UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2023

OR

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

For the transition period from __________ to __________

Commission file number 001-2979

WELLS FARGO & COMPANY

(Exact name of registrant as specified in its charter)

Delaware

No.

41-0449260

(State of incorporation)

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

420 Montgomery Street, San Francisco, California 94104

(Address of principal executive offices) (Zip code)

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

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

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

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

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

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

             Large accelerated filer   þ                    Accelerated filer  ¨

            Non-accelerated filer  ¨                     Smaller reporting company  ☐

                                        Emerging growth company  ☐

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

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

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

						Shares Outstanding
						April 21, 2023
Common stock, $1-2/3 par value						3,752,223,519

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FORM 10-Q
CROSS-REFERENCE INDEX
PART I			Financial Information
Item 1.			Financial Statements									Page
			Consolidated Statement of Income									56
			Consolidated Statement of Comprehensive Income									57
			Consolidated Balance Sheet									58
			Consolidated Statement of Changes in Equity									59
			Consolidated Statement of Cash Flows									60
			Notes to Financial Statements
			1			—			Summary of Significant Accounting Policies			61
			2			—			Trading Activities			64
			3			—			Available-for-Sale and Held-to-Maturity Debt Securities			65
			4			—			Equity Securities			71
			5			—			Loans and Related Allowance for Credit Losses			73
			6			—			Mortgage Banking Activities			87
			7			—			Intangible Assets and Other Assets			89
			8			—			Leasing Activity			90
			9			—			Preferred Stock			91
			10			—			Legal Actions			92
			11			—			Derivatives			94
			12			—			Fair Values of Assets and Liabilities			101
			13			—			Securitizations and Variable Interest Entities			109
			14			—			Guarantees and Other Commitments			114
			15			—			Pledged Assets and Collateral			116
			16			—			Operating Segments			119
			17			—			Revenue and Expenses			121
			18			—			Employee Benefits			122
			19			—			Earnings and Dividends Per Common Share			123
			20			—			Other Comprehensive Income			124
			21			—			Regulatory Capital Requirements and Other Restrictions			126
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations (Financial Review)
			Summary Financial Data									2
			Overview									3
			Earnings Performance									6
			Balance Sheet Analysis									23
			Off-Balance Sheet Arrangements									25
			Risk Management									26
			Capital Management									43
			Regulatory Matters									49
			Critical Accounting Policies									50
			Current Accounting Developments									51
			Forward-Looking Statements									52
			Risk Factors									54
			Glossary of Acronyms									128
Item 3.			Quantitative and Qualitative Disclosures About Market Risk									37
Item 4.			Controls and Procedures									55
PART II			Other Information
Item 1.			Legal Proceedings									129
Item 1A.			Risk Factors									129
Item 2.			Unregistered Sales of Equity Securities and Use of Proceeds									129
Item 6.			Exhibits									130
Signature												131

			Wells Fargo & Company			1

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FINANCIAL REVIEW

Summary Financial Data (1)
			Quarter ended																		Mar 31, 2023 % Change from
($ in millions, except per share amounts)			Mar 31, 2023						Dec 31, 2022						Mar 31, 2022						Dec 31, 2022						Mar 31, 2022
Selected Income Statement Data
Total revenue			$	20,729					20,034						17,728						3		%				17
Noninterest expense			13,676						16,186						13,851						(16)						(1)
Pre-tax pre-provision profit (PTPP) (2)			7,053						3,848						3,877						83						82
Provision for credit losses (3)			1,207						957						(787)						26						253
Wells Fargo net income			4,991						3,155						3,788						58						32
Wells Fargo net income applicable to common stock			4,713						2,877						3,509						64						34
Common Share Data
Diluted earnings per common share			1.23						0.75						0.91						64						35
Dividends declared per common share			0.30						0.30						0.25						—						20
Common shares outstanding			3,763.2						3,833.8						3,789.9						(2)						(1)
Average common shares outstanding			3,785.6						3,799.9						3,831.1						—						(1)
Diluted average common shares outstanding			3,818.7						3,832.7						3,868.9						—						(1)
Book value per common share (4)			$	43.02					41.98						42.18						2						2
Tangible book value per common share (4)(5)			35.87						34.98						35.11						3						2
Selected Equity Data (period-end)
Total equity			183,220						182,213						181,597						1						1
Common stockholders’ equity			161,893						160,952						159,876						1						1
Tangible common equity (5)			134,992						134,090						133,052						1						1
Performance Ratios
Return on average assets (ROA) (6)			1.09		%				0.67						0.80
Return on average equity (ROE) (7)			11.7						7.1						8.7
Return on average tangible common equity (ROTCE) (5)			14.0						8.5						10.4
Efficiency ratio (8)			66						81						78
Net interest margin on a taxable-equivalent basis			3.20						3.14						2.16
Selected Balance Sheet Data (average)
Loans			$	948,651					948,517						898,005						—						6
Assets			1,863,676						1,875,191						1,919,397						(1)						(3)
Deposits			1,356,694						1,380,459						1,464,072						(2)						(7)
Selected Balance Sheet Data (period-end)
Debt securities			511,597						496,808						535,916						3						(5)
Loans			947,991						955,871						911,807						(1)						4
Allowance for credit losses for loans			13,705						13,609						12,681						1						8
Equity securities			60,610						64,414						70,755						(6)						(14)
Assets			1,886,400						1,881,020						1,939,709						—						(3)
Deposits			1,362,629						1,383,985						1,481,354						(2)						(8)
Headcount (#) (period-end)			235,591						238,698						246,577						(1)						(4)
Capital and Other Metrics
Risk-based capital ratios and components (9):
Standardized Approach:
Common equity Tier 1 (CET1)			10.81		%				10.60						10.45
Tier 1 capital			12.34						12.11						11.96
Total capital			15.09						14.82						14.72
Risk-weighted assets (RWAs) (in billions)			$	1,243.8					1,259.9						1,265.5						(1)						(2)
Advanced Approach:
Common equity Tier 1 (CET1)			12.03		%				12.00						11.82
Tier 1 capital			13.73						13.72						13.52
Total capital			15.92						15.94						15.87
Risk-weighted assets (RWAs) (in billions)			$	1,117.9					1,112.3						1,119.5						1						—
Tier 1 leverage ratio			8.36		%				8.26						8.00
Supplementary Leverage Ratio (SLR)			6.96						6.86						6.61
Total Loss Absorbing Capacity (TLAC) Ratio (10)			23.34						23.27						22.31
Liquidity Coverage Ratio (LCR) (11)			122						122						119

(1)In first quarter 2023, we adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2018-12 – Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts. We adopted ASU 2018-12 with retrospective application, which required revision of prior period financial statements. Prior period risk-based capital and certain other regulatory related metrics were not revised. For additional information, including the financial statement line items impacted by the adoption of ASU 2018-12, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

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

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

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

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

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

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

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

(9)For additional information, see the “Capital Management” section and Note 21 (Regulatory Capital Requirements and Other Restrictions) to Financial Statements in this Report.

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

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

2			Wells Fargo & Company

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

 

When we refer to “Wells Fargo,” “the Company,” “we,” “our,” or “us” in this Report, we mean Wells Fargo & Company and Subsidiaries (consolidated). When we refer to the “Parent,” we mean Wells Fargo & Company. See the “Glossary 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 March 31, 2023. 

Wells Fargo’s top priority remains building a risk and control infrastructure appropriate for its size and complexity. The Company is subject to a number of consent orders and other regulatory actions, which may require the Company, among other things, to undertake certain changes to its business, operations, products and services, and risk management practices. Addressing these regulatory actions is expected to take multiple years, and we are likely to continue to experience issues or delays along the way in satisfying their requirements. We are also likely to continue to identify more issues as we implement our risk and control infrastructure, which may result in additional regulatory actions. Issues or delays with one regulatory action could affect our progress on others, and failure to satisfy the requirements of a regulatory action on a timely basis could result in additional penalties, business restrictions, enforcement actions, and other negative consequences, which could be significant. While we still have significant work to do and have not yet satisfied certain aspects of these regulatory actions, the Company is committed to devoting the resources necessary to operate with strong business practices and controls, maintain the highest level of integrity, and have an appropriate culture in place.

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

On February 2, 2018, the Company entered into a consent order with the Board of Governors of the Federal Reserve System (FRB). As required by the consent order, the Company’s Board of Directors (Board) submitted to the FRB a plan to further enhance the Board’s governance and oversight of the Company, and the Company submitted to the FRB a plan to further improve the Company’s compliance and operational risk management program. The Company continues to engage with the FRB as the Company works to address the consent order provisions. The consent order also requires the Company, following the FRB’s

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

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

On April 20, 2018, the Company entered into consent orders with the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) to pay an aggregate of $1 billion in civil money penalties to resolve matters regarding the Company’s compliance risk management program and past practices involving certain automobile collateral protection insurance (CPI) policies and certain mortgage interest rate lock extensions. As required by the consent orders, the Company submitted to the CFPB and OCC an enterprise-wide compliance risk management plan and a plan to enhance the Company’s internal audit program with respect to federal consumer financial law and the terms of the consent orders. In addition, as required by the consent orders, the Company submitted for non-objection plans to remediate customers affected by the automobile collateral protection insurance and mortgage interest rate lock matters, as well as a plan for the management of remediation activities conducted by the Company. The Company continues to work to address the provisions of the consent orders. On September 9, 2021, the OCC assessed a $250 million civil money penalty against the Company related to insufficient progress in addressing requirements under the OCC’s April 2018 consent order and loss mitigation activities in the Company’s Home Lending business. On December 20, 2022, the CFPB modified its consent order to clarify how it would terminate.

Consent Order with the OCC Regarding Loss Mitigation Activities

On September 9, 2021, the Company entered into a consent order with the OCC requiring the Company to improve the

			Wells Fargo & Company			3

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Overview (continued)

execution, risk management, and oversight of loss mitigation activities in its Home Lending business. In addition, the consent order restricts the Company from acquiring certain third-party residential mortgage servicing and limits transfers of certain mortgage loans requiring customer remediation out of the Company’s mortgage servicing portfolio until remediation is provided.

Consent Order with the CFPB Regarding Automobile Lending, Consumer Deposit Accounts, and Mortgage Lending

On December 20, 2022, the Company entered into a consent order with the CFPB requiring the Company to provide customer remediation for multiple matters related to automobile lending, consumer deposit accounts, and mortgage lending; maintain practices designed to ensure auto lending customers receive refunds for the unused portion of certain guaranteed automobile protection agreements; comply with certain business practice requirements related to consumer deposit accounts; and pay a $1.7 billion civil penalty to the CFPB. The required actions related to many of these matters were already substantially complete at the time we entered into the consent order, and the consent order lays out a path to termination after the Company completes the remainder of the required actions.

Retail Sales Practices Matters

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

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

Customer Remediation Activities

Our priority of rebuilding trust has included an effort to identify 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 accrued for the probable and estimable costs related to our customer remediation activities, which amounts may change based on additional facts and information, as well as ongoing reviews and communications with our regulators. As our ongoing reviews continue and as we continue to strengthen our risk and control infrastructure, we have identified and may in the future identify additional items or areas of potential concern. To the extent issues are identified, we will continue to assess any customer harm and provide remediation as appropriate. We have previously disclosed key areas of focus as part of these activities.

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

Recent Developments

LIBOR Transition

The London Interbank Offered Rate (LIBOR) is a widely referenced benchmark rate that seeks to estimate the cost at

which banks can borrow on an unsecured basis from other banks. On March 5, 2021, the United Kingdom’s Financial Conduct Authority and ICE Benchmark Administration, the administrator of LIBOR, announced that certain settings of LIBOR would no longer be published on a representative basis after December 31, 2021, and the most commonly used U.S. dollar (USD) LIBOR settings would no longer be published on a representative basis after June 30, 2023.

In first quarter 2022, the Adjustable Interest Rate (LIBOR) Act (the LIBOR Act) was enacted into U.S. federal law to provide a statutory framework to replace LIBOR with a benchmark rate based on the Secured Overnight Financing Rate (SOFR) in U.S. law contracts that do not have fallback provisions or that have fallback provisions resulting in a replacement rate based on LIBOR. The FRB adopted a final rule implementing the LIBOR Act on December 16, 2022, which became effective on February 27, 2023. We expect that the LIBOR Act will transition certain of our legacy USD LIBOR contracts that do not have appropriate fallback provisions to the applicable SOFR-based replacement rates specified in the FRB’s final rule.

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

For certain contracts, including commercial credit facilities and related derivatives, we continue to proactively engage with our clients and contract parties to replace LIBOR with SOFR-based rates or other alternative reference rates in advance of the June 30, 2023 transition date.

Following June 30, 2023, we expect substantially all of our consumer loans, commercial credit facilities, debt securities, derivatives, and long-term debt indexed to USD LIBOR to transition to SOFR-based or other alternative reference rates in accordance with existing fallback provisions or the LIBOR Act.

For additional information 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 2022 Form 10-K.

Financial Performance

Adoption of Accounting Standards Update 2018-12

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

We adopted this ASU with retrospective application, which required revision of prior period financial statements. Prior period risk-based capital and certain other regulatory related metrics were not revised. For additional information, including the financial statement line items impacted by the adoption of ASU 2018-12, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

4			Wells Fargo & Company

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

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

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

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

•provision for credit losses reflected increases for commercial real estate loans, primarily office loans, as well as for credit card and auto loans;

•noninterest expense decreased due to lower operating losses, partially offset by higher personnel expense;

•average loans increased driven by loan growth across both our commercial and consumer loan portfolios; and

•average deposits decreased driven by reductions in all operating segments, partially offset by growth in Corporate.

Capital and Liquidity

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

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

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

•our liquidity coverage ratio (LCR) was 122%, which continued to exceed the regulatory minimum of 100%.

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

Credit Quality

Credit quality reflected the following:

•The allowance for credit losses (ACL) for loans of $13.7 billion at March 31, 2023, increased $96 million from December 31, 2022.

•Our provision for credit losses for loans was $1.1 billion in first quarter 2023, compared with $(775) million in the same period a year ago. The ACL for loans and the provision for credit losses for loans reflected increases for commercial real estate loans, primarily office loans, as well as for credit card and auto loans.

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

•Commercial portfolio net loan charge-offs were $63 million, or 5 basis points of average commercial loans, in first quarter 2023, compared with net loan charge-offs of $(29) million, or (2) basis points, in the same period a year ago, driven by higher losses across all commercial portfolios, primarily in our commercial and industrial portfolio.

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

•Nonperforming assets (NPAs) of $6.1 billion at March 31, 2023, increased $379 million, or 7%, from December 31, 2022, driven by higher commercial real estate nonaccrual loans, partially offset by lower residential mortgage nonaccrual loans. NPAs represented 0.65% of total loans at March 31, 2023.

			Wells Fargo & Company			5

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Earnings Performance

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

Net Interest Income

Net interest income and net interest margin increased in first quarter 2023, compared with the same period a year ago, due to the impact of higher interest rates on earning assets, higher loan balances, and lower mortgage-backed securities (MBS) premium amortization, partially offset by higher expenses for interest bearing deposits and long-term debt.

Table 1 presents the individual components of net interest income and net interest margin. Net interest income and net interest margin are presented on a taxable-equivalent basis in Table 1 to consistently reflect income from taxable and tax-exempt loans and debt and equity securities based on a 21% federal statutory tax rate for the periods ended March 31, 2023 and 2022.

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

6			Wells Fargo & Company

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

			Quarter ended March 31,
															2023																		2022
(in millions)			Average  balance						Interest  income/ expense						Interest rates						Average  balance						Interest  income/  expense						Interest rates
Assets
Interest-earning deposits with banks			$	114,858					1,167						4.12		%				$	179,051					96						0.22		%
Federal funds sold and securities purchased under resale agreements			68,633						696						4.12						64,845						(9)						(0.05)
Debt securities:
Trading debt securities			96,405						801						3.33						90,677						553						2.44
Available-for-sale debt securities			145,894						1,282						3.54						169,048						723						1.72
Held-to-maturity debt securities			279,955						1,780						2.55						279,245						1,379						1.98
Total debt securities			522,254						3,863						2.97						538,970						2,655						1.97
Loans held for sale (2)			6,611						97						5.90						19,513						140						2.86
Loans:
Commercial and industrial – U.S.			307,176						4,772						6.30						276,070						1,700						2.50
Commercial and industrial – Non-U.S.			76,101						1,134						6.04						77,759						403						2.10
Commercial real estate mortgage			130,845						1,949						6.04						127,464						833						2.65
Commercial real estate construction			24,229						438						7.33						20,259						165						3.31
Lease financing			14,832						172						4.63						14,586						155						4.24
Total commercial loans			553,183						8,465						6.20						516,138						3,256						2.56
Residential mortgage – first lien			255,018						2,088						3.28						242,883						1,907						3.14
Residential mortgage – junior lien			12,966						210						6.53						16,017						165						4.17
Credit card			45,842						1,440						12.74						38,164						1,065						11.32
Auto			53,065						597						4.56						56,701						584						4.17
Other consumer			28,577						545						7.74						28,102						256						3.69
Total consumer loans			395,468						4,880						4.98						381,867						3,977						4.20
Total loans (2)			948,651						13,345						5.69						898,005						7,233						3.25
Equity securities			28,651						170						2.39						33,282						170						2.05
Other			11,043						125						4.60						11,498						3						0.12
Total interest-earning assets			$	1,700,701					19,463						4.62		%				$	1,745,164					10,288						2.38		%
Cash and due from banks			28,147						—												24,976						—
Goodwill			25,173						—												25,180						—
Other			109,655						—												124,077						—
Total noninterest-earning assets			$	162,975					—												174,233						—
Total assets			$	1,863,676					19,463												1,919,397						10,288
Liabilities
Deposits:
Demand deposits			$	420,835					1,379						1.33		%				$	455,350					38						0.03		%
Savings deposits			402,285						547						0.55						440,680						24						0.02
Time deposits			78,866						725						3.72						27,849						19						0.28
Deposits in non-U.S. offices			18,240						110						2.45						21,456						2						0.03
Total interest-bearing deposits			920,226						2,761						1.22						945,335						83						0.04
Short-term borrowings:
Federal funds purchased and securities sold under agreements to repurchase			39,235						416						4.30						20,431						(3)						(0.05)
Other short-term borrowings			19,261						154						3.25						12,327						(11)						(0.36)
Total short-term borrowings			58,496						570						3.95						32,758						(14)						(0.17)
Long-term debt			172,567						2,511						5.83						153,803						761						1.98
Other liabilities			33,427						178						2.16						31,092						130						1.68
Total interest-bearing liabilities			$	1,184,716					6,020						2.05		%				$	1,162,988					960						0.33		%
Noninterest-bearing demand deposits			436,468						—												518,737						—
Other noninterest-bearing liabilities			58,195						—												51,555						—
Total noninterest-bearing liabilities			$	494,663					—												570,292						—
Total liabilities			$	1,679,379					6,020												1,733,280						960
Total equity			184,297						—												186,117						—
Total liabilities and equity			$	1,863,676					6,020												1,919,397						960
Interest rate spread on a taxable-equivalent basis (3)															2.57		%																2.05		%
Net interest margin and net interest income on a taxable-equivalent basis (3)									$	13,443					3.20		%										$	9,328					2.16		%

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

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

(3)Includes taxable-equivalent adjustments of $107 million in both quarters ended March 31, 2023 and 2022, predominantly related to tax-exempt income on certain loans and securities.

			Wells Fargo & Company			7

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Earnings Performance (continued)

Noninterest Income

Table 2: Noninterest Income

																					Quarter ended Mar 31,
(in millions)																											2023						2022						$ Change						% Change
Deposit-related fees																											$	1,148					1,473						(325)						(22)		%
Lending-related fees																											356						342						14						4
Investment advisory and other asset-based fees																											2,114						2,498						(384)						(15)
Commissions and brokerage services fees																											619						537						82						15
Investment banking fees																											326						447						(121)						(27)
Card fees																											1,033						1,029						4						—
Net servicing income																											112						154						(42)						(27)
Net gains on mortgage loan originations/sales																											120						539						(419)						(78)
Mortgage banking																											232						693						(461)						(67)
Net gains from trading activities																											1,342						218						1,124						516
Net gains from debt securities																											—						2						(2)						(100)
Net gains (losses) from equity securities																											(357)						576						(933)						NM
Lease income																											347						327						20						6
Other																											233						365						(132)						(36)
Total																											$	7,393					8,507						(1,114)						(13)

NM – Not meaningful

First quarter 2023 vs. first quarter 2022

Deposit-related fees decreased reflecting:

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

•lower fees on commercial accounts driven by a higher earnings credit rate due to an increase in interest rates.

Investment advisory and other asset-based fees decreased reflecting 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 increased due to higher service fee rates.

Investment banking fees decreased due to lower market activity.

Net servicing income decreased driven by:

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

partially offset by:

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

Net gains on mortgage loan originations/sales decreased

driven by:

•lower residential mortgage origination volume driven by our exit from the correspondent business in first quarter 2023; and

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

In first quarter 2023, we executed letters of intent to sell MSRs on approximately $50 billion of loans serviced for others that we expect to close later this year. These expected sales have been considered in the valuation of our MSRs.

For additional information on servicing income and net gains on mortgage loan originations/sales, see Note 6 (Mortgage Banking Activities) to Financial Statements in this Report.

Net gains from trading activities increased driven by higher trading results across all asset classes.

Net gains (losses) from equity securities decreased reflecting:

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

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

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

8			Wells Fargo & Company

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Noninterest Expense

Table 3: Noninterest Expense

																					Quarter ended Mar 31,
(in millions)																											2023						2022						$ Change						% Change
Personnel																											$	9,415					9,271						144						2		%
Technology, telecommunications and equipment																											922						876						46						5
Occupancy																											713						722						(9)						(1)
Operating losses																											267						673						(406)						(60)
Professional and outside services																											1,229						1,286						(57)						(4)
Leases (1)																											177						188						(11)						(6)
Advertising and promotion																											154						99						55						56
Restructuring charges																											—						5						(5)						(100)
Other																											799						731						68						9
Total																											$	13,676					13,851						(175)						(1)

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

First quarter 2023 vs. first quarter 2022

Personnel expense increased driven by:

•higher salaries expense; and

•higher severance expense;

partially offset by:

•lower incentive compensation expense; and

•the impact of efficiency initiatives.

Technology, telecommunications and equipment expense increased due to higher expense for the amortization of internally developed software.

Operating losses decreased driven by lower expense for customer remediation and litigation matters.

As previously disclosed, we have outstanding litigation, regulatory, and customer remediation matters that could impact operating losses in the coming quarters.

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

Advertising and promotion expense increased due to higher marketing and brand campaign volumes.

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

We expect our FDIC deposit assessment expense will further increase as a result of the FDIC's announcement to recover by special assessment losses to the FDIC deposit insurance fund as a result of recent bank failures.

Income Tax Expense

Table 4: Income Tax Expense

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

(1)Represents Income tax expense (benefit) divided by Income (loss) before income tax expense (benefit) less Net income (loss) from noncontrolling interests.

For additional information on income taxes, see Note 22 (Income Taxes) to Financial Statements in our 2022 Form 10-K.

			Wells Fargo & Company			9

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Earnings Performance (continued)

Operating Segment Results

Our management reporting is organized into four reportable operating segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. All other business activities that are not included in the reportable operating segments have been included in Corporate. For additional information, see Table 5. We define our reportable operating segments by type of product and customer segment, and their results are based on our management reporting process. The management reporting process measures the performance of the reportable operating segments based on the Company’s management structure, and the results are regularly reviewed with our Chief Executive Officer and relevant senior management. The management reporting process is based on U.S. GAAP and includes specific adjustments, such as funds transfer pricing for asset/liability management, shared revenue and expenses, and taxable-equivalent adjustments to consistently reflect income from taxable and tax-exempt sources, which allows management to assess performance consistently across the operating segments.

Funds Transfer Pricing Corporate treasury manages a funds transfer pricing methodology that considers interest rate risk, liquidity risk, and other product characteristics. Operating segments pay a funding charge for their assets and receive a funding credit for their deposits, both of which are included in net interest income. The net impact of the funding charges or credits is recognized in corporate treasury.

Revenue and Expense Sharing When lines of business jointly serve customers, the line of business that is responsible for providing the product or service recognizes revenue or expense with a referral fee paid or an allocation of cost to the other line of business based on established internal revenue-sharing agreements.

When a line of business uses a service provided by another line of business or enterprise function (included in Corporate), expense is generally allocated based on the cost and use of the service provided.

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

Allocated Capital Reportable operating segments are allocated capital under a risk-sensitive framework that is primarily based on aspects of our regulatory capital requirements, and the assumptions and methodologies used to allocate capital are periodically assessed and revised. Effective January 1, 2023, management modified its capital allocation methodology to improve alignment of allocated capital with the binding regulatory constraints of the Company. Management believes that return on allocated capital is a useful financial measure because it enables management, investors, and others to assess a reportable operating segment’s use of capital.

Selected Metrics We present certain financial and nonfinancial metrics that management uses when evaluating reportable operating segment results. Management believes that these metrics are useful to investors and others to assess the performance, customer growth, and trends of reportable operating segments or lines of business.

Table 5: Management Reporting Structure

Wells Fargo & Company

Consumer Banking and Lending

Commercial Banking

Corporate and Investment Banking

Wealth and Investment Management

Corporate

• Consumer and Small Business Banking • Home Lending • Credit Card • Auto • Personal Lending

• Middle Market Banking • Asset-Based Lending and Leasing

• Banking • Commercial Real Estate • Markets

• Wells Fargo Advisors • The Private Bank

• Corporate Treasury • Enterprise Functions • Investment Portfolio • Affiliated venture capital and private equity businesses • Non-strategic businesses

10			Wells Fargo & Company

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Table 6 and the following discussion present our results by reportable operating segment. For additional information, see Note 16 (Operating Segments) to Financial Statements in this Report.

Table 6: Operating Segment Results – Highlights

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

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

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

			Wells Fargo & Company			11

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Earnings Performance (continued)

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

debit cards as well as home, auto, personal, and small business lending. Table 6a and Table 6b provide additional information for Consumer Banking and Lending.

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

			Quarter ended Mar 31,
($ in millions, unless otherwise noted)			2023						2022						$ Change						% Change
Income Statement
Net interest income			$	7,433					5,996						1,437						24		%
Noninterest income:
Deposit-related fees			672						845						(173)						(20)
Card fees			958						961						(3)						—
Mortgage banking			160						654						(494)						(76)
Other			141						107						34						32
Total noninterest income			1,931						2,567						(636)						(25)
Total revenue			9,364						8,563						801						9
Net charge-offs			589						375						214						57
Change in the allowance for credit losses			278						(565)						843						149
Provision for credit losses			867						(190)						1,057						556
Noninterest expense			6,038						6,395						(357)						(6)
Income before income tax expense			2,459						2,358						101						4
Income tax expense			618						588						30						5
Net income			$	1,841					1,770						71						4
Revenue by Line of Business
Consumer and Small Business Banking			$	6,486					5,071						1,415						28
Consumer Lending:
Home Lending			863						1,490						(627)						(42)
Credit Card			1,305						1,265						40						3
Auto			392						444						(52)						(12)
Personal Lending			318						293						25						9
Total revenue			$	9,364					8,563						801						9
Selected Metrics
Consumer Banking and Lending:
Return on allocated capital (1)			16.5		%				14.4
Efficiency ratio (2)			64						75
Retail bank branches (#)			4,525						4,705												(4)
Digital active customers (# in millions) (3)			34.3						33.7												2
Mobile active customers (# in millions) (3)			28.8						27.8												4
Consumer and Small Business Banking:
Deposit spread (4)			2.5		%				1.6
Debit card purchase volume ($ in billions) (5)			$	117.3					115.0						2.3						2
Debit card purchase transactions (# in millions) (5)			2,369						2,338												1

(continued on following page)

12			Wells Fargo & Company

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(continued from previous page)

			Quarter ended Mar 31,
($ in millions, unless otherwise noted)			2023						2022						$ Change						% Change
Home Lending:
Mortgage banking:
Net servicing income			$	84					116						(32)						(28)		%
Net gains on mortgage loan originations/sales			76						538						(462)						(86)
Total mortgage banking			$	160					654						(494)						(76)
Originations ($ in billions):
Retail			$	5.6					24.1						(18.5)						(77)
Correspondent			1.0						13.8						(12.8)						(93)
Total originations			$	6.6					37.9						(31.3)						(83)
% of originations held for sale (HFS)			46.8		%				51.4
Third-party mortgage loans serviced (period-end) ($ in billions) (6)			$	666.8					704.2						(37.4)						(5)
Mortgage servicing rights (MSR) carrying value (period-end)			8,819						8,511						308						4
Ratio of MSR carrying value (period-end) to third-party mortgage loans serviced (period-end) (6)			1.32		%				1.21
Home lending loans 30+ days delinquency rate (7)(8)			0.26						0.29
Credit Card:
Point of sale (POS) volume ($ in billions)			$	30.1					26.0						4.1						16
New accounts (# in thousands)			567						484												17
Credit card loans 30+ days delinquency rate			2.26		%				1.58
Credit card loans 90+ days delinquency rate			1.16						0.78
Auto:
Auto originations ($ in billions)			$	5.0					7.3						(2.3)						(32)
Auto loans 30+ days delinquency rate (8)			2.25		%				1.68
Personal Lending:
New volume ($ in billions)			$	2.9					2.6						0.3						12

(1)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.

First quarter 2023 vs. first quarter 2022

Revenue increased driven by:

•higher net interest income driven by higher interest rates and deposit spreads, partially offset by lower deposit balances;

partially offset by:

•lower mortgage banking noninterest income due to lower origination volumes and lower revenue related to the resecuritization of loans we purchased from GNMA loan securitization pools; and

•lower deposit-related fees reflecting the elimination of non-sufficient funds fees and our efforts to help customers avoid overdraft fees.

Provision for credit losses included a $843 million increase in the allowance for credit losses reflecting a less favorable economic outlook and portfolio credit normalization, as well as higher net charge-offs.

Noninterest expense decreased driven by:

•lower operating losses reflecting lower expense for customer remediation and litigation matters; and

•lower personnel expense driven by lower revenue-related incentive compensation in Home Lending due to lower production, and the impact of efficiency initiatives;

partially offset by:

•higher operating costs.

			Wells Fargo & Company			13

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Earnings Performance (continued)

Table 6b: Consumer Banking and Lending – Balance Sheet

			Quarter ended Mar 31,
(in millions)			2023						2022						$ Change						% Change
Selected Balance Sheet Data (average)
Loans by Line of Business:
Consumer and Small Business Banking			$	9,363					10,605						(1,242)						(12)		%
Consumer Lending:
Home Lending			222,561						213,714						8,847						4
Credit Card			38,190						31,503						6,687						21
Auto			53,676						57,278						(3,602)						(6)
Personal Lending			14,518						11,955						2,563						21
Total loans			$	338,308					325,055						13,253						4
Total deposits			841,265						881,339						(40,074)						(5)
Allocated capital			44,000						48,000						(4,000)						(8)
Selected Balance Sheet Data (period-end)
Loans by Line of Business:
Consumer and Small Business Banking			$	9,457					11,006						(1,549)						(14)
Consumer Lending:
Home Lending			222,012						215,858						6,154						3
Credit Card			38,201						31,974						6,227						19
Auto			53,244						57,652						(4,408)						(8)
Personal Lending			14,597						12,068						2,529						21
Total loans			$	337,511					328,558						8,953						3
Total deposits			851,304						909,896						(58,592)						(6)

First quarter 2023 vs. first quarter 2022

Total loans (average and period-end) increased driven by:

•higher loan balances in Home Lending;

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

•higher origination volumes in our Personal Lending business;

partially offset by:

•a decline in our Auto business due to lower origination volumes reflecting credit tightening actions and rising interest rates; and

•a decline in Paycheck Protection Program loans in Consumer and Small Business Banking.

Total deposits (average and period-end) decreased due to continued consumer spending and lower servicing escrow deposits, as well as customers continuing to reallocate cash into higher yielding alternatives.

14			Wells Fargo & Company

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Commercial Banking provides financial solutions to private, family owned and certain public companies. Products and services include banking and credit products across multiple

industry sectors and municipalities, secured lending and lease products, and treasury management. Table 6c and Table 6d provide additional information for Commercial Banking.

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

			Quarter ended Mar 31,
($ in millions)			2023						2022						$ Change						% Change
Income Statement
Net interest income			$	2,489					1,361						1,128						83		%
Noninterest income:
Deposit-related fees			236						328						(92)						(28)
Lending-related fees			129						121						8						7
Lease income			169						179						(10)						(6)
Other			284						338						(54)						(16)
Total noninterest income			818						966						(148)						(15)
Total revenue			3,307						2,327						980						42
Net charge-offs			(39)						(29)						(10)						(34)
Change in the allowance for credit losses			(4)						(315)						311						99
Provision for credit losses			(43)						(344)						301						88
Noninterest expense			1,752						1,531						221						14
Income (loss) before income tax expense (benefit)			1,598						1,140						458						40
Income tax expense			399						280						119						43
Less: Net income from noncontrolling interests			3						3						—						—
Net income			$	1,196					857						339						40
Revenue by Line of Business
Middle Market Banking			$	2,155					1,246						909						73
Asset-Based Lending and Leasing			1,152						1,081						71						7
Total revenue			$	3,307					2,327						980						42
Revenue by Product
Lending and leasing			$	1,324					1,255						69						5
Treasury management and payments			1,562						779						783						101
Other			421						293						128						44
Total revenue			$	3,307					2,327						980						42
Selected Metrics
Return on allocated capital			18.1		%				16.9
Efficiency ratio			53						66

First quarter 2023 vs. first quarter 2022

Revenue increased driven by:

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

partially offset by:

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

•lower other noninterest income driven by lower net gains from equity securities.

Provision for credit losses reflected loan growth.

Noninterest expense increased driven by higher operating costs and personnel expense, partially offset by the impact of efficiency initiatives.

			Wells Fargo & Company			15

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Earnings Performance (continued)

Table 6d: Commercial Banking – Balance Sheet

			Quarter ended Mar 31,
(in millions)			2023						2022						$ Change						% Change
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial			$	163,210					135,792						27,418						20		%
Commercial real estate			45,862						45,053						809						2
Lease financing and other			13,754						13,550						204						2
Total loans			$	222,826					194,395						28,431						15
Loans by Line of Business:
Middle Market Banking			$	121,625					108,583						13,042						12
Asset-Based Lending and Leasing			101,201						85,812						15,389						18
Total loans			$	222,826					194,395						28,431						15
Total deposits			170,467						200,699						(30,232)						(15)
Allocated capital			25,500						19,500						6,000						31
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial			$	166,853					140,932						25,921						18
Commercial real estate			45,895						44,428						1,467						3
Lease financing and other			13,851						13,473						378						3
Total loans			$	226,599					198,833						27,766						14
Loans by Line of Business:
Middle Market Banking			$	121,626					110,258						11,368						10
Asset-Based Lending and Leasing			104,973						88,575						16,398						19
Total loans			$	226,599					198,833						27,766						14
Total deposits			169,827						195,549						(25,722)						(13)

First quarter 2023 vs. first quarter 2022

Total loans (average and period-end) increased driven by new customer growth and higher line utilization.

Total deposits (average and period-end) decreased as customers continued to reallocate cash into higher yielding alternatives.

16			Wells Fargo & Company

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Corporate and Investment Banking delivers a suite of capital markets, banking, and financial products and services to corporate, commercial real estate, government and institutional clients globally. Products and services include corporate banking, investment banking, treasury management, commercial real

estate lending and servicing, equity and fixed income solutions as well as sales, trading, and research capabilities. Table 6e and Table 6f provide additional information for Corporate and Investment Banking.

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

			Quarter ended Mar 31,
($ in millions)			2023						2022						$ Change						% Change
Income Statement
Net interest income			$	2,461					1,990						471						24		%
Noninterest income:
Deposit-related fees			236						293						(57)						(19)
Lending-related fees			194						185						9						5
Investment banking fees			314						462						(148)						(32)
Net gains from trading activities			1,257						228						1,029						451
Other			440						312						128						41
Total noninterest income			2,441						1,480						961						65
Total revenue			4,902						3,470						1,432						41
Net charge-offs			17						(31)						48						155
Change in the allowance for credit losses			235						(165)						400						242
Provision for credit losses			252						(196)						448						229
Noninterest expense			2,217						1,983						234						12
Income before income tax expense			2,433						1,683						750						45
Income tax expense			615						425						190						45
Net income			$	1,818					1,258						560						45
Revenue by Line of Business
Banking:
Lending			$	692					521						171						33
Treasury Management and Payments			785						432						353						82
Investment Banking			280						331						(51)						(15)
Total Banking			1,757						1,284						473						37
Commercial Real Estate			1,311						995						316						32
Markets:
Fixed Income, Currencies, and Commodities (FICC)			1,285						877						408						47
Equities			437						267						170						64
Credit Adjustment (CVA/DVA) and Other			71						25						46						184
Total Markets			1,793						1,169						624						53
Other			41						22						19						86
Total revenue			$	4,902					3,470						1,432						41
Selected Metrics
Return on allocated capital			15.9		%				13.2
Efficiency ratio			45						57

First quarter 2023 vs. first quarter 2022

Revenue increased driven by:

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

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

partially offset by:

•lower investment banking fees due to lower market activity; and

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

Provision for credit losses included a $400 million increase in the allowance for credit losses reflecting an increase for commercial real estate loans, primarily office loans.

Noninterest expense increased driven by higher operating costs and personnel expense, partially offset by the impact of efficiency initiatives.

			Wells Fargo & Company			17

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Earnings Performance (continued)

Table 6f: Corporate and Investment Banking – Balance Sheet

			Quarter ended Mar 31,
(in millions)			2023						2022						$ Change						% Change
Selected Balance Sheet Data (average)
Loans:
Commercial and industrial			$	193,770					191,152						2,618						1		%
Commercial real estate			100,972						93,346						7,626						8
Total loans			$	294,742					284,498						10,244						4
Loans by Line of Business:
Banking			$	99,078					102,485						(3,407)						(3)
Commercial Real Estate			136,806						126,248						10,558						8
Markets			58,858						55,765						3,093						6
Total loans			$	294,742					284,498						10,244						4
Trading-related assets:
Trading account securities			$	112,628					115,687						(3,059)						(3)
Reverse repurchase agreements/securities borrowed			57,818						54,832						2,986						5
Derivative assets			17,928						26,244						(8,316)						(32)
Total trading-related assets			$	188,374					196,763						(8,389)						(4)
Total assets			548,808						551,404						(2,596)						—
Total deposits			157,551						169,181						(11,630)						(7)
Allocated capital			44,000						36,000						8,000						22
Selected Balance Sheet Data (period-end)
Loans:
Commercial and industrial			$	191,020					194,201						(3,181)						(2)
Commercial real estate			100,797						96,426						4,371						5
Total loans			$	291,817					290,627						1,190						—
Loans by Line of Business:
Banking			$	97,178					107,081						(9,903)						(9)
Commercial Real Estate			135,728						129,375						6,353						5
Markets			58,911						54,171						4,740						9
Total loans			$	291,817					290,627						1,190						—
Trading-related assets:
Trading account securities			$	115,198					113,763						1,435						1
Reverse repurchase agreements/securities borrowed			57,502						57,579						(77)						—
Derivative assets			16,968						26,695						(9,727)						(36)
Total trading-related assets			$	189,668					198,037						(8,369)						(4)
Total assets			542,168						564,976						(22,808)						(4)
Total deposits			158,564						168,467						(9,903)						(6)

First quarter 2023 vs. first quarter 2022

Total assets (average and period-end) decreased reflecting lower trading-related derivative assets due to declines in derivative balances for commodities and equities.

Total deposits (average and period-end) decreased as customers continued to reallocate cash into higher yielding alternatives.

18			Wells Fargo & Company

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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 6g and Table 6h provide additional information for Wealth and Investment Management (WIM).

Table 6g: Wealth and Investment Management

			Quarter ended Mar 31,
($ in millions, unless otherwise noted)			2023						2022						$ Change						% Change
Income Statement
Net interest income			$	1,044					799						245						31		%
Noninterest income:
Investment advisory and other asset-based fees			2,061						2,476						(415)						(17)
Commissions and brokerage services fees			541						454						87						19
Other			35						28						7						25
Total noninterest income			2,637						2,958						(321)						(11)
Total revenue			3,681						3,757						(76)						(2)
Net charge-offs			(1)						(4)						3						75
Change in the allowance for credit losses			12						(33)						45						136
Provision for credit losses			11						(37)						48						130
Noninterest expense			3,061						3,175						(114)						(4)
Income before income tax expense			609						619						(10)						(2)
Income tax expense			152						154						(2)						(1)
Net income			$	457					465						(8)						(2)
Selected Metrics
Return on allocated capital			28.9		%				21.0
Efficiency ratio			83						85
Advisory assets ($ in billions)			$	825					912						(87)						(10)
Other brokerage assets and deposits ($ in billions)			1,104						1,168						(64)						(5)
Total client assets ($ in billions)			$	1,929					2,080						(151)						(7)
Selected Balance Sheet Data (average)
Total loans			$	83,621					84,765						(1,144)						(1)
Total deposits			126,604						185,814						(59,210)						(32)
Allocated capital			6,250						8,750						(2,500)						(29)
Selected Balance Sheet Data (period-end)
Total loans			$	82,817					84,688						(1,871)						(2)
Total deposits			117,252						183,727						(66,475)						(36)

First quarter 2023 vs. first quarter 2022

Revenue decreased driven by:

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

partially offset by:

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

•higher commissions and brokerage services fees due to higher service fee rates.

Noninterest expense decreased driven by:

•lower personnel expense driven by lower revenue-related incentive compensation; and

•the impact of efficiency initiatives.

Total deposits (average and period-end) decreased as customers continued to reallocate cash into higher yielding alternatives.

			Wells Fargo & Company			19

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Earnings Performance (continued)

WIM Advisory Assets In addition to transactional accounts, WIM offers advisory account relationships to brokerage customers. Fees from advisory accounts are based on a percentage of the market value of the assets as of the beginning of the quarter, which vary across the account types based on the distinct services provided, and are affected by investment performance as well as asset inflows and outflows. Advisory accounts include assets that are financial advisor-directed and separately managed by third-party managers as well as certain client-directed brokerage assets where we earn a fee for advisory and other services, but do not have investment discretion.

WIM also manages personal trust and other assets for high net worth clients, with fee income earned based on a percentage of the market value of these assets. Table 6h presents advisory assets activity by WIM line of business. Management believes that advisory assets is a useful metric because it allows management, investors, and others to assess how changes in asset amounts may impact the generation of certain asset-based fees.

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

Table 6h: WIM Advisory Assets

									Quarter ended
(in billions)																					Balance, beginning of period			Inflows (1)			Outflows (2)			Market impact (3)			Balance, end of period
March 31, 2023
Client-directed (4)																					$	165.2		8.2			(8.4)			6.9			171.9
Financial advisor-directed (5)																					222.9			9.4			(9.2)			10.0			233.1
Separate accounts (6)																					176.5			5.9			(6.1)			6.4			182.7
Mutual fund advisory (7)																					78.6			2.0			(3.1)			3.1			80.6
Total Wells Fargo Advisors																					$	643.2		25.5			(26.8)			26.4			668.3
The Private Bank (8)																					153.6			7.3			(9.3)			5.2			156.8
Total WIM advisory assets																					$	796.8		32.8			(36.1)			31.6			825.1
March 31, 2022
Client-directed (4)																					$	205.6		8.8			(10.2)			(10.5)			193.7
Financial advisor-directed (5)																					255.5			12.6			(9.9)			(11.0)			247.2
Separate accounts (6)																					203.3			7.5			(7.0)			(11.0)			192.8
Mutual fund advisory (7)																					102.1			3.2			(4.0)			(6.2)			95.1
Total Wells Fargo Advisors																					$	766.5		32.1			(31.1)			(38.7)			728.8
The Private Bank (8)																					198.0			7.4			(11.7)			(10.1)			183.6
Total WIM advisory assets																					$	964.5		39.5			(42.8)			(48.8)			912.4

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

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

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

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

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

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

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

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

20			Wells Fargo & Company

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Corporate includes corporate treasury and enterprise functions, net of allocations (including funds transfer pricing, capital, liquidity and certain expenses), in support of the reportable operating segments as well as our investment portfolio and affiliated venture capital and private equity businesses.

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 6i and Table 6j provide additional information for Corporate.

Table 6i: Corporate – Income Statement

			Quarter ended Mar 31,
(in millions)			2023						2022						$ Change						% Change
Income Statement
Net interest income			$	16					(818)						834						102		%
Noninterest income			5						942						(937)						(99)
Total revenue			21						124						(103)						(83)
Net charge-offs			(2)						(6)						4						67
Change in the allowance for credit losses			122						(14)						136						971
Provision for credit losses			120						(20)						140						700
Noninterest expense			608						767						(159)						(21)
Loss before income tax benefit			(707)						(623)						(84)						(13)
Income tax benefit			(272)						(188)						(84)						(45)
Less: Net income (loss) from noncontrolling interests (1)			(114)						127						(241)						NM
Net loss			$	(321)					(562)						241						43

NM – Not meaningful

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

First quarter 2023 vs. first quarter 2022

Revenue decreased driven by:

•net losses on nonmarketable equity securities from our affiliated venture capital and private equity businesses;

partially offset by:

•higher net interest income reflecting higher interest rates.

Provision for credit losses reflected an increase in allowance for credit losses.

Noninterest expense decreased driven by the impact of divestitures.

Corporate includes our rail car leasing business, which had long-lived operating lease assets, net of accumulated depreciation, of $4.6 billion and $4.7 billion as of March 31, 2023, and December 31, 2022, respectively. The average age of our rail cars is 22 years and the rail cars are typically leased to customers under short-term leases of 3 to 5 years. Our four largest concentrations, which represented 67% of our rail car fleet as of March 31, 2023, were rail cars used for the transportation of cement/sand, agricultural grain, plastics, and coal products. We may incur impairment charges in the future based on changing economic and market conditions affecting the long-term demand and utility of specific types of rail cars. Our assumptions for impairment are sensitive to estimated utilization and rental rates as well as the estimated economic life of the leased asset. For additional information on the accounting for impairment of operating lease assets, see Note 1 (Summary of Significant Accounting Policies) and Note 8 (Leasing Activity) to Financial Statements in our 2022 Form 10-K.

			Wells Fargo & Company			21

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Earnings Performance (continued)

Table 6j: Corporate – Balance Sheet

			Quarter ended Mar 31,
(in millions)			2023						2022						$ Change						% Change
Selected Balance Sheet Data (average)
Cash and due from banks, and interest-earning deposits with banks			$	117,419					178,747						(61,328)						(34)		%
Available-for-sale debt securities (1)			128,770						156,756						(27,986)						(18)
Held-to-maturity debt securities (1)			272,718						275,510						(2,792)						(1)
Equity securities			15,519						15,760						(241)						(2)
Total loans			9,154						9,292						(138)						(1)
Total assets			596,087						687,346						(91,259)						(13)
Total deposits			60,807						27,039						33,768						125
Selected Balance Sheet Data (period-end)
Cash and due from banks, and interest-earning deposits with banks			$	136,093					175,201						(39,108)						(22)
Available-for-sale debt securities (1)			133,311						157,164						(23,853)						(15)
Held-to-maturity debt securities (1)			274,202						277,965						(3,763)						(1)
Equity securities			15,200						16,137						(937)						(6)
Total loans			9,247						9,101						146						2
Total assets			620,241						682,912						(62,671)						(9)
Total deposits			65,682						23,715						41,967						177

(1)In first quarter 2023, we reclassified HTM debt securities with a fair value of $23.2 billion to AFS debt securities in connection with the adoption of ASU 2022-01 – Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

First quarter 2023 vs. first quarter 2022

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

•a decrease in cash and due from banks, and interest-earning deposits with banks that are managed by corporate treasury as a result of a decrease in deposits in the operating segments and an increase in loans originated in the operating segments; and

•lower available-for-sale debt securities due to sales and net unrealized losses, partially offset by the reclassification of HTM debt securities to AFS debt securities in connection with the adoption of ASU 2022-01.

Total deposits (average and period-end) increased driven by issuances of certificates of deposit (CDs).

22			Wells Fargo & Company

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Balance Sheet Analysis

At March 31, 2023, our assets totaled $1.89 trillion, up $5.4 billion from December 31, 2022.

The following discussion provides additional information about the major components of our consolidated balance sheet. See the “Capital Management” section in this Report for information on changes in our equity.

Available-for-Sale and Held-to-Maturity Debt Securities

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

			March 31, 2023																								December 31, 2022
($ in millions)			Amortized cost, net (1)						Net  unrealized gains (losses)						Fair value						Weighted average expected maturity (yrs)						Amortized cost, net (1)						Net  unrealized gains (losses)						Fair value						Weighted average expected maturity (yrs)
Available-for-sale (2)			$	151,861					(7,463)						144,398						4.7						$	121,725					(8,131)						113,594						5.4
Held-to-maturity (3)			277,147						(36,459)						240,688						8.1						297,059						(41,538)						255,521						8.1
Total			$	429,008					(43,922)						385,086						n/a						$	418,784					(49,669)						369,115						n/a

(1)Represents amortized cost of the securities, net of the allowance for credit losses of $6 million related to available-for-sale debt securities at both March 31, 2023, and December 31, 2022, and $77 million and $85 million related to held-to-maturity debt securities at March 31, 2023, and December 31, 2022, respectively.

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

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

Table 7 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 2022 Form 10-K for information on our investment management objectives and practices and the “Risk Management – Asset/Liability Management” section in this Report for information on liquidity and interest rate risk.

The amortized cost, net of the allowance for credit losses, of AFS and HTM debt securities increased from December 31, 2022. Purchases of AFS and HTM debt securities exceeded portfolio runoff.

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

Additionally, in first quarter 2023, we also reclassified HTM debt securities with an aggregate fair value of $23.2 billion and amortized cost of $23.9 billion to AFS debt securities in connection with the adoption of ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method. For additional information on our adoption of ASU 2022-01, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

The total net unrealized losses on AFS and HTM debt securities at March 31, 2023, were driven by higher interest rates and changes in credit spreads.

At March 31, 2023, 99% of the combined AFS and HTM debt securities portfolio was rated AA- or above. Ratings are based on external ratings where available and, where not available, based on internal credit grades. See Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for additional information on AFS and HTM debt securities, including a summary of debt securities by security type.

			Wells Fargo & Company			23

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Balance Sheet Analysis (continued)

Loan Portfolios

Table 8 provides a summary of total outstanding loans by portfolio segment. Commercial loans decreased from December 31, 2022, primarily due to a decrease in the commercial and industrial loan portfolio as a result of paydowns,

partially offset by seasonally higher loan draws and new originations within the commercial and industrial loan portfolio. Consumer loans decreased from December 31, 2022, a significant portion of which was due to paydowns exceeding originations in the residential mortgage portfolio.

Table 8: Loan Portfolios

($ in millions)			March 31, 2023						December 31, 2022						$ Change						% Change
Commercial			$	554,217					557,516						(3,299)						(1)		%
Consumer			393,774						398,355						(4,581)						(1)
Total loans			$	947,991					955,871						(7,880)						(1)

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

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

Deposits

Deposits decreased from December 31, 2022, reflecting:

•customers continuing to reallocate cash into higher yielding alternatives; and

•continued consumer spending;

partially offset by:

•higher time deposits driven by issuances of certificates of deposit (CDs).

Table 9 provides additional information regarding deposit balances. Information regarding the impact of deposits on net interest income and a comparison of average deposit balances is provided in the “Earnings Performance – Net Interest Income” section and Table 1 earlier in this Report. In response to higher interest rates, our average deposit cost in first quarter 2023 increased to 0.83%, compared with 0.46% in fourth quarter 2022.

Table 9: Deposits

($ in millions)			Mar 31, 2023						% of total deposits						Dec 31, 2022						% of total  deposits						$ Change						% Change
Noninterest-bearing demand deposits			$	434,912					32		%				$	458,010					33		%				$	(23,098)					(5)		%
Interest-bearing demand deposits			422,868						31						428,877						31						(6,009)						(1)
Savings deposits			396,909						29						410,139						30						(13,230)						(3)
Time deposits			89,436						7						66,197						5						23,239						35
Interest-bearing deposits in non-U.S. offices			18,504						1						20,762						1						(2,258)						(11)
Total deposits			$	1,362,629					100		%				$	1,383,985					100		%				$	(21,356)					(2)

24			Wells Fargo & Company

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Off-Balance Sheet Arrangements

In the ordinary course of business, we engage in financial transactions that are not recorded on our consolidated balance sheet, or may be recorded on our consolidated balance sheet in amounts that are different from the full contract or notional amount of the transaction. Our off-balance sheet arrangements include unfunded credit commitments, transactions with unconsolidated entities, guarantees, commitments to 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 5 (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 13 (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 14 (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 14 (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 our consolidated balance sheet at fair value, and volume can be measured in terms of the notional amount, which is generally not exchanged, but is used only as the basis on which interest and other payments are determined. The notional amount is not recorded on our consolidated balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the instruments. For additional information, see Note 11 (Derivatives) to Financial Statements in this Report.

			Wells Fargo & Company			25

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Risk Management

Wells Fargo manages a variety of risks that can significantly affect our financial performance and our ability to meet the expectations of our customers, shareholders, regulators and other stakeholders.

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

Credit Risk Management

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

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

Loan Portfolio Our loan portfolios represent the largest component of assets on our consolidated balance sheet for which we have credit risk. Table 10 presents our total loans outstanding by portfolio segment and class of financing receivable.

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

(in millions)			Mar 31, 2023						Dec 31, 2022
Commercial and industrial			$	384,690					386,806
Commercial real estate			154,707						155,802
Lease financing			14,820						14,908
Total commercial			554,217						557,516
Residential mortgage			267,138						269,117
Credit card			45,766						46,293
Auto			52,631						53,669
Other consumer			28,239						29,276
Total consumer			393,774						398,355
Total loans			$	947,991					955,871

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

•Loan concentrations and related credit quality;

•Counterparty credit risk;

•Economic and market conditions;

•Legislative or regulatory mandates;

•Changes in interest rates;

•Merger and acquisition activities; and

•Reputation risk.

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

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

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

Credit Quality Overview  Table 11 provides credit quality trends.

Table 11: Credit Quality Overview

($ in millions)			Mar 31, 2023						Dec 31, 2022
Nonaccrual loans
Commercial loans			$	2,275					1,823
Consumer loans			3,735						3,803
Total nonaccrual loans			$	6,010					5,626
Nonaccrual loans as a % of total loans			0.63		%				0.59
Allowance for credit losses (ACL) for loans			$	13,705					13,609
ACL for loans as a % of total loans			1.45		%				1.42
			Mar 31, 2023						Mar 31, 2022
Net loan charge-offs as a % of:
Average commercial loans			0.05		%				(0.02)
Average consumer loans			0.56						0.35

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

Significant Loan Portfolio Reviews 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 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report for more analysis and credit metric information for each of the following portfolios.

COMMERCIAL AND INDUSTRIAL LOANS AND LEASE FINANCING

For purposes of portfolio risk management, we aggregate commercial and industrial loans and lease financing according to market segmentation and standard industry codes. We generally subject commercial and industrial loans and lease financing to individual risk assessment using our internal borrower and collateral quality ratings. Our ratings are aligned to regulatory definitions of pass and criticized categories with criticized segmented among special mention, substandard, doubtful and loss categories.

26			Wells Fargo & Company

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We had $13.3 billion of the commercial and industrial loans and lease financing portfolio internally classified as criticized in accordance with regulatory guidance at March 31, 2023, compared with $12.6 billion at December 31, 2022. The increase was driven by the technology, telecom and media, and entertainment and recreation industries.

The majority of our commercial and industrial loans and lease financing portfolio is secured by short-term assets, such as accounts receivable, inventory and debt securities, as well as long-lived assets, such as equipment and other business assets.

Generally, the primary source of repayment for this portfolio is the operating cash flows of customers, with the collateral securing this portfolio representing a secondary source of repayment.

The portfolio decreased at March 31, 2023, compared with December 31, 2022, as a result of paydowns, partially offset by seasonally higher loan draws and new originations. Table 12 provides our commercial and industrial loans and lease financing by industry. The industry categories are based on the North American Industry Classification System.

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

			March 31, 2023																								December 31, 2022
($ in millions)			Nonaccrual loans						Loans outstanding balance						% of total loans						Total commitments (1)						Nonaccrual loans						Loans outstanding balance						% of total loans						Total commitments (1)(2)
Financials except banks			$	13					144,954						15		%				$	225,689					44						147,171						15		%				$	229,822
Technology, telecom and media			43						27,807						3						66,024						31						27,767						3						66,340
Real estate and construction			53						24,353						3						55,341						73						24,478						3						56,393
Retail			45						20,468						2						49,625						47						19,487						2						49,334
Equipment, machinery and parts manufacturing			177						24,569						3						46,773						83						23,675						2						47,507
Materials and commodities			82						16,960						2						40,199						86						16,610						2						39,667
Food and beverage manufacturing			5						16,890						2						33,480						17						17,393						2						33,951
Oil, gas and pipelines			48						9,782						1						30,991						55						9,991						1						31,077
Health care and pharmaceuticals			20						14,914						2						30,360						21						14,861						2						30,294
Auto related			8						13,926						1						28,485						10						13,168						1						27,451
Commercial services			32						11,536						1						27,067						50						11,418						1						26,693
Utilities			18						8,342						*						25,953						18						9,457						*						26,899
Diversified or miscellaneous			3						8,587						*						20,508						2						8,161						*						21,498
Entertainment and recreation			26						13,648						1						19,820						28						13,085						1						18,741
Transportation services			196						8,357						*						15,542						237						8,389						*						16,064
Insurance and fiduciaries			1						4,714						*						14,718						1						4,691						*						15,592
Banks			—						12,373						1						12,954						—						14,403						2						16,537
Government and education			36						6,131						*						12,064						25						6,482						*						12,590
Agribusiness			7						6,215						*						11,516						24						6,180						*						11,457
Other (3)			12						4,984						*						11,981						13						4,847						*						12,301
Total			$	825					399,510						42		%				$	779,090					865						401,714						42		%				$	790,208

*Less than 1%.

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit. For additional information on issued letters of credit, see Note 14 (Guarantees and Other Commitments) to Financial Statements in this Report.

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

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

			Wells Fargo & Company			27

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Risk Management – Credit Risk Management (continued)

Table 12a provides further loan segmentation for our largest industry category, financials except banks. This category includes loans to investment firms, financial vehicles, nonbank creditors, rental and leasing companies, securities firms, and investment banks. These loans are generally secured and have features to

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

Table 12a: Financials Except Banks Industry Category

			March 31, 2023																								December 31, 2022
($ in millions)			Nonaccrual loans						Loans outstanding balance						% of total loans						Total commitments (1)						Nonaccrual loans						Loans outstanding balance						% of total loans						Total commitments (1)(2)
Asset managers and funds (3)			$	1					50,242						5		%				$	92,385					1						52,254						5		%				$	97,998
Commercial finance (4)			2						53,669						6						78,085						31						53,269						5						76,016
Consumer finance (5)			2						16,665						2						28,532						4						17,028						2						29,047
Real estate finance (6)			8						24,378						2						26,687						8						24,620						3						26,761
Total			$	13					144,954						15		%				$	225,689					44						147,171						15		%				$	229,822

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit. For additional information on issued letters of credit, see Note 14 (Guarantees and Other Commitments) to Financial Statements in this Report.

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

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

(4)Includes asset-based lending and leasing, including loans to special purpose entities, loans to commercial leasing entities, structured lending facilities to commercial loan managers, and also includes collateralized loan obligations (CLOs) in loan form, all of which were rated AA or above, of $7.7 billion and $7.8 billion at March 31, 2023, and December 31, 2022, respectively.

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

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

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

•$43.1 billion and $45.7 billion in the financials except banks industry;

•$12.2 billion and $14.1 billion in the banks industry; and

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

28			Wells Fargo & Company

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COMMERCIAL REAL ESTATE (CRE)  Our CRE loan portfolio is comprised of CRE mortgage and CRE construction loans. The total CRE loan portfolio decreased $1.1 billion from December 31, 2022, primarily driven by a decrease in loans for mixed use properties and office property types, partially offset by an increase in loans for the apartments property type. The portfolio is diversified both geographically and by property type. The largest geographic concentrations of CRE loans are in California, New York, Texas, and Florida, which represented a combined 48% of the total CRE portfolio. The largest property type concentrations are apartments at 26% and office at 23% of the portfolio. Unfunded credit commitments were $9.2 billion and $8.8 billion at March 31, 2023, and December 31, 2022, respectively, for CRE mortgage loans and $18.9 billion and $20.7 billion, respectively, for CRE construction loans.

We generally subject CRE loans to individual risk assessment using our internal borrower and collateral quality ratings. We had

$13.2 billion of CRE mortgage loans classified as criticized at March 31, 2023, compared with $11.3 billion at December 31, 2022, and $1.3 billion of CRE construction loans classified as criticized at March 31, 2023, compared with $1.1 billion at December 31, 2022. The increase in criticized CRE loans was predominantly driven by the office property type. The credit quality of the office property type continued to be adversely affected as weakened demand for office space continued to drive higher vacancy rates and deteriorating operating performance. At March 31, 2023, nearly one-third of the CRE loans in the office property type had recourse to a guarantor, typically through a repayment guarantee, in addition to the related collateral. Loans in California and New York represented approximately 40% of the office property type at March 31, 2023.

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

Table 13: CRE Loans by State and Property Type

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

*    Less than 1%.

(1)Total commitments consist of loans outstanding plus unfunded credit commitments, excluding issued letters of credit. For additional information on issued letters of credit, see

Note 14 (Guarantees and Other Commitments) to Financial Statements in this Report.

(2)Includes 40 states and non-U.S. loans. No state in Other had loans in excess of $4.0 billion and $4.1 billion at March 31, 2023, and December 31, 2022, respectively. Non-U.S. loans were $7.7 billion and $7.6 billion at March 31, 2023, and December 31, 2022, respectively.

			Wells Fargo & Company			29

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Risk Management – Credit Risk Management (continued)

NON-U.S. LOANS Our classification of non-U.S. loans is based on whether the borrower’s primary address is outside of the United States. At March 31, 2023, non-U.S. loans totaled $84.4 billion, representing approximately 9% of our total consolidated loans outstanding, compared with $87.5 billion, or approximately 9% of our total consolidated loans outstanding, at December 31, 2022. Non-U.S. loans were approximately 4% and 5% of our total consolidated assets at March 31, 2023, and December 31, 2022, respectively.

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

which gives consideration for allowable transfers of risk, such as guarantees and collateral, and may be different from the reporting based on a borrower’s primary address.

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

$30.5 billion, or approximately 2% of our total assets, and included $4.6 billion of sovereign claims. Our United Kingdom sovereign claims arise from deposits we have placed with the Bank of England pursuant to regulatory requirements in support of our London branch.

Table 14 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 14:

•Lending and deposits exposure includes outstanding loans, unfunded credit commitments (excluding discretionary amounts where our approval or consent is required prior to any loan funding or commitment increase), and deposits with non-U.S. banks. These balances are presented prior to the deduction of allowance for credit losses or collateral received under the terms of the credit agreements, if any.

•Securities exposure represents debt and equity securities of non-U.S. issuers. Long and short positions are netted, and net short positions are reflected as negative exposure.

•Derivatives and other exposure represents foreign exchange contracts, derivative contracts, securities resale agreements, and securities lending agreements.

Table 14: Select Country Exposures

			March 31, 2023
			Lending and deposits												Securities												Derivatives and other												Total exposure
($ in millions)			Sovereign						Non-sovereign						Sovereign						Non-sovereign						Sovereign						Non-sovereign						Sovereign						Non-sovereign (1)						Total
Top 20 country exposures:
United Kingdom			$	4,639					23,202						—						1,119						3						1,551						4,642						25,872						30,514
Canada			9						15,958						(1)						178						72						224						80						16,360						16,440
Cayman Islands			—						7,424						—						—						—						248						—						7,672						7,672
Luxembourg			—						6,531						—						132						—						225						—						6,888						6,888
Japan			3,838						627						—						604						—						96						3,838						1,327						5,165
France			53						3,948						539						161						101						53						693						4,162						4,855
Ireland			6						4,472						—						135						—						226						6						4,833						4,839
Bermuda			—						3,891						—						17						—						40						—						3,948						3,948
Germany			—						3,053						—						149						11						262						11						3,464						3,475
South Korea			—						2,722						3						351						—						4						3						3,077						3,080
Guernsey			—						3,208						—						—						—						12						—						3,220						3,220
Netherlands			—						2,745						—						109						—						89						—						2,943						2,943
Chile			—						1,879						—						253						—						1						—						2,133						2,133
Australia			—						1,721						—						150						—						17						—						1,888						1,888
China			12						1,594						—						179						55						30						67						1,803						1,870
Brazil			—						1,288						—						(5)						—						1						—						1,284						1,284
Switzerland			—						1,053						—						(23)						—						176						—						1,206						1,206
India			275						909						(40)						(42)						—						—						235						867						1,102
Belgium			—						945						—						—						—						—						—						945						945
Norway			—						738						—						116						—						21						—						875						875
Total top 20 country exposures			$	8,832					87,908						501						3,583						242						3,276						9,575						94,767						104,342

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

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 both March 31, 2023, and December 31, 2022.

The residential mortgage loan portfolio includes loans with adjustable-rate features. We monitor the risk of default as a result of interest rate increases on adjustable-rate mortgage (ARM) loans, which may be mitigated by product features that limit the amount of the increase in the contractual interest rate. The default risk of these loans is considered in our ACL for loans.

ARM loans were 7% of total loans at both March 31, 2023, and December 31, 2022, with an initial reset date in 2025 or later for the majority of this portfolio at March 31, 2023. We do not offer option ARM products, nor do we offer variable-rate mortgage products with fixed payment amounts, commonly referred to within the financial services industry as negative amortizing mortgage loans.

The residential mortgage – junior lien portfolio consists of residential mortgage lines of credit and loans that are subordinate in rights to an existing lien on the same property. These lines and loans may have draw periods, interest-only

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

We monitor changes in real estate values and underlying economic or market conditions for all geographic areas of our residential mortgage portfolio as part of our credit risk management process. Our periodic review of this portfolio includes original appraisals adjusted for the change in Home Price Index (HPI) or estimates from automated valuation models (AVMs) to support property values. For additional information about our use of appraisals and AVMs, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report and the “Risk Management – Credit Risk Management – Residential Mortgage Loans” section in our 2022 Form 10-K.

Part of our credit monitoring includes tracking delinquency, current Fair Isaac Corporation (FICO) credit scores and loan/

combined loan to collateral values (LTV/CLTV) on the entire residential mortgage loan portfolio. CLTV represents the ratio of the total loan balance of first and junior lien mortgages (including unused line amounts for credit line products) to property collateral value. For additional information regarding credit quality indicators, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

We continue to modify residential mortgage loans to assist homeowners and other borrowers experiencing financial difficulties. For additional information on loan modifications, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report and the “Risk Management – Credit Risk Management – Residential Mortgage Loans” section in our 2022 Form 10-K.

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

December 31, 2022, due to loan paydowns, partially offset by originations.

Table 15 shows certain delinquency and loss information for the residential mortgage – first lien portfolio and lists the top five states by outstanding balance.

Table 15: Residential Mortgage – First Lien Portfolio Performance

			Outstanding balance												% of total loans												% of loans 30 days or more past due																					Net loan charge-off rate quarter ended (1)
($ in millions)			Mar 31, 2023						Dec 31, 2022						Mar 31, 2023						Dec 31, 2022						Mar 31, 2023						Dec 31, 2022															Mar 31, 2023						Dec 31, 2022
California (2)			$	110,551					110,877						11.66		%				11.60						0.43						0.45															0.01						—
New York			31,583						31,753						3.33						3.32						0.68						0.80															—						(0.02)
Washington			10,603						10,523						1.12						1.10						0.26						0.30															(0.06)						0.02
Florida			10,430						10,535						1.10						1.10						1.05						1.13															(0.12)						(0.14)
New Jersey			10,332						10,416						1.09						1.09						1.12						1.24															0.01						(0.01)
Other (3)			72,451						72,843						7.64						7.62						0.81						0.93															—						—
Total			245,950						246,947						25.94						25.83						0.62						0.69															—						(0.01)
Government insured/guaranteed loans (4)			8,578						8,860						0.90						0.93
Total first lien mortgage portfolio			$	254,528					255,807						26.84		%				26.76

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

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

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

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

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Risk Management – Credit Risk Management (continued)

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

Table 16 shows certain delinquency and loss information for the residential mortgage – junior lien portfolio and lists the top five states by outstanding balance.

Table 16: Residential Mortgage – Junior Lien Portfolio Performance

			Outstanding balance												% of total loans												% of loans 30 days or more past due																					Net loan charge-off rate quarter ended (1)
($ in millions)			Mar 31, 2023						Dec 31, 2022						Mar 31, 2023						Dec 31, 2022						Mar 31, 2023						Dec 31, 2022															Mar 31, 2023						Dec 31, 2022
California			$	3,396					3,550						0.36		%				0.37						1.78						2.02															(0.04)						(0.16)
New Jersey			1,305						1,383						0.14						0.14						2.82						2.76															(0.03)						0.21
Florida			1,092						1,165						0.12						0.12						2.53						2.69															(0.21)						(0.92)
Pennsylvania			780						832						0.08						0.09						2.87						2.76															0.03						(0.01)
New York			749						794						0.08						0.08						3.27						2.86															(0.35)						0.05
Other (2)			5,288						5,586						0.56						0.58						2.05						2.05															(0.49)						(0.36)
Total junior lien mortgage portfolio			$	12,610					13,310						1.34		%				1.38						2.22						2.27															(0.26)						(0.25)

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

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

CREDIT CARD, AUTO, AND OTHER CONSUMER LOANS Table 17 shows the outstanding balance of our credit card, auto, and other consumer loan portfolios. For information regarding credit quality indicators for these portfolios, see Note 5 (Loans and Related Allowance for Credit Losses) to Financial Statements in this Report.

Table 17: Credit Card, Auto, and Other Consumer Loans

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

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

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

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

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

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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 2022 Form 10-K. Table 18 summarizes nonperforming assets (NPAs).

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

($ in millions)						Mar 31, 2023						Dec 31, 2022
Nonaccrual loans:
Commercial and industrial						$	739					746
Commercial real estate						1,450						958
Lease financing						86						119
Total commercial						2,275						1,823
Residential mortgage (1)						3,552						3,611
Auto						145						153
Other consumer						38						39
Total consumer						3,735						3,803
Total nonaccrual loans						$	6,010					5,626
As a percentage of total loans						0.63		%				0.59
Foreclosed assets:
Government insured/guaranteed (2)						$	18					22
Non-government insured/guaranteed						114						115
Total foreclosed assets						132						137
Total nonperforming assets						$	6,142					5,763
As a percentage of total loans						0.65		%				0.60

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

(2)Consistent with regulatory reporting requirements, foreclosed real estate resulting from government insured/guaranteed loans are classified as nonperforming. Both principal and interest related to these foreclosed real estate assets are collectible because the loans were predominantly insured by the FHA or guaranteed by the VA. Receivables related to the foreclosure of certain government guaranteed real estate mortgage loans are excluded from this table and included in Accounts receivable 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 2022 Form 10-K.

Commercial nonaccrual loans increased $452 million from December 31, 2022, driven by an increase in commercial real estate nonaccrual loans, predominantly within the office property type. For additional information on commercial nonaccrual loans, see the “Risk Management – Credit Risk Management – Commercial and Industrial Loans and Lease Financing” and “Risk Management – Credit Risk Management – Commercial Real Estate” sections in this Report.

Consumer nonaccrual loans decreased $68 million from December 31, 2022, due to lower residential mortgage nonaccrual loans.

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Risk Management – Credit Risk Management (continued)

Table 19 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 19: Analysis of Changes in Nonaccrual Loans

			Quarter ended March 31,
(in millions)			2023						2022
Commercial nonaccrual loans
Balance, beginning of period			$	1,823					2,376
Inflows			1,046						191
Outflows:
Returned to accruing			(146)						(194)
Foreclosures			—						(19)
Charge-offs			(115)						(35)
Payments, sales and other			(333)						(366)
Total outflows			(594)						(614)
Balance, end of period			2,275						1,953
Consumer nonaccrual loans
Balance, beginning of period			3,803						4,836
Inflows			347						594
Outflows:
Returned to accruing			(192)						(186)
Foreclosures			(26)						(18)
Charge-offs			(38)						(74)
Payments, sales and other			(159)						(234)
Total outflows			(415)						(512)
Balance, end of period			3,735						4,918
Total nonaccrual loans			$	6,010					6,871

We considered the risk of losses on nonaccrual loans in developing our allowance for loan losses. We believe exposure to losses on nonaccrual loans is mitigated by the following factors at March 31, 2023:

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

•86% of commercial nonaccrual loans were current on interest and 78% of commercial nonaccrual loans were current on both principal and interest, but were on nonaccrual status because the full or timely collection of interest or principal had become uncertain.

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

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

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

Table 20: Foreclosed Assets

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

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

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

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TROUBLED DEBT RESTRUCTURINGS (TDRs) In January 2023, we adopted ASU 2022-02, which eliminated the accounting and reporting guidance for TDRs. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

At December 31, 2022, TDRs totaled $9.2 billion. The amount of our TDRs for COVID-related loan modification programs would have otherwise been higher without the TDR relief provided by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and the 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 programs may require further assistance and may receive or be eligible to receive modifications. For additional information on customer accommodations, including loan modifications, in response to the COVID-19 pandemic, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2022 Form 10-K.

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

Table 21: Net Loan Charge-offs

						Quarter ended March 31,
						2023												2022
($ in millions)						Net loan charge- offs						% of avg. loans (1)						Net loan charge- offs						% of avg. loans (1)
Commercial and industrial						$	43					0.05		%				$	(23)					(0.03)		%
Commercial real estate						17						0.04						(5)						(0.01)
Lease financing						3						0.07						(1)						(0.02)
			Total commercial			63						0.05						(29)						(0.02)
Residential mortgage						(11)						(0.02)						(21)						(0.03)
Credit card						344						3.05						176						1.87
Auto						121						0.93						96						0.68
Other consumer						87						1.21						83						1.20
			Total consumer			541						0.56						334						0.35
			Total			$	604					0.26		%				$	305					0.14		%

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

The increase in commercial net loan charge-offs in first quarter 2023, compared with the same period a year ago, was driven by higher losses across all commercial portfolios, primarily in our commercial and industrial portfolio.

The increase in consumer net loan charge-offs in first quarter 2023, compared with the same period a year ago, was driven by higher losses in all consumer portfolios, primarily in our credit card portfolio.

ALLOWANCE FOR CREDIT LOSSES  We maintain an allowance for credit losses (ACL) for loans, which is management’s estimate of the expected lifetime credit losses in the loan portfolio and unfunded credit commitments, at the balance sheet date, excluding loans and unfunded credit commitments carried at fair value or held for sale. Additionally, we maintain an ACL for debt securities classified as either AFS or HTM, other financial assets measured at amortized cost, including deposits with banks, net investments in leases, and other off-balance sheet credit exposures.

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 2022 Form 10-K. For additional information on our ACL for loans, see Note 5 (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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Risk Management – Credit Risk Management (continued)

Table 22: Allocation of the ACL for Loans

			Mar 31, 2023																		Dec 31, 2022
($ in millions)			ACL						ACL as % of loan class						Loans as % of total loans						ACL						ACL as % of loan class						Loans as % of total loans
Commercial and industrial			$	4,287					1.11		%				40						$	4,507					1.17		%				40
Commercial real estate			2,724						1.76						16						2,231						1.43						16
Lease financing			213						1.44						2						218						1.46						2
Total commercial			7,224						1.30						58						6,956						1.25						58
Residential mortgage (1)			751						0.28						28						1,096						0.41						28
Credit card			3,641						7.96						5						3,567						7.71						5
Auto			1,449						2.75						6						1,380						2.57						6
Other consumer			640						2.27						3						610						2.08						3
Total consumer			6,481						1.65						42						6,653						1.67						42
Total			$	13,705					1.45		%				100						$	13,609					1.42		%				100
Components:
Allowance for loan losses															$	13,120																	12,985
Allowance for unfunded credit commitments															585																		624
Allowance for credit losses															$	13,705																	13,609
Ratio of allowance for loan losses to total net loan charge-offs (2)															5.35x																		8.08
Ratio of allowance for loan losses to total nonaccrual loans															2.18																		2.31
Allowance for loan losses as a percentage of total loans															1.38		%																1.36

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

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

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

The ACL for loans increased $96 million, or 1%, from December 31, 2022, reflecting increases for commercial real estate loans, primarily office loans, as well as for credit card and auto loans, partially offset by a decrease for residential mortgage loans related to the adoption of ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. For additional information on ASU 2022-02, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report. The detail of the changes in the ACL for loans by portfolio segment (including charge-offs and recoveries by loan class) is included in Note 5 (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. We weighted the base scenario and the downside scenarios in our estimate of the ACL for loans at March 31, 2023. The base scenario assumed elevated inflation and economic contraction in the near term, reflecting increased unemployment rates from historically low levels and declining property values. The downside scenarios assumed a more substantial economic contraction due to high inflation, declining property values, and lower business and consumer confidence.

Additionally, we consider qualitative factors that represent the risk of limitations inherent in our processes and assumptions such as economic environmental factors, modeling assumptions and performance, and other subjective factors, including industry trends and emerging risk assessments.

The forecasted key economic variables used in our estimate of the ACL for loans at March 31, 2023, and December 31, 2022, are presented in Table 23.

Table 23: Forecasted Key Economic Variables

									2Q 2023						4Q 2023						2Q 2024
Weighted blend of economic scenarios:
U.S. unemployment rate (1):
March 31, 2023									3.8		%				4.7						5.6
December 31, 2022									4.3						5.5						6.2
U.S. real GDP (2):
March 31, 2023									(1.2)						(0.3)						0.5
December 31, 2022									(2.5)						(1.0)						1.1
Home price index (3):
March 31, 2023									(2.9)						(5.5)						(7.7)
December 31, 2022									(4.7)						(7.0)						(6.2)
Commercial real estate asset prices (3):
March 31, 2023									(1.2)						(5.2)						(8.0)
December 31, 2022									(3.8)						(6.7)						(5.8)

(1)Quarterly average.

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

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

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

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We believe the ACL for loans of $13.7 billion at March 31, 2023, was appropriate to cover expected credit losses, including unfunded credit commitments, at that date. The entire allowance is available to absorb credit losses from the total loan portfolio. The ACL for loans is subject to change and reflects existing factors as of the date of determination, including economic or market conditions and ongoing internal and external examination 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 2022 Form 10-K.

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

In addition to servicing loans in our portfolio, we act as servicer and/or master servicer of residential and commercial mortgage loans included in 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 6 (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, 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 may repurchase these loans for cash and as a result, our total consolidated assets do not change. 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. At March 31, 2023, and December 31, 2022, these loans, which we have repurchased or have the option to repurchase, were $9.3 billion and $9.8 billion, respectively, which included $8.3 billion and $8.6 billion, respectively, in loans held for investment, with the remainder in loans held for sale. See

Note 13 (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 2022 Form 10-K. For additional information on mortgage banking activities, see Note 6 (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 2022 Form 10-K.

INTEREST RATE RISK Interest rate risk is the risk that market fluctuations in interest rates, credit spreads, or foreign exchange can cause a loss of the Company’s earnings and capital stemming from mismatches in the Company’s asset and liability cash flows primarily arising from customer-related activities such as lending and deposit-taking. We are subject to interest rate risk because:

•assets and liabilities may mature or reprice at different times. If assets reprice faster than liabilities and interest rates are generally rising, earnings will initially increase;

•assets and liabilities may reprice at the same time but by different amounts;

•short-term and long-term market interest rates may change by different amounts. For example, the shape of the yield curve may affect yield for new loans and funding costs differently;

•the remaining maturity for various assets or liabilities may shorten or lengthen as interest rates change. For example, if long-term mortgage interest rates increase sharply, mortgage-related products may pay down at a slower rate than anticipated, which could impact portfolio income; or

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

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

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

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

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

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

			Wells Fargo & Company			37

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Risk Management – Asset/Liability Management (continued)

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

•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). Our actual experience in base and alternative scenarios 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 Over the Next 12 Months Using Instantaneous Movements

($ in billions)			Mar 31, 2023						Dec 31, 2022
Parallel shift:
+100 bps shift in interest rates			$	2.1					2.3
-100 bps shift in interest rates			(2.1)						(1.7)
Steeper yield curve:
+100 bps shift in long-term interest rates			1.0						0.8
-100 bps shift in short-term interest rates			(1.2)						(1.0)
Flatter yield curve:
+100 bps shift in short-term interest rates			1.1						1.5
-100 bps shift in long-term interest rates			(0.9)						(0.7)

The changes in our interest rate sensitivity from December 31, 2022, to March 31, 2023, in Table 24 reflected updates to our base scenario, including expectations for 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.

The sensitivity results above do not capture noninterest income or expense impacts. Our interest rate sensitive noninterest income and expense are impacted by mortgage banking activities that may have sensitivity impacts that move in the opposite direction of our net interest income. See the “Risk Management – Asset/Liability Management – Mortgage Banking Interest Rate and Market Risk” section in our 2022 Form 10-K for additional information.

Interest rate sensitive noninterest income is also impacted by changes in earnings credit for noninterest-bearing deposits that reduce treasury management deposit-related service fees on commercial accounts, and by trading assets. In addition, the impact to net interest income does not include the fair value changes of trading securities, which, along with the effects of related economic hedges, are recorded in noninterest income. In addition to changes in interest rates, net interest income and noninterest income from trading securities may be impacted by the actual composition of the trading portfolio. For additional information on our trading assets and liabilities, see Note 2 (Trading Activities) to Financial Statements in this Report.

We use the debt securities portfolio and exchange-traded and over-the-counter (OTC) interest rate derivatives to manage our interest rate exposures. As interest rates increase, changes in

the fair value of AFS debt securities may negatively affect accumulated other comprehensive income (AOCI), which lowers the amount of our regulatory capital. AOCI also includes unrealized gains or losses related to the transfer of debt securities from AFS to HTM, which are subsequently amortized into earnings over the life of the security with no further impact from interest rate changes. See Note 1 (Summary of Significant Accounting Policies) and Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for additional information on the debt securities portfolios. We use derivatives for asset/liability management in the following main ways:

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

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

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

Derivatives used to hedge our interest rate risk exposures are presented in Note 14 (Derivatives) to Financial Statements in this Report.

MORTGAGE BANKING INTEREST RATE AND MARKET RISK  We originate, fund and service mortgage loans, which subjects us to various risks, including market, interest rate, credit, and liquidity risks that can be substantial. Based on market conditions and other factors, we reduce credit and liquidity risks by selling or securitizing mortgage loans. We determine whether mortgage loans will be held for investment or held for sale at the time of commitment, but may change our intent to hold loans for investment or sale as part of our corporate asset/liability management activities. We may also retain securities in our investment portfolio at the time we securitize mortgage loans.

Changes in interest rates may impact mortgage banking noninterest income, including origination and servicing fees, and the fair value of our residential MSRs, LHFS, and derivative loan commitments (interest rate “locks”) extended to mortgage applicants. Interest rate changes will generally impact our mortgage banking noninterest income on a lagging basis due to the time it takes for the market to reflect a shift in customer demand, as well as the time required for processing a new application, providing the commitment, and securitizing and selling the loan. The amount and timing of the impact will depend on the magnitude, speed and duration of the changes in interest rates. For additional information on mortgage banking, including key assumptions and the sensitivity of the fair value of MSRs, see the “Risk Management – Asset/Liability Management – Mortgage Banking Interest Rate and Market Risk” section and Note 6 (Mortgage Banking Activities), Note 11 (Derivatives), and Note 12 (Fair Values of Assets and Liabilities) to Financial Statements in our 2022 Form 10-K.

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 includes price risk in the trading book, mortgage servicing rights and the hedge effectiveness risk associated with mortgage loans held at fair value, and impairment of private equity investments. For information on our oversight of market risk, see the “Risk

38			Wells Fargo & Company

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

MARKET RISK – TRADING ACTIVITIES  We engage in trading activities to accommodate the investment and risk management activities of our customers and to execute economic hedging to manage certain balance sheet risks. These trading activities predominantly occur within our CIB businesses and, to a lesser extent, other businesses of the Company. Debt securities held for trading, equity securities held for trading, trading loans and trading derivatives are financial instruments used in our trading activities, and all are carried at fair value. Income earned on the financial instruments used in our trading activities include net interest income, changes in fair value and realized gains and losses. Net interest income earned from our trading activities is reflected in the interest income and interest expense components of our consolidated statement of income. Changes in fair value of the financial instruments used in our trading activities are reflected in net gains from trading activities. For additional information on the financial instruments used in our trading activities and the income from these trading activities,

see Note 2 (Trading Activities) to Financial Statements in this Report.

Value-at-risk (VaR) is a statistical risk measure used to estimate the potential loss from adverse moves in the financial markets. The Company uses VaR metrics complemented with sensitivity analysis and stress testing in measuring and monitoring market risk. For additional information on our monitoring activities, sensitivity analysis and stress testing, see the “Risk Management – Asset/Liability Management – Market Risk – Trading Activities” section in our 2022 Form 10-K.

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

Table 25 shows the Company’s Trading General VaR by risk category. The increase in average Company Trading General VaR for the quarter ended March 31, 2023, compared with the same period a year ago, was primarily driven by changes in portfolio composition.

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

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

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

MARKET RISK – EQUITY SECURITIES We are directly and indirectly affected by changes in the equity markets. We make and manage direct investments in start-up businesses, emerging growth companies, management buy-outs, acquisitions and corporate recapitalizations. We also invest in non-affiliated funds that make similar private equity investments. For additional information, see the “Risk Management – Asset/Liability Management – Market Risk – Equity Securities” section in our 2022 Form 10-K.

We also have marketable equity securities that include investments relating to our venture capital activities. The fair value changes in these marketable equity securities are recognized in net income. For additional information, see Note 4 (Equity Securities) to Financial Statements in this Report.

Changes in equity market prices may also indirectly affect our net income by (1) the value of third-party assets under management and, hence, fee income, (2) borrowers whose ability to repay principal and/or interest may be affected by the stock market, or (3) brokerage activity, related commission income and other business activities. Each business line monitors and manages these indirect risks.

LIQUIDITY RISK AND FUNDING Liquidity risk is the risk arising from the inability of the Company to meet obligations when they come due, or roll over funds at a reasonable cost, without

incurring heightened costs. In the ordinary course of business, we enter into contractual obligations that may require future cash payments, including funding for customer loan requests, customer deposit maturities and withdrawals, debt service, leases for premises and equipment, and other cash commitments. Liquidity risk also considers the stability of deposits, including the risk of losing uninsured or non-operational deposits. The objective of effective liquidity management is to ensure that we can meet our contractual obligations and other cash commitments efficiently under both normal operating conditions and under periods of Wells Fargo-specific and/or market stress.

To help achieve this objective, the Board establishes liquidity guidelines that require sufficient asset-based liquidity to cover potential funding requirements and to avoid over-dependence on volatile, less reliable funding markets. These guidelines are monitored on a monthly basis by the management-level Corporate Asset/Liability Committee and on a quarterly basis by the Board. These guidelines are established and monitored for both the Company and the Parent on a stand-alone basis so that the Parent is a source of strength for its banking subsidiaries. For additional information on liquidity risk and funding management, see the “Risk Management – Liquidity Risk and Funding” section in our 2022 Form 10-K.

			Wells Fargo & Company			39

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Risk Management – Asset/Liability Management (continued)

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

The FRB, OCC and FDIC have also issued a rule implementing a stable funding requirement, known as the net stable funding ratio (NSFR), which requires a covered banking organization, such

as Wells Fargo, to maintain a minimum amount of stable funding, including common equity, long-term debt and most types of deposits, in relation to its assets, derivative exposures and commitments over a one-year horizon period. The NSFR applies to the Company and to our IDIs with total assets of $10 billion or more. As of March 31, 2023, we were compliant with the NSFR requirement.

Liquidity Coverage Ratio As of March 31, 2023, the 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)			Mar 31, 2023						Dec 31, 2022						Mar 31, 2022
HQLA (1):
Eligible cash			$	108,725					123,446						170,867
Eligible securities (2)			239,123						231,337						203,622
Total HQLA			347,848						354,783						374,489
Projected net cash outflows (3)			284,290						292,001						314,691
LCR			122		%				122						119

(1)Excludes excess HQLA at certain subsidiaries that are not transferable to other Wells Fargo entities.

(2)Net of applicable haircuts required under the LCR rule.

(3)Projected net cash outflows are calculated by applying a standardized set of outflow and inflow assumptions, defined by the LCR rule, to various exposures and liability types, such as deposits and unfunded loan commitments, which are prescribed based on a number of factors, including the type of customer and the nature of the account.

Liquidity Sources We maintain liquidity in the form of cash, interest-earning deposits with banks, and unencumbered high-quality, liquid debt securities. These assets make up our primary sources of liquidity. Our primary sources of liquidity are substantially the same in composition as HQLA under the LCR rule; however, our primary sources of liquidity will generally exceed HQLA calculated under the LCR rule due to the applicable haircuts to HQLA and the exclusion of excess HQLA at our subsidiary IDIs required under the LCR rule. Our primary sources

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

Our cash is predominantly on deposit with the Federal Reserve. We believe the debt securities included in Table 27 provide quick and reliable sources of liquidity through sales or by pledging to obtain financing, regardless of market conditions. Debt securities within our HTM portfolio are not intended for sale but may be pledged to obtain financing.

Table 27: Primary Sources of Liquidity

			March 31, 2023																		December 31, 2022
(in millions)			Total						Encumbered						Unencumbered						Total						Encumbered						Unencumbered
Interest-earning deposits with banks (1)			$	124,473					—						124,473						124,561						—						124,561
Debt securities of U.S. Treasury and federal agencies			60,491						7,782						52,709						59,570						12,080						47,490
Federal agency mortgage-backed securities			245,761						24,701						221,060						230,881						34,151						196,730
Total			$	430,725					32,483						398,242						415,012						46,231						368,781

(1)Excludes time deposits, which are included in interest-earning deposits with banks in our consolidated balance sheet.

In addition to our primary sources of liquidity shown in

Table 27, liquidity is also available through the sale or financing of other debt securities, including trading and/or AFS debt securities, as well as through the sale, securitization, or financing of loans, to the extent such debt securities and loans are not encumbered.

Funding Sources The Parent acts as a source of funding for the Company through the issuance of long-term debt and equity. WFC Holdings, LLC (the “IHC”) is an intermediate holding company and subsidiary of the Parent, which provides funding

support for the ongoing operational requirements of the Parent and certain of its direct and indirect subsidiaries. For additional information on the IHC, see the “Regulatory Matters – ‘Living Will’ Requirements and Related Matters” section in our 2022 Form 10-K. Additional subsidiary funding is provided by deposits, short-term borrowings and long-term debt.

Deposits have historically provided a sizable source of relatively low-cost funds. Deposits were 144% and 145% of total loans at March 31, 2023, and December 31, 2022, respectively.

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

40			Wells Fargo & Company

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Banks and the Federal Reserve Discount Window. Although available, we do not view the borrowing capacity at the Federal Reserve Discount Window as a primary source of liquidity.

Table 28 presents a summary of our short-term borrowings, which generally mature in less than 30 days. For additional information on the classification of our short-term borrowings, see Note 1 (Summary of Significant Accounting Policies) to

Financial Statements in our 2022 Form 10-K. We pledge certain financial instruments that we own to collateralize repurchase agreements and other securities financings. For additional information, see the “Pledged Assets” section of Note 15 (Pledged Assets and Collateral) to Financial Statements in this Report.

Table 28: Short-Term Borrowings

(in millions)			March 31, 2023						December 31, 2022
Federal funds purchased and securities sold under agreements to repurchase			$	62,235					30,623
Other short-term borrowings (1)			18,772						20,522
Total			$	81,007					51,145

(1)Includes $5.0 billion and $7.0 billion of Federal Home Loan Bank (FHLB) advances at March 31, 2023, and December 31, 2022, respectively.

We access domestic and international capital markets for long-term funding 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 unless otherwise specified in the applicable prospectus or prospectus supplement, and we expect the proceeds from securities issued in the future will be used for

the same purposes. Depending on market conditions and our liquidity position, we may redeem or repurchase, and subsequently retire, our outstanding debt securities in privately negotiated or open market transactions, by tender offer, or otherwise. Table 29 provides the aggregate carrying value of long-term debt maturities (based on contractual payment dates) for the remainder of 2023 and the following years thereafter, as of March 31, 2023.

Table 29: Maturity of Long-Term Debt

			March 31, 2023
(in millions)			Remaining 2023						2024						2025						2026						2027						Thereafter						Total
Wells Fargo & Company (Parent Only)
Senior notes			$	3,659					11,235						14,247						23,602						7,581						53,851						114,175
Subordinated notes			1,558						707						959						2,658						2,379						12,619						20,880
Junior subordinated notes			—						—						—						—						346						849						1,195
Total long-term debt – Parent			5,217						11,942						15,206						26,260						10,306						67,319						136,250
Wells Fargo Bank, N.A. and other bank entities (Bank)
Senior notes (1)			7,003						17,003						177						81						3						133						24,400
Subordinated notes			923						—						149						—						27						3,333						4,432
Junior subordinated notes			—						—						—						—						404						—						404
Other bank debt (2)			2,364						1,705						561						233						154						2,104						7,121
Total long-term debt – Bank			10,290						18,708						887						314						588						5,570						36,357
Other consolidated subsidiaries
Senior notes			45						83						413						221						—						97						859
Total long-term debt – Other consolidated subsidiaries			45						83						413						221						—						97						859
Total long-term debt			$	15,552					30,733						16,506						26,795						10,894						72,986						173,466

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

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

			Wells Fargo & Company			41

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Risk Management – Asset/Liability Management (continued)

Credit Ratings Investors in the long-term capital markets, as well as other market participants, generally will consider, among other factors, a company’s debt rating in making investment decisions. Rating agencies base their ratings on many quantitative and qualitative factors, including capital adequacy, liquidity, asset quality, business mix, the level and quality of earnings, and rating agency assumptions regarding the probability and extent of federal financial assistance or support for certain large financial institutions. Adverse changes in these factors could result in a reduction of our credit rating; however, our debt securities do not contain credit rating covenants.

There were no actions undertaken by the rating agencies with regard to our credit ratings during first quarter 2023.

See the “Risk Factors” section in our 2022 Form 10-K for additional information regarding our credit ratings and the potential impact a credit rating downgrade would have on our liquidity and operations as well as Note 11 (Derivatives) to Financial Statements in this Report for information regarding additional collateral and funding obligations required for certain derivative instruments in the event our credit ratings were to fall below investment grade.

The credit ratings of the Parent and Wells Fargo Bank, N.A., as of March 31, 2023, are presented in Table 30.

Table 30: Credit Ratings as of March 31, 2023

Wells Fargo & Company

Wells Fargo Bank, N.A.

Senior debt

Short-term  borrowings

Long-term  deposits

Short-term  borrowings

Moody’s

A1

P-1

Aa1

P-1

S&P Global Ratings

BBB+

A-2

A+

A-1

Fitch Ratings

A+

F1

AA

F1+

DBRS Morningstar

AA (low)

R-1 (middle)

AA

R-1 (high)

42			Wells Fargo & Company

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Capital Management

We have an active program for managing capital through a comprehensive process for assessing the Company’s overall capital adequacy. Our objective is to maintain capital at an amount commensurate with our risk profile and risk tolerance objectives, and to meet both regulatory and market expectations. We primarily fund our capital needs through the retention of earnings net of both dividends and share repurchases, as well as through the issuance of preferred stock and long- and short-term debt. Retained earnings at March 31, 2023, increased $3.7 billion from December 31, 2022, predominantly as a result of $5.0 billion of Wells Fargo net income, partially offset by $1.4 billion of common and preferred stock dividends. During first quarter 2023, we issued $676 million of common stock, substantially all of which was issued in connection with employee compensation and benefits. In first quarter 2023, we repurchased 86 million shares of common stock at a cost of $4.0 billion. In first quarter 2023, our AOCI increased $789 million, predominantly due to a decrease in net unrealized losses on AFS debt securities and derivative and hedging activities. For additional information about capital planning, see the “Capital Planning and Stress Testing” section below.

Regulatory Capital Requirements

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

RISK-BASED CAPITAL AND RISK-WEIGHTED ASSETS The Company is subject to rules issued by federal banking regulators to implement Basel III capital requirements for U.S. banking organizations. The rules contain two frameworks for calculating capital requirements, a Standardized Approach and an Advanced Approach applicable to certain institutions, including Wells Fargo, and we must calculate our risk-based capital ratios under both approaches. The Company is required to satisfy the risk-based capital ratio requirements to avoid restrictions on capital distributions and discretionary bonus payments. Table 31 and Table 32 present the risk-based capital requirements applicable to the Company under the Standardized Approach and Advanced Approach, respectively, as of March 31, 2023.

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

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

In addition to the risk-based capital requirements described in Table 31 and Table 32, if the FRB determines that a period of excessive credit growth is contributing to an increase in systemic risk, a countercyclical buffer of up to 2.50% could be added to the risk-based capital ratio requirements under federal banking regulations. The countercyclical buffer in effect at March 31, 2023, was 0.00%.

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

			Wells Fargo & Company			43

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Capital Management (continued)

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

As a global systemically important bank (G-SIB), we are also subject to the FRB’s rule implementing an additional capital surcharge 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. Our

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

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

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.

Table 33: Capital Components and Ratios

						Standardized Approach																		Advanced Approach
($ in millions)						Required Capital Ratios (1)						Mar 31, 2023						Dec 31, 2022						Required Capital Ratios (1)						Mar 31, 2023						Dec 31, 2022
Common Equity Tier 1			(A)									$	134,454					133,527												134,454						133,527
Tier 1 capital			(B)									153,485						152,567												153,485						152,567
Total capital			(C)									187,626						186,747												177,963						177,258
Risk-weighted assets			(D)									1,243,787						1,259,889												1,117,860						1,112,307
Common Equity Tier 1 capital ratio			(A)/(D)			9.20		%				10.81			*			10.60						8.50						12.03						12.00
Tier 1 capital ratio			(B)/(D)			10.70						12.34			*			12.11						10.00						13.73						13.72
Total capital ratio			(C)/(D)			12.70						15.09			*			14.82						12.00						15.92						15.94

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

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

44			Wells Fargo & Company

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Table 34 provides information regarding the calculation and composition of our risk-based capital under the Standardized and Advanced Approaches.

Table 34: Risk-Based Capital Calculation and Components

(in millions)						Mar 31, 2023						Dec 31, 2022
Total equity (1)						$	183,220					182,213
Effect of accounting policy change (1)						—						338
Total equity (as reported)						183,220						181,875
Adjustments:
Preferred stock						(19,448)						(19,448)
Additional paid-in capital on preferred stock						173						173
Noncontrolling interests						(2,052)						(1,986)
Total common stockholders’ equity						$	161,893					160,614
Adjustments:
Goodwill						(25,173)						(25,173)
Certain identifiable intangible assets (other than MSRs)						(139)						(152)
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)						(2,486)						(2,427)
Applicable deferred taxes related to goodwill and other intangible assets (2)						897						890
CECL transition provision (3)						120						180
Other						(658)						(405)
Common Equity Tier 1 under the Standardized and Advanced Approaches						$	134,454					133,527
Preferred stock						19,448						19,448
Additional paid-in capital on preferred stock						(173)						(173)
Other						(244)						(235)
Total Tier 1 capital under the Standardized and Advanced Approaches			(A)			$	153,485					152,567
Long-term debt and other instruments qualifying as Tier 2						20,319						20,503
Qualifying allowance for credit losses (4)						14,150						13,959
Other						(328)						(282)
Total Tier 2 capital under the Standardized Approach			(B)			$	34,141					34,180
Total qualifying capital under the Standardized Approach			(A)+(B)			$	187,626					186,747
Long-term debt and other instruments qualifying as Tier 2						20,319						20,503
Qualifying allowance for credit losses (4)						4,487						4,470
Other						(328)						(282)
Total Tier 2 capital under the Advanced Approach			(C)			$	24,478					24,691
Total qualifying capital under the Advanced Approach			(A)+(C)			$	177,963					177,258

(1)In first quarter 2023, we adopted ASU 2018-12. We adopted this ASU with retrospective application, which required revision of prior period financial statements. Prior period risk-based capital and certain other regulatory related metrics were not revised. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

(2)Determined by applying the combined federal statutory rate and composite state income tax rates to the difference between book and tax basis of the respective goodwill and intangible assets at period-end.

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

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

Table 35 provides the composition of our RWAs under the Standardized and Advanced Approaches.

Table 35: Risk-Weighted Assets

						Standardized Approach															Advanced Approach (1)
(in millions)						Mar 31, 2023												Dec 31, 2022						Mar 31, 2023												Dec 31, 2022
Risk-weighted assets (RWAs):
Credit risk						$	1,205,239											1,218,006						759,674												757,436
Market risk						38,548												41,883						38,548												41,883
Operational risk						—												—						319,638												312,988
Total RWAs						$	1,243,787											1,259,889						1,117,860												1,112,307

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

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Capital Management (continued)

Table 36 provides an analysis of changes in CET1.

Table 36: Analysis of Changes in Common Equity Tier 1

(in millions)
Common Equity Tier 1 at December 31, 2022						$	133,527
Cumulative effect from change in accounting policy (1)						323
Net income applicable to common stock						4,713
Common stock dividends						(1,138)
Common stock issued, repurchased, and stock compensation-related items						(3,746)
Changes in accumulated other comprehensive income (loss)						789
Goodwill						—
Certain identifiable intangible assets (other than MSRs)						13
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)						(59)
Applicable deferred taxes related to goodwill and other intangible assets (2)						7
CECL transition provision (3)						(60)
Other (4)						85
Change in Common Equity Tier 1						927
Common Equity Tier 1 at March 31, 2023						$	134,454

(1)Effective January 1, 2023, we adopted ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

(2)Determined by applying the combined federal statutory rate and composite state income tax rates to the difference between book and tax basis of the respective goodwill and intangible assets at period-end.

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

(4)Includes $338 million related to our first quarter 2023 adoption of ASU 2018-12. For additional information, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

Table 37 presents net changes in the components of RWAs under the Standardized and Advanced Approaches.

Table 37: Analysis of Changes in RWAs

(in millions)			Standardized Approach			Advanced Approach
Risk-weighted assets (RWAs) at December 31, 2022			$	1,259,889		1,112,307
Net change in credit risk RWAs			(12,767)			2,238
Net change in market risk RWAs			(3,335)			(3,335)
Net change in operational risk RWAs			—			6,650
Total change in RWAs			(16,102)			5,553
RWAs at March 31, 2023			$	1,243,787		1,117,860

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

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

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

Table 38: Tangible Common Equity

									Balance at period-end												Average balance
									Quarter ended												Quarter ended
(in millions, except ratios)									Mar 31, 2023			Dec 31, 2022			Mar 31, 2022									Mar 31, 2023			Dec 31, 2022			Mar 31, 2022
Total equity									$	183,220		182,213			181,597									184,297			182,621			186,117
Adjustments:
Preferred stock (1)									(19,448)			(19,448)			(20,057)									(19,448)			(19,553)			(20,057)
Additional paid-in capital on preferred stock (1)									173			173			136									173			166			134
Unearned ESOP shares (1)									—			—			646									—			112			646
Noncontrolling interests									(2,052)			(1,986)			(2,446)									(2,019)			(2,185)			(2,468)
Total common stockholders’ equity			(A)						161,893			160,952			159,876									163,003			161,161			164,372
Adjustments:
Goodwill									(25,173)			(25,173)			(25,181)									(25,173)			(25,173)			(25,180)
Certain identifiable intangible assets (other than MSRs)									(139)			(152)			(210)									(145)			(160)			(218)
Goodwill and other intangibles on investments in consolidated portfolio companies (included in other assets)									(2,486)			(2,427)			(2,304)									(2,440)			(2,378)			(2,395)
Applicable deferred taxes related to goodwill and other intangible assets (2)									897			890			871									895			890			803
Tangible common equity			(B)						$	134,992		134,090			133,052									136,140			134,340			137,382
Common shares outstanding			(C)						3,763.2			3,833.8			3,789.9									N/A			N/A			N/A
Net income applicable to common stock			(D)						N/A			N/A			N/A									$	4,713		2,877			3,509
Book value per common share			(A)/(C)						$	43.02		41.98			42.18									N/A			N/A			N/A
Tangible book value per common share			(B)/(C)						35.87			34.98			35.11									N/A			N/A			N/A
Return on average common stockholders’ equity (ROE)			(D)/(A)						N/A			N/A			N/A									11.73		%	7.08			8.66
Return on average tangible common equity (ROTCE)			(D)/(B)						N/A			N/A			N/A									14.04			8.50			10.36

(1)In fourth quarter 2022, we redeemed all outstanding shares of our Employee Stock Ownership Plan (ESOP) Cumulative Convertible Preferred Stock in exchange for shares of the Company's common stock. For additional information, see Note 11 (Preferred Stock) to Financial Statements in our 2022 Form 10-K.

(2)Determined by applying the combined federal statutory rate and composite state income tax rates to the difference between book and tax basis of the respective goodwill and intangible assets at period-end.

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 March 31, 2023.

Table 39: Leverage Requirements Applicable to the Company

In addition, our IDIs are required to maintain an SLR of at least 6.00% to be considered well capitalized under applicable regulatory capital adequacy rules and maintain a minimum Tier 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 2022 Form 10-K.

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Capital Management (continued)

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

Table 40: Leverage Ratios for the Company

($ in millions)						Quarter ended March 31, 2023
Tier 1 capital			(A)			$	153,485
Total average assets						1,863,796
Less: Goodwill and other permitted Tier 1 capital deductions (net of deferred tax liabilities)						28,348
Total adjusted average assets						1,835,448
Plus adjustments for off-balance sheet exposures:
Derivatives (1)						61,138
Repo-style transactions (2)						3,582
Other (3)						306,207
Total off-balance sheet exposures						370,927
Total leverage exposure			(B)			$	2,206,375
Supplementary leverage ratio			(A)/(B)			6.96		%
Tier 1 leverage ratio (4)						8.36		%

(1)Adjustment represents derivatives and collateral netting exposures as defined for supplementary leverage ratio determination purposes.

(2)Adjustment represents counterparty credit risk for repo-style transactions where Wells Fargo & Company is the principal counterparty facing the client.

(3)Adjustment represents credit equivalent amounts of other off-balance sheet exposures not already included as derivatives and repo-style transactions exposures.

(4)The Tier 1 leverage ratio consists of Tier 1 capital divided by total average assets, excluding goodwill and certain other items as determined under the rule.

TOTAL LOSS ABSORBING CAPACITY As a G-SIB, we are required to have a minimum amount of equity and unsecured long-term debt for purposes of resolvability and resiliency, often referred to as Total Loss Absorbing Capacity (TLAC). U.S. G-SIBs are required to have a minimum amount of TLAC (consisting of CET1 capital and additional Tier 1 capital issued directly by the top-tier or covered BHC plus eligible external long-term debt) to avoid restrictions on capital distributions and discretionary bonus payments as well as a minimum amount of eligible unsecured long-term debt. The components used to calculate our minimum TLAC and eligible unsecured long-term debt requirements as of March 31, 2023, are presented in Table 41.

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

TLAC requirement Greater of:

18.00% of RWAs

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

+

+

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

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

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

6.00% of RWAs

4.50% of total leverage exposure

+

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

The FRB and OCC have proposed amendments to the TLAC

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

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

Table 42 provides our TLAC and eligible unsecured long-term debt and related ratios.

Table 42: TLAC and Eligible Unsecured Long-Term Debt

March 31, 2023
($ in millions)						TLAC (1)						Regulatory Minimum (2)						Eligible Unsecured Long-term Debt						Regulatory Minimum
Total eligible amount						$	290,240											131,646
Percentage of RWAs (3)						23.34		%				21.50						10.58						7.50
Percentage of total leverage exposure						13.15						9.50						5.97						4.50

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

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

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

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

Our principal U.S. broker-dealer subsidiaries, Wells Fargo Securities, LLC, and Wells Fargo Clearing Services, LLC, are subject to regulations to maintain minimum net capital requirements. As of March 31, 2023, these broker-dealer subsidiaries were in compliance with their respective regulatory minimum net capital requirements.

Capital Planning and Stress Testing

Our planned long-term capital structure is designed to meet regulatory and market expectations. We believe that our long-term targeted capital structure enables us to invest in and grow our business, satisfy our customers’ financial needs in varying environments, access markets, and maintain flexibility to return capital to our shareholders. Our long-term targeted capital structure also considers capital levels sufficient to exceed capital requirements, including the G-SIB capital surcharge and the stress capital buffer, as well as potential changes to regulatory requirements for our capital ratios, planned capital actions, changes in our risk profile and other factors. Accordingly, our long-term target capital levels are set above their respective regulatory minimums plus buffers.

The FRB capital plan rule establishes capital planning and other requirements that govern capital distributions, including dividends and share repurchases, by certain BHCs, including Wells Fargo. The FRB assesses, among other things, the overall financial condition, risk profile, and capital adequacy of BHCs when evaluating their capital plans. We submitted our 2023 capital plan to the FRB prior to the April 5, 2023, deadline.

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 has indicated it will publish its supervisory stress test results by June 30, 2023.

Federal banking regulators also require large BHCs and banks to conduct their own stress tests to evaluate whether the institution has sufficient capital to continue to operate during periods of adverse economic and financial conditions.

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Securities Repurchases

From time to time the Board authorizes the Company to repurchase shares of our common stock. Although we announce when the Board authorizes share repurchases, we typically do not give any public notice before we repurchase our shares. Various factors determine the amount of our share repurchases, including our capital requirements, the number of shares we expect to issue for employee benefit plans and any acquisitions, market conditions (including the trading price of our stock), and regulatory and legal considerations, including under the FRB’s capital plan rule. Due to the various factors that may impact the

amount of our share repurchases and the fact that we tend to be in the market regularly to satisfy repurchase considerations under our capital plan, our share repurchases occur at various price levels. We may suspend share repurchase activity at any time.

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

Regulatory Matters

The U.S. financial services industry is subject to significant regulation and regulatory oversight initiatives. This regulation and oversight may continue to impact how U.S. financial services companies conduct business and may continue to result in increased regulatory compliance costs.

For a discussion of certain consent orders applicable to the Company, see the “Overview” section in this Report. 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 2022 Form 10-K.

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Critical Accounting Policies

Our significant accounting policies (see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2022 Form 10-K) are fundamental to understanding our results of operations and financial condition because they require that we use estimates and assumptions that may affect the value of our assets or liabilities and financial results. Six of these policies are critical because they require management to make difficult, subjective and complex judgments about matters that are inherently uncertain and because it is likely that materially different amounts would be reported under different conditions or using different assumptions. These policies govern:

•the allowance for credit losses;

•the valuation of residential MSRs;

•the fair value of financial instruments;

•income taxes;

•liability for contingent litigation losses; and

•goodwill impairment.

Management has discussed these critical accounting policies and the related estimates and judgments with the Board’s Audit Committee. For additional information on these policies, see the “Critical Accounting Policies” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2022 Form 10-K and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.

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Current Accounting Developments

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

Table 43: Current Accounting Developments – Issued Standards

Description and Effective Date						Financial statement impact
Accounting Standards Update (ASU) 2023-02 - Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method
The Update, effective January 1, 2024 (with early adoption permitted), permits entities to elect to account for additional tax credit investments using the proportional amortization method. The Update requires a separate accounting policy election for each tax credit program. For any tax credit program where the proportional amortization method is elected, all investments within that program that meet eligibility criteria are required to apply the proportional amortization method. The Update also requires additional disclosures for any tax credit program where the proportional amortization method is elected.						The Update eliminates the low-income housing tax credit (LIHTC)-only scope limitation of the proportional amortization method and permits entities to account for all tax credit investments made primarily for the purpose of receiving income tax credits and income tax benefits using a consistent accounting method. Under the proportional amortization method, tax credit investments are carried at amortized cost and amortized in proportion to the income tax credits and income tax benefits received. The amortization of the investment and the related income tax credits and income tax benefits are recorded in income tax expense. The Update may be adopted on either a full retrospective or modified retrospective basis and early adoption is permitted. Upon adoption of the Update, we will disaggregate our tax credit investment portfolio into tax credit programs and make a separate accounting policy election as to whether to apply the proportional amortization method for each program. For any investments that will apply the proportional amortization method upon adoption of the Update, the cumulative effect of the difference between the current carrying value and the carrying value under the proportional amortization method will be recorded as an adjustment to the opening balance of retained earnings, the period of which is dependent upon which transition method is selected. We are currently evaluating the impact of the Update on our consolidated financial statements.

Other Accounting Developments

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

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

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Forward-Looking Statements

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

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

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

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

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

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

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

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

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

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

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

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

•negative effects from the retail banking sales practices matter and from 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, 2022.

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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, 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, 2022, as filed with the Securities and Exchange Commission and available on its website at www.sec.gov.1

Any forward-looking statement made by us speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

1 We do not control this website. Wells Fargo has provided this link for your convenience, but does not endorse and is not responsible for the content, links, privacy policy, or security policy of this website.

Forward-looking Non-GAAP Financial Measures. From time to time management may discuss forward-looking non-GAAP financial measures, such as forward-looking estimates or targets for return on average tangible common equity. We are unable to provide a reconciliation of forward-looking non-GAAP financial measures to their most directly comparable GAAP financial measures because we are unable to provide, without unreasonable effort, a meaningful or accurate calculation or estimation of amounts that would be necessary for the reconciliation due to the complexity and inherent difficulty in forecasting and quantifying future amounts or when they may occur. Such unavailable information could be significant to future results.

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Risk Factors

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

54			Wells Fargo & Company

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Controls and Procedures

Disclosure Controls and Procedures

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

 

Internal Control Over Financial Reporting

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

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

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

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

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

			Wells Fargo & Company			55

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Financial Statements

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

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

The accompanying notes are an integral part of these statements.

56			Wells Fargo & Company

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Wells Fargo & Company and Subsidiaries
Consolidated Statement of Comprehensive Income (Unaudited)
									Quarter ended March 31,
(in millions)															2023						2022
Net income before noncontrolling interests (1)															$	4,880					3,918
Other comprehensive income (loss), after tax:
Net change in debt securities															362						(5,148)
Net change in derivatives and hedging activities															378						20
Defined benefit plans adjustments															21						72
Other (1)															28						4
Other comprehensive income (loss), after tax															789						(5,052)
Total comprehensive income (loss) before noncontrolling interests															5,669						(1,134)
Less: Other comprehensive income (loss) from noncontrolling interests															(1)						1
Less: Net income (loss) from noncontrolling interests															(111)						130
Wells Fargo comprehensive income (loss)															$	5,781					(1,265)

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

The accompanying notes are an integral part of these statements.

			Wells Fargo & Company			57

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Wells Fargo & Company and Subsidiaries
Consolidated Balance Sheet
(in millions, except shares)			Mar 31, 2023						Dec 31, 2022
Assets			(Unaudited)
Cash and due from banks			$	31,958					34,596
Interest-earning deposits with banks			130,478						124,561
Federal funds sold and securities purchased under resale agreements			67,288						68,036
Debt securities:
Trading, at fair value (includes assets pledged as collateral of $49,295 and $26,932)			90,052						86,155
Available-for-sale, at fair value (amortized cost of $151,861 and $121,725, net of allowance for credit losses)			144,398						113,594
Held-to-maturity, at amortized cost, net of allowance for credit losses (fair value $240,688 and $255,521)			277,147						297,059
Loans held for sale (includes $3,427 and $4,220 carried at fair value)			6,199						7,104
Loans			947,991						955,871
Allowance for loan losses			(13,120)						(12,985)
Net loans			934,871						942,886
Mortgage servicing rights (includes $8,819 and $9,310 carried at fair value)			9,950						10,480
Premises and equipment, net			8,416						8,350
Goodwill			25,173						25,173
Derivative assets			17,117						22,774
Equity securities (includes $25,003 and $28,383 carried at fair value; and assets pledged as collateral of $645 and $747)			60,610						64,414
Other assets (1)			82,743						75,838
Total assets (2)			$	1,886,400					1,881,020
Liabilities
Noninterest-bearing deposits			$	434,912					458,010
Interest-bearing deposits			927,717						925,975
Total deposits			1,362,629						1,383,985
Short-term borrowings (includes $190 and $181 carried at fair value)			81,007						51,145
Derivative liabilities (1)			16,897						20,067
Accrued expenses and other liabilities (includes $22,937 and $20,290 carried at fair value) (1)			69,181						68,740
Long-term debt (includes $1,506 and $1,346 carried at fair value)			173,466						174,870
Total liabilities (3)			1,703,180						1,698,807
Equity
Wells Fargo stockholders’ equity:
Preferred stock – aggregate liquidation preference of $20,216 and $20,216			19,448						19,448
Common stock – $1-2/3 par value, authorized 9,000,000,000 shares; issued 5,481,811,474 shares			9,136						9,136
Additional paid-in capital			59,946						60,319
Retained earnings (1)			191,688						187,968
Accumulated other comprehensive loss (1)			(12,572)						(13,362)
Treasury stock, at cost – 1,718,587,875 shares and 1,648,007,022 shares			(86,049)						(82,853)
Unearned ESOP shares			(429)						(429)
Total Wells Fargo stockholders’ equity			181,168						180,227
Noncontrolling interests			2,052						1,986
Total equity			183,220						182,213
Total liabilities and equity			$	1,886,400					1,881,020

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

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

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

The accompanying notes are an integral part of these statements.

58			Wells Fargo & Company

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Wells Fargo & Company and Subsidiaries
Consolidated Statement of Changes in Equity (Unaudited)
			Wells Fargo stockholders’ equity
			Preferred stock												Common stock
($ and shares in millions)			Shares						Amount						Shares						Amount						Additional paid-in capital						Retained earnings						Accumulated other comprehensive income (loss)						Treasury stock						Unearned ESOP shares												Noncontrolling interests						Total equity
Balance December 31, 2022 (1)			4.7						$	19,448					3,833.8						$	9,136					60,319						187,968						(13,362)						(82,853)						(429)												1,986						182,213
Cumulative effect from change in accounting policy (2)																																	323																																				323
Balance January 1, 2023			4.7						19,448						3,833.8						9,136						60,319						188,291						(13,362)						(82,853)						(429)												1,986						182,536
Net income (loss)																																	4,991																														(111)						4,880
Other comprehensive income (loss), net of tax																																							790																								(1)						789
Noncontrolling interests																																																															178						178
Common stock issued															15.8												—						(154)												830																								676
Common stock repurchased															(86.4)																														(4,049)																								(4,049)
Common stock dividends																											24						(1,162)																																				(1,138)
Preferred stock dividends																																	(278)																																				(278)
Stock-based compensation																											474																																										474
Net change in deferred compensation and related plans																											(871)																		23																								(848)
Net change			—						—						(70.6)						—						(373)						3,397						790						(3,196)						—												66						684
Balance March 31, 2023			4.7						$	19,448					3,763.2						$	9,136					59,946						191,688						(12,572)						(86,049)						(429)												2,052						183,220
Balance December 31, 2021			5.3						$	20,057					3,885.8						$	9,136					60,196						180,322						(1,702)						(79,757)						(646)												2,504						190,110
Cumulative effect from change in accounting policy (1)																																	(176)						(44)																								(1)						(221)
Balance January 1, 2022			5.3						20,057						3,885.8						9,136						60,196						180,146						(1,746)						(79,757)						(646)												2,503						189,889
Net income (1)																																	3,788																														130						3,918
Other comprehensive income (loss), net of tax (1)																																							(5,053)																								1						(5,052)
Noncontrolling interests																																																															(188)						(188)
Common stock issued															14.2												—						(117)												697																								580
Common stock repurchased															(110.1)																														(6,018)																								(6,018)
Common stock dividends																											16						(975)																																				(959)
Preferred stock dividends																																	(279)																																				(279)
Stock-based compensation																											494																																										494
Net change in deferred compensation and related plans																											(807)																		19																								(788)
Net change			—						—						(95.9)						—						(297)						2,417						(5,053)						(5,302)						—												(57)						(8,292)
Balance March 31, 2022			5.3						$	20,057					3,789.9						$	9,136					59,899						182,563						(6,799)						(85,059)						(646)												2,446						181,597

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

(2)Effective January 1, 2023, we adopted ASU 2022-02 – Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. For additional information, see Note 1 (Summary of Significant Accounting Policies).

The accompanying notes are an integral part of these statements.

			Wells Fargo & Company			59

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Wells Fargo & Company and Subsidiaries
Consolidated Statement of Cash Flows (Unaudited)
			Quarter ended March 31,
(in millions)			2023						2022
Cash flows from operating activities:
Net income before noncontrolling interests (1)			$	4,880					3,918
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses			1,207						(787)
Changes in fair value of MSRs and LHFS carried at fair value			441						(891)
Depreciation, amortization and accretion			1,552						1,791
Deferred income tax expense (benefit) (1)			600						(140)
Other, net			3,703						(6,116)
Originations and purchases of loans held for sale			(8,924)						(24,206)
Proceeds from sales of and paydowns on loans originally classified as held for sale			7,776						18,324
Net change in:
Debt and equity securities, held for trading			1,663						11,771
Derivative assets and liabilities (1)			3,126						(763)
Other assets			(7,473)						(5,815)
Other accrued expenses and liabilities (1)			(1,145)						3,113
Net cash provided by operating activities			7,406						199
Cash flows from investing activities:
Net change in:
Federal funds sold and securities purchased under resale agreements			1,106						(1,541)
Available-for-sale debt securities:
Proceeds from sales			—						19
Paydowns and maturities			2,821						6,876
Purchases			(12,393)						(19,195)
Held-to-maturity debt securities:
Paydowns and maturities			3,910						8,626
Purchases			(4,225)						(2,295)
Equity securities, not held for trading:
Proceeds from sales and capital returns			476						1,911
Purchases			(947)						(1,481)
Loans:
Loans originated by banking subsidiaries, net of principal collected			4,073						(20,285)
Proceeds from sales of loans originally classified as held for investment			1,588						4,143
Purchases of loans			(415)						(100)
Principal collected on nonbank entities’ loans			2,385						1,465
Loans originated by nonbank entities			(189)						(1,219)
Other, net			(6,145)						115
Net cash used by investing activities			(7,955)						(22,961)
Cash flows from financing activities:
Net change in:
Deposits			(21,356)						(1,125)
Short-term borrowings			29,862						(980)
Long-term debt:
Proceeds from issuance			157						8,089
Repayment			(5,158)						(7,889)
Preferred stock:
Cash dividends paid			(220)						(220)
Common stock:
Repurchased			(4,016)						(6,018)
Cash dividends paid			(1,137)						(958)
Other, net			(309)						(472)
Net cash used by financing activities			(2,177)						(9,573)
Net change in cash, cash equivalents, and restricted cash			(2,726)						(32,335)
Cash, cash equivalents, and restricted cash at beginning of period (2)			159,157						234,230
Cash, cash equivalents, and restricted cash at end of period (2)			$	156,431					201,895
Supplemental cash flow disclosures:
Cash paid for interest			$	5,477					661
Net cash paid (refunded) for income taxes			(827)						76

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

(2)Includes Cash and due from banks and Interest-earning deposits with banks on our consolidated balance sheet and excludes time deposits, which are included in Interest-earning deposits with banks.

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

60			Wells Fargo & Company

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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, 2022 (2022 Form 10-K). There were no material changes to these policies in first quarter 2023.

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

•allowance for credit losses (Note 5 (Loans and Related Allowance for Credit Losses));

•valuations of residential mortgage servicing rights (MSRs) (Note 6 (Mortgage Banking Activities) and Note 13 (Securitizations and Variable Interest Entities));

•valuations of financial instruments (Note 12 (Fair Values of Assets and Liabilities));

•liabilities for contingent litigation losses (Note 10 (Legal Actions));

•income taxes; and

•goodwill impairment (Note 7 (Intangible Assets and Other Assets)).

Actual results could differ from those estimates.

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

Accounting Standards Adopted in 2023

In 2023, we adopted the following new accounting guidance:

•Accounting Standards Update (ASU) 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures

•ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method

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

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

ASU 2022-02 eliminates the accounting and reporting for troubled debt restructurings (TDRs) by creditors and introduces new required disclosures for loan modifications made to borrowers experiencing financial difficulty. The new required disclosures include information about modifications granted to borrowers experiencing financial difficulty in the form of principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, or a combination of these modifications. The ASU also requires new disclosures for the financial effects of these modifications and for loan performance in the twelve months following the modification. The Update also amends the guidance for vintage disclosures to require disclosure of current period gross charge-offs by year of origination. See Note 5 (Loans and Related Allowance for Credit Losses) for additional information related to the new disclosures for loan modifications to borrowers experiencing financial difficulty and for gross charge-offs by year of origination, which are provided on a prospective basis.

The Update eliminates the requirement to use a discounted cash flow (DCF) approach to measure the allowance for credit losses (ACL) for TDRs and instead allows for the use of a current expected credit loss approach for all loans. Under a current expected credit loss approach, the impact of loan modifications and the subsequent performance of modified loans, including defaults, is reflected in the historical loss data used to calculate expected lifetime credit losses. Upon adoption on January 1, 2023, we discontinued utilizing a DCF approach to measure credit impairment for consumer loans and certain commercial loans previously modified in a TDR and we removed the interest concession component recognized in the ACL. We elected to apply the modified-retrospective transition approach method, resulting in a cumulative effect adjustment to retained earnings upon adoption, which reflects the difference between the pre-modification and post-modification effective interest rates that would have been recognized over the remaining life of the loans as interest income. Upon adoption, we recognized a decrease in our ACL of $429 million, pre-tax, and an increase to our retained earnings of $323 million, after tax. We continue to use a DCF approach for certain non-accruing, non-collateral dependent commercial loans.

ASU 2022-01 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.

			Wells Fargo & Company			61

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Note 1: Summary of Significant Accounting Policies (continued)

We adopted ASU 2022-01 on January 1, 2023 on a prospective basis. No cumulative effect adjustment to the opening balance of stockholders’ equity was required upon adoption, as impacts to us were reflected prospectively. The portfolio layer method improves our ability to use derivatives to hedge interest rate risk exposures associated with portfolios of financial assets, such as fixed-rate available-for-sale (AFS) debt securities and loans. The Update allows us to hedge a larger proportion of these portfolios by expanding the number and type of derivatives permitted as eligible hedges, as well as by increasing the scope of eligible hedged items to include both prepayable and nonprepayable assets. Unlike other fair value hedging relationships where basis adjustments adjust the carrying amount of the individual hedged item, basis adjustments related to active portfolio layer method hedges are maintained at a portfolio level and not allocated to the individual assets in the portfolio.

Upon adoption, any election to designate portfolio layer method hedges is applied prospectively. Additionally, the Update permits a one-time reclassification of debt securities from held-to-maturity (HTM) to AFS classification as long as the securities are designated in a portfolio layer method hedge no later than 30 days after the adoption date.

In January 2023, we reclassified fixed-rate debt securities with an aggregate fair value of $23.2 billion and amortized cost of $23.9 billion from HTM to AFS and designated interest rate swaps with notional amounts of $20.1 billion as fair value hedges using the portfolio layer method. The transfer of debt securities was recorded at fair value and resulted in approximately $566 million of unrealized losses associated with AFS debt securities being recorded to other comprehensive income, net of deferred taxes.

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

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

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

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

The ASU also requires more frequent updates for insurance assumptions, mandates the use of a standardized discount rate for traditional long-duration contracts, and simplifies the amortization of deferred acquisition costs. The accounting changes for the liability of future policyholder benefits for traditional long-duration contracts (included in accrued expenses and other liabilities) and deferred acquisition costs (included in other assets) did not have a material impact upon adoption.

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

62			Wells Fargo & Company

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Table 1.1: Impact of Adoption of ASU 2018-12

																								Quarter ended March 31, 2022
($ in millions, except per share amounts)																								As reported						Effect of adoption						As revised
Selected Income Statement Data
Noninterest income																								$	8,371					136						8,507
Noninterest expense																								13,870						(19)						13,851
Income tax expense																								707						39						746
Net income																								3,671						117						3,788
Diluted earnings per common share																								0.88						0.03						0.91
																								At December 31, 2022
																								As reported						Effect of adoption						As revised
Selected Balance Sheet Data
Other assets																								75,834						4						75,838
Derivative liabilities																								20,085						(18)						20,067
Accrued expenses and other liabilities																								69,056						(316)						68,740
Retained earnings																								187,649						319						187,968
Accumulated other comprehensive income (loss)																								(13,381)						19						(13,362)

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

Table 1.2: Transition Adjustment of ASU 2018-12

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

Supplemental Cash Flow Information

Significant noncash activities are presented in Table 1.3.

Table 1.3: Supplemental Cash Flow Information

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

(1)Predominantly represents agency mortgage-backed securities purchased upon settlement of the sale and securitization of our conforming residential mortgage loans. See Note 13 (Securitizations and Variable Interest Entities) for additional information.

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

Subsequent Events

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

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

			Wells Fargo & Company			63

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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)			Mar 31, 2023						Dec 31, 2022
Trading assets:
Debt securities			$	90,052					86,155
Equity securities			23,277						26,910
Loans held for sale			1,463						1,466
Gross trading derivative assets			60,508						77,148
Netting (1)			(43,843)						(54,922)
Total trading derivative assets			16,665						22,226
Total trading assets			131,457						136,757
Trading liabilities:
Short sale and other liabilities			22,934						20,304
Long-term debt			1,506						1,346
Gross trading derivative liabilities			63,483						77,698
Netting (1)			(47,897)						(59,232)
Total trading derivative liabilities			15,586						18,466
Total trading liabilities			$	40,026					40,116

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

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

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

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

									Quarter ended March 31,
(in millions)															2023						2022
Interest income:
Debt securities															$	797					548
Equity securities															94						120
Loans held for sale															19						11
Total interest income															910						679
Less: Interest expense															143						132
Net interest income															767						547
Net gains (losses) from trading activities (1):
Debt securities															1,471						(3,648)
Equity securities															1,689						(824)
Loans held for sale															12						9
Long-term debt															(30)						12
Derivatives (2)															(1,800)						4,669
Total net gains from trading activities															1,342						218
Total trading-related net interest and noninterest income															$	2,109					765

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

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

64			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 (Intangible Assets and Other Assets) for additional information on accrued interest receivable. Amounts considered to be uncollectible are reversed through interest income. The interest income reversed in first quarter 2023 and 2022 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						Net unrealized gains (losses)						Fair value
March 31, 2023
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies			$	60,397					26						(2,380)						(2,354)						58,043
Non-U.S. government securities			163						—						(1)						(1)						162
Securities of U.S. states and political subdivisions (2)			22,499						37						(776)						(739)						21,760
Federal agency mortgage-backed securities			59,396						44						(4,235)						(4,191)						55,205
Non-agency mortgage-backed securities (3)			3,269						1						(126)						(125)						3,144
Collateralized loan obligations			3,980						—						(75)						(75)						3,905
Other debt securities			2,163						59						(43)						16						2,179
Total available-for-sale debt securities, excluding portfolio level basis adjustments			151,867						167						(7,636)						(7,469)						144,398
Portfolio level basis adjustments (4)			(6)																		6						—
Total available-for-sale debt securities			151,861						167						(7,636)						(7,463)						144,398
Held-to-maturity debt securities:
Securities of U.S. Treasury and federal agencies			3,788						—						(1,340)						(1,340)						2,448
Securities of U.S. states and political subdivisions			19,110						4						(3,284)						(3,280)						15,830
Federal agency mortgage-backed securities			221,553						218						(31,215)						(30,997)						190,556
Non-agency mortgage-backed securities (3)			1,267						1						(140)						(139)						1,128
Collateralized loan obligations			29,703						2						(590)						(588)						29,115
Other debt securities			1,726						—						(115)						(115)						1,611
Total held-to-maturity debt securities			277,147						225						(36,684)						(36,459)						240,688
Total			$	429,008					392						(44,320)						(43,922)						385,086
December 31, 2022
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies			$	47,536					9						(2,260)						(2,251)						45,285
Non-U.S. government securities			162						—						—						—						162
Securities of U.S. states and political subdivisions (2)			10,958						20						(533)						(513)						10,445
Federal agency mortgage-backed securities			53,302						2						(5,167)						(5,165)						48,137
Non-agency mortgage-backed securities (3)			3,423						1						(140)						(139)						3,284
Collateralized loan obligations			4,071						—						(90)						(90)						3,981
Other debt securities			2,273						75						(48)						27						2,300
Total available-for-sale debt securities			121,725						107						(8,238)						(8,131)						113,594
Held-to-maturity debt securities:
Securities of U.S. Treasury and federal agencies			16,202						—						(1,917)						(1,917)						14,285
Securities of U.S. states and political subdivisions			30,985						8						(4,385)						(4,377)						26,608
Federal agency mortgage-backed securities			216,966						30						(34,252)						(34,222)						182,744
Non-agency mortgage-backed securities (3)			1,253						—						(147)						(147)						1,106
Collateralized loan obligations			29,926						1						(727)						(726)						29,200
Other debt securities			1,727						—						(149)						(149)						1,578
Total held-to-maturity debt securities			297,059						39						(41,577)						(41,538)						255,521
Total			$	418,784					146						(49,815)						(49,669)						369,115

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

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

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

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

			Wells Fargo & Company			65

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

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

connection with the adoption of ASU 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging – Portfolio Layer Method. For additional information, see Note 1 (Summary of Significant Accounting Policies).

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

									Quarter ended March 31,
(in millions)															2023						2022
Purchases of held-to-maturity debt securities (1):
Securities of U.S. states and political subdivisions															—						834
Federal agency mortgage-backed securities															4,225						2,051
Non-agency mortgage-backed securities															26						104
Total purchases of held-to-maturity debt securities															4,251						2,989
Transfers from available-for-sale debt securities to held-to-maturity debt securities (2):
Federal agency mortgage-backed securities															3,687						14,651
Total transfers from available-for-sale debt securities to held-to-maturity debt securities															$	3,687					14,651

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

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

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

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

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

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

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

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

Credit Quality

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

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

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

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

66			Wells Fargo & Company

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Table 3.4: Investment Grade Debt Securities

			Available-for-Sale									Held-to-Maturity
($ in millions)			Fair value			% investment grade						Amortized cost			% investment grade
March 31, 2023
Total portfolio (1)			$	144,398		99		%				$	277,224		99		%
Breakdown by category:
Securities of U.S. Treasury and federal agencies (2)			$	113,248		100		%				$	225,341		100		%
Securities of U.S. states and political subdivisions			21,760			99						19,121			100
Collateralized loan obligations (3)			3,905			100						29,740			100
All other debt securities (4)			5,485			90						3,022			62
December 31, 2022
Total portfolio (1)			$	113,594		99		%				$	297,144		99		%
Breakdown by category:
Securities of U.S. Treasury and federal agencies (2)			$	93,422		100		%				$	233,169		100		%
Securities of U.S. states and political subdivisions			10,445			99						31,000			100
Collateralized loan obligations (3)			3,981			100						29,972			100
All other debt securities (4)			5,746			89						3,003			63

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

(2)Includes federal agency mortgage-backed securities.

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

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

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

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

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

			Wells Fargo & Company			67

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

Unrealized Losses of Available-for-Sale Debt Securities

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

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

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

			Less than 12 months												12 months or more												Total
(in millions)			Gross unrealized losses (1)						Fair value						Gross unrealized losses (1)						Fair value						Gross unrealized losses (1)						Fair value
March 31, 2023
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies			$	(371)					13,866						(2,009)						33,465						(2,380)						47,331
Non-U.S. government securities			—						—						(1)						63						(1)						63
Securities of U.S. states and political subdivisions			(353)						11,016						(423)						2,925						(776)						13,941
Federal agency mortgage-backed securities			(471)						19,406						(3,764)						32,514						(4,235)						51,920
Non-agency mortgage-backed securities			(13)						376						(113)						2,745						(126)						3,121
Collateralized loan obligations			(1)						86						(74)						3,767						(75)						3,853
Other debt securities			(10)						810						(33)						852						(43)						1,662
Total available-for-sale debt securities			$	(1,219)					45,560						(6,417)						76,331						(7,636)						121,891
December 31, 2022
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies			$	(291)					9,870						(1,969)						27,899						(2,260)						37,769
Securities of U.S. states and political subdivisions			(72)						2,154						(461)						2,382						(533)						4,536
Federal agency mortgage-backed securities			(3,580)						39,563						(1,587)						8,481						(5,167)						48,044
Non-agency mortgage-backed securities			(43)						1,194						(97)						2,068						(140)						3,262
Collateralized loan obligations			(65)						3,195						(25)						786						(90)						3,981
Other debt securities			(31)						1,591						(17)						471						(48)						2,062
Total available-for-sale debt securities			$	(4,082)					57,567						(4,156)						42,087						(8,238)						99,654

(1)Excludes portfolio level basis adjustments.

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

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

68			Wells Fargo & Company

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Contractual Maturities

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

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

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

By remaining contractual maturity ($ in millions)			Total						Within one year						After one year through five years						After five years through ten years						After ten years
March 31, 2023
Available-for-sale debt securities (1)(2):
Securities of U.S. Treasury and federal agencies
Amortized cost, net			$	60,397					6,356						34,323						18,161						1,557
Fair value			58,043						6,190						33,412						16,928						1,513
Weighted average yield			1.37		%				0.99						1.29						1.64						1.44
Non-U.S. government securities
Amortized cost, net			$	163					2						137						24						—
Fair value			162						1						137						24						—
Weighted average yield			4.15		%				5.10						4.14						4.16						—
Securities of U.S. states and political subdivisions
Amortized cost, net			$	22,499					2,587						5,357						4,687						9,868
Fair value			21,760						2,580						5,333						4,381						9,466
Weighted average yield			2.76		%				2.73						3.33						2.82						2.43
Federal agency mortgage-backed securities
Amortized cost, net			$	59,396					—						246						842						58,308
Fair value			55,205						—						236						790						54,179
Weighted average yield			3.52		%				—						1.93						2.54						3.54
Non-agency mortgage-backed securities
Amortized cost, net			$	3,269					—						—						59						3,210
Fair value			3,144						—						—						46						3,098
Weighted average yield			4.81		%				—						—						3.24						4.84
Collateralized loan obligations
Amortized cost, net			$	3,980					—						8						3,546						426
Fair value			3,905						—						8						3,484						413
Weighted average yield			6.14		%				—						6.24						6.13						6.17
Other debt securities
Amortized cost, net			$	2,163					82						183						830						1,068
Fair value			2,179						80						180						830						1,089
Weighted average yield			5.74		%				6.07						6.25						5.03						6.17
Total available-for-sale debt securities
Amortized cost, net			$	151,867					9,027						40,254						28,149						74,437
Fair value			144,398						8,851						39,306						26,483						69,758
Weighted average yield			2.67		%				1.54						1.58						2.53						3.46

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

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

			Wells Fargo & Company			69

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

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

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

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

70			Wells Fargo & Company

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Note 4:  Equity Securities

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

Table 4.1: Equity Securities

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

(1)Represents securities economically hedged with equity derivatives.

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

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

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

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

Net Gains and Losses Not Held for Trading

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

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

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

									Quarter ended March 31,
(in millions)															2023						2022
Net gains (losses) from equity securities carried at fair value:
Marketable equity securities															$	(37)					(2)
Nonmarketable equity securities															(1)						(22)
Total equity securities carried at fair value															(38)						(24)
Net gains (losses) from nonmarketable equity securities not carried at fair value (1):
Impairment write-downs															(490)						(438)
Net unrealized gains (2)															151						690
Net realized gains from sale															20						348
Total nonmarketable equity securities not carried at fair value															(319)						600
Total net gains (losses) from equity securities not held for trading															$	(357)					576

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

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

			Wells Fargo & Company			71

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Note 4: Equity Securities (continued)

Measurement Alternative

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

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

Table 4.3: Net Gains (Losses) from Measurement Alternative Equity Securities

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

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

Table 4.4: Measurement Alternative Cumulative Gains (Losses)

(in millions)			Mar 31, 2023						Dec 31, 2022
Cumulative gains (losses):
Gross unrealized gains from observable price changes			$	7,271					7,141
Gross unrealized losses from observable price changes			(24)						(14)
Impairment write-downs			(3,339)						(2,896)

72			Wells Fargo & Company

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Note 5:  Loans and Related Allowance for Credit Losses

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

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

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

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

Table 5.1: Loans Outstanding

(in millions)			Mar 31, 2023						Dec 31, 2022
Commercial and industrial			$	384,690					386,806
Commercial real estate			154,707						155,802
Lease financing			14,820						14,908
Total commercial			554,217						557,516
Residential mortgage			267,138						269,117
Credit card			45,766						46,293
Auto			52,631						53,669
Other consumer			28,239						29,276
Total consumer			393,774						398,355
Total loans			$	947,991					955,871

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

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

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

(in millions)			Mar 31, 2023						Dec 31, 2022
Commercial and industrial			$	75,851					78,981
Commercial real estate			7,698						7,619
Lease financing			673						670
Total non-U.S. commercial loans			$	84,222					87,270

			Wells Fargo & Company			73

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

Loan Purchases, Sales, and Transfers

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

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

Table 5.3: Loan Purchases, Sales, and Transfers

			2023																		2022
(in millions)			Commercial						Consumer						Total						Commercial						Consumer						Total
Quarter ended March 31,
Purchases			$	416					3						419						100						—						100
Sales and net transfers (to)/from LHFS			(1,115)						(1)						(1,116)						(561)						(9)						(570)

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. 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 March 31, 2023, and December 31, 2022, we had $1.3 billion and $1.8 billion, respectively, of outstanding issued commercial letters of credit. See Note 14 (Guarantees and Other Commitments) for additional information on issued standby letters of credit.

We may be a fronting bank, whereby we act as a representative for other lenders, and advance funds or provide for the issuance of letters of credit under syndicated loan or letter of credit agreements. Any advances are generally repaid in less than a week and would normally require default of both the customer and another lender to expose us to loss.

The contractual amount of our unfunded credit commitments, including unissued letters of credit, is summarized in Table 5.4. The table excludes issued letters of credit and is presented net of commitments syndicated to others, including the fronting arrangements described above.

Table 5.4: Unfunded Credit Commitments

(in millions)			Mar 31, 2023						Dec 31, 2022
Commercial and industrial (1)			$	379,580					388,504
Commercial real estate			28,112						29,518
Total commercial			407,692						418,022
Residential mortgage (2)			37,811						39,155
Credit card			151,234						145,526
Other consumer (3)			73,294						69,244
Total consumer			262,339						253,925
Total unfunded credit commitments			$	670,031					671,947

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

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

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

74			Wells Fargo & Company

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Allowance for Credit Losses

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

commercial real estate loans, primarily office loans, as well as for credit card and auto loans, partially offset by a decrease for residential mortgage loans related to the adoption of ASU 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.

Table 5.5: Allowance for Credit Losses for Loans

									Quarter ended March 31,
($ in millions)															2023						2022
Balance, beginning of period															$	13,609					13,788
Cumulative effect from change in accounting policy (1)															(429)						—
Balance, beginning of period, adjusted															13,180						13,788
Provision for credit losses															1,129						(775)
Interest income on certain loans (2)															—						(29)
Loan charge-offs:
Commercial and industrial															(101)						(56)
Commercial real estate															(27)						—
Lease financing															(7)						(4)
Total commercial															(135)						(60)
Residential mortgage															(28)						(47)
Credit card															(424)						(267)
Auto															(217)						(165)
Other consumer															(105)						(108)
Total consumer															(774)						(587)
Total loan charge-offs															(909)						(647)
Loan recoveries:
Commercial and industrial															58						79
Commercial real estate															10						5
Lease financing															4						5
Total commercial															72						89
Residential mortgage															39						68
Credit card															80						91
Auto															96						69
Other consumer															18						25
Total consumer															233						253
Total loan recoveries															305						342
Net loan charge-offs															(604)						(305)
Other															—						2
Balance, end of period															$	13,705					12,681
Components:
Allowance for loan losses															$	13,120					11,504
Allowance for unfunded credit commitments															585						1,177
Allowance for credit losses															$	13,705					12,681
Net loan charge-offs (annualized) as a percentage of average total loans															0.26		%				0.14
Allowance for loan losses as a percentage of total loans															1.38						1.26
Allowance for credit losses for loans as a percentage of total loans															1.45						1.39

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

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

			Wells Fargo & Company			75

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

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

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

			2023																		2022
(in millions)			Commercial						Consumer						Total						Commercial						Consumer						Total
Quarter ended March 31,
Balance, beginning of period			$	6,956					6,653						13,609						7,791						5,997						13,788
Cumulative effect from change in accounting policy (1)			27						(456)						(429)						—						—						—
Balance, beginning of period, adjusted			6,983						6,197						13,180						7,791						5,997						13,788
Provision for credit losses			304						825						1,129						(665)						(110)						(775)
Interest income on certain loans (2)			—						—						—						(9)						(20)						(29)
Loan charge-offs			(135)						(774)						(909)						(60)						(587)						(647)
Loan recoveries			72						233						305						89						253						342
Net loan charge-offs			(63)						(541)						(604)						29						(334)						(305)
Other			—						—						—						2						—						2
Balance, end of period			$	7,224					6,481						13,705						7,148						5,533						12,681

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

(2)Prior to the adoption of ASU 2022-02, loans with an allowance measured by discounting expected cash flows using the loan’s effective interest rate over the remaining life of the loan recognized 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 5.7 provides the outstanding balances of our commercial loan portfolio by risk category and credit quality information by origination year for term loans. Revolving loans may convert to term loans as a result of a contractual provision in the original loan agreement or if modified for a borrower experiencing financial difficulty. At March 31, 2023, we had $526.4 billion and $27.8 billion of pass and criticized commercial loans, respectively. Gross charge-offs by loan class are included in the following table for the quarter ended March 31, 2023, which we monitor as part of our credit risk management practices; however, charge-offs are not a primary credit quality indicator for our loan portfolio.

76			Wells Fargo & Company

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Table 5.7: Commercial Loan Categories by Risk Categories and Vintage

			Term loans by origination year																																				Revolving loans						Revolving loans converted to term loans						Total
(in millions)			2023						2022						2021						2020						2019						Prior
March 31, 2023
Commercial and industrial
Pass			$	13,124					49,208						29,262						10,296						14,292						6,867						249,092						465						372,606
Criticized			308						1,055						1,281						636						644						953						7,207						—						12,084
Total commercial and industrial			13,432						50,263						30,543						10,932						14,936						7,820						256,299						465						384,690
Gross charge-offs (1)			3						11						14						1						3						2						67						—						101
Commercial real estate
Pass			3,666						37,782						37,271						15,434						15,253						24,541						6,114						150						140,211
Criticized			546						3,175						3,481						1,250						2,867						2,970						207						—						14,496
Total commercial real estate			4,212						40,957						40,752						16,684						18,120						27,511						6,321						150						154,707
Gross charge-offs			—						19						—						—						6						2						—						—						27
Lease financing
Pass			876						4,652						3,051						1,736						1,237						2,061						—						—						13,613
Criticized			88						346						298						193						158						124						—						—						1,207
Total lease financing			964						4,998						3,349						1,929						1,395						2,185						—						—						14,820
Gross charge-offs			—						1						2						2						1						1						—						—						7
Total commercial loans			$	18,608					96,218						74,644						29,545						34,451						37,516						262,620						615						554,217
			Term loans by origination year																																				Revolving loans						Revolving loans converted to term loans						Total
			2022						2021						2020						2019						2018						Prior
December 31, 2022
Commercial and industrial
Pass			$	61,646					31,376						11,128						13,656						3,285						5,739						247,594						842						375,266
Criticized			872						1,244						478						505						665						532						7,244						—						11,540
Total commercial and industrial			62,518						32,620						11,606						14,161						3,950						6,271						254,838						842						386,806
Commercial real estate
Pass			38,022						38,709						16,564						16,409						10,587						16,159						6,765						150						143,365
Criticized			2,785						2,794						965						2,958						1,088						1,688						159						—						12,437
Total commercial real estate			40,807						41,503						17,529						19,367						11,675						17,847						6,924						150						155,802
Lease financing
Pass			4,543						3,336						1,990						1,427						765						1,752						—						—						13,813
Criticized			330						275						190						169						94						37						—						—						1,095
Total lease financing			4,873						3,611						2,180						1,596						859						1,789						—						—						14,908
Total commercial loans			$	108,198					77,734						31,315						35,124						16,484						25,907						261,762						992						557,516

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

			Wells Fargo & Company			77

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

Table 5.8 provides days past due (DPD) 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 5.8: Commercial Loan Categories by Delinquency Status

			Still accruing																		Nonaccrual loans						Total commercial loans
(in millions)			Current-29 DPD						30-89 DPD						90+ DPD
March 31, 2023
Commercial and industrial			$	383,084					711						156						739						384,690
Commercial real estate			152,609						439						209						1,450						154,707
Lease financing			14,580						154						—						86						14,820
Total commercial loans			$	550,273					1,304						365						2,275						554,217
December 31, 2022
Commercial and industrial			$	384,164					1,313						583						746						386,806
Commercial real estate			153,877						833						134						958						155,802
Lease financing			14,623						166						—						119						14,908
Total commercial loans			$	552,664					2,312						717						1,823						557,516

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

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

We obtain FICO scores at loan origination and the scores

are generally updated at least quarterly, except in limited circumstances, including compliance with the Fair Credit Reporting Act (FCRA). 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.

Table 5.9 provides the outstanding balances of our residential mortgage loans by our primary credit quality indicators.

LTV refers to the ratio comparing the loan’s outstanding balance to the property’s collateral value. Combined LTV (CLTV) refers to the combination of first lien mortgage and junior lien mortgage (including unused line amounts for credit line products) ratios. We obtain LTVs and CLTVs using a cascade approach which first uses values provided by automated valuation models (AVMs) for the property. If an AVM is not available, then the value is estimated using the original appraised value adjusted by the change in Home Price Index (HPI) for the property location. If an HPI is not available, the original appraised value is used. The HPI value is normally the only method considered for high value properties, generally with an original value of $1 million or more, as the AVM values have proven less accurate for these properties. Generally, we obtain available LTVs 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.

78			Wells Fargo & Company

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Table 5.9: Credit Quality Indicators for Residential Mortgage Loans by Vintage

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

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

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

			Wells Fargo & Company			79

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

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

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

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

Table 5.10: Credit Quality Indicators for Credit Card Loans

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

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

Table 5.11: Credit Quality Indicators for Auto Loans by Vintage

			Term loans by origination year																																				Revolving loans						Revolving loans converted to term loans
(in millions)			2023						2022						2021						2020						2019						Prior																		Total
March 31, 2023
By delinquency status:
Current-29 DPD			$	4,710					17,382						17,366						6,651						3,919						1,377						—						—						51,405
30-89 DPD			3						230						492						201						125						76						—						—						1,127
90+ DPD			—						23						47						15						9						5						—						—						99
Total auto			$	4,713					17,635						17,905						6,867						4,053						1,458						—						—						52,631
By FICO:
740+			$	3,079					8,400						7,461						2,799						1,790						591						—						—						24,120
700-739			756						2,737						2,673						1,112						651						219						—						—						8,148
660-699			519						2,502						2,567						1,002						538						180						—						—						7,308
620-659			221						1,810						1,901						686						355						132						—						—						5,105
<620			138						2,162						3,277						1,244						687						307						—						—						7,815
No FICO available			—						24						26						24						32						29						—						—						135
Total auto			$	4,713					17,635						17,905						6,867						4,053						1,458						—						—						52,631
Gross charge-offs			$	—					60						107						29						17						4						—						—						217
			Term loans by origination year																																				Revolving loans						Revolving loans converted to term loans
(in millions)			2022						2021						2020						2019						2018						Prior																		Total
December 31, 2022
By delinquency status:
Current-29 DPD			$	19,101					19,126						7,507						4,610						1,445						421						—						—						52,210
30-89 DPD			218						585						253						167						69						45						—						—						1,337
90+ DPD			23						56						22						13						4						4						—						—						122
Total auto			$	19,342					19,767						7,782						4,790						1,518						470						—						—						53,669
By FICO:
740+			$	9,361					8,233						3,193						2,146						664						166						—						—						23,763
700-739			3,090						3,033						1,287						788						238						64						—						—						8,500
660-699			2,789						2,926						1,163						641						192						58						—						—						7,769
620-659			2,021						2,156						796						421						130						47						—						—						5,571
<620			2,062						3,389						1,316						756						263						126						—						—						7,912
No FICO available			19						30						27						38						31						9						—						—						154
Total auto			$	19,342					19,767						7,782						4,790						1,518						470						—						—						53,669

80			Wells Fargo & Company

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Table 5.12 provides the outstanding balances of our Other consumer loans portfolio by primary credit quality indicators.

Table 5.12: Credit Quality Indicators for Other Consumer Loans by Vintage

			Term loans by origination year																																				Revolving loans						Revolving loans converted to term loans
(in millions)			2023						2022						2021						2020						2019						Prior																		Total
March 31, 2023
By delinquency status:
Current-29 DPD			$	1,128					3,219						1,013						288						191						115						22,063						110						28,127
30-89 DPD			1						25						10						2						2						3						16						10						69
90+ DPD			—						8						5						1						—						1						14						14						43
Total other consumer			$	1,129					3,252						1,028						291						193						119						22,093						134						28,239
By FICO:
740+			$	653					1,626						462						150						86						49						1,462						31						4,519
700-739			239						615						181						45						34						19						529						18						1,680
660-699			143						481						151						28						25						15						408						18						1,269
620-659			31						197						68						11						11						9						159						13						499
<620			5						117						63						12						14						10						144						18						383
No FICO available			58						216						103						45						23						17						854						36						1,352
FICO not required (1)			—						—						—						—						—						—						18,537						—						18,537
Total other consumer			$	1,129					3,252						1,028						291						193						119						22,093						134						28,239
Gross charge-offs (2)			$	13					53						15						3						3						2						14						2						105
			Term loans by origination year																																				Revolving loans						Revolving loans converted to term loans						Total
(in millions)			2022						2021						2020						2019						2018						Prior
December 31, 2022
By delinquency status:
Current-29 DPD			$	3,718					1,184						341						240						63						83						23,431						117						29,177
30-89 DPD			17						12						2						3						1						2						14						8						59
90+ DPD			5						5						1						1						—						1						13						14						40
Total other consumer			$	3,740					1,201						344						244						64						86						23,458						139						29,276
By FICO:
740+			$	1,908					546						174						112						21						50						1,660						43						4,514
700-739			726						216						62						44						10						13						568						18						1,657
660-699			527						177						34						33						9						8						449						19						1,256
620-659			204						81						13						14						4						5						181						11						513
<620			89						64						14						16						5						5						154						18						365
No FICO available			286						117						47						25						15						5						920						30						1,445
FICO not required (1)			—						—						—						—						—						—						19,526						—						19,526
Total other consumer			$	3,740					1,201						344						244						64						86						23,458						139						29,276

(1)Substantially all loans not requiring a FICO score are securities-based loans originated by the Wealth and Investment Management operating segment.

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

			Wells Fargo & Company			81

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

NONACCRUAL LOANS Table 5.13 provides loans on nonaccrual status. Nonaccrual loans may have an ACL or a negative

allowance for credit losses from expected recoveries of amounts previously written off.

Table 5.13: Nonaccrual Loans

			Amortized cost																								Recognized interest income
			Nonaccrual loans												Nonaccrual loans without related allowance for credit losses (1)												Quarter ended March 31,
(in millions)			Mar 31, 2023						Dec 31, 2022						Mar 31, 2023						Dec 31, 2022						2023						2022
Commercial and industrial			$	739					746						125						174						5						22
Commercial real estate			1,450						958						131						134						8						17
Lease financing			86						119						4						5						—						—
Total commercial			2,275						1,823						260						313						13						39
Residential mortgage			3,552						3,611						2,281						2,316						47						55
Auto			145						153						—						—						5						8
Other consumer			38						39						—						—						1						1
Total consumer			3,735						3,803						2,281						2,316						53						64
Total nonaccrual loans			$	6,010					5,626						2,541						2,629						66						103

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

LOANS IN PROCESS OF FORECLOSURE Our recorded investment in consumer mortgage loans collateralized by residential real estate property that are in process of foreclosure was $1.0 billion at both March 31, 2023, and December 31, 2022, which included $762 million and $771 million, respectively, of loans that are government insured/guaranteed. Under the Consumer Financial Protection Bureau guidelines, we do not commence the foreclosure process on residential mortgage loans until after the loan is 120 days delinquent. Foreclosure procedures and timelines vary depending on whether the property address resides in a judicial or non-judicial state. Judicial states require the foreclosure to be processed through the state’s courts while non-judicial states are processed without court intervention. Foreclosure timelines vary according to

state law.

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

Table 5.14: Loans 90 Days or More Past Due and Still Accruing

(in millions)			Mar 31, 2023						Dec 31, 2022
Total:			$	3,822					4,340
Less: FHA insured/VA guaranteed (1)			2,809						3,005
Total, not government insured/guaranteed			$	1,013					1,335
By segment and class, not government insured/guaranteed:
Commercial and industrial			$	156					583
Commercial real estate			209						134
Total commercial			365						717
Residential mortgage			29						28
Credit card			511						455
Auto			80						111
Other consumer			28						24
Total consumer			648						618
Total, not government insured/guaranteed			$	1,013					1,335

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

82			Wells Fargo & Company

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LOAN MODIFICATIONS TO BORROWERS EXPERIENCING FINANCIAL DIFFICULTY  We may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty.

Our commercial loan modifications may include principal forgiveness, interest rate reductions, payment delays, term extensions, or a combination of these modifications. Commercial loan term extensions have terms that vary based on the borrower’s request and are evaluated by our credit teams on an individual basis.

Our consumer loan modifications vary based upon the loan product and the modification program offered to the borrower, and may include interest rate reductions, payment delays, term extensions, principal forbearance or forgiveness, or a combination of these modifications. Generally, our consumer loan modification programs modify the loan terms to achieve payment terms that are more affordable to the borrower and, as a result, increase the likelihood of full repayment of principal and interest.

Our residential mortgage loan modification programs may offer a short-term payment deferral based upon the borrower's demonstrated hardship, up to 12 months. If additional assistance is needed after 12 months, the borrower may request another loan modification. Modifications may also include a trial payment period of three months to determine if the borrower can perform in accordance with the proposed permanent loan modification terms. Loans in a trial payment period continue to advance through delinquency status and accrue interest according to their original terms. Loans in a trial payment period are excluded from our loan modification disclosures until the borrower has successfully completed the trial period and the loan modification is formally executed. Residential mortgage loans in a trial payment period totaled $161 million at March 31, 2023.

Credit card loan modifications result in a reduction in the credit card interest rate and may be offered on a short-term or long-term basis. A short-term interest rate reduction program reduces the borrower’s interest rate for 12 months. A long-term interest rate reduction program provides a reduction of the interest rate over a fixed five-year term. During the modification period, the borrower’s revolving charge privileges are revoked.

Auto loan modifications generally include insignificant (e.g., three months or less) payment deferrals over the loan term.

The following disclosures provide information on loan modifications granted to borrowers experiencing financial difficulty in the form of principal forgiveness, interest rate reductions, other-than-insignificant (e.g., greater than three months) payment delays, term extensions or a combination of these modifications, as well as the financial effects of these modifications, and loan performance in the twelve months following the modification. Loans that both modify and are paid off or charged-off during the period, resulting in an amortized cost balance of zero at the end of the period, are not included in the disclosures below. Additionally, where amortized cost balances are presented below, accrued interest receivable is excluded. See Note 7 (Intangible Assets and Other Assets) for additional information on accrued interest receivable. Borrowers experiencing financial difficulty with modified terms mandated by a bankruptcy court are considered contractually modified loans and are included in these disclosures. These disclosures do not include loans discharged by a bankruptcy court as the only concession, which were insignificant for the quarter ended March 31, 2023.

Table 5.15 presents the amortized cost of commercial loans that were modified during the quarter ended March 31, 2023, by class of financing receivable and by modification type.

Table 5.15: Commercial Loan Modifications

			Modification type																																										Modifications as a % of loan class
($ in millions)			Principal forgiveness						Interest rate reduction						Payment delay						Term extension						Interest rate reduction & term extension												All other modifications and combinations									Total
Quarter ended March 31, 2023
Commercial and industrial			$	15					5						3						112						1												1						137						0.04		%
Commercial real estate			—						8						1						56						7												—						72						0.05
Total commercial			$	15					13						4						168						8												1						209						0.04

Table 5.15a presents the financial effects of modifications made to commercial loans that were modified during the quarter ended March 31, 2023, presented by class of financing receivable.

Table 5.15a: Financial Effects of Commercial Loan Modifications

									Quarter ended
($ in millions)									Principal forgiven						Weighted average interest rate reduction						Weighted average payments deferred (months)						Weighted average term extension (months)
March 31, 2023
Commercial and industrial									$	5					13.66		%				6						6
Commercial real estate									0						2.80						6						20

			Wells Fargo & Company			83

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

Commercial loans that received a modification during the quarter ended March 31, 2023, and subsequently defaulted were insignificant. Defaults that occur on commercial modifications are reported based on a payment default definition of 90 days past due.

Table 5.15b provides past due information for commercial loans that were modified during the quarter ended March 31,

2023. For loan modifications that include a payment deferral, payment performance is not included in the table below until the loan exits the deferral period and payments resume. The table also includes the amount of gross charge-offs that occurred during first quarter 2023 for loans that were modified in the quarter, inclusive of charge-offs to loans with no amortized cost remaining at period end.

Table 5.15b: Payment Performance of Commercial Loan Modifications

			By delinquency status																								Gross charge-offs
(in millions)			Current-29 days past due (DPD)						30-89 DPD						90+ DPD						Total						Quarter ended
March 31, 2023
Commercial and industrial			$	115					19						—						134						10
Commercial real estate			70						1						—						71						—
Total commercial			$	185					20						—						205						10

Table 5.16 presents the amortized cost of consumer loans that were modified during the quarter ended March 31, 2023, by class of financing receivable and by modification type.

Table 5.16: Consumer Loan Modifications

									Modification type
($ in millions)									Interest rate reduction						Payment delay (1)						Term extension						Interest rate reduction & term extension						Term extension & payment delay						Interest rate reduction, term extension & payment delay						All other modifications and combinations (2)						Total						Modifications as a % of loan class
Quarter ended March 31, 2023
Residential mortgage									$	4					376						25						14						30						31						2						482						0.18		%
Credit card									122						—						—						—						—						—						—						122						0.27
Auto									1						9						—						—						—						—						1						11						0.02
Other consumer									3						1						—						6						—						—						—						10						0.04
Total consumer									$	130					386						25						20						30						31						3						625						0.16

(1)Includes residential mortgage loan modifications that defer a set amount of principal to the end of the loan term.

(2)Includes principal forgiveness and other combinations of modifications.

Table 5.16a presents the financial effects of modifications made to consumer loans that were modified during the quarter ended March 31, 2023, by class of financing receivable.

Table 5.16a: Financial Effects of Consumer Loan Modifications (1)

									Quarter ended
									Weighted average interest rate reduction						Weighted average payments deferred (months)						Weighted average term extension (years)
March 31, 2023
Residential mortgage (2)									1.58		%				3						10.2
Credit card									21.64						0						0.0
Auto									3.73						6						0.0
Other consumer									11.40						3						3.0

(1)Principal forgiven for the quarter ended March 31, 2023 was insignificant.

(2)Excludes the financial effects of residential mortgage loans with a set amount of principal deferred to the end of the loan term. The weighted average period of principal deferred was 27.1 years for the quarter ended March 31, 2023.

84			Wells Fargo & Company

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Consumer loans that received a modification during the quarter ended March 31, 2023, and subsequently defaulted totaled $21 million, and predominantly related to payment delay modifications in the residential mortgage loan portfolio. Defaults that occur on consumer modifications are reported based on a payment default definition of 60 days past due.

Table 5.16b provides past due information for consumer loans that were modified during the quarter ended March 31,

2023. For loan modifications that include a payment delay, payment performance is not included in the table below until the loan exits the deferral period and payments resume. The table also includes the amount of gross charge-offs that occurred during the quarter ended March 31, 2023, for loans that were modified in the quarter, inclusive of charge-offs to loans with no amortized cost remaining at period end.

Table 5.16b: Payment Performance of Consumer Loan Modifications

			By delinquency status																								Gross charge-offs
(in millions)			Current-29 days past due (DPD)						30-89 DPD						90+ DPD						Total						Quarter ended
March 31, 2023
Residential mortgage (1)			$	124					14						19						157						1
Credit card (2)			75						28						19						122						4
Auto			10						1						—						11						—
Other consumer			8						1						—						9						—
Total			$	217					44						38						299						5

(1)Includes loans that were past due prior to entering a payment delay modification. Delinquency advancement is paused during the deferral period and resumes upon exit. 

(2)Credit card loans that are past due at the time of the modification do not become current until they have three months of consecutive payment performance.

Commitments to lend additional funds on commercial loans that were modified during the quarter ended March 31, 2023, were $30 million at March 31, 2023, substantially all of which were in the commercial and industrial portfolio. Commitments to lend additional funds on consumer loans that were modified during the quarter ended March 31, 2023, were insignificant at March 31, 2023.

TROUBLED DEBT RESTRUCTURINGS (TDRs)  In January 2023, we adopted ASU 2022-02, which eliminated the accounting and reporting guidance for TDRs. For additional information, see Note 1 (Summary of Significant Accounting Policies). The following disclosures present TDR information for the periods ended December 31, 2022, and March 31, 2022. When, for economic or legal reasons related to a borrower’s financial difficulties, we grant a concession for other than an insignificant period of time to a borrower that we would not otherwise consider, the related loan is classified as a TDR, the balance of which totaled $9.2 billion at December 31, 2022. We do not consider loan resolutions such as foreclosure or short sale to be a TDR. In addition, COVID-19-related modifications are generally not classified as TDRs due to the relief under the CARES Act and the Interagency Statement. For additional information on the TDR relief, see Note 1 (Summary of Significant Accounting Policies) in our 2022 Form 10-K.

We may require some consumer borrowers experiencing financial difficulty to make trial payments generally for a period of three to four months, according to the terms of a planned permanent modification, to determine if they can perform according to those terms. These arrangements represent trial modifications, which we classified and accounted for as TDRs through December 31, 2022, prior to the adoption of ASU 2022-02. While loans are in trial payment programs, their original terms are not considered modified and they continue to advance through delinquency status and accrue interest according to their original terms.

Commitments to lend additional funds on loans whose terms have been modified in a TDR amounted to $434 million at December 31, 2022.

Table 5.17 summarizes our TDR modifications by primary modification type and includes the financial effects of these modifications. For those loans that modify more than once, the table reflects each modification that occurred during the period. Loans that both modify and are paid off or written-off within the period, as well as changes in recorded investment during the period for loans modified in prior periods, are not included in the table.

			Wells Fargo & Company			85

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

Table 5.17: TDR Modifications

			Primary modification type (1)																								Financial effects of modifications
($ in millions)			Principal forgiveness						Interest rate reduction						Other concessions (2)						Total						Charge- offs (3)						Weighted average interest rate reduction						Recorded investment related to interest rate reduction (4)
Quarter ended March 31, 2022
Commercial and industrial			$	—					6						73						79						—						9.94		%				$	6
Commercial real estate			—						5						27						32						—						1.45						5
Lease financing			—						—						—						—						—						—						—
Total commercial			—						11						100						111						—						6.37						11
Residential mortgage			1						68						336						405						1						1.67						68
Credit card			—						70						—						70						—						19.12						70
Auto			1						3						40						44						9						4.91						3
Other consumer			—						3						1						4						—						11.64						3
Trial modifications (5)			—						—						211						211						—						—						—
Total consumer			2						144						588						734						10						10.43						144
Total			$	2					155						688						845						10						10.15						$	155

(1)Amounts represent the recorded investment in loans after recognizing the effects of the TDR, if any. TDRs may have multiple types of concessions, but are presented only once in the first modification type based on the order presented in the table above. The reported amounts include loans remodified of $118 million for first quarter 2022.

(2)Other concessions include loans with payment (principal and/or interest) deferral, loans discharged in bankruptcy, loan renewals, term extensions and other interest and noninterest adjustments, but exclude modifications that also forgive principal and/or reduce the contractual interest rate. The reported amounts include loans that are new TDRs that may have COVID-19-related payment deferrals and exclude COVID-19-related payment deferrals on loans previously reported as TDRs given limited current financial effects other than payment deferral.

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

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

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

Table 5.18 summarizes permanent modification TDRs that defaulted during the period presented within 12 months of their permanent modification date. We are reporting these defaulted TDRs based on a payment default definition of 90 days past due for the commercial portfolio segment and 60 days past due for the consumer portfolio segment.

Table 5.18: Defaulted TDRs

															Recorded investment of defaults
(in millions)																																				Quarter ended March 31, 2022
Commercial and industrial																																				$	49
Commercial real estate																																				2
Lease financing																																				—
Total commercial																																				51
Residential mortgage																																				7
Credit card																																				5
Auto																																				6
Other consumer																																				—
Total consumer																																				18
Total																																				$	69

86			Wells Fargo & Company

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Note 6:  Mortgage Banking Activities

Mortgage banking activities consist of residential and commercial mortgage originations, sales and servicing.

We apply the amortization method to commercial MSRs and apply the fair value method to residential MSRs. The amortized

cost of commercial MSRs was $1.1 billion and $1.2 billion, with an estimated fair value of $2.0 billion and $1.9 billion, at March 31, 2023 and 2022, respectively. Table 6.1 presents the changes in MSRs measured using the fair value method.

Table 6.1: Analysis of Changes in Fair Value MSRs

															Quarter ended March 31,
(in millions)															2023						2022
Fair value, beginning of period															$	9,310					6,920
Servicing from securitizations or asset transfers (1)															48						342
Sales and other (2)															7						1
Net additions															55						343
Changes in fair value:
Due to valuation inputs or assumptions:
Mortgage interest rates (3)															(181)						1,699
Servicing and foreclosure costs (4)															1						(3)
Discount rates															(25)						55
Prepayment estimates and other (5)															(20)						(146)
Net changes in valuation inputs or assumptions															(225)						1,605
Changes due to collection/realization of expected cash flows (6)															(321)						(357)
Total changes in fair value															(546)						1,248
Fair value, end of period															$	8,819					8,511

(1)Includes impacts associated with exercising cleanup calls on securitizations and our right to repurchase delinquent loans from Government National Mortgage Association (GNMA) loan securitization pools. MSRs may increase upon repurchase due to servicing liabilities associated with these delinquent GNMA loans.

(2)Includes sales and transfers of MSRs, which can result in an increase in MSRs if related to portfolios with servicing liabilities.

(3)Includes prepayment rate changes as well as other valuation changes due to changes in mortgage interest rates. To reduce exposure to changes in interest rates, MSRs are economically hedged with derivative instruments.

(4)Includes costs to service and unreimbursed foreclosure costs.

(5)Represents other changes in valuation model inputs or assumptions, including prepayment rate estimation changes that are independent of mortgage interest rate changes.

(6)Represents the reduction in the MSR fair value for the cash flows expected to be collected during the period, net of income accreted due to the passage of time.

Table 6.2 provides key weighted-average assumptions used in the valuation of residential MSRs and sensitivity of the current fair value of residential MSRs to immediate adverse changes in those assumptions. Amounts for residential MSRs include

purchased servicing rights as well as servicing rights resulting from the transfer of loans. See Note 12 (Fair Values of Assets and Liabilities) for additional information on key assumptions for residential MSRs.

Table 6.2: Assumptions and Sensitivity of Residential MSRs

($ in millions, except cost to service amounts)			Mar 31, 2023						Dec 31, 2022
Fair value of interests held			$	8,819					9,310
Expected weighted-average life (in years)			6.1						6.3
Key assumptions:
Prepayment rate assumption (1)			9.7		%				9.4
Impact on fair value from 10% adverse change			$	287					288
Impact on fair value from 25% adverse change			684						688
Discount rate assumption			8.9		%				9.1
Impact on fair value from 100 basis point increase			$	346					368
Impact on fair value from 200 basis point increase			664						707
Cost to service assumption ($ per loan)			101						102
Impact on fair value from 10% adverse change			166						171
Impact on fair value from 25% adverse change			412						427

(1)Includes a blend of prepayment speeds and expected defaults. Prepayment speeds are influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.

The sensitivities in the preceding table are hypothetical and caution should be exercised when relying on this data. Changes in value based on variations in assumptions generally cannot be extrapolated because the relationship of the change in the assumption to the change in value may not be linear. Also, the effect of a variation in a particular assumption on the value of the other interests held is calculated independently without changing

any other assumptions. In reality, changes in one factor may result in changes in others, which might magnify or counteract the sensitivities.

			Wells Fargo & Company			87

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Note 6:  Mortgage Banking Activities (continued)

We present the components of our managed servicing portfolio in Table 6.3 at unpaid principal balance for loans serviced and subserviced for others and at carrying value for owned loans serviced.

Table 6.3: Managed Servicing Portfolio

(in billions)			Mar 31, 2023						Dec 31, 2022
Residential mortgage servicing:
Serviced and subserviced for others (1)			$	668					681
Owned loans serviced			270						273
Total residential servicing			938						954
Commercial mortgage servicing:
Serviced and subserviced for others			571						577
Owned loans serviced			131						133
Total commercial servicing			702						710
Total managed servicing portfolio			$	1,640					1,664
Total serviced for others, excluding subserviced for others			$	1,228					1,246
MSRs as a percentage of loans serviced for others			0.81		%				0.84
Weighted average note rate (mortgage loans serviced for others)			4.37						4.30

(1)In first quarter 2023, we executed letters of intent to sell mortgage servicing rights on approximately $50 billion of loans serviced for others that we expect to close later this year.

At March 31, 2023, and December 31, 2022, we had servicer advances, net of an allowance for uncollectible amounts, of $2.3 billion and $2.5 billion, respectively. As the servicer of loans for others, we advance certain payments of principal, interest, taxes, insurance, and default-related expenses which are generally reimbursed within a short timeframe from cash flows from the trust, government-sponsored entities (GSEs), insurer or borrower.

The credit risk related to these advances is limited since the reimbursement is generally senior to cash payments to investors. We also advance payments of taxes and insurance for our owned

loans which are collectible from the borrower. We maintain an allowance for uncollectible amounts for advances on loans serviced for others that may not be reimbursed if the payments were not made in accordance with applicable servicing agreements or if the insurance or servicing agreements contain limitations on reimbursements. Servicing advances on owned loans are charged-off when deemed uncollectible.

Table 6.4 presents the components of mortgage banking noninterest income.

Table 6.4: Mortgage Banking Noninterest Income

												Quarter ended March 31,
(in millions)																		2023						2022
Servicing fees:
Contractually specified servicing fees, late charges and ancillary fees																		$	567					635
Unreimbursed direct servicing costs (1)																		(33)						(24)
Servicing fees																		534						611
Amortization (2)																		(61)						(59)
Changes due to collection/realization of expected cash flows (3)			(A)															(321)						(357)
Net servicing fees																		152						195
Changes in fair value of MSRs due to valuation inputs or assumptions (4)			(B)															(225)						1,605
Net derivative gains (losses) from economic hedges (5)																		185						(1,646)
Market-related valuation changes to MSRs, net of hedge results																		(40)						(41)
Total net servicing income																		112						154
Net gains on mortgage loan originations/sales (6)																		120						539
Total mortgage banking noninterest income																		$	232					693
Total changes in fair value of MSRs carried at fair value			(A)+(B)															$	(546)					1,248

(1)Includes costs associated with foreclosures, unreimbursed interest advances to investors, and other interest costs.

(2)There was no impairment on the commercial amortized MSRs in first quarter 2023, compared with a $4 million reversal of impairment in first quarter 2022.

(3)Represents the reduction in the MSR fair value for the cash flows expected to be collected during the period, net of income accreted due to the passage of time.

(4)Refer to the analysis of changes in fair value MSRs presented in Table 6.1 in this Note for more detail.

(5)See Note 11 (Derivatives) for additional information on economic hedges.

(6)Includes net gains (losses) of $(39) million and $1.3 billion in first quarter 2023 and 2022, respectively, related to derivatives used as economic hedges of mortgage loans held for sale and derivative loan commitments.

88			Wells Fargo & Company

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Note 7: Intangible Assets and Other Assets

Table 7.1 presents the gross carrying value of intangible assets and accumulated amortization.

Table 7.1: Intangible Assets

			March 31, 2023																		December 31, 2022
(in millions)			Gross carrying value						Accumulated amortization						Net carrying value						Gross carrying value						Accumulated amortization						Net carrying value
Amortized intangible assets (1):
MSRs			$	4,964					(3,833)						1,131						4,942						(3,772)						1,170
Customer relationship and other intangibles			754						(615)						139						754						(602)						152
Total amortized intangible assets			$	5,718					(4,448)						1,270						5,696						(4,374)						1,322
Unamortized intangible assets:
MSRs (carried at fair value)			$	8,819																	9,310
Goodwill			25,173																		25,173

(1)Balances are excluded commencing in the period following full amortization.

Table 7.2 provides the current year and estimated future amortization expense for amortized intangible assets. We based our projections of amortization expense shown below on existing

asset balances at March 31, 2023. Future amortization expense may vary from these projections.

Table 7.2: Amortization Expense for Intangible Assets

(in millions)			Amortized MSRs												Customer relationship and other intangibles						Total
Three months ended March 31, 2023 (actual)			$	61											13						74
Estimate for the remainder of 2023			$	181											38						219
Estimate for year ended December 31,
2024			208												41						249
2025			180												33						213
2026			144												27						171
2027			113												—						113
2028			94												—						94

Table 7.3 shows the allocation of goodwill to our reportable operating segments.

Table 7.3: Goodwill

(in millions)			Consumer Banking and Lending						Commercial Banking						Corporate and Investment Banking						Wealth and Investment Management						Corporate						Consolidated Company
December 31, 2022 and March 31, 2023			$	16,418					2,931						5,375						344						105						25,173

Table 7.4 presents the components of other assets.

Table 7.4: Other Assets

(in millions)			Mar 31, 2023						Dec 31, 2022
Corporate/bank-owned life insurance (1)			$	20,836					20,807
Accounts receivable (2)			29,887						23,646
Interest receivable:
AFS and HTM debt securities			1,616						1,572
Loans			3,600						3,470
Trading and other			864						767
Operating lease assets (lessor)			5,633						5,790
Operating lease ROU assets (lessee)			3,782						3,837
Other (3)(4)			16,525						15,949
Total other assets			$	82,743					75,838

(1)Corporate/bank-owned life insurance is recorded at cash surrender value.

(2)Primarily includes derivatives clearinghouse receivables, trade date receivables, and servicer advances, which are recorded at amortized cost.

(3)Primarily includes income tax receivables, prepaid expenses, foreclosed assets, and private equity and venture capital investments in consolidated portfolio companies.

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

			Wells Fargo & Company			89

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Note 8:  Leasing Activity

The information below provides a summary of our leasing activities as a lessor and lessee. See Note 8 (Leasing Activity) in our 2022 Form 10-K for additional information about our leasing activities.

As a Lessor

Noninterest income on leases, included in Table 8.1, is included in other noninterest income on our consolidated statement of income. Lease expense, included in other noninterest expense on our consolidated statement of income, was $177 million and $188 million in first quarter 2023 and 2022, respectively.

Table 8.1: Leasing Revenue

									Quarter ended March 31,
(in millions)															2023						2022
Interest income on lease financing															$	169					152
Other lease revenue:
Variable revenue on lease financing															25						30
Fixed revenue on operating leases															249						245
Variable revenue on operating leases															11						15
Other lease-related revenue (1)															62						37
Noninterest income on leases															347						327
Total leasing revenue															$	516					479

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

As a Lessee

Substantially all of our leases are operating leases. Table 8.2 presents balances for our operating leases.

Table 8.2: Operating Lease Right-of-Use (ROU) Assets and Lease Liabilities

(in millions)			Mar 31, 2023			Dec 31, 2022
ROU assets			$	3,782		3,837
Lease liabilities			4,381			4,465

Table 8.3 provides the composition of our lease costs, which are predominantly included in net occupancy expense.

Table 8.3: Lease Costs

									Quarter ended March 31,
(in millions)															2023						2022
Fixed lease expense – operating leases															$	251					253
Variable lease expense															71						73
Other (1)															(16)						(10)
Total lease costs															$	306					316

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

90			Wells Fargo & Company

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Note 9:  Preferred Stock

We are authorized to issue 20 million shares of preferred stock, without par value. Outstanding preferred shares rank senior to common shares both as to the payment of dividends and liquidation preferences but have no general voting rights. All outstanding preferred stock with a liquidation preference value, except for Series L Preferred Stock, may be redeemed for the liquidation preference value, plus any accrued but unpaid dividends, on any dividend payment date on or after the earliest redemption date for that series. Additionally, these same series of preferred stock may be redeemed following a “regulatory

capital treatment event”, as described in the terms of each series. Capital actions, including redemptions of our preferred stock, may be subject to regulatory approval or conditions.

In addition, we are authorized to issue 4 million shares of preference stock, without par value. We have not issued any preference shares under this authorization. If issued, preference shares would be limited to one vote per share.

Table 9.1 summarizes information about our preferred stock.

Table 9.1: Preferred Stock

												March 31, 2023																								December 31, 2022
(in millions, except shares)						Earliest redemption date						Shares  authorized and designated						Shares issued and outstanding						Liquidation preference value						Carrying value						Shares  authorized and designated						Shares issued and outstanding						Liquidation preference value						Carrying value
DEP Shares
Dividend Equalization Preferred Shares (DEP)						Currently redeemable						97,000						96,546						$	—					—						97,000						96,546						$	—					—
Preferred Stock:
Series L (1)
7.50% Non-Cumulative Perpetual Convertible Class A						—						4,025,000						3,967,986						3,968						3,200						4,025,000						3,967,986						3,968						3,200
Series Q
5.85% Fixed-to-Floating Non-Cumulative Perpetual Class A						9/15/2023						69,000						69,000						1,725						1,725						69,000						69,000						1,725						1,725
Series R
6.625% Fixed-to-Floating Non-Cumulative Perpetual Class A						3/15/2024						34,500						33,600						840						840						34,500						33,600						840						840
Series S
5.90% Fixed-to-Floating Non-Cumulative Perpetual Class A						6/15/2024						80,000						80,000						2,000						2,000						80,000						80,000						2,000						2,000
Series U
5.875% Fixed-to-Floating Non-Cumulative Perpetual Class A						6/15/2025						80,000						80,000						2,000						2,000						80,000						80,000						2,000						2,000
Series Y
5.625% Non-Cumulative Perpetual Class A						Currently redeemable						27,600						27,600						690						690						27,600						27,600						690						690
Series Z
4.75% Non-Cumulative Perpetual Class A						3/15/2025						80,500						80,500						2,013						2,013						80,500						80,500						2,013						2,013
Series AA
4.70% Non-Cumulative Perpetual Class A						12/15/2025						46,800						46,800						1,170						1,170						46,800						46,800						1,170						1,170
Series BB
3.90% Fixed-Reset Non-Cumulative Perpetual Class A						3/15/2026						140,400						140,400						3,510						3,510						140,400						140,400						3,510						3,510
Series CC
4.375% Non-Cumulative Perpetual Class A						3/15/2026						46,000						42,000						1,050						1,050						46,000						42,000						1,050						1,050
Series DD
4.25% Non-Cumulative Perpetual Class A						9/15/2026						50,000						50,000						1,250						1,250						50,000						50,000						1,250						1,250
Total												4,776,800						4,714,432						$	20,216					19,448						4,776,800						4,714,432						$	20,216					19,448

(1)At the option of the holder, each share of Series L Preferred Stock may be converted at any time into 6.3814 shares of common stock, plus cash in lieu of fractional shares, subject to anti-dilution adjustments. If converted within 30 days of certain liquidation or change of control events, the holder may receive up to 16.5916 additional shares, or, at our option, receive an equivalent amount of cash in lieu of common stock. We may convert some or all of the Series L Preferred Stock into shares of common stock if the closing price of our common stock exceeds 130 percent of the conversion price of the Series L Preferred Stock for 20 trading days during any period of 30 consecutive trading days. We declared dividends of $74 million on Series L Preferred Stock for both quarters ended March 31, 2023, and March 31, 2022.

			Wells Fargo & Company			91

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Note 10:  Legal Actions

Wells Fargo and certain of our subsidiaries are involved in a number of judicial, regulatory, governmental, arbitration, and other proceedings or investigations concerning matters arising from the conduct of our business activities, and many of those proceedings and investigations expose Wells Fargo to potential financial loss or other adverse consequences. These proceedings and investigations include actions brought against Wells Fargo and/or our subsidiaries with respect to corporate-related matters and transactions in which Wells Fargo and/or our subsidiaries were involved. In addition, Wells Fargo and our subsidiaries may be requested to provide information to or otherwise cooperate with government authorities in the conduct of investigations of other persons or industry groups.

We establish accruals for legal actions when potential losses associated with the actions become probable and the costs can be reasonably estimated. For such accruals, we record the amount we consider to be the best estimate within a range of potential losses that are both probable and estimable; however, if we cannot determine a best estimate, then we record the low end of the range of those potential losses. There can be no assurance as to the ultimate outcome of legal actions, including the matters described below, and the actual costs of resolving legal actions may be substantially higher or lower than the amounts accrued for those actions.

AUTOMOBILE LENDING MATTERS On April 20, 2018, the Company entered into consent orders with the Office of the Comptroller of the Currency (OCC) and the Consumer Financial Protection Bureau (CFPB) to resolve, among other things, investigations by the agencies into the Company’s compliance risk management program and its past practices involving certain automobile collateral protection insurance (CPI) policies and certain mortgage interest rate lock extensions. Shareholders filed a putative securities fraud class action against the Company and its executive officers alleging material misstatements and omissions of CPI-related information in the Company’s public disclosures. In January 2020, the court dismissed this action as to all defendants except the Company and a former executive officer and limited the action to two alleged misstatements. Subject to court approval, the parties have entered into an agreement pursuant to which the Company will pay $300 million to resolve this action. Additionally, a number of other lawsuits were filed by non-governmental parties seeking damages or other remedies related to these CPI policies and related to the unused portion of guaranteed automobile protection (GAP) waiver or insurance agreements. As previously disclosed, the Company entered into various settlements to resolve these lawsuits, while others were dismissed. In addition, federal and state government agencies, including the CFPB, have undertaken formal or informal inquiries, investigations, or examinations regarding these and other issues related to the origination, servicing, and collection of consumer auto loans, including related insurance products. On December 20, 2022, the Company entered into a consent order with the CFPB to resolve the CFPB’s investigations related to automobile lending, consumer deposit accounts, and mortgage lending. The consent order requires, among other things, remediation to customers and the payment of a $1.7 billion civil penalty to the CFPB. As previously disclosed, the Company entered into an agreement to resolve investigations by state attorneys general.

COMPANY 401(K) PLAN MATTERS Federal government agencies, including the United States Department of Labor (Department of Labor), have undertaken reviews of certain transactions associated with the Employee Stock Ownership Plan feature of the Company’s 401(k) plan, including the manner in which the 401(k) plan purchased certain securities used in connection with the Company’s contributions to the 401(k) plan. As previously disclosed, the Company entered into an agreement to resolve the Department of Labor’s review. On September 26, 2022, participants in the Company’s 401(k) plan filed a putative class action in the United States District Court for the District of Minnesota alleging that the Company violated the Employee Retirement Income Security Act of 1974 in connection with certain of these transactions.

CONSENT ORDER DISCLOSURE LITIGATION Wells Fargo shareholders have brought a putative securities fraud class action in the United States District Court for the Southern District of New York alleging that the Company and certain of its current and former executive officers and directors made false or misleading statements regarding the Company’s efforts to comply with the February 2018 consent order with the Federal Reserve Board and the April 2018 consent orders with the CFPB and OCC. Allegations related to the Company’s efforts to comply with these three consent orders are also among the subjects of a shareholder derivative lawsuit filed in California state court.

HIRING PRACTICES MATTERS Government agencies, including the United States Department of Justice and the United States Securities and Exchange Commission, have undertaken formal or informal inquiries or investigations regarding the Company’s hiring practices related to diversity. A putative securities fraud class action has also been filed in the United States District Court for the Northern District of California alleging that the Company and certain of its executive officers made false or misleading statements about the Company’s hiring practices related to diversity. Allegations related to the Company’s hiring practices related to diversity are also among the subjects of shareholder derivative lawsuits filed in the United States District Court for the Northern District of California and in California state court.

INTERCHANGE LITIGATION Plaintiffs representing a class of merchants have filed putative class actions, and individual merchants have filed individual actions, against Wells Fargo Bank, N.A., Wells Fargo & Company, Wachovia Bank, N.A., and Wachovia Corporation regarding the interchange fees associated with Visa and MasterCard payment card transactions. Visa, MasterCard, and several other banks and bank holding companies are also named as defendants in these actions. These actions have been consolidated in the United States District Court for the Eastern District of New York. The amended and consolidated complaint asserts claims against defendants based on alleged violations of federal and state antitrust laws and seeks damages as well as injunctive relief. Plaintiff merchants allege that Visa, MasterCard, and payment card issuing banks unlawfully colluded to set interchange rates. Plaintiffs also allege that enforcement of certain Visa and MasterCard rules and alleged tying and bundling of services offered to merchants are anticompetitive. Wells Fargo and Wachovia, along with other defendants and entities, are parties to Loss and Judgment Sharing Agreements, which provide that they, along with other entities, will share, based on a formula, in any losses from the

92			Wells Fargo & Company

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Interchange Litigation. On July 13, 2012, Visa, MasterCard, and the financial institution defendants, including Wells Fargo, signed a memorandum of understanding with plaintiff merchants to resolve the consolidated class action and reached a separate settlement in principle of the consolidated individual actions. The settlement payments to be made by all defendants in the consolidated class and individual actions totaled approximately $6.6 billion before reductions applicable to certain merchants opting out of the settlement. The class settlement also provided for the distribution to class merchants of 10 basis points of default interchange across all credit rate categories for a period of eight consecutive months. The district court granted final approval of the settlement, which was appealed to the United States Court of Appeals for the Second Circuit by settlement objector merchants. Other merchants opted out of the settlement and are pursuing several individual actions. On June 30, 2016, the Second Circuit vacated the settlement agreement and reversed and remanded the consolidated action to the United States District Court for the Eastern District of New York for further proceedings. On November 23, 2016, prior class counsel filed a petition to the United States Supreme Court, seeking review of the reversal of the settlement by the Second Circuit, and the Supreme Court denied the petition on March 27, 2017. On November 30, 2016, the district court appointed lead class counsel for a damages class and an equitable relief class. The parties have entered into a settlement agreement to resolve the damages class claims pursuant to which defendants will pay a total of approximately $6.2 billion, which includes approximately $5.3 billion of funds remaining from the 2012 settlement and $900 million in additional funding. The Company’s allocated responsibility for the additional funding is approximately $94.5 million. The court granted final approval of the settlement on December 13, 2019, which was appealed to the United States Court of Appeals for the Second Circuit by settlement objector merchants. On March 15, 2023, the Second Circuit affirmed the damages class settlement. Settlement objector merchants filed a petition for a rehearing by the Second Circuit en banc. On September 27, 2021, the district court granted the plaintiffs’ motion for class certification in the equitable relief case. Several of the opt-out and direct action litigations have been settled while others remain pending.

OFAC RELATED INVESTIGATION The Company self-identified an issue whereby certain foreign banks utilized a Wells Fargo software-based solution to conduct import/export trade-related financing transactions with countries and entities prohibited by the Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury. We do not believe any funds related to these transactions flowed through accounts at Wells Fargo as a result of the aforementioned conduct. The Company made voluntary self-disclosures to OFAC and cooperated with investigations or inquiries arising out of this matter by federal government agencies. In March 2023, the Company entered into agreements pursuant to which it agreed to pay $67.8 million to the Federal Reserve and $30 million to OFAC in order to resolve their investigations.

RECORD-KEEPING INVESTIGATIONS The United States Securities and Exchange Commission and the United States Commodity Futures Trading Commission have undertaken investigations regarding the Company’s compliance with records retention requirements relating to business communications sent over unapproved electronic messaging channels.

RMBS TRUSTEE LITIGATION In December 2014, Phoenix Light SF Limited (Phoenix Light) and certain related entities filed a complaint in the United States District Court for the Southern District of New York alleging claims against Wells Fargo Bank, N.A., in its capacity as trustee for a number of residential mortgage-backed securities (RMBS) trusts. Complaints raising similar allegations have been filed by Commerzbank AG in the Southern District of New York and by IKB International and IKB Deutsche Industriebank in New York state court. In each case, the plaintiffs allege that Wells Fargo Bank, N.A., as trustee, caused losses to investors, and plaintiffs assert causes of action based upon, among other things, the trustee’s alleged failure to notify and enforce repurchase obligations of mortgage loan sellers for purported breaches of representations and warranties, notify investors of alleged events of default, and abide by appropriate standards of care following alleged events of default. In July 2022, the district court dismissed Phoenix Light’s claims and certain of the claims asserted by Commerzbank AG, and subsequently entered judgment in each case in favor of Wells Fargo Bank, N.A. In August 2022, Phoenix Light and Commerzbank AG appealed the district court’s decision to the United States Court of Appeals for the Second Circuit. The Company previously settled two class actions filed by institutional investors and an action filed by the National Credit Union Administration with similar allegations. In addition, Park Royal I LLC and Park Royal II LLC have filed substantially similar lawsuits in New York state court alleging Wells Fargo Bank, N.A., as trustee, failed to take appropriate actions upon learning of defective mortgage loan documentation.

SEMINOLE TRIBE TRUSTEE LITIGATION The Seminole Tribe of Florida filed a complaint in Florida state court alleging that Wells Fargo, as trustee, charged excess fees in connection with the administration of a minor’s trust and failed to invest the assets of the trust prudently. The complaint was later amended to include three individual current and former beneficiaries as plaintiffs and to remove the Tribe as a party to the case.

OUTLOOK  As described above, the Company establishes accruals for legal actions when potential losses associated with the actions become probable and the costs can be reasonably estimated. The high end of the range of reasonably possible losses in excess of the Company’s accrual for probable and estimable losses was approximately $1.4 billion as of March 31, 2023. The outcomes of legal actions are unpredictable and subject to significant uncertainties, and it is inherently difficult to determine whether any loss is probable or even possible. It is also inherently difficult to estimate the amount of any loss and there may be matters for which a loss is probable or reasonably possible but not currently estimable. Accordingly, actual losses may be in excess of the established accrual or the range of reasonably possible loss. Based on information currently available, advice of counsel, available insurance coverage, and established reserves, Wells Fargo believes that the eventual outcome of the actions against Wells Fargo and/or its subsidiaries will not, individually or in the aggregate, have a material adverse effect on Wells Fargo’s consolidated financial condition. However, it is possible that the ultimate resolution of a matter, if unfavorable, may be material to Wells Fargo’s results of operations for any particular period.

			Wells Fargo & Company			93

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Note 11:  Derivatives

We use derivatives to manage exposure to market risk, including interest rate risk, credit risk and foreign currency risk, and to assist customers with their risk management objectives. We designate certain derivatives as hedging instruments in qualifying hedge accounting relationships (fair value or cash flow hedges). Our remaining derivatives consist of economic hedges that do not qualify for hedge accounting and derivatives held for customer accommodation trading or other purposes. For additional information on our derivatives activities, see Note 14 (Derivatives) in our 2022 Form 10-K.

Table 11.1 presents the total notional or contractual amounts and fair values for our derivatives. Derivative transactions can be measured in terms of the notional amount, but this amount is not recorded on our consolidated balance sheet and is not, when viewed in isolation, a meaningful measure of the risk profile of the instruments. The notional amount is generally not exchanged, but is used only as the basis on which derivative cash flows are determined.

Table 11.1: Notional or Contractual Amounts and Fair Values of Derivatives

			March 31, 2023																		December 31, 2022
			Notional or contractual amount						Fair value												Notional or contractual amount						Fair value
									Derivative assets						Derivative liabilities												Derivative assets						Derivative liabilities
(in millions)
Derivatives designated as hedging instruments
Interest rate contracts			$	296,341					773						456						263,876						670						579
Commodity contracts			4,166						32						51						1,681						9						25
Foreign exchange contracts			11,251						91						874						15,544						161						1,015
Total derivatives designated as qualifying hedging instruments									896						1,381												840						1,619
Derivatives not designated as hedging instruments
Economic hedges:
Interest rate contracts			79,712						374						275						65,727						410						253
Equity contracts (1)			4,568						61						44						3,326						—						242
Foreign exchange contracts			44,033						369						612						38,139						490						968
Credit contracts			265						15						—						290						14						—
Subtotal									819						931												914						1,463
Customer accommodation trading and other derivatives:
Interest rate contracts			10,899,705						32,487						35,425						10,156,300						40,006						42,641
Commodity contracts			92,472						3,716						3,000						96,001						5,991						3,420
Equity contracts			409,253						11,044						11,223						390,427						9,573						8,012
Foreign exchange contracts			1,553,355						13,237						14,841						1,475,224						21,562						24,703
Credit contracts			54,133						53						32						45,359						52						36
Subtotal									60,537						64,521												77,184						78,812
Total derivatives not designated as hedging instruments									61,356						65,452												78,098						80,275
Total derivatives before netting									62,252						66,833												78,938						81,894
Netting									(45,135)						(49,936)												(56,164)						(61,827)
Total									$	17,117					16,897												22,774						20,067

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

Balance Sheet Offsetting

We execute substantially all of our derivative transactions under master netting arrangements. Where legally enforceable, these master netting arrangements give the ability, in the event of default by the counterparty, to liquidate securities held as collateral and to offset receivables and payables with the same counterparty. We reflect all derivative balances and related cash collateral subject to enforceable master netting arrangements on a net basis on our consolidated balance sheet. We do not net non-cash collateral that we receive or pledge against derivative balances on our consolidated balance sheet.

For disclosure purposes, we present “Total Derivatives, net” which represents the aggregate of our net exposure to each counterparty after considering the balance sheet netting

adjustments and any non-cash collateral. We manage derivative exposure by monitoring the credit risk associated with each counterparty using counterparty-specific credit risk limits, using master netting arrangements and obtaining collateral.

Table 11.2 provides information on the fair values of derivative assets and liabilities subject to enforceable master netting arrangements, the balance sheet netting adjustments and the resulting net fair value amount recorded on our consolidated balance sheet, as well as the non-cash collateral associated with such arrangements. In addition to the netting amounts included in the table, we also have balance sheet netting related to resale and repurchase agreements that are disclosed within Note 15 (Pledged Assets and Collateral).

94			Wells Fargo & Company

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Table 11.2: Fair Values of Derivative Assets and Liabilities

			March 31, 2023												December 31, 2022
(in millions)			Derivative Assets						Derivative Liabilities						Derivative Assets						Derivative Liabilities
Interest rate contracts
Over-the-counter (OTC)			$	31,386					32,130						37,000						37,598
OTC cleared			733						639						649						845
Exchange traded			234						207						262						193
Total interest rate contracts			32,353						32,976						37,911						38,636
Commodity contracts
OTC			2,601						2,177						4,833						2,010
Exchange traded			927						724						876						1,134
Total commodity contracts			3,528						2,901						5,709						3,144
Equity contracts
OTC			4,542						6,829						4,269						4,475
Exchange traded			4,172						2,843						3,742						2,409
Total equity contracts			8,714						9,672						8,011						6,884
Foreign exchange contracts
OTC			13,445						15,975						21,537						26,127
Total foreign exchange contracts			13,445						15,975						21,537						26,127
Credit contracts
OTC			43						22						39						22
Total credit contracts			43						22						39						22
Total derivatives subject to enforceable master netting arrangements, gross			58,083						61,546						73,207						74,813
Less: Gross amounts offset
Counterparty netting (1)			(40,603)						(40,590)						(49,115)						(49,073)
Cash collateral netting			(4,532)						(9,346)						(7,049)						(12,754)
Total derivatives subject to enforceable master netting arrangements, net			12,948						11,610						17,043						12,986
Derivatives not subject to enforceable master netting arrangements (2)			4,169						5,287						5,731						7,081
Total derivatives recognized in consolidated balance sheet, net			17,117						16,897						22,774						20,067
Non-cash collateral			(2,307)						(1,968)						(3,517)						(582)
Total Derivatives, net			$	14,810					14,929						19,257						19,485

(1)Represents amounts with counterparties subject to enforceable master netting arrangements that have been offset in our consolidated balance sheet, including portfolio level counterparty valuation adjustments related to customer accommodation and other trading derivatives. Counterparty valuation adjustments related to derivative assets were $346 million and $372 million and debit valuation adjustments related to derivative liabilities were $333 million and $331 million as of March 31, 2023, and December 31, 2022, respectively, and were primarily related to interest rate contracts.

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

Fair Value and Cash Flow Hedges

For fair value hedges, we use interest rate swaps to convert certain of our fixed-rate long-term debt and time certificates of deposit to floating rates to hedge our exposure to interest rate risk. We also enter into cross-currency swaps, cross-currency interest rate swaps and forward contracts to hedge our exposure to foreign currency risk and interest rate risk associated with the issuance of non-U.S. dollar denominated long-term debt. We also enter into futures contracts, forward contracts, and swap contracts to hedge our exposure to the price risk of physical commodities included in Other Assets. In addition, we use interest rate swaps, cross-currency swaps, cross-currency interest rate swaps and forward contracts to hedge against changes in fair value of certain investments in available-for-sale (AFS) debt securities due to changes in interest rates, foreign currency rates, or both. For certain fair value hedges of interest rate risk, we use the portfolio layer method to hedge stated amounts of closed portfolios of AFS debt securities. For certain fair value hedges of foreign currency risk, changes in fair value of cross-currency swaps attributable to changes in cross-currency basis spreads are excluded from the assessment of hedge effectiveness and recorded in other comprehensive income

(OCI). See Note 20 (Other Comprehensive Income) for the amounts recognized in other comprehensive income.

For cash flow hedges, we use interest rate swaps to hedge the variability in interest payments received on certain interest-earning deposits with banks and certain floating-rate commercial loans, and interest paid on certain floating-rate debt due to changes in the contractually specified interest rate. We also use cross-currency swaps to hedge variability in interest payments on fixed-rate foreign currency-denominated long-term debt due to changes in foreign exchange rates.

We estimate $693 million pre-tax of deferred net losses related to cash flow hedges in OCI at March 31, 2023, will be reclassified into net interest income during the next twelve months. For cash flow hedges as of March 31, 2023, we are hedging our interest rate and foreign currency exposure to the variability of future cash flows for all forecasted transactions for a maximum of 9 years. For additional information on our accounting hedges, see Note 1 (Summary of Significant Accounting Policies) in our 2022 Form 10-K.

Table 11.3 and Table 11.4 show the net gains (losses) related to derivatives in cash flow and fair value hedging relationships, respectively.

			Wells Fargo & Company			95

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Note 11: Derivatives (continued)

Table 11.3: Gains (Losses) Recognized on Cash Flow Hedging Relationships

						Net interest income												Total recorded in net income			Total recorded in OCI
(in millions)						Loans			Other interest income			Long-term debt						Derivative gains (losses)			Derivative gains (losses)
Quarter ended March 31, 2023
Total amounts presented in the consolidated statement of income and other comprehensive income						$	13,318		1,988			(2,511)						N/A			503
Interest rate contracts:
Realized gains (losses) (pre-tax) reclassified from OCI into net income						(53)			(58)			—						(111)			111
Net unrealized gains (losses) (pre-tax) recognized in OCI						N/A			N/A			N/A						N/A			383
Total gains (losses) (pre-tax) on interest rate contracts						(53)			(58)			—						(111)			494
Foreign exchange contracts:
Realized gains (losses) (pre-tax) reclassified from OCI into net income						—			—			(2)						(2)			2
Net unrealized gains (losses) (pre-tax) recognized in OCI						N/A			N/A			N/A						N/A			1
Total gains (losses) (pre-tax) on foreign exchange contracts						—			—			(2)						(2)			3
Total gains (losses) (pre-tax) recognized on cash flow hedges						$	(53)		(58)			(2)						(113)			497
Quarter ended March 31, 2022
Total amounts presented in the consolidated statement of income and other comprehensive income						$	7,218		90			(761)						N/A			27
Interest rate contracts:
Realized gains (losses) (pre-tax) reclassified from OCI into net income						(16)			4			—						(12)			12
Net unrealized gains (losses) (pre-tax) recognized in OCI						N/A			N/A			N/A						N/A			(48)
Total gains (losses) (pre-tax) on interest rate contracts						(16)			4			—						(12)			(36)
Foreign exchange contracts:
Realized gains (losses) (pre-tax) reclassified from OCI into net income						—			—			(2)						(2)			2
Net unrealized gains (losses) (pre-tax) recognized in OCI						N/A			N/A			N/A						N/A			(3)
Total gains (losses) (pre-tax) on foreign exchange contracts						—			—			(2)						(2)			(1)
Total gains (losses) (pre-tax) recognized on cash flow hedges						$	(16)		4			(2)						(14)			(37)

96			Wells Fargo & Company

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Table 11.4: Gains (Losses) Recognized on Fair Value Hedging Relationships

			Net interest income												Noninterest income						Total recorded in net income						Total recorded in OCI
(in millions)			Debt securities						Deposits			Long-term debt						Other						Derivative gains (losses)						Derivative gains (losses)
Quarter ended March 31, 2023
Total amounts presented in the consolidated statement of income and other comprehensive income			$	3,783					(2,761)			(2,511)						580						N/A						503
Interest contracts
Amounts related to cash flows on derivatives			269						(30)			(682)						—						(443)						N/A
Recognized on derivatives			(700)						105			2,358						—						1,763						—
Recognized on hedged items			692						(108)			(2,360)						—						(1,776)						N/A
Total gains (losses) (pre-tax) on interest rate contracts			261						(33)			(684)						—						(456)						—
Foreign exchange contracts
Amounts related to cash flows on derivatives			—						—			(103)						—						(103)						N/A
Recognized on derivatives			—						—			52						35						87						6
Recognized on hedged items			—						—			(60)						(29)						(89)						N/A
Total gains (losses) (pre-tax) on foreign exchange contracts			—						—			(111)						6						(105)						6
Commodity contracts
Recognized on derivatives			—						—			—						(12)						(12)						—
Recognized on hedged items			—						—			—						25						25						N/A
Total gains (losses) (pre-tax) on commodity contracts			—						—			—						13						13						—
Total gains (losses) (pre-tax) recognized on fair value hedges			$	261					(33)			(795)						19						(548)						6
Quarter ended March 31, 2022
Total amounts presented in the consolidated statement of income and other comprehensive income			$	2,563					(83)			(761)						692						N/A						27
Interest contracts
Amounts related to cash flows on derivatives			(41)						41			481						—						481						N/A
Recognized on derivatives			1,262						(145)			(6,869)						—						(5,752)						—
Recognized on hedged items			(1,248)						143			6,813						—						5,708						N/A
Total gains (losses) (pre-tax) on interest rate contracts			(27)						39			425						—						437						—
Foreign exchange contracts
Amounts related to cash flows on derivatives			—						—			4						—						4						N/A
Recognized on derivatives			—						—			(456)						(242)						(698)						64
Recognized on hedged items			—						—			445						241						686						N/A
Total gains (losses) (pre-tax) on foreign exchange contracts			—						—			(7)						(1)						(8)						64
Commodity contracts
Recognized on derivatives			—						—			—						(92)						(92)						—
Recognized on hedged items			—						—			—						87						87						N/A
Total gains (losses) (pre-tax) on commodity contracts			—						—			—						(5)						(5)						—
Total gains (losses) (pre-tax) recognized on fair value hedges			$	(27)					39			418						(6)						424						64

			Wells Fargo & Company			97

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Note 11: Derivatives (continued)

Table 11.5 shows the carrying amount and associated cumulative basis adjustment related to the application of hedge accounting that is included in the carrying amount of hedged assets and liabilities in fair value hedging relationships.

Table 11.5: Hedged Items in Fair Value Hedging Relationships

			Hedged items currently designated									Hedged items no longer designated
(in millions)			Carrying amount of assets/(liabilities) (1)(2)			Hedge accounting basis adjustment assets/(liabilities) (3)						Carrying amount of assets/(liabilities) (2)			Hedge accounting basis adjustment assets/(liabilities)
March 31, 2023
Available-for-sale debt securities (4)(5)			$	59,752		(3,160)						15,822			656
Other assets			1,652			100						—			—
Deposits			(51,456)			97						(10)			—
Long-term debt			(132,434)			11,421						(32)			5
December 31, 2022
Available-for-sale debt securities (4)			$	39,423		(3,859)						16,100			722
Other assets			1,663			38						—			—
Deposits			(41,687)			205						(10)			—
Long-term debt			(130,997)			13,862						(5)			—

(1)Does not include the carrying amount of hedged items where only foreign currency risk is the designated hedged risk. The carrying amount excluded for debt securities was $710 million and for long-term debt was $0 million as of March 31, 2023, and $739 million for debt securities and $0 million for long-term debt as of December 31, 2022.

(2)Represents the full carrying amount of the hedged asset or liability item as of the balance sheet date, except for circumstances in which only a portion of the asset or liability was designated as the hedged item in which case only the portion designated is presented.

(3)The balance includes $37 million and $586 million of debt securities and long-term debt cumulative basis adjustments as of March 31, 2023, respectively, and $39 million and $334 million of debt securities and long-term debt cumulative basis adjustments as of December 31, 2022, respectively, on terminated hedges whereby the hedged items have subsequently been re-designated into existing hedges.

(4)Carrying amount represents the amortized cost.

(5)The balance includes cumulative basis adjustments of $(6) million for hedged items currently designated as of March 31, 2023, related to certain AFS debt securities designated as the hedged item in a fair value hedge using the portfolio layer method. At March 31, 2023, the aggregated designated hedged items using the portfolio layer method had a carrying amount of $19.9 billion from closed portfolios of financial assets totaling $23.3 billion.

Derivatives Not Designated as Hedging Instruments

Derivatives not designated as hedging instruments include economic hedges and derivatives entered into for customer accommodation trading purposes.

We use economic hedge derivatives to manage our exposure to interest rate risk, equity price risk, foreign currency risk, and credit risk. We also use economic hedge derivatives to mitigate the periodic earnings volatility caused by mismatches between the changes in fair value of the hedged item and hedging instrument recognized on our fair value accounting hedges.

Changes in the fair values of derivatives used to economically hedge the deferred compensation plan are reported in personnel expense.

For additional information on our derivatives activities, see Note 14 (Derivatives) in our 2022 Form 10-K.

98			Wells Fargo & Company

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Table 11.6 shows the net gains (losses), recognized by income statement lines, related to derivatives not designated as hedging instruments.

Table 11.6: Gains (Losses) on Derivatives Not Designated as Hedging Instruments

			Noninterest income															Noninterest expense
(in millions)			Mortgage banking			Net gains from trading and securities						Other			Total						Personnel expense
Quarter ended March 31, 2023
Net gains (losses) recognized on economic hedges derivatives:
Interest contracts (1)			$	146		—						48			194						—
Equity contracts			—			—						(80)			(80)						(191)
Foreign exchange contracts			—			—						(366)			(366)						—
Credit contracts			—			—						(1)			(1)						—
Subtotal			146			—						(399)			(253)						(191)
Net gains (losses) recognized on customer accommodation trading and other derivatives:
Interest contracts			(2)			(336)						—			(338)						—
Commodity contracts			—			112						—			112						—
Equity contracts			—			(1,470)						(64)			(1,534)						—
Foreign exchange contracts			—			(99)						—			(99)						—
Credit contracts			—			(7)						—			(7)						—
Subtotal			(2)			(1,800)						(64)			(1,866)						—
Net gains (losses) recognized related to derivatives not designated as hedging instruments			$	144		(1,800)						(463)			(2,119)						(191)
Quarter ended March 31, 2022
Net gains (losses) recognized on economic hedges derivatives:
Interest contracts (1)			$	(368)		—						(26)			(394)						—
Equity contracts (2)			—			—						5			5						266
Foreign exchange contracts			—			—						231			231						—
Credit contracts			—			—						5			5						—
Subtotal			(368)			—						215			(153)						266
Net gains (losses) recognized on customer accommodation trading and other derivatives:
Interest contracts			(498)			3,214						—			2,716						—
Commodity contracts			—			113						—			113						—
Equity contracts			—			1,003						(38)			965						—
Foreign exchange contracts			—			327						—			327						—
Credit contracts			—			12						—			12						—
Subtotal			(498)			4,669						(38)			4,133						—
Net gains (losses) recognized related to derivatives not designated as hedging instruments			$	(866)		4,669						177			3,980						266

(1)Mortgage banking amounts for first quarter 2023 are comprised of gains (losses) of $185 million related to derivatives used as economic hedges of MSRs measured at fair value offset by gains (losses) of $(39) million related to derivatives used as economic hedges of mortgage loans held for sale and derivative loan commitments. The corresponding amounts for first quarter 2022 are comprised of gain (losses) of $(1.6) billion offset by gains (losses) of $1.3 billion.

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

			Wells Fargo & Company			99

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Note 11: Derivatives (continued)

Credit Derivatives

Credit derivative contracts are arrangements whose value is derived from the transfer of credit risk of a reference asset or entity from one party (the purchaser of credit protection) to another party (the seller of credit protection). We generally use credit derivatives to assist customers with their risk management objectives by purchasing and selling credit protection on corporate debt obligations through the use of credit default swaps or through risk participation swaps to help manage counterparty exposure. We would be required to perform under the credit derivatives we sold in the event of default by the referenced obligors. Events of default include events such as bankruptcy, capital restructuring or lack of principal and/or interest payment.

Table 11.7 provides details of sold credit derivatives.

Table 11.7: Sold Credit Derivatives

			Notional amount
(in millions)			Protection sold			Protection sold – non-investment grade
March 31, 2023
Credit default swaps			$	17,033		2,200
Risk participation swaps			6,782			6,571
Total credit derivatives			$	23,815		8,771
December 31, 2022
Credit default swaps			$	12,733		1,860
Risk participation swaps			6,728			6,518
Total credit derivatives			$	19,461		8,378

Protection sold represents the estimated maximum exposure to loss that would be incurred if, upon an event of default, the value of our interests and any associated collateral declined to zero, and does not take into consideration any of recovery value from the referenced obligation or offset from collateral held or any economic hedges.

The amounts under non-investment grade represent the notional amounts of those credit derivatives on which we have a higher risk of being required to perform under the terms of the credit derivative and are a function of the underlying assets.

We consider the credit risk to be low if the underlying assets under the credit derivative have an external rating that is investment grade. If an external rating is not available, we classify the credit derivative as non-investment grade.

Our maximum exposure to sold credit derivatives is managed through posted collateral and purchased credit derivatives with identical or similar reference positions in order to achieve our desired credit risk profile. The credit risk management is designed to provide an ability to recover a significant portion of any amounts that would be paid under sold credit derivatives.

Credit-Risk Contingent Features

Certain of our derivative contracts contain provisions whereby if the credit rating of our debt were to be downgraded by certain major credit rating agencies, the counterparty could demand additional collateral or require termination or replacement of derivative instruments in a net liability position. Table 11.8 illustrates our exposure to OTC bilateral derivative contracts with credit-risk contingent features, collateral we have posted, and the additional collateral we would be required to post if the credit rating of our debt was downgraded below investment grade.

Table 11.8: Credit-Risk Contingent Features

(in billions)			Mar 31, 2023			Dec 31, 2022
Net derivative liabilities with credit-risk contingent features			$	17.4		20.7
Collateral posted			17.3			17.4
Additional collateral to be posted upon a below investment grade credit rating (1)			0.1			3.3

(1)Any credit rating below investment grade requires us to post the maximum amount of collateral.

100			Wells Fargo & Company

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Note 12:  Fair Values of Assets and Liabilities

We use fair value measurements to record fair value adjustments to certain assets and liabilities and to fulfill fair value disclosure requirements. Assets and liabilities recorded at fair value on a recurring basis, such as derivatives, residential MSRs, and trading or AFS debt securities, are presented in Table 12.1 in this Note. Additionally, from time to time, we record fair value adjustments on a nonrecurring basis. These nonrecurring adjustments typically involve application of lower of cost or fair value (LOCOM) accounting, write-downs of individual assets or application of the measurement alternative for nonmarketable equity securities. Assets recorded at fair value on a nonrecurring basis are presented in Table 12.4 in this Note. We provide in Table 12.9 estimates of fair value for financial instruments that are not recorded at fair value, such as loans and debt liabilities carried at amortized cost.

See Note 1 (Summary of Significant Accounting Policies) in our 2022 Form 10-K for discussion of how we determine fair value. For descriptions of the valuation methodologies we use for assets and liabilities recorded at fair value on a recurring or nonrecurring basis, see Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K.

FAIR VALUE HIERARCHY We classify our assets and liabilities recorded at fair value as either Level 1, 2, or 3 in the fair value hierarchy. The highest priority (Level 1) is assigned to valuations based on unadjusted quoted prices in active markets and the lowest priority (Level 3) is assigned to valuations based on significant unobservable inputs. See Note 1 (Summary of Significant Accounting Policies) in our 2022 Form 10-K for a detailed description of the fair value hierarchy.

In the determination of the classification of financial instruments in Level 2 or Level 3 of the fair value hierarchy, we consider all available information, including observable market data, indications of market liquidity and orderliness, and our understanding of the valuation techniques and significant inputs used. This determination is ultimately based upon the specific facts and circumstances of each instrument or instrument category and judgments are made regarding the significance of the unobservable inputs to the instruments’ fair value measurement in its entirety. If unobservable inputs are considered significant, the instrument is classified as Level 3.

We do not classify nonmarketable equity securities in the fair value hierarchy if we use the non-published net asset value (NAV) per share (or its equivalent) as a practical expedient to measure fair value. Marketable equity securities with published NAVs are classified in the fair value hierarchy.

			Wells Fargo & Company			101

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Note 12: Fair Values of Assets and Liabilities (continued)

Assets and Liabilities Recorded at Fair Value on a Recurring Basis

Table 12.1 presents the balances of assets and liabilities recorded at fair value on a recurring basis.

Table 12.1: Fair Value on a Recurring Basis

			March 31, 2023																								December 31, 2022
(in millions)			Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3						Total
Trading debt securities:
Securities of U.S. Treasury and federal agencies			$	29,984					4,132						—						34,116						28,844						4,530						—						33,374
Collateralized loan obligations			—						555						117						672						—						540						150						690
Corporate debt securities			—						11,447						15						11,462						—						10,344						23						10,367
Federal agency mortgage-backed securities			—						33,776						—						33,776						—						34,447						—						34,447
Non-agency mortgage-backed securities			—						1,277						—						1,277						—						1,243						12						1,255
Other debt securities			—						8,749						—						8,749						—						6,022						—						6,022
Total trading debt securities			29,984						59,936						132						90,052						28,844						57,126						185						86,155
Available-for-sale debt securities:
Securities of U.S. Treasury and federal agencies			58,043						—						—						58,043						45,285						—						—						45,285
Non-U.S. government securities			—						162						—						162						—						162						—						162
Securities of U.S. states and political subdivisions			—						21,403						357						21,760						—						10,332						113						10,445
Federal agency mortgage-backed securities			—						55,205						—						55,205						—						48,137						—						48,137
Non-agency mortgage-backed securities			—						3,144						—						3,144						—						3,284						—						3,284
Collateralized loan obligations			—						3,905						—						3,905						—						3,981						—						3,981
Other debt securities			—						2,031						148						2,179						—						2,137						163						2,300
Total available-for-sale debt securities			58,043						85,850						505						144,398						45,285						68,033						276						113,594
Loans held for sale			—						2,863						564						3,427						—						3,427						793						4,220
Mortgage servicing rights (residential)			—						—						8,819						8,819						—						—						9,310						9,310
Derivative assets (gross):
Interest rate contracts			234						32,841						559						33,634						262						40,503						321						41,086
Commodity contracts			—						3,723						25						3,748						—						5,866						134						6,000
Equity contracts			167						10,739						199						11,105						112						9,051						410						9,573
Foreign exchange contracts			27						13,659						11						13,697						27						22,175						11						22,213
Credit contracts			—						46						22						68						—						44						22						66
Total derivative assets (gross)			428						61,008						816						62,252						401						77,639						898						78,938
Equity securities:
Marketable			14,319						95						4						14,418						18,527						86						3						18,616
Nonmarketable			—						10,557						28						10,585						—						9,750						17						9,767
Total equity securities			14,319						10,652						32						25,003						18,527						9,836						20						28,383
Total assets prior to derivative netting			$	102,774					220,309						10,868						333,951						93,057						216,061						11,482						320,600
Derivative netting (1)																					(45,135)																								(56,164)
Total assets after derivative netting																					$	288,816																							264,436
Derivative liabilities (gross):
Interest rate contracts			$	(209)					(32,636)						(3,311)						(36,156)						(193)						(40,377)						(2,903)						(43,473)
Commodity contracts			—						(3,013)						(38)						(3,051)						—						(3,325)						(120)						(3,445)
Equity contracts (2)			(155)						(9,635)						(1,477)						(11,267)						(118)						(6,502)						(1,634)						(8,254)
Foreign exchange contracts			(37)						(16,263)						(27)						(16,327)						(29)						(26,622)						(35)						(26,686)
Credit contracts			—						(29)						(3)						(32)						—						(33)						(3)						(36)
Total derivative liabilities (gross)			(401)						(61,576)						(4,856)						(66,833)						(340)						(76,859)						(4,695)						(81,894)
Short-sale and other liabilities (2)			(17,951)						(4,983)						(193)						(23,127)						(14,791)						(5,513)						(167)						(20,471)
Long-term debt			—						(1,506)						—						(1,506)						—						(1,346)						—						(1,346)
Total liabilities prior to derivative netting			$	(18,352)					$	(68,065)					(5,049)						(91,466)						(15,131)						(83,718)						(4,862)						(103,711)
Derivative netting (1)																					49,936																								61,827
Total liabilities after derivative netting																					$	(41,530)																							(41,884)

(1)Represents balance sheet netting of derivative asset and liability balances, related cash collateral and portfolio level counterparty valuation adjustments. See Note 11 (Derivatives) for additional information.

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

102			Wells Fargo & Company

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Level 3 Assets and Liabilities Recorded at Fair Value on a Recurring Basis

Table 12.2 presents the changes in Level 3 assets and liabilities measured at fair value on a recurring basis.

Table 12.2: Changes in Level 3 Fair Value Assets and Liabilities on a Recurring Basis

																																																			Net unrealized gains (losses) related to assets and liabilities held at period end
(in millions)			Balance, beginning of period						Net gains/(losses) (1)						Purchases (2)						Sales						Settlements						Transfers  into  Level 3 (3)						Transfers out of Level 3 (4)						Balance,  end of  period									(5)
Quarter ended March 31, 2023
Trading debt securities			$	185					1						76						(112)						(1)						—						(17)						132						1			(6)
Available-for-sale debt securities			276						(20)						69						—						(6)						233						(47)						505						(19)			(6)
Loans held for sale			793						10						73						(49)						(39)						16						(240)						564						10			(7)
Mortgage servicing rights (residential) (8)			9,310						(546)						48						7						—						—						—						8,819						(225)			(7)
Net derivative assets and liabilities:
Interest rate contracts			(2,582)						295						—						—						267						(746)						14						(2,752)						509
Equity contracts			(1,224)						(303)						—						—						285						(38)						2						(1,278)						(2)
Other derivative contracts			9						(55)						2						(1)						37						(2)						—						(10)						(41)
Total derivative contracts			(3,797)						(63)						2						(1)						589						(786)						16						(4,040)						466			(9)
Equity securities			20						(1)						—						—						—						13						—						32						(1)			(6)
Other liabilities			(167)						(26)						—						—						—						—						—						(193)						(26)			(10)
Quarter ended March 31, 2022
Trading debt securities			$	241					(15)						47						(14)						(35)						5						(28)						201						(17)			(6)
Available-for-sale debt securities			186						(21)						52						—						(5)						126						—						338						(21)			(6)
Loans held for sale			1,033						(57)						63						(43)						(73)						102						(6)						1,019						(57)			(7)
Mortgage servicing rights (residential) (8)			6,920						1,248						342						1						—						—						—						8,511						1,605			(7)
Net derivative assets and liabilities:
Interest rate contracts			127						(578)						—						—						275						—						—						(176)						(259)
Equity contracts (11)			(417)						(216)						—						—						589						(80)						(1,292)						(1,416)						266
Other derivative contracts			5						(22)						—						—						44						—						—						27						18
Total derivative contracts			(285)						(816)						—						—						908						(80)						(1,292)						(1,565)						25			(9)
Equity securities			8,910						(1)						—						—						—						2						(8,885)						26						(2)			(6)
Other liabilities (11)			(791)						153						—						—						—						—						—						(638)						153			(10)

(1)Includes net gains (losses) included in both net income and other comprehensive income. All amounts represent net gains (losses) included in net income except for $(16) million and $(21) million included in other comprehensive income from AFS debt securities, and $0 and $14 million in other comprehensive income from other liabilities for first quarter 2023 and 2022, respectively.

(2)Includes originations of mortgage servicing rights and loans held for sale.

(3)All assets and liabilities transferred into Level 3 were previously classified within Level 2.

(4)All assets and liabilities transferred out of Level 3 are classified as Level 2. During first quarter 2022, we transferred $8.9 billion of non-marketable equity securities and $1.4 billion of related economic hedging derivative assets (equity contracts) out of Level 3 due to our election to measure fair value of these instruments as a portfolio. Under this election, the unit of valuation is the portfolio-level, rather than each individual instrument. The unobservable inputs previously significant to the valuation of the instruments individually are no longer significant, as those unobservable inputs offset under the portfolio election.

(5)Includes net unrealized gains (losses) related to assets and liabilities held at period end included in both net income and other comprehensive income. All amounts represent net unrealized gains (losses) included in net income except for $(15) million and $(21) million included in other comprehensive income from AFS debt securities, and $0 and $14 million in other comprehensive income from other liabilities for first quarter 2023 and 2022, respectively.

(6)Included in net gains from trading and securities on our consolidated statement of income.

(7)Included in mortgage banking income on our consolidated statement of income.

(8)For additional information on the changes in mortgage servicing rights, see Note 6 (Mortgage Banking Activities).

(9)Included in mortgage banking income, net gains from trading and securities, and other noninterest income on our consolidated statement of income.

(10)Included in other noninterest income on our consolidated statement of income.

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

Table 12.3 provides quantitative information about the valuation techniques and significant unobservable inputs used in the valuation of our Level 3 assets and liabilities measured at fair value on a recurring basis.

The significant unobservable inputs for Level 3 assets inherent in the fair values obtained from third-party vendors are not included in the table, as the specific inputs applied are not

provided by the vendor (for additional information on vendor-developed valuations, see Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K).

Weighted averages of inputs are calculated using outstanding unpaid principal balance for cash instruments, such as loans and securities, and notional amounts for derivative instruments.

			Wells Fargo & Company			103

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Note 12: Fair Values of Assets and Liabilities (continued)

Table 12.3: Valuation Techniques – Recurring Basis

($ in millions, except cost to service amounts)			Fair Value Level 3						Valuation Technique						Significant Unobservable Input						Range of Inputs															Weighted Average
March 31, 2023
Trading and available-for-sale debt securities			$	398					Discounted cash flow						Discount rate						2.5			-			12.5			%						5.5
			132						Market comparable pricing						Comparability adjustment						(24.4)			-			47.1									(2.6)
			107						Market comparable pricing						Multiples						1.1x			-			7.4x									3.9x
Loans held for sale			564						Discounted cash flow						Default rate						0.0			-			29.8			%						0.9
															Discount rate						2.9			-			13.9									9.2
															Loss severity						0.0			-			55.7									17.1
															Prepayment rate						3.1			-			13.9									10.5
Mortgage servicing rights (residential)			8,819						Discounted cash flow						Cost to service per loan (1)						$	52		-			533									101
															Discount rate						8.5			-			13.6			%						8.9
															Prepayment rate (2)						8.3			-			24.2									9.7
Net derivative assets and (liabilities):
Interest rate contracts			(2,632)						Discounted cash flow						Discount rate						3.0			-			4.9									4.0
			(39)						Discounted cash flow						Default rate						0.4			-			5.0									2.2
															Loss severity						50.0			-			50.0									50.0
															Prepayment rate						2.8			-			22.0									18.6
Interest rate contracts: derivative loan commitments			(81)						Discounted cash flow						Fall-out factor						1.0			-			99.0									35.3
															Initial-value servicing						(153.1)			-			141.0			bps						(112.8)
Equity contracts			(948)						Discounted cash flow						Conversion factor						(8.7)			-			0.0			%						(6.4)
															Weighted average life						0.8			-			1.8			yrs						1.2
			(330)						Option model						Correlation factor						(77.0)			-			99.0			%						64.9
															Volatility factor						6.5			-			96.5									36.6
Insignificant Level 3 liabilities, net of assets (3)			(171)
Total Level 3 assets, net of liabilities			$	5,819		(4)
December 31, 2022
Trading and available-for-sale debt securities			$	157					Discounted cash flow						Discount rate						2.7			-			12.5			%						6.4
			185						Market comparable pricing						Comparability adjustment						(33.6)			-			14.1									(4.8)
			119						Market comparable pricing						Multiples						1.1x			-			7.4x									4.0x
Loans held for sale			793						Discounted cash flow						Default rate						0.0			-			25.0			%						0.7
															Discount rate						2.9			-			13.4									9.5
															Loss severity						0.0			-			53.6									15.7
															Prepayment rate						3.5			-			14.2									10.7
Mortgage servicing rights (residential)			9,310						Discounted cash flow						Cost to service per loan (1)						$	52		-			550									102
															Discount rate						8.7			-			14.1			%						9.1
															Prepayment rate (2)						8.1			-			21.9									9.4
Net derivative assets and (liabilities):
Interest rate contracts			(2,411)						Discounted cash flow						Discount rate						3.2			-			4.9									4.2
			(63)						Discounted cash flow						Default rate						0.4			-			5.0									2.3
															Loss severity						50.0			-			50.0									50.0
															Prepayment rate						2.8			-			22.0									18.7
Interest rate contracts: derivative loan commitments			(108)						Discounted cash flow						Fall-out factor						1.0			-			99.0									41.0
															Initial-value servicing						(9.3)			-			141.0			bps						11.5
Equity contracts (3)			(1,000)						Discounted cash flow						Conversion factor						(12.2)			-			0.0			%						(9.9)
															Weighted average life						0.5			-			1.5			yrs						0.8
			(224)						Option model						Correlation factor						(77.0)			-			99.0			%						49.5
															Volatility factor						6.5			-			96.5									37.3
Insignificant Level 3 liabilities, net of assets (3)			(138)
Total Level 3 assets, net of liabilities			$	6,620		(4)

(1)The high end of the range of inputs is for servicing modified loans. For non-modified loans, the range is $52 - $177 at March 31, 2023, and $52 - $178 at December 31, 2022.

(2)Includes a blend of prepayment speeds and expected defaults. Prepayment speeds are influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.

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

(4)Consists of total Level 3 assets of $10.9 billion and $11.5 billion and total Level 3 liabilities of $5.0 billion and $4.9 billion, before netting of derivative balances, at March 31, 2023, and December 31, 2022, respectively.

For additional information on the valuation techniques and significant unobservable inputs used in the valuation of our Level 3 assets and liabilities, including how changes in these inputs affect fair value estimates, see Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K.

104			Wells Fargo & Company

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Assets and Liabilities Recorded at Fair Value on a Nonrecurring Basis

We may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from application of LOCOM accounting, write-downs of individual assets, or application of the measurement alternative for certain nonmarketable equity securities.

Table 12.4 provides the fair value hierarchy and fair value at the date of the nonrecurring fair value adjustment for all assets that were still held as of March 31, 2023, and December 31, 2022, and for which a nonrecurring fair value adjustment was recorded during the quarter ended March 31, 2023, and the year ended December 31, 2022.

Table 12.4: Fair Value on a Nonrecurring Basis

			March 31, 2023																		December 31, 2022
(in millions)			Level 2						Level 3						Total						Level 2						Level 3						Total
Loans held for sale (1)			$	1,184					354						1,538						838						554						1,392
Loans:
Commercial			204						—						204						285						—						285
Consumer			44						—						44						512						—						512
Total loans			248						—						248						797						—						797
Mortgage servicing rights (commercial)			—						—						—						—						75						75
Nonmarketable equity securities			553						1,005						1,558						1,926						2,818						4,744
Other assets			1,683						1						1,684						1,862						296						2,158
Total assets at fair value on a nonrecurring basis			$	3,668					1,360						5,028						5,423						3,743						9,166

(1)Consists of commercial mortgages and residential mortgage – first lien loans.

Table 12.5 presents the gains (losses) on certain assets held at the end of the reporting periods presented for which a nonrecurring fair value adjustment was recognized in earnings during the respective periods. 

Table 12.5: Gains (Losses) on Assets with Nonrecurring Fair Value Adjustment

			Quarter ended March 31,
(in millions)			2023						2022
Loans held for sale			$	(8)					(59)
Loans:
Commercial			(68)						(12)
Consumer			(214)						(206)
Total loans			(282)						(218)
Mortgage servicing rights (commercial)			—						4
Nonmarketable equity securities (1)			(339)						295
Other assets (2)			20						(52)
Total			$	(609)					(30)

(1)Includes impairment of nonmarketable equity securities and observable price changes related to nonmarketable equity securities accounted for under the measurement alternative.

(2)Includes impairment of operating lease ROU assets, valuation of physical commodities, valuation losses on foreclosed real estate and other collateral owned, and impairment of private equity and venture capital investments in consolidated portfolio companies.

Table 12.6 provides quantitative information about the valuation techniques and significant unobservable inputs used in the valuation of our Level 3 assets that are measured at fair value on a nonrecurring basis and determined using an internal model. The table is limited to financial instruments that had nonrecurring fair value adjustments during the periods presented. Weighted averages of inputs are calculated using outstanding unpaid principal balance for cash instruments, such as loans, and carrying value prior to the nonrecurring fair value measurement for nonmarketable equity securities and private equity and venture capital investments in consolidated portfolio companies.

			Wells Fargo & Company			105

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Note 12: Fair Values of Assets and Liabilities (continued)

Table 12.6: Valuation Techniques – Nonrecurring Basis

($ in millions)			Fair Value Level 3			Valuation Technique (1)						Significant Unobservable Input (1)						Range of Inputs Positive (Negative)												Weighted Average
March 31, 2023
Loans held for sale (2)			$	354		Discounted cash flow						Default rate			(3)			0.1			-			89.7		%				14.9
												Discount rate						0.6			-			13.6						5.5
												Loss severity						0.5			-			49.1						11.8
												Prepayment rate			(4)			2.8			-			100.0						40.4
Nonmarketable equity securities			64			Market comparable pricing						Comparability adjustment						(100.0)			-			(12.0)						(28.0)
			938			Market comparable pricing						Multiples						3.0x			-			27.1x						9.7x
Insignificant Level 3 assets			4
Total			$	1,360
December 31, 2022
Loans held for sale (2)			$	143		Discounted cash flow						Default rate			(3)			0.1			-			86.1		%				13.8
												Discount rate						3.8			-			13.8						9.0
												Loss severity						8.1			-			43.8						18.6
												Prepayment rate			(4)			2.3			-			23.4						18.6
			411			Market comparable pricing						Comparability adjustment						(8.2)			-			(0.9)						(4.3)
Mortgage servicing rights (commercial)			75			Discounted cash flow						Cost to service per loan						$	3,775		-			3,775						3,775
												Discount rate						5.2			-			5.2		%				5.2
												Prepayment rate						0.0			-			20.6						6.7
Nonmarketable equity securities			1,461			Market comparable pricing						Comparability adjustment						(100.0)			-			(4.0)						(30.1)
			1,352			Market comparable pricing						Multiples						0.8x			-			18.7x						9.9x
Other assets (5)			234			Market comparable pricing						Multiples						6.4			-			8.0						7.1
Insignificant Level 3 assets			67
Total			$	3,743

(1)See Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K for additional information on the valuation technique(s) and significant unobservable inputs used in the valuation of Level 3 assets.

(2)Consists of approximately $220 million and $400 million of government insured/guaranteed loans purchased from GNMA-guaranteed mortgage securitizations at March 31, 2023, and December 31, 2022, respectively, and approximately $130 million and $150 million of other mortgage loans that are not government insured/guaranteed at March 31, 2023, and December 31, 2022, respectively.

(3)Applies only to non-government insured/guaranteed loans.

(4)Includes the impact on prepayment rate of expected defaults for government insured/guaranteed loans, which impact the frequency and timing of early resolution of loans.

(5)Represents private equity and venture capital investments in consolidated portfolio companies.

106			Wells Fargo & Company

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Fair Value Option

The fair value option is an irrevocable election, generally only permitted upon initial recognition of financial assets or liabilities, to measure eligible financial instruments at fair value with changes in fair value reflected in earnings. We may elect the fair value option to align the measurement model with how the financial assets or liabilities are managed or to reduce complexity or accounting asymmetry. Following is a discussion of the

portfolios for which we elected the fair value option. For additional information, including the basis for our fair value option elections, see Note 15 (Fair Values of Assets and Liabilities) in our 2022 Form 10-K.

Table 12.7 reflects differences between the fair value carrying amount of the assets and liabilities for which we have elected the fair value option and the contractual aggregate unpaid principal amount at maturity.

Table 12.7: Fair Value Option

			March 31, 2023																		December 31, 2022
(in millions)			Fair value carrying amount						Aggregate unpaid principal						Fair value carrying amount less aggregate unpaid principal						Fair value carrying amount						Aggregate unpaid principal						Fair value carrying amount less aggregate unpaid principal
Loans held for sale (1)			$	3,427					3,742						(315)						4,220						4,614						(394)
Long-term debt			(1,506)						(1,919)						413						(1,346)						(1,775)						429

(1)Nonaccrual loans and loans 90 days or more past due and still accruing included in LHFS for which we have elected the fair value option were insignificant at March 31, 2023, and December 31, 2022.

Table 12.8 reflects amounts included in earnings related to initial measurement and subsequent changes in fair value, by income statement line item, for assets and liabilities for which

the fair value option was elected. Amounts recorded in net interest income are excluded from the table below.

Table 12.8: Gains (Losses) on Changes in Fair Value Included in Earnings

			2023																		2022
(in millions)			Mortgage banking noninterest income						Net gains from trading and securities						Other noninterest income						Mortgage banking noninterest income						Net gains from trading and securities						Other noninterest income
Quarter ended March 31,
Loans held for sale			$	97					12						(4)						(365)						9						—
Long-term debt			—						(30)						—						—						12						—

For performing loans, instrument-specific credit risk gains or losses are derived principally by determining the change in fair value of the loans due to changes in the observable or implied credit spread. Credit spread is the market yield on the loans less the relevant risk-free benchmark interest rate. For nonperforming loans, we attribute all changes in fair value to instrument-specific credit risk. For LHFS accounted for under the fair value option, instrument-specific credit gains or losses were insignificant during the first quarter of both 2023 and 2022.

For long-term debt, instrument-specific credit risk gains or losses represent the impact of changes in fair value due to changes in our credit spread and are derived using observable secondary bond market information. These impacts are recorded within the debit valuation adjustments (DVA) in OCI. See

Note 20 (Other Comprehensive Income) for additional information.

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Note 12: Fair Values of Assets and Liabilities (continued)

Disclosures about Fair Value of Financial Instruments

Table 12.9 presents a summary of fair value estimates for financial instruments that are not carried at fair value on a recurring basis. Some financial instruments are excluded from the scope of this table, such as certain insurance contracts, certain nonmarketable equity securities, and leases. This table also excludes assets and liabilities that are not financial instruments such as the value of the long-term relationships with our deposit, credit card and trust customers, MSRs, premises and equipment, goodwill and deferred taxes.

Loan commitments, standby letters of credit and commercial and similar letters of credit are not included in

Table 12.9. A reasonable estimate of the fair value of these instruments is the carrying value of deferred fees plus the allowance for unfunded credit commitments, which totaled $689 million and $737 million at March 31, 2023, and December 31, 2022, respectively.

The total of the fair value calculations presented does not represent, and should not be construed to represent, the underlying fair value of the Company.

Table 12.9: Fair Value Estimates for Financial Instruments

									Estimated fair value
(in millions)			Carrying amount						Level 1						Level 2						Level 3						Total
March 31, 2023
Financial assets
Cash and due from banks (1)			$	31,958					31,958						—						—						31,958
Interest-earning deposits with banks (1)			130,478						125,379						5,099						—						130,478
Federal funds sold and securities purchased under resale agreements (1)			67,288						—						67,288						—						67,288
Held-to-maturity debt securities			277,147						2,448						235,501						2,739						240,688
Loans held for sale			2,772						—						2,304						526						2,830
Loans, net (2)			920,121						—						56,715						832,899						889,614
Nonmarketable equity securities (cost method)			4,699						—						—						4,764						4,764
Total financial assets			$	1,434,463					159,785						366,907						840,928						1,367,620
Financial liabilities
Deposits (3)			$	90,420					—						57,971						30,658						88,629
Short-term borrowings			80,817						—						80,799						—						80,799
Long-term debt (4)			171,939						—						170,874						1,023						171,897
Total financial liabilities			$	343,176					—						309,644						31,681						341,325
December 31, 2022
Financial assets
Cash and due from banks (1)			$	34,596					34,596						—						—						34,596
Interest-earning deposits with banks (1)			124,561						124,338						223						—						124,561
Federal funds sold and securities purchased under resale agreements (1)			68,036						—						68,036						—						68,036
Held-to-maturity debt securities			297,059						14,285						238,552						2,684						255,521
Loans held for sale			2,884						—						2,208						719						2,927
Loans, net (2)			928,049						—						57,532						836,831						894,363
Nonmarketable equity securities (cost method)			4,900						—						—						4,961						4,961
Total financial assets			$	1,460,085					173,219						366,551						845,195						1,384,965
Financial liabilities
Deposits (3)			$	66,887					—						46,745						18,719						65,464
Short-term borrowings			50,964						—						50,970						—						50,970
Long-term debt (4)			173,502						—						172,783						999						173,782
Total financial liabilities			$	291,353					—						270,498						19,718						290,216

(1)Amounts consist of financial instruments for which carrying value approximates fair value.

(2)Excludes lease financing with a carrying amount of $14.6 billion and $14.7 billion at March 31, 2023, and December 31, 2022, respectively.

(3)Excludes deposit liabilities with no defined or contractual maturity of $1.3 trillion and $1.3 trillion at March 31, 2023, and December 31, 2022, respectively.

(4)Excludes obligations under finance leases of $21 million and $22 million at March 31, 2023, and December 31, 2022, respectively.

108			Wells Fargo & Company

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Note 13: Securitizations and Variable Interest Entities

Involvement with Variable Interest Entities (VIEs)

In the normal course of business, we enter into various types of on- and off-balance sheet transactions with special purpose entities (SPEs), which are corporations, trusts, limited liability companies or partnerships that are established for a limited purpose. SPEs are often formed in connection with securitization transactions whereby financial assets are transferred to an SPE. SPEs formed in connection with securitization transactions are generally considered variable interest entities (VIEs). The VIE may alter the risk profile of the asset by entering into derivative transactions or obtaining credit support, and issues various forms of interests in those assets to investors. When we transfer financial assets from our consolidated balance sheet to a VIE in connection with a securitization, we typically receive cash and sometimes other interests in the VIE as proceeds for the assets we transfer. In certain transactions with VIEs, we may retain the right to service the transferred assets and repurchase the transferred assets if the outstanding balance of the assets falls below the level at which the cost to service the assets exceed the benefits. In addition, we may purchase the right to service loans transferred to a VIE by a third party.

In connection with our securitization or other VIE activities, we have various forms of ongoing involvement with VIEs, which may include:

•underwriting securities issued by VIEs and subsequently making markets in those securities;

•providing credit enhancement on securities issued by VIEs through the use of letters of credit or financial guarantees;

•entering into other derivative contracts with VIEs;

•holding senior or subordinated interests in VIEs;

•acting as servicer or investment manager for VIEs;

•providing administrative or trustee services to VIEs; and

•providing seller financing to VIEs.

Loan Sales and Securitization Activity

We periodically transfer consumer and commercial loans and other types of financial assets in securitization and whole loan sale transactions.

MORTGAGE LOANS SOLD TO U.S. GOVERNMENT SPONSORED ENTITIES AND TRANSACTIONS WITH GINNIE MAE In the normal course of business we sell originated and purchased residential and commercial mortgage loans to government-sponsored entities (GSEs). These loans are generally transferred into securitizations sponsored by the GSEs, which provide certain credit guarantees to investors and servicers. We also transfer mortgage loans into securitization pools pursuant to Government National Mortgage Association (GNMA) guidelines which are insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA). Mortgage loans eligible for securitization with the GSEs or GNMA are considered conforming loans. The GSEs or GNMA design the structure of these securitizations, sponsor the involved VIEs, and have power over the activities most significant to the VIE.

We account for loans transferred in conforming mortgage loan securitization transactions as sales and do not consolidate the VIEs as we are not the primary beneficiary. In exchange for the transfer of loans, we typically receive securities issued by the VIEs which we sell to third parties for cash or hold for investment purposes as HTM or AFS securities. We also retain servicing rights on the transferred loans. As a servicer, we retain the option

to repurchase loans from GNMA loan securitization pools, which becomes exercisable when three scheduled loan payments remain unpaid by the borrower. During the quarters ended March 31, 2023 and 2022, we repurchased loans of $92 million and $933 million, respectively, which primarily represented repurchases of government insured loans. We recorded assets and related liabilities of $935 million and $743 million at March 31, 2023, and December 31, 2022, respectively, where we did not exercise our option to repurchase eligible loans.

Upon transfers of loans, we also provide indemnification for losses incurred due to material breaches of contractual representations and warranties as well as other recourse arrangements. At March 31, 2023, and December 31, 2022, our liability for these repurchase and recourse arrangements was $165 million and $167 million, respectively, and the maximum exposure to loss was $13.9 billion and $13.8 billion at March 31, 2023, and December 31, 2022, respectively.

Substantially all residential servicing activity is related to assets transferred to GSE and GNMA securitizations. See Note 6 (Mortgage Banking Activities) for additional information about residential and commercial servicing rights, advances and servicing fees.

NONCONFORMING MORTGAGE LOAN SECURITIZATIONS In the normal course of business, we sell nonconforming residential and commercial mortgage loans in securitization transactions that we design and sponsor. Nonconforming mortgage loan securitizations do not involve a government credit guarantee, and accordingly, beneficial interest holders are subject to credit risk of the underlying assets held by the securitization VIE. We typically originate the transferred loans and account for the transfers as sales. We also typically retain the right to service the loans and may hold other beneficial interests issued by the VIEs, such as debt securities held for investment purposes. Our servicing role related to nonconforming commercial mortgage loan securitizations is limited to primary or master servicer. We do not consolidate the VIE because the most significant decisions impacting the performance of the VIE are generally made by the special servicer or the controlling class security holder. For our residential nonconforming mortgage loan securitizations accounted for as sales, we either do not hold variable interests that we consider potentially significant or are not the primary servicer for a majority of the VIE assets.

WHOLE LOAN SALE TRANSACTIONS We may also sell whole loans to VIEs where we have continuing involvement in the form of financing. We account for these transfers as sales, and do not consolidate the VIEs as we do not have the power to direct the most significant activities of the VIEs.

Table 13.1 presents information about transfers of assets during the periods presented for which we recorded the transfers as sales and have continuing involvement with the transferred assets. In connection with these transfers, we received proceeds and recorded servicing assets and securities. Each of these interests are initially measured at fair value. Servicing rights are classified as Level 3 measurements, and generally securities are classified as Level 2. The majority of our transfers relate to residential mortgage securitizations with the GSEs or GNMA and generally result in no gain or loss because the loans are measured at fair value on a recurring basis. Additionally, we may transfer certain government insured loans that we previously

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Note 13: Securitizations and Variable Interest Entities (continued)

repurchased. These loans are carried at the lower of cost or market, and we recognize gains on such transfers when the

market value is greater than the carrying value of the loan when it is sold.

Table 13.1: Transfers with Continuing Involvement

			2023												2022
(in millions)			Residential mortgages						Commercial mortgages						Residential mortgages						Commercial mortgages
Quarter ended March 31,
Assets sold			$	4,461					1,499						26,174						4,033
Proceeds from transfer (1)			4,461						1,540						26,226						4,097
Net gains (losses) on sale			—						41						52						64
Continuing involvement (2):
Servicing rights recognized			$	47					18						327						29
Securities recognized (3)			—						26						1,587						104

(1)Represents cash proceeds and the fair value of non-cash beneficial interests recognized at securitization settlement.

(2)Represents assets or liabilities recognized at securitization settlement date related to our continuing involvement in the transferred assets.

(3)Represents debt securities obtained at securitization settlement held for investment purposes that are classified as available-for-sale or held-to-maturity. In 2022, these predominantly related to agency securities. Excludes trading debt securities held temporarily for market-marking purposes, which are sold to third parties at or shortly after securitization settlement, of $1.9 billion and $6.7 billion, during the quarters ended March 31, 2023 and 2022, respectively.

In the normal course of business, we purchase certain

non-agency securities at initial securitization or subsequently in the secondary market, which we hold for investment. We also provide seller financing in the form of loans. During the quarters ended March 31, 2023 and 2022, we received cash flows of $50 million and $136 million, respectively, related to principal and interest payments on these securities and loans, which exclude cash flows related to trading activities.

Table 13.2 presents the key weighted-average assumptions we used to initially measure residential MSRs recognized during the periods presented.

Table 13.2: Residential MSRs – Assumptions at Securitization Date

			2023						2022
Quarter ended March 31,
Prepayment rate (1)			18.6		%				11.1
Discount rate			9.7						7.0
Cost to service ($ per loan)			$	193					112

(1)Includes a blend of prepayment speeds and expected defaults. Prepayment speeds are influenced by mortgage interest rates as well as our estimation of drivers of borrower behavior.

See Note 12 (Fair Values of Assets and Liabilities) and

Note 6 (Mortgage Banking Activities) for additional information on key assumptions for residential MSRs.

RESECURITIZATION ACTIVITIES We enter into resecuritization transactions as part of our trading activities to accommodate the investment and risk management activities of our customers. In resecuritization transactions, we transfer trading debt securities to VIEs in exchange for new beneficial interests that are sold to third parties at or shortly after securitization settlement. This activity is performed for customers seeking a specific return or risk profile. Substantially all of our transactions involve the resecuritization of conforming mortgage-backed securities issued by the GSEs or guaranteed by GNMA. We do not consolidate the resecuritization VIEs as we share in the decision-making power with third parties and do not hold significant economic interests in the VIEs other than for market-making activities. During the quarters ended March 31, 2023 and 2022, we transferred securities of $3.2 billion and $6.4 billion, respectively, to resecuritization VIEs, and retained securities of $198 million and $738 million, respectively. These amounts are not included in Table 13.1. Related total VIE assets were $111.6 billion and $112.0 billion at March 31, 2023, and December 31, 2022, respectively. As of March 31, 2023, and December 31, 2022, we held $1.3 billion and $793 million of securities, respectively.

110			Wells Fargo & Company

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Sold or Securitized Loans Serviced for Others

Table 13.3 presents information about loans that we sold or securitized in which we have ongoing involvement as servicer. Delinquent loans include loans 90 days or more past due and loans in bankruptcy, regardless of delinquency status. For loans sold or securitized where servicing is our only form of continuing involvement, we generally experience a loss only if we were required to repurchase a delinquent loan or foreclosed asset due

to a breach in representations and warranties associated with our loan sale or servicing contracts. Table 13.3 excludes mortgage loans in GSE or GNMA securitizations of $693.2 billion and $704.5 billion at March 31, 2023, and December 31, 2022, respectively. Delinquent loans and foreclosed assets related to loans in GSE and GNMA securitizations were $3.6 billion and $4.6 billion at March 31, 2023, and December 31, 2022, respectively.

Table 13.3: Sold or Securitized Loans Serviced for Others

																											Net charge-offs
			Total loans												Delinquent loans and foreclosed assets (1)												Quarter ended March 31,
(in millions)			Mar 31, 2023						Dec 31, 2022						Mar 31, 2023						Dec 31, 2022						2023						2022
Commercial			$	66,844					67,029						1,140						912						14						4
Residential			9,003						9,201						457						501						5						3
Total off-balance sheet sold or securitized loans			$	75,847					76,230						1,597						1,413						19						7

(1)Includes $290 million and $274 million of commercial foreclosed assets and $29 million and $25 million of residential foreclosed assets at March 31, 2023, and December 31, 2022, respectively.

Transactions with Unconsolidated VIEs

MORTGAGE LOAN SECURITIZATIONS Table 13.4 includes nonconforming mortgage loan securitizations where we originate and transfer the loans to the unconsolidated securitization VIEs that we sponsor. For additional information about these VIEs, see the “Loan Sales and Securitization Activity” section within this Note. Nonconforming mortgage loan securitizations also include commercial mortgage loan securitizations sponsored by third parties where we did not originate or transfer the loans but serve as master servicer and invest in securities that could be potentially significant to the VIE.

Conforming loan securitization and resecuritization transactions involving the GSEs and GNMA are excluded from Table 13.4 because we are not the sponsor or we do not have power over the activities most significant to the VIEs. Additionally, due to the nature of the guarantees provided by the GSEs and the FHA and VA, our credit risk associated with these VIEs is limited. For additional information about conforming mortgage loan securitizations and resecuritizations, see the “Loan Sales and Securitization Activity” and “Resecuritization Activities” sections within this Note.

COMMERCIAL REAL ESTATE LOANS We may transfer purchased industrial development bonds and GSE credit enhancements to VIEs in exchange for beneficial interests. We may also acquire such beneficial interests in transactions where we do not act as a transferor. We own all of the beneficial interests and may also service the underlying mortgages that serve as collateral to the bonds. The GSEs have the power to direct the servicing and workout activities of the VIE in the event of a default, therefore we do not have control over the key decisions of the VIEs.

OTHER VIE STRUCTURES  We engage in various forms of structured finance arrangements with other VIEs, including asset-backed finance structures and other securitizations collateralized by asset classes other than mortgages. Collateral may include rental properties, asset-backed securities, student loans and mortgage loans. We may participate in structuring or marketing the arrangements as well as provide financing, service one or more of the underlying assets, or enter into derivatives with the VIEs. We may also receive fees for those services. We are not the primary beneficiary of these structures because we do not have power to direct the most significant activities of the VIEs.

Table 13.4 provides a summary of our exposure to the unconsolidated VIEs described above, which includes investments in securities, loans, guarantees, liquidity agreements, commitments and certain derivatives. We exclude certain transactions with unconsolidated VIEs when our continuing involvement is temporary or administrative in nature or insignificant in size.

In Table 13.4, “Total VIE assets” represents the remaining principal balance of assets held by unconsolidated VIEs using the most current information available. “Carrying value” is the amount in our consolidated balance sheet related to our involvement with the unconsolidated VIEs. “Maximum exposure to loss” is determined as the carrying value of our investment in the VIEs excluding the unconditional repurchase options that have not been exercised, plus the remaining undrawn liquidity and lending commitments, the notional amount of net written derivative contracts, and generally the notional amount of, or stressed loss estimate for, other commitments and guarantees.

Debt, guarantees and other commitments include amounts related to lending arrangements, liquidity agreements, and certain loss sharing obligations associated with loans originated, sold, and serviced under certain GSE programs.

“Maximum exposure to loss” represents estimated loss that would be incurred under severe, hypothetical circumstances, for which we believe the possibility is extremely remote, such as where the value of our interests and any associated collateral declines to zero, without any consideration of recovery or offset from any economic hedges. Accordingly, this disclosure is not an indication of expected loss.

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Note 13: Securitizations and Variable Interest Entities (continued)

Table 13.4: Unconsolidated VIEs

									Carrying value – asset (liability)
(in millions)			Total VIE assets						Loans						Debt securities (1)						Equity securities						All other assets (2)						Debt and other liabilities						Net assets
March 31, 2023
Nonconforming mortgage loan securitizations			$	153,867					—						2,471						—						604						(10)						3,065
Commercial real estate loans			5,616						5,600						—						—						16						—						5,616
Other			2,147						273						—						43						22						—						338
Total			$	161,630					5,873						2,471						43						642						(10)						9,019
									Maximum exposure to loss
									Loans						Debt securities (1)						Equity securities						All other assets (2)						Debt, guarantees, and other commitments						Total exposure
Nonconforming mortgage loan securitizations									$	—					2,471						—						604						10						3,085
Commercial real estate loans									5,600						—						—						16						704						6,320
Other									273						—						43						22						229						567
Total									$	5,873					2,471						43						642						943						9,972
									Carrying value – asset (liability)
(in millions)			Total VIE assets						Loans						Debt securities (1)						Equity securities						All other assets (2)						Debt and other liabilities						Net assets
December 31, 2022
Nonconforming mortgage loan securitizations			$	154,464					—						2,420						—						617						(13)						3,024
Commercial real estate loans			5,627						5,611						—						—						16						—						5,627
Other			2,174						292						1						43						21						—						357
Total			$	162,265					5,903						2,421						43						654						(13)						9,008
									Maximum exposure to loss
									Loans						Debt securities (1)						Equity securities						All other assets (2)						Debt, guarantees, and other commitments						Total exposure
Nonconforming mortgage loan securitizations									$	—					2,420						—						617						13						3,050
Commercial real estate loans									5,611						—						—						16						705						6,332
Other									292						1						43						21						228						585
Total									$	5,903					2,421						43						654						946						9,967

(1)Includes $205 million and $172 million of securities classified as trading at March 31, 2023, and December 31, 2022, respectively.

(2)All other assets includes mortgage servicing rights, derivative assets, and other assets (predominantly servicing advances).

INVOLVEMENT WITH TAX CREDIT VIES In addition to the unconsolidated VIEs in Table 13.4, we may invest in or provide funding to affordable housing, renewable energy or similar projects that are designed to generate a return primarily through the realization of federal tax credits and other tax benefits. The projects are typically managed by third-party sponsors who have the power over the VIE’s assets, therefore, we do not consolidate the VIEs. The carrying value of our equity investments in tax credit VIEs was $18.6 billion and $18.7 billion at March 31, 2023, and December 31, 2022, respectively. We also had loans to tax credit VIEs with a carrying value of $1.9 billion and $2.0 billion at March 31, 2023, and December 31, 2022, respectively.

Our maximum exposure to loss for tax credit VIEs at March 31, 2023, and December 31, 2022, was $28.7 billion and $28.0 billion, respectively. Our maximum exposure to loss included total unfunded equity and lending commitments of $8.2 billion and $7.3 billion at March 31, 2023, and December 31, 2022, respectively. See Note 14 (Guarantees and Other Commitments) for additional information about commitments to purchase equity securities.

Our affordable housing equity investments qualify for the low-income housing tax credit (LIHTC). For additional information on our LIHTC investments, see Note 16 (Securitizations and Variable Interest Entities) in our 2022 Form 10-K.

Consolidated VIEs

We consolidate VIEs where we are the primary beneficiary. We are the primary beneficiary of the following structure types:

COMMERCIAL AND INDUSTRIAL LOANS AND LEASES We may securitize dealer floor plan loans in a revolving master trust entity. As servicer and residual interest holder, we control the key decisions of the trust and consolidate the entity. The total VIE assets held by the master trust represent a majority of the total VIE assets presented for this category in Table 13.5. In a separate transaction structure, we may provide the majority of debt and equity financing to an SPE that engages in lending and leasing to specific vendors and service the underlying collateral.

OTHER VIE STRUCTURES Other VIEs are predominantly related to municipal tender option bond (MTOB) transactions. MTOBs are vehicles to finance the purchase of municipal bonds through the issuance of short-term debt to investors. Our involvement with MTOBs includes serving as the residual interest holder, which provides control over the key decisions of the VIE, as well as the remarketing agent or liquidity provider related to the debt issued to investors. We may also securitize nonconforming mortgage loans, in which our involvement includes servicer of the underlying assets and holder of subordinate or senior securities issued by the VIE. During second quarter 2022, we purchased the outstanding mortgage loans from the VIEs and extinguished the related debt associated with such securitizations.

112			Wells Fargo & Company

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Table 13.5 presents a summary of financial assets and liabilities of our consolidated VIEs. The carrying value represents assets and liabilities recorded on our consolidated balance sheet. “Total VIE assets” includes affiliate balances that are eliminated upon consolidation, and therefore in some instances will differ from the carrying value of assets.

On our consolidated balance sheet, we separately disclose (1) the consolidated assets of certain VIEs that can only be used to settle the liabilities of those VIEs, and (2) the consolidated liabilities of certain VIEs for which the VIE creditors do not have recourse to Wells Fargo.

Table 13.5: Transactions with Consolidated VIEs

									Carrying value – asset (liability)
(in millions)			Total VIE assets						Loans						Debt securities						All other assets (1)												Liabilities (2)
March 31, 2023
Commercial and industrial loans and leases			$	7,231					5,309						—						195												(138)
Other			72						—						71						1												(72)
Total consolidated VIEs			$	7,303					5,309						71						196												(210)
December 31, 2022
Commercial and industrial loans and leases			$	7,148					4,802						—						190												(129)
Other			72						—						71						1												(72)
Total consolidated VIEs			$	7,220					4,802						71						191												(201)

(1)All other assets includes cash and due from banks, and other assets.

(2)Liabilities include short-term borrowings, and accrued expenses and other liabilities.

Other Transactions

In addition to the transactions included in the previous tables, we have used wholly-owned trust preferred security VIEs to issue debt securities or preferred equity exclusively to third-party investors. As the sole assets of the VIEs are receivables from us, we do not consolidate the VIEs even though we own all of the voting equity shares of the VIEs, have fully guaranteed the obligations of the VIEs, and may have the right to redeem the third-party securities under certain circumstances. On our consolidated balance sheet, we reported the debt securities issued to the VIEs as long-term junior subordinated debt with a carrying value of $404 million and $401 million at March 31, 2023, and December 31, 2022, respectively.

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Note 14:  Guarantees and Other Commitments

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. For additional

descriptions of our guarantees, see Note 17 (Guarantees and Other Commitments) in our 2022 Form 10-K. Table 14.1 shows carrying value and maximum exposure to loss on our guarantees.

Table 14.1: Guarantees – Carrying Value and Maximum Exposure to Loss

									Maximum exposure to loss
(in millions)			Carrying value of obligation						Expires in one year or less						Expires after one year through three years						Expires after three years through five years						Expires after five years						Total						Non-investment grade
March 31, 2023
Standby letters of credit (1)			$	101					14,938						3,865						3,281						19						22,103						7,365
Direct pay letters of credit (1)			10						1,384						3,035						329						5						4,753						1,241
Loans and LHFS sold with recourse (2)			19						319						1,947						2,754						8,815						13,835						11,320
Exchange and clearing house guarantees			—						5,022						—						—						—						5,022						—
Other guarantees and indemnifications (3)			—						513						—						9						254						776						486
Total guarantees			$	130					22,176						8,847						6,373						9,093						46,489						20,412
December 31, 2022
Standby letters of credit (1)			$	112					14,014						4,694						3,058						53						21,819						7,071
Direct pay letters of credit (1)			13						1,593						2,734						465						5						4,797						1,283
Loans and LHFS sold with recourse (2)			16						322						1,078						3,408						8,906						13,714						11,399
Exchange and clearing house guarantees			—						4,623						—						—						—						4,623						—
Other guarantees and indemnifications (3)			—						548						1						10						201						760						515
Total guarantees			$	141					21,100						8,507						6,941						9,165						45,713						20,268

(1)Standby and direct pay letters of credit are reported net of syndications and participations.

(2)Represents recourse provided, predominantly to the GSEs, on loans sold under various programs and arrangements.

(3)Includes indemnifications provided to certain third-party clearing agents. Estimated maximum exposure to loss was $210 million and $157 million with related collateral of $1.5 billion and $1.3 billion as of March 31, 2023, and December 31, 2022, respectively.

Maximum exposure to loss represents the estimated loss that would be incurred under an assumed hypothetical circumstance, despite what we believe is a remote possibility, where the value of our interests and any associated collateral declines to zero. Maximum exposure to loss estimates in

Table 14.1 do not reflect economic hedges or collateral we could use to offset or recover losses we may incur under our guarantee agreements. Accordingly, these amounts are not an indication of expected loss. We believe the carrying value is more representative of our current exposure to loss than maximum exposure to loss. The carrying value represents the fair value of the guarantee, if any, and also includes an ACL for guarantees, if applicable. In determining the ACL for guarantees, we consider the credit risk of the related contingent obligation.

For our guarantees in Table 14.1, non-investment grade represents those guarantees on which we have a higher risk of performance under the terms of the guarantee, which is determined based on an external rating or an internal credit grade that is below investment grade.

WRITTEN OPTIONS We enter into written foreign currency options and over-the-counter written equity put options that are derivative contracts that have the characteristics of a guarantee. The fair value of written options represents our view of the probability that we will be required to perform under the contract. The fair value of these written options was a liability of $150 million and $15 million at March 31, 2023, and December 31, 2022, respectively. The fair value may be an asset as a result of deferred premiums on certain option trades. The maximum exposure to loss represents the notional value of these derivative contracts. At March 31, 2023, the maximum exposure to loss was $32.1 billion, with $29.8 billion expiring in three years or less compared with $23.4 billion and $21.3 billion,

respectively, at December 31, 2022. See Note 11 (Derivatives) for additional information regarding written derivative contracts.

MERCHANT PROCESSING SERVICES We provide debit and credit card transaction processing services through payment networks directly for merchants and as a sponsor for merchant processing servicers, including our joint venture with a third party that is accounted for as an equity method investment. In our role as the merchant acquiring bank, we have a potential obligation in connection with payment and delivery disputes between the merchant and the cardholder that are resolved in favor of the cardholder, referred to as a charge-back transaction. We estimate our potential maximum exposure to be the total merchant transaction volume processed in the preceding four months, which is generally the lifecycle for a charge-back transaction. As of March 31, 2023, our potential maximum exposure was approximately $757.6 billion, and related losses, including those from our joint venture entity, were insignificant.

GUARANTEES OF SUBSIDIARIES The Parent fully and unconditionally guarantees the payment of principal, interest, and any other amounts that may be due on securities that its 100% owned finance subsidiary, Wells Fargo Finance LLC, may issue. These securities are not guaranteed by any other subsidiary of the Parent. The guaranteed liabilities were $891 million and $948 million at March 31, 2023, and December 31, 2022, respectively. These guarantees rank on parity with all of the Parent’s other unsecured and unsubordinated indebtedness.

OTHER COMMITMENTS To meet the financing needs of our customers, we may enter into commitments to purchase debt and equity securities to provide capital for their funding, liquidity or other future needs. As of March 31, 2023, and December 31,

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2022, we had commitments to purchase debt securities of $249 million and $100 million and commitments to purchase equity securities of $4.7 billion and $3.8 billion, respectively.

As part of maintaining our memberships in certain clearing organizations, we are required to stand ready to provide liquidity to sustain market clearing activity in the event unforeseen events occur or are deemed likely to occur. Certain of these obligations are guarantees of other members’ performance and accordingly are included in Table 14.1 in Other guarantees and indemnifications.

We have commitments to enter into resale and securities borrowing agreements as well as repurchase and securities lending agreements with certain counterparties, including central clearing organizations. The amount of our unfunded contractual commitments for resale and securities borrowing agreements was $17.6 billion and $19.9 billion as of March 31, 2023, and December 31, 2022, respectively. The amount of our unfunded contractual commitments for repurchase and securities lending agreements was $2.5 billion and $1.6 billion as of March 31, 2023, and December 31, 2022, respectively.

Given the nature of these commitments, they are excluded from Table 5.4 (Unfunded Credit Commitments) in Note 5 (Loans and Related Allowance for Credit Losses).

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Note 15:  Pledged Assets and Collateral

Pledged Assets

Table 15.1 provides the carrying amount of on-balance sheet pledged assets as well as the fair value of other pledged collateral not recognized on our consolidated balance sheet, which we have received from third parties, have the right to repledge and have repledged. These amounts include assets pledged in transactions accounted for as secured borrowings, which are presented parenthetically on our consolidated balance sheet.

TRADING RELATED ACTIVITY Our trading businesses may pledge debt and equity securities in connection with securities sold under agreements to repurchase (repurchase agreements) and securities lending arrangements. The collateral that we pledge related to our trading activities may include our own collateral as well as collateral that we have received from third parties and have the right to repledge. All of the collateral we pledge related to trading activity is eligible to be repledged or sold by the secured party.

NON-TRADING RELATED ACTIVITY As part of our liquidity management strategy, we may pledge loans, debt securities, and other financial assets to secure trust and public deposits, borrowings and letters of credit from Federal Home Loan Banks (FHLBs) and the Board of Governors of the Federal Reserve System (FRB) and for other purposes as required or permitted by law or insurance statutory requirements. Substantially all of the non-trading activity pledged collateral is not eligible to be repledged or sold by the secured party.

VIE RELATED We pledge assets in connection with various types of transactions entered into with VIEs. These pledged assets can only be used to settle the liabilities of those entities.

We also have loans recorded on our consolidated balance sheet which represent certain delinquent loans that are eligible for repurchase from GNMA loan securitizations. See Note 13 (Securitizations and Variable Interest Entities) for additional information on consolidated VIE assets.

Table 15.1: Pledged Assets

(in millions)			Mar 31, 2023						Dec 31, 2022
Related to trading activities:
Off-balance sheet repledged third-party owned debt and equity securities			$	53,127					38,191
Trading debt securities and other			50,259						28,284
Equity securities			1,625						1,477
Total pledged assets related to trading activities			105,011						67,952
Related to non-trading activities:
Loans			355,979						344,000
Debt securities:
Available-for-sale			48,135						50,538
Held-to-maturity			15,626						17,477
Equity securities			169						141
Total pledged assets related to non-trading activities			419,909						412,156
Related to VIEs:
Consolidated VIE assets			5,576						5,064
Loans eligible for repurchase from GNMA securitizations			942						749
Total pledged assets related to VIEs			6,518						5,813
Total pledged assets			$	531,438					485,921

Securities and Other Collateralized Financing Activities

We enter into resale and repurchase agreements and securities borrowing and lending agreements (collectively, “securities financing activities”) typically to finance trading positions (including securities and derivatives), acquire securities to cover short trading positions, accommodate customers’ financing needs, and settle other securities obligations. These activities are conducted through our broker-dealer subsidiaries and, to a lesser extent, through other bank entities. Our securities financing activities primarily involve high-quality, liquid securities such as U.S. Treasury securities and government agency securities and, to a lesser extent, less liquid securities, including equity securities, corporate bonds and asset-backed securities. We account for these transactions as collateralized financings in which we typically receive or pledge securities as collateral. We believe these financing transactions generally do not have material credit risk given the collateral provided and the related monitoring processes. We also enter into resale agreements

involving collateral other than securities, such as loans, as part of our commercial lending business activities.

OFFSETTING OF SECURITIES AND OTHER COLLATERALIZED FINANCING ACTIVITIES Table 15.2 presents resale and repurchase agreements subject to master repurchase agreements (MRA) and securities borrowing and lending agreements subject to master securities lending agreements (MSLA). Where legally enforceable, these master netting arrangements give the ability, in the event of default by the counterparty, to liquidate securities held as collateral and to offset receivables and payables with the same counterparty. Collateralized financings, and those with a single counterparty, are presented net on our consolidated balance sheet, provided certain criteria are met that permit balance sheet netting. The majority of transactions subject to these agreements do not meet those criteria and thus are not eligible for balance sheet netting.

Collateral we pledged consists of non-cash instruments, such as securities or loans, and is not netted on our consolidated balance sheet against the related liability. Collateral we received

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includes securities or loans and is not recognized on our consolidated balance sheet. Collateral pledged or received may be increased or decreased over time to maintain certain contractual thresholds, as the assets underlying each arrangement fluctuate in value. Generally, these agreements require collateral to exceed the asset or liability recognized on the balance sheet. The following table includes the amount of collateral pledged or received related to exposures subject to

enforceable MRAs or MSLAs. While these agreements are typically over-collateralized, U.S. GAAP requires disclosure in this table to limit the reported amount of such collateral to the amount of the related recognized asset or liability for each counterparty.

In addition to the amounts included in Table 15.2, we also have balance sheet netting related to derivatives that is disclosed in Note 11 (Derivatives).

Table 15.2: Offsetting – Securities and Other Collateralized Financing Activities

(in millions)			Mar 31, 2023						Dec 31, 2022
Assets:
Resale and securities borrowing agreements
Gross amounts recognized			$	117,461					114,729
Gross amounts offset in consolidated balance sheet (1)			(28,024)						(24,464)
Net amounts in consolidated balance sheet (2)			89,437						90,265
Collateral not recognized in consolidated balance sheet (3)			(89,052)						(89,592)
Net amount (4)			$	385					673
Liabilities:
Repurchase and securities lending agreements
Gross amounts recognized			$	90,248					55,054
Gross amounts offset in consolidated balance sheet (1)			(28,024)						(24,464)
Net amounts in consolidated balance sheet (5)			62,224						30,590
Collateral pledged but not netted in consolidated balance sheet (6)			(62,124)						(30,383)
Net amount (4)			$	100					207

(1)Represents recognized amount of resale and repurchase agreements with counterparties subject to enforceable MRAs that have been offset in our consolidated balance sheet.

(2)Includes $67.2 billion and $68.0 billion classified on our consolidated balance sheet in federal funds sold and securities purchased under resale agreements at March 31, 2023, and December 31, 2022, respectively. Also includes $22.2 billion and $22.3 billion classified on our consolidated balance sheet in loans at March 31, 2023, and December 31, 2022, respectively.

(3)Represents the fair value of collateral we have received under enforceable MRAs or MSLAs, limited in the table above to the amount of the recognized asset due from each counterparty. At March 31, 2023, and December 31, 2022, we have received total collateral with a fair value of $141.1 billion and $136.6 billion, respectively, all of which we have the right to sell or repledge. These amounts include securities we have sold or repledged to others with a fair value of $76.3 billion and $59.1 billion at March 31, 2023, and December 31, 2022, respectively.

(4)Represents the amount of our exposure (assets) or obligation (liabilities) that is not collateralized and/or is not subject to an enforceable MRA or MSLA.

(5)Amount is classified in short-term borrowings on our consolidated balance sheet.

(6)Represents the fair value of collateral we have pledged, related to enforceable MRAs or MSLAs, limited in the table above to the amount of the recognized liability owed to each counterparty. At March 31, 2023, and December 31, 2022, we have pledged total collateral with a fair value of $92.6 billion and $56.3 billion, respectively, substantially all of which may be sold or repledged by the counterparty.

REPURCHASE AND SECURITIES LENDING AGREEMENTS Securities sold under repurchase agreements and securities lending arrangements are effectively short-term collateralized borrowings. In these transactions, we receive cash in exchange for transferring securities as collateral and recognize an obligation to reacquire the securities for cash at the transaction’s maturity. These types of transactions create risks, including (1) the counterparty may fail to return the securities at maturity, (2) the fair value of the securities transferred may decline below the amount of our obligation to reacquire the securities, and therefore create an obligation for us to pledge additional amounts, and (3) the counterparty may accelerate the maturity on demand, requiring us to reacquire the security prior to contractual maturity. We attempt to mitigate these risks in various ways. Our collateral primarily consists of highly liquid securities. In addition, we underwrite and monitor the financial strength of our counterparties, monitor the fair value of collateral pledged relative to contractually required repurchase amounts, and monitor that our collateral is properly returned through the clearing and settlement process in advance of our cash repayment. Table 15.3 provides the gross amounts recognized on our consolidated balance sheet (before the effects of offsetting) of our liabilities for repurchase and securities lending agreements disaggregated by underlying collateral type.

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Note 15:  Pledged Assets and Collateral (continued)

Table 15.3: Gross Obligations by Underlying Collateral Type

(in millions)						Mar 31, 2023						Dec 31, 2022
Repurchase agreements:
Securities of U.S. Treasury and federal agencies						$	37,217					27,857
Securities of U.S. States and political subdivisions						73						83
Federal agency mortgage-backed securities						35,613						8,386
Non-agency mortgage-backed securities						670						682
Corporate debt securities						6,068						6,541
Asset-backed securities						1,949						1,529
Equity securities						416						711
Other						648						300
Total repurchases						82,654						46,089
Securities lending arrangements:
Securities of U.S. Treasury and federal agencies						301						278
Federal agency mortgage-backed securities						81						58
Corporate debt securities						293						206
Equity securities (1)						6,871						8,356
Other						48						67
Total securities lending						7,594						8,965
Total repurchases and securities lending						$	90,248					55,054

(1)Equity securities are generally exchange traded and represent collateral received from third parties that has been repledged. We received the collateral through either margin lending agreements or contemporaneous securities borrowing transactions with other counterparties.

Table 15.4 provides the contractual maturities of our gross obligations under repurchase and securities lending agreements.

Table 15.4: Contractual Maturities of Gross Obligations

(in millions)			Overnight/continuous						Up to 30 days						30-90 days						>90 days						Total gross obligation
March 31, 2023
Repurchase agreements			$	72,070					1,215						2,609						6,760						82,654
Securities lending arrangements			7,494						—						—						100						7,594
Total repurchases and securities lending (1)			$	79,564					1,215						2,609						6,860						90,248
December 31, 2022
Repurchase agreements			$	36,251					734						2,884						6,220						46,089
Securities lending arrangements			8,965						—						—						—						8,965
Total repurchases and securities lending (1)			$	45,216					734						2,884						6,220						55,054

(1)Securities lending is executed under agreements that allow either party to terminate the transaction without notice, while repurchase agreements have a term structure to them that technically matures at a point in time. The overnight/continuous repurchase agreements require election of both parties to roll the trade rather than the election to terminate the arrangement as in securities lending.

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Note 16:  Operating Segments

Our management reporting is organized into four reportable operating segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. All other business activities that are not included in the reportable operating segments have been included in Corporate. We define our reportable operating segments 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 with our Chief Executive Officer and relevant senior management. The management reporting process is based on U.S. GAAP and includes specific adjustments, such as funds transfer pricing for asset/liability management, shared revenue and expenses, and taxable-equivalent adjustments to consistently reflect income from taxable and tax-exempt sources, which allows management to assess performance consistently across the operating segments.

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.

Commercial Banking provides financial solutions to private, family owned and certain public companies. Products and services include banking and credit products across multiple industry sectors and municipalities, secured lending and lease products, and treasury management.

Corporate 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.

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®.

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. Corporate also includes certain lines of business that management has determined are no longer consistent with the long-term strategic goals of the Company as well as results for previously divested businesses.

Basis of Presentation

FUNDS TRANSFER PRICING Corporate treasury manages a funds transfer pricing methodology that considers interest rate risk, liquidity risk, and other product characteristics. Operating segments pay a funding charge for their assets and receive a funding credit for their deposits, both of which are included in net interest income. The net impact of the funding charges or credits is recognized in corporate treasury.

REVENUE AND EXPENSE SHARING When lines of business jointly serve customers, the line of business that is responsible for providing the product or service recognizes revenue or expense with a referral fee paid or an allocation of cost to the other line of business based on established internal revenue-sharing agreements.

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.

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Note 16: Operating Segments (continued)

Table 16.1 presents our results by operating segment.

Table 16.1: Operating Segments

(in millions)			Consumer Banking and Lending						Commercial Banking						Corporate and Investment Banking						Wealth and Investment Management						Corporate (1)						Reconciling Items (2)						Consolidated Company
Quarter ended March 31, 2023
Net interest income (3)			$	7,433					2,489						2,461						1,044						16						(107)						13,336
Noninterest income			1,931						818						2,441						2,637						5						(439)						7,393
Total revenue			9,364						3,307						4,902						3,681						21						(546)						20,729
Provision for credit losses			867						(43)						252						11						120						—						1,207
Noninterest expense			6,038						1,752						2,217						3,061						608						—						13,676
Income (loss) before income tax expense (benefit)			2,459						1,598						2,433						609						(707)						(546)						5,846
Income tax expense (benefit)			618						399						615						152						(272)						(546)						966
Net income (loss) before noncontrolling interests			1,841						1,199						1,818						457						(435)						—						4,880
Less: Net income (loss) from noncontrolling interests			—						3						—						—						(114)						—						(111)
Net income (loss)			$	1,841					1,196						1,818						457						(321)						—						4,991
Quarter ended March 31, 2022
Net interest income (3)			$	5,996					1,361						1,990						799						(818)						(107)						9,221
Noninterest income			2,567						966						1,480						2,958						942						(406)						8,507
Total revenue			8,563						2,327						3,470						3,757						124						(513)						17,728
Provision for credit losses			(190)						(344)						(196)						(37)						(20)						—						(787)
Noninterest expense			6,395						1,531						1,983						3,175						767						—						13,851
Income (loss) before income tax expense (benefit)			2,358						1,140						1,683						619						(623)						(513)						4,664
Income tax expense (benefit)			588						280						425						154						(188)						(513)						746
Net income (loss) before noncontrolling interests			1,770						860						1,258						465						(435)						—						3,918
Less: Net income from noncontrolling interests			—						3						—						—						127						—						130
Net income (loss)			$	1,770					857						1,258						465						(562)						—						3,788
Quarter ended March 31, 2023
Loans (average)			$	338,308					222,826						294,742						83,621						9,154						—						948,651
Assets (average)			381,757						246,101						548,808						90,923						596,087						—						1,863,676
Deposits (average)			841,265						170,467						157,551						126,604						60,807						—						1,356,694
Loans (period-end)			337,511						226,599						291,817						82,817						9,247						—						947,991
Assets (period-end)			381,487						252,914						542,168						89,590						620,241						—						1,886,400
Deposits (period-end)			851,304						169,827						158,564						117,252						65,682						—						1,362,629
Quarter ended March 31, 2022
Loans (average)			$	325,055					194,395						284,498						84,765						9,292						—						898,005
Assets (average)			374,869						214,937						551,404						90,841						687,346						—						1,919,397
Deposits (average)			881,339						200,699						169,181						185,814						27,039						—						1,464,072
Loans (period-end)			328,558						198,833						290,627						84,688						9,101						—						911,807
Assets (period-end)			379,115						221,886						564,976						90,820						682,912						—						1,939,709
Deposits (period-end)			909,896						195,549						168,467						183,727						23,715						—						1,481,354

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

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

(3)Net interest income is interest earned on assets minus the interest paid on liabilities to fund those assets. Segment interest earned includes actual interest income on segment assets as well as a funding credit for their deposits. Segment interest paid on liabilities includes actual interest expense on segment liabilities as well as a funding charge for their assets.

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Note 17: Revenue and Expenses

Revenue

Our revenue includes net interest income on financial instruments and noninterest income. Table 17.1 presents our

revenue by operating segment. For additional description of our

operating segments, including additional financial information

and the underlying management accounting process, see

Note 16 (Operating Segments). For a description of our revenue from contracts with customers, see Note 20 (Revenue and Expenses) in our 2022 Form 10-K.

Table 17.1: Revenue by Operating Segment

(in millions)			Consumer Banking and Lending						Commercial Banking						Corporate and Investment Banking						Wealth and Investment Management						Corporate						Reconciling Items (1)						Consolidated Company
Quarter ended March 31, 2023
Net interest income (2)			$	7,433					2,489						2,461						1,044						16						(107)						13,336
Noninterest income:
Deposit-related fees			672						236						236						5						(1)						—						1,148
Lending-related fees (2)			31						129						194						2						—						—						356
Investment advisory and other asset-based fees (3)			—						18						35						2,061						—						—						2,114
Commissions and brokerage services fees			—						—						78						541						—						—						619
Investment banking fees			—						20						314						—						(8)						—						326
Card fees:
Card interchange and network revenue (4)			863						56						17						1						1						—						938
Other card fees (2)			95						—						—						—						—						—						95
Total card fees			958						56						17						1						1						—						1,033
Mortgage banking (2)			160						—						75						(3)						—						—						232
Net gains (losses) from trading activities (2)			—						(1)						1,257						23						63						—						1,342
Net gains from debt securities (2)			—						—						—						—						—						—						—
Net losses from equity securities (2)			—						(12)						(1)						(2)						(342)						—						(357)
Lease income (2)			—						169						42						—						136						—						347
Other (2)			110						203						194						9						156						(439)						233
Total noninterest income			1,931						818						2,441						2,637						5						(439)						7,393
Total revenue			$	9,364					3,307						4,902						3,681						21						(546)						20,729
Quarter ended March 31, 2022
Net interest income (2)			$	5,996					1,361						1,990						799						(818)						(107)						9,221
Noninterest income:
Deposit-related fees			845						328						293						7						—						—						1,473
Lending-related fees (2)			34						121						185						2						—						—						342
Investment advisory and other asset-based fees (3)			—						2						12						2,476						8						—						2,498
Commissions and brokerage services fees			—						—						83						454						—						—						537
Investment banking fees			(1)						15						462						—						(29)						—						447
Card fees:
Card interchange and network revenue (4)			834						53						14						1						—						—						902
Other card fees (2)			127						—						—						—						—						—						127
Total card fees			961						53						14						1						—						—						1,029
Mortgage banking (2)			654						—						42						(3)						—						—						693
Net gains (losses) from trading activities (2)			—						—						228						1						(11)						—						218
Net gains from debt securities (2)			—						—						—						—						2						—						2
Net gains (losses) from equity securities (2)			(9)						86						(5)						—						504						—						576
Lease income (2)			—						179						2						—						146						—						327
Other (2)(5)			83						182						164						20						322						(406)						365
Total noninterest income			2,567						966						1,480						2,958						942						(406)						8,507
Total revenue			$	8,563					2,327						3,470						3,757						124						(513)						17,728

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

(2)These revenue types are related to financial assets and liabilities, including loans, leases, securities and derivatives, with additional details included in other footnotes to our financial statements.

(3)We earned trailing commissions of $227 million and $271 million for the quarters ended March 31, 2023 and 2022, respectively.

(4)The cost of credit card rewards and rebates of $592 million and $482 million for the quarters ended March 31, 2023 and 2022, respectively, are presented net against the related revenue.

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

Expenses

OTHER EXPENSES Regulatory Charges and Assessments expense, which is included in other noninterest expense, was $271 million in first quarter 2023, compared with $225 million in the same period a year ago, and primarily consisted of Federal Deposit Insurance Corporation (FDIC) deposit assessment expense.

On April 18, 2023, the FDIC announced it would recover by special assessment losses to the FDIC deposit insurance fund as a result of recent bank failures. We are not able to reasonably estimate the amount of any special assessment until additional information about the assessment is released by the FDIC. However, we expect our FDIC deposit assessment expense will increase.

			Wells Fargo & Company			121

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Note 18: Employee Benefits

Pension and Postretirement Plans

We sponsor a frozen noncontributory qualified defined benefit retirement plan, the Wells Fargo & Company Cash Balance Plan (Cash Balance Plan), which covers eligible employees of Wells Fargo. The Cash Balance Plan was frozen on July 1, 2009, and no new benefits accrue after that date. For additional information on our pension and postretirement plans, including plan assumptions, investment strategy and asset allocation, projected benefit payments, and valuation methodologies used

for assets measured at fair value, see Note 1 (Summary of Significant Accounting Policies) and Note 21 (Employee Benefits and Other Expenses) in our 2022 Form 10-K.

Table 18.1 presents the components of net periodic benefit cost. Service cost is reported in personnel expense and all other components of net periodic benefit cost are reported in other noninterest expense on our consolidated statement of income.

Table 18.1: Net Periodic Benefit Cost

			2023																		2022
			Pension benefits																		Pension benefits
(in millions)			Qualified						Non-  qualified						Other  benefits						Qualified						Non-  qualified						Other  benefits
Quarter ended March 31,
Service cost			$	6					—						—						5						—						—
Interest cost			101						5						4						67						2						2
Expected return on plan assets			(126)						—						(6)						(139)						—						(5)
Amortization of net actuarial loss (gain)			35						1						(6)						33						3						(5)
Amortization of prior service credit			—						—						(3)						—						—						(3)
Settlement loss			—						—						—						47						1						—
Net periodic benefit cost			$	16					6						(11)						13						6						(11)

122			Wells Fargo & Company

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Note 19: Earnings and Dividends Per Common Share

Table 19.1 shows earnings per common share and diluted earnings per common share and reconciles the numerator and denominator of both earnings per common share calculations.

Table 19.1: Earnings Per Common Share Calculations

												Quarter ended March 31,
(in millions, except per share amounts)																		2023						2022
Wells Fargo net income (1)																		$	4,991					3,788
Less: Preferred stock dividends and other																		278						279
Wells Fargo net income applicable to common stock (numerator) (1)																		$	4,713					3,509
Earnings per common share
Average common shares outstanding (denominator)																		3,785.6						3,831.1
Per share																		$	1.24					0.92
Diluted earnings per common share
Average common shares outstanding																		3,785.6						3,831.1
Add:			Restricted share rights (2)															33.1						37.8
Diluted average common shares outstanding (denominator)																		3,818.7						3,868.9
Per share																		$	1.23					0.91

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

(2)Calculated using the treasury stock method.

Table 19.2 presents the outstanding securities that were anti-dilutive and therefore not included in the calculation of diluted earnings per common share.

Table 19.2: Outstanding Anti-Dilutive Securities

									Weighted-average shares
									Quarter ended March 31,
(in millions)															2023						2022
Convertible Preferred Stock, Series L (1)															25.3						25.3
Restricted share rights (2)															0.4						0.1

(1)    Calculated using the if-converted method.

(2)    Calculated using the treasury stock method.

Table 19.3 presents dividends declared per common share.

Table 19.3: Dividends Declared Per Common Share

									Quarter ended March 31,
															2023						2022
Per common share															$	0.30					0.25

			Wells Fargo & Company			123

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Note 20: Other Comprehensive Income

Table 20.1 provides the components of other comprehensive income (OCI), reclassifications to net income by income statement line item, and the related tax effects.

Table 20.1: Summary of Other Comprehensive Income

									Three months ended March 31,
															2023																		2022
(in millions)																																							Before   tax						Tax   effect						Net of   tax						Before   tax						Tax   effect						Net of   tax
Debt securities:
Net unrealized gains (losses) arising during the period																																							$	358					(87)						271						(6,888)						1,697						(5,191)
Reclassification of net (gains) losses to net income																																							121						(30)						91						58						(15)						43
Net change																																							479						(117)						362						(6,830)						1,682						(5,148)
Derivatives and hedging activities:
Fair Value Hedges:
Change in fair value of excluded components on fair value hedges (1)																																							6						(2)						4						64						(16)						48
Cash Flow Hedges:
Net unrealized gains (losses) arising during the period on cash flow hedges																																							384						(95)						289						(51)						13						(38)
Reclassification of net (gains) losses to net income																																							113						(28)						85						14						(4)						10
Net change																																							503						(125)						378						27						(7)						20
Defined benefit plans adjustments:
Net actuarial and prior service gains (losses) arising during the period																																							—						—						—						19						(5)						14
Reclassification of amounts to noninterest expense (2)																																							27						(6)						21						76						(18)						58
Net change																																							27						(6)						21						95						(23)						72
Debit valuation adjustments (DVA) and other:
Net unrealized gains (losses) arising during the period (3)																																							4						(1)						3						12						(3)						9
Reclassification of net (gains) losses to net income																																							—						—						—						—						—						—
Net change																																							4						(1)						3						12						(3)						9
Foreign currency translation adjustments:
Net unrealized gains (losses) arising during the period																																							26						(1)						25						(5)						—						(5)
Reclassification of net (gains) losses to net income																																							—						—						—						—						—						—
Net change																																							26						(1)						25						(5)						—						(5)
Other comprehensive income (loss)																																							$	1,039					(250)						789						(6,701)						1,649						(5,052)
Less: Other comprehensive income (loss) from noncontrolling interests, net of tax																																																			(1)																		1
Wells Fargo other comprehensive income (loss), net of tax																																																			$	790																	(5,053)

(1)Represents changes in fair value of cross-currency swaps attributable to changes in cross-currency basis spreads, which are excluded from the assessment of hedge effectiveness and recorded in other comprehensive income.

(2)These items are included in the computation of net periodic benefit cost (see Note 18 (Employee Benefits) for additional information).

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

124			Wells Fargo & Company

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Table 20.2 provides the accumulated OCI (AOCI) balance activity on an after-tax basis.

Table 20.2: Accumulated OCI Balances

(in millions)			Debt securities						Fair value hedges (1)						Cash flow hedges (2)						Defined   benefit   plans   adjustments						Debit valuation adjustments (DVA) and other						Foreign   currency   translation  adjustments						Accumulated   other  comprehensive income (loss)
Quarter ended March 31, 2023
Balance, beginning of period			$	(9,835)					(77)						(1,183)						(1,901)						(6)						(380)						(13,382)
Transition adjustment (3)			—						—						—						—						20						—						20
Balance, beginning of period (3)			(9,835)						(77)						(1,183)						(1,901)						14						(380)						(13,362)
Net unrealized gains arising during the period			271						4						289						—						3						25						592
Amounts reclassified from accumulated other comprehensive income			91						—						85						21						—						—						197
Net change			362						4						374						21						3						25						789
Less: Other comprehensive loss from noncontrolling interests			—						—						—						—						—						(1)						(1)
Balance, end of period (3)(4)			$	(9,473)					(73)						(809)						(1,880)						17						(354)						(12,572)
Quarter ended March 31, 2022
Balance, beginning of period			$	665					(143)						(27)						(2,055)						—						(142)						(1,702)
Transition adjustment (3)			—						—						—						—						(44)						—						(44)
Balance, beginning of period (3)			665						(143)						(27)						(2,055)						(44)						(142)						(1,746)
Net unrealized gains (losses) arising during the period			(5,191)						48						(38)						14						9						(5)						(5,163)
Amounts reclassified from accumulated other comprehensive income			43						—						10						58						—						—						111
Net change			(5,148)						48						(28)						72						9						(5)						(5,052)
Less: Other comprehensive income from noncontrolling interests			—						—						—						—						—						1						1
Balance, end of period (3)(4)			$	(4,483)					(95)						(55)						(1,983)						(35)						(148)						(6,799)

(1)Substantially all of the amounts for fair value hedges are foreign exchange contracts.

(2)Substantially all of the amounts for cash flow hedges are interest rate contracts.

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

(4)AOCI related to debt securities includes after-tax unrealized gains or losses associated with the transfer of securities from AFS to HTM of $3.9 billion and $942 million at March 31, 2023 and 2022, respectively. These amounts are subsequently amortized from AOCI into earnings over the same period as the related unamortized premiums and discounts.

			Wells Fargo & Company			125

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Note 21:  Regulatory Capital Requirements and Other Restrictions

Regulatory Capital Requirements

The Company and each of its subsidiary banks are subject to regulatory capital adequacy requirements promulgated by federal banking regulators. The FRB establishes capital requirements for the consolidated financial holding company, and the Office of the Comptroller of the Currency (OCC) has similar requirements for the Company’s national banks, including Wells Fargo Bank, N.A. (the Bank).

Table 21.1 presents regulatory capital information for the Company and the Bank in accordance with Basel III capital requirements. We must calculate our risk-based capital ratios

under both the Standardized and Advanced Approaches. The Standardized Approach applies assigned risk weights to broad risk categories, while the calculation of risk-weighted assets (RWAs) under the Advanced Approach differs by requiring applicable banks to utilize a risk-sensitive methodology, which relies upon the use of internal credit models, and includes an operational risk component.

At March 31, 2023, the Bank and our other insured depository institutions were considered well-capitalized under the requirements of the Federal Deposit Insurance Act.

Table 21.1: Regulatory Capital Information

			Wells Fargo & Company																								Wells Fargo Bank, N.A.
			Standardized Approach												Advanced Approach												Standardized Approach												Advanced Approach
(in millions, except ratios)			March 31, 2023						December 31, 2022						March 31, 2023						December 31, 2022						March 31, 2023						December 31, 2022						March 31, 2023						December 31, 2022
Regulatory capital:
Common Equity Tier 1			$	134,454					133,527						134,454						133,527						141,504						140,644						141,504						140,644
Tier 1			153,485						152,567						153,485						152,567						141,504						140,644						141,504						140,644
Total			187,626						186,747						177,963						177,258						165,030						163,885						155,163						154,292
Assets:
Risk-weighted assets			1,243,787						1,259,889						1,117,860						1,112,307						1,156,017						1,177,300						984,898						977,713
Adjusted average assets			1,835,448						1,846,954						1,835,448						1,846,954						1,661,558						1,685,401						1,661,558						1,685,401
Regulatory capital ratios:
Common Equity Tier 1 capital			10.81		%	*			10.60						12.03						12.00						12.24			*			11.95						14.37						14.39
Tier 1 capital			12.34			*			12.11						13.73						13.72						12.24			*			11.95						14.37						14.39
Total capital			15.09			*			14.82						15.92						15.94						14.28			*			13.92						15.75						15.78
Required minimum capital ratios:
Common Equity Tier 1 capital			9.20						9.20						8.50						8.50						7.00						7.00						7.00						7.00
Tier 1 capital			10.70						10.70						10.00						10.00						8.50						8.50						8.50						8.50
Total capital			12.70						12.70						12.00						12.00						10.50						10.50						10.50						10.50
			Wells Fargo & Company																								Wells Fargo Bank, N.A.
			March 31, 2023												December 31, 2022												March 31, 2023												December 31, 2022
Regulatory leverage:
Total leverage exposure (1)			$	2,206,375											2,224,789												2,023,955												2,058,568
Supplementary leverage ratio (SLR) (1)			6.96								%				6.86												6.99												6.83
Tier 1 leverage ratio (2)			8.36												8.26												8.52												8.34
Required minimum leverage:
Supplementary leverage ratio			5.00												5.00												6.00												6.00
Tier 1 leverage ratio			4.00												4.00												4.00												4.00

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

(1)The SLR consists of Tier 1 capital divided by total leverage exposure. Total leverage exposure consists of total average assets, less goodwill and other permitted Tier 1 capital deductions (net of deferred tax liabilities), plus certain off-balance sheet exposures.

(2)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.

At March 31, 2023, the Common Equity Tier 1 (CET1), Tier 1 and total capital ratio requirements for the Company included a global systemically important bank (G-SIB) surcharge of 1.50%. The G-SIB surcharge is not applicable to the Bank. In addition, the CET1, Tier 1 and total capital ratio requirements for the Company included a stress capital buffer of 3.20% under the Standardized Approach and a capital conservation buffer of 2.50% under the Advanced Approach. The capital ratio requirements for the Bank included a capital conservation buffer of 2.50% under both the Standardized and Advanced Approaches. The Company is required to maintain these risk-based capital ratios and to maintain an SLR of at least 5.00% (composed of a 3.00% minimum requirement plus a supplementary leverage buffer of 2.00%) to avoid restrictions on capital distributions and discretionary bonus payments. The Bank is required to maintain an SLR of at least 6.00% to be considered well-capitalized under applicable regulatory capital adequacy rules.

Capital Planning Requirements

The FRB’s capital plan rule establishes capital planning and other requirements that govern capital distributions, including dividends and share repurchases, by certain large bank holding companies (BHCs), including Wells Fargo. The FRB conducts an annual Comprehensive Capital Analysis and Review exercise and has also published guidance regarding its supervisory expectations for capital planning, including capital policies regarding the process relating to common stock dividend and repurchase decisions in the FRB’s SR Letter 15-18. The Parent’s ability to make certain capital distributions is subject to the requirements of the capital plan rule and is also subject to the Parent meeting or exceeding certain regulatory capital minimums.

126			Wells Fargo & Company

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Loan and Dividend Restrictions

Federal law restricts the amount and the terms of both credit and non-credit transactions between a bank and its nonbank affiliates. Additionally, federal laws and regulations limit the dividends that a national bank may pay.

Our nonbank subsidiaries are also limited by certain federal and state statutory provisions and regulations covering the amount of dividends that may be paid in any given year. In addition, under a Support Agreement dated June 28, 2017, as amended and restated on June 26, 2019, among Wells Fargo & Company, the parent holding company (Parent), WFC Holdings, LLC, an intermediate holding company and subsidiary of the Parent (IHC), the Bank, Wells Fargo Securities, LLC, Wells Fargo Clearing Services, LLC, and certain other subsidiaries of the Parent designated from time to time as material entities for resolution planning purposes or identified from time to time as related support entities in our resolution plan, the IHC may be restricted from making dividend payments to the Parent if certain liquidity and/or capital metrics fall below defined triggers or if the Parent’s board of directors authorizes it to file a case under the U.S. Bankruptcy Code.

For additional information on loan and dividend restrictions, see Note 25 (Regulatory Capital Requirements and Other Restrictions) in our 2022 Form 10-K.

Cash Restrictions

Cash and cash equivalents may be restricted as to usage or withdrawal. Table 21.2 provides a summary of restrictions on cash and cash equivalents.

Table 21.2: Nature of Restrictions on Cash and Cash Equivalents

(in millions)			Mar 31, 2023						Dec 31, 2022
Reserve balance for non-U.S. central banks			$	243					238
Segregated for benefit of brokerage customers under federal and other brokerage regulations			548						898

			Wells Fargo & Company			127

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Glossary of Acronyms
ACL			Allowance for credit losses			HTM			Held-to-maturity
AFS			Available-for-sale			LCR			Liquidity coverage ratio
AOCI			Accumulated other comprehensive income			LHFS			Loans held for sale
ARM			Adjustable-rate mortgage			LIBOR			London Interbank Offered Rate
ASC			Accounting Standards Codification			LIHTC			Low-income housing tax credit
ASU			Accounting Standards Update			LOCOM			Lower of cost or fair value
AVM			Automated valuation model			LTV			Loan-to-value
BCBS			Basel Committee on Banking Supervision			MBS			Mortgage-backed securities
BHC			Bank holding company			MSR			Mortgage servicing right
CCAR			Comprehensive Capital Analysis and Review			NAV			Net asset value
CD			Certificate of deposit			NPA			Nonperforming asset
CECL			Current expected credit loss			NSFR			Net stable funding ratio
CET1			Common Equity Tier 1			OCC			Office of the Comptroller of the Currency
CFPB			Consumer Financial Protection Bureau			OCI			Other comprehensive income
CLO			Collateralized loan obligation			OTC			Over-the-counter
CLTV			Combined loan-to-value			PCD			Purchased credit-deteriorated
CPI			Collateral protection insurance			PTPP			Pre-tax pre-provision profit
CRE			Commercial real estate			RMBS			Residential mortgage-backed securities
DPD			Days past due			ROA			Return on average assets
ESOP			Employee Stock Ownership Plan			ROE			Return on average equity
FASB			Financial Accounting Standards Board			ROTCE			Return on average tangible common equity
FDIC			Federal Deposit Insurance Corporation			RWAs			Risk-weighted assets
FHA			Federal Housing Administration			SEC			Securities and Exchange Commission
FHLB			Federal Home Loan Bank			S&P			Standard & Poor’s Global Ratings
FHLMC			Federal Home Loan Mortgage Corporation			SLR			Supplementary leverage ratio
FICO			Fair Isaac Corporation (credit rating)			SOFR			Secured Overnight Financing Rate
FNMA			Federal National Mortgage Association			SPE			Special purpose entity
FRB			Board of Governors of the Federal Reserve System			TDR			Troubled debt restructuring
GAAP			Generally accepted accounting principles			TLAC			Total Loss Absorbing Capacity
GNMA			Government National Mortgage Association			VA			Department of Veterans Affairs
GSE			Government-sponsored entity			VaR			Value-at-Risk
G-SIB			Global systemically important bank			VIE			Variable interest entity
HQLA			High-quality liquid assets			WIM			Wealth and Investment Management

128			Wells Fargo & Company

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PART II – OTHER INFORMATION

Item 1.    Legal Proceedings

 

Information in response to this item can be found in Note 10 (Legal Actions) to Financial Statements in this Report which information is incorporated by reference into this item.

Item 1A.    Risk Factors

 

Information in response to this item can be found under the “Financial Review – Risk Factors” section in this Report which information is incorporated by reference into this item. 

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds

 

The following table shows Company repurchases of its common stock for each calendar month in the quarter ended March 31, 2023.

Calendar month			Total number of shares repurchased (1)						Weighted average price paid per share						Maximum number of shares that may yet be repurchased under the authorization
January			22,215,680						$	44.47					228,174,154
February			47,552,452						47.47						180,621,702
March			16,617,428						46.36						164,004,274
Total			86,385,560

(1)All shares were repurchased under an authorization covering up to 500 million shares of common stock approved by the Board of Directors (Board) and publicly announced by the Company on January 15, 2021. Unless modified or revoked by the Board, this authorization does not expire.

			Wells Fargo & Company			129

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Item 6.    Exhibits

 

A list of exhibits to this Form 10-Q is set forth below.

 

The Company’s SEC file number is 001-2979. On and before November 2, 1998, the Company filed documents with the SEC under the name Norwest Corporation. The former Wells Fargo & Company filed documents under SEC file number 001-6214.

Exhibit Number

Description

Location

3(a)

Restated Certificate of Incorporation, as amended and in effect on the date hereof.

Incorporated by reference to Exhibit 3(a) to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2022.

3(b)

By-Laws.

Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed March 1, 2018.

4(a)

See Exhibits 3(a) and 3(b).

4(b)

The Company agrees to furnish upon request to the Commission a copy of each instrument defining the rights of holders of senior and subordinated debt of the Company.

22

Subsidiary guarantors and issuers of guaranteed securities and affiliates whose securities collateralize securities of the registrant.

Filed herewith.

31(a)

Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith.

31(b)

Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Filed herewith.

32(a)

Certification of Periodic Financial Report by Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and 18 U.S.C. § 1350.

Furnished herewith.

32(b)

Certification of Periodic Financial Report by Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and 18 U.S.C. § 1350.

Furnished herewith.

101.INS

Inline XBRL Instance Document

The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

101.SCH

Inline XBRL Taxonomy Extension Schema Document

Filed herewith.

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

Filed herewith.

101.DEF

Inline XBRL Taxonomy Extension Definitions Linkbase Document

Filed herewith.

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

Filed herewith.

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

Filed herewith.

104

Cover Page Interactive Data File

Formatted as Inline XBRL and contained in Exhibit 101.

130			Wells Fargo & Company

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SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated: May 2, 2023    WELLS FARGO & COMPANY

 

 

By:			/s/ MUNEERA S. CARR
			Muneera S. Carr
			Executive Vice President, Chief Accounting Officer and Controller
			(Principal Accounting Officer)

			Wells Fargo & Company			131