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WELLS FARGO & COMPANY/MN - Quarter Report: 2022 June (Form 10-Q)



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended 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)
DelawareNo.41-0449260
(State of incorporation)(I.R.S. Employer Identification No.)

420 Montgomery Street, San Francisco, California 94104
(Address of principal executive offices) (Zip code)
Registrant’s telephone number, including area code: 1-866-249-3302
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange
on Which Registered
Common Stock, par value $1-2/3
WFC
New York Stock
Exchange
(NYSE)
7.5% Non-Cumulative Perpetual Convertible Class A Preferred Stock, Series L
WFC.PRL
NYSE
Depositary Shares, each representing a 1/1000th interest in a share of 5.85% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series Q
WFC.PRQ
NYSE
Depositary Shares, each representing a 1/1000th interest in a share of 6.625% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series R
WFC.PRR
NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series Y
WFC.PRY
NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series Z
WFC.PRZ
NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series AA
WFC.PRA
NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series CC
WFC.PRC
NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series DD
WFC.PRD
NYSE
Guarantee of Medium-Term Notes, Series A, due October 30, 2028 of Wells Fargo Finance LLC
WFC/28A
NYSE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                     Yes þ   No ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                                Yes þ   No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
             Large accelerated filer   þ                    Accelerated filer  ¨
            Non-accelerated filer  ¨                     Smaller reporting company 
                                        Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.             ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes   No þ
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
Shares Outstanding
July 21, 2022
Common stock, $1-2/3 par value
3,793,049,509



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



FINANCIAL REVIEW
Summary Financial Data
Quarter endedJun 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 expense12,883 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 losses580 (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 stock2,839 3,393 5,743 (16)(51)6,232 9,999 (38)
Common Share Data
Diluted earnings per common share0.74 0.88 1.38 (16)(46)1.62 2.40 (33)
Dividends declared per common share0.25 0.25 0.10 — 150 0.50 0.20 150 
Common shares outstanding3,793.0 3,789.9 4,108.0 — (8)
Average common shares outstanding3,793.8 3,831.1 4,124.6 (1)(8)3,812.3 4,132.9 (8)
Diluted average common shares outstanding3,819.6 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 equity179,793 181,689 193,127 (1)(7)
Common stockholders’ equity158,256 159,968 171,453 (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 basis2.39 2.16 2.02 2.27 2.04 
Selected Balance Sheet Data (average)
Loans$926,567 898,005 854,747 $912,365 864,041 
Assets1,902,571 1,919,392 1,939,879 (1)(2)1,910,935 1,937,167 (1)
Deposits1,445,793 1,464,072 1,435,824 (1)1,454,882 1,414,765 
Selected Balance Sheet Data (period-end)
Debt securities516,772 535,916 533,565 (4)(3)
Loans943,734 911,807 852,300 11 
Allowance for credit losses for loans12,884 12,681 16,391 (21)
Equity securities61,774 70,755 64,547 (13)(4)
Assets1,881,142 1,939,709 1,945,996 (3)(3)
Deposits1,425,153 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 capital11.89 11.96 13.71 
Total capital14.65 14.72 16.84 
Risk-weighted assets (RWAs) (in billions)$1,253.6 1,265.5 1,188.7 (1)
Advanced Approach:
Common equity tier 1 (CET1)11.60 %11.82 12.73 
Tier 1 capital13.30 13.52 14.47 
Total capital15.58 15.87 16.88 
Risk-weighted assets (RWAs) (in billions)$1,121.6 1,119.5 1,126.5 — — 
Tier 1 leverage ratio7.96 %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


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


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


Financial Performance
Consolidated Financial Highlights
Quarter ended Jun 30,Six months ended Jun 30,
($ in millions)20222021$ Change% Change20222021$ Change% Change
Selected income statement data
Net interest income$10,198 8,800 1,398 16 %$19,419 17,608 1,811 10 %
Noninterest income6,830 11,470 (4,640)(40)15,201 21,194 (5,993)(28)
Total revenue17,028 20,270 (3,242)(16)34,620 38,802 (4,182)(11)
Net charge-offs345 379 (34)(9)650 902 (252)(28)
Change in the allowance for credit losses235 (1,639)1,874 114 (857)(3,210)2,353 73 
Provision for credit losses580 (1,260)1,840 146 (207)(2,308)2,101 91 
Noninterest expense12,883 13,341 (458)(3)26,753 27,330 (577)(2)
Income tax expense613 1,445 (832)(58)1,320 2,346 (1,026)(44)
Wells Fargo net income3,119 6,040 (2,921)(48)6,790 10,676 (3,886)(36)
Wells Fargo net income applicable to common stock2,839 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


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.
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Wells Fargo & Company


Table 1: Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis) (1)
Quarter ended June 30,
20222021
(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 agreements60,450 72 0.47 72,513 0.02 
Debt securities:
Trading debt securities89,258 557 2.50 84,612 501 2.37 
Available-for-sale debt securities147,138 701 1.91 192,418 686 1.43 
Held-to-maturity debt securities298,101 1,536 2.06 237,812 1,106 1.86 
Total debt securities534,497 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 mortgage131,128 980 3.00 120,526 823 2.74 
Real estate construction21,328 191 3.59 22,015 169 3.08 
Lease financing14,445 153 4.24 15,565 174 4.49 
Total commercial loans537,516 4,024 3.00 477,023 3,167 2.66 
Consumer loans:
Residential mortgage – first lien248,879 1,943 3.12 247,815 1,957 3.16 
Residential mortgage – junior lien14,998 168 4.48 20,457 211 4.13 
Credit card39,614 1,100 11.13 34,211 979 11.48 
Auto56,262 586 4.18 50,014 563 4.52 
Other consumer29,298 311 4.26 25,227 233 3.70 
Total consumer loans389,051 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 securities30,770 193 2.51 29,773 133 1.77 
Other16,085 26 0.65 9,103 0.04 
Total interest-earning assets$1,729,468 11,664 2.70 %$1,763,388 9,803 2.23 %
Cash and due from banks26,018  24,336  
Goodwill25,179  26,213  
Other121,906  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 deposits440,478 32 0.03 422,650 32 0.03 
Time deposits25,381 26 0.41 37,116 29 0.32 
Deposits in non-U.S. offices18,684 10 0.22 29,796 — — 
Total interest-bearing deposits924,526 158 0.07 941,746 92 0.04 
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase22,593 33 0.58 36,526 0.01 
Other short-term borrowings12,998 (2)(0.07)11,979 (14)(0.49)
Total short-term borrowings35,591 31 0.34 48,505 (11)(0.09)
Long-term debt151,230 1,011 2.67 181,101 712 1.57 
Other liabilities35,583 158 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 deposits521,267  494,078  
Other noninterest-bearing liabilities53,358  55,763  
Total noninterest-bearing liabilities$574,625  549,841 — 
Total liabilities$1,721,555 1,358 1,748,911 894 
Total equity181,016  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


Earnings Performance (continued)
(continued from previous page)
Table 1: Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis) (1)
Six months ended June 30,
20222021
(in millions) Average 
balance 
Interest 
income/
expense 
Interest ratesAverage 
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 agreements62,636 63 0.20 72,332 10 0.03 
Debt securities:
Trading debt securities89,964 1,110 2.47 85,990 1,035 2.41 
Available-for-sale debt securities158,032 1,424 1.81 199,642 1,527 1.53 
Held-to-maturity debt securities288,725 2,915 2.02 227,377 2,133 1.88 
Total debt securities536,721 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 mortgage129,306 1,813 2.83 120,629 1,635 2.73 
Real estate construction20,797 356 3.46 21,886 335 3.09 
Lease financing14,516 308 4.24 15,681 358 4.55 
Total commercial loans526,886 7,280 2.78 476,812 6,263 2.64 
Consumer loans:
Residential mortgage – first lien245,898 3,850 3.13 256,982 4,025 3.13 
Residential mortgage – junior lien15,505 333 4.32 21,384 439 4.13 
Credit card38,893 2,165 11.22 34,705 2,012 11.69 
Auto56,480 1,170 4.18 49,351 1,123 4.59 
Other consumer28,703 567 3.98 24,807 466 3.79 
Total consumer loans385,479 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 securities32,019 363 2.27 29,604 270 1.82 
Other13,804 29 0.43 9,299 0.04 
Total interest-earning assets $1,737,273 21,952 2.54 %$1,758,553 19,956 2.28 %
Cash and due from banks25,500  24,466  
Goodwill25,180  26,297  
Other122,982  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 deposits440,579 56 0.03 417,153 64 0.03 
Time deposits26,608 45 0.34 40,552 76 0.38 
Deposits in non-U.S. offices20,062 12 0.12 30,260 — — 
Total interest-bearing deposits934,873 241 0.05 936,460 204 0.04 
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase21,518 30 0.28 41,912 0.01 
Other short-term borrowings12,664 (13)(0.21)11,852 (25)(0.43)
Total short-term borrowings34,182 17 0.10 53,764 (20)(0.08)
Long-term debt152,509 1,772 2.32 189,673 1,738 1.83 
Other liabilities33,350 288 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 deposits520,009  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 equity183,662  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


Noninterest Income

Table 2: Noninterest Income
Quarter ended Jun 30,Six months ended Jun 30,
(in millions)20222021$ Change% Change20222021$ Change% Change
Deposit-related fees$1,376 1,342 34 %$2,849 2,597 252 10 %
Lending-related fees353 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 fees286 570 (284)(50)733 1,138 (405)(36)
Card fees1,112 1,077 35 2,141 2,026 115 
Net servicing income125 (21)146 695 279 (120)399 333 
Net gains on mortgage loan originations/sales162 1,357 (1,195)(88)701 2,782 (2,081)(75)
Mortgage banking287 1,336 (1,049)(79)980 2,662 (1,682)(63)
Net gains from trading activities446 21 425 NM664 369 295 80 
Net gains from debt securities143 — 143 NM145 151 (6)(4)
Net gains (losses) from equity securities(615)2,696 (3,311)NM(39)3,088 (3,127)NM
Lease income333 313 20 660 628 32 
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


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


Noninterest Expense

Table 3: Noninterest Expense
Quarter ended Jun 30,Six months ended Jun 30,
(in millions)20222021$ Change% Change20222021$ Change% Change
Personnel$8,442 8,818 (376)(4)%$17,713 18,376 (663)(4)%
Technology, telecommunications and equipment799 815 (16)(2)1,675 1,659 16 
Occupancy705 735 (30)(4)1,427 1,505 (78)(5)
Operating losses576 303 273 90 1,249 516 733 142 
Professional and outside services1,310 1,450 (140)(10)2,596 2,838 (242)(9)
Leases (1)185 226 (41)(18)373 452 (79)(17)
Advertising and promotion102 132 (30)(23)201 222 (21)(9)
Restructuring charges (4)100 5 (4)(44)
Other764 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


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


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

Table 5: Operating Segment Results – Highlights
(in millions)Consumer Banking and LendingCommercial BankingCorporate and Investment BankingWealth and Investment ManagementCorporate (1)Reconciling Items (2)Consolidated Company
Quarter ended June 30, 2022
Net interest income$6,372 1,580 2,057 916 (619)(108)10,198 
Noninterest income2,135 912 1,516 2,789 (114)(408)6,830 
Total revenue8,507 2,492 3,573 3,705 (733)(516)17,028 
Provision for credit losses613 21 (62)(7)15  580 
Noninterest expense6,036 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 interests1,393 744 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 income3,068 906 1,555 2,926 3,327 (312)11,470 
Total revenue8,686 2,108 3,338 3,536 3,023 (421)20,270 
Provision for credit losses(367)(382)(501)24 (34)— (1,260)
Noninterest expense6,202 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 interests2,138 786 1,521 465 1,834 — 6,744 
Less: Net income (loss) from noncontrolling interests— (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 income4,702 1,878 2,996 5,747 692 (814)15,201 
Total revenue17,070 4,819 7,043 7,462 (745)(1,029)34,620 
Provision for credit losses423 (323)(258)(44)(5) (207)
Noninterest expense12,431 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 interests3,163 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 income6,107 1,733 3,380 5,813 4,744 (583)21,194 
Total revenue17,340 4,189 6,942 7,080 4,050 (799)38,802 
Provision for credit losses(786)(781)(785)(19)63 — (2,308)
Noninterest expense12,469 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 interests4,242 1,424 3,076 884 1,808 — 11,434 
Less: Net income (loss) from noncontrolling interests— (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


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)20222021$ Change% Change20222021$ Change% Change
Income Statement
Net interest income$6,372 5,618 754 13 %$12,368 11,233 1,135 10 %
Noninterest income:
Deposit-related fees779 732 47 1,624 1,393 231 17 
Card fees1,038 1,017 21 1,999 1,909 90 
Mortgage banking211 1,158 (947)(82)865 2,417 (1,552)(64)
Other107 161 (54)(34)214 388 (174)(45)
Total noninterest income2,135 3,068 (933)(30)4,702 6,107 (1,405)(23)
Total revenue8,507 8,686 (179)(2)17,070 17,340 (270)(2)
Net charge-offs358 359 (1)— 733 729 
Change in the allowance for credit losses255 (726)981 135 (310)(1,515)1,205 80 
Provision for credit losses613 (367)980 267 423 (786)1,209 154 
Noninterest expense6,036 6,202 (166)(3)12,431 12,469 (38)— 
Income before income tax expense1,858 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 Lending972 2,072 (1,100)(53)2,462 4,299 (1,837)(43)
Credit Card1,304 1,218 86 2,569 2,406 163 
Auto436 415 21 880 818 62 
Personal Lending285 267 18 578 553 25 
Total revenue$8,507 8,686 (179)(2)$17,070 17,340 (270)(2)
Selected Metrics
Consumer Banking and Lending:
Return on allocated capital (1)11.1 %17.3 12.7 %17.2 
Efficiency ratio (2)71 71 73 72 
Headcount (#) (period-end)109,200 116,185 (6)109,200 116,185 (6)
Retail bank branches (#)4,660 4,878 (4)4,660 4,878 (4)
Digital active customers (# in millions) (3)33.4 32.6 33.4 32.6 
Mobile active customers (# in millions) (3)28.0 26.8 28.0 26.8 
Consumer and Small Business Banking:
Deposit spread (4)1.7 %1.5 1.7 %1.6 
Debit card purchase volume ($ in billions) (5)$125.2 122.0 3.2 $240.2 230.5 9.7 
Debit card purchase transactions (# in millions) (5)2,517 2,504 4,855 4,770 
(continued on following page)

14
Wells Fargo & Company


(continued from previous page)
Quarter ended June 30,Six months ended June 30,
($ in millions, unless otherwise noted)20222021$ Change% Change20222021$ Change% Change
Home Lending:
Mortgage banking:
Net servicing income$77 (76)153 201 %$193 (199)392 197 %
Net gains on mortgage loan originations/sales134 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)
Correspondent14.5 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 $56.1 43.2 12.9 30 
New accounts (# in thousands) 524 323 62 1,008 589 71 
Credit card loans 30+ days delinquency rate1.54 %1.53 1.54 %1.53 
Auto:
Auto originations ($ 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


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)20222021$ Change% Change20222021$ 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 Lending218,371 223,229 (4,858)(2)216,055 233,078 (17,023)(7)
Credit Card32,825 28,003 4,822 17 32,168 28,444 3,724 13 
Auto56,813 50,762 6,051 12 57,044 50,143 6,901 14 
Personal Lending12,397 11,130 1,267 11 12,177 11,314 863 
Total loans$330,859 331,892 (1,033)— $327,973 342,428 (14,455)(4)
Total deposits898,650 835,752 62,898 890,042 812,723 77,319 10 
Allocated capital48,000 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 Lending222,088 218,626 3,462 222,088 218,626 3,462 
Credit Card34,075 28,548 5,527 19 34,075 28,548 5,527 19 
Auto56,224 51,784 4,440 56,224 51,784 4,440 
Personal Lending12,945 11,308 1,637 14 12,945 11,308 1,637 14 
Total loans$335,732 326,760 8,972 $335,732 326,760 8,972 
Total deposits892,373 840,434 51,939 892,373 840,434 51,939 
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


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)20222021$ Change% Change20222021$ Change% Change
Income Statement
Net interest income$1,580 1,202 378 31 %$2,941 2,456 485 20 %
Noninterest income:
Deposit-related fees310 325 (15)(5)638 642 (4)(1)
Lending-related fees122 135 (13)(10)243 271 (28)(10)
Lease income179 173 358 347 11 
Other301 273 28 10 639 473 166 35 
Total noninterest income912 906 1,878 1,733 145 
Total revenue2,492 2,108 384 18 4,819 4,189 630 15 
Net charge-offs4 53 (49)(92)(25)92 (117)NM
Change in the allowance for credit losses17 (435)452 104 (298)(873)575 66 
Provision for credit losses21 (382)403 105 (323)(781)458 59 
Noninterest expense1,478 1,443 35 3,009 3,073 (64)(2)
Income before income tax expense993 1,047 (54)(5)2,133 1,897 236 12 
Income tax expense249 261 (12)(5)529 473 56 12 
Less: Net income from noncontrolling interests3 50 6 100 
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 Leasing1,033 957 76 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 $2,563 2,409 154 
Treasury management and payments943 680 263 39 1,722 1,401 321 23 
Other241 221 20 534 379 155 41 
Total revenue$2,492 2,108 384 18 $4,819 4,189 630 15 
Selected Metrics
Return on allocated capital14.3 %15.2 15.6 %13.8 
Efficiency ratio59 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


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)20222021$ Change% Change20222021$ 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 estate44,790 47,203 (2,413)(5)44,921 47,885 (2,964)(6)
Lease financing and other13,396 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 
Asset-Based Lending and Leasing88,986 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 deposits188,286 192,586 (4,300)(2)194,458 190,984 3,474 
Allocated capital19,500 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 estate44,992 46,905 (1,913)(4)44,992 46,905 (1,913)(4)
Lease financing and other13,593 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 Leasing89,177 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 deposits183,145 197,461 (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


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)20222021$ Change% Change20222021$ Change% Change
Income Statement
Net interest income$2,057 1,783 274 15 %$4,047 3,562 485 14 %
Noninterest income:
Deposit-related fees280 277 573 543 30 
Lending-related fees195 190 380 373 
Investment banking fees307 580 (273)(47)769 1,191 (422)(35)
Net gains from trading activities378 30 348 NM606 361 245 68 
Other356 478 (122)(26)668 912 (244)(27)
Total noninterest income1,516 1,555 (39)(3)2,996 3,380 (384)(11)
Total revenue3,573 3,338 235 7,043 6,942 101 
Net charge-offs(11)(19)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 expense1,840 1,805 35 3,823 3,638 185 
Income before income tax expense1,795 2,034 (239)(12)3,478 4,089 (611)(15)
Income tax expense459 513 (54)(11)884 1,013 (129)(13)
Less: Net loss from noncontrolling interests (2)100  (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 Payments529 353 176 50 961 723 238 33 
Investment Banking222 407 (185)(45)553 823 (270)(33)
Total Banking1,279 1,234 45 2,563 2,473 90 
Commercial Real Estate1,060 1,014 46 2,055 1,926 129 
Markets:
Fixed Income, Currencies, and Commodities (FICC)934 888 46 1,811 2,032 (221)(11)
Equities253 206 47 23 520 458 62 14 
Credit Adjustment (CVA/DVA) and Other13 (16)29 181 38 20 18 90 
Total Markets1,200 1,078 122 11 2,369 2,510 (141)(6)
Other34 12 22 183 56 33 23 70 
Total revenue$3,573 3,338 235 $7,043 6,942 101 
Selected Metrics
Return on allocated capital13.8 %17.0 13.5 %17.3 
Efficiency ratio51 54 54 52 
Headcount (#) (period-end)9,000 8,673 9,000 8,673
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


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)20222021$ Change% Change20222021$ 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 estate98,167 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 Estate133,212 108,893 24,319 22 129,749 108,255 21,494 20 
Markets56,359 52,690 3,669 56,064 52,348 3,716 
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 $113,079 105,546 7,533 
Reverse repurchase agreements/securities borrowed48,909 62,066 (13,157)(21)51,854 63,010 (11,156)(18)
Derivative assets30,845 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 assets564,306 513,414 50,892 10 557,891 512,476 45,415 
Total deposits164,860 190,810 (25,950)(14)167,009 192,645 (25,636)(13)
Allocated capital36,000 34,000 2,000 36,000 34,000 2,000 
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 estate100,872 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 Estate137,083 108,885 28,198 26 137,083 108,885 28,198 26 
Markets59,564 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 $109,634 108,291 1,343 
Reverse repurchase agreements/securities borrowed
42,696 57,351 (14,655)(26)42,696 57,351 (14,655)(26)
Derivative assets24,540 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 assets567,733 516,518 51,215 10 567,733 516,518 51,215 10 
Total deposits162,439 188,219 (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


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)20222021$ Change% Change20222021$ 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 fees2,306 2,382 (76)(3)4,782 4,688 94 
Commissions and brokerage services fees 459 513 (54)(11)913 1,068 (155)(15)
Other24 31 (7)(23)52 57 (5)(9)
Total noninterest income2,789 2,926 (137)(5)5,747 5,813 (66)(1)
Total revenue3,705 3,536 169 7,462 7,080 382 
Net charge-offs (6)100 (4)(6)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 expense2,911 2,891 20 6,086 5,919 167 
Income before income tax expense801 621 180 29 1,420 1,180 240 20 
Income tax expense198 156 42 27 352 296 56 19 
Net income$603 465 138 30 $1,068 884 184 21 
Selected Metrics
Return on allocated capital27.1 %20.7 24.1 %19.8 
Efficiency ratio79 82 82 84 
Headcount (#) (period-end)24,996 26,989 (7)24,996 26,989 (7)
Advisory assets ($ 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 $85,342 81,314 4,028 
Total deposits173,670 174,980 (1,310)(1)179,708 174,333 5,375 
Allocated capital8,750 8,750 — — 8,750 8,750 — — 
Selected Balance Sheet Data (period-end)
Total loans$85,342 82,783 2,559 $85,342 82,783 2,559 
Total deposits165,633 174,267 (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


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 endedSix months ended
(in billions)Balance, beginning of periodInflows (1)Outflows (2)Market impact (3)Balance, end of periodBalance, beginning of periodInflows (1)Outflows (2)Market impact (3)Balance, end of period
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


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)20222021$ Change% Change20222021$ Change% Change
Income Statement
Net interest income$(619)(304)(315)NM$(1,437)(694)(743)NM
Noninterest income(114)3,327 (3,441)NM692 4,744 (4,052)(85)%
Total revenue(733)3,023 (3,756)NM(745)4,050 (4,795)NM
Net charge-offs(6)(8)25 %(12)69 (81)NM
Change in the allowance for credit losses21 (26)47 181 7 (6)13 217 
Provision for credit losses15 (34)49 144 (5)63 (68)NM
Noninterest expense618 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


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 $2.2 billion of accumulated depreciation, as of June 30, 2022. The average age of our rail cars is 21 years and the rail cars are typically leased under short-term leases of 3 to 5 years. Our three largest concentrations, which represented 55% of our rail car fleet as of June 30, 2022, were rail cars used for the transportation of agricultural grain, coal, and cement/sand products. Impairment may result in the future based on changing
economic and market conditions affecting the long-term demand and utility of specific types of rail cars. Our assumptions for impairment are sensitive to estimated utilization and rental rates, as well as the estimated economic life of the leased asset. For additional information on the accounting for impairment of operating lease assets, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2021 Form 10-K.
Table 5j: Corporate – Balance Sheet
Quarter ended June 30,Six months ended June 30,
(in millions)20222021$ Change% Change20222021$ 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 securities127,997 185,396 (57,399)(31)142,297 192,867 (50,570)(26)
Held-to-maturity debt securities291,710 237,788 53,922 23 283,655 227,623 56,032 25 
Equity securities15,681 11,499 4,182 36 15,720 11,203 4,517 40 
Total loans9,083 10,077 (994)(10)9,187 10,152 (965)(10)
Total assets642,606 754,629 (112,023)(15)664,850 741,203 (76,353)(10)
Total deposits20,327 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 securities114,469 177,923 (63,454)(36)114,469 177,923 (63,454)(36)
Held-to-maturity debt securities298,895 260,054 38,841 15 298,895 260,054 38,841 15 
Equity securities15,004 13,142 1,862 14 15,004 13,142 1,862 14 
Total loans9,133 10,593 (1,460)(14)9,133 10,593 (1,460)(14)
Total assets611,658 761,915 (150,257)(20)611,658 761,915 (150,257)(20)
Total deposits21,563 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


Balance Sheet Analysis
At June 30, 2022, our assets totaled $1.88 trillion, down $66.9 billion from December 31, 2021.
The following discussion provides additional information about the major components of our consolidated balance sheet. See the “Capital Management” section in this Report for information on changes in our equity.
Available-for-Sale and Held-to-Maturity Debt Securities
Table 6: Available-for-Sale and Held-to-Maturity Debt Securities
June 30, 2022December 31, 2021
($ in millions)Amortized
cost, net (1)
Net
 unrealized gains (losses)
Fair valueWeighted
average expected maturity (yrs)
Amortized
cost, net (1)
Net
 unrealized gains (losses)
Fair valueWeighted 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


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, 2022December 31, 2021
Commercial$549,919 513,120 
Consumer393,815 382,274 
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


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 deposits428,433 30 465,887 31 (8)
Savings deposits436,499 31 439,600 30 (1)
Time deposits25,203 2 29,461 (14)
Interest-bearing deposits in non-U.S. offices19,581 1 19,783 (1)
Total deposits$1,425,153 100 %$1,482,479 100 %(4)

Wells Fargo & Company
27


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.
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Wells Fargo & Company


Risk Management
Wells Fargo manages a variety of risks that can significantly affect our financial performance and our ability to meet the expectations of our customers, shareholders, regulators and other stakeholders. 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, 2022Dec 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 lien252,941 242,270 
Residential mortgage – junior lien14,604 16,618 
Credit card
41,222 38,453 
Auto55,658 56,659 
Other consumer29,390 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

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 $13.0 billion at December 31, 2021. The decline was driven by decreases in the technology, telecom and media, real estate and construction, and oil, gas and pipelines industries, as these industries continued to recover from the economic impacts of the COVID-19 pandemic, partially offset by an increase in the equipment, machinery and parts manufacturing industry.
The majority of our commercial and industrial loans and lease financing portfolio is secured by short-term assets, such as accounts receivable, inventory and debt securities, as well as long-lived assets, such as equipment and other business assets. Generally, the primary source of repayment for this portfolio is the operating cash flows of customers, with the collateral securing this portfolio representing a secondary source of repayment.
The portfolio increased at June 30, 2022, compared with December 31, 2021, driven by higher loan demand resulting in increased originations and loan draws, partially offset by paydowns. Table 10 provides our commercial and industrial loans and lease financing by industry. The industry categories are based on the North American Industry Classification System.
Table 10: Commercial and Industrial Loans and Lease Financing by Industry
June 30, 2022December 31, 2021
($ 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 media70 26,215 3 67,564 64 23,345 62,984 
Real estate and construction67 26,154 3 58,281 78 25,035 55,304 
Equipment, machinery and parts manufacturing19 21,473 2 45,914 24 18,130 43,729 
Retail19 18,994 2 41,335 27 17,645 41,344 
Materials and commodities25 16,793 2 38,571 32 14,684 36,660 
Food and beverage manufacturing6 15,522 2 33,816 13,242 30,882 
Oil, gas and pipelines84 9,878 1 31,043 197 8,828 *28,978 
Health care and pharmaceuticals20 13,936 1 29,624 24 12,847 28,808 
Auto related11 11,868 1 27,255 31 10,629 25,735 
Utilities77 9,060 *25,579 77 6,982 *22,406 
Commercial services38 10,954 1 24,824 78 10,492 24,617 
Banks 19,775 2 20,836 — 16,178 16,612 
Diversified or miscellaneous10 8,661 *20,714 7,493 *18,317 
Entertainment and recreation39 11,399 1 18,909 23 9,907 17,893 
Transportation services213 8,583 *15,725 288 8,162 *14,710 
Insurance and fiduciaries1 5,104 *15,688 3,387 *13,993 
Government and education16 6,096 *12,225 5,863 *11,193 
Agribusiness26 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 $3.1 billion at June 30, 2022, and December 31, 2021, respectively.
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Table 10a provides further loan segmentation for our largest industry category, financials except banks. This category includes loans to investment firms, financial vehicles, nonbank creditors, rental and leasing companies, securities firms, and investment banks. These loans are generally secured and have features to
help manage credit risk, such as structural credit enhancements, collateral eligibility requirements, contractual re-margining of collateral supporting the loans, and loan amounts limited to a percentage of the value of the underlying assets considering underlying credit risk, asset duration, and ongoing performance.
Table 10a: Financials Except Banks Industry Category
June 30, 2022December 31, 2021
($ in millions)Nonaccrual loans Loans outstanding balance% of total loans Total commitments (1)Nonaccrual loansLoans outstanding balance% of total loansTotal commitments (1)
Asset managers and funds (2)$1 56,714 6 %$101,813 60,518 %$101,035 
Commercial finance (3)37 48,462 5 72,265 82 46,043 69,923 
Real estate finance (4)9 26,782 3 42,751 23,231 37,997 
Consumer finance (5)9 14,306 1 28,370 12 12,491 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.
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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 loansLoans outstanding balanceNonaccrual loansLoans outstanding balanceNonaccrual loansLoans outstanding balance
By state:
California$151 30,442 4,296 152 34,738 4%
New York128 14,570 — 2,013 128 16,583 2
Texas43 11,628 — 1,240 43 12,868 1
Florida25 9,830 — 1,341 25 11,171 1
Washington82 4,277 — 1,451 82 5,728 *
Georgia5,048 — 541 5,589 *
Arizona16 4,852 — 494 16 5,346 *
North Carolina4,488 — 709 5,197 *
Illinois16 3,804 — 566 16 4,370 *
Massachusetts3,087 — 945 4,032 *
Other (1)421 41,385 8,147 423 49,532 5
Total
$898 133,411 21,743 901 155,154 16%
By property:
Apartments$10 30,350 — 7,357 10 37,707 4%
Office buildings109 32,936 — 3,225 109 36,161 4
Industrial/warehouse57 16,284 — 2,217 57 18,501 2
Hotel/motel186 11,710 — 1,668 186 13,378 1
Retail (excluding shopping center)103 11,851 119 105 11,970 1
Shopping center283 9,345 — 822 283 10,167 1
Institutional37 5,239 — 2,500 37 7,739 *
Mixed use properties61 6,266 — 1,251 61 7,517 *
Collateral pool— 3,143 — 246 — 3,389 *
Storage facility— 2,687 — 138 — 2,825 *
Other52 3,600 2,200 53 5,800 *
Total
$898 133,411 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.
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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 $8.7 billion of sovereign claims. Our United Kingdom sovereign claims arise from deposits we have placed with the Bank of England pursuant to regulatory requirements in support of our London branch.
Table 12 provides information regarding our top 20 exposures by country (excluding the U.S.), based on our assessment of risk, which gives consideration to the country of any guarantors and/or underlying collateral. With respect to Table 12:
Lending and deposits exposure includes outstanding loans, unfunded credit commitments, and deposits with non-U.S. banks. These balances are presented prior to the deduction of allowance for credit losses or collateral received under the terms of the credit agreements, if any.
Securities exposure represents debt and equity securities of non-U.S. issuers. Long and short positions are netted, and net short positions are reflected as negative exposure.
Derivatives and other exposure represents foreign exchange contracts, derivative contracts, securities resale agreements, and securities lending agreements.
Table 12: Select Country Exposures
June 30, 2022
Lending and depositsSecurities Derivatives and other Total exposure
($ in millions)SovereignNon-sovereignSovereignNon-sovereignSovereignNon-sovereignSovereignNon-
sovereign (1)
Total
Top 20 country exposures:
United Kingdom$8,727 25,304 — 907 — 4,481 8,727 30,692 39,419 
Canada18,203 — 358 11 409 12 18,970 18,982 
Cayman Islands— 7,439 — — — 209 — 7,648 7,648 
Ireland2,250 4,817 — 191 — 57 2,250 5,065 7,315 
Luxembourg— 5,964 — 30 — 81 — 6,075 6,075 
Japan4,368 841 — 199 — 33 4,368 1,073 5,441 
France116 4,120 — 32 495 108 611 4,260 4,871 
China— 3,794 110 391 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— 3,224 320 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 — — 2,177 2,177 
Brazil— 1,485 — 26 26 1,487 1,513 
India— 1,477 — 15 — — 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)21 1,338 1,343 
United Arab Emirates— 1,334 — — — — 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.
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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 York31,286 30,039 3.32 3.35 0.89 1.34 0.01 0.50
Florida10,570 9,978 1.12 1.11 1.36 1.93 (0.13)0.64
New Jersey10,399 10,205 1.10 1.14 1.18 1.95 0.04 0.40
Washington9,912 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
Total244,263 229,112 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 Jersey1,545 1,728 0.16 0.19 2.52 2.98 0.05 0.54 
Florida1,297 1,533 0.14 0.17 2.07 2.54 (0.67)0.87 
Pennsylvania916 1,039 0.10 0.12 2.10 2.19 (0.41)0.12 
New York871 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 $980 million at June 30, 2022 and December 31, 2021, respectively.
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CREDIT CARD, AUTO AND OTHER CONSUMER LOANS Table 15 shows the outstanding balance of our credit card, auto and other consumer loan portfolios. For information regarding credit quality indicators for these portfolios, see Note 4 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.
Table 15: Credit Card, Auto, and Other Consumer Loans
June 30, 2022December 31, 2021
($ in millions)Outstanding
balance
% of
total
loans
Outstanding
balance
% of
total
loans
Credit card$41,222 4.37 %$38,453 4.29 %
Auto55,658 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 
Auto188 198 
Other consumer35 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.
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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)2022202120222021
Commercial nonaccrual loans
Balance, beginning of period$1,953 4,230 $2,376 4,779 
Inflows165 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 period1,719 3,549 1,719 3,549 
Consumer nonaccrual loans
Balance, beginning of period4,918 3,825 4,836 3,949 
Inflows408 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 period4,274 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.
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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 
Commercial69 54 
Consumer42 42 
Total foreclosed assets
$130 112 
(in millions)Quarter ended June 30,Six months ended June 30,
2022202120222021
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.
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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)20222021
Commercial:
Commercial and industrial
$657 793 
Real estate mortgage
478 543 
Real estate construction
1 
Lease financing
7 10 
Total commercial TDRs
1,143 1,348 
Consumer:
Residential mortgage – first lien6,485 7,282 
Residential mortgage – junior lien884 946 
Credit card
340 309 
Auto156 169 
Other consumer53 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/guaranteed1,817 2,462 
Non-government insured/guaranteed4,281 4,578 
Total TDRs
$9,353 10,182 
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Wells Fargo & Company


For information on our nonaccrual policies when a restructuring is involved, see the “Risk Management – Credit Risk Management – Troubled Debt Restructurings (TDRs)” section in our 2021 Form 10-K. See Note 4 (Loans and Related Allowance for Credit Losses) 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)2022202120222021
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 period1,143 1,894 1,143 1,894 
Consumer TDRs
Balance, beginning of period8,500 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 period8,210 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.
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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,
2022202120222021
($ 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  0.12 (1)(0.02)20 0.26 
Total commercial23 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 card199 2.02 256 3.01 375 1.94 492 2.86 
Auto68 0.49 45 0.35 164 0.24 97 0.40 
Other consumer70 0.98 50 0.80 153 1.08 169 1.37 
Total consumer321 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.

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Table 22: Allocation of the ACL for Loans
Jun 30, 2022Dec 31, 2021
($ in millions)ACLLoans
as %
of total
loans
ACLLoans
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 
Lease financing
274 2 402 
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 
Credit card
3,253 4 3,290 
Auto1,045 6 928 
Other consumer486 3 493 
Total consumer
5,802 42 5,997 43 
Total
$12,884 100 %$13,788 100 %
Components:
Allowance for loan losses
$11,78612,490
Allowance for unfunded credit commitments
1,0981,298
Allowance for credit losses
$12,88413,788
Ratio of allowance for loan losses to total net loan charge-offs (annualized)8.54x7.94 
Ratio of allowance for loan losses to total nonaccrual loans1.97 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 loans1.37 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 20222Q 20234Q 2023
Weighted blend of economic scenarios:
U.S. unemployment rate (1):
March 31, 20224.7 %5.6 5.7 
June 30, 20224.1 5.2 6.0 
U.S. real GDP (2):
March 31, 2022(0.6)0.2 2.1 
June 30, 20220.4 (0.3)1.0 
Home price index (3):
March 31, 20222.1 (3.1)(4.1)
June 30, 202212.7 (0.2)(6.2)
Commercial real estate asset prices (3):
March 31, 20222.8 (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
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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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Wells Fargo & Company


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, 2022Dec 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 rates0.5 1.2 
Flatter yield curve:
+50 bps shift in short-term interest rates1.2 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
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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, 2022March 31, 2022June 30, 2021
(in millions)Period
end
AverageLowHighPeriod
end
AverageLowHighPeriod
end
AverageLowHigh
Company Trading General VaR Risk Categories
Credit$28 31 21 40 33 28 20 35 14 21 12 30 
Interest rate26 23 11 35 26 15 30 22 
Equity20 24 17 36 26 21 13 28 29 37 25 56 
Commodity5 5 4 7 20 28 28 
Foreign exchange1 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


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, 2022Mar 31, 2022Jun 30, 2021
HQLA (1):
Eligible cash$137,147170,867 248,404 
Eligible securities (2)232,815203,622 137,718 
Total HQLA369,962374,489 386,122 
Projected net cash outflows305,212314,691 314,678 
LCR121 %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, 2022December 31, 2021
(in millions)TotalEncumberedUnencumberedTotalEncumberedUnencumbered
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


Risk Management – Asset/Liability Management (continued)
Table 28: Short-Term Borrowings
(in millions)June 30, 2022December 31, 2021
Federal funds purchased and securities sold under agreements to repurchase$23,887 21,191 
Other short-term borrowings13,188 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 20222023202420252026ThereafterTotal
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 notes180 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 notes40 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


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’sA1P-1Aa1P-1
S&P Global RatingsBBB+A-2A+A-1
Fitch RatingsA+F1AAF1+
DBRS MorningstarAA (low)R-1 (middle)AAR-1 (high)
FEDERAL HOME LOAN BANK MEMBERSHIP The Federal Home Loan Banks (the FHLBs) are a group of cooperatives that lending institutions use to finance housing and economic development in local communities. We are a member of the FHLBs based in Dallas, Des Moines and San Francisco. FHLB members are required to maintain a minimum investment in capital stock of the applicable FHLB. The board of directors of each FHLB can increase the minimum investment requirements in the event it has concluded that additional capital is required to allow it to meet its own regulatory capital requirements. Any increase in the minimum investment requirements outside of specified ranges requires the approval of the Federal Housing Finance Agency. Because the extent of any obligation to increase our investment in any of the FHLBs depends entirely upon the occurrence of a future event, the amount of any future investment in the capital stock of the FHLBs is not determinable.
Wells Fargo & Company
47


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
wfc-20220630_g1.jpg
Table 32: Risk-Based Capital Requirements – Advanced Approach as of June 30, 2022
wfc-20220630_g2.jpg
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


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 ApproachAdvanced 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


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 stock135 136 
Unearned ESOP shares646 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 stock20,057 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 221,580 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 221,580 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 ApproachAdvanced 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 risk44,961 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.
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Wells Fargo & Company


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 stock6,232 
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
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 ApproachAdvanced 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


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 endAverage balance
Quarter endedQuarter endedSix 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 $179,793 181,689 193,127 181,016186,337 190,968 183,662190,026 
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 shares646 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/AN/AN/AN/AN/A
Net income applicable to common stock(D)N/AN/AN/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/AN/AN/AN/AN/A
Tangible book value per common share(B)/(C)34.66 35.13 34.95 N/AN/AN/AN/AN/A
Return on average common stockholders’ equity (ROE)(D)/(A)N/AN/AN/A7.15 %8.36 13.59 7.76 %11.98 
Return on average tangible common equity (ROTCE)(D)/(B)N/AN/AN/A8.59 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
wfc-20220630_g3.jpg
In addition, our IDIs are required to maintain an SLR of at least 6.00% to be considered well capitalized under applicable regulatory capital adequacy rules and maintain a minimum tier 1 leverage ratio of 4.00%.
The FRB and OCC have proposed amendments to the SLR rules. For information regarding the proposed amendments to the SLR rules, see the “Capital Management – Leverage Requirements” section in our 2021 Form 10-K.

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Wells Fargo & Company


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 assets1,902,751 
Less: Goodwill and other permitted Tier 1 capital deductions (net of deferred tax liabilities)28,460 
Total adjusted average assets1,874,291 
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 exposures375,836 
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 RWAs7.50% of total leverage exposure
(the denominator of the SLR calculation)
++
TLAC buffer (equal to 2.50% of RWAs + method one G-SIB capital surcharge + any countercyclical buffer)External TLAC leverage buffer
(equal to 2.00% of total leverage exposure)
Minimum amount of eligible unsecured long-term debt

Greater of:
6.00% of RWAs4.50% of total leverage exposure
+
Greater of method one and method two G-SIB capital surcharge
The FRB and OCC have proposed amendments to the TLAC and eligible unsecured long-term debt requirements. For information regarding these proposed amendments, see the “Capital Management – Total Loss Absorbing Capacity” section in our 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 DebtRegulatory Minimum
June 30, 2022
Total eligible amount$284,775128,218 
Percentage of RWAs (3)22.72 %21.50 10.23 7.50 
Percentage of total leverage exposure12.66 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 DateFinancial 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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Wells Fargo & Company


Forward-Looking Statements
This document contains forward-looking statements. In addition, we may make forward-looking statements in our other documents filed or furnished with the Securities and Exchange Commission, and our management may make forward-looking statements orally to analysts, investors, representatives of the media and others. Forward-looking statements can be identified by words such as “anticipates,” “intends,” “plans,” “seeks,” “believes,” “estimates,” “expects,” “target,” “projects,” “outlook,” “forecast,” “will,” “may,” “could,” “should,” “can” and similar references to future periods. In particular, forward-looking statements include, but are not limited to, statements we make about: (i) the future operating or financial performance of the Company, including our outlook for future growth; (ii) our noninterest expense and efficiency ratio; (iii) future credit quality and performance, including our expectations regarding future loan losses, our allowance for credit losses, and the economic scenarios considered to develop the allowance; (iv) our expectations regarding net interest income and net interest margin; (v) loan growth or the reduction or mitigation of risk in our loan portfolios; (vi) future capital or liquidity levels, ratios or targets; (vii) the performance of our mortgage business and any related exposures; (viii) the expected outcome and impact of legal, regulatory and legislative developments, as well as our expectations regarding compliance therewith; (ix) future common stock dividends, common share repurchases and other uses of capital; (x) our targeted range for return on assets, return on equity, and return on tangible common equity; (xi) expectations regarding our effective income tax rate; (xii) the outcome of contingencies, such as legal proceedings; (xiii) environmental, social and governance related goals or commitments; and (xiv) the Company’s plans, objectives and strategies.
Forward-looking statements are not based on historical facts but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation:
current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters (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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Wells Fargo & Company


Risk Factors
An investment in the Company involves risk, including the possibility that the value of the investment could fall substantially and that dividends or other distributions on the investment could be reduced or eliminated. For a discussion of risk factors that could adversely affect our financial results and condition, and the value of, and return on, an investment in the Company, we refer you to the “Risk Factors” section in our 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)2022202120222021
Interest income
Debt securities$2,702 2,199 $5,265 4,511 
Loans held for sale126 193 266 524 
Loans8,116 7,095 15,334 14,296 
Equity securities193 132 363 269 
Other interest income419 74 509 139 
Total interest income11,556 9,693 21,737 19,739 
Interest expense
Deposits158 92 241 204 
Short-term borrowings31 (12)17 (21)
Long-term debt1,011 712 1,772 1,738 
Other interest expense158 101 288 210 
Total interest expense1,358 893 2,318 2,131 
Net interest income10,198 8,800 19,419 17,608 
Noninterest income
Deposit and lending-related fees1,729 1,704 3,544 3,320 
Investment advisory and other asset-based fees2,346 2,794 4,844 5,550 
Commissions and brokerage services fees542 580 1,079 1,216 
Investment banking fees286 570 733 1,138 
Card fees1,112 1,077 2,141 2,026 
Mortgage banking287 1,336 980 2,662 
Net gains (losses) from trading and securities(26)2,717 770 3,608 
Other554 692 1,110 1,674 
Total noninterest income6,830 11,470 15,201 21,194 
Total revenue17,028 20,270 34,620 38,802 
Provision for credit losses580 (1,260)(207)(2,308)
Noninterest expense
Personnel8,442 8,818 17,713 18,376 
Technology, telecommunications and equipment799 815 1,675 1,659 
Occupancy705 735 1,427 1,505 
Operating losses576 303 1,249 516 
Professional and outside services1,310 1,450 2,596 2,838 
Advertising and promotion102 132 201 222 
Restructuring charges (4)5 
Other949 1,092 1,887 2,205 
Total noninterest expense12,883 13,341 26,753 27,330 
Income before income tax expense3,565 8,189 8,074 13,780 
Income tax expense613 1,445 1,320 2,346 
Net income before noncontrolling interests2,952 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 other280 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 share0.74 1.38 1.62 2.40 
Average common shares outstanding3,793.8 4,124.6 3,812.3 4,132.9 
Diluted average common shares outstanding3,819.6 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)2022202120222021
Net income before noncontrolling interests$2,952 6,744 $6,754 11,434 
Other comprehensive income (loss), after tax:
Net change in debt securities(3,620)304 (8,768)(1,221)
Net change in derivatives and hedging activities(83)27 (63)63 
Defined benefit plans adjustments(22)334 50 369 
Other(116)22 (125)33 
Other comprehensive income (loss), after tax(3,841)687 (8,906)(756)
Total comprehensive income (loss) before noncontrolling interests(889)7,431 (2,152)10,678 
Less: Other comprehensive income from noncontrolling interests  
Less: Net income (loss) from noncontrolling interests(167)704 (36)758 
Wells Fargo comprehensive income (loss)$(722)6,726 $(2,116)9,918 
The accompanying notes are an integral part of these statements.
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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 cash155,140 234,230 
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 
Loans943,734 895,394 
Allowance for loan losses(11,786)(12,490)
Net loans931,948 882,904 
Mortgage servicing rights (includes $9,163 and $6,920 carried at fair value)
10,386 8,189 
Premises and equipment, net8,444 8,571 
Goodwill25,178 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 deposits909,716 954,731 
Total deposits1,425,153 1,482,479 
Short-term borrowings (includes $165 and $0 carried at fair value)
37,075 34,409 
Derivative liabilities17,168 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 stock20,057 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 capital60,024 60,196 
Retained earnings184,475 180,322 
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 interests2,261 2,504 
Total equity179,793 190,110 
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 $408 million, respectively.
The accompanying notes are an integral part of these statements.
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Wells Fargo & Company and Subsidiaries
Consolidated Statement of Changes in Equity (Unaudited)
Wells Fargo stockholders’ equity
Preferred stockCommon stock
($ and shares in millions)SharesAmountSharesAmountAdditional
paid-in
capital
Retained
earnings
Accumulated
other
comprehensive
income (loss)
Treasury
stock
Unearned
ESOP
shares
Noncontrolling
interests
Total
equity
Balance March 31, 20225.3 $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 issued3.2 (26)162 136 
Common stock repurchased(0.1)(4)(4)
Preferred stock redeemed      
Common stock dividends13 (961)(948)
Preferred stock dividends(280)(280)
Stock-based compensation152 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, 20215.6 $21,170 4,141.1 $9,136 59,854 166,458 (1,250)(67,589)(875)1,130 188,034 
Net income6,040 704 6,744 
Other comprehensive income,
net of tax
686 687 
Noncontrolling interests 30 30 
Common stock issued2.2 (20)115 95 
Common stock repurchased (35.3)(1,565)(1,565)
Preferred stock redeemed (1)— (350)(4)(350)
Common stock dividends (416)(412)
Preferred stock dividends (293)(293)
Stock-based compensation226 226 
Net change in deferred compensation and related plans(70)(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.


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Wells Fargo & Company and Subsidiaries
Consolidated Statement of Changes in Equity (Unaudited)
Wells Fargo stockholders’ equity
Preferred stockCommon stock
($ and shares in millions)SharesAmountSharesAmountAdditional
paid-in
capital
Retained
earnings
Accumulated
other
comprehensive
income (loss)
Treasury
stock
Unearned
ESOP
shares
Noncontrolling
interests
Total
equity
Balance December 31, 20215.3 $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 issued17.4 (143)859 716 
Common stock repurchased(110.2)(6,022)(6,022)
Preferred stock issued    
Preferred stock redeemed      
Common stock dividends29 (1,936)(1,907)
Preferred stock dividends(558)(558)
Stock-based compensation646 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, 20205.5 $21,136 4,144.0 $9,136 60,197 162,683 194 (67,791)(875)1,032 185,712 
Net income10,676 758 11,434 
Other comprehensive income (loss),
net of tax
(758)(756)
Noncontrolling interests 73 73 
Common stock issued16.5 (81)900 819 
Common stock repurchased (52.5)(2,161)(2,161)
Preferred stock issued0.2 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 compensation724 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
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Wells Fargo & Company and Subsidiaries
Consolidated Statement of Cash Flows (Unaudited)
Six months ended June 30,
(in millions)20222021
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 sale41,623 55,502 
Net change in:
Debt and equity securities, held for trading20,943 7,531 
Derivative assets and liabilities3,665 (1,299)
Other assets(13,763)11,256 
Other accrued expenses and liabilities 2,079 (1,572)
Net cash provided (used) by operating activities7,787 (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 sales15,330 13,675 
Prepayments and maturities11,850 45,238 
Purchases(31,292)(71,997)
Held-to-maturity debt securities:
Paydowns and maturities15,966 45,833 
Purchases(2,360)(43,192)
Equity securities, not held for trading:
Proceeds from sales and capital returns3,090 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 investment8,171 22,174 
Purchases of loans(376)(186)
Principal collected on nonbank entities’ loans2,705 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 borrowings2,494 (13,364)
Long-term debt:
Proceeds from issuance16,378 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 period234,230 264,612 
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, net3,817 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.
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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
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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)20222021
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 LHFS4,970 11,551 
Transfers from available-for-sale debt securities to held-to-maturity debt securities43,041 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.
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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 sale1,913 3,242 
Gross trading derivative assets (1)67,487 48,325 
Netting (2)(43,871)(28,146)
Total trading derivative assets23,616 20,179 
Total trading assets140,616 139,162 
Trading liabilities:
Short sale22,116 20,685 
Other liabilities518 — 
Gross trading derivative liabilities (1)58,182 42,449 
Netting (2)(42,222)(33,978)
Total trading derivative liabilities15,960 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)2022202120222021
Interest income:
Debt securities$549 496 $1,097 1,025 
Equity securities (1)139 93 259 196 
Loans held for sale9 20 15 
Total interest income697 592 1,376 1,236 
Less: Interest expense158 105 290 215 
Net interest income539 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 sale1 15 10 39 
Other liabilities11 — 23 — 
Derivatives (1)(3)7,143 (1,619)11,812 (342)
Total net gains from trading activities446 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
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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 securities166   166 
Securities of U.S. states and political subdivisions (2)12,444 45 (413)12,076 
Federal agency mortgage-backed securities59,559 13 (3,377)56,195 
Non-agency mortgage-backed securities (3)3,917 4 (117)3,804 
Collateralized loan obligations4,513  (104)4,409 
Other debt securities2,620 91 (44)2,667 
Total available-for-sale debt securities131,991 190 (6,349)125,832 
Held-to-maturity debt securities:
Securities of U.S. Treasury and federal agencies16,198  (1,232)14,966 
Securities of U.S. states and political subdivisions32,483 28 (3,812)28,699 
Federal agency mortgage-backed securities219,972  (23,737)196,235 
Non-agency mortgage-backed securities (3)1,220  (121)1,099 
Collateralized loan obligations30,183 1 (760)29,424 
Other debt securities1,727  (106)1,621 
Total held-to-maturity debt securities301,783 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 securities71 — — 71 
Securities of U.S. states and political subdivisions (2)16,618 350 (51)16,917 
Federal agency mortgage-backed securities104,661 1,807 (582)105,886 
Non-agency mortgage-backed securities (3)4,515 32 (15)4,532 
Collateralized loan obligations5,713 (7)5,708 
Other debt securities4,217 259 (7)4,469 
Total available-for-sale debt securities175,463 2,635 (854)177,244 
Held-to-maturity debt securities:
Securities of U.S. Treasury and federal agencies16,544 599 (318)16,825 
Securities of U.S. states and political subdivisions32,689 847 (61)33,475 
Federal agency mortgage-backed securities188,909 1,882 (2,807)187,984 
Non-agency mortgage-backed securities (3)1,082 31 (18)1,095 
Collateralized loan obligations31,067 194 (2)31,259 
Other debt securities1,731 17 — 1,748 
Total held-to-maturity debt securities272,022 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.
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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)2022202120222021
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 securities55 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 securities28,390 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)2022202120222021
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 losses2 (21)(10)48 
Realized gains and losses (2):
Gross realized gains247 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.
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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-SaleHeld-to-Maturity
($ in millions)Fair value % investment gradeAmortized 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 subdivisions12,076 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 subdivisions16,917 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.
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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 lossesFair value Gross unrealized lossesFair value Gross unrealized lossesFair 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.
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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) TotalWithin
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 value46,515 1,948 16,916 25,983 1,668 
Weighted average yield1.03 %0.55 0.35 1.45 1.44 
Non-U.S. government securities
Amortized cost, net$166 140 25 — 
Fair value166 140 25 — 
Weighted average yield1.14 %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 value12,076 1,132 2,795 4,977 3,172 
Weighted average yield1.94 %1.77 1.73 1.88 2.28 
Federal agency mortgage-backed securities
Amortized cost, net$59,559 — 241 1,024 58,294 
Fair value56,195 — 236 999 54,960 
Weighted average yield3.05 %— 1.98 2.34 3.06 
Non-agency mortgage-backed securities
Amortized cost, net$3,917 — — 28 3,889 
Fair value3,804 — — 28 3,776 
Weighted average yield2.64 %— — 3.50 2.64 
Collateralized loan obligations
Amortized cost, net$4,513 — 4,101 403 
Fair value4,409 — 4,013 387 
Weighted average yield2.43 %— 2.74 2.43 2.40 
Other debt securities
Amortized cost, net$2,620 92 247 917 1,364 
Fair value2,667 90 243 914 1,420 
Weighted average yield2.57 %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 value125,832 3,171 20,339 36,939 65,383 
Weighted average yield2.15 %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.
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Wells Fargo & Company


Table 3.7: Contractual Maturities – Held-to-Maturity Debt Securities
By remaining contractual maturity ($ in millions) TotalWithin
one year
After
one year
through
five years
After
five years
through
ten years
After
ten years
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 value14,966 — 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 value28,699 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 value196,235 — — — 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 value1,099 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 value29,424 — — 12,881 16,543 
Weighted average yield
2.50 %— — 2.60 2.42 
Other debt securities
Amortized cost, net$1,727 — 760 967 — 
Fair value1,621 — 729 892 — 
Weighted average yield4.47 %— 4.13 4.74 — 
Total held-to-maturity debt securities
Amortized cost, net$301,783 1,672 16,043 16,177 267,891 
Fair value272,044 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.
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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 mortgage133,411 127,733 
Real estate construction21,743 20,092 
Lease financing14,530 14,859 
Total commercial549,919 513,120 
Consumer:
Residential mortgage – first lien252,941 242,270 
Residential mortgage – junior lien14,604 16,618 
Credit card41,222 38,453 
Auto55,658 56,659 
Other consumer29,390 28,274 
Total consumer393,815 382,274 
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 

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Wells Fargo & Company



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
20222021
(in millions)Commercial ConsumerTotalCommercialConsumerTotal
Quarter ended June 30,
Purchases$276 2 278 134 135 
Sales(689) (689)(65)— (65)
Transfers (to)/from LHFS(62)(14)(76)(359)(99)(458)
Six months ended
Purchases$376 2 378 182 184 
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 construction21,178 19,943 
Total commercial
429,744 419,620 
Consumer:
Residential mortgage – first lien24,929 32,992 
Residential mortgage – junior lien24,142 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.
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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)2022202120222021
Balance, beginning of period$12,681 18,043 $13,788 19,713 
Provision for credit losses578 (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 industrial41 68 120 139 
Real estate mortgage7 16 12 22 
Real estate construction  
Lease financing5 10 11 
Total commercial53 90 142 173 
Consumer:
Residential mortgage – first lien29 25 57 66 
Residential mortgage – junior lien33 43 73 81 
Credit card88 101 179 200 
Auto83 83 152 160 
Other consumer24 29 49 57 
Total consumer257 281 510 564 
Total loan recoveries310 371 652 737 
Net loan charge-offs(344)(381)(649)(894)
Other(4)(2)
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 commitments1,098 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 loans0.15 %0.18 0.14 0.21 
Allowance for loan losses as a percentage of total loans1.25 1.78 1.25 1.78 
Allowance for credit losses for loans as a percentage of total loans1.37 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.
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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
20222021
(in millions)CommercialConsumer TotalCommercial 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)— 
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-offs6 (655)(649)(229)(665)(894)
Other
(2) (2)— 
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.

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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 yearRevolving loansRevolving loans converted to term loansTotal
(in millions)20222021202020192018Prior
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 yearRevolving loansRevolving loans converted to term loansTotal
20212020201920182017Prior
December 31, 2021
Commercial and industrial
Pass$65,562 15,193 20,553 7,400 3,797 13,985 211,452 679 338,621 
Criticized1,657 884 1,237 1,256 685 551 5,528 17 11,815 
Total commercial and industrial67,219 16,077 21,790 8,656 4,482 14,536 216,980 696 350,436 
Real estate mortgage
Pass38,196 15,929 19,013 12,618 7,451 16,026 5,411 114,647 
Criticized3,462 1,119 2,975 1,834 875 2,421 400 — 13,086 
Total real estate mortgage41,658 17,048 21,988 14,452 8,326 18,447 5,811 127,733 
Real estate construction
Pass5,895 4,058 4,549 2,167 379 329 1,042 18,421 
Criticized510 266 586 234 68 — — 1,671 
Total real estate construction6,405 4,324 5,135 2,401 447 336 1,042 20,092 
Lease financing
Pass4,100 3,012 2,547 1,373 838 1,805 — — 13,675 
Criticized284 246 282 184 86 102 — — 1,184 
Total lease financing4,384 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 
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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 loans722 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 loans980 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.


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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 yearRevolving loansRevolving loans converted to term loans
(in millions)20222021202020192018PriorTotal
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 lien36,441 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 lien12 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 auto11,838 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 consumer2,022 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)
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(continued from previous page)
Term loans by origination yearRevolving loansRevolving loans converted to term loans
(in millions)20212020201920182017PriorTotal
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 DPD129 27 30 12 24 418 14 29 683 
60-89 DPD10 — 126 15 170 
90-119 DPD— 53 74 
120-179 DPD16 63 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 lien70,148 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 DPD28 20 30 26 21 700 10,883 4,426 16,134 
30-59 DPD— — — — 10 29 46 86 
60-89 DPD— — — — — 10 21 35 
90-119 DPD— — — — 12 20 
120-179 DPD— — — — — 14 26 
180+ DPD— — — — 40 59 217 317 
Total residential mortgage – junior lien28 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— — — — — — 176 183 
60-89 DPD— — — — — — 118 123 
90-119 DPD— — — — — — 98 103 
120-179 DPD— — — — — — 165 166 
180+ DPD— — — — — — — — — 
Total credit cards— — — — — — 38,243 210 38,453 
Auto
By delinquency status:
Current-29 DPD29,246 12,412 8,476 3,271 1,424 714 — — 55,543 
30-59 DPD220 193 165 81 46 57 — — 762 
60-89 DPD69 67 53 25 14 21 — — 249 
90-119 DPD31 27 22 — — 103 
120-179 DPD— — — — — — 
180+ DPD— — — — — — — — — 
Total auto29,566 12,700 8,717 3,386 1,490 800 — — 56,659 
Other consumer
By delinquency status:
Current-29 DPD2,221 716 703 203 107 125 23,988 143 28,206 
30-59 DPD— 10 25 
60-89 DPD— 13 
90-119 DPD— — — 
120-179 DPD— — — — — — 10 
180+ DPD— — — — — 11 
Total other consumer2,227 720 710 206 107 129 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.

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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 yearRevolving loansRevolving loans converted to term loans
(in millions)20222021202020192018PriorTotal
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 available66 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 lien36,441 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 available12 31 18 25 22 74 227 315 724 
Total residential mortgage – junior lien12 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 auto11,838 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 available223 153 66 97 17 11 1,074 29 1,670 
FICO not required      19,942  19,942 
Total other consumer2,022 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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(continued from previous page)
Term loans by origination yearRevolving loansRevolving loans converted to term loans
(in millions)20212020201920182017PriorTotal
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 
760-79923,645 9,814 5,412 1,464 2,485 10,509 1,073 265 54,667 
720-7597,842 3,083 1,980 642 1,137 6,277 646 238 21,845 
680-7191,986 876 645 283 501 3,682 393 206 8,572 
640-679449 233 187 89 129 1,851 188 146 3,272 
600-639101 63 46 31 41 1,035 102 89 1,508 
< 60015 13 24 19 41 1,083 114 124 1,433 
No FICO available161 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 lien70,148 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 available28 20 31 27 22 69 334 243 774 
Total residential mortgage – junior lien28 20 31 27 22 762 10,992 4,736 16,618 
Credit card
800+— — — — — — 4,247 4,248 
760-799— — — — — — 6,053 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— — — — — — 117 118 
Total credit card— — — — — — 38,243 210 38,453 
Auto
800+4,688 1,983 1,680 690 318 108 — — 9,467 
760-7994,967 2,123 1,586 586 234 87 — — 9,583 
720-7594,789 2,104 1,503 583 241 106 — — 9,326 
680-7195,005 2,282 1,441 526 218 111 — — 9,583 
640-6794,611 1,824 1,025 369 160 99 — — 8,088 
600-6393,118 1,114 617 243 117 92 — — 5,301 
< 6002,372 1,236 853 376 193 187 — — 5,217 
No FICO available16 34 12 13 10 — — 94 
Total auto29,566 12,700 8,717 3,386 1,490 800 — — 56,659 
Other consumer
800+450 162 128 34 47 1,343 22 2,194 
760-799502 147 117 33 22 819 19 1,666 
720-759461 134 115 38 18 714 22 1,511 
680-719349 95 99 37 15 630 22 1,256 
640-679170 44 55 21 328 17 649 
600-63942 13 19 117 216 
< 60018 12 22 11 114 12 197 
No FICO available235 113 155 23 62 10 1,236 36 1,870 
FICO not required— — — — — — 18,715 — 18,715 
Total other consumer2,227 720 710 206 107 129 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
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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 yearRevolving loansRevolving loans converted to term loans
(in millions)20222021202020192018PriorTotal
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 available38 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 lien36,441 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 available12 31 18 25 22 50 17 26 201 
Total residential mortgage – junior lien12 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 yearRevolving loansRevolving loans converted to term loans
20212020201920182017PriorTotal
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 48 33 172 
> 120% (1)10 10 35 14 84 
No LTV available122 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 lien70,148 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)— — — — — 35 13 51 
No CLTV available28 20 31 27 22 44 21 29 222 
Total residential mortgage – junior lien28 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.

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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 costRecognized interest income
Nonaccrual loansNonaccrual 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
20222021
Commercial:
Commercial and industrial$722 980 212 190 41 45 
Real estate mortgage898 1,235 39 66 28 33 
Real estate construction3 13 1  
Lease financing96 148   — 
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 lien729 801 509 497 28 25 
Auto188 198  — 14 17 
Other consumer35 34  — 2 
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 $583 million, respectively, of loans that are government insured/guaranteed. Under the Consumer Financial Protection Bureau guidelines, we do not commence the foreclosure process on residential mortgage loans until after the loan is 120 days delinquent. Foreclosure procedures and timelines vary depending on whether the property address resides in a judicial or non-judicial state. Judicial states require the foreclosure to be processed through the state’s courts while non-judicial states are processed without court intervention. Foreclosure timelines vary according to state law.
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Note 4: Loans and Related Allowance for Credit Losses (continued)
LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING  Certain loans 90 days or more past due are still accruing, because they are (1) well-secured and in the process of collection or (2) residential mortgage or consumer loans exempt under regulatory rules from being classified as nonaccrual until later delinquency, usually 120 days past due.
Table 4.13 shows loans 90 days or more past due and still accruing by class for loans not government insured/guaranteed.
Table 4.13: Loans 90 Days or More Past Due and Still Accruing
($ 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 mortgage84 29 
Real estate construction — 
Total commercial579 235 
Consumer:
Residential mortgage – first lien17 37 
Residential mortgage – junior lien5 12 
Credit card294 269 
Auto79 88 
Other consumer17 18 
Total consumer412 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 $431 million at June 30, 2022, and December 31, 2021, respectively.
Table 4.14 summarizes our TDR modifications for the periods presented by primary modification type and includes the financial effects of these modifications. For those loans that modify more than once, the table reflects each modification that occurred during the period. Loans that both modify and are paid off or written-off within the period, as well as changes in recorded investment during the period for loans modified in prior periods, are not included in the table.
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Table 4.14: TDR Modifications
Primary modification type (1)Financial effects of modifications
($ in millions) Principal forgivenessInterest
rate
reduction
Other
concessions (2)
TotalCharge-
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 %$208 
Quarter ended June 30, 2021
Commercial:
Commercial and industrial$— 330 331 14 1.22 %$
Real estate mortgage41 86 132 — 1.15 
Real estate construction— — — — — 
Lease financing— — — — — 
Total commercial41 419 466 14 1.17 
Consumer:
Residential mortgage – first lien— 353 361 1.26 
Residential mortgage – junior lien— 11 — 2.51 
Credit card— 24 — 24 — 19.02 24 
Auto72 74 30 3.93 
Other consumer— — — 12.02 
Trial modifications (5)— — — — — 
Total consumer39 436 476 31 13.24 39 
Total$42 45 855 942 45 11.68 %$45 

(continued on following page)

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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 forgivenessInterest
rate
reduction
Other
concessions (2)
TotalCharge-
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 lien1 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 
Auto1 4 48 53 11 4.64 4 
Other consumer 7 1 8  11.31 7 
Trial modifications (5)  252 252    
Total consumer2 339 987 1,328 14 8.73 339 
Total$2 363 1,201 1,566 14 8.50 %$363 
Six months ended June 30, 2021
Commercial:
Commercial and industrial$— 560 562 20 1.10 %$
Real estate mortgage41 186 236 — 1.04 
Real estate construction— — — — — 
Lease financing— — — — — 
Total commercial41 11 753 805 20 1.05 11 
Consumer:
Residential mortgage – first lien— 15 885 900 1.53 15 
Residential mortgage – junior lien— 22 29 2.44 
Credit card— 56 — 56 — 18.93 56 
Auto86 89 37 3.90 
Other consumer— 11 12 — 12.14 11 
Trial modifications (5)— — — — — 
Total consumer91 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.

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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) 2022202120222021
Commercial:
Commercial and industrial$3 84 $52 125 
Real estate mortgage8 10 25 
Real estate construction —  — 
Lease financing —  — 
Total commercial11 93 62 150 
Consumer:
Residential mortgage – first lien49 56 
Residential mortgage – junior lien2 — 2 
Credit card8 13 16 
Auto7 12 13 23 
Other consumer1 — 1 
Total consumer67 20 85 46 
Total$78 113 $147 196 
Wells Fargo & Company
91


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)2022202120222021
Interest income on lease financing$152 172 $304 353 
Other lease revenue:
Variable revenue on lease financing27 25 57 51 
Fixed revenue on operating leases242 254 487 514 
Variable revenue on operating leases14 18 29 36 
Other lease-related revenue (1)50 16 87 27 
Noninterest income on leases333 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, 2022Dec 31, 2021
ROU assets$3,835 3,805 
Lease liabilities4,458 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)
2022202120222021
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.
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Wells Fargo & Company


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 trading25,930 27,476 
Not held for trading:
Fair value:
Marketable equity securities1,625 2,578 
Nonmarketable equity securities (2)98 9,044 
Total equity securities not held for trading at fair value1,723 11,622 
Equity method:
Private equity2,918 3,077 
Tax-advantaged renewable energy4,949 4,740 
New market tax credit