same period a year ago. In the first half of 2022, we generated $6.8 billion of net income and diluted EPS of $1.62, compared with $10.7 billion of net income and diluted EPS of $2.40 in the same period a year ago. Financial performance for the second quarter and first half of 2022, compared with the same periods a year ago, included the following:

•total revenue decreased due to lower net gains from equity securities and mortgage banking income, partially offset by higher net interest income;

•provision for credit losses increased reflecting loan growth and modest weakening in the economic outlook;

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

•average loans increased due to growth in commercial and industrial, commercial real estate mortgage, credit card, auto and other consumer loans, partially offset by a decrease in residential mortgage – junior lien loans as paydowns exceeded originations. The first half of 2022 was also impacted by a decrease in residential mortgage – first lien loans as paydowns exceeded originations; and

•average deposits increased driven by growth in the Consumer Banking and Lending operating segment due to higher levels of liquidity and savings for 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.

Capital and Liquidity

We maintained a strong capital position in the first half of 2022, with total equity of $179.8 billion at June 30, 2022, compared with $190.1 billion at December 31, 2021. Our liquidity and regulatory capital ratios remained strong at June 30, 2022, including:

•our Common Equity Tier 1 (CET1) ratio was 10.38% under the Standardized Approach (our binding ratio), which continued to exceed the regulatory minimum and buffers of 9.10%;

•our total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was 22.72%, compared with the regulatory minimum of 21.50%; and

•our liquidity coverage ratio (LCR) was 121%, which continued to exceed the regulatory minimum of 100%.

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

Credit Quality

Credit quality reflected the following:

•The allowance for credit losses (ACL) for loans of $12.9 billion at June 30, 2022, decreased $904 million from December 31, 2021, reflecting reduced uncertainty around the economic impact of the COVID-19 pandemic on our loan portfolio. This decrease was partially offset by increased uncertainty related to the risks of high inflation, as well as loan growth.

•Our provision for credit losses for loans was $(197) million in the first half of 2022, compared with $(2.4) billion in the same period a year ago, reflecting loan growth and modest weakening in the economic outlook, partially offset by lower net charge-offs.

•The allowance coverage for total loans was 1.37% at June 30, 2022, compared with 1.54% at December 31, 2021.

•Commercial portfolio net loan charge-offs were $23 million, or 2 basis points of average commercial loans, in second quarter 2022, compared with net loan charge-offs of $80 million, or 7 basis points, in the same period a year ago, due to lower losses and higher recoveries in our commercial and industrial portfolio within the transportation services and financials except banks industries.

•Consumer portfolio net loan charge-offs were $321 million, or 33 basis points of average consumer loans, in second quarter 2022, compared with net loan charge-offs of $301 million, or 32 basis points, in the same period a year ago, driven by lower recoveries in our residential mortgage portfolio and higher losses in our auto and other consumer portfolios, partially offset by lower losses in our credit card portfolio.

•Nonperforming assets (NPAs) of $6.1 billion at June 30, 2022, decreased $1.2 billion, or 16%, from December 31, 2021, driven by decreases in all commercial nonaccrual loan portfolios, and a decrease in residential mortgage nonaccrual loans due to sustained payment performance of borrowers after exiting COVID-19-related accommodation programs. NPAs represented 0.65% of total loans at June 30, 2022.

			Wells Fargo & Company			5

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Earnings Performance

Wells Fargo net income for second quarter 2022 was $3.1 billion ($0.74 diluted EPS), compared with $6.0 billion ($1.38 diluted EPS) in the same period a year ago. Net income decreased in second quarter 2022, compared with the same period a year ago, due to a $4.6 billion decrease in noninterest income and a $1.8 billion increase in provision for credit losses, partially offset by a $1.4 billion increase in net interest income, a $871 million decrease in net income from noncontrolling interests, a $832 million decrease in income tax expense, and a $458 million decrease in noninterest expense.

Net income for the first half of 2022 was $6.8 billion ($1.62 diluted EPS), compared with $10.7 billion ($2.40 diluted EPS) in the same period a year ago. Net income decreased in the first half of 2022, compared with the same period a year ago, due to a $6.0 billion decrease in noninterest income and a $2.1 billion increase in provision for credit losses, partially offset by a $1.8 billion increase in net interest income, a $1.0 billion decrease in income tax expense, a $794 million decrease in net income from noncontrolling interests, and a $577 million decrease in noninterest expense.

Net Interest Income

Net interest income and net interest margin increased in both the second quarter and first half of 2022, compared with the same periods a year ago, due to the impact of higher interest rates on earning assets, higher loan balances, and lower mortgage-backed securities (MBS) premium amortization, partially offset by lower interest income from Paycheck Protection Program (PPP) loans and loans purchased from securitization pools, and higher expenses for interest-bearing deposits and long-term debt. Interest income from PPP loans was $70 million in the first half of 2022, compared with $272 million in the same period a year ago. Additionally, interest income associated with loans we purchased from Government National Mortgage Association (GNMA) loan securitization pools was $378 million in the first half of 2022, compared with $525 million in the same period a year ago. For additional information about loans purchased from GNMA loan securitization pools, see the “Risk Management – Credit Risk Management – Mortgage Banking Activities” section in this Report.

Table 1 presents the individual components of net interest income and the net interest margin. Net interest income and net interest margin are presented on a taxable-equivalent basis in Table 1 to consistently reflect income from taxable and tax-exempt loans and debt and equity securities based on a 21% federal statutory tax rate for the periods ended June 30, 2022 and 2021.

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

6			Wells Fargo & Company

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

			Quarter ended June 30,
			2022																		2021
(in millions)			Average balance						Interest income/ expense						Interest rates						Average balance						Interest income/ expense						Interest rates
Assets
Interest-earning deposits with banks			$	146,271					321						0.88		%				$	255,237					70						0.11		%
Federal funds sold and securities purchased under resale agreements			60,450						72						0.47						72,513						3						0.02
Debt securities:
Trading debt securities			89,258						557						2.50						84,612						501						2.37
Available-for-sale debt securities			147,138						701						1.91						192,418						686						1.43
Held-to-maturity debt securities			298,101						1,536						2.06						237,812						1,106						1.86
Total debt securities			534,497						2,794						2.09						514,842						2,293						1.78
Loans held for sale (2)			14,828						126						3.41						27,173						193						2.85
Loans:
Commercial loans:
Commercial and industrial – U.S.			288,831						2,179						3.02						248,153						1,627						2.63
Commercial and industrial – Non-U.S.			81,784						521						2.56						70,764						374						2.12
Real estate mortgage			131,128						980						3.00						120,526						823						2.74
Real estate construction			21,328						191						3.59						22,015						169						3.08
Lease financing			14,445						153						4.24						15,565						174						4.49
Total commercial loans			537,516						4,024						3.00						477,023						3,167						2.66
Consumer loans:
Residential mortgage – first lien			248,879						1,943						3.12						247,815						1,957						3.16
Residential mortgage – junior lien			14,998						168						4.48						20,457						211						4.13
Credit card			39,614						1,100						11.13						34,211						979						11.48
Auto			56,262						586						4.18						50,014						563						4.52
Other consumer			29,298						311						4.26						25,227						233						3.70
Total consumer loans			389,051						4,108						4.23						377,724						3,943						4.18
Total loans (2)			926,567						8,132						3.52						854,747						7,110						3.33
Equity securities			30,770						193						2.51						29,773						133						1.77
Other			16,085						26						0.65						9,103						1						0.04
Total interest-earning assets			$	1,729,468					11,664						2.70		%				$	1,763,388					9,803						2.23		%
Cash and due from banks			26,018						—												24,336						—
Goodwill			25,179						—												26,213						—
Other			121,906						—												125,942						—
Total noninterest-earning assets			$	173,103					—												176,491						—
Total assets			$	1,902,571					11,664												1,939,879						9,803
Liabilities
Deposits:
Demand deposits			$	439,983					90						0.08		%				$	452,184					31						0.03		%
Savings deposits			440,478						32						0.03						422,650						32						0.03
Time deposits			25,381						26						0.41						37,116						29						0.32
Deposits in non-U.S. offices			18,684						10						0.22						29,796						—						—
Total interest-bearing deposits			924,526						158						0.07						941,746						92						0.04
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase			22,593						33						0.58						36,526						3						0.01
Other short-term borrowings			12,998						(2)						(0.07)						11,979						(14)						(0.49)
Total short-term borrowings			35,591						31						0.34						48,505						(11)						(0.09)
Long-term debt			151,230						1,011						2.67						181,101						712						1.57
Other liabilities			35,583						158						1.78						27,718						101						1.47
Total interest-bearing liabilities			$	1,146,930					1,358						0.47		%				$	1,199,070					894						0.30		%
Noninterest-bearing demand deposits			521,267						—												494,078						—
Other noninterest-bearing liabilities			53,358						—												55,763						—
Total noninterest-bearing liabilities			$	574,625					—												549,841						—
Total liabilities			$	1,721,555					1,358												1,748,911						894
Total equity			181,016						—												190,968						—
Total liabilities and equity			$	1,902,571					1,358												1,939,879						894
Interest rate spread on a taxable-equivalent basis (3)															2.23		%																1.93		%
Net interest income and net interest margin on a taxable-equivalent basis (3)									$	10,306					2.39		%										$	8,909					2.02		%

(continued on following page)

			Wells Fargo & Company			7

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Earnings Performance (continued)

(continued from previous page)

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

			Six months ended June 30,
															2022																		2021
(in millions)			Average  balance						Interest  income/ expense						Interest rates						Average  balance						Interest  income/  expense						Interest rates
Assets
Interest-earning deposits with banks			$	162,570					417						0.52		%				$	239,425					127						0.11		%
Federal funds sold and securities purchased under resale agreements			62,636						63						0.20						72,332						10						0.03
Debt securities:
Trading debt securities			89,964						1,110						2.47						85,990						1,035						2.41
Available-for-sale debt securities			158,032						1,424						1.81						199,642						1,527						1.53
Held-to-maturity debt securities			288,725						2,915						2.02						227,377						2,133						1.88
Total debt securities			536,721						5,449						2.03						513,009						4,695						1.83
Loans held for sale (2)			17,158						266						3.10						30,843						524						3.41
Loans:
Commercial loans:
Commercial and industrial – U.S.			282,485						3,879						2.77						250,510						3,223						2.59
Commercial and industrial – Non-U.S.			79,782						924						2.34						68,106						712						2.11
Real estate mortgage			129,306						1,813						2.83						120,629						1,635						2.73
Real estate construction			20,797						356						3.46						21,886						335						3.09
Lease financing			14,516						308						4.24						15,681						358						4.55
Total commercial loans			526,886						7,280						2.78						476,812						6,263						2.64
Consumer loans:
Residential mortgage – first lien			245,898						3,850						3.13						256,982						4,025						3.13
Residential mortgage – junior lien			15,505						333						4.32						21,384						439						4.13
Credit card			38,893						2,165						11.22						34,705						2,012						11.69
Auto			56,480						1,170						4.18						49,351						1,123						4.59
Other consumer			28,703						567						3.98						24,807						466						3.79
Total consumer loans			385,479						8,085						4.21						387,229						8,065						4.18
Total loans (2)			912,365						15,365						3.39						864,041						14,328						3.33
Equity securities			32,019						363						2.27						29,604						270						1.82
Other			13,804						29						0.43						9,299						2						0.04
Total interest-earning assets			$	1,737,273					21,952						2.54		%				$	1,758,553					19,956						2.28		%
Cash and due from banks			25,500						—												24,466						—
Goodwill			25,180						—												26,297						—
Other			122,982						—												127,851						—
Total noninterest-earning assets			$	173,662					—												178,614						—
Total assets			$	1,910,935					21,952												1,937,167						19,956
Liabilities
Deposits:
Demand deposits			$	447,624					128						0.06		%				$	448,495					64						0.03		%
Savings deposits			440,579						56						0.03						417,153						64						0.03
Time deposits			26,608						45						0.34						40,552						76						0.38
Deposits in non-U.S. offices			20,062						12						0.12						30,260						—						—
Total interest-bearing deposits			934,873						241						0.05						936,460						204						0.04
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase			21,518						30						0.28						41,912						5						0.01
Other short-term borrowings			12,664						(13)						(0.21)						11,852						(25)						(0.43)
Total short-term borrowings			34,182						17						0.10						53,764						(20)						(0.08)
Long-term debt			152,509						1,772						2.32						189,673						1,738						1.83
Other liabilities			33,350						288						1.74						28,294						210						1.49
Total interest-bearing liabilities			$	1,154,914					2,318						0.40		%				$	1,208,191					2,132						0.35		%
Noninterest-bearing demand deposits			520,009						—												478,305						—
Other noninterest-bearing liabilities			52,350						—												60,645						—
Total noninterest-bearing liabilities			$	572,359					—												538,950						—
Total liabilities			$	1,727,273					2,318												1,747,141						2,132
Total equity			183,662						—												190,026						—
Total liabilities and equity			$	1,910,935					2,318												1,937,167						2,132
Interest rate spread on a taxable-equivalent basis (3)															2.14		%																1.93		%
Net interest margin and net interest income on a taxable-equivalent basis (3)									$	19,634					2.27		%										$	17,824					2.04		%

(1)The average balance amounts represent amortized costs, except for certain held-to-maturity debt securities, which exclude unamortized basis adjustments related to the transfer of those securities from available-for-sale debt securities. The interest rates are based on interest income or expense amounts for the period and are annualized. Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.

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

(3)Includes taxable-equivalent adjustments of $108 million and $109 million for the quarters ended June 30, 2022 and 2021, respectively, and $215 million and $216 million for the first half of 2022 and 2021, respectively, predominantly related to tax-exempt income on certain loans and securities.

8			Wells Fargo & Company

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Noninterest Income

Table 2: Noninterest Income

			Quarter ended Jun 30,																								Six months ended Jun 30,
(in millions)			2022						2021						$ Change						% Change						2022						2021						$ Change						% Change
Deposit-related fees			$	1,376					1,342						34						3		%				$	2,849					2,597						252						10		%
Lending-related fees			353						362						(9)						(2)						695						723						(28)						(4)
Investment advisory and other asset-based fees			2,346						2,794						(448)						(16)						4,844						5,550						(706)						(13)
Commissions and brokerage services fees			542						580						(38)						(7)						1,079						1,216						(137)						(11)
Investment banking fees			286						570						(284)						(50)						733						1,138						(405)						(36)
Card fees			1,112						1,077						35						3						2,141						2,026						115						6
Net servicing income			125						(21)						146						695						279						(120)						399						333
Net gains on mortgage loan originations/sales			162						1,357						(1,195)						(88)						701						2,782						(2,081)						(75)
Mortgage banking			287						1,336						(1,049)						(79)						980						2,662						(1,682)						(63)
Net gains from trading activities			446						21						425						NM						664						369						295						80
Net gains from debt securities			143						—						143						NM						145						151						(6)						(4)
Net gains (losses) from equity securities			(615)						2,696						(3,311)						NM						(39)						3,088						(3,127)						NM
Lease income			333						313						20						6						660						628						32						5
Other			221						379						(158)						(42)						450						1,046						(596)						(57)
Total			$	6,830					11,470						(4,640)						(40)						$	15,201					21,194						(5,993)						(28)

NM – Not meaningful

Second quarter 2022 vs. second quarter 2021

Investment advisory and other asset-based fees decreased reflecting:

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

•lower average market valuations.

For additional information on certain client investment assets, see the “Earnings Performance – Operating Segment Results – Wealth and Investment Management – WIM Advisory Assets” section in this Report.

Investment banking fees decreased due to lower market activity and a $107 million write-down on unfunded leveraged finance commitments due to the widening of market spreads.

Net servicing income increased driven by:

•lower amortization of the fair value mortgage servicing right (MSR) due to lower prepayment rates resulting from increases in interest rates;

partially offset by:

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

Net gains on mortgage loan originations/sales decreased

driven by:

•lower residential mortgage held for sale (HFS) origination volumes and lower margins in our retail and correspondent production channels;

•lower gains related to the resecuritization of loans we purchased from GNMA loan securitization pools; and

•a shift in production to more correspondent loans, which have a lower production margin compared with retail loans.

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

Net gains from trading activities increased reflecting:

•higher foreign exchange and commodities trading revenue, as well as higher trading activity in equities;

partially offset by:

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

Net gains from debt securities increased due to higher gains on sales of asset-backed securities and municipal bonds as a result of increased sales volumes.

Net gains (losses) from equity securities decreased reflecting:

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

•lower realized gains on the sales of equity securities; and

•a $576 million impairment of equity securities (before the impact of noncontrolling interests) predominantly in our affiliated venture capital business driven by market conditions.

Other income decreased driven by a gain on the sale of a portion of our student loan portfolio in second quarter 2021.

First half of 2022 vs. first half of 2021

Deposit-related fees increased driven by:

•lower fee waivers and reversals as the first half of 2021 included various accommodations to support customers during the COVID-19 pandemic, as well as other temporary fee waivers; and

•higher overdraft fees driven by increased consumer transaction volumes, partially offset by the initial implementation of overdraft policy changes in 2022.

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

			Wells Fargo & Company			9

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Earnings Performance (continued)

Investment advisory and other asset-based fees decreased reflecting:

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

•lower average market valuations.

For additional information on certain client investment assets, see the “Earnings Performance – Operating Segment Results – Wealth and Investment Management – WIM Advisory Assets” section in this Report.

Commissions and brokerage services fees decreased driven by lower transactional revenue.

Investment banking fees decreased due to lower market activity and a $107 million write-down on unfunded leveraged finance commitments due to the widening of market spreads.

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

Net servicing income increased driven by:

•lower amortization of the fair value MSR due to lower prepayment rates driven by increases in interest rates; and

•lower unreimbursed servicing costs due to lower payoff volumes;

partially offset by:

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

Net gains on mortgage loan originations/sales decreased

driven by:

•lower residential mortgage HFS origination volumes and lower margins in our retail and correspondent production channels;

•lower gains related to the resecuritization of loans we purchased from GNMA loan securitization pools; and

•a shift in production to more correspondent loans, which have a lower production margin compared with retail loans.

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

Net gains from trading activities increased reflecting:

•higher foreign exchange, rates, and commodities trading revenue, as well as higher trading activity in equities;

partially offset by:

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

Net gains (losses) from equity securities decreased reflecting:

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

•lower realized gains on the sales of equity securities; and

•a $1.0 billion impairment of equity securities (before the impact of noncontrolling interests) predominantly in our affiliated venture capital business driven by market conditions.

Other income decreased due to:

•a gain on the sale of substantially all of our student loan portfolio in the first half of 2021; and

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

partially offset by:

•lower valuation losses related to the retained litigation risk associated with shares of Visa Class B common stock that we sold. For additional information, see the “Risk Management – Asset/Liability Management – Market Risk - Equity Securities” section in our 2021 Form 10-K.

10			Wells Fargo & Company

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Noninterest Expense

Table 3: Noninterest Expense

			Quarter ended Jun 30,																								Six months ended Jun 30,
(in millions)			2022						2021						$ Change						% Change						2022						2021						$ Change						% Change
Personnel			$	8,442					8,818						(376)						(4)		%				$	17,713					18,376						(663)						(4)		%
Technology, telecommunications and equipment			799						815						(16)						(2)						1,675						1,659						16						1
Occupancy			705						735						(30)						(4)						1,427						1,505						(78)						(5)
Operating losses			576						303						273						90						1,249						516						733						142
Professional and outside services			1,310						1,450						(140)						(10)						2,596						2,838						(242)						(9)
Leases (1)			185						226						(41)						(18)						373						452						(79)						(17)
Advertising and promotion			102						132						(30)						(23)						201						222						(21)						(9)
Restructuring charges			—						(4)						4						100						5						9						(4)						(44)
Other			764						866						(102)						(12)						1,514						1,753						(239)						(14)
Total			$	12,883					13,341						(458)						(3)						$	26,753					27,330						(577)						(2)

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

Second quarter 2022 vs. second quarter 2021

Personnel expense decreased driven by:

•the impact of divestitures and efficiency initiatives;

•lower incentive compensation expense, including the impact of lower market valuations on stock-based compensation; and

•lower revenue-related compensation expense.

Operating losses increased driven by higher litigation expense and higher customer remediation expense predominantly for a variety of historical matters.

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

Leases expense decreased driven by lower depreciation expense from a reduction in the size of our operating lease asset portfolio.

Advertising and promotion expense decreased driven by lower marketing and brand campaign volumes.

Other expenses decreased driven by:

•a write-down of goodwill in second quarter 2021 related to the sale of a portion of our student loan portfolio; and

•lower donation expense due to higher donations of PPP processing fees in second quarter 2021.

First half of 2022 vs. first half of 2021

Personnel expense decreased driven by:

•the impact of divestitures and efficiency initiatives;

•lower incentive compensation expense, including the impact of lower market valuations on stock-based compensation; and

•lower revenue-related compensation expense.

Occupancy expense decreased driven by efficiency initiatives.

Operating losses increased driven by higher customer remediation expense predominantly for a variety of historical matters, and higher litigation expense.

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

Leases expense decreased driven by lower depreciation expense from a reduction in the size of our operating lease asset portfolio.

Other expenses decreased driven by:

•a write-down of goodwill in the first half of 2021 related to the sale of substantially all of our student loan portfolio; and

•lower donation expense due to higher donations of PPP processing fees in the first half of 2021.

Income Tax Expense

Income tax expense was $613 million in second quarter 2022, compared with $1.4 billion in the same period a year ago. The effective income tax rate was 16.4% for second quarter 2022, compared with 19.3% for the same period a year ago.

Income tax expense was $1.3 billion in the first half of 2022, compared with $2.3 billion in the same period a year ago. The effective income tax rate was 16.3% for the first half of 2022, compared with 18.0% for the same period a year ago.

The decrease in our income tax expense for both the second quarter and first half of 2022, compared with the same periods a year ago, was predominantly driven by lower pre-tax income.

			Wells Fargo & Company			11

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Earnings Performance (continued)

Operating Segment Results

Our management reporting is organized into four reportable operating segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. All other business activities that are not included in the reportable operating segments have been included in Corporate. For additional information, see Table 4. 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

12			Wells Fargo & Company

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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 Lending						Commercial Banking						Corporate and Investment Banking						Wealth and Investment Management						Corporate (1)						Reconciling Items (2)						Consolidated Company
Quarter ended June 30, 2022
Net interest income			$	6,372					1,580						2,057						916						(619)						(108)						10,198
Noninterest income			2,135						912						1,516						2,789						(114)						(408)						6,830
Total revenue			8,507						2,492						3,573						3,705						(733)						(516)						17,028
Provision for credit losses			613						21						(62)						(7)						15						—						580
Noninterest expense			6,036						1,478						1,840						2,911						618						—						12,883
Income (loss) before income tax expense (benefit)			1,858						993						1,795						801						(1,366)						(516)						3,565
Income tax expense (benefit)			465						249						459						198						(242)						(516)						613
Net income (loss) before noncontrolling interests			1,393						744						1,336						603						(1,124)						—						2,952
Less: Net income (loss) from noncontrolling interests			—						3						—						—						(170)						—						(167)
Net income (loss)			$	1,393					741						1,336						603						(954)						—						3,119
Quarter ended June 30, 2021
Net interest income			$	5,618					1,202						1,783						610						(304)						(109)						8,800
Noninterest income			3,068						906						1,555						2,926						3,327						(312)						11,470
Total revenue			8,686						2,108						3,338						3,536						3,023						(421)						20,270
Provision for credit losses			(367)						(382)						(501)						24						(34)						—						(1,260)
Noninterest expense			6,202						1,443						1,805						2,891						1,000						—						13,341
Income (loss) before income tax expense (benefit)			2,851						1,047						2,034						621						2,057						(421)						8,189
Income tax expense (benefit)			713						261						513						156						223						(421)						1,445
Net income before noncontrolling interests			2,138						786						1,521						465						1,834						—						6,744
Less: Net income (loss) from noncontrolling interests			—						2						(2)						—						704						—						704
Net income			$	2,138					784						1,523						465						1,130						—						6,040
Six months ended June 30, 2022
Net interest income			$	12,368					2,941						4,047						1,715						(1,437)						(215)						19,419
Noninterest income			4,702						1,878						2,996						5,747						692						(814)						15,201
Total revenue			17,070						4,819						7,043						7,462						(745)						(1,029)						34,620
Provision for credit losses			423						(323)						(258)						(44)						(5)						—						(207)
Noninterest expense			12,431						3,009						3,823						6,086						1,404						—						26,753
Income (loss) before income tax expense (benefit)			4,216						2,133						3,478						1,420						(2,144)						(1,029)						8,074
Income tax expense (benefit)			1,053						529						884						352						(469)						(1,029)						1,320
Net income (loss) before noncontrolling interests			3,163						1,604						2,594						1,068						(1,675)						—						6,754
Less: Net income (loss) from noncontrolling interests			—						6						—						—						(42)						—						(36)
Net income (loss)			$	3,163					1,598						2,594						1,068						(1,633)						—						6,790
Six months ended June 30, 2021
Net interest income			$	11,233					2,456						3,562						1,267						(694)						(216)						17,608
Noninterest income			6,107						1,733						3,380						5,813						4,744						(583)						21,194
Total revenue			17,340						4,189						6,942						7,080						4,050						(799)						38,802
Provision for credit losses			(786)						(781)						(785)						(19)						63						—						(2,308)
Noninterest expense			12,469						3,073						3,638						5,919						2,231						—						27,330
Income (loss) before income tax expense (benefit)			5,657						1,897						4,089						1,180						1,756						(799)						13,780
Income tax expense (benefit)			1,415						473						1,013						296						(52)						(799)						2,346
Net income before noncontrolling interests			4,242						1,424						3,076						884						1,808						—						11,434
Less: Net income (loss) from noncontrolling interests			—						3						(2)						—						757						—						758
Net income			$	4,242					1,421						3,078						884						1,051						—						10,676

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

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

			Wells Fargo & Company			13

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Earnings Performance (continued)

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

debit cards, as well as home, auto, personal, and small business lending. Table 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 June 30,																								Six months ended June 30,
($ in millions, unless otherwise noted)			2022						2021						$ Change						% Change						2022						2021						$ Change						% Change
Income Statement
Net interest income			$	6,372					5,618						754						13		%				$	12,368					11,233						1,135						10		%
Noninterest income:
Deposit-related fees			779						732						47						6						1,624						1,393						231						17
Card fees			1,038						1,017						21						2						1,999						1,909						90						5
Mortgage banking			211						1,158						(947)						(82)						865						2,417						(1,552)						(64)
Other			107						161						(54)						(34)						214						388						(174)						(45)
Total noninterest income			2,135						3,068						(933)						(30)						4,702						6,107						(1,405)						(23)
Total revenue			8,507						8,686						(179)						(2)						17,070						17,340						(270)						(2)
Net charge-offs			358						359						(1)						—						733						729						4						1
Change in the allowance for credit losses			255						(726)						981						135						(310)						(1,515)						1,205						80
Provision for credit losses			613						(367)						980						267						423						(786)						1,209						154
Noninterest expense			6,036						6,202						(166)						(3)						12,431						12,469						(38)						—
Income before income tax expense			1,858						2,851						(993)						(35)						4,216						5,657						(1,441)						(25)
Income tax expense			465						713						(248)						(35)						1,053						1,415						(362)						(26)
Net income			$	1,393					2,138						(745)						(35)						$	3,163					4,242						(1,079)						(25)
Revenue by Line of Business
Consumer and Small Business Banking			$	5,510					4,714						796						17						$	10,581					9,264						1,317						14
Consumer Lending:
Home Lending			972						2,072						(1,100)						(53)						2,462						4,299						(1,837)						(43)
Credit Card			1,304						1,218						86						7						2,569						2,406						163						7
Auto			436						415						21						5						880						818						62						8
Personal Lending			285						267						18						7						578						553						25						5
Total revenue			$	8,507					8,686						(179)						(2)						$	17,070					17,340						(270)						(2)
Selected Metrics
Consumer Banking and Lending:
Return on allocated capital (1)			11.1		%				17.3																		12.7		%				17.2
Efficiency ratio (2)			71						71																		73						72
Headcount (#) (period-end)			109,200						116,185												(6)						109,200						116,185												(6)
Retail bank branches (#)			4,660						4,878												(4)						4,660						4,878												(4)
Digital active customers (# in millions) (3)			33.4						32.6												2						33.4						32.6												2
Mobile active customers (# in millions) (3)			28.0						26.8												4						28.0						26.8												4
Consumer and Small Business Banking:
Deposit spread (4)			1.7		%				1.5																		1.7		%				1.6
Debit card purchase volume ($ in billions) (5)			$	125.2					122.0						3.2						3						$	240.2					230.5						9.7						4
Debit card purchase transactions (# in millions) (5)			2,517						2,504												1						4,855						4,770												2

(continued on following page)

14			Wells Fargo & Company

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(continued from previous page)

			Quarter ended June 30,																								Six months ended June 30,
($ in millions, unless otherwise noted)			2022						2021						$ Change						% Change						2022						2021						$ Change						% Change
Home Lending:
Mortgage banking:
Net servicing income			$	77					(76)						153						201		%				$	193					(199)						392						197		%
Net gains on mortgage loan originations/sales			134						1,234						(1,100)						(89)						672						2,616						(1,944)						(74)
Total mortgage banking			$	211					1,158						(947)						(82)						$	865					2,417						(1,552)						(64)
Originations ($ in billions):
Retail			$	19.6					36.9						(17.3)						(47)						$	43.7					70.5						(26.8)						(38)
Correspondent			14.5						16.3						(1.8)						(11)						28.3						34.5						(6.2)						(18)
Total originations			$	34.1					53.2						(19.1)						(36)						$	72.0					105.0						(33.0)						(31)
% of originations held for sale (HFS)			46.1		%				65.6																		48.9		%				70.7
Third-party mortgage loans serviced (period-end) ($ in billions) (6)			$	696.9					769.4						(72.5)						(9)						$	696.9					769.4						(72.5)						(9)
Mortgage servicing rights (MSR) carrying value (period-end)			9,163						6,717						2,446						36						9,163						6,717						2,446						36
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) (6)			1.31		%				0.87																		1.31		%				0.87
Home lending loans 30+ days delinquency rate (7)(8)(9)			0.28						0.51																		0.28						0.51
Credit Card:
Point of sale (POS) volume ($ in billions)			$	30.1					23.6						6.5						28						$	56.1					43.2						12.9						30
New accounts (# in thousands)			524						323												62						1,008						589												71
Credit card loans 30+ days delinquency rate			1.54		%				1.53																		1.54		%				1.53
Auto:
Auto originations ($ in billions)			$	5.4					8.3						(2.9)						(35)						$	12.7					15.3						(2.6)						(17)
Auto loans 30+ days delinquency rate (8)			1.95		%				1.30																		1.95		%				1.30
Personal Lending:
New volume ($ in billions)			$	3.3					2.5						0.8						32						$	5.9					4.4						1.5						34

(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)Excludes nonaccrual loans.

(9)Beginning in second quarter 2020, customer payment deferral activities instituted in response to the COVID-19 pandemic may have delayed the recognition of delinquencies for those customers who would have otherwise moved into past due or nonaccrual status.

Second quarter 2022 vs. second quarter 2021

Revenue decreased driven by:

•lower mortgage banking noninterest income due to lower origination volumes and margins, and lower gains related to the resecuritization of loans we purchased from GNMA securitization pools, partially offset by higher servicing income;

partially offset by:

•higher net interest income reflecting higher interest rates and higher deposit balances and deposit spreads; and

•higher deposit-related fees reflecting lower fee waivers and reversals, partially offset by lower fees reflecting the initial implementation of overdraft policy changes in March 2022.

Provision for credit losses increased due to loan growth and modest weakening in the economic outlook.

Noninterest expense decreased driven by:

•lower personnel expense driven by lower revenue-related compensation in Home Lending due to lower production;

•lower occupancy expense and professional and outside

services expense related to efficiency initiatives; and

•lower donation expense due to higher donations of PPP processing fees in second quarter 2021;

partially offset by:

•higher operating losses reflecting higher customer remediation expense predominantly for a variety of historical matters, and higher litigation expense.

First half of 2022 vs. first half of 2021

Revenue decreased driven by:

•lower mortgage banking noninterest income due to lower origination volumes and margins, and lower gains related to the resecuritization of loans we purchased from GNMA securitization pools, partially offset by higher servicing income; and

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

partially offset by:

•higher net interest income reflecting higher interest rates and higher deposit balances and deposit spreads;

			Wells Fargo & Company			15

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Earnings Performance (continued)

•higher deposit-related fees reflecting lower fee waivers and reversals as the first half of 2021 included various accommodations to support customers during the COVID-19 pandemic, as well as other temporary fee waivers, and higher overdraft fees in the first half of 2022 driven by increased consumer transaction volumes, partially offset by the initial implementation of overdraft policy changes in 2022; and

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

Provision for credit losses increased due to loan growth and modest weakening in the economic outlook.

Noninterest expense decreased driven by:

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

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

•lower donation expense due to higher donations of PPP processing fees in the first half of 2021;

partially offset by:

•higher operating losses reflecting higher customer remediation expense predominantly for a variety of historical matters.

Table 5b: Consumer Banking and Lending – Balance Sheet

			Quarter ended June 30,																								Six months ended June 30,
(in millions)			2022						2021						$ Change						% Change						2022						2021						$ Change						% Change
Selected Balance Sheet Data (average)
Loans by Line of Business:
Consumer and Small Business Banking			$	10,453					18,768						(8,315)						(44)		%				$	10,529					19,449						(8,920)						(46)		%
Consumer Lending:
Home Lending			218,371						223,229						(4,858)						(2)						216,055						233,078						(17,023)						(7)
Credit Card			32,825						28,003						4,822						17						32,168						28,444						3,724						13
Auto			56,813						50,762						6,051						12						57,044						50,143						6,901						14
Personal Lending			12,397						11,130						1,267						11						12,177						11,314						863						8
Total loans			$	330,859					331,892						(1,033)						—						$	327,973					342,428						(14,455)						(4)
Total deposits			898,650						835,752						62,898						8						890,042						812,723						77,319						10
Allocated capital			48,000						48,000						—						—						48,000						48,000						—						—
Selected Balance Sheet Data (period-end)
Loans by Line of Business:
Consumer and Small Business Banking			$	10,400					16,494						(6,094)						(37)						$	10,400					16,494						(6,094)						(37)
Consumer Lending:
Home Lending			222,088						218,626						3,462						2						222,088						218,626						3,462						2
Credit Card			34,075						28,548						5,527						19						34,075						28,548						5,527						19
Auto			56,224						51,784						4,440						9						56,224						51,784						4,440						9
Personal Lending			12,945						11,308						1,637						14						12,945						11,308						1,637						14
Total loans			$	335,732					326,760						8,972						3						$	335,732					326,760						8,972						3
Total deposits			892,373						840,434						51,939						6						892,373						840,434						51,939						6

Second quarter 2022 vs. second quarter 2021

Total loans (average) decreased as paydowns exceeded originations in our Home Lending and Consumer and Small Business Banking businesses, partially offset by higher customer spend and the launch of new products in our Credit Card business in the second half of 2021 and higher loan balances in our Auto business. Consumer and Small Business Banking loan balances were impacted by a decline in PPP loans.

Total deposits (average) increased driven by higher levels of customer liquidity and savings.

First half of 2022 vs. first half of 2021

Total loans (average) decreased as paydowns exceeded originations in our Home Lending and Consumer and Small Business Banking businesses, partially offset by higher customer spend and the launch of new products in our Credit Card business in the second half of 2021 and higher loan balances in our Auto

business. Home Lending loan balances were impacted by the resecuritization of loans we purchased from GNMA loan securitization pools and the continued suspension of home equity originations. Consumer and Small Business Banking loan balances were impacted by a decline in PPP loans.

Total loans (period-end) increased driven by growth in our Home Lending business, higher customer spend and the launch of new products in our Credit Card business, and higher loan balances in our Auto business, partially offset by a decline in PPP loans in Consumer and Small Business Banking.

Total deposits (average and period-end) increased driven by higher levels of customer liquidity and savings.

16			Wells Fargo & Company

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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 June 30,																								Six months ended June 30,
($ in millions)			2022						2021						$ Change						% Change						2022						2021						$ Change						% Change
Income Statement
Net interest income			$	1,580					1,202						378						31		%				$	2,941					2,456						485						20		%
Noninterest income:
Deposit-related fees			310						325						(15)						(5)						638						642						(4)						(1)
Lending-related fees			122						135						(13)						(10)						243						271						(28)						(10)
Lease income			179						173						6						3						358						347						11						3
Other			301						273						28						10						639						473						166						35
Total noninterest income			912						906						6						1						1,878						1,733						145						8
Total revenue			2,492						2,108						384						18						4,819						4,189						630						15
Net charge-offs			4						53						(49)						(92)						(25)						92						(117)						NM
Change in the allowance for credit losses			17						(435)						452						104						(298)						(873)						575						66
Provision for credit losses			21						(382)						403						105						(323)						(781)						458						59
Noninterest expense			1,478						1,443						35						2						3,009						3,073						(64)						(2)
Income before income tax expense			993						1,047						(54)						(5)						2,133						1,897						236						12
Income tax expense			249						261						(12)						(5)						529						473						56						12
Less: Net income from noncontrolling interests			3						2						1						50						6						3						3						100
Net income			$	741					784						(43)						(5)						$	1,598					1,421						177						12
Revenue by Line of Business
Middle Market Banking			$	1,459					1,151						308						27						$	2,705					2,310						395						17
Asset-Based Lending and Leasing			1,033						957						76						8						2,114						1,879						235						13
Total revenue			$	2,492					2,108						384						18						$	4,819					4,189						630						15
Revenue by Product
Lending and leasing			$	1,308					1,207						101						8						$	2,563					2,409						154						6
Treasury management and payments			943						680						263						39						1,722						1,401						321						23
Other			241						221						20						9						534						379						155						41
Total revenue			$	2,492					2,108						384						18						$	4,819					4,189						630						15
Selected Metrics
Return on allocated capital			14.3		%				15.2																		15.6		%				13.8
Efficiency ratio			59						68																		62						73
Headcount (#) (period-end)			17,792						19,647												(9)						17,792						19,647												(9)

NM – Not meaningful

Second quarter 2022 vs. second quarter 2021

Revenue increased driven by:

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

•higher other noninterest income driven by higher income from investments accounted for under the equity method;

partially offset by:

•lower unrealized gains on equity securities and lower realized gains on the sales of equity securities.

Provision for credit losses increased due to loan growth and modest weakening in the economic outlook, partially offset by lower net charge-offs.

Noninterest expense increased driven by:

•higher operating costs;

partially offset by:

•lower spending due to efficiency initiatives, including lower personnel expense from reduced headcount.

First half of 2022 vs. first half of 2021

Revenue increased driven by:

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

•higher other noninterest income driven by higher income from investments accounted for under the equity method and higher income from renewable energy investments;

partially offset by:

•lower realized gains on the sales of equity securities.

Provision for credit losses increased due to loan growth and modest weakening in the economic outlook, partially offset by lower net charge-offs.

Noninterest expense decreased driven by:

•lower spending due to efficiency initiatives, including lower personnel expense from reduced headcount;

			Wells Fargo & Company			17

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Earnings Performance (continued)

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

•lower operating losses due to lower litigation expense and customer remediation expense;

partially offset by:

•higher operating costs.

Table 5d: Commercial Banking – Balance Sheet

			Quarter ended June 30,																								Six months ended June 30,
(in millions)			2022						2021						$ Change						% Change						2022						2021						$ Change						% Change
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial			$	143,833					117,585						26,248						22		%				$	139,835					119,248						20,587						17		%
Commercial real estate			44,790						47,203						(2,413)						(5)						44,921						47,885						(2,964)						(6)
Lease financing and other			13,396						13,784						(388)						(3)						13,472						13,712						(240)						(2)
Total loans			$	202,019					178,572						23,447						13						$	198,228					180,845						17,383						10
Loans by Line of Business:
Middle Market Banking			$	113,033					102,054						10,979						11						$	110,820					103,210						7,610						7
Asset-Based Lending and Leasing			88,986						76,518						12,468						16						87,408						77,635						9,773						13
Total loans			$	202,019					178,572						23,447						13						$	198,228					180,845						17,383						10
Total deposits			188,286						192,586						(4,300)						(2)						194,458						190,984						3,474						2
Allocated capital			19,500						19,500						—						—						19,500						19,500						—						—
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial			$	146,656					117,782						28,874						25						$	146,656					117,782						28,874						25
Commercial real estate			44,992						46,905						(1,913)						(4)						44,992						46,905						(1,913)						(4)
Lease financing and other			13,593						14,218						(625)						(4)						13,593						14,218						(625)						(4)
Total loans			$	205,241					178,905						26,336						15						$	205,241					178,905						26,336						15
Loans by Line of Business:
Middle Market Banking			$	116,064					102,062						14,002						14						$	116,064					102,062						14,002						14
Asset-Based Lending and Leasing			89,177						76,843						12,334						16						89,177						76,843						12,334						16
Total loans			$	205,241					178,905						26,336						15						$	205,241					178,905						26,336						15
Total deposits			183,145						197,461						(14,316)						(7)						183,145						197,461						(14,316)						(7)

Second quarter 2022 vs. second quarter 2021

Total loans (average) increased driven by higher loan demand, including higher line utilization, and customer growth.

First half of 2022 vs. first half of 2021

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

Total deposits (period-end) decreased reflecting continued actions to manage under the asset cap and the transfer of certain customer accounts to the Consumer Banking and Lending operating segment in first quarter 2022.

18			Wells Fargo & Company

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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 June 30,																								Six months ended June 30,
($ in millions)			2022						2021						$ Change						% Change						2022						2021						$ Change						% Change
Income Statement
Net interest income			$	2,057					1,783						274						15		%				$	4,047					3,562						485						14		%
Noninterest income:
Deposit-related fees			280						277						3						1						573						543						30						6
Lending-related fees			195						190						5						3						380						373						7						2
Investment banking fees			307						580						(273)						(47)						769						1,191						(422)						(35)
Net gains from trading activities			378						30						348						NM						606						361						245						68
Other			356						478						(122)						(26)						668						912						(244)						(27)
Total noninterest income			1,516						1,555						(39)						(3)						2,996						3,380						(384)						(11)
Total revenue			3,573						3,338						235						7						7,043						6,942						101						1
Net charge-offs			(11)						(19)						8						42						(42)						18						(60)						NM
Change in the allowance for credit losses			(51)						(482)						431						89						(216)						(803)						587						73
Provision for credit losses			(62)						(501)						439						88						(258)						(785)						527						67
Noninterest expense			1,840						1,805						35						2						3,823						3,638						185						5
Income before income tax expense			1,795						2,034						(239)						(12)						3,478						4,089						(611)						(15)
Income tax expense			459						513						(54)						(11)						884						1,013						(129)						(13)
Less: Net loss from noncontrolling interests			—						(2)						2						100						—						(2)						2						100
Net income			$	1,336					1,523						(187)						(12)						$	2,594					3,078						(484)						(16)
Revenue by Line of Business
Banking:
Lending			$	528					474						54						11						$	1,049					927						122						13
Treasury Management and Payments			529						353						176						50						961						723						238						33
Investment Banking			222						407						(185)						(45)						553						823						(270)						(33)
Total Banking			1,279						1,234						45						4						2,563						2,473						90						4
Commercial Real Estate			1,060						1,014						46						5						2,055						1,926						129						7
Markets:
Fixed Income, Currencies, and Commodities (FICC)			934						888						46						5						1,811						2,032						(221)						(11)
Equities			253						206						47						23						520						458						62						14
Credit Adjustment (CVA/DVA) and Other			13						(16)						29						181						38						20						18						90
Total Markets			1,200						1,078						122						11						2,369						2,510						(141)						(6)
Other			34						12						22						183						56						33						23						70
Total revenue			$	3,573					3,338						235						7						$	7,043					6,942						101						1
Selected Metrics
Return on allocated capital			13.8		%				17.0																		13.5		%				17.3
Efficiency ratio			51						54																		54						52
Headcount (#) (period-end)			9,000						8,673												4						9,000						8,673												4

NM – Not meaningful

Second quarter 2022 vs. second quarter 2021

Revenue increased driven by:

•higher net gains from trading activities driven by higher foreign exchange and commodities trading revenue, as well as higher trading activity in equities, partially offset by lower trading activity in residential mortgage-backed securities and high yield products; and

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

partially offset by:

•lower investment banking fees due to lower market activity and a $107 million write-down on unfunded leveraged finance commitments due to the widening of market spreads;

•lower other noninterest income driven by lower mortgage banking income due to lower commercial mortgage-backed securities gain on sale margins and volumes.

Provision for credit losses increased due to loan growth and modest weakening in the economic outlook.

			Wells Fargo & Company			19

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Earnings Performance (continued)

First half of 2022 vs. first half of 2021

Revenue increased driven by:

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

•higher net gains from trading activities driven by higher foreign exchange, rates, and commodities trading revenue, as well as higher trading activity in equities, partially offset by lower trading activity in residential mortgage-backed securities and high yield products;

partially offset by:

•lower investment banking fees due to lower market activity and a $107 million write-down on unfunded leveraged

finance commitments due to the widening of market spreads; and

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

Provision for credit losses increased due to loan growth and modest weakening in the economic outlook, partially offset by lower net charge-offs.

Noninterest expense increased driven by higher personnel expense due to higher salaries expense.

Table 5f: Corporate and Investment Banking – Balance Sheet

			Quarter ended June 30,																								Six months ended June 30,
(in millions)			2022						2021						$ Change						% Change						2022						2021						$ Change						% Change
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial			$	200,527					167,076						33,451						20		%				$	195,865					164,696						31,169						19		%
Commercial real estate			98,167						85,346						12,821						15						95,770						84,606						11,164						13
Total loans			$	298,694					252,422						46,272						18						$	291,635					249,302						42,333						17
Loans by Line of Business:
Banking			$	109,123					90,839						18,284						20						$	105,822					88,699						17,123						19
Commercial Real Estate			133,212						108,893						24,319						22						129,749						108,255						21,494						20
Markets			56,359						52,690						3,669						7						56,064						52,348						3,716						7
Total loans			$	298,694					252,422						46,272						18						$	291,635					249,302						42,333						17
Trading-related assets:
Trading account securities			$	110,499					104,743						5,756						5						$	113,079					105,546						7,533						7
Reverse repurchase agreements/securities borrowed			48,909						62,066						(13,157)						(21)						51,854						63,010						(11,156)						(18)
Derivative assets			30,845						24,731						6,114						25						28,557						25,910						2,647						10
Total trading-related assets			$	190,253					191,540						(1,287)						(1)						$	193,490					194,466						(976)						(1)
Total assets			564,306						513,414						50,892						10						557,891						512,476						45,415						9
Total deposits			164,860						190,810						(25,950)						(14)						167,009						192,645						(25,636)						(13)
Allocated capital			36,000						34,000						2,000						6						36,000						34,000						2,000						6
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial			$	207,414					166,969						40,445						24						$	207,414					166,969						40,445						24
Commercial real estate			100,872						86,290						14,582						17						100,872						86,290						14,582						17
Total loans			$	308,286					253,259						55,027						22						$	308,286					253,259						55,027						22
Loans by Line of Business:
Banking			$	111,639					92,758						18,881						20						$	111,639					92,758						18,881						20
Commercial Real Estate			137,083						108,885						28,198						26						137,083						108,885						28,198						26
Markets			59,564						51,616						7,948						15						59,564						51,616						7,948						15
Total loans			$	308,286					253,259						55,027						22						$	308,286					253,259						55,027						22
Trading-related assets:
Trading account securities			$	109,634					108,291						1,343						1						$	109,634					108,291						1,343						1
Reverse repurchase agreements/securities borrowed			42,696						57,351						(14,655)						(26)						42,696						57,351						(14,655)						(26)
Derivative assets			24,540						25,288						(748)						(3)						24,540						25,288						(748)						(3)
Total trading-related assets			$	176,870					190,930						(14,060)						(7)						$	176,870					190,930						(14,060)						(7)
Total assets			567,733						516,518						51,215						10						567,733						516,518						51,215						10
Total deposits			162,439						188,219						(25,780)						(14)						162,439						188,219						(25,780)						(14)

Second quarter 2022 vs. second quarter 2021

Total assets (average) increased driven by higher loan balances reflecting broad-based loan demand driven by a modest increase in utilization rates due to increased client working capital needs.

Total deposits (average) decreased reflecting continued actions to manage under the asset cap.

20			Wells Fargo & Company

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First half of 2022 vs. first half of 2021

Total assets (average and period-end) increased driven by higher loan balances reflecting broad-based loan demand driven by a modest increase in utilization rates due to increased client working capital needs.

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

Wealth and Investment Management provides personalized wealth management, brokerage, financial planning, lending, private banking, trust and fiduciary products and services to affluent, high-net worth and ultra-high-net worth clients. We operate through financial advisors in our brokerage and wealth offices, consumer bank branches, independent offices, and digitally through WellsTrade® and Intuitive Investor®. Table 5g and Table 5h provide additional information for Wealth and Investment Management (WIM).

Table 5g: Wealth and Investment Management

			Quarter ended June 30,																								Six months ended June 30,
($ in millions, unless otherwise noted)			2022						2021						$ Change						% Change						2022						2021						$ Change						% Change
Income Statement
Net interest income			$	916					610						306						50		%				$	1,715					1,267						448						35		%
Noninterest income:
Investment advisory and other asset-based fees			2,306						2,382						(76)						(3)						4,782						4,688						94						2
Commissions and brokerage services fees			459						513						(54)						(11)						913						1,068						(155)						(15)
Other			24						31						(7)						(23)						52						57						(5)						(9)
Total noninterest income			2,789						2,926						(137)						(5)						5,747						5,813						(66)						(1)
Total revenue			3,705						3,536						169						5						7,462						7,080						382						5
Net charge-offs			—						(6)						6						100						(4)						(6)						2						33
Change in the allowance for credit losses			(7)						30						(37)						NM						(40)						(13)						(27)						NM
Provision for credit losses			(7)						24						(31)						NM						(44)						(19)						(25)						NM
Noninterest expense			2,911						2,891						20						1						6,086						5,919						167						3
Income before income tax expense			801						621						180						29						1,420						1,180						240						20
Income tax expense			198						156						42						27						352						296						56						19
Net income			$	603					465						138						30						$	1,068					884						184						21
Selected Metrics
Return on allocated capital			27.1		%				20.7																		24.1		%				19.8
Efficiency ratio			79						82																		82						84
Headcount (#) (period-end)			24,996						26,989												(7)						24,996						26,989												(7)
Advisory assets ($ in billions)			$	800					931						(131)						(14)						$	800					931						(131)						(14)
Other brokerage assets and deposits ($ in billions)			1,035						1,212						(177)						(15)						1,035						1,212						(177)						(15)
Total client assets ($ in billions)			$	1,835					2,143						(308)						(14)						$	1,835					2,143						(308)						(14)
Annualized revenue per advisor ($ in thousands) (1)			1,213						1,084						129						12						1,217						1,071						146						14
Total financial and wealth advisors (#) (period-end)			12,184						12,819												(5)						12,184						12,819												(5)
Selected Balance Sheet Data (average)
Total loans			$	85,912					81,784						4,128						5						$	85,342					81,314						4,028						5
Total deposits			173,670						174,980						(1,310)						(1)						179,708						174,333						5,375						3
Allocated capital			8,750						8,750						—						—						8,750						8,750						—						—
Selected Balance Sheet Data (period-end)
Total loans			$	85,342					82,783						2,559						3						$	85,342					82,783						2,559						3
Total deposits			165,633						174,267						(8,634)						(5)						165,633						174,267						(8,634)						(5)

NM – Not meaningful

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

Second quarter 2022 vs. second quarter 2021

Revenue increased driven by:

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

partially offset by:

•lower investment advisory and other asset-based fees due to lower average market valuations; and

•lower commissions and brokerage services fees due to lower transactional revenue.

Total loans (average) increased due to higher securities-based loan balances.

			Wells Fargo & Company			21

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Earnings Performance (continued)

First half of 2022 vs. first half of 2021

Revenue increased driven by:

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

•higher investment advisory and other asset-based fees due to higher average market valuations;

partially offset by:

•lower commissions and brokerage services fees due to lower transactional revenue.

Noninterest expense increased driven by higher operating costs.

Total loans (average and period-end) increased due to higher securities-based loan balances.

Total deposits (period-end) decreased as customers continued to allocate more cash into higher yielding liquid alternatives.

WIM Advisory Assets In addition to transactional accounts, WIM offers advisory account relationships to brokerage customers. Fees from advisory accounts are generally 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. 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 second quarter 2022 and 2021, the average fee rate by account type ranged from 50 to 120 basis points.

Table 5h: WIM Advisory Assets

			Quarter ended																		Six months ended
(in billions)			Balance, beginning of period			Inflows (1)			Outflows (2)			Market impact (3)			Balance, end of period						Balance, beginning of period			Inflows (1)			Outflows (2)			Market impact (3)			Balance, end of period
June 30, 2022
Client-directed (4)			$	193.7		7.5			(10.0)			(24.2)			167.0						$	205.6		16.3			(20.2)			(34.7)			167.0
Financial advisor-directed (5)			247.2			9.8			(11.3)			(27.1)			218.6						255.5			22.4			(21.2)			(38.1)			218.6
Separate accounts (6)			192.8			6.1			(7.2)			(20.1)			171.6						203.3			13.6			(14.2)			(31.1)			171.6
Mutual fund advisory (7)			95.1			2.1			(4.0)			(11.0)			82.2						102.1			5.3			(8.0)			(17.2)			82.2
Total Wells Fargo Advisors			$	728.8		25.5			(32.5)			(82.4)			639.4						$	766.5		57.6			(63.6)			(121.1)			639.4
The Private Bank (8)			183.6			7.1			(13.5)			(16.8)			160.4						198.0			14.5			(25.2)			(26.9)			160.4
Total WIM advisory assets			$	912.4		32.6			(46.0)			(99.2)			799.8						$	964.5		72.1			(88.8)			(148.0)			799.8
June 30, 2021
Client-directed (4)			$	192.7		11.1			(12.2)			9.7			201.3						$	186.3		21.7			(22.0)			15.3			201.3
Financial advisor-directed (5)			223.4			12.3			(10.9)			13.2			238.0						211.0			24.6			(19.9)			22.3			238.0
Separate accounts (6)			183.1			8.0			(7.7)			9.5			192.9						174.6			16.5			(14.7)			16.5			192.9
Mutual fund advisory (7)			94.7			4.3			(3.6)			4.7			100.1						91.4			8.3			(7.1)			7.5			100.1
Total Wells Fargo Advisors			$	693.9		35.7			(34.4)			37.1			732.3						$	663.3		71.1			(63.7)			61.6			732.3
The Private Bank (8)			191.5			9.3			(11.1)			8.7			198.4						189.4			18.2			(23.6)			14.4			198.4
Total WIM advisory assets			$	885.4		45.0			(45.5)			45.8			930.7						$	852.7		89.3			(87.3)			76.0			930.7

(1)Inflows include new advisory account assets, contributions, dividends and interest.

(2)Outflows include closed advisory account assets, withdrawals and client management fees.

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

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

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

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

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

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

22			Wells Fargo & Company

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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 and

Table 5j provide additional information for Corporate.

Table 5i: Corporate – Income Statement and Selected Metrics

			Quarter ended June 30,																								Six months ended June 30,
($ in millions, unless otherwise noted)			2022						2021						$ Change						% Change						2022						2021						$ Change						% Change
Income Statement
Net interest income			$	(619)					(304)						(315)						NM						$	(1,437)					(694)						(743)						NM
Noninterest income			(114)						3,327						(3,441)						NM						692						4,744						(4,052)						(85)		%
Total revenue			(733)						3,023						(3,756)						NM						(745)						4,050						(4,795)						NM
Net charge-offs			(6)						(8)						2						25		%				(12)						69						(81)						NM
Change in the allowance for credit losses			21						(26)						47						181						7						(6)						13						217
Provision for credit losses			15						(34)						49						144						(5)						63						(68)						NM
Noninterest expense			618						1,000						(382)						(38)						1,404						2,231						(827)						(37)
Income (loss) before income tax benefit			(1,366)						2,057						(3,423)						NM						(2,144)						1,756						(3,900)						NM
Income tax expense (benefit)			(242)						223						(465)						NM						(469)						(52)						(417)						NM
Less: Net income (loss) from noncontrolling interests (1)			(170)						704						(874)						NM						(42)						757						(799)						NM
Net income (loss)			$	(954)					1,130						(2,084)						NM						$	(1,633)					1,051						(2,684)						NM
Selected Metrics
Headcount (#) (period-end)			82,686						87,702												(6)						82,686						87,702												(6)

NM – Not meaningful

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

Second quarter 2022 vs. second quarter 2021

Revenue decreased driven by:

•lower net gains from equity securities due to lower unrealized gains on nonmarketable equity securities from our affiliated venture capital and private equity businesses, lower realized gains on the sales of equity securities, and higher impairment driven by market conditions;

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

•lower net interest income due to higher deposit crediting rates paid to the operating segments, unfavorable hedge ineffectiveness accounting results, and the sale of our Corporate Trust Services business in 2021; and

•a gain on the sale of a portion of our student loan portfolio and a modest gain on the sale of our Canadian equipment finance business in second quarter 2021;

partially offset by:

•lower valuation losses related to the retained litigation risk associated with shares of Visa Class B common stock that we sold; and

•higher net gains from debt securities due to higher gains on sales of asset-backed securities and municipal bonds as a result of higher sales volumes.

Noninterest expense decreased due to:

•the impact of divestitures; and

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

First half of 2022 vs. first half of 2021

Revenue decreased driven by:

•lower net gains from equity securities due to lower unrealized gains on nonmarketable equity securities from our affiliated venture capital and private equity businesses, lower realized gains on the sales of equity securities, and higher impairment driven by market conditions;

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

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

•a gain on the sale of substantially all of our student loan portfolio in the first half of 2021;

partially offset by:

•lower valuation losses related to the retained litigation risk associated with shares of Visa Class B common stock that we sold.

Provision for credit losses decreased due to lower net charge-offs driven by the sale of substantially all of our student loan portfolio in the first half of 2021.

Noninterest expense decreased due to:

•the impact of divestitures; and

•a write-down of goodwill in the first half of 2021 related to the sale of substantially all of our student loan portfolio.

			Wells Fargo & Company			23

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Earnings Performance (continued)

Corporate includes our rail car leasing business, which had long-lived operating lease assets (as a lessor) of $4.9 billion, which was net of $2.2 billion of accumulated depreciation, as of June 30, 2022. 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 June 30, 2022, were rail cars used for the transportation of agricultural grain, coal, and cement/sand products. Impairment may result in the future based on changing

economic and market conditions affecting the long-term demand and utility of specific types of rail cars. Our assumptions for impairment are sensitive to estimated utilization and rental rates, as well as the estimated economic life of the leased asset. For additional information on the accounting for impairment of operating lease assets, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2021 Form 10-K.

Table 5j: Corporate – Balance Sheet

			Quarter ended June 30,																								Six months ended June 30,
(in millions)			2022						2021						$ Change						% Change						2022						2021						$ Change						% Change
Selected Balance Sheet Data (average)
Cash, cash equivalents, and restricted cash			$	145,637					255,043						(109,406)						(43)		%				$	162,101					239,010						(76,909)						(32)		%
Available-for-sale debt securities			127,997						185,396						(57,399)						(31)						142,297						192,867						(50,570)						(26)
Held-to-maturity debt securities			291,710						237,788						53,922						23						283,655						227,623						56,032						25
Equity securities			15,681						11,499						4,182						36						15,720						11,203						4,517						40
Total loans			9,083						10,077						(994)						(10)						9,187						10,152						(965)						(10)
Total assets			642,606						754,629						(112,023)						(15)						664,850						741,203						(76,353)						(10)
Total deposits			20,327						41,696						(21,369)						(51)						23,665						44,080						(20,415)						(46)
Selected Balance Sheet Data (period-end)
Cash, cash equivalents, and restricted cash			$	123,872					248,784						(124,912)						(50)						$	123,872					248,784						(124,912)						(50)
Available-for-sale debt securities			114,469						177,923						(63,454)						(36)						114,469						177,923						(63,454)						(36)
Held-to-maturity debt securities			298,895						260,054						38,841						15						298,895						260,054						38,841						15
Equity securities			15,004						13,142						1,862						14						15,004						13,142						1,862						14
Total loans			9,133						10,593						(1,460)						(14)						9,133						10,593						(1,460)						(14)
Total assets			611,658						761,915						(150,257)						(20)						611,658						761,915						(150,257)						(20)
Total deposits			21,563						40,091						(18,528)						(46)						21,563						40,091						(18,528)						(46)

Second quarter 2022 vs. second quarter 2021

Total assets (average) decreased reflecting:

•a decrease in cash, cash equivalents, and restricted cash managed by corporate treasury as a result of a decrease in long-term debt and an increase in loans in the operating segments; and

•a transfer from available-for-sale debt securities to held-to-maturity debt securities related to portfolio rebalancing to manage liquidity and interest rate risk.

Total deposits (average) decreased due to divestitures in fourth quarter 2021 and actions taken to manage under the asset cap.

First half of 2022 vs. first half of 2021

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

•a decrease in cash, cash equivalents, and restricted cash managed by corporate treasury as a result of a decrease in long-term debt and an increase in loans in the operating segments; and

•a transfer from available-for-sale debt securities to held-to-maturity debt securities related to portfolio rebalancing to manage liquidity and interest rate risk.

Total deposits (average and period-end) decreased due to divestitures in fourth quarter 2021 and actions taken to manage under the asset cap.

24			Wells Fargo & Company

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Balance Sheet Analysis

At June 30, 2022, our assets totaled $1.88 trillion, down $66.9 billion from December 31, 2021.

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

			June 30, 2022																								December 31, 2021
($ in millions)			Amortized cost, net (1)						Net  unrealized gains (losses)						Fair value						Weighted average expected maturity (yrs)						Amortized cost, net (1)						Net  unrealized gains (losses)						Fair value						Weighted average expected maturity (yrs)
Available-for-sale (2)			$	131,991					(6,159)						125,832						5.9						$	175,463					1,781						177,244						5.2
Held-to-maturity (3)			301,783						(29,739)						272,044						8.0						272,022						364						272,386						6.3
Total			$	433,774					(35,898)						397,876						n/a						$	447,485					2,145						449,630						n/a

(1)Represents amortized cost of the securities, net of the allowance for credit losses of $9 million and $8 million related to available-for-sale debt securities and $83 million and $96 million related to held-to-maturity debt securities at June 30, 2022 and December 31, 2021, respectively.

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

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

Table 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 2021 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 decreased from December 31, 2021. Purchases of AFS and HTM debt securities, including HTM debt securities through securitizations of loans held for sale (LHFS), were more than offset by portfolio runoff and AFS debt security sales. In addition, we transferred AFS debt securities with a fair value of $43.0 billion to HTM debt securities in the first half of 2022 due to actions taken to reposition the overall portfolio for capital management purposes. Debt securities transferred from AFS to HTM in the first half of 2022 had $3.9 billion of pre-tax unrealized losses at the time of the transfers.

The total net unrealized losses on AFS and HTM debt securities at June 30, 2022, were driven by higher interest rates and wider credit spreads.

At June 30, 2022, 98% of the combined AFS and HTM debt securities portfolio was rated AA- or above. Ratings are based on external ratings where available and, where not available, based on internal credit grades. See Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for additional information on AFS and HTM debt securities, including a summary of debt securities by security type.

			Wells Fargo & Company			25

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Balance Sheet Analysis (continued)

Loan Portfolios

Table 7 provides a summary of total outstanding loans by portfolio segment. Commercial loans increased from December 31, 2021, predominantly due to an increase in the commercial and industrial loan portfolio, driven by higher loan demand resulting in increased originations and loan draws, partially offset by paydowns. Consumer loans increased from

December 31, 2021, predominantly driven by an increase in the residential mortgage – first lien portfolio due to loan originations of $36.8 billion, partially offset by loan paydowns and the transfer of $4.9 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.

Table 7: Loan Portfolios

(in millions)						June 30, 2022						December 31, 2021
Commercial						$	549,919					513,120
Consumer						393,815						382,274
Total loans						$	943,734					895,394
Change from prior year-end						$	48,340					7,757

Average loan balances and a comparative detail of average loan balances is included in Table 1 under “Earnings Performance – Net Interest Income” earlier in this Report. Additional information on total loans outstanding by portfolio segment and class of financing receivable is included in the “Risk Management – Credit Risk Management” section in this Report. Period-end balances and other loan related information are in Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

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

26			Wells Fargo & Company

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Deposits

Deposits decreased from December 31, 2021, reflecting:

•lower interest-bearing demand deposits driven by elevated consumer spending, as well as the transition of client assets related to the sale of trust deposits;

•customers continuing to allocate more cash into higher yielding liquid alternatives; and

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

partially offset by:

•higher levels of liquidity and savings for consumer customers.

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)			Jun 30, 2022						% of total deposits						Dec 31, 2021						% of total  deposits						% Change
Noninterest-bearing demand deposits			$	515,437					36		%				$	527,748					36		%				(2)
Interest-bearing demand deposits			428,433						30						465,887						31						(8)
Savings deposits			436,499						31						439,600						30						(1)
Time deposits			25,203						2						29,461						2						(14)
Interest-bearing deposits in non-U.S. offices			19,581						1						19,783						1						(1)
Total deposits			$	1,425,153					100		%				$	1,482,479					100		%				(4)

			Wells Fargo & Company			27

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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 unfunded credit commitments, transactions with unconsolidated entities, guarantees, commitments to purchase debt and equity securities, derivatives, and other commitments. These transactions are designed to (1) meet the financial needs of customers, (2) manage our credit, market or liquidity risks, and/or (3) diversify our funding sources.

Unfunded Credit Commitments

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

28			Wells Fargo & Company

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

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

Credit Risk Management

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

The Board’s Risk Committee has primary oversight responsibility for credit risk. A Credit Subcommittee of the Risk Committee assists the Risk Committee in providing oversight of credit risk. At the management level, Credit Risk, which is part of Independent Risk Management, has oversight responsibility for credit risk. Credit Risk reports to the Chief Risk Officer and supports periodic reports related to credit risk provided to the Board’s Risk Committee or its Credit Subcommittee.

Loan Portfolio Our loan portfolios represent the largest component of assets on our consolidated balance sheet for which we have credit risk. Table 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)			Jun 30, 2022						Dec 31, 2021
Commercial:
Commercial and industrial			$	380,235					350,436
Real estate mortgage			133,411						127,733
Real estate construction			21,743						20,092
Lease financing			14,530						14,859
Total commercial			549,919						513,120
Consumer:
Residential mortgage – first lien			252,941						242,270
Residential mortgage – junior lien			14,604						16,618
Credit card			41,222						38,453
Auto			55,658						56,659
Other consumer			29,390						28,274
Total consumer			393,815						382,274
Total loans			$	943,734					895,394

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

•Loan concentrations and related credit quality;

•Counterparty credit risk;

•Economic and market conditions;

•Legislative or regulatory mandates;

•Changes in interest rates;

•Merger and acquisition activities; and

•Reputation risk.

In addition, the Company will continue to integrate climate considerations into its credit risk management activities.

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

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

Credit Quality Overview  Credit quality in second quarter 2022 reflected:

•Nonaccrual loans were $6.0 billion at June 30, 2022, compared with $7.2 billion at December 31, 2021. Commercial nonaccrual loans decreased to $1.7 billion at June 30, 2022, compared with $2.4 billion at December 31, 2021, and consumer nonaccrual loans decreased to $4.3 billion at June 30, 2022, compared with $4.8 billion at December 31, 2021. Nonaccrual loans represented 0.64% of total loans at June 30, 2022, compared with 0.81% at December 31, 2021.

•Net loan charge-offs (recoveries) as a percentage of our average commercial and consumer loan portfolios were 0.02% and 0.33% in the second quarter and 0.00% and 0.34% in the first half of 2022, respectively, compared with 0.07% and 0.32% in the second quarter and 0.10% and 0.35%, respectively, in the first half of 2021.

•Loans that are not government insured/guaranteed and 90 days or more past due and still accruing were $579 million and $412 million in our commercial and consumer portfolios, respectively, at June 30, 2022, compared with $235 million and $424 million at December 31, 2021.

•Our provision for credit losses for loans was $578 million and $(197) million in the second quarter and first half of 2022, respectively, compared with $(1.2) billion and $(2.4) billion for the same periods a year ago.

•The ACL for loans decreased to $12.9 billion, or 1.37% of total loans, at June 30, 2022, compared with $13.8 billion, or 1.54%, at December 31, 2021.

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

			Wells Fargo & Company			29

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Risk Management – Credit Risk Management (continued)

Significant Loan Portfolio Reviews  Measuring and monitoring our credit risk is an ongoing process that tracks delinquencies, collateral values, Fair Isaac Corporation (FICO) scores, economic trends by geographic areas, loan-level risk grading for certain portfolios (typically commercial) and other indications of credit risk. Our credit risk monitoring process is designed to enable early identification of developing risk and to support our determination of an appropriate allowance for credit losses. The following discussion provides additional characteristics and analysis of our significant portfolios. See Note 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 $11.1 billion of the commercial and industrial loans and lease financing portfolio internally classified as criticized in accordance with regulatory guidance at June 30, 2022, compared with $13.0 billion at December 31, 2021. The decline was driven by decreases in the technology, telecom and media, real estate and construction, and oil, gas and pipelines industries, as these industries continued to recover from the economic impacts of the COVID-19 pandemic, partially offset by an increase in the equipment, machinery and parts manufacturing industry.

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

The portfolio increased at June 30, 2022, compared with December 31, 2021, driven by higher loan demand resulting in increased originations and loan draws, partially offset by paydowns. Table 10 provides our commercial and industrial loans and lease financing by industry. The industry categories are based on the North American Industry Classification System.

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

			June 30, 2022																								December 31, 2021
($ in millions)			Nonaccrual loans						Loans outstanding balance						% of total loans						Total commitments (1)						Nonaccrual loans						Loans outstanding balance						% of total loans						Total commitments (1)
Financials except banks			$	56					146,264						15		%				$	245,199					104						142,283						16		%				$	236,133
Technology, telecom and media			70						26,215						3						67,564						64						23,345						3						62,984
Real estate and construction			67						26,154						3						58,281						78						25,035						3						55,304
Equipment, machinery and parts manufacturing			19						21,473						2						45,914						24						18,130						2						43,729
Retail			19						18,994						2						41,335						27						17,645						2						41,344
Materials and commodities			25						16,793						2						38,571						32						14,684						2						36,660
Food and beverage manufacturing			6						15,522						2						33,816						7						13,242						1						30,882
Oil, gas and pipelines			84						9,878						1						31,043						197						8,828						*						28,978
Health care and pharmaceuticals			20						13,936						1						29,624						24						12,847						1						28,808
Auto related			11						11,868						1						27,255						31						10,629						1						25,735
Utilities			77						9,060						*						25,579						77						6,982						*						22,406
Commercial services			38						10,954						1						24,824						78						10,492						1						24,617
Banks			—						19,775						2						20,836						—						16,178						2						16,612
Diversified or miscellaneous			10						8,661						*						20,714						3						7,493						*						18,317
Entertainment and recreation			39						11,399						1						18,909						23						9,907						1						17,893
Transportation services			213						8,583						*						15,725						288						8,162						*						14,710
Insurance and fiduciaries			1						5,104						*						15,688						1						3,387						*						13,993
Government and education			16						6,096						*						12,225						5						5,863						*						11,193
Agribusiness			26						6,070						*						11,631						35						6,086						*						11,576
Other (2)			21						1,966						*						9,248						30						4,077						*						11,583
Total			$	818					394,765						42		%				$	793,981					1,128						365,295						41		%				$	753,457

*Less than 1%.

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit. In second quarter 2022, we reclassified commitments for securities-based loans from commercial and industrial loan commitments to other consumer loan commitments to align all securities-based loan commitments originated by the Wealth and Investment Management operating segment. Prior period balances have been revised to conform with the current period presentation. For additional information on issued letters of credit, see

Note 11 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)No other single industry had total loans in excess of $3.0 billion and $3.1 billion at June 30, 2022, and December 31, 2021, respectively.

30			Wells Fargo & Company

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Table 10a provides further loan segmentation for our largest industry category, financials except banks. This category includes loans to investment firms, financial vehicles, nonbank creditors, rental and leasing companies, securities firms, and investment banks. These loans are generally secured and have features to

help manage credit risk, such as structural credit enhancements, collateral eligibility requirements, contractual re-margining of collateral supporting the loans, and loan amounts limited to a percentage of the value of the underlying assets considering underlying credit risk, asset duration, and ongoing performance.

Table 10a: Financials Except Banks Industry Category

			June 30, 2022																								December 31, 2021
($ in millions)			Nonaccrual loans						Loans outstanding balance						% of total loans						Total commitments (1)						Nonaccrual loans						Loans outstanding balance						% of total loans						Total commitments (1)
Asset managers and funds (2)			$	1					56,714						6		%				$	101,813					1						60,518						7		%				$	101,035
Commercial finance (3)			37						48,462						5						72,265						82						46,043						5						69,923
Real estate finance (4)			9						26,782						3						42,751						9						23,231						3						37,997
Consumer finance (5)			9						14,306						1						28,370						12						12,491						1						27,178
Total			$	56					146,264						15		%				$	245,199					104						142,283						16		%				$	236,133

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit. In second quarter 2022, we reclassified commitments for securities-based loans from commercial and industrial loan commitments to other consumer loan commitments to align all securities-based loan commitments originated by the Wealth and Investment Management operating segment. Prior period balances have been revised to conform with the current period presentation. For additional information on issued letters of credit, see Note 11 (Guarantees and Other Commitments) to Financial Statements in this Report.

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

(3)Includes asset-based lending and leasing, including loans to special purpose entities, structured lending facilities to commercial loan managers, and also includes collateralized loan obligations (CLOs) in loan form, all of which were rated AA or above, of $7.8 billion and $8.1 billion at June 30, 2022, and December 31, 2021, respectively.

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

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

Our commercial and industrial loans and lease financing portfolio also included non-U.S. loans of $83.3 billion and $78.0 billion at June 30, 2022, and December 31, 2021, respectively. Significant industry concentrations of non-U.S. loans at June 30, 2022, and December 31, 2021, respectively, included:

•$45.6 billion and $46.7 billion in the financials except banks category;

•$19.7 billion and $15.9 billion in the banks category; and

•$1.5 billion and $1.7 billion in the oil, gas and pipelines category.

			Wells Fargo & Company			31

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Risk Management – Credit Risk Management (continued)

COMMERCIAL REAL ESTATE (CRE)  We generally subject CRE loans to individual risk assessment using our internal borrower and collateral quality ratings. We had $10.6 billion of CRE mortgage loans classified as criticized at June 30, 2022, compared with $13.1 billion at December 31, 2021, and $1.7 billion of CRE construction loans classified as criticized at both June 30, 2022 and December 31, 2021. The decrease in criticized CRE mortgage loans was driven by the apartments, hotel/motel, and shopping center property types, as these property types continued to recover from the economic impacts of the COVID-19 pandemic, partially offset by an increase in the office buildings property type. The credit quality of certain property types within our CRE loan portfolio, such as office buildings, could continue to be adversely affected due to uncertainty in

their recovery from the economic impacts of the COVID-19 pandemic.

The total CRE loan portfolio increased $7.3 billion from December 31, 2021, predominantly driven by an increase in mixed use properties and apartments property types. The CRE loan portfolio included $8.1 billion of non-U.S. CRE loans at June 30, 2022. The portfolio is diversified both geographically and by property type. The largest geographic concentrations of CRE loans are in California, New York, Texas, and Florida, which represented a combined 49% of the total CRE portfolio. The largest property type concentrations are apartments at 24% and office buildings at 23% of the portfolio.

Table 11 summarizes CRE loans by state and property type with the related nonaccrual totals at June 30, 2022.

Table 11: CRE Loans by State and Property Type

			June 30, 2022
			Real estate mortgage												Real estate construction												Total												% of total  loans
($ in millions)			Nonaccrual loans						Loans outstanding balance						Nonaccrual loans						Loans outstanding balance						Nonaccrual loans						Loans outstanding balance
By state:
California			$	151					30,442						1						4,296						152						34,738						4%
New York			128						14,570						—						2,013						128						16,583						2
Texas			43						11,628						—						1,240						43						12,868						1
Florida			25						9,830						—						1,341						25						11,171						1
Washington			82						4,277						—						1,451						82						5,728						*
Georgia			9						5,048						—						541						9						5,589						*
Arizona			16						4,852						—						494						16						5,346						*
North Carolina			3						4,488						—						709						3						5,197						*
Illinois			16						3,804						—						566						16						4,370						*
Massachusetts			4						3,087						—						945						4						4,032						*
Other (1)			421						41,385						2						8,147						423						49,532						5
Total			$	898					133,411						3						21,743						901						155,154						16%
By property:
Apartments			$	10					30,350						—						7,357						10						37,707						4%
Office buildings			109						32,936						—						3,225						109						36,161						4
Industrial/warehouse			57						16,284						—						2,217						57						18,501						2
Hotel/motel			186						11,710						—						1,668						186						13,378						1
Retail (excluding shopping center)			103						11,851						2						119						105						11,970						1
Shopping center			283						9,345						—						822						283						10,167						1
Institutional			37						5,239						—						2,500						37						7,739						*
Mixed use properties			61						6,266						—						1,251						61						7,517						*
Collateral pool			—						3,143						—						246						—						3,389						*
Storage facility			—						2,687						—						138						—						2,825						*
Other			52						3,600						1						2,200						53						5,800						*
Total			$	898					133,411						3						21,743						901						155,154						16		%

*    Less than 1%.

(1)Includes 40 states; no state in Other had loans in excess of $3.9 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 June 30, 2022, non-U.S. loans totaled $91.6 billion, representing approximately 10% of our total consolidated loans outstanding, compared with $86.9 billion, or approximately 10% of our total consolidated loans outstanding, at December 31, 2021. Non-U.S. loans were approximately 5% and 4% of our total consolidated assets at June 30, 2022, and December 31, 2021, respectively.

COUNTRY RISK EXPOSURE Our country risk monitoring process incorporates centralized monitoring of economic, political, social,

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

32			Wells Fargo & Company

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Our largest single country exposure outside the U.S. at June 30, 2022, was the United Kingdom, which totaled $39.4 billion, or approximately 2% of our total assets, and included $8.7 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.

Table 12 provides information regarding our top 20 exposures by country (excluding the U.S.), based on our assessment of risk, which gives consideration to the country of any guarantors and/or underlying collateral. With respect to Table 12:

•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 12: Select Country Exposures

			June 30, 2022
			Lending and deposits												Securities												Derivatives and other												Total exposure
($ in millions)			Sovereign						Non-sovereign						Sovereign						Non-sovereign						Sovereign						Non-sovereign						Sovereign						Non- sovereign (1)						Total
Top 20 country exposures:
United Kingdom			$	8,727					25,304						—						907						—						4,481						8,727						30,692						39,419
Canada			1						18,203						—						358						11						409						12						18,970						18,982
Cayman Islands			—						7,439						—						—						—						209						—						7,648						7,648
Ireland			2,250						4,817						—						191						—						57						2,250						5,065						7,315
Luxembourg			—						5,964						—						30						—						81						—						6,075						6,075
Japan			4,368						841						—						199						—						33						4,368						1,073						5,441
France			116						4,120						—						32						495						108						611						4,260						4,871
China			—						3,794						1						110						391						53						392						3,957						4,349
Guernsey			—						3,765						—						10						—						60						—						3,835						3,835
Bermuda			—						3,605						—						17						—						31						—						3,653						3,653
South Korea			—						3,224						6						320						4						14						10						3,558						3,568
Germany			—						3,075						51						23						—						266						51						3,364						3,415
Netherlands			—						2,416						—						45						—						76						—						2,537						2,537
Chile			—						2,142						—						31						—						4						—						2,177						2,177
Brazil			—						1,485						—						1						26						1						26						1,487						1,513
India			—						1,477						—						15						—						1						—						1,493						1,493
Switzerland			—						1,350						—						(12)						—						122						—						1,460						1,460
Australia			—						1,300						—						56						—						18						—						1,374						1,374
Taiwan			—						1,351						—						(34)						5						21						5						1,338						1,343
United Arab Emirates			—						1,334						—						8						—						—						—						1,342						1,342
Total top 20 country exposures			$	15,462					97,006						58						2,307						932						6,045						16,452						105,358						121,810

(1)Total non-sovereign exposure comprised 58.5 billion exposure to financial institutions and $46.9 billion to non-financial corporations at June 30, 2022.

RESIDENTIAL MORTGAGE LOANS Our residential mortgage loan portfolio is comprised of 1-4 family first and junior lien mortgage loans. Residential mortgage – first lien loans comprised 95% of the total residential mortgage loan portfolio at June 30, 2022, compared with 94% at December 31, 2021.

The outstanding balance of residential mortgage lines of credit was $20.1 billion at June 30, 2022. The unfunded credit commitments for these lines of credit totaled $40.0 billion at June 30, 2022.

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 June 30, 2022, and December 31, 2021. 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. These lines and loans may have draw periods, interest-only payments, balloon payments, adjustable rates and similar

features. For additional information on our residential mortgage loan portfolio, see the “Risk Management – Credit Risk Management – Residential Mortgage Loans” section in our 2021 Form 10-K.

We monitor changes in real estate values and underlying economic or market conditions for all geographic areas of our residential mortgage portfolio as part of our credit risk management process. Our periodic review of this portfolio includes original appraisals adjusted for the change in Home Price Index (HPI) or estimates from automated valuation models (AVMs) to support property values. For additional information about appraisals, AVMs, and our policy for their use, see 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 2021 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. For additional information regarding credit quality indicators, see Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

			Wells Fargo & Company			33

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We continue to modify residential mortgage loans to assist homeowners and other borrowers experiencing financial difficulties. For additional information on loan modifications, see the “Risk Management – Credit Risk Management – Residential Mortgage Loans” section in our 2021 Form 10-K. Customer payment deferral activities instituted in response to the COVID-19 pandemic could continue to delay the recognition of delinquencies. For information on customer accommodations, including loan modifications, in response to the COVID-19 pandemic, see the “Risk Management – Credit Risk Management – COVID-Related Lending Accommodations” section in our 2021 Form 10-K.

Residential Mortgage – First Lien Portfolio Our residential mortgage – first lien portfolio increased $10.7 billion from

December 31, 2021, driven by originations of $36.8 billion, partially offset by loan paydowns and the transfer of $4.9 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.

Table 13 shows certain delinquency and loss information for the residential mortgage – first lien portfolio and lists the top five states by outstanding balance.

Table 13: Residential Mortgage – First Lien Portfolio Performance

			Outstanding balance												% of total loans												% of loans 30 days or more past due																					Net loan charge-off rate quarter ended (1)(2)
($ in millions)			Jun 30, 2022						Dec 31, 2021						Jun 30, 2022						Dec 31, 2021						Jun 30, 2022						Dec 31, 2021															Jun 30, 2022						Dec 31, 2021
California (3)			$	109,111					100,933						11.56		%				11.27						0.55						0.95															(0.01)						0.01
New York			31,286						30,039						3.32						3.35						0.89						1.34															0.01						0.50
Florida			10,570						9,978						1.12						1.11						1.36						1.93															(0.13)						0.64
New Jersey			10,399						10,205						1.10						1.14						1.18						1.95															0.04						0.40
Washington			9,912						8,636						1.05						0.96						0.33						0.47															—						0.02
Other (4)			72,985						69,321						7.73						7.74						0.99						1.48															—						0.25
Total			244,263						229,112						25.88						25.57						0.78						1.23															(0.01)						0.18
Government insured/guaranteed loans (5)			8,678						13,158						0.92						1.47
Total first lien mortgage portfolio			$	252,941					242,270						26.80						27.04

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

(2)The net loan charge-off rate for the quarter ended December 31, 2021, includes $120 million of loan charge-offs related to a change in practice to fully charge-off certain delinquent legacy residential mortgage loans.

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

(4)Consists of 45 states; no state in Other had loans in excess of $7.6 billion and $7.2 billion at June 30, 2022, and December 31, 2021, respectively.

(5)Represents loans, substantially all of which were repurchased from GNMA loan securitization pools, where the repayment of the loans is predominantly insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). For additional information on GNMA loan securitization pools, see the “Risk Management – Credit Risk Management – Mortgage Banking Activities” section in this Report.

Residential Mortgage – Junior Lien Portfolio Our residential mortgage – junior lien portfolio decreased $2.0 billion from December 31, 2021, driven by loan paydowns.

Table 14 shows certain delinquency and loss information for the residential mortgage – junior lien portfolio and lists the top five states by outstanding balance.

Table 14: Residential Mortgage – Junior Lien Portfolio Performance

			Outstanding balance												% of total loans												% of loans 30 days or more past due																					Net loan charge-off rate quarter ended (1)(2)
($ in millions)			Jun 30, 2022						Dec 31, 2021						Jun 30, 2022						Dec 31, 2021						Jun 30, 2022						Dec 31, 2021															Jun 30, 2022						Dec 31, 2021
California			$	3,821					4,310						0.40		%				0.48						2.51						3.52															(0.26)						(0.24)
New Jersey			1,545						1,728						0.16						0.19						2.52						2.98															0.05						0.54
Florida			1,297						1,533						0.14						0.17						2.07						2.54															(0.67)						0.87
Pennsylvania			916						1,039						0.10						0.12						2.10						2.19															(0.41)						0.12
New York			871						975						0.09						0.11						3.31						4.05															0.27						2.71
Other (3)			6,154						7,033						0.65						0.79						2.16						2.25															(0.55)						(0.11)
Total junior lien mortgage portfolio			$	14,604					16,618						1.54		%				1.86						2.35						2.91															(0.36)						0.19

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

(2)The net loan charge-off rate for the quarter ended December 31, 2021, includes $32 million of loan charge-offs related to a change in practice to fully charge-off certain delinquent legacy residential mortgage loans.

(3)Consists of 45 states; no state in Other had loans in excess of $870 million and $980 million at June 30, 2022 and December 31, 2021, respectively.

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CREDIT CARD, AUTO AND OTHER CONSUMER LOANS Table 15 shows the outstanding balance of our credit card, auto and other consumer loan portfolios. For information regarding credit quality indicators for these portfolios, see Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Table 15: Credit Card, Auto, and Other Consumer Loans

						June 30, 2022												December 31, 2021
($ in millions)						Outstanding balance						% of total loans						Outstanding balance						% of total loans
Credit card						$	41,222					4.37		%				$	38,453					4.29		%
Auto						55,658						5.90						56,659						6.33
Other consumer (1)						29,390						3.11						28,274						3.16
Total						$	126,270					13.38		%				$	123,386					13.78		%

(1)Other consumer loans primarily include both commercial and consumer securities-based loans originated by the WIM operating segment.

Credit Card  Our credit card portfolio totaled $41.2 billion at June 30, 2022, compared with $38.5 billion at December 31, 2021. The increase in the outstanding balance at June 30, 2022, compared with December 31, 2021, was due to higher purchase volume and the launch of new products.

Auto  Our auto portfolio totaled $55.7 billion at June 30, 2022, compared with $56.7 billion at December 31, 2021. The outstanding balance at June 30, 2022, compared with December 31, 2021, decreased due to lower origination volumes.

Other Consumer  Other consumer loans totaled $29.4 billion at June 30, 2022, compared with $28.3 billion at December 31, 2021. The increase in the outstanding balance at June 30, 2022, compared with December 31, 2021, was primarily due to originations of personal lines and loans.

NONPERFORMING ASSETS (NONACCRUAL LOANS AND FORECLOSED ASSETS) For information about when we generally place loans on nonaccrual status, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2021 Form 10-K. Customer payment deferral activities in the residential mortgage portfolio instituted in response to the COVID-19 pandemic could continue to delay the recognition of nonaccrual loans for those residential mortgage customers who would have otherwise moved into nonaccrual status. For information on customer accommodations, including loan modifications, in response to the COVID-19 pandemic, see the “Risk Management – Credit Risk Management – COVID-Related Lending Accommodations” section in our 2021 Form 10-K.

Table 16 summarizes nonperforming assets (NPAs).

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

($ in millions)						Jun 30, 2022						Dec 31, 2021
Nonaccrual loans:
Commercial:
Commercial and industrial						$	722					980
Real estate mortgage						898						1,235
Real estate construction						3						13
Lease financing						96						148
Total commercial						1,719						2,376
Consumer:
Residential mortgage – first lien (1)						3,322						3,803
Residential mortgage – junior lien (1)						729						801
Auto						188						198
Other consumer						35						34
Total consumer						4,274						4,836
Total nonaccrual loans						$	5,993					7,212
As a percentage of total loans						0.64		%				0.81
Foreclosed assets:
Government insured/guaranteed (2)						$	19					16
Non-government insured/guaranteed						111						96
Total foreclosed assets						130						112
Total nonperforming assets						$	6,123					7,324
As a percentage of total loans						0.65		%				0.82

(1)Residential mortgage loans predominantly insured by the FHA or guaranteed by the VA are not placed on nonaccrual status because they are insured or guaranteed.

(2)Consistent with regulatory reporting requirements, foreclosed real estate resulting from government insured/guaranteed loans are classified as nonperforming. Both principal and interest related to these foreclosed real estate assets are collectible because the loans were predominantly insured by the FHA or guaranteed by the VA. Receivables related to the foreclosure of certain government guaranteed real estate mortgage loans are excluded from this table and included in Accounts Receivable in Other Assets. For additional information on the classification of certain government-guaranteed mortgage loans upon foreclosure, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2021 Form 10-K.

Commercial nonaccrual loans decreased $657 million from December 31, 2021, predominantly due to a decline in commercial and industrial nonaccrual loans and real estate mortgage nonaccrual loans. For additional information on commercial nonaccrual loans, see the “Risk Management – Credit Risk Management – Commercial and Industrial Loans and Lease

Financing” and “Risk Management – Credit Risk Management – Commercial Real Estate” sections in this Report.

Consumer nonaccrual loans decreased $562 million from December 31, 2021, driven by a decrease in residential mortgage nonaccrual loans due to sustained payment performance of borrowers after exiting COVID-19-related accommodation programs.

			Wells Fargo & Company			35

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Table 17 provides an analysis of the changes in nonaccrual loans. Typically, changes to nonaccrual loans period-over-period represent inflows for loans that are placed on nonaccrual status in accordance with our policies, offset by reductions for loans

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

Table 17: Analysis of Changes in Nonaccrual Loans

			Quarter ended June 30,												Six months ended June 30,
(in millions)			2022						2021						2022						2021
Commercial nonaccrual loans
Balance, beginning of period			$	1,953					4,230						$	2,376					4,779
Inflows			165						560						356						1,333
Outflows:
Returned to accruing			(88)						(287)						(282)						(464)
Foreclosures			—						(3)						(19)						(9)
Charge-offs			(56)						(145)						(91)						(347)
Payments, sales and other			(255)						(806)						(621)						(1,743)
Total outflows			(399)						(1,241)						(1,013)						(2,563)
Balance, end of period			1,719						3,549						1,719						3,549
Consumer nonaccrual loans
Balance, beginning of period			4,918						3,825						4,836						3,949
Inflows			408						563						1,002						1,017
Outflows:
Returned to accruing			(729)						(200)						(915)						(352)
Foreclosures			(17)						(16)						(35)						(35)
Charge-offs			(70)						(17)						(144)						(43)
Payments, sales and other			(236)						(333)						(470)						(714)
Total outflows			(1,052)						(566)						(1,564)						(1,144)
Balance, end of period			4,274						3,822						4,274						3,822
Total nonaccrual loans			$	5,993					7,371						$	5,993					7,371

We considered the risk of losses on nonaccrual loans in developing our allowance for loan losses. We believe exposure to losses on nonaccrual loans is mitigated by the following factors at June 30, 2022:

•93% of total commercial nonaccrual loans are secured, the majority of which are secured by real estate.

•80% of commercial nonaccrual loans were current on interest and 78% of commercial nonaccrual loans were current on both principal and interest, but were on nonaccrual status because the full or timely collection of interest or principal had become uncertain.

•99% of total consumer nonaccrual loans are secured, of which 95% are secured by real estate and 98% have a combined LTV (CLTV) ratio of 80% or less.

•$637 million of the $811 million of consumer loans in bankruptcy or discharged in bankruptcy, and classified as nonaccrual, were current.

36			Wells Fargo & Company

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

Table 18: Foreclosed Assets

(in millions)															Jun 30, 2022						Dec 31, 2021
Summary by loan segment
Government insured/guaranteed															$	19					16
Commercial															69						54
Consumer															42						42
Total foreclosed assets															$	130					112
(in millions)			Quarter ended June 30,												Six months ended June 30,
			2022						2021						2022						2021
Analysis of changes in foreclosed assets
Balance, beginning of period			$	130					140						$	112					159
Net change in government insured/guaranteed (1)			3						(1)						3						(3)
Additions to foreclosed assets (2)			99						96						201						184
Reductions from sales and write-downs			(102)						(106)						(186)						(211)
Balance, end of period			$	130					129						$	130					129

(1)Foreclosed government insured/guaranteed loans are temporarily transferred to and held by us as servicer, until reimbursement is received from FHA or VA.

(2)Includes loans moved into foreclosed assets from nonaccrual status and repossessed autos.

As part of our actions to support customers during the COVID-19 pandemic, we temporarily suspended certain residential mortgage foreclosure activities through December 31, 2021. Beginning January 1, 2022, we resumed these mortgage foreclosure activities. For additional information on loans in process of foreclosure, see Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

			Wells Fargo & Company			37

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TROUBLED DEBT RESTRUCTURINGS (TDRs) Table 19 provides information regarding the recorded investment of loans modified in TDRs. TDRs decreased from December 31, 2021, predominantly driven by a decrease in residential mortgage – first lien loans, partially offset by an increase in trial modifications. The decrease in residential mortgage – first lien loans was due to paydowns and transfers to LHFS, which related to sales of repurchased loans from GNMA loan securitization pools.

The amount of our TDRs at June 30, 2022, would have otherwise been higher without the TDR relief provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)

and the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised) (Interagency Statement). Customers who are unable to resume making their contractual loan payments upon exiting from these deferral programs may require further assistance and may receive or be eligible to receive modifications, which may be classified as TDRs. For additional information on the CARES Act and the Interagency Statement, see the “Risk Management – Credit Risk Management – COVID-Related Lending Accommodations” section in our 2021 Form 10-K.

Table 19: TDR Balances

			June 30,						December 31,
(in millions)			2022						2021
Commercial:
Commercial and industrial			$	657					793
Real estate mortgage			478						543
Real estate construction			1						2
Lease financing			7						10
Total commercial TDRs			1,143						1,348
Consumer:
Residential mortgage – first lien			6,485						7,282
Residential mortgage – junior lien			884						946
Credit card			340						309
Auto			156						169
Other consumer			53						57
Trial modifications			292						71
Total consumer TDRs			8,210						8,834
Total TDRs			$	9,353					10,182
TDRs on nonaccrual status			$	3,255					3,142
TDRs on accrual status:
Government insured/guaranteed			1,817						2,462
Non-government insured/guaranteed			4,281						4,578
Total TDRs			$	9,353					10,182

38			Wells Fargo & Company

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

Table 20 provides an analysis of the changes in TDRs. Loans modified more than once as a TDR are reported as inflows only in the period they are first modified. In addition to foreclosures, sales and transfers to held for sale, we may remove loans from TDR classification, but only if they have been refinanced or restructured at market terms and qualify as a new loan.

Table 20: Analysis of Changes in TDRs

			Quarter ended June 30,									Six months ended June 30,
(in millions)			2022			2021						2022			2021
Commercial TDRs
Balance, beginning of period			$	1,212		2,013						$	1,348		2,731
Inflows (1)			129			336						216			491
Outflows
Charge-offs			(2)			(45)						(3)			(94)
Foreclosure			—			—						—			(5)
Payments, sales and other (2)			(196)			(410)						(418)			(1,229)
Balance, end of period			1,143			1,894						1,143			1,894
Consumer TDRs
Balance, beginning of period			8,500			11,335						8,834			11,792
Inflows (1)			483			495						941			1,128
Outflows
Charge-offs			(38)			(36)						(71)			(79)
Foreclosure			(13)			(15)						(25)			(29)
Payments, sales and other (2)			(737)			(1,133)						(1,690)			(2,157)
Net change in trial modifications (3)			15			(4)						221			(13)
Balance, end of period			8,210			10,642						8,210			10,642
Total TDRs			$	9,353		12,536						$	9,353		12,536

(1)Inflows include loans that modify, even if they resolve within the period, as well as gross advances on term loans that modified in a prior period and net advances on revolving TDRs that modified in a prior period.

(2)Other outflows include normal amortization/accretion of loan basis adjustments and loans transferred to LHFS. Occasionally, loans that have been refinanced or restructured at market terms qualify as new loans, which are also included as other outflows.

(3)Net change in trial modifications includes: inflows of new TDRs entering the trial payment period, net of outflows for modifications that either (i) successfully perform and enter into a permanent modification, or (ii) did not successfully perform according to the terms of the trial period plan and are subsequently charged-off, foreclosed upon or otherwise resolved.

			Wells Fargo & Company			39

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

Table 21: Net Loan Charge-offs

						Quarter ended June 30,																								Six months ended June 30,
						2022												2021												2022												2021
($ in millions)						Net loan charge- offs						% of avg. loans (1)						Net loan charge- offs						% of avg. loans (1)						Net loan charge- offs						% of avg. loans (1)						Net loan charge- offs						% of avg. loans (1)
Commercial:
			Commercial and industrial			$	27					0.03		%				$	81					0.10		%				$	4					—		%				$	169					0.11		%
			Real estate mortgage			(4)						(0.01)						(5)						(0.02)						(9)						(0.01)						41						0.07
			Real estate construction			—						—						(1)						—						—						—						(1)						(0.01)
			Lease financing			—						—						5						0.12						(1)						(0.02)						20						0.26
Total commercial						23						0.02						80						0.07						(6)						—						229						0.10
Consumer:
			Residential mortgage – first lien			(3)						(0.01)						(19)						(0.03)						(6)						(0.01)						(43)						(0.03)
			Residential mortgage – junior lien			(13)						(0.36)						(31)						(0.60)						(31)						(0.41)						(50)						(0.47)
			Credit card			199						2.02						256						3.01						375						1.94						492						2.86
			Auto			68						0.49						45						0.35						164						0.24						97						0.40
			Other consumer			70						0.98						50						0.80						153						1.08						169						1.37
Total consumer						321						0.33						301						0.32						655						0.34						665						0.35
			Total			$	344					0.15		%				$	381					0.18		%				$	649					0.14		%				$	894					0.21		%

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

The decrease in commercial net loan charge-offs in second quarter 2022, compared with the same period a year ago, was due to lower losses and higher recoveries in our commercial and industrial portfolio within the transportation services and financials except banks industries.

The increase in consumer net loan charge-offs in second quarter 2022, compared with the same period a year ago, was driven by lower recoveries in our residential mortgage portfolio and higher losses in our auto and other consumer portfolios, partially offset by lower losses in our credit card portfolio.

The COVID-19 pandemic may continue to impact the credit quality of our loan portfolio. Although the potential impacts were considered in our allowance for credit losses for loans, payment deferral activities in our residential mortgage portfolio instituted in response to the COVID-19 pandemic could continue to delay the recognition of residential mortgage loan charge-offs. For information on customer accommodations in response to the COVID-19 pandemic, see the “Risk Management – Credit Risk Management – COVID-Related Lending Accommodations” section in our 2021 Form 10-K.

ALLOWANCE FOR CREDIT LOSSES  We maintain an allowance for credit losses (ACL) for loans, which is management’s estimate of the expected life-time 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 2021 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 Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report.

Table 22 presents the allocation of the ACL for loans by loan portfolio segment and class.

40			Wells Fargo & Company

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Table 22: Allocation of the ACL for Loans

			Jun 30, 2022												Dec 31, 2021
($ in millions)			ACL						Loans as % of total loans						ACL						Loans as % of total loans
Commercial:
Commercial and industrial			$	4,620					40		%				$	4,873					39		%
Real estate mortgage			1,810						14						2,085						14
Real estate construction			378						2						431						2
Lease financing			274						2						402						2
Total commercial			7,082						58						7,791						57
Consumer:
Residential mortgage – first lien (1)			1,024						27						1,156						28
Residential mortgage – junior lien (1)			(6)						2						130						2
Credit card			3,253						4						3,290						4
Auto			1,045						6						928						6
Other consumer			486						3						493						3
Total consumer			5,802						42						5,997						43
Total			$	12,884					100		%				$	13,788					100		%
Components:
Allowance for loan losses									$	11,786											12,490
Allowance for unfunded credit commitments									1,098												1,298
Allowance for credit losses									$	12,884											13,788
Ratio of allowance for loan losses to total net loan charge-offs (annualized)									8.54x												7.94
Ratio of allowance for loan losses to total nonaccrual loans									1.97												1.73
Allowance for loan losses as a percentage of total loans									1.25		%										1.39
Allowance for credit losses for loans as a percentage of total loans									1.37												1.54

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

The ratios for the allowance for loan losses and the ACL for loans presented in Table 22 may fluctuate from period to period due to such factors as the mix of loan types in the portfolio, borrower credit strength, and the value and marketability of collateral.

The ACL for loans decreased $904 million, or 7%, from December 31, 2021, reflecting reduced uncertainty around the economic impact of the COVID-19 pandemic on our loan portfolio. This decrease was partially offset by increased uncertainty related to the risks of high inflation, as well as loan growth. The detail of the changes in the ACL for loans by portfolio segment (including charge-offs and recoveries by loan class) is included in Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

We consider multiple economic scenarios to develop our estimate of the ACL for loans, which generally include a base scenario, along with an optimistic (upside) and one or more pessimistic (downside) scenarios. In our estimate of the ACL for loans at June 30, 2022, we weighted the base scenario and the downside scenarios to reflect our economic outlook. The base scenario assumed moderate economic growth with elevated inflation in the near term. The downside scenarios assumed economic contractions due to high inflation and rising interest rates.

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.

The forecasted key economic variables used in our estimate of the ACL for loans at June 30 and March 31, 2022, are presented in Table 23.

Table 23: Forecasted Key Economic Variables

									4Q 2022						2Q 2023						4Q 2023
Weighted blend of economic scenarios:
U.S. unemployment rate (1):
March 31, 2022									4.7		%				5.6						5.7
June 30, 2022									4.1						5.2						6.0
U.S. real GDP (2):
March 31, 2022									(0.6)						0.2						2.1
June 30, 2022									0.4						(0.3)						1.0
Home price index (3):
March 31, 2022									2.1						(3.1)						(4.1)
June 30, 2022									12.7						(0.2)						(6.2)
Commercial real estate asset prices (3):
March 31, 2022									2.8						(2.7)						(3.6)
June 30, 2022									(1.0)						(2.6)						(2.6)

(1)Quarterly average.

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

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

Future amounts of the ACL for loans will be based on a variety of factors, including loan balance changes, portfolio credit quality and mix changes, and changes in general economic conditions and expectations (including for unemployment and real GDP), among other factors.

We believe the ACL for loans of $12.9 billion at June 30, 2022, was appropriate to cover expected credit losses, including unfunded credit commitments, at that date. The entire allowance is available to absorb credit losses from the total loan portfolio. The ACL for loans is subject to change and reflects existing factors as of the date of determination, including economic or market conditions and ongoing internal and external examination

			Wells Fargo & Company			41

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processes. Due to the sensitivity of the ACL for loans to changes in the economic and business environment, it is possible that we will incur incremental credit losses not anticipated as of the balance sheet date. Our process for determining the ACL is discussed in the “Critical Accounting Policies – Allowance for Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2021 Form 10-K.

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

In addition to servicing loans in our portfolio, we act as servicer and/or master servicer of residential and commercial mortgage loans included in government sponsored entity (GSE)-guaranteed mortgage securitizations, GNMA-guaranteed mortgage securitizations of FHA-insured/VA-guaranteed mortgages and private label mortgage securitizations, as well as for unsecuritized loans owned by institutional investors.

As a servicer, we are required to advance certain delinquent payments of principal and interest on mortgage loans we service. The amount and timing of reimbursement for advances of delinquent payments vary by investor and the applicable servicing agreements. See Note 9 (Mortgage Banking Activities) to Financial Statements in this Report for additional information about residential and commercial servicing rights, servicer advances and servicing fees.

In accordance with applicable servicing guidelines, delinquency status continues to advance for loans with COVID-related payment deferrals, which has resulted in an increase in delinquent loans serviced for others and a corresponding increase in loans eligible for repurchase from GNMA loan securitization pools. Upon transfer as servicer, we retain the option to repurchase loans from GNMA loan securitization pools, which generally becomes exercisable when three scheduled loan payments remain unpaid by the borrower. We generally repurchase these loans for cash and as a result, our total consolidated assets do not change. These repurchased loan balances were $10.9 billion and $17.3 billion at June 30, 2022 and December 31, 2021, respectively, which included $8.4 billion and $12.9 billion, respectively, in our held for investment loan portfolio, with the remainder in loans held for sale.

Repurchased loans that regain current status or are otherwise modified in accordance with applicable servicing guidelines may be included in future GNMA loan securitization pools. However, in accordance with guidance issued by GNMA, certain loans repurchased after June 30, 2020, are ineligible for inclusion in future GNMA loan securitization pools until the borrower has timely made six consecutive payments. This requirement may delay our ability to resell loans into the securitization market. See Note 8 (Securitizations and Variable Interest Entities) to Financial Statements in this Report for additional information about our involvement with mortgage loan securitizations.

For additional information about the risks related to our servicing activities, see the “Risk Management – Credit Risk Management – Mortgage Banking Activities” section in our 2021 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 2021 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 slower rate than anticipated, which could impact portfolio income; or

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

We assess interest rate risk by comparing outcomes under various net interest income simulations using many interest rate scenarios that differ in the direction of interest rate changes, the degree of change over time, the speed of change and the projected shape of the yield curve. These simulations require assumptions regarding drivers of earnings and balance sheet composition such as loan originations, prepayment rates on loans and debt securities, deposit flows and mix, as well as pricing strategies.

Our most recent simulations, as presented in Table 24, estimate net interest income sensitivity over the next 12 months using instantaneous movements across the yield curve with both lower and higher interest rates relative to our base scenario. Steeper and flatter scenarios measure non-parallel changes in the yield curve, with long-term interest rates defined as all tenors three years and longer and short-term interest rates defined as all tenors less than three years. Where applicable, U.S. dollar interest rates are floored at 0.00%. The following describes the simulation assumptions for the scenarios presented in Table 24:

•Simulations are dynamic and reflect anticipated changes to our assets and liabilities.

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

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

•Our base scenario deposit forecast incorporates mix changes consistent with the base interest rate trajectory. Deposit mix is modeled to be the same as in the base scenario across the alternative scenarios. In higher interest rate scenarios, customer deposit activity that shifts balances into higher-yielding products could impact expected net interest income.

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•The interest rate sensitivity of deposits is modeled using the historical behavior of our deposits portfolio and reflects the expectations of deposit products repricing as market interest rates change (referred to as deposit betas) as well as shifts in the mix of our deposit products. Our actual experience may differ from expectations due to the lag or acceleration of deposit repricing, changes in consumer behavior, and other factors.

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

Table 24: Net Interest Income Sensitivity

($ in billions)			Jun 30, 2022						Dec 31, 2021
Parallel Shift:
+100 bps shift in interest rates			$	3.3					7.1
-100 bps shift in interest rates			(4.4)						(3.3)
Steeper yield curve:
+50 bps shift in long-term interest rates			0.5						1.2
Flatter yield curve:
+50 bps shift in short-term interest rates			1.2						2.6
-50 bps shift in long-term interest rates			(0.5)						(1.0)

The changes in our interest rate sensitivity from December 31, 2021 to June 30, 2022 in Table 24 reflected updates to our base scenario, which included changes in expectations for both balance sheet composition and interest rates. Our interest rate sensitivity indicates that we would expect to benefit from higher interest rates as our assets would reprice faster and to a greater degree than our liabilities, while in the case of lower interest rates, our assets would reprice downward and to a greater degree than our liabilities resulting in lower net interest income. For the December 31, 2021 simulations with downward shifts in interest rates, the 0.00% interest rate floor limited the amount of the decline in net interest income. We may have a larger decline in net interest income when interest rates increase for the base scenario relative to the interest rate floor.

The sensitivity results above do not capture noninterest income or expense impacts. Our interest rate sensitive noninterest income and expense are primarily 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 2021 Form 10-K for additional information.

Interest rate sensitive noninterest income is also impacted by changes in earnings credit for noninterest-bearing deposits that reduce treasury management deposit service fees, and trading assets, which are generally less sensitive to changes in interest rates than the related funding liabilities. In addition, the impact to net interest income does not include the fair value changes of trading securities, which are recorded in noninterest income. For additional information on our trading assets and liabilities, see Note 2 (Trading Activities) to Financial Statements in this Report.

We use the debt securities portfolio and exchange-traded and over-the-counter (OTC) interest rate derivatives to manage our interest rate exposures. As interest rates increase, changes in the fair value of AFS debt securities may negatively affect accumulated other comprehensive income (AOCI), which lowers the amount of our risk-based capital. AOCI also includes unrealized gains or losses related to the transfer of debt securities from AFS to HTM, which are subsequently amortized into earnings over the life of the security with no further impact

from interest rate changes. See Note 1 (Summary of Significant Accounting Policies) and Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for additional information on the debt securities portfolios. We use derivatives for asset/liability management in two main ways:

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

•to economically hedge our mortgage origination pipeline, funded mortgage loans, and MSRs.

In the first half of 2022, we entered into interest rate swap hedges to reduce AOCI sensitivity of our AFS debt securities portfolio. Additionally, we entered into interest rate swaps to convert the interest cash flows of some floating-rate assets, such as commercial loans, to a fixed-rate. Derivatives used to hedge our interest rate risk exposures are presented in Note 14 (Derivatives) to Financial Statements in this Report.

MORTGAGE BANKING INTEREST RATE AND MARKET RISK  We originate, fund and service mortgage loans, which subjects us to various risks, including 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 2021 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 2021 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

			Wells Fargo & Company			43

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Risk Management – Asset/Liability Management (continued)

reflected in the interest income and interest expense components of our consolidated statement of income. Changes in fair value of the financial instruments used in our trading activities are reflected in net gains from trading activities. For additional information on the financial instruments used in our trading activities and the income from these trading activities, see Note 2 (Trading Activities) to Financial Statements in this Report.

Value-at-risk (VaR) is a statistical risk measure used to estimate the potential loss from adverse moves in the financial markets. The Company uses VaR metrics complemented with sensitivity analysis and stress testing in measuring and monitoring market risk. For additional information on our monitoring activities, sensitivity analysis and stress testing, see the “Risk Management – Asset/Liability Management – Market Risk – Trading Activities” section in our 2021 Form 10-K.

Trading VaR is the measure used to provide insight into the market risk exhibited by the Company’s trading positions. The Company calculates Trading VaR for risk management purposes to establish line of business and Company-wide risk limits. Trading VaR is calculated based on all trading positions on our consolidated balance sheet.

Table 25 shows the Company’s Trading General VaR by risk category. The decrease in average Company Trading General VaR for the quarter ended June 30, 2022, compared with the same period a year ago, was driven by reduced market volatility in the lookback window used to calculate average Company Trading General VaR for the quarter ended June 30, 2022. Market volatility present in average Company Trading General VaR for the quarter ended June 30, 2021, was driven by the impact of the COVID-19 pandemic, primarily resulting in changes in interest rate curves and a significant widening of credit spreads.

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

			Quarter ended
			June 30, 2022																								March 31, 2022																								June 30, 2021
(in millions)			Period end						Average						Low						High						Period end						Average						Low						High						Period end						Average						Low						High
Company Trading General VaR Risk Categories
Credit			$	28					31						21						40						33						28						20						35						14						21						12						30
Interest rate			26						23						11						35						26						15						9						30						7						7						4						22
Equity			20						24						17						36						26						21						13						28						29						37						25						56
Commodity			5						5						4						7						6						5						2						20						28						7						2						28
Foreign exchange			1						1						0						1						1						1						0						1						0						1						0						1
Diversification benefit (1)			(44)						(52)																		(63)						(43)																		(38)						(30)
Company Trading General VaR			$	36					32																		29						27																		40						43

(1)The period-end VaR was less than the sum of the VaR components described above, which is due to portfolio diversification. The diversification effect arises because the risks are not perfectly correlated causing a portfolio of positions to usually be less risky than the sum of the risks of the positions alone. The diversification benefit is not meaningful for low and high metrics since they may occur on different days.

MARKET RISK – EQUITY SECURITIES We are directly and indirectly affected by changes in the equity markets. We make and manage direct investments in start-up businesses, emerging growth companies, management buy-outs, acquisitions and corporate recapitalizations. We also invest in non-affiliated funds that make similar private equity investments. For additional information, see the “Risk Management – Asset/Liability Management – Market Risk – Equity Securities” section in our 2021 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 2021 Form 10-K. For additional information on the IHC, see the “Regulatory Matters – ‘Living Will’ Requirements and Related Matters” section in our 2021 Form 10-K.

Liquidity Standards We are subject to a rule issued by the FRB, OCC and FDIC that establishes a quantitative minimum liquidity requirement consistent with the liquidity coverage ratio (LCR) established by the Basel Committee on Banking Supervision (BCBS). The rule requires a covered banking organization to hold high-quality liquid assets (HQLA) in an amount equal to or greater than its projected net cash outflows during a 30-day stress period. Our HQLA under the rule predominantly consists of central bank deposits, government debt securities, and mortgage-backed securities of federal agencies. The LCR applies to the Company on a consolidated basis and to our insured depository institutions (IDIs) with total assets of $10 billion or

44			Wells Fargo & Company

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more. In addition, rules issued by the FRB impose enhanced liquidity risk management standards on large bank holding companies (BHCs), such as Wells Fargo.

The FRB, OCC and FDIC have also issued a rule implementing a stable funding requirement, known as the net stable funding ratio (NSFR), which requires a covered banking organization, such as Wells Fargo, to maintain a minimum amount of stable funding, including common equity, long-term debt and most types of deposits, in relation to its assets, derivative exposures and commitments over a one-year horizon period. The NSFR applies to the Company on a consolidated basis and to our IDIs with total

assets of $10 billion or more. As of June 30, 2022, we were compliant with the NSFR requirement.

Liquidity Coverage Ratio As of June 30, 2022, the consolidated Company, Wells Fargo Bank, N.A., and Wells Fargo National Bank West exceeded the minimum LCR requirement of 100%.

Table 26 presents the Company’s quarterly average values for the daily-calculated LCR and its components calculated pursuant to the LCR rule requirements. The LCR represents average HQLA divided by average projected net cash outflows, as each is defined under the LCR rule.

Table 26: Liquidity Coverage Ratio

			Average for Quarter ended
(in millions, except ratio)			Jun 30, 2022						Mar 31, 2022						Jun 30, 2021
HQLA (1):
Eligible cash			$	137,147					170,867						248,404
Eligible securities (2)			232,815						203,622						137,718
Total HQLA			369,962						374,489						386,122
Projected net cash outflows			305,212						314,691						314,678
LCR			121		%				119						123

(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 27 at fair value, which also includes encumbered securities that are not included as available HQLA in the calculation of the LCR.

Our cash is predominantly on deposit with the Federal Reserve. Debt 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 27: Primary Sources of Liquidity

			June 30, 2022																		December 31, 2021
(in millions)			Total						Encumbered						Unencumbered						Total						Encumbered						Unencumbered
Interest-earning deposits with banks			$	125,424					—						125,424						209,614						—						209,614
Debt securities of U.S. Treasury and federal agencies			61,481						12,785						48,696						56,486						4,066						52,420
Federal agency mortgage-backed securities (1)			252,430						47,778						204,652						293,870						58,955						234,915
Total			$	439,335					60,563						378,772						559,970						63,021						496,949

(1)Included in encumbered securities at June 30, 2022, were securities with a fair value of $139 million, which were purchased in June 2022, but settled in July 2022.

In addition to our primary sources of liquidity shown in

Table 27, liquidity is also available through the sale or financing of other debt securities including trading and/or AFS debt securities, as well as through the sale, securitization or financing of loans, to the extent such debt securities and loans are not encumbered. As of June 30, 2022, we also maintained approximately $216.4 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 151% and 166% of total loans at June 30, 2022, and December 31, 2021, respectively. Additional funding is provided by long-term debt and short-term borrowings. Table 28 presents a summary of our short-term borrowings, which generally mature in less than 30 days. We pledge certain financial instruments that we own to collateralize repurchase agreements and other securities financings. For additional information, see the “Pledged Assets” section of

Note 12 (Pledged Assets and Collateral) to Financial Statements in this Report.

			Wells Fargo & Company			45

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Risk Management – Asset/Liability Management (continued)

Table 28: Short-Term Borrowings

(in millions)			June 30, 2022						December 31, 2021
Federal funds purchased and securities sold under agreements to repurchase			$	23,887					21,191
Other short-term borrowings			13,188						13,218
Total			$	37,075					34,409

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. In addition, we issued $14.3 billion of long-term debt in July 2022. Table 29 provides the aggregate carrying value of long-term debt maturities (based on contractual payment dates) for the remainder of 2022 and the following years thereafter, as of June 30, 2022.

Table 29: Maturity of Long-Term Debt

			June 30, 2022
(in millions)			Remaining 2022						2023						2024						2025						2026						Thereafter						Total
Wells Fargo & Company (Parent Only)
Senior notes			$	5,050					5,721						11,222						13,665						21,739						55,476						112,873
Subordinated notes			—						2,630						711						1,005						2,730						15,851						22,927
Junior subordinated notes			—						—						—						—						—						1,227						1,227
Total long-term debt – Parent			5,050						8,351						11,933						14,670						24,469						72,554						137,027
Wells Fargo Bank, N.A. and other bank entities (Bank)
Senior notes			2						3						3						180						83						138						409
Subordinated notes			—						913						—						154						—						3,510						4,577
Junior subordinated notes			—						—						—						—						—						395						395
Securitizations and other bank debt			1,718						1,556						1,364						237						146						1,498						6,519
Total long-term debt – Bank			1,720						2,472						1,367						571						229						5,541						11,900
Other consolidated subsidiaries
Senior notes			40						481						105						416						222						100						1,364
Total long-term debt – Other consolidated subsidiaries			40						481						105						416						222						100						1,364
Total long-term debt			$	6,810					11,304						13,405						15,657						24,920						78,195						150,291

46			Wells Fargo & Company

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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 May 23, 2022, DBRS Morningstar confirmed the Company’s ratings and changed the rating trend to stable from negative. On June 6, 2022, Fitch Ratings affirmed the Company’s

ratings and changed the rating outlook to stable from negative. There were no other actions undertaken by the rating agencies with regard to our credit ratings during second quarter 2022.

See the “Risk Factors” section in our 2021 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 June 30, 2022, are presented in Table 30.

Table 30: Credit Ratings as of June 30, 2022

Wells Fargo & Company

Wells Fargo Bank, N.A.

Senior debt

Short-term  borrowings

Long-term  deposits

Short-term  borrowings

Moody’s

A1

P-1

Aa1

P-1

S&P Global Ratings

BBB+

A-2

A+

A-1

Fitch Ratings

A+

F1

AA

F1+

DBRS Morningstar

AA (low)

R-1 (middle)

AA

R-1 (high)

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.

			Wells Fargo & Company			47

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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 June 30, 2022, increased $4.2 billion from December 31, 2021, predominantly as a result of $6.8 billion of Wells Fargo net income, partially offset by $2.5 billion of common and preferred stock dividends. During the first half of 2022, we issued $716 million of common stock, substantially all of which was issued in connection with employee compensation and benefits. In the first half of 2022, we repurchased 110 million shares of common stock at a cost of $6 billion. In the first half of 2022, our AOCI decreased $8.9 billion, predominantly due to net unrealized losses on AFS debt securities. As interest rates increase, changes in the fair value of AFS debt securities may negatively affect AOCI, which lowers the amount of our risk-based capital. For additional information about capital planning, see the “Capital Planning and Stress Testing” section below.

Regulatory Capital Requirements

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

RISK-BASED CAPITAL AND RISK-WEIGHTED ASSETS The Company is subject to rules issued by federal banking regulators to implement Basel III capital requirements for U.S. banking organizations. The rules contain two frameworks for calculating capital requirements, a Standardized Approach and an Advanced Approach applicable to certain institutions, including Wells Fargo, and we must calculate our risk-based capital ratios under both approaches. The Company is required to satisfy the risk-based capital ratio requirements to avoid restrictions on capital distributions and discretionary bonus payments. Table 31 and Table 32 present the risk-based capital requirements applicable to the Company under the Standardized Approach and Advanced Approach, respectively, as of June 30, 2022.

Table 31: Risk-Based Capital Requirements – Standardized Approach as of June 30, 2022

Table 32: Risk-Based Capital Requirements – Advanced Approach as of June 30, 2022

In addition to the risk-based capital requirements described in Table 31 and Table 32, if the FRB determines that a period of excessive credit growth is contributing to an increase in systemic risk, a countercyclical buffer of up to 2.50% could be added to the risk-based capital ratio requirements under federal banking regulations. The countercyclical buffer in effect at June 30, 2022, was 0.00%.

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

48			Wells Fargo & Company

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The stress capital buffer is calculated based on the decrease in a BHC’s risk-based capital ratios under the severely adverse scenario in the FRB’s annual supervisory stress test and related Comprehensive Capital Analysis and Review (CCAR), plus four quarters of planned common stock dividends. Because the stress capital buffer is calculated annually based on data that can differ over time, our stress capital buffer, and thus our risk-based capital ratio requirements under the Standardized Approach, are subject to change in future periods. Our stress capital buffer for the period October 1, 2021, through September 30, 2022, is 3.10%. We expect our stress capital buffer for the period October 1, 2022, through September 30, 2023, to be 3.20%. The FRB has indicated that it will publish the final stress capital buffer for the period October 1, 2022, through September 30, 2023, for each BHC by August 31, 2022.

As a global systemically important bank (G-SIB), we are also subject to the FRB’s rule implementing an additional capital surcharge of between 1.00-4.50% on the risk-based capital ratio requirements of G-SIBs. Under the rule, we must annually calculate our surcharge under two methods and use the higher of the two surcharges. The first method (method one) considers our size, interconnectedness, cross-jurisdictional activity, substitutability, and complexity, consistent with the methodology developed by the BCBS and the Financial Stability Board (FSB). The second method (method two) uses similar

inputs, but replaces substitutability with use of short-term wholesale funding and will generally result in higher surcharges than under method one. Because the G-SIB capital surcharge is calculated annually based on data that can differ over time, the amount of the surcharge is subject to change in future years. If our annual calculation results in a decrease to our G-SIB capital surcharge, the decrease takes effect the next calendar year. If our annual calculation results in an increase to our G-SIB capital surcharge, the increase takes effect in two calendar years. For 2022, our G-SIB capital surcharge is 1.50%.

Under the risk-based capital rules, on-balance sheet assets and credit equivalent amounts of derivatives and off-balance sheet items are assigned to one of several broad risk categories according to the obligor, or, if relevant, the guarantor or the nature of any collateral. The aggregate dollar amount in each risk category is then multiplied by the risk weight associated with that category. The resulting weighted values from each of the risk categories are aggregated for determining total risk-weighted assets (RWAs).

The tables that follow provide information about our risk-based capital and related ratios as calculated under Basel III capital rules. Table 33 summarizes our CET1, tier 1 capital, total capital, RWAs and capital ratios at June 30, 2022, and December 31, 2021.

Table 33: Capital Components and Ratios

						Standardized Approach																		Advanced Approach
($ in millions)						Required Capital Ratios (1)						Jun 30, 2022						Dec 31, 2021						Required Capital Ratios (1)						Jun 30, 2022						Dec 31, 2021
Common Equity Tier 1			(A)									$	130,068					140,643												130,068						140,643
Tier 1 capital			(B)									149,116						159,671												149,116						159,671
Total capital			(C)									183,620						196,281												174,783						186,553
Risk-weighted assets			(D)									1,253,618						1,239,026												1,121,572						1,116,068
Common Equity Tier 1 capital ratio			(A)/(D)			9.10		%				10.38			*			11.35						8.50						11.60						12.60
Tier 1 capital ratio			(B)/(D)			10.60						11.89			*			12.89						10.00						13.30						14.31
Total capital ratio			(C)/(D)			12.60						14.65			*			15.84						12.00						15.58						16.72

*Denotes the binding ratio under the Standardized and Advanced Approaches at June 30, 2022.

(1)Represents the minimum ratios required to avoid restrictions on capital distributions and discretionary bonus payments at June 30, 2022.

			Wells Fargo & Company			49

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Capital Management (continued)

Table 34 provides information regarding the calculation and composition of our risk-based capital under the Standardized and Advanced Approaches at June 30, 2022, and December 31, 2021.

Table 34: Risk-Based Capital Calculation and Components

(in millions)						Jun 30, 2022						Dec 31, 2021
Total equity						$	179,793					190,110
Adjustments:
Preferred stock						(20,057)						(20,057)
Additional paid-in capital on preferred stock						135						136
Unearned ESOP shares						646						646
Noncontrolling interests						(2,261)						(2,504)
Total common stockholders’ equity						$	158,256					168,331
Adjustments:
Goodwill						(25,178)						(25,180)
Certain identifiable intangible assets (other than MSRs)						(191)						(225)
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)						(2,307)						(2,437)
Applicable deferred taxes related to goodwill and other intangible assets (1)						880						765
CECL transition provision (2)						179						241
Other						(1,571)						(852)
Common Equity Tier 1 under the Standardized and Advanced Approaches						$	130,068					140,643
Preferred stock						20,057						20,057
Additional paid-in capital on preferred stock						(135)						(136)
Unearned ESOP shares						(646)						(646)
Other						(228)						(247)
Total Tier 1 capital under the Standardized and Advanced Approaches			(A)			$	149,116					159,671
Long-term debt and other instruments qualifying as Tier 2						21,580						22,740
Qualifying allowance for credit losses (3)						13,243						14,149
Other						(319)						(279)
Total Tier 2 capital under the Standardized Approach			(B)			$	34,504					36,610
Total qualifying capital under the Standardized Approach			(A)+(B)			$	183,620					196,281
Long-term debt and other instruments qualifying as Tier 2						21,580						22,740
Qualifying allowance for credit losses (3)						4,406						4,421
Other						(319)						(279)
Total Tier 2 capital under the Advanced Approach			(C)			$	25,667					26,882
Total qualifying capital under the Advanced Approach			(A)+(C)			$	174,783					186,553

(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)In second quarter 2020, the Company elected to apply a modified transition provision issued by federal banking regulators related to the impact of the current expected credit loss accounting standard (CECL) on regulatory capital. The rule permits certain banking organizations to exclude from regulatory capital the initial adoption impact of CECL, plus 25% of the cumulative changes in the allowance for credit losses (ACL) under CECL for each period until December 31, 2021, followed by a three-year phase-out period in which the benefit is reduced by 25% in year one, 50% in year two and 75% in year three.

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

Table 35 provides the composition of our RWAs under the Standardized and Advanced Approaches at June 30, 2022, and December 31, 2021.

Table 35: Risk-Weighted Assets

						Standardized Approach															Advanced Approach (1)
(in millions)						Jun 30, 2022												Dec 31, 2021						Jun 30, 2022												Dec 31, 2021
Risk-weighted assets (RWAs):
Credit risk						$	1,208,657											1,186,810						751,748												747,714
Market risk						44,961												52,216						44,961												52,216
Operational risk						—												—						324,863												316,138
Total RWAs						$	1,253,618											1,239,026						1,121,572												1,116,068

(1)RWAs calculated under the Advanced Approach utilize a risk-sensitive methodology, which relies upon the use of internal credit models based upon our experience with internal rating grades. Advanced Approach also includes an operational risk component, which reflects the risk of loss resulting from inadequate or failed internal processes, people and systems, or from external events.

50			Wells Fargo & Company

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Table 36 presents the changes in CET1 for the six months ended June 30, 2022.

Table 36: Analysis of Changes in Common Equity Tier 1

(in millions)
Common Equity Tier 1 at December 31, 2021						$	140,643
Net income applicable to common stock						6,232
Common stock dividends						(1,907)
Common stock issued, repurchased, and stock compensation-related items						(5,487)
Changes in accumulated other comprehensive income						(8,906)
Goodwill						2
Certain identifiable intangible assets (other than MSRs)						34
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)						130
Applicable deferred taxes related to goodwill and other intangible assets (1)						115
CECL transition provision (2)						(62)
Other						(726)
Change in Common Equity Tier 1						(10,575)
Common Equity Tier 1 at June 30, 2022						$	130,068

(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)In second quarter 2020, the Company elected to apply a modified transition provision issued by federal banking regulators related to the impact of CECL on regulatory capital. The rule permits certain banking organizations to exclude from regulatory capital the initial adoption impact of CECL, plus 25% of the cumulative changes in the allowance for credit losses (ACL) under CECL for each period until December 31, 2021, followed by a three-year phase-out period in which the benefit is reduced by 25% in year one, 50% in year two and 75% in year three.

Table 37 presents net changes in the components of RWAs under the Standardized and Advanced Approaches for the six months ended June 30, 2022.

Table 37: Analysis of Changes in RWAs

(in millions)			Standardized Approach			Advanced Approach
Risk-weighted assets (RWAs) at December 31, 2021			$	1,239,026		1,116,068
Net change in credit risk RWAs			21,847			4,034
Net change in market risk RWAs			(7,255)			(7,255)
Net change in operational risk RWAs			—			8,725
Total change in RWAs			14,592			5,504
RWAs at June 30, 2022			$	1,253,618		1,121,572

			Wells Fargo & Company			51

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Capital Management (continued)

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

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

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

Table 38: Tangible Common Equity

									Balance at period end												Average balance
									Quarter ended												Quarter ended												Six months ended
(in millions, except ratios)									Jun 30, 2022			Mar 31, 2022			Jun 30, 2021									Jun 30, 2022			Mar 31, 2022			Jun 30, 2021						Jun 30, 2022			Jun 30, 2021
Total equity									$	179,793		181,689			193,127									181,016			186,337			190,968						183,662			190,026
Adjustments:
Preferred stock									(20,057)			(20,057)			(20,820)									(20,057)			(20,057)			(21,108)						(20,057)			(21,472)
Additional paid-in capital on preferred stock									135			136			136									135			134			138						135			142
Unearned ESOP shares									646			646			875									646			646			875						646			875
Noncontrolling interests									(2,261)			(2,446)			(1,865)									(2,386)			(2,468)			(1,313)						(2,427)			(1,215)
Total common stockholders’ equity			(A)						158,256			159,968			171,453									159,354			164,592			169,560						161,959			168,356
Adjustments:
Goodwill									(25,178)			(25,181)			(26,194)									(25,179)			(25,180)			(26,213)						(25,180)			(26,297)
Certain identifiable intangible assets (other than MSRs)									(191)			(210)			(301)									(200)			(218)			(310)						(209)			(320)
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)									(2,307)			(2,304)			(2,256)									(2,304)			(2,395)			(2,208)						(2,349)			(2,212)
Applicable deferred taxes related to goodwill and other intangible assets (1)									880			871			875									877			803			873						840			868
Tangible common equity			(B)						$	131,460		133,144			143,577									132,548			137,602			141,702						135,061			140,395
Common shares outstanding			(C)						3,793.0			3,789.9			4,108.0									N/A			N/A			N/A						N/A			N/A
Net income applicable to common stock			(D)						N/A			N/A			N/A									$	2,839		3,393			5,743						$	6,232		9,999
Book value per common share			(A)/(C)						$	41.72		42.21			41.74									N/A			N/A			N/A						N/A			N/A
Tangible book value per common share			(B)/(C)						34.66			35.13			34.95									N/A			N/A			N/A						N/A			N/A
Return on average common stockholders’ equity (ROE)			(D)/(A)						N/A			N/A			N/A									7.15		%	8.36			13.59						7.76		%	11.98
Return on average tangible common equity (ROTCE)			(D)/(B)						N/A			N/A			N/A									8.59			10.00			16.26						9.30			14.36

(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 39 presents the leverage requirements applicable to the Company as of June 30, 2022.

Table 39: Leverage Requirements Applicable to the Company

In addition, our IDIs are required to maintain an SLR of at least 6.00% to be considered well capitalized under applicable regulatory capital adequacy rules and maintain a minimum tier 1 leverage ratio of 4.00%.

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

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At June 30, 2022, the Company’s SLR was 6.63%, and each of our IDIs exceeded their applicable SLR requirements. Table 40 presents information regarding the calculation and components of the Company’s SLR and tier 1 leverage ratio.

Table 40: Leverage Ratios for the Company

($ in millions)						Quarter ended June 30, 2022
Tier 1 capital			(A)			$	149,116
Total average assets						1,902,751
Less: Goodwill and other permitted Tier 1 capital deductions (net of deferred tax liabilities)						28,460
Total adjusted average assets						1,874,291
Plus adjustments for off-balance sheet exposures:
Derivatives (1)						62,099
Repo-style transactions (2)						3,229
Other (3)						310,508
Total off-balance sheet exposures						375,836
Total leverage exposure			(B)			$	2,250,127
Supplementary leverage ratio			(A)/(B)			6.63		%
Tier 1 leverage ratio (4)						7.96		%

(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 June 30, 2022, are presented in Table 41.

Table 41: Components Used to Calculate TLAC and Eligible Unsecured Long-Term Debt Requirements

TLAC requirement Greater of:

18.00% of RWAs

7.50% of total leverage exposure (the denominator of the SLR calculation)

+

+

TLAC buffer (equal to 2.50% of RWAs + method one G-SIB capital surcharge + any countercyclical buffer)

External TLAC leverage buffer (equal to 2.00% of total leverage exposure)

Minimum amount of eligible unsecured long-term debt Greater of:

6.00% of RWAs

4.50% of total leverage exposure

+

Greater of method one and method two G-SIB capital surcharge

The FRB and OCC have proposed amendments to the TLAC and eligible unsecured long-term debt requirements. For information regarding these proposed amendments, see the “Capital Management – Total Loss Absorbing Capacity” section in our 2021 Form 10-K.

Table 42 provides our TLAC and eligible unsecured long-term debt and related ratios as of June 30, 2022.

Table 42: TLAC and Eligible Unsecured Long-Term Debt

($ in millions)						TLAC (1)						Regulatory Minimum (2)						Eligible Unsecured Long-term Debt						Regulatory Minimum
						June 30, 2022
Total eligible amount						$	284,775											128,218
Percentage of RWAs (3)						22.72		%				21.50						10.23						7.50
Percentage of total leverage exposure						12.66						9.50						5.70						4.50

(1)TLAC ratios are calculated using the CECL transition provision issued by federal banking regulators.

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

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

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

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 the regulatory minimum and buffers, plus an incremental internal buffer of up to 25 basis points. Our capital targets are subject to change based on various factors, including changes to the regulatory requirements for our capital ratios, planned capital actions, changes in our risk profile and other factors.

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

As part of the annual Comprehensive Capital Analysis and Review, the FRB generates a supervisory stress test. The FRB reviews the supervisory stress test results as required under the Dodd-Frank Act using a common set of capital actions for all large BHCs and also reviews the Company’s proposed capital actions. The FRB published its supervisory stress test results on June 23, 2022.

On July 26, 2022, the Board approved an increase to the Company’s third quarter 2022 common stock dividend to $0.30 per share.

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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Capital Management (continued)

Securities Repurchases

From time to time the Board authorizes the Company to repurchase shares of our common stock. Although we announce when the Board authorizes share repurchases, we typically do not give any public notice before we repurchase our shares. Various factors determine the amount of our share repurchases, including our capital requirements, the number of shares we expect to issue for employee benefit plans and 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 June 30, 2022, we had remaining Board authority to repurchase approximately 251 million shares, subject to regulatory and legal conditions. For additional information about share repurchases during second quarter 2022, 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 2021 Form 10-K and the “Regulatory Matters” section in our 2022 First Quarter Report 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 2021 Form 10-K) are fundamental to understanding our results of operations and financial condition because they require that we use estimates and assumptions that may affect the value of our assets or liabilities and financial results. Six of these policies are critical because they require management to make difficult, subjective and complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. These policies govern:

•the allowance for credit losses;

•the valuation of residential MSRs;

•the fair value of financial instruments;

•income taxes;

•liability for contingent litigation losses; and

•goodwill impairment.

Management has discussed these critical accounting policies and the related estimates and judgments with the Board’s Audit Committee. For additional information on these policies, see the “Critical Accounting Policies” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2021 Form 10-K and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

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Current Accounting Developments

Table 43 provides the significant accounting updates applicable to us that have been issued by the Financial Accounting Standards Board (FASB) but are not yet effective.

Table 43: Current Accounting Developments – Issued Standards

Description and Effective Date						Financial statement impact
ASU 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts and subsequent related updates
The Update, effective January 1, 2023, requires market risk benefits (features of insurance contracts that protect the policyholder from other-than-nominal capital market risk and expose the insurer to that risk) to be measured at fair value through earnings with changes in fair value attributable to our own credit risk recognized in other comprehensive income. The Update also requires more frequent updates for insurance assumptions, mandates the use of a standardized discount rate for traditional long-duration contracts, and simplifies the amortization of deferred acquisition costs.						The most significant impact of adoption relates to reinsurance of variable annuity products for a limited number of our insurance clients. Our reinsurance business is no longer entering into new contracts. These variable annuity products contain guaranteed minimum benefits that require us to make benefit payments for the remainder of the policyholder's life once the account values are exhausted. These guaranteed minimum benefits meet the definition of market risk benefits and will be measured at fair value. The cumulative effect of the difference between fair value and the carrying value upon adoption of the Update, net of income tax adjustments and excluding the impact of our own credit risk, will be recognized in the opening balance of retained earnings in the earliest period presented and will affect our regulatory capital calculations. At June 30, 2022, our estimated liability related to these guaranteed minimum benefits was approximately $500 million and was associated with approximately $10.5 billion of policyholder account values. We expect future earnings volatility from changes in the fair value of market risk benefits, which are sensitive to changes in equity and fixed income markets, as well as policyholder behavior and changes in mortality assumptions. We plan to economically hedge the market volatility, where feasible. Changes in the accounting for the liability of future policy benefits for traditional long-duration contracts and deferred acquisition costs are not expected to be material.
ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method
The Update, effective January 1, 2023 (with early adoption permitted), establishes the portfolio layer method, which expands an entity’s ability to achieve fair value hedge accounting for interest rate risk hedges of closed portfolios of financial assets. The Update also provides guidance on the accounting for hedged item basis adjustments under the portfolio layer method.						The Update improves our ability to use derivatives to hedge interest rate risk exposures associated with portfolios of financial assets, such as fixed-rate available-for-sale debt securities and loans. The Update allows us to hedge a larger proportion of these portfolios by expanding the number and type of derivatives permitted as eligible hedges, as well as by increasing the scope of eligible hedged items to include both prepayable and nonprepayable assets. Upon adoption, any election to designate portfolio layer method hedges is applied prospectively. Additionally, the Update permits a one-time reclassification of debt securities from held-to-maturity to available-for-sale classification as long as the securities are designated in a portfolio layer method hedge no later than 30 days after the adoption date. We are currently evaluating the impact of the Update on our consolidated financial statements.
ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures
The Update, effective January 1, 2023 (with early adoption permitted), eliminates the accounting guidance for troubled debt restructurings (TDRs) by creditors and introduces new required disclosures for loan modifications made to borrowers experiencing financial difficulty. The Update also amends the guidance for vintage disclosures to require disclosure of current period gross charge-offs by year of origination.						The Update will impact the measurement of the allowance for credit losses (ACL) and require new disclosures related to loan modifications and credit quality, specifically the Update: •Eliminates the requirement to use a discounted cash flow (DCF) approach to measure the ACL for certain TDRs and instead allows for the use of an expected loss approach for all loans. Upon adoption, we expect to discontinue using a DCF approach for consumer loans and retain a DCF approach for certain nonperforming commercial loans. Any changes to the ACL as a result of the change in TDR measurement will be included as an adjustment to opening retained earnings as of the beginning of the earliest period presented. •Requires new disclosures for modifications made to borrowers experiencing financial difficulty in the form of principal forgiveness, interest rate reduction, other than insignificant payment delay, term extension, or a combination of these modifications. •Requires us to provide current period gross charge-offs by origination date (vintage) in our credit quality disclosures on a prospective basis beginning as of the adoption date.

Other Accounting Developments

The following Updates are applicable to us but are not expected to have a material impact on our consolidated financial statements:

•ASU 2021-08 – Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers

•ASU 2021-10 – Government Assistance (Topic 832): Disclosures by Business Entities About Government Assistance

•ASU 2022-03 – Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions

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Forward-Looking Statements

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

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

•current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters (including the conflict in Ukraine), and any slowdown in global economic growth;

•the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions;

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

•current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses,

including rules and regulations relating to bank products and financial services;

•developments in our mortgage banking business, including the extent of the success of our mortgage loan modification efforts, the amount of mortgage loan repurchase demands that we receive, any negative effects relating to our mortgage servicing, loan modification or foreclosure practices, and the effects of regulatory or judicial requirements or guidance impacting our mortgage banking business and any changes in industry standards;

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

•the effect of the current interest rate environment or changes in interest rates or in the level or composition of our assets or liabilities on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgage loans held for sale;

•significant turbulence or a disruption in the capital or financial markets, which could result in, among other things, reduced investor demand for mortgage loans, a reduction in the availability of funding or increased funding costs, and declines in asset values and/or recognition of impairments of securities held in our debt securities and equity securities portfolios;

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

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

•resolution of regulatory matters, litigation, or other legal actions, which may result in, among other things, additional costs, fines, penalties, restrictions on our business activities, reputational harm, or other adverse consequences;

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

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

•fiscal and monetary policies of the Federal Reserve Board;

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

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

•the other risk factors and uncertainties described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2021.

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Forward-Looking Statements (continued)

In addition to the above factors, we also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of the Company, market conditions, capital requirements (including under Basel capital standards), common stock issuance requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by the Company’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, 2021, 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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Risk Factors

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

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Controls and Procedures

Disclosure Controls and Procedures

The Company’s management evaluated the effectiveness, as of June 30, 2022, 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 June 30, 2022.

 

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 second quarter 2022 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Financial Statements

Wells Fargo & Company and Subsidiaries
Consolidated Statement of Income (Unaudited)
			Quarter ended June 30,												Six months ended June 30,
(in millions, except per share amounts)			2022						2021						2022						2021
Interest income
Debt securities			$	2,702					2,199						$	5,265					4,511
Loans held for sale			126						193						266						524
Loans			8,116						7,095						15,334						14,296
Equity securities			193						132						363						269
Other interest income			419						74						509						139
Total interest income			11,556						9,693						21,737						19,739
Interest expense
Deposits			158						92						241						204
Short-term borrowings			31						(12)						17						(21)
Long-term debt			1,011						712						1,772						1,738
Other interest expense			158						101						288						210
Total interest expense			1,358						893						2,318						2,131
Net interest income			10,198						8,800						19,419						17,608
Noninterest income
Deposit and lending-related fees			1,729						1,704						3,544						3,320
Investment advisory and other asset-based fees			2,346						2,794						4,844						5,550
Commissions and brokerage services fees			542						580						1,079						1,216
Investment banking fees			286						570						733						1,138
Card fees			1,112						1,077						2,141						2,026
Mortgage banking			287						1,336						980						2,662
Net gains (losses) from trading and securities			(26)						2,717						770						3,608
Other			554						692						1,110						1,674
Total noninterest income			6,830						11,470						15,201						21,194
Total revenue			17,028						20,270						34,620						38,802
Provision for credit losses			580						(1,260)						(207)						(2,308)
Noninterest expense
Personnel			8,442						8,818						17,713						18,376
Technology, telecommunications and equipment			799						815						1,675						1,659
Occupancy			705						735						1,427						1,505
Operating losses			576						303						1,249						516
Professional and outside services			1,310						1,450						2,596						2,838
Advertising and promotion			102						132						201						222
Restructuring charges			—						(4)						5						9
Other			949						1,092						1,887						2,205
Total noninterest expense			12,883						13,341						26,753						27,330
Income before income tax expense			3,565						8,189						8,074						13,780
Income tax expense			613						1,445						1,320						2,346
Net income before noncontrolling interests			2,952						6,744						6,754						11,434
Less: Net income (loss) from noncontrolling interests			(167)						704						(36)						758
Wells Fargo net income			$	3,119					6,040						$	6,790					10,676
Less: Preferred stock dividends and other			280						297						558						677
Wells Fargo net income applicable to common stock			$	2,839					5,743						$	6,232					9,999
Per share information
Earnings per common share			$	0.75					1.39						$	1.63					2.42
Diluted earnings per common share			0.74						1.38						1.62						2.40
Average common shares outstanding			3,793.8						4,124.6						3,812.3						4,132.9
Diluted average common shares outstanding			3,819.6						4,156.1						3,845.0						4,164.6

The accompanying notes are an integral part of these statements.

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Wells Fargo & Company and Subsidiaries
Consolidated Statement of Comprehensive Income (Unaudited)
			Quarter ended June 30,												Six months ended June 30,
(in millions)			2022						2021						2022						2021
Net income before noncontrolling interests			$	2,952					6,744						$	6,754					11,434
Other comprehensive income (loss), after tax:
Net change in debt securities			(3,620)						304						(8,768)						(1,221)
Net change in derivatives and hedging activities			(83)						27						(63)						63
Defined benefit plans adjustments			(22)						334						50						369
Other			(116)						22						(125)						33
Other comprehensive income (loss), after tax			(3,841)						687						(8,906)						(756)
Total comprehensive income (loss) before noncontrolling interests			(889)						7,431						(2,152)						10,678
Less: Other comprehensive income from noncontrolling interests			—						1						—						2
Less: Net income (loss) from noncontrolling interests			(167)						704						(36)						758
Wells Fargo comprehensive income (loss)			$	(722)					6,726						$	(2,116)					9,918

The accompanying notes are an integral part of these statements.

62			Wells Fargo & Company

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Wells Fargo & Company and Subsidiaries
Consolidated Balance Sheet
(in millions, except shares)			Jun 30, 2022						Dec 31, 2021
Assets			(Unaudited)
Cash and due from banks			$	29,716					24,616
Interest-earning deposits with banks			125,424						209,614
Total cash, cash equivalents, and restricted cash			155,140						234,230
Federal funds sold and securities purchased under resale agreements			55,546						66,223
Debt securities:
Trading, at fair value			89,157						88,265
Available-for-sale, at fair value (includes amortized cost of $131,991 and $175,463, net of allowance for credit losses)			125,832						177,244
Held-to-maturity, at amortized cost, net of allowance for credit losses (fair value $272,044 and $272,386)			301,783						272,022
Loans held for sale (includes $5,699 and $15,895 carried at fair value)			9,674						23,617
Loans			943,734						895,394
Allowance for loan losses			(11,786)						(12,490)
Net loans			931,948						882,904
Mortgage servicing rights (includes $9,163 and $6,920 carried at fair value)			10,386						8,189
Premises and equipment, net			8,444						8,571
Goodwill			25,178						25,180
Derivative assets			24,896						21,478
Equity securities (includes $27,653 and $39,098 carried at fair value)			61,774						72,886
Other assets			81,384						67,259
Total assets (1)			$	1,881,142					1,948,068
Liabilities
Noninterest-bearing deposits			$	515,437					527,748
Interest-bearing deposits			909,716						954,731
Total deposits			1,425,153						1,482,479
Short-term borrowings (includes $165 and $0 carried at fair value)			37,075						34,409
Derivative liabilities			17,168						9,424
Accrued expenses and other liabilities (includes $22,116 and $20,685 carried at fair value)			71,662						70,957
Long-term debt (includes $353 and $0 carried at fair value)			150,291						160,689
Total liabilities (2)			1,701,349						1,757,958
Equity
Wells Fargo stockholders’ equity:
Preferred stock			20,057						20,057
Common stock – $1-2/3 par value, authorized 9,000,000,000 shares; issued 5,481,811,474 shares			9,136						9,136
Additional paid-in capital			60,024						60,196
Retained earnings			184,475						180,322
Accumulated other comprehensive income (loss)			(10,608)						(1,702)
Treasury stock – 1,688,846,993 shares and 1,596,009,977 shares			(84,906)						(79,757)
Unearned ESOP shares			(646)						(646)
Total Wells Fargo stockholders’ equity			177,532						187,606
Noncontrolling interests			2,261						2,504
Total equity			179,793						190,110
Total liabilities and equity			$	1,881,142					1,948,068

(1)Our consolidated assets at June 30, 2022 and December 31, 2021, included the following assets of certain variable interest entities (VIEs) that can only be used to settle the liabilities of those VIEs: Debt securities, $71 million and $71 million; Loans, $4.5 billion and $4.5 billion; All other assets, $167 million and $234 million; and Total assets, $4.7 billion and $4.8 billion, respectively.

(2)Our consolidated liabilities at June 30, 2022 and December 31, 2021, include the following VIE liabilities for which the VIE creditors do not have recourse to Wells Fargo: Long-term debt, $0 and $149 million; All other liabilities, $241 million and $259 million; and Total liabilities, $241 million and $408 million, respectively.

The accompanying notes are an integral part of these statements.

			Wells Fargo & Company			63

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Wells Fargo & Company and Subsidiaries
Consolidated Statement of Changes in Equity (Unaudited)
			Wells Fargo stockholders’ equity
			Preferred stock												Common stock
($ and shares in millions)			Shares						Amount						Shares						Amount						Additional paid-in capital						Retained earnings						Accumulated other comprehensive income (loss)						Treasury stock						Unearned ESOP shares												Noncontrolling interests						Total equity
Balance March 31, 2022			5.3						$	20,057					3,789.9						$	9,136					59,899						182,623						(6,767)						(85,059)						(646)												2,446						181,689
Net income (loss)																																	3,119																														(167)						2,952
Other comprehensive loss, net of tax																																							(3,841)																								—						(3,841)
Noncontrolling interests																																																															(18)						(18)
Common stock issued															3.2																		(26)												162																								136
Common stock repurchased															(0.1)																														(4)																								(4)
Preferred stock redeemed			—						—																		—						—																																				—
Common stock dividends																											13						(961)																																				(948)
Preferred stock dividends																																	(280)																																				(280)
Stock-based compensation																											152																																										152
Net change in deferred compensation and related plans																											(40)																		(5)																								(45)
Net change			—						—						3.1						—						125						1,852						(3,841)						153						—												(185)						(1,896)
Balance June 30, 2022			5.3						$	20,057					3,793.0						$	9,136					60,024						184,475						(10,608)						(84,906)						(646)												2,261						179,793
Balance March 31, 2021			5.6						$	21,170					4,141.1						$	9,136					59,854						166,458						(1,250)						(67,589)						(875)												1,130						188,034
Net income																																	6,040																														704						6,744
Other comprehensive income, net of tax																																							686																								1						687
Noncontrolling interests																																																															30						30
Common stock issued															2.2																		(20)												115																								95
Common stock repurchased															(35.3)																														(1,565)																								(1,565)
Preferred stock redeemed (1)			—						(350)																		4						(4)																																				(350)
Common stock dividends																											4						(416)																																				(412)
Preferred stock dividends																																	(293)																																				(293)
Stock-based compensation																											226																																										226
Net change in deferred compensation and related plans																											(70)																		1																								(69)
Net change			—						(350)						(33.1)						—						164						5,307						686						(1,449)						—												735						5,093
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

(1)Represents the impact of the redemption of the remaining Preferred Stock, Series N, in second quarter 2021.

The accompanying notes are an integral part of these statements.

64			Wells Fargo & Company

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Wells Fargo & Company and Subsidiaries
Consolidated Statement of Changes in Equity (Unaudited)
			Wells Fargo stockholders’ equity
			Preferred stock												Common stock
($ and shares in millions)			Shares						Amount						Shares						Amount						Additional paid-in capital						Retained earnings						Accumulated other comprehensive income (loss)						Treasury stock						Unearned ESOP shares												Noncontrolling interests						Total equity
Balance December 31, 2021			5.3						$	20,057					3,885.8						$	9,136					60,196						180,322						(1,702)						(79,757)						(646)												2,504						190,110
Net income (loss)																																	6,790																														(36)						6,754
Other comprehensive loss, net of tax																																							(8,906)																								—						(8,906)
Noncontrolling interests																																																															(207)						(207)
Common stock issued															17.4																		(143)												859																								716
Common stock repurchased															(110.2)																														(6,022)																								(6,022)
Preferred stock issued			—						—																		—																																										—
Preferred stock redeemed			—						—																		—						—																																				—
Common stock dividends																											29						(1,936)																																				(1,907)
Preferred stock dividends																																	(558)																																				(558)
Stock-based compensation																											646																																										646
Net change in deferred compensation and related plans																											(847)																		14																								(833)
Net change			—						—						(92.8)						—						(172)						4,153						(8,906)						(5,149)						—												(243)						(10,317)
Balance June 30, 2022			5.3						$	20,057					3,793.0						$	9,136					60,024						184,475						(10,608)						(84,906)						(646)												2,261						179,793
Balance December 31, 2020			5.5						$	21,136					4,144.0						$	9,136					60,197						162,683						194						(67,791)						(875)												1,032						185,712
Net income																																	10,676																														758						11,434
Other comprehensive income (loss), net of tax																																							(758)																								2						(756)
Noncontrolling interests																																																															73						73
Common stock issued															16.5																		(81)												900																								819
Common stock repurchased															(52.5)																														(2,161)																								(2,161)
Preferred stock issued			0.2						4,560																		(31)																																										4,529
Preferred stock redeemed (1)			(0.1)						(4,876)																		48						(48)																																				(4,876)
Common stock dividends																											10						(836)																																				(826)
Preferred stock dividends																																	(629)																																				(629)
Stock-based compensation																											724																																										724
Net change in deferred compensation and related plans																											(930)																		14																								(916)
Net change			0.1						(316)						(36.0)						—						(179)						9,082						(758)						(1,247)						—												833						7,415
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

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

The accompanying notes are an integral part of these statements.

			Wells Fargo & Company			65

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Wells Fargo & Company and Subsidiaries
Consolidated Statement of Cash Flows (Unaudited)
			Six months ended June 30,
(in millions)			2022						2021
Cash flows from operating activities:
Net income before noncontrolling interests			$	6,754					11,434
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses			(207)						(2,308)
Changes in fair value of MSRs and LHFS carried at fair value			(1,236)						(895)
Depreciation, amortization and accretion			3,563						4,173
Deferred income tax benefit			(292)						(1,495)
Other, net (1)			(12,071)						(6,186)
Originations and purchases of loans held for sale			(43,271)						(87,673)
Proceeds from sales of and paydowns on loans originally classified as held for sale			41,623						55,502
Net change in:
Debt and equity securities, held for trading			20,943						7,531
Derivative assets and liabilities			3,665						(1,299)
Other assets			(13,763)						11,256
Other accrued expenses and liabilities			2,079						(1,572)
Net cash provided (used) by operating activities			7,787						(11,532)
Cash flows from investing activities:
Net change in:
Federal funds sold and securities purchased under resale agreements			10,677						(4,477)
Available-for-sale debt securities:
Proceeds from sales			15,330						13,675
Prepayments and maturities			11,850						45,238
Purchases			(31,292)						(71,997)
Held-to-maturity debt securities:
Paydowns and maturities			15,966						45,833
Purchases			(2,360)						(43,192)
Equity securities, not held for trading:
Proceeds from sales and capital returns			3,090						2,131
Purchases			(2,744)						(3,033)
Loans:
Loans originated by banking subsidiaries, net of principal collected			(56,839)						21,926
Proceeds from sales of loans originally classified as held for investment			8,171						22,174
Purchases of loans			(376)						(186)
Principal collected on nonbank entities’ loans			2,705						7,007
Loans originated by nonbank entities			(2,244)						(5,723)
Other, net (1)			597						1,428
Net cash provided (used) by investing activities			(27,469)						30,804
Cash flows from financing activities:
Net change in:
Deposits			(57,326)						36,575
Short-term borrowings			2,494						(13,364)
Long-term debt:
Proceeds from issuance			16,378						1,125
Repayment			(11,978)						(29,810)
Preferred stock:
Proceeds from issuance			—						4,529
Redeemed			—						(4,875)
Cash dividends paid			(558)						(629)
Common stock:
Repurchased			(6,022)						(2,161)
Cash dividends paid			(1,904)						(795)
Other, net (1)			(492)						(306)
Net cash used by financing activities			(59,408)						(9,711)
Net change in cash, cash equivalents, and restricted cash			(79,090)						9,561
Cash, cash equivalents, and restricted cash at beginning of period			234,230						264,612
Cash, cash equivalents, and restricted cash at end of period			$	155,140					274,173
Supplemental cash flow disclosures:
Cash paid for interest			$	2,240					2,345
Cash paid for income taxes, net			3,817						3,052

(1)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.

66			Wells Fargo & Company

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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, 2021 (2021 Form 10-K). There were no material changes to these policies in the first half of 2022.

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 2021 Form 10-K.

Accounting Standards Adopted in 2022

In 2022, we adopted the following new accounting guidance:

•Accounting Standards Update (ASU or Update) 2020-06 – Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): 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 2020-06 simplifies the accounting for convertible financial instruments that embody characteristics of debt and equity by (1) eliminating accounting models for convertible financial instruments with cash conversion and beneficial conversion features within Accounting Standards Codification (ASC) 470-20, (2) removing three equity classification requirements for a contract in an entity's own equity to qualify for the derivative scope exception in ASC Subtopic 815-40, and (3) prescribing the method used for computing earnings per share. We adopted this Update prospectively in first quarter 2022. This Update did not have a material impact to our consolidated financial statements.

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

			Wells Fargo & Company			67

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Note 1: Summary of Significant Accounting Policies (continued)

Supplemental Cash Flow Information

Significant noncash activities are presented in Table 1.1.

Table 1.1: Supplemental Cash Flow Information

			Six months ended June 30,
(in millions)			2022						2021
Available-for-sale debt securities purchased from securitization of LHFS (1)			$	1,506					—
Held-to-maturity debt securities purchased from securitization of LHFS (1)			693						16,462
Transfers from loans to LHFS			4,970						11,551
Transfers from available-for-sale debt securities to held-to-maturity debt securities			43,041						41,298

(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.

Subsequent Events

We have evaluated the effects of events that have occurred subsequent to June 30, 2022, and there have been no material events that would require recognition in our second quarter 2022 consolidated financial statements or disclosure in the Notes to the consolidated financial statements.

68			Wells Fargo & Company

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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)			Jun 30, 2022						Dec 31, 2021
Trading assets:
Debt securities			$	89,157					88,265
Equity securities (1)			25,930						27,476
Loans held for sale			1,913						3,242
Gross trading derivative assets (1)			67,487						48,325
Netting (2)			(43,871)						(28,146)
Total trading derivative assets			23,616						20,179
Total trading assets			140,616						139,162
Trading liabilities:
Short sale			22,116						20,685
Other liabilities			518						—
Gross trading derivative liabilities (1)			58,182						42,449
Netting (2)			(42,222)						(33,978)
Total trading derivative liabilities			15,960						8,471
Total trading liabilities			$	38,594					29,156

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

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

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

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

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

			Quarter ended June 30,												Six months ended June 30,
(in millions)			2022						2021						2022						2021
Interest income:
Debt securities			$	549					496						$	1,097					1,025
Equity securities (1)			139						93						259						196
Loans held for sale			9						3						20						15
Total interest income			697						592						1,376						1,236
Less: Interest expense			158						105						290						215
Net interest income			539						487						1,086						1,021
Net gains (losses) from trading activities (2):
Debt securities			(3,103)						769						(6,751)						(1,337)
Equity securities (1)			(3,606)						856						(4,430)						2,009
Loans held for sale			1						15						10						39
Other liabilities			11						—						23						—
Derivatives (1)(3)			7,143						(1,619)						11,812						(342)
Total net gains from trading activities			446						21						664						369
Total trading-related net interest and noninterest income			$	985					508						$	1,750					1,390

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

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

(3)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.

			Wells Fargo & Company			69

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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 accumulated other comprehensive income (AOCI), net of the ACL and applicable income taxes. Information on debt securities held for trading is included in Note 2 (Trading Activities).

Outstanding balances exclude accrued interest receivable on AFS and HTM debt securities, which are included in other assets. See Note 7 (Other Assets) for additional information on accrued interest receivable. Amounts considered to be uncollectible are reversed through interest income. The interest income reversed in the second quarter and first half of both 2022 and 2021 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
June 30, 2022
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies			$	48,772					37						(2,294)						46,515
Non-U.S. government securities			166						—						—						166
Securities of U.S. states and political subdivisions (2)			12,444						45						(413)						12,076
Federal agency mortgage-backed securities			59,559						13						(3,377)						56,195
Non-agency mortgage-backed securities (3)			3,917						4						(117)						3,804
Collateralized loan obligations			4,513						—						(104)						4,409
Other debt securities			2,620						91						(44)						2,667
Total available-for-sale debt securities			131,991						190						(6,349)						125,832
Held-to-maturity debt securities:
Securities of U.S. Treasury and federal agencies			16,198						—						(1,232)						14,966
Securities of U.S. states and political subdivisions			32,483						28						(3,812)						28,699
Federal agency mortgage-backed securities			219,972						—						(23,737)						196,235
Non-agency mortgage-backed securities (3)			1,220						—						(121)						1,099
Collateralized loan obligations			30,183						1						(760)						29,424
Other debt securities			1,727						—						(106)						1,621
Total held-to-maturity debt securities			301,783						29						(29,768)						272,044
Total			$	433,774					219						(36,117)						397,876
December 31, 2021
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies			$	39,668					185						(192)						39,661
Non-U.S. government securities			71						—						—						71
Securities of U.S. states and political subdivisions (2)			16,618						350						(51)						16,917
Federal agency mortgage-backed securities			104,661						1,807						(582)						105,886
Non-agency mortgage-backed securities (3)			4,515						32						(15)						4,532
Collateralized loan obligations			5,713						2						(7)						5,708
Other debt securities			4,217						259						(7)						4,469
Total available-for-sale debt securities			175,463						2,635						(854)						177,244
Held-to-maturity debt securities:
Securities of U.S. Treasury and federal agencies			16,544						599						(318)						16,825
Securities of U.S. states and political subdivisions			32,689						847						(61)						33,475
Federal agency mortgage-backed securities			188,909						1,882						(2,807)						187,984
Non-agency mortgage-backed securities (3)			1,082						31						(18)						1,095
Collateralized loan obligations			31,067						194						(2)						31,259
Other debt securities			1,731						17						—						1,748
Total held-to-maturity debt securities			272,022						3,570						(3,206)						272,386
Total			$	447,485					6,205						(4,060)						449,630

(1)Represents amortized cost of the securities, net of the ACL of $9 million and $8 million related to AFS debt securities and $83 million and $96 million related to HTM debt securities at June 30, 2022, and December 31, 2021, 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 $5.4 billion at June 30, 2022, and $5.2 billion at December 31, 2021.

(3)Predominantly consists of commercial mortgage-backed securities at both June 30, 2022, and December 31, 2021.

70			Wells Fargo & Company

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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 June 30,												Six months ended June 30,
(in millions)			2022						2021						2022						2021
Purchases of held-to-maturity debt securities (1):
Securities of U.S. states and political subdivisions			$	9					1,173						$	843					3,083
Federal agency mortgage-backed securities			—						24,855						2,051						49,722
Non-agency mortgage-backed securities			55						55						159						84
Collateralized loan obligations			—						3,385						—						7,338
Total purchases of held-to-maturity debt securities			64						29,468						3,053						60,227
Transfers from available-for-sale debt securities to held-to-maturity debt securities (2):
Federal agency mortgage-backed securities			28,390						24,681						43,041						41,298
Total transfers from available-for-sale debt securities to held-to-maturity debt securities			$	28,390					24,681						$	43,041					41,298

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

(2)Represents fair value as of the date of the transfers. Debt securities transferred from available-for-sale to held-to-maturity had pre-tax unrealized losses recorded in AOCI of $3.5 billion and $3.9 billion in the second quarter and first half of 2022, respectively, and $269 million and $615 million in the second quarter and first half of 2021, respectively, at the time of the transfers.

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

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

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

			Quarter ended June 30,												Six months ended June 30,
(in millions)			2022						2021						2022						2021
Interest income (1):
Available-for-sale			$	683					655						$	1,385					1,466
Held-to-maturity			1,470						1,048						2,783						2,020
Total interest income			2,153						1,703						4,168						3,486
Provision for credit losses:
Available-for-sale			3						(10)						4						12
Held-to-maturity			(1)						(11)						(14)						36
Total provision for credit losses			2						(21)						(10)						48
Realized gains and losses (2):
Gross realized gains			247						1						249						152
Gross realized losses			(104)						(1)						(104)						(1)
Net realized gains			$	143					—						$	145					151

(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 June 30, 2022, and December 31, 2021.

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.

			Wells Fargo & Company			71

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

Table 3.4: Investment Grade Debt Securities

			Available-for-Sale									Held-to-Maturity
($ in millions)			Fair value			% investment grade						Amortized cost			% investment grade
June 30, 2022
Total portfolio (1)			$	125,832		99		%				$	301,866		99		%
Breakdown by category:
Securities of U.S. Treasury and federal agencies (2)			$	102,710		100		%				$	236,170		100		%
Securities of U.S. states and political subdivisions			12,076			99						32,498			100
Collateralized loan obligations (3)			4,409			100						30,228			100
All other debt securities (4)			6,637			89						2,970			61
December 31, 2021
Total portfolio (1)			$	177,244		99		%				$	272,118		99		%
Breakdown by category:
Securities of U.S. Treasury and federal agencies (2)			$	145,547		100		%				$	205,453		100		%
Securities of U.S. states and political subdivisions			16,917			99						32,704			100
Collateralized loan obligations (3)			5,708			100						31,128			100
All other debt securities (4)			9,072			88						2,833			64

(1)98% were rated AA- and above at both June 30, 2022, and December 31, 2021, respectively.

(2)Includes federal agency mortgage-backed securities.

(3)100% were rated AA- and above at both June 30, 2022, and December 31, 2021, 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 June 30, 2022, and December 31, 2021. The carrying value of debt securities in nonaccrual status was insignificant at both June 30, 2022, and December 31, 2021. Charge-offs on debt securities were insignificant in the second quarter and first half of both 2022 and 2021.

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 second quarter and first half of both 2022 and 2021.

72			Wells Fargo & Company

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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 losses						Fair value						Gross unrealized losses						Fair value						Gross unrealized losses						Fair value
June 30, 2022
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies			$	(2,222)					42,780						(72)						1,741						(2,294)						44,521
Securities of U.S. states and political subdivisions			(296)						4,020						(117)						602						(413)						4,622
Federal agency mortgage-backed securities			(2,996)						51,990						(381)						2,999						(3,377)						54,989
Non-agency mortgage-backed securities			(94)						3,253						(23)						493						(117)						3,746
Collateralized loan obligations			(88)						3,857						(16)						552						(104)						4,409
Other debt securities			(29)						1,870						(15)						511						(44)						2,381
Total available-for-sale debt securities			$	(5,725)					107,770						(624)						6,898						(6,349)						114,668
December 31, 2021
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies			$	(192)					24,418						—						—						(192)						24,418
Securities of U.S. states and political subdivisions			(36)						2,308						(15)						532						(51)						2,840
Federal agency mortgage-backed securities			(334)						40,695						(248)						9,464						(582)						50,159
Non-agency mortgage-backed securities			(4)						1,966						(11)						543						(15)						2,509
Collateralized loan obligations			(3)						1,619						(4)						1,242						(7)						2,861
Other debt securities			—						—						(7)						624						(7)						624
Total available-for-sale debt securities			$	(569)					71,006						(285)						12,405						(854)						83,411

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

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

			Wells Fargo & Company			73

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

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)			Total						Within one year						After one year through five years						After five years through ten years						After ten years
June 30, 2022
Available-for-sale debt securities (1):
Securities of U.S. Treasury and federal agencies
Amortized cost, net			$	48,772					1,977						17,259						27,892						1,644
Fair value			46,515						1,948						16,916						25,983						1,668
Weighted average yield			1.03		%				0.55						0.35						1.45						1.44
Non-U.S. government securities
Amortized cost, net			$	166					1						140						25						—
Fair value			166						1						140						25						—
Weighted average yield			1.14		%				1.49						1.27						0.43						—
Securities of U.S. states and political subdivisions
Amortized cost, net			$	12,444					1,133						2,779						5,234						3,298
Fair value			12,076						1,132						2,795						4,977						3,172
Weighted average yield			1.94		%				1.77						1.73						1.88						2.28
Federal agency mortgage-backed securities
Amortized cost, net			$	59,559					—						241						1,024						58,294
Fair value			56,195						—						236						999						54,960
Weighted average yield			3.05		%				—						1.98						2.34						3.06
Non-agency mortgage-backed securities
Amortized cost, net			$	3,917					—						—						28						3,889
Fair value			3,804						—						—						28						3,776
Weighted average yield			2.64		%				—						—						3.50						2.64
Collateralized loan obligations
Amortized cost, net			$	4,513					—						9						4,101						403
Fair value			4,409						—						9						4,013						387
Weighted average yield			2.43		%				—						2.74						2.43						2.40
Other debt securities
Amortized cost, net			$	2,620					92						247						917						1,364
Fair value			2,667						90						243						914						1,420
Weighted average yield			2.57		%				2.40						2.43						2.42						2.72
Total available-for-sale debt securities
Amortized cost, net			$	131,991					3,203						20,675						39,221						68,892
Fair value			125,832						3,171						20,339						36,939						65,383
Weighted average yield			2.15		%				1.03						0.58						1.66						2.95

(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.

74			Wells Fargo & Company

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

By remaining contractual maturity ($ in millions)			Total						Within one year						After one year through five years						After five years through ten years						After ten years
June 30, 2022
Held-to-maturity debt securities (1):
Securities of U.S. Treasury and federal agencies
Amortized cost, net			$	16,198					—						12,413						—						3,785
Fair value			14,966						—						12,249						—						2,717
Weighted average yield			2.18		%				—						2.37						—						1.58
Securities of U.S. states and political subdivisions
Amortized cost, net			$	32,483					1,657						2,852						2,091						25,883
Fair value			28,699						1,656						2,815						2,061						22,167
Weighted average yield			2.14		%				2.28						1.40						2.37						2.19
Federal agency mortgage-backed securities
Amortized cost, net			$	219,972					—						—						—						219,972
Fair value			196,235						—						—						—						196,235
Weighted average yield			2.24		%				—						—						—						2.24
Non-agency mortgage-backed securities
Amortized cost, net			$	1,220					15						18						49						1,138
Fair value			1,099						14						18						47						1,020
Weighted average yield			3.02		%				3.24						2.93						3.43						3.00
Collateralized loan obligations
Amortized cost, net			$	30,183					—						—						13,070						17,113
Fair value			29,424						—						—						12,881						16,543
Weighted average yield			2.50		%				—						—						2.60						2.42
Other debt securities
Amortized cost, net			$	1,727					—						760						967						—
Fair value			1,621						—						729						892						—
Weighted average yield			4.47		%				—						4.13						4.74						—
Total held-to-maturity debt securities
Amortized cost, net			$	301,783					1,672						16,043						16,177						267,891
Fair value			272,044						1,670						15,811						15,881						238,682
Weighted average yield			2.26		%				2.29						2.28						2.70						2.24

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

			Wells Fargo & Company			75

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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 June 30, 2022, and December 31, 2021.

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 half of 2022, we reversed accrued interest receivable of $20 million for our commercial portfolio segment and $65 million for our consumer portfolio segment, compared with $24 million and $104 million, respectively, for the same period a year ago.

Table 4.1: Loans Outstanding

(in millions)			Jun 30, 2022						Dec 31, 2021
Commercial:
Commercial and industrial			$	380,235					350,436
Real estate mortgage			133,411						127,733
Real estate construction			21,743						20,092
Lease financing			14,530						14,859
Total commercial			549,919						513,120
Consumer:
Residential mortgage – first lien			252,941						242,270
Residential mortgage – junior lien			14,604						16,618
Credit card			41,222						38,453
Auto			55,658						56,659
Other consumer			29,390						28,274
Total consumer			393,815						382,274
Total loans			$	943,734					895,394

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)			Jun 30, 2022						Dec 31, 2021
Non-U.S. commercial loans:
Commercial and industrial			$	82,621					77,365
Real estate mortgage			6,442						7,070
Real estate construction			1,619						1,582
Lease financing			696						680
Total non-U.S. commercial loans			$	91,378					86,697

76			Wells Fargo & Company

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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

			2022																		2021
(in millions)			Commercial						Consumer						Total						Commercial						Consumer						Total
Quarter ended June 30,
Purchases			$	276					2						278						134						1						135
Sales			(689)						—						(689)						(65)						—						(65)
Transfers (to)/from LHFS			(62)						(14)						(76)						(359)						(99)						(458)
Six months ended
Purchases			$	376					2						378						182						2						184
Sales			(1,271)						—						(1,271)						(338)						(188)						(526)
Transfers (to)/from LHFS			(41)						(23)						(64)						(794)						(36)						(830)

Unfunded Credit Commitments

Unfunded credit commitments are legally binding agreements to lend to customers with terms covering usage of funds, contractual interest rates, expiration dates, and any required collateral. Our commercial lending commitments include, but are not limited to, (i) commitments for working capital and general corporate purposes, (ii) financing to customers who warehouse financial assets secured by real estate, consumer, or corporate loans, (iii) financing that is expected to be syndicated or replaced with other forms of long-term financing, and (iv) commercial real estate lending. We also originate multipurpose lending commitments under which commercial customers have the option to draw on the facility in one of several forms, including the issuance of letters of credit, which reduces the unfunded commitment amounts of the facility.

The maximum credit risk for these commitments will generally be lower than the contractual amount because these commitments may expire without being used or may be cancelled at the customer’s request. We may reduce or cancel lines of credit in accordance with the contracts and applicable law. Certain commitments either provide us with funding discretion or are subject to loan agreements with covenants regarding the financial performance of the customer or borrowing base formulas that must be met before we are required to fund the commitment. Our credit risk monitoring activities include managing the amount of commitments, both to individual customers and in total, and the size and maturity structure of these commitments. We do not recognize an ACL for commitments that are unconditionally cancellable at our discretion.

We issue commercial letters of credit to assist customers in purchasing goods or services, typically for international trade. At June 30, 2022, and December 31, 2021, we had $2.2 billion and $1.5 billion, respectively, of outstanding issued commercial letters of credit. See Note 11 (Guarantees and Other Commitments) for additional information on issued standby letters of credit.

We may be a fronting bank, whereby we act as a representative for other lenders, and advance funds or provide for the issuance of letters of credit under syndicated loan or letter of credit agreements. Any advances are generally repaid in less than a week and would normally require default of both the customer and another lender to expose us to loss. The unfunded amount of these fronting arrangements totaled approximately $87.6 billion at June 30, 2022.

The contractual amount of our unfunded credit commitments, including unissued letters of credit, is summarized in Table 4.4. The table excludes issued letters of credit and is presented net of commitments syndicated to others, including the fronting arrangements described above.

Table 4.4: Unfunded Credit Commitments

(in millions)			Jun 30, 2022						Dec 31, 2021
Commercial:
Commercial and industrial (1)			$	399,216					388,162
Real estate mortgage			9,350						11,515
Real estate construction			21,178						19,943
Total commercial			429,744						419,620
Consumer:
Residential mortgage – first lien			24,929						32,992
Residential mortgage – junior lien			24,142						27,447
Credit card			137,789						130,743
Other consumer (1)			67,339						75,919
Total consumer			254,199						267,101
Total unfunded credit commitments			$	683,943					686,721

(1)In second quarter 2022, we reclassified commitments for securities-based loans from commercial and industrial loan commitments to other consumer loan commitments to align all securities-based loan commitments originated by the Wealth and Investment Management operating segment. Prior period balances have been revised to conform with the current period presentation.

			Wells Fargo & Company			77

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

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 $904 million from December 31, 2021, reflecting reduced

uncertainty around the economic impact of the COVID-19 pandemic on our loan portfolio. This decrease was partially offset by increased uncertainty related to the risks of high inflation, as well as loan growth.

Table 4.5: Allowance for Credit Losses for Loans

			Quarter ended June 30,												Six months ended June 30,
($ in millions)			2022						2021						2022						2021
Balance, beginning of period			$	12,681					18,043						$	13,788					19,713
Provision for credit losses			578						(1,239)						(197)						(2,356)
Interest income on certain loans (1)			(27)						(36)						(56)						(77)
Loan charge-offs:
Commercial:
Commercial and industrial			(68)						(149)						(124)						(308)
Real estate mortgage			(3)						(11)						(3)						(63)
Real estate construction			—						—						—						—
Lease financing			(5)						(10)						(9)						(31)
Total commercial			(76)						(170)						(136)						(402)
Consumer:
Residential mortgage – first lien			(26)						(6)						(51)						(23)
Residential mortgage – junior lien			(20)						(12)						(42)						(31)
Credit card			(287)						(357)						(554)						(692)
Auto			(151)						(128)						(316)						(257)
Other consumer			(94)						(79)						(202)						(226)
Total consumer			(578)						(582)						(1,165)						(1,229)
Total loan charge-offs			(654)						(752)						(1,301)						(1,631)
Loan recoveries:
Commercial:
Commercial and industrial			41						68						120						139
Real estate mortgage			7						16						12						22
Real estate construction			—						1						—						1
Lease financing			5						5						10						11
Total commercial			53						90						142						173
Consumer:
Residential mortgage – first lien			29						25						57						66
Residential mortgage – junior lien			33						43						73						81
Credit card			88						101						179						200
Auto			83						83						152						160
Other consumer			24						29						49						57
Total consumer			257						281						510						564
Total loan recoveries			310						371						652						737
Net loan charge-offs			(344)						(381)						(649)						(894)
Other			(4)						4						(2)						5
Balance, end of period			$	12,884					16,391						$	12,884					16,391
Components:
Allowance for loan losses			$	11,786					15,148						$	11,786					15,148
Allowance for unfunded credit commitments			1,098						1,243						1,098						1,243
Allowance for credit losses			$	12,884					16,391						$	12,884					16,391
Net loan charge-offs as a percentage of average total loans			0.15		%				0.18						0.14						0.21
Allowance for loan losses as a percentage of total loans			1.25						1.78						1.25						1.78
Allowance for credit losses for loans as a percentage of total loans			1.37						1.92						1.37						1.92

(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.

78			Wells Fargo & Company

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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

			2022																		2021
(in millions)			Commercial						Consumer						Total						Commercial						Consumer						Total
Quarter ended June 30,
Balance, beginning of period			$	7,148					5,533						12,681						10,682						7,361						18,043
Provision for credit losses			(32)						610						578						(1,021)						(218)						(1,239)
Interest income on certain loans (1)			(7)						(20)						(27)						(15)						(21)						(36)
Loan charge-offs			(76)						(578)						(654)						(170)						(582)						(752)
Loan recoveries			53						257						310						90						281						371
Net loan charge-offs			(23)						(321)						(344)						(80)						(301)						(381)
Other			(4)						—						(4)						4						—						4
Balance, end of period			$	7,082					5,802						12,884						9,570						6,821						16,391
Six months ended June 30,
Balance, beginning of period			$	7,791					5,997						13,788						11,516						8,197						19,713
Provision for credit losses			(697)						500						(197)						(1,688)						(668)						(2,356)
Interest income on certain loans (1)			(16)						(40)						(56)						(34)						(43)						(77)
Loan charge-offs			(136)						(1,165)						(1,301)						(402)						(1,229)						(1,631)
Loan recoveries			142						510						652						173						564						737
Net loan charge-offs			6						(655)						(649)						(229)						(665)						(894)
Other			(2)						—						(2)						5						—						5
Balance, end of period			$	7,082					5,802						12,884						9,570						6,821						16,391

(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.

Credit Quality

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

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

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

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

debt restructuring (TDR). At June 30, 2022, we had $526.5 billion and $23.4 billion of pass and criticized commercial loans, respectively.

			Wells Fargo & Company			79

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

Table 4.7: Commercial Loan Categories by Risk Categories and Vintage

			Term loans by origination year																																				Revolving loans						Revolving loans converted to term loans						Total
(in millions)			2022						2021						2020						2019						2018						Prior
June 30, 2022
Commercial and industrial
Pass			$	38,557					37,325						11,983						16,317						5,329						7,622						252,271						777						370,181
Criticized			548						1,464						737						729						793						749						5,034						—						10,054
Total commercial and industrial			39,105						38,789						12,720						17,046						6,122						8,371						257,305						777						380,235
Real estate mortgage
Pass			21,684						34,936						14,144						15,869						11,230						19,604						5,355						12						122,834
Criticized			886						2,151						1,011						2,673						1,379						2,224						253						—						10,577
Total real estate mortgage			22,570						37,087						15,155						18,542						12,609						21,828						5,608						12						133,411
Real estate construction
Pass			2,445						6,553						3,859						3,919						1,464						550						1,218						—						20,008
Criticized			285						545						174						467						197						67						—						—						1,735
Total real estate construction			2,730						7,098						4,033						4,386						1,661						617						1,218						—						21,743
Lease financing
Pass			1,941						3,897						2,536						1,938						1,052						2,144						—						—						13,508
Criticized			157						259						191						204						127						84						—						—						1,022
Total lease financing			2,098						4,156						2,727						2,142						1,179						2,228						—						—						14,530
Total commercial loans			$	66,503					87,130						34,635						42,116						21,571						33,044						264,131						789						549,919
			Term loans by origination year																																				Revolving loans						Revolving loans converted to term loans						Total
			2021						2020						2019						2018						2017						Prior
December 31, 2021
Commercial and industrial
Pass			$	65,562					15,193						20,553						7,400						3,797						13,985						211,452						679						338,621
Criticized			1,657						884						1,237						1,256						685						551						5,528						17						11,815
Total commercial and industrial			67,219						16,077						21,790						8,656						4,482						14,536						216,980						696						350,436
Real estate mortgage
Pass			38,196						15,929						19,013						12,618						7,451						16,026						5,411						3						114,647
Criticized			3,462						1,119						2,975						1,834						875						2,421						400						—						13,086
Total real estate mortgage			41,658						17,048						21,988						14,452						8,326						18,447						5,811						3						127,733
Real estate construction
Pass			5,895						4,058						4,549						2,167						379						329						1,042						2						18,421
Criticized			510						266						586						234						68						7						—						—						1,671
Total real estate construction			6,405						4,324						5,135						2,401						447						336						1,042						2						20,092
Lease financing
Pass			4,100						3,012						2,547						1,373						838						1,805						—						—						13,675
Criticized			284						246						282						184						86						102						—						—						1,184
Total lease financing			4,384						3,258						2,829						1,557						924						1,907						—						—						14,859
Total commercial loans			$	119,666					40,707						51,742						27,066						14,179						35,226						223,833						701						513,120

80			Wells Fargo & Company

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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.

Table 4.8: Commercial Loan Categories by Delinquency Status

(in millions)			Commercial and industrial						Real estate mortgage						Real estate construction						Lease financing						Total
June 30, 2022
By delinquency status:
Current-29 days past due (DPD) and still accruing			$	376,176					132,008						21,510						14,288						543,982
30-89 DPD and still accruing			2,842						421						230						146						3,639
90+ DPD and still accruing			495						84						—						—						579
Nonaccrual loans			722						898						3						96						1,719
Total commercial loans			$	380,235					133,411						21,743						14,530						549,919
December 31, 2021
By delinquency status:
Current-29 DPD and still accruing			$	348,033					126,184						19,900						14,568						508,685
30-89 DPD and still accruing			1,217						285						179						143						1,824
90+ DPD and still accruing			206						29						—						—						235
Nonaccrual loans			980						1,235						13						148						2,376
Total commercial loans			$	350,436					127,733						20,092						14,859						513,120

CONSUMER CREDIT QUALITY INDICATORS  We have various classes of consumer loans that present unique credit risks. Loan delinquency, FICO credit scores and loan-to-value (LTV) for residential mortgage loans are the primary credit quality indicators that we monitor and utilize in our evaluation of the appropriateness of the ACL for the consumer loan portfolio segment.

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

Table 4.9 provides the outstanding balances of our consumer loan portfolio by delinquency status. Credit quality information is provided with the year of origination for term loans. Revolving loans may convert to term loans as a result of a contractual provision in the original loan agreement or if modified 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.

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

			Wells Fargo & Company			81

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

Table 4.9: Consumer Loan Categories by Delinquency Status and Vintage

			Term loans by origination year																																				Revolving loans						Revolving loans converted to term loans
(in millions)			2022						2021						2020						2019						2018						Prior																		Total
June 30, 2022
Residential mortgage – first lien
By delinquency status:
Current-29 DPD			$	36,321					67,320						38,481						21,788						6,533						65,767						4,231						1,919						242,360
30-59 DPD			116						42						27						25						8						459						14						34						725
60-89 DPD			1						6						6						7						2						140						5						16						183
90-119 DPD			2						1						3						2						1						51						3						8						71
120-179 DPD			—						7						4						1						4						79						3						16						114
180+ DPD			—						3						25						21						26						576						25						134						810
Government insured/guaranteed loans (1)			1						41						128						146						220						8,142						—						—						8,678
Total residential mortgage – first lien			36,441						67,420						38,674						21,990						6,794						75,214						4,281						2,127						252,941
Residential mortgage – junior lien
By delinquency status:
Current-29 DPD			12						31						18						25						22						591						8,856						4,706						14,261
30-59 DPD			—						—						—						—						—						9						19						50						78
60-89 DPD			—						—						—						—						—						4						8						22						34
90-119 DPD			—						—						—						—						—						3						3						11						17
120-179 DPD			—						—						—						—						—						4						5						16						25
180+ DPD			—						—						—						—						—						23						35						131						189
Total residential mortgage – junior lien			12						31						18						25						22						634						8,926						4,936						14,604
Credit cards
By delinquency status:
Current-29 DPD			—						—						—						—						—						—						40,397						201						40,598
30-59 DPD			—						—						—						—						—						—						186						10						196
60-89 DPD			—						—						—						—						—						—						126						8						134
90-119 DPD			—						—						—						—						—						—						97						6						103
120-179 DPD			—						—						—						—						—						—						188						3						191
180+ DPD			—						—						—						—						—						—						—						—						—
Total credit cards			—						—						—						—						—						—						40,994						228						41,222
Auto
By delinquency status:
Current-29 DPD			11,764						23,554						9,625						6,283						2,225						1,024						—						—						54,475
30-59 DPD			54						340						182						130						59						56						—						—						821
60-89 DPD			15						118						56						42						18						19						—						—						268
90-119 DPD			5						45						20						12						5						6						—						—						93
120-179 DPD			—						1						—						—						—						—						—						—						1
180+ DPD			—						—						—						—						—						—						—						—						—
Total auto			11,838						24,058						9,883						6,467						2,307						1,105						—						—						55,658
Other consumer
By delinquency status:
Current-29 DPD			2,019						1,606						484						439						116						116						24,407						131						29,318
30-59 DPD			2						6						1						2						1						2						7						6						27
60-89 DPD			1						3						1						1						1						1						5						4						17
90-119 DPD			—						3						1						1						—						—						4						2						11
120-179 DPD			—						—						—						1						—						—						6						1						8
180+ DPD			—						—						—						—						—						1						1						7						9
Total other consumer			2,022						1,618						487						444						118						120						24,430						151						29,390
Total consumer loans			$	50,313					93,127						49,062						28,926						9,241						77,073						78,631						7,442						393,815

(continued on following page)

82			Wells Fargo & Company

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(continued from previous page)

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

(1)Represents loans whose repayments are predominantly insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). Loans insured/guaranteed by the FHA/VA and 90+ DPD totaled $3.0 billion and $5.7 billion at June 30, 2022, and December 31, 2021, respectively.

Of the $1.6 billion of consumer loans not government insured/guaranteed that are 90 days or more past due at June 30, 2022, $412 million was accruing, compared with

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

			Wells Fargo & Company			83

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

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

securities-based loans originated by our retail brokerage business.

Table 4.10 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 or above.

Table 4.10: Consumer Loan Categories by FICO and Vintage

			Term loans by origination year																																				Revolving loans						Revolving loans converted to term loans
(in millions)			2022						2021						2020						2019						2018						Prior																		Total
June 30, 2022
By FICO:
Residential mortgage – first lien
800+			$	16,288					41,130						26,393						14,748						4,378						40,390						2,092						591						146,010
760-799			13,513						17,649						8,218						4,503						1,211						11,332						864						319						57,609
720-759			4,643						6,057						2,722						1,726						562						6,408						543						268						22,929
680-719			1,447						1,780						796						546						247						3,585						316						212						8,929
640-679			394						455						207						178						80						1,743						164						148						3,369
600-639			73						113						55						41						28						911						71						80						1,372
< 600			16						25						20						17						19						937						86						126						1,246
No FICO available			66						170						135						85						49						1,766						145						383						2,799
Government insured/guaranteed loans (1)			1						41						128						146						220						8,142						—						—						8,678
Total residential mortgage – first lien			36,441						67,420						38,674						21,990						6,794						75,214						4,281						2,127						252,941
Residential mortgage – junior lien
800+			—						—						—						—						—						152						4,562						1,646						6,360
760-799			—						—						—						—						—						94						1,808						839						2,741
720-759			—						—						—						—						—						109						1,158						784						2,051
680-719			—						—						—						—						—						90						667						628						1,385
640-679			—						—						—						—						—						49						260						330						639
600-639			—						—						—						—						—						30						123						186						339
< 600			—						—						—						—						—						36						121						208						365
No FICO available			12						31						18						25						22						74						227						315						724
Total residential mortgage – junior lien			12						31						18						25						22						634						8,926						4,936						14,604
Credit card
800+			—						—						—						—						—						—						4,726						1						4,727
760-799			—						—						—						—						—						—						6,527						8						6,535
720-759			—						—						—						—						—						—						8,940						27						8,967
680-719			—						—						—						—						—						—						9,635						48						9,683
640-679			—						—						—						—						—						—						6,279						47						6,326
600-639			—						—						—						—						—						—						2,472						33						2,505
< 600			—						—						—						—						—						—						2,216						63						2,279
No FICO available			—						—						—						—						—						—						199						1						200
Total credit card			—						—						—						—						—						—						40,994						228						41,222
Auto
800+			2,083						3,824						1,656						1,290						484						203						—						—						9,540
760-799			2,168						4,115						1,652						1,154						393						149						—						—						9,631
720-759			2,054						3,833						1,628						1,103						388						162						—						—						9,168
680-719			1,992						3,878						1,702						1,028						347						153						—						—						9,100
640-679			1,732						3,456						1,313						720						243						124						—						—						7,588
600-639			1,088						2,301						802						443						163						100						—						—						4,897
< 600			721						2,606						1,116						709						276						203						—						—						5,631
No FICO available			—						45						14						20						13						11						—						—						103
Total auto			11,838						24,058						9,883						6,467						2,307						1,105						—						—						55,658
Other consumer
800+			413						314						110						81						19						40						1,070						19						2,066
760-799			460						332						91						69						17						18						664						17						1,668
720-759			408						315						104						71						21						18						594						26						1,557
680-719			314						268						63						62						20						15						576						18						1,336
640-679			153						153						32						35						12						8						298						20						711
600-639			38						47						10						13						5						4						113						10						240
< 600			13						36						11						16						7						6						99						12						200
No FICO available			223						153						66						97						17						11						1,074						29						1,670
FICO not required			—						—						—						—						—						—						19,942						—						19,942
Total other consumer			2,022						1,618						487						444						118						120						24,430						151						29,390
Total consumer loans			$	50,313					93,127						49,062						28,926						9,241						77,073						78,631						7,442						393,815

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

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

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

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

			Wells Fargo & Company			85

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

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

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

Table 4.11: Consumer Loan Categories by LTV/CLTV and Vintage

			Term loans by origination year																																				Revolving loans						Revolving loans converted to term loans
(in millions)			2022						2021						2020						2019						2018						Prior																		Total
June 30, 2022
Residential mortgage – first lien
By LTV:
0-60%			$	11,784					34,740						29,463						17,236						5,325						62,930						3,859						1,959						167,296
60.01-80%			23,853						31,942						8,858						4,411						1,165						3,773						322						129						74,453
80.01-100%			765						555						124						127						51						125						50						24						1,821
100.01-120% (1)			—						16						13						5						2						18						7						2						63
> 120% (1)			—						10						4						6						—						16						6						2						44
No LTV available			38						116						84						59						31						210						37						11						586
Government insured/guaranteed loans (2)			1						41						128						146						220						8,142						—						—						8,678
Total residential mortgage – first lien			36,441						67,420						38,674						21,990						6,794						75,214						4,281						2,127						252,941
Residential mortgage – junior lien
By CLTV:
0-60%			—						—						—						—						—						458						7,514						4,122						12,094
60.01-80%			—						—						—						—						—						98						1,173						649						1,920
80.01-100%			—						—						—						—						—						23						187						116						326
100.01-120% (1)			—						—						—						—						—						4						26						16						46
> 120% (1)			—						—						—						—						—						1						9						7						17
No CLTV available			12						31						18						25						22						50						17						26						201
Total residential mortgage – junior lien			12						31						18						25						22						634						8,926						4,936						14,604
Total			$	36,453					67,451						38,692						22,015						6,816						75,848						13,207						7,063						267,545
			Term loans by origination year																																				Revolving loans						Revolving loans converted to term loans
			2021						2020						2019						2018						2017						Prior																		Total
December 31, 2021
Residential mortgage – first lien
By LTV:
0-60%			$	26,618					22,882						16,063						5,310						11,030						57,880						4,348						1,644						145,775
60.01-80%			42,893						18,188						8,356						2,234						2,647						5,017						674						188						80,197
80.01-100%			486						437						474						147						134						339						157						42						2,216
100.01-120% (1)			10						31						24						11						7						48						33						8						172
> 120% (1)			5						10						10						4						3						35						14						3						84
No LTV available			122						92						67						40						38						211						87						11						668
Government insured/guaranteed loans (2)			14						134						209						349						364						12,088						—						—						13,158
Total residential mortgage – first lien			70,148						41,774						25,203						8,095						14,223						75,618						5,313						1,896						242,270
Residential mortgage – junior lien
By CLTV:
0-60%			—						—						—						—						—						475						7,949						3,588						12,012
60.01-80%			—						—						—						—						—						172						2,329						823						3,324
80.01-100%			—						—						—						—						—						55						554						241						850
100.01-120% (1)			—						—						—						—						—						13						104						42						159
> 120% (1)			—						—						—						—						—						3						35						13						51
No CLTV available			28						20						31						27						22						44						21						29						222
Total residential mortgage – junior lien			28						20						31						27						22						762						10,992						4,736						16,618
Total			$	70,176					41,794						25,234						8,122						14,245						76,380						16,305						6,632						258,888

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

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

86			Wells Fargo & Company

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NONACCRUAL LOANS Table 4.12 provides loans on nonaccrual status. Nonaccrual loans may have an ACL or a negative allowance for credit losses from expected recoveries of amounts previously written off. Customer payment deferral activities in

the residential mortgage portfolio instituted in response to the COVID-19 pandemic could continue to delay the recognition of nonaccrual loans for those residential mortgage customers who would have otherwise moved into nonaccrual status.

Table 4.12: Nonaccrual Loans

			Amortized cost																								Recognized interest income
			Nonaccrual loans												Nonaccrual loans without related allowance for credit losses (1)												Six months ended June 30,
(in millions)			Jun 30, 2022						Dec 31, 2021						Jun 30, 2022						Dec 31, 2021						2022						2021
Commercial:
Commercial and industrial			$	722					980						212						190						41						45
Real estate mortgage			898						1,235						39						66						28						33
Real estate construction			3						13						1						5						—						1
Lease financing			96						148						—						9						—						—
Total commercial			1,719						2,376						252						270						69						79
Consumer:
Residential mortgage- first lien			3,322						3,803						2,380						2,722						83						56
Residential mortgage- junior lien			729						801						509						497						28						25
Auto			188						198						—						—						14						17
Other consumer			35						34						—						—						2						1
Total consumer			4,274						4,836						2,889						3,219						127						99
Total nonaccrual loans			$	5,993					7,212						3,141						3,489						196						178

(1)Nonaccrual loans may not have an allowance for credit losses if the loss expectations are zero given solid collateral value.

LOANS IN PROCESS OF FORECLOSURE Our recorded investment in consumer mortgage loans collateralized by residential real estate property that are in process of foreclosure was $946 million and $694 million at June 30, 2022, and December 31, 2021, respectively, which included $781 million and $583 million, respectively, of loans that are government insured/guaranteed. Under the Consumer Financial Protection Bureau guidelines, we do not commence the foreclosure process on residential mortgage loans until after the loan is 120 days delinquent. Foreclosure procedures and timelines vary depending on whether the property address resides in a judicial or non-judicial state. Judicial states require the foreclosure to be processed through the state’s courts while non-judicial states are processed without court intervention. Foreclosure timelines vary according to state law.

			Wells Fargo & Company			87

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

LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING  Certain loans 90 days or more past due are still accruing, because they are (1) well-secured and in the process of collection or (2) residential mortgage or consumer loans exempt under regulatory rules from being classified as nonaccrual until later delinquency, usually 120 days past due.

Table 4.13 shows loans 90 days or more past due and still accruing by class for loans not government insured/guaranteed.

Table 4.13: Loans 90 Days or More Past Due and Still Accruing

($ in millions)			Jun 30, 2022						Dec 31, 2021
Total:			$	3,653					5,358
Less: FHA insured/VA guaranteed (1)			2,662						4,699
Total, not government insured/guaranteed			$	991					659
By segment and class, not government insured/guaranteed:
Commercial:
Commercial and industrial			$	495					206
Real estate mortgage			84						29
Real estate construction			—						—
Total commercial			579						235
Consumer:
Residential mortgage – first lien			17						37
Residential mortgage – junior lien			5						12
Credit card			294						269
Auto			79						88
Other consumer			17						18
Total consumer			412						424
Total, not government insured/guaranteed			$	991					659

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

TROUBLED DEBT RESTRUCTURINGS (TDRs)  When, for economic or legal reasons related to a borrower’s financial difficulties, we grant a concession for other than an insignificant period of time to a borrower that we would not otherwise consider, the related loan is classified as a TDR, the balance of which totaled $9.4 billion and $10.2 billion at June 30, 2022 and December 31, 2021, respectively. We do not consider loan resolutions such as foreclosure or short sale to be a TDR. In addition, COVID-related modifications are generally not classified as TDRs due to the relief under the CARES Act and the Interagency Statement. For additional information on the TDR relief, see Note 1 (Summary of Significant Accounting Policies) in our 2021 Form 10-K.

We may require some consumer borrowers experiencing financial difficulty to make trial payments generally for a period of three to four months, according to the terms of a planned permanent modification, to determine if they can perform according to those terms. These arrangements represent trial modifications, which we classify and account for as TDRs. While loans are in trial payment programs, their original terms are not considered modified and they continue to advance through delinquency status and accrue interest according to their original terms.

Commitments to lend additional funds on loans whose terms have been modified in a TDR amounted to $411 million and $431 million at June 30, 2022, and December 31, 2021, respectively.

Table 4.14 summarizes our TDR modifications for the periods presented by primary modification type and includes the financial effects of these modifications. For those loans that modify more than once, the table reflects each modification that occurred during the period. Loans that both modify and are paid off or written-off within the period, as well as changes in recorded investment during the period for loans modified in prior periods, are not included in the table.

88			Wells Fargo & Company

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Table 4.14: TDR Modifications

			Primary modification type (1)																								Financial effects of modifications
($ in millions)			Principal forgiveness						Interest rate reduction						Other concessions (2)						Total						Charge- offs (3)						Weighted average interest rate reduction						Recorded investment related to interest rate reduction (4)
Quarter ended June 30, 2022
Commercial:
Commercial and industrial			$	—					8						75						83						—						7.09		%				$	8
Real estate mortgage			—						5						37						42						—						0.62						5
Real estate construction			—						—						1						1						—						—						—
Lease financing			—						—						1						1						—						—						—
Total commercial			—						13						114						127						—						4.38						13
Consumer:
Residential mortgage – first lien			—						106						323						429						1						1.36						106
Residential mortgage – junior lien			—						21						27						48						1						2.41						21
Credit card			—						63						—						63						—						19.23						63
Auto			—						1						8						9						2						4.02						1
Other consumer			—						4						—						4						—						11.01						4
Trial modifications (5)			—						—						41						41						—						—						—
Total consumer			—						195						399						594						4						7.47						195
Total			$	—					208						513						721						4						7.28		%				$	208
Quarter ended June 30, 2021
Commercial:
Commercial and industrial			$	—					1						330						331						14						1.22		%				$	1
Real estate mortgage			41						5						86						132						—						1.15						5
Real estate construction			—						—						2						2						—						—						—
Lease financing			—						—						1						1						—						—						—
Total commercial			41						6						419						466						14						1.17						6
Consumer:
Residential mortgage – first lien			—						8						353						361						1						1.26						8
Residential mortgage – junior lien			—						2						9						11						—						2.51						2
Credit card			—						24						—						24						—						19.02						24
Auto			1						1						72						74						30						3.93						1
Other consumer			—						4						—						4						—						12.02						4
Trial modifications (5)			—						—						2						2						—						—						—
Total consumer			1						39						436						476						31						13.24						39
Total			$	42					45						855						942						45						11.68		%				$	45

(continued on following page)

			Wells Fargo & Company			89

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

(continued from previous page)

			Primary modification type (1)																								Financial effects of modifications
($ in millions)			Principal forgiveness						Interest rate reduction						Other concessions (2)						Total						Charge- offs (3)						Weighted average interest rate reduction						Recorded investment related to interest rate reduction (4)
Six months ended June 30, 2022
Commercial:
Commercial and industrial			$	—					14						148						162						—						8.37		%				$	14
Real estate mortgage			—						10						64						74						—						0.99						10
Real estate construction			—						—						1						1						—						—						—
Lease financing			—						—						1						1						—						—						—
Total commercial			—						24						214						238						—						5.27						24
Consumer:
Residential mortgage – first lien			1						166						638						805						2						1.44						166
Residential mortgage – junior lien			—						29						48						77						1						2.39						29
Credit card			—						133						—						133						—						19.17						133
Auto			1						4						48						53						11						4.64						4
Other consumer			—						7						1						8						—						11.31						7
Trial modifications (5)			—						—						252						252						—						—						—
Total consumer			2						339						987						1,328						14						8.73						339
Total			$	2					363						1,201						1,566						14						8.50		%				$	363
Six months ended June 30, 2021
Commercial:
Commercial and industrial			$	—					2						560						562						20						1.10		%				$	2
Real estate mortgage			41						9						186						236						—						1.04						9
Real estate construction			—						—						3						3						—						—						—
Lease financing			—						—						4						4						—						—						—
Total commercial			41						11						753						805						20						1.05						11
Consumer:
Residential mortgage – first lien			—						15						885						900						1						1.53						15
Residential mortgage – junior lien			—						7						22						29						1						2.44						7
Credit card			—						56						—						56						—						18.93						56
Auto			1						2						86						89						37						3.90						2
Other consumer			—						11						1						12						—						12.14						11
Trial modifications (5)			—						—						2						2						—						—						—
Total consumer			1						91						996						1,088						39						13.67						91
Total			$	42					102						1,749						1,893						59						12.31		%				$	102

(1)Amounts represent the recorded investment in loans after recognizing the effects of the TDR, if any. TDRs may have multiple types of concessions, but are presented only once in the first modification type based on the order presented in the table above. The reported amounts include loans remodified of $132 million and $202 million for the quarters ended June 30, 2022 and 2021, respectively, and $250 million and $458 million for the first half of 2022 and 2021, respectively.

(2)Other concessions include loans with payment (principal and/or interest) deferral, loans discharged in bankruptcy, loan renewals, term extensions and other interest and noninterest adjustments, but exclude modifications that also forgive principal and/or reduce the contractual interest rate. The reported amounts include loans that are new TDRs that may have COVID-related payment deferrals and exclude COVID-related payment deferrals on loans previously reported as TDRs given limited current financial effects other than payment deferral.

(3)Charge-offs include write-downs of the investment in the loan in the period it is contractually modified. The amount of charge-off will differ from the modification terms if the loan has been charged down prior to the modification based on our policies. In addition, there may be cases where we have a charge-off/down with no legal principal modification.

(4)Recorded investment related to interest rate reduction reflects the effect of reduced interest rates on loans with an interest rate concession as one of their concession types, which includes loans reported as a principal primary modification type that also have an interest rate concession.

(5)Trial modifications are granted a delay in payments due under the original terms during the trial payment period. However, these loans continue to advance through delinquency status and accrue interest according to their original terms. Any subsequent permanent modification generally includes interest rate related concessions; however, the exact concession type and resulting financial effect are usually not known until the loan is permanently modified. Trial modifications for the period are presented net of previously reported trial modifications that became permanent in the current period.

90			Wells Fargo & Company

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Table 4.15 summarizes permanent modification TDRs that have defaulted in the current period within 12 months of their permanent modification date. We are reporting these defaulted

TDRs based on a payment default definition of 90 days past due for the commercial portfolio segment and 60 days past due for the consumer portfolio segment.

Table 4.15: Defaulted TDRs

			Recorded investment of defaults
			Quarter ended June 30,												Six months ended June 30,
(in millions)			2022						2021						2022						2021
Commercial:
Commercial and industrial			$	3					84						$	52					125
Real estate mortgage			8						9						10						25
Real estate construction			—						—						—						—
Lease financing			—						—						—						—
Total commercial			11						93						62						150
Consumer:
Residential mortgage – first lien			49						2						56						5
Residential mortgage – junior lien			2						—						2						1
Credit card			8						6						13						16
Auto			7						12						13						23
Other consumer			1						—						1						1
Total consumer			67						20						85						46
Total			$	78					113						$	147					196

			Wells Fargo & Company			91

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Note 5:  Leasing Activity

The information below provides a summary of our leasing activities as a lessor and lessee. See Note 5 (Leasing Activity) in our 2021 Form 10-K for additional information about our leasing activities.

As a Lessor

Noninterest income on leases, included in Table 5.1, is included in other noninterest income on our consolidated statement of income. Lease expense, included in other noninterest expense on our consolidated statement of income, was $185 million and $226 million for the quarters ended June 30, 2022 and 2021, respectively, and $373 million and $452 million for the first half of 2022 and 2021, respectively.

Table 5.1: Leasing Revenue

			Quarter ended June 30,												Six months ended June 30,
(in millions)			2022						2021						2022						2021
Interest income on lease financing			$	152					172						$	304					353
Other lease revenue:
Variable revenue on lease financing			27						25						57						51
Fixed revenue on operating leases			242						254						487						514
Variable revenue on operating leases			14						18						29						36
Other lease-related revenue (1)			50						16						87						27
Noninterest income on leases			333						313						660						628
Total leasing revenue			$	485					485						$	964					981

(1)Predominantly includes net gains (losses) on disposition of assets leased under operating leases or lease financings.

As a Lessee

Substantially all of our leases are operating leases. Table 5.2 presents balances for our operating leases.

Table 5.2: Operating Lease Right-of-Use (ROU) Assets and Lease Liabilities

(in millions)			Jun 30, 2022			Dec 31, 2021
ROU assets			$	3,835		3,805
Lease liabilities			4,458			4,476

Table 5.3 provides the composition of our lease costs, which are predominantly included in net occupancy expense.

Table 5.3: Lease Costs

			Quarter ended June 30,												Six months ended June 30,
(in millions)			2022						2021						2022						2021
Fixed lease expense – operating leases			$	253					265						$	506					530
Variable lease expense			70						69						143						147
Other (1)			(8)						(28)						(18)						(31)
Total lease costs			$	315					306						$	631					646

(1)Predominantly includes gains recognized from sale leaseback transactions and sublease rental income.

92			Wells Fargo & Company

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Note 6:  Equity Securities

Table 6.1 provides a summary of our equity securities by business purpose and accounting method.

Table 6.1: Equity Securities

(in millions)			Jun 30, 2022						Dec 31, 2021
Held for trading at fair value:
Marketable equity securities (1)			$	16,640					27,476
Nonmarketable equity securities (2)(3)			9,290						—
Total equity securities held for trading			25,930						27,476
Not held for trading:
Fair value:
Marketable equity securities			1,625						2,578
Nonmarketable equity securities (2)			98						9,044
Total equity securities not held for trading at fair value			1,723						11,622
Equity method:
Private equity			2,918						3,077
Tax-advantaged renewable energy			4,949						4,740
New market tax credit