falseCA0000072971falseDEWELLS FARGO & COMPANY/MNfalsefalseDep Shr, 1/1000th int. per shr of 5.85% Fix-to-Float Non-Cum. Perpetual Class A Pref. Stock, Ser. QDep Shr, 1/1000th int. per shr of 6.625% Fix-to-Float Non-Cum. Perpetual Class A Pref. Stock, Ser. Rfalsefalse 0000072971 2020-04-14 2020-04-14 0000072971 wfc:NonCumulativePerpetualClassAPreferredStockSeriesOMember 2020-04-14 2020-04-14 0000072971 wfc:NonCumulativePerpetualClassAPreferredStockSeriesXMember 2020-04-14 2020-04-14 0000072971 wfc:NonCumulativePerpetualClassAPreferredStockSeriesWMember 2020-04-14 2020-04-14 0000072971 wfc:GuaranteeofMediumTermNotesSeriesAdueOctober302028ofWellsFargoFinanceLLCMember 2020-04-14 2020-04-14 0000072971 wfc:NonCumulativePerpetualClassAPreferredStockSeriesTMember 2020-04-14 2020-04-14 0000072971 wfc:NonCumulativePerpetualClassAPreferredStockSeriesZMember 2020-04-14 2020-04-14 0000072971 wfc:NonCumulativePerpetualClassAPreferredStockSeriesNMember 2020-04-14 2020-04-14 0000072971 wfc:NonCumulativePerpetualClassAPreferredStockSeriesVMember 2020-04-14 2020-04-14 0000072971 wfc:Guaranteeof5.80FixedtoFloatingRateNormalWachoviaIncomeTrustSecuritiesofWachoviaCapitalTrustIIIMember 2020-04-14 2020-04-14 0000072971 wfc:FixedtoFloatingRate6.625NonCumulativePerpetualClassAPFDStockSeriesRMember 2020-04-14 2020-04-14 0000072971 wfc:NonCumulativePerpetualClassAPreferredStockSeriesYMember 2020-04-14 2020-04-14 0000072971 us-gaap:CommonStockMember 2020-04-14 2020-04-14 0000072971 wfc:FixedtoFloatingRate5.85NonCumulativePerpetualClassAPFDStockSeriesQMember 2020-04-14 2020-04-14 0000072971 wfc:NonCumulativePerpetualClassAPreferredStockSeriesPMember 2020-04-14 2020-04-14 0000072971 wfc:A7.5NonCumulativePerpetualConvertibleClassAPreferredStockSeriesLMember 2020-04-14 2020-04-14


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): April 14, 2020

WELLS FARGO & COMPANY
(Exact name of registrant as specified in its charter)
Delaware
 
001-02979
 
No.
41-0449260
(State or Other Jurisdiction
of Incorporation)
 
(Commission File
Number)
 
(IRS 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


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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
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 Non-Cumulative Perpetual Class A Preferred Stock, Series N
WFC.PRN
NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series O
WFC.PRO
NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series P
WFC.PRP
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 T
WFC.PRT
NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series V
WFC.PRV
NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series W
WFC.PRW
NYSE
Depositary Shares, each representing a 1/1000th interest in a share of Non-Cumulative Perpetual Class A Preferred Stock, Series X
WFC.PRX
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
Guarantee of 5.80% Fixed-to-Floating Rate Normal Wachovia Income Trust Securities of Wachovia Capital Trust III
WFC/TP
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 is an emerging growth company as defined in Rule 405 of the Securities Act (17 CFR 230.405) or Rule 12b-2 of the Exchange Act (17 CFR 240.12b‑2).
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. o





Item 2.02 Results of Operations and Financial Condition.

On April 14, 2020, Wells Fargo & Company (the “Company”) issued a press release regarding its results of operations and financial condition for the quarter ended March 31, 2020, and posted on its website its 1Q20 Quarterly Supplement, which contains certain additional historical and forward-looking information relating to the Company. The press release is included as Exhibit 99.1 to this report and is incorporated by reference into this Item 2.02. The information included in Exhibit 99.1 is considered to be “filed” for purposes of Section 18 under the Securities Exchange Act of 1934. The Quarterly Supplement is included as Exhibit 99.2 to this report and is incorporated by reference into this Item 2.02. Except for the “Managing under the asset cap” portion on page 10 of the Quarterly Supplement, which portion shall be considered “filed,” the rest of Exhibit 99.2 shall not be considered “filed” for purposes of Section 18 under the Securities Exchange Act of 1934 and shall not be deemed to be incorporated by reference into the filings of the Company under the Securities Act of 1933.

On April 14, 2020, the Company intends to host a live conference call that will also be available by webcast to discuss the press release, the Quarterly Supplement, and other matters relating to the Company.

Item 8.01.
Other Events.

The following risk factor supplements the “Risk Factors” section in our 2019 Annual Report and item 1A of our 2019 Form 10-K.

The COVID-19 pandemic has adversely impacted our business and financial results, and the ultimate impact will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities in response to the pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, lowered equity market valuations, created significant volatility and disruption in financial markets, and increased unemployment levels. In addition, the pandemic has resulted in temporary closures of many businesses and the institution of social distancing and sheltering in place requirements in many states and communities. As a result, the demand for our products and services may be significantly impacted, which could adversely affect our revenue. Furthermore, the pandemic could continue to result in the recognition of credit losses in our loan portfolios and increases in our allowance for credit losses, particularly if businesses remain closed, the impact on the global economy worsens, or more customers draw on their lines of credit or seek additional loans to help finance their businesses. Similarly, because of changing economic and market conditions affecting issuers, we may be required to recognize further impairments on the securities we hold as well as reductions in other comprehensive income. Our business operations may also be disrupted if significant portions of our workforce are unable to work effectively, including because of illness, quarantines, government actions, or other restrictions in connection with the pandemic, and we have already temporarily closed certain of our branches and offices. In response to the pandemic, we have also suspended residential property foreclosure sales, evictions, and involuntary automobile repossessions, and are offering fee waivers, payment deferrals, and other expanded assistance for credit card, automobile, mortgage, small business and personal lending customers, and future governmental actions may require these and other types of customer-related responses. In addition, we have temporarily suspended share repurchases and could take other capital actions in response to the COVID-19 pandemic. The





extent to which the COVID-19 pandemic impacts our business, results of operations, and financial condition, as well as our regulatory capital and liquidity ratios, will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of the pandemic and actions taken by governmental authorities and other third parties in response to the pandemic.

Item 9.01.    Financial Statements and Exhibits.

(d)    Exhibits
    
Exhibit No.
Description
Location
Filed herewith
Furnished herewith, except
for the “Managing under
the asset cap” portion on
page 10, which portion is
deemed filed herewith
104
Cover Page Interactive Data File
Embedded within the Inline XBRL document





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 hereunto duly authorized.
 
Dated:
April 14, 2020
WELLS FARGO & COMPANY
 
 
 
 
 
 
By: 
/s/ MUNEERA CARR
 
 
 
Muneera Carr
 
 
 
Executive Vice President, Chief Accounting Officer and Controller




Exhibit 99.1


ERWELLSFARGOIMAGEA03.JPG
News Release | April 14, 2020
Wells Fargo Reports First Quarter 2020 Net Income of $653 Million
Diluted EPS of $0.01 included a $(0.73) per share impact from a reserve build and an impairment of securities, driven by economic and market conditions, as well as a $(0.06) per share impact from the redemption of our Series K Preferred Stock
Financial results:
Net income of $653 million and diluted earnings per share (EPS) of $0.01
Included the impact of a reserve build1 of $3.1 billion, or $(0.56) per share, and an impairment of securities of $950 million, or $(0.17) per share, driven by economic and market conditions
Revenue of $17.7 billion, down from $21.6 billion in first quarter 2019
Net interest income of $11.3 billion, down $999 million
Noninterest income of $6.4 billion, down $2.9 billion
Noninterest expense of $13.0 billion, down $868 million from first quarter 2019
Average loans of $965.0 billion, up $15.0 billion, or 2%, from first quarter 2019; period-end loans of $1.0 trillion up $47.6 billion, or 5%, from fourth quarter 2019
Average deposits of $1.3 trillion, up $75.9 billion, or 6%, from first quarter 2019; period-end deposits of $1.4 trillion up $53.9 billion, or 4%, from fourth quarter 2019
Credit quality:
Provision expense for loans and debt securities of $4.0 billion, up $3.2 billion from first quarter 2019
Net charge-offs on loans and debt securities of $940 million, up $245 million
Net loan charge-offs of 0.38% of average loans (annualized), up from 0.30%
Reserve build1 of $3.1 billion for loans and debt securities
Nonaccrual loans of $6.2 billion, down $749 million, or 11%
Strong liquidity and capital positions:
Liquidity coverage ratio2 (LCR) of 121%, which continued to exceed the regulatory minimum of 100%
Common Equity Tier 1 ratio of 10.7%3, which continued to exceed both the regulatory minimum of 9% and our current internal target of 10%
Period-end common shares outstanding down 415.5 million shares, or 9%, from first quarter 2019
On March 15, 2020, Wells Fargo, along with the other members of the Financial Services Forum, decided to temporarily suspend share repurchases for the remainder of the first quarter and for second quarter 2020
1 Reserve build represents the amount by which the provision for credit losses exceeds net charge-offs, while reserve release represents the amount by which net charge-offs exceed the provision for credit losses.
2 Liquidity coverage ratio (LCR) is calculated as high-quality liquid assets divided by projected net cash outflows, as each is defined under the LCR rule. LCR is a preliminary estimate.
3 See table on page 35 for more information on Common Equity Tier 1. Common Equity Tier 1 is a preliminary estimate.




- 2 -

First quarter 2020 included the issuance of $2.0 billion of Series Z Preferred Stock; the redemption of the remaining $1.8 billion of Series K Preferred Stock, which reduced diluted EPS by $0.06 per share as a result of eliminating the purchase accounting discount recorded on these shares; and the redemption of $668 million of Series T Preferred Stock

Financial results reported in this document are preliminary. Final financial results and other disclosures will be reported in our Quarterly Report on
Form 10-Q for the quarter ended March 31, 2020, and may differ materially from the results and disclosures in this document due to, among other things, the completion of final review procedures, the occurrence of subsequent events, or the discovery of additional information.
Selected Financial Information
 
 
 
Quarter ended
 
 
Mar 31,
2020

 
Dec 31,
2019

 
Mar 31,
2019

Earnings
 
 
 
 
 
Diluted earnings per common share
$
0.01

 
0.60

 
1.20

Wells Fargo net income (in billions)
0.65

 
2.87

 
5.86

Return on assets (ROA)
0.13
%
 
0.59

 
1.26

Return on equity (ROE)
0.10

 
5.91

 
12.71

Return on average tangible common equity (ROTCE)
0.12

 
7.08

 
15.16

Asset Quality
 
 
 
 
 
Net loan charge-offs (annualized) as a % of average total loans
0.38
%
 
0.32

 
0.30

Allowance for credit losses for loans as a % of total loans
1.19

 
1.09

 
1.14

Allowance for credit losses for loans as a % of annualized net loan charge-offs
329

 
343

 
384

Other
 
 
 
 
 
Revenue (in billions)
$
17.7

 
19.9

 
21.6

Efficiency ratio (b)
73.6
%
 
78.6

 
64.4

Average loans (in billions)
$
965.0

 
956.5

 
950.0

Average deposits (in billions)
1,338.0

 
1,321.9

 
1,262.1

Net interest margin
2.58
%
 
2.53

 
2.91

(a)
Tangible common equity and return on average tangible common equity are non-GAAP financial measures. For additional information, including a corresponding reconciliation to GAAP financial measures, see the “Tangible Common Equity” tables on page 34.
(b)
The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).
SAN FRANCISCO April 14, 2020 – Wells Fargo & Company (NYSE:WFC) reported net income of $653 million, or $0.01 per diluted common share, for first quarter 2020, compared with $5.9 billion, or $1.20 per share, for first quarter 2019, and $2.9 billion, or $0.60 per share, for fourth quarter 2019.
Chief Executive Officer Charlie Scharf said, “Wells Fargo plays an important role in the financial system and the economic strength of our country, and we take our responsibility seriously, particularly in these unprecedented times.”
“We have taken comprehensive steps to help customers, employees and communities. For our customers, we’ve suspended residential property foreclosure sales, offered fee waivers, and provided payment deferrals, among other actions. For example, starting in early March and continuing into last week, we helped more than 1.3 million consumer and small business customers by deferring and waiving fees. This included deferring more than 1 million payments and providing over 900,000 fee waivers. We were also there for our commercial clients, who utilized over $80 billion of their loan commitments in March alone. For our employees, we’ve enabled approximately 180,000 to work remotely. We are making additional cash payments to employees whose roles require them to come into the office, and we have taken significant actions to help ensure their safety. We have also provided financial support for child care and increased medical benefits for employees. To support our communities, we are directing $175 million in charitable donations from the Wells Fargo Foundation to help address food, shelter, small business and housing stability, as well as providing help to publ



- 3 -

ic health organizations fighting to contain the spread of COVID-19. We will continue to evaluate this fluid situation and take additional actions as necessary,” Scharf added.
“I’m incredibly proud of the efforts our employees are making across Wells Fargo to support our customers and each other, particularly those on the front lines. Our priority is to continue to help our customers, our employees and our country through these challenging times,” Scharf concluded.
Chief Financial Officer John Shrewsberry said, “Wells Fargo reported $653 million of net income in the first quarter and diluted earnings per share of $0.01. Our results were impacted by a $3.1 billion reserve build, which reflected the expected impact these unprecedented times could have on our customers. Our results also included an impairment of securities of $950 million driven by economic and market conditions. We maintained strong liquidity and capital, and we are committed to using our financial strength to help support the U.S. economy, while still operating in compliance with the asset cap under the Federal Reserve consent order. In the first quarter, we continued to serve our customers and as a result, commercial loans grew by $52 billion, deposits increased by $54 billion, we originated $48 billion of residential mortgage loans, and we raised $47 billion of debt capital for our clients.”
Net Interest Income
Net interest income in the first quarter was $11.3 billion, up $112 million from fourth quarter 2019, predominantly due to favorable hedge ineffectiveness accounting results and lower mortgage-backed securities (MBS) premium amortization, partially offset by balance sheet repricing driven by the impact of the lower interest rate environment and one fewer day in the quarter.
The net interest margin was 2.58%, up 5 basis points from the prior quarter predominantly due to favorable hedge ineffectiveness accounting results and lower MBS premium amortization, partially offset by balance sheet repricing driven by the impact of the lower interest rate environment.
Noninterest Income
Noninterest income in the first quarter was $6.4 billion, down $2.3 billion from fourth quarter 2019. First quarter noninterest income included lower market sensitive revenue4, mortgage banking income, and card fees.
Card fees were $892 million, down $128 million from fourth quarter 2019, primarily due to seasonally lower point of sale volumes as well as the impact of the COVID-19 pandemic on consumer spending.
Mortgage banking income was $379 million, down from $783 million in fourth quarter 2019. The decline in mortgage banking income reflected unrealized losses on residential and commercial mortgage loans held for sale of approximately $143 million and $62 million, respectively, due to illiquid market conditions and a widening of credit spreads. Additionally, we recorded $192 million of higher losses on the valuation of our mortgage servicing rights asset as a result of assumption updates, primarily prepayment assumptions.
Market sensitive revenue4 was a loss of $(1.1) billion, down from a gain of $574 million in fourth quarter 2019, predominantly due to a $1.9 billion decline in net gains from equity securities driven by $857 million of lower deferred compensation plan investment results (largely offset by lower employee benefits expense), and an
4 Market sensitive revenue represents net gains from trading activities, debt securities, and equity securities.



- 4 -

$811 million increase in impairment of securities primarily in our affiliated venture capital and private equity partnerships and wholesale business.
Other income was $372 million, up $37 million from the prior quarter. First quarter 2020 included a $463 million gain from the sale of $709 million of residential mortgage loans. Fourth quarter 2019 included a $362 million gain from the sale of our commercial real estate brokerage business, Eastdil Secured (Eastdil).

Noninterest Expense
Noninterest expense in the first quarter was $13.0 billion, down $2.6 billion from the prior quarter. Operating losses in the first quarter declined $1.5 billion from a fourth quarter that included elevated litigation accruals. In addition, employee benefits expense was down $306 million, as $861 million of lower deferred compensation expense (largely offset by higher net losses from equity securities) was partially offset by seasonally higher payroll tax and 401(k) expense. A variety of other expenses were also lower in the first quarter, including commission and incentive compensation, outside professional services, and technology and equipment.

Income Taxes
The Company’s effective income tax rate was 19.5% for first quarter 2020 and included net discrete income tax expense of $141 million driven by the accounting for stock compensation activity, the net impact of accounting for uncertain tax positions, and the outcome of U.S. federal income tax examinations. The effective income tax rate in fourth quarter 2019 was 19.1% and included net discrete income tax expense of $303 million predominantly related to the non-tax deductible treatment of certain litigation accruals.
Loans
Average loans were $965.0 billion in the first quarter, up $8.5 billion from the fourth quarter. Period-end loan balances were $1.0 trillion at March 31, 2020, up $47.6 billion from December 31, 2019. Commercial loans were up $52.0 billion compared with December 31, 2019, predominantly due to $50.9 billion of growth in commercial and industrial loans driven by draws of revolving lines and origination of new lending facilities due to the impact of the COVID-19 pandemic on economic and market conditions. Consumer loans decreased $4.4 billion from the prior quarter driven by a $2.4 billion decrease in credit card loans, primarily due to seasonality and fewer new account openings, and a $1.9 billion decrease in real estate 1-4 family first and junior lien mortgage loans, as originations and draws of existing lines were more than offset by paydowns.
Period-End Loan Balances
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Commercial
$
567,735

 
515,719

 
512,332

 
512,245

 
512,226

Consumer
442,108

 
446,546

 
442,583

 
437,633

 
436,023

Total loans
$
1,009,843

 
962,265

 
954,915

 
949,878

 
948,249

Change from prior quarter
$
47,578

 
7,350

 
5,037

 
1,629

 
(4,861
)



- 5 -

Debt and Equity Securities
Debt securities include available-for-sale and held-to-maturity debt securities, as well as debt securities held for trading. Period-end debt securities were $501.6 billion at March 31, 2020, up $4.4 billion from the fourth quarter driven by a $3.7 billion increase in debt securities available-for-sale and held-to-maturity, as purchases of approximately $38.9 billion, largely federal agency MBS, were partially offset by runoff and sales. Additionally, on January 1, 2020, we adopted the current expected credit loss (CECL) accounting standard, which requires an allowance for credit losses for available-for-sale and held-to-maturity debt securities. The provision for credit losses on debt securities was $172 million in first quarter 2020, driven by a reserve build1 of $141 million and net charge-offs of $31 million.
Net unrealized gains on available-for-sale debt securities were $3.0 billion at March 31, 2020, compared with $3.4 billion at December 31, 2019, primarily due to wider credit spreads, partially offset by lower long-term interest rates in the first quarter.
Equity securities include marketable and non-marketable equity securities, as well as equity securities held for trading. Period-end equity securities were $54.0 billion at March 31, 2020, down $14.2 billion from the fourth quarter.
Deposits
Period-end deposits were $1.4 trillion at March 31, 2020, up $53.9 billion from December 31, 2019. Total average deposits for first quarter 2020 were $1.3 trillion, up $16.1 billion from the prior quarter driven by growth in both commercial and consumer deposits. The average deposit cost for first quarter 2020 was 52 basis points, down 10 basis points from the prior quarter and down 13 basis points from a year ago.
Capital
The Company's Common Equity Tier 1 ratio was 10.7%3 and continued to exceed both the regulatory minimum of 9% and our current internal target of 10%. In first quarter 2020, the Company repurchased 75.4 million shares of its common stock, which, net of issuances, reduced period-end common shares outstanding by 38.0 million. The Company paid a quarterly common stock dividend of $0.51 per share.
In first quarter 2020, the Company issued $2.0 billion of Non-Cumulative Perpetual Class A Preferred Stock, Series Z. Additionally, the Company redeemed the remaining $1.8 billion of its Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series K, which reduced diluted earnings per common share in first quarter 2020 by $0.06 per share as a result of eliminating the purchase accounting discount recorded on these shares at the time of the Wachovia acquisition. The Company also redeemed $668 million of its Non-Cumulative Perpetual Class A Preferred Stock, Series T, in the first quarter, and following this partial redemption, $132 million of the Series T Preferred Stock remains outstanding.
As of March 31, 2020, our eligible external total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was 23.2%5, compared with the required minimum of 22.0%.
5 The TLAC ratio is a preliminary estimate.



- 6 -

Credit Quality

Net Loan Charge-offs
The quarterly loss rate in the first quarter was 0.38% (annualized), up from 0.32% in the prior quarter and 0.30% a year ago. Commercial and consumer losses were 0.25% and 0.53%, respectively. Total credit losses were $909 million in first quarter 2020, up $140 million from fourth quarter 2019. Commercial losses increased $121 million predominantly driven by higher commercial and industrial losses primarily related to significant declines in oil prices impacting the oil and gas portfolio.
Net Loan Charge-Offs
 
Quarter ended
 
 
March 31, 2020
 
 
December 31, 2019
 
 
March 31, 2019
 
($ in millions)
Net loan 
charge- 
offs 

 
As a % of 
average 
loans (a) 

 
Net loan 
charge- 
offs 

 
As a % of 
average 
loans (a) 

 
Net loan 
charge- 
offs 

 
As a % of 
average 
loans (a) 

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
333

 
0.37
 %
 
$
168

 
0.19
 %
 
$
133

 
0.15
 %
Real estate mortgage
(2
)
 
(0.01
)
 
4

 
0.01

 
6

 
0.02

Real estate construction
(16
)
 
(0.32
)
 

 

 
(2
)
 
(0.04
)
Lease financing
9

 
0.19

 
31

 
0.63

 
8

 
0.17

Total commercial
324

 
0.25

 
203

 
0.16

 
145

 
0.11

Consumer:
 
 
 
 
 
 
 
 
 
 
 
Real estate 1-4 family first mortgage
(3
)
 

 
(3
)
 

 
(12
)
 
(0.02
)
Real estate 1-4 family junior lien mortgage
(5
)
 
(0.07
)
 
(16
)
 
(0.20
)
 
(9
)
 
(0.10
)
Credit card
377

 
3.81

 
350

 
3.48

 
352

 
3.73

Automobile
82

 
0.68

 
87

 
0.73

 
91

 
0.82

Other revolving credit and installment
134

 
1.59

 
148

 
1.71

 
128

 
1.47

Total consumer
585

 
0.53

 
566

 
0.51

 
550

 
0.51

Total
$
909

 
0.38
 %
 
$
769

 
0.32
 %
 
$
695

 
0.30
 %
 
 
 
 
 
 
 
 
 
 
 
 
(a)
Quarterly net charge-offs (recoveries) as a percentage of average loans are annualized.



- 7 -

Nonperforming Assets
Nonperforming assets increased $759 million, or 13%, from fourth quarter 2019 to $6.4 billion. Nonaccrual loans increased $810 million from fourth quarter 2019 to $6.2 billion. Commercial nonaccrual loans increased $621 million predominantly driven by the commercial real estate, and commercial and industrial portfolios, as the effect of the COVID-19 pandemic on market conditions began to impact our customer base. Consumer nonaccrual loans increased $189 million, predominantly driven by higher nonaccruals in the real estate 1-4 family first mortgage portfolio, as the implementation of CECL required purchased credit-impaired (PCI) loans to be classified as non-accruing based on performance.

Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)
 
March 31, 2020
 
 
December 31, 2019
 
 
March 31, 2019
 
($ in millions)
Total 
balances 

 
As a
% of 
total 
loans 

 
Total balances 

 
As a 
% of 
total 
loans 

 
Total 
balances 

 
As a 
% of 
total 
loans 

Commercial:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
1,779

 
0.44
%
 
$
1,545

 
0.44
%
 
$
1,986

 
0.57
%
Real estate mortgage
944

 
0.77

 
573

 
0.47

 
699

 
0.57

Real estate construction
21

 
0.10

 
41

 
0.21

 
36

 
0.16

Lease financing
131

 
0.68

 
95

 
0.48

 
76

 
0.40

Total commercial
2,875

 
0.51

 
2,254

 
0.44

 
2,797

 
0.55

Consumer:
 
 
 
 
 
 
 
 
 
 
 
Real estate 1-4 family first mortgage
2,372

 
0.81

 
2,150

 
0.73

 
3,026

 
1.06

Real estate 1-4 family junior lien mortgage
769

 
2.70

 
796

 
2.70

 
916

 
2.77

Automobile
99

 
0.20

 
106

 
0.22

 
116

 
0.26

Other revolving credit and installment
41

 
0.12

 
40

 
0.12

 
50

 
0.14

Total consumer
3,281

 
0.74

 
3,092

 
0.69

 
4,108

 
0.94

Total nonaccrual loans
6,156

 
0.61

 
5,346

 
0.56

 
6,905

 
0.73

Foreclosed assets:
 
 
 
 
 
 
 
 
 
 
 
Government insured/guaranteed
43

 
 
 
50

 
 
 
75

 
 
Non-government insured/guaranteed
209

 
 
 
253

 
 
 
361

 
 
Total foreclosed assets
252

 
 
 
303

 
 
 
436

 
 
Total nonperforming assets
$
6,408

 
0.63
%
 
$
5,649

 
0.59
%
 
$
7,341

 
0.77
%
Change from prior quarter:
 
 
 
 
 
 
 
 
 
 
 
Total nonaccrual loans
$
810

 
 
 
$
(199
)
 
 
 
$
409

 
 
Total nonperforming assets
759

 
 
 
(333
)
 
 
 
394

 
 
 
Allowance for Credit Losses for Loans
The allowance for credit losses (ACL) for loans was $10.5 billion at December 31, 2019. Upon adoption of CECL on January 1, 2020, we recognized a decrease in our ACL for loans of approximately $1.3 billion, as a cumulative effect adjustment from change in accounting policies, with a corresponding increase in retained earnings (pre tax). At March 31, 2020, the ACL for loans, including the allowance for unfunded commitments, totaled $12.0 billion, up $1.6 billion from December 31, 2019, driven by a $2.9 billion reserve build1 in first quarter 2020, partially offset by the $1.3 billion decline as a result of adopting CECL. The increase in the ACL for loans reflects forecasted credit deterioration due to the COVID-19 pandemic and credit weakness in the oil and gas portfolio due to the recent sharp declines in oil prices. The allowance coverage for total loans was 1.19%, compared with 1.09% in fourth quarter 2019. The allowance covered 3.3 times annualized first quarter net charge-offs, compared with 3.4 times in the prior quarter. The allowance coverage for nonaccrual loans was 195% at March 31, 2020, compared with 196% at December 31, 2019.




- 8 -

Business Segment Performance
Wells Fargo defines its operating segments by product type and customer segment. On February 11, 2020, we announced a new organizational structure with five principal lines of business: Consumer and Small Business Banking; Consumer Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management. This new organizational structure is intended to help drive operating, control, and business performance. The Company is currently in the process of transitioning to this new organizational structure, including identifying leadership for some of these principal business lines and aligning management reporting and allocation methodologies. These changes will not impact the consolidated financial results of the Company, but are expected to result in changes to our operating segments. We will update our operating segment disclosures, including comparative financial results, when the Company completes its transition and is managed in accordance with the new organizational structure.

Segment net income (loss) for each of the three current business segments was:
 
Quarter ended 
 
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Mar 31,
2019

Community Banking
$
155

 
429

 
2,823

Wholesale Banking
311

 
2,493

 
2,770

Wealth and Investment Management
463

 
254

 
577

Community Banking offers a complete line of diversified financial products and services for consumers and small businesses with annual sales generally up to $5 million in which the owner generally is the financial decision maker. These financial products and services include checking and savings accounts, credit and debit cards, automobile, student, mortgage, home equity and small business lending, as well as referrals to Wholesale Banking and Wealth and Investment Management business partners. The Community Banking segment also includes the results of our Corporate Treasury activities net of allocations (including funds transfer pricing, capital, liquidity and certain corporate expenses) in support of other segments and results of investments in our affiliated venture capital and private equity partnerships.
Selected Financial Information
 
Quarter ended 
 
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Mar 31,
2019

Total revenue
$
9,496

 
10,522

 
11,750

Provision for credit losses
1,718

 
522

 
710

Noninterest expense
7,116

 
9,029

 
7,689

Segment net income
155

 
429

 
2,823

(in billions)
 
 
 
 
 
Average loans
462.6

 
462.5

 
458.2

Average assets
1,039.2

 
1,039.3

 
1,015.4

Average deposits
798.6

 
794.6

 
765.6

First Quarter 2020 vs. Fourth Quarter 2019
Net income of $155 million, down $274 million, or 64%
Revenue of $9.5 billion, down $1.0 billion, or 10%, driven by net losses from equity securities reflecting lower deferred compensation plan investment results (largely offset by lower employee benefits expense), lower mortgage banking revenue, and lower card fees, partially offset by a gain from the sale of residential mortgage loans and higher net interest income
Noninterest expense of $7.1 billion decreased $1.9 billion, or 21%, predominantly driven by lower operating losses and lower personnel expense primarily due to lower deferred compensation expense (largely offset by net losses from equity securities), as well as lower outside professional services expense
Provision for credit losses increased $1.2 billion, predominantly due to a $1.0 billion reserve build1 in first quarter 2020 reflecting forecasted credit deterioration due to the COVID-19 pandemic



- 9 -

First Quarter 2020 vs. First Quarter 2019
Net income down $2.7 billion, or 95%
Revenue down $2.3 billion, or 19%, largely driven by net losses from equity securities reflecting lower deferred compensation plan investment results (largely offset by lower employee benefits expense), as well as lower mortgage banking income, card fees, and net interest income, partially offset by higher service charges on deposit accounts, as first quarter 2019 included a higher level of fee waivers associated with customers affected by our data center system outage and the government shutdown
Noninterest expense decreased $573 million, or 7%, predominantly due to lower employee benefits expense due to lower deferred compensation expense (largely offset by net losses from equity securities), partially offset by higher operating losses
Provision for credit losses increased $1.0 billion, predominantly due to a $1.0 billion reserve build1 in first quarter 2020 reflecting forecasted credit deterioration due to the COVID-19 pandemic
Business Metrics and Highlights
Primary consumer checking customers6,7 of 24.4 million, up 1.9% from a year ago
Debit card point-of-sale purchase volume8 of $90.6 billion in the first quarter, up 5% from first quarter 2019
General purpose credit card point-of-sale purchase volume of $18.2 billion in the first quarter, down 1% from first quarter 2019
30.9 million digital (online and mobile) active customers, including 24.7 million mobile active customers7, 9
5,329 retail bank branches as of the end of first quarter 2020, reflecting 24 branch consolidations in the quarter
Home Lending
Originations of $48 billion in first quarter 2020, down from $60 billion in fourth quarter 2019, driven primarily by seasonality
Originations of loans held-for-sale and loans held-for-investment were $33 billion and $15 billion, respectively
Production margin on residential held-for-sale mortgage loan originations10 of 1.08% in first quarter 2020, down from 1.21% in fourth quarter 2019
Applications of $108 billion in first quarter 2020, up from $72 billion in fourth quarter 2019, driven primarily by lower interest rates
Unclosed application pipeline of $62 billion at quarter end, up from $33 billion at December 31, 2019, driven primarily by lower interest rates
Automobile originations of $6.5 billion in the first quarter, up 19% from first quarter 2019, reflecting our renewed emphasis on growing auto loans following the restructuring of the business
6 Customers who actively use their checking account with transactions such as debit card purchases, online bill payments, and direct deposit. Management uses this metric to help monitor trends in checking customer engagement with the Company.
7 Data as of February 2020, comparisons with February 2019.
8 Combined consumer and business debit card purchase volume dollars.
9 Digital and mobile active customers is the number of consumer and small business customers who have logged on via a digital or mobile device in the prior 90 days.
10 Production margin represents net gains on residential mortgage loan origination/sales activities divided by total residential held-for-sale
mortgage originations. See the “Selected Five Quarter Residential Mortgage Production Data” table on page 40 for more information.



- 10 -

Wholesale Banking provides financial solutions to businesses with annual sales generally in excess of $5 million and to financial institutions globally. Products and businesses include Commercial Banking, Commercial Real Estate, Corporate and Investment Banking, Credit Investment Portfolio, Treasury Management, and Commercial Capital.
Selected Financial Information
 
Quarter ended
 
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Mar 31,
2019

Total revenue
$
5,817

 
6,559

 
7,111

Provision for credit losses
2,288

 
124

 
134

Noninterest expense
3,763

 
3,743

 
3,838

Segment net income
311

 
2,493

 
2,770

(in billions)
 
 
 
 
 
Average loans
484.5

 
476.5

 
476.4

Average assets
885.0

 
877.6

 
844.5

Average deposits
456.6

 
447.4

 
409.8

First Quarter 2020 vs. Fourth Quarter 2019
Net income of $311 million, down $2.2 billion, or 88%
Revenue of $5.8 billion, down $742 million, or 11%, driven by lower net interest income, and lower other income as fourth quarter 2019 included a $362 million gain from the sale of Eastdil, as well as declines in market sensitive revenue5 and mortgage banking fees
Noninterest expense of $3.8 billion increased $20 million, or 1%, reflecting seasonally higher personnel expense
Provision for credit losses increased $2.2 billion, predominantly due to a $2.1 billion reserve build1 in first quarter 2020, reflecting forecasted credit deterioration due to the COVID-19 pandemic and higher charge-offs in the oil and gas portfolio driven by the significant decline in oil prices
First Quarter 2020 vs. First Quarter 2019
Net income down $2.5 billion, or 89%
Revenue down $1.3 billion, or 18%, driven by lower net interest income, as well as declines in a variety of other income categories including market sensitive revenue4, other noninterest income, lease income, and commercial real estate brokerage fees (due to the sale of Eastdil). These decreases were partially offset by higher investment banking fees
Noninterest expense decreased $75 million, or 2%, reflecting the sale of Eastdil, as well as lower personnel expense, lease expense, and travel expense, partially offset by higher regulatory and risk related expense
Provision for credit losses increased $2.2 billion, predominantly due to a $2.1 billion reserve build1 in first quarter 2020, reflecting forecasted credit deterioration due to the COVID-19 pandemic and higher charge-offs in the oil and gas portfolio driven by the significant decline in oil prices
Business Metrics and Highlights
Commercial card spend volume11 of $8.1 billion in first quarter 2020, down 4% from first quarter 2019, primarily due to reduced travel and entertainment spend as a result of the COVID-19 pandemic
2.0 billion ACH payment transactions originated12 in first quarter 2020, up 12% from first quarter 2019
U.S. investment banking market share of 4.0% in first quarter 202013, compared with 3.2% in first quarter 201913 
11 Includes commercial card volume for the entire company.
12 Includes ACH payment transactions originated by the entire company.
13 Source: Dealogic U.S. investment banking fee market share.



- 11 -

Wealth and Investment Management (WIM) provides a full range of personalized wealth management, investment and retirement products and services to clients across U.S. based businesses including Wells Fargo Advisors, The Private Bank, Abbot Downing, and Wells Fargo Asset Management. We deliver financial planning, private banking, credit, investment management and fiduciary services to high-net worth and ultra-high-net worth individuals and families. We also serve clients’ brokerage needs and provide investment management capabilities delivered to global institutional clients through separate accounts and the Wells Fargo Funds.
Selected Financial Information
 
Quarter ended
 
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Mar 31,
2019

Total revenue
$
3,715

 
4,071

 
4,079

Provision (reversal of provision) for credit losses
8

 
(1
)
 
4

Noninterest expense
3,103

 
3,729

 
3,303

Segment net income
463

 
254

 
577

(in billions)
 
 
 
 
 
Average loans
78.5

 
77.1

 
74.4

Average assets
88.1

 
85.5

 
83.2

Average deposits
151.4

 
145.0

 
153.2

First Quarter 2020 vs. Fourth Quarter 2019
Net income of $463 million, up $209 million, or 82%
Revenue of $3.7 billion, down $356 million, or 9%, predominantly due to net losses from equity securities driven by a $359 million decline in deferred compensation plan investment results (largely offset by lower employee benefits expense), and lower net interest income, partially offset by higher retail brokerage advisory fees (priced at the beginning of the quarter) and higher brokerage transaction revenue
Noninterest expense of $3.1 billion decreased $626 million, or 17%, primarily due to lower employee benefits expense driven by a $362 million decline in deferred compensation expense (largely offset by net losses from equity securities) and lower operating losses, as well as lower technology and equipment expense, partially offset by seasonally higher personnel expense and higher broker commissions
First Quarter 2020 vs. First Quarter 2019
Net income down $114 million, or 20%
Revenue down $364 million, or 9%, predominantly due to net losses from equity securities driven by a $394 million decline in deferred compensation plan investment results (largely offset by lower employee benefits expense) and lower net interest income, partially offset by higher retail brokerage advisory fees and brokerage transaction revenue
Noninterest expense decreased $200 million, or 6%, predominantly due to lower employee benefits expense driven by a $389 million decline in deferred compensation expense (largely offset by net losses from equity securities), partially offset by higher broker commissions and higher regulatory, risk, and technology expense



- 12 -

Business Metrics and Highlights
Total WIM Segment 
WIM total client assets of $1.6 trillion, down 12% from a year ago, primarily driven by lower market valuations and net outflows in the Correspondent Clearing business
Average loan balances up 6% compared with a year ago
First quarter 2020 closed referred investment assets (referrals resulting from the WIM/Community Banking partnership) up 16% compared with first quarter 2019
Retail Brokerage 
Client assets of $1.4 trillion, down 13% from the prior year, primarily driven by lower market valuations and net outflows in the Correspondent Clearing business
Advisory assets of $499 billion, down 9% from the prior year, primarily driven by lower market valuations and net outflows in the Correspondent Clearing business
IRA assets of $367 billion, down 9% from the prior year
Wealth Management
Client assets of $213 billion, down 8% from the prior year, primarily driven by lower market valuations
Asset Management
Total assets under management of $518 billion, up 9% from the prior year, primarily driven by higher money market fund net inflows, partially offset by equity and fixed income net outflows



Conference Call
The Company will host a live conference call on Tuesday, April 14, at 7:00 a.m. PT (10:00 a.m. ET). You may listen to the call by dialing 866-872-5161 (U.S. and Canada) or 440-424-4922 (International). The call will also be available online at https://www.wellsfargo.com/about/investor-relations/quarterly-earnings/ and
https://engage.vevent.com/rt/wells_fargo_ao/index.jsp?seid=513.

A replay of the conference call will be available beginning at 11:00 a.m. PT (2:00 p.m. ET) on Tuesday, April 14 through Tuesday, April 28. Please dial 855-859-2056 (U.S. and Canada) or 404-537-3406 (International) and enter Conference ID #5371395. The replay will also be available online at
https://www.wellsfargo.com/about/investor-relations/quarterly-earnings/ and
https://engage.vevent.com/rt/wells_fargo_ao/index.jsp?seid=513.



- 13 -

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 SEC, 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 and our allowance for credit losses; (iv) the appropriateness of the allowance for credit losses; (v) our expectations regarding net interest income and net interest margin; (vi) loan growth or the reduction or mitigation of risk in our loan portfolios; (vii) future capital or liquidity levels, ratios or targets; (viii) the performance of our mortgage business and any related exposures; (ix) the expected outcome and impact of legal, regulatory and legislative developments, as well as our expectations regarding compliance therewith; (x) future common stock dividends, common share repurchases and other uses of capital; (xi) our targeted range for return on assets, return on equity, and return on tangible common equity; (xii) expectations regarding our effective income tax rate; (xiii) the outcome of contingencies, such as legal proceedings; and (xiv) the Company’s plans, objectives and strategies.
Forward-looking statements are not based on historical facts but instead represent our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. While there is no assurance that any list of risks and uncertainties or risk factors is complete, important factors that could cause actual results to differ materially from those in the forward-looking statements include the following, without limitation: 
current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates, U.S. fiscal debt, budget and tax matters, geopolitical matters, and any slowdown in global economic growth;
the effect of the COVID-19 pandemic, including on our credit quality and business operations, as well as its impact on general economic and financial market conditions;
our capital and liquidity requirements (including under regulatory capital standards, such as the Basel III capital standards) and our ability to generate capital internally or raise capital on favorable terms;
financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services;
developments in our mortgage banking business, including the extent of the success of our mortgage loan modification efforts, the amount of mortgage loan repurchase demands that we receive, any negative effects relating to our mortgage servicing, loan modification or foreclosure practices, and the effects of regulatory or judicial requirements or guidance impacting our mortgage banking business and any changes in industry standards;
our ability to realize any efficiency ratio or expense target as part of our expense management initiatives, including as a result of business and economic cyclicality, seasonality, changes in our business composition and operating environment, growth in our businesses and/or acquisitions, and unexpected expenses relating to, among other things, litigation and regulatory matters;
the effect of the current interest rate environment or changes in interest rates or in the level or composition of our assets or liabilities on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgage loans held for sale;
significant turbulence or a disruption in the capital or financial markets, which could result in, among other things, reduced investor demand for mortgage loans, a reduction in the availability of funding or increased funding costs, and declines in asset values and/or recognition of impairments of securities held in our debt securities and equity securities portfolios;



- 14 -

the effect of a fall in stock market prices on our investment banking business and our fee income from our brokerage, asset and wealth management businesses;
negative effects from the retail banking sales practices matter and from other instances where customers may have experienced financial harm, including on our legal, operational and compliance costs, our ability to engage in certain business activities or offer certain products or services, our ability to keep and attract customers, our ability to attract and retain qualified team members, 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, 2019, as supplemented by our Current Report on Form 8-K filed on April 14, 2020.
In addition to the above factors, we also caution that the amount and timing of any future common stock dividends or repurchases will depend on the earnings, cash requirements and financial condition of the Company, market conditions, capital requirements (including under Basel capital standards), common stock issuance requirements, applicable law and regulations (including federal securities laws and federal banking regulations), and other factors deemed relevant by the Company’s Board of Directors, and may be subject to regulatory approval or conditions.
For more 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, 2019, as supplemented by our Current Report on Form 8-K filed on April 14, 2020, as filed with the Securities and Exchange Commission and available on its website at www.sec.gov.
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.

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.




- 15 -

About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $1.98 trillion in assets. Wells Fargo’s vision is to satisfy our customers’ financial needs and help them succeed financially. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, investment and mortgage products and services, as well as consumer and commercial finance, through 7,400 locations, more than 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 31 countries and territories to support customers who conduct business in the global economy. With approximately 263,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 29 on Fortune’s 2019 rankings of America’s largest corporations.


Contact Information
Media
Peter Gilchrist, 704-715-3213
peter.gilchrist@wellsfargo.com

Ancel Martinez, 415-222-3858
ancel.martinez@wellsfargo.com
or
Investor Relations
John M. Campbell, 415-396-0523
john.m.campbell@wellsfargo.com

# # #





- 16 -

Wells Fargo & Company and Subsidiaries
QUARTERLY FINANCIAL DATA
TABLE OF CONTENTS
 
 
 
 
Pages
 
 
Summary Information
 
17
 
 
Income
 
19
21
21
22
23
24
Five Quarter Deferred Compensation Plan Investment Results
26
 
 
Balance Sheet
 
27
Trading Activities
29
29
Equity Securities
30
 
 
Loans
 
31
32
32
Changes in Allowance for Credit Losses
33
 
 
Equity
 
Tangible Common Equity
34
35
 
 
Operating Segments
 
36
 
 
Other
 
38



- 17 -

Wells Fargo & Company and Subsidiaries
SUMMARY FINANCIAL DATA
 
Quarter ended
 
 
% Change
Mar 31, 2020 from
 
 
($ in millions, except per share amounts)
Mar 31,
2020

 
Dec 31,
2019

 
Mar 31,
2019

 
Dec 31,
2019

 
Mar 31,
2019

 
For the Period
 
 
 
 
 
 
 
 
 
 
Wells Fargo net income
$
653

 
2,873

 
5,860

 
(77
)%
 
(89
)
 
Wells Fargo net income applicable to common stock
42

 
2,546

 
5,507

 
(98
)
 
(99
)
 
Diluted earnings per common share
0.01

 
0.60

 
1.20

 
(98
)
 
(99
)
 
Profitability ratios (annualized):
 
 
 
 
 
 


 


 
Wells Fargo net income to average assets (ROA)
0.13
%
 
0.59

 
1.26

 
(78
)
 
(90
)
 
Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders’ equity (ROE)
0.10

 
5.91

 
12.71

 
(98
)
 
(99
)
 
Return on average tangible common equity (ROTCE)(1)
0.12

 
7.08

 
15.16

 
(98
)
 
(99
)
 
Efficiency ratio (2)
73.6

 
78.6

 
64.4

 
(6
)
 
14

 
Total revenue
$
17,717

 
19,860

 
21,609

 
(11
)
 
(18
)
 
Pre-tax pre-provision profit (PTPP)(3)
4,669

 
4,246

 
7,693

 
10

 
(39
)
 
Dividends declared per common share
0.51

 
0.51

 
0.45

 

 
13

 
Average common shares outstanding
4,104.8

 
4,197.1

 
4,551.5

 
(2
)
 
(10
)
 
Diluted average common shares outstanding
4,135.3

 
4,234.6

 
4,584.0

 
(2
)
 
(10
)
 
Average loans
$
965,046

 
956,536

 
950,010

 
1

 
2

 
Average assets
1,950,659

 
1,941,843

 
1,883,091

 

 
4

 
Average total deposits
1,337,963

 
1,321,913

 
1,262,062

 
1

 
6

 
Average consumer and small business banking deposits (4)
779,521

 
763,169

 
739,654

 
2

 
5

 
Net interest margin
2.58
%
 
2.53

 
2.91

 
2

 
(11
)
 
At Period End
 
 
 
 
 
 


 


 
Debt securities
$
501,563

 
497,125

 
483,467

 
1

 
4

 
Loans
1,009,843

 
962,265

 
948,249

 
5

 
6

 
Allowance for loan losses
11,263

 
9,551

 
9,900

 
18

 
14

 
Goodwill
26,381

 
26,390

 
26,420

 

 

 
Equity securities
54,047

 
68,241

 
58,440

 
(21
)
 
(8
)
 
Assets
1,981,349

 
1,927,555

 
1,887,792

 
3

 
5

 
Deposits
1,376,532

 
1,322,626

 
1,264,013

 
4

 
9

 
Common stockholders' equity
162,654

 
166,669

 
176,025

 
(2
)
 
(8
)
 
Wells Fargo stockholders’ equity
182,718

 
187,146

 
197,832

 
(2
)
 
(8
)
 
Total equity
183,330

 
187,984

 
198,733

 
(2
)
 
(8
)
 
Tangible common equity (1)
134,787

 
138,506

 
147,723

 
(3
)
 
(9
)
 
Common shares outstanding
4,096.4

 
4,134.4

 
4,511.9

 
(1
)
 
(9
)
 
Book value per common share (5)
$
39.71

 
40.31

 
39.01

 
(1
)
 
2

 
Tangible book value per common share (1)(5)
32.90

 
33.50

 
32.74

 
(2
)
 

 
Team members (active, full-time equivalent)
262,800

 
259,800

 
262,100

 
1

 

 
(1)
Tangible common equity, return on average tangible common equity, and tangible book value per common share are non-GAAP financial measures. For additional information, including a corresponding reconciliation to GAAP financial measures, see the “Tangible Common Equity” tables on page 34.
(2)
The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).
(3)
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.
(4)
Consumer and small business banking deposits are total deposits excluding mortgage escrow and wholesale deposits.
(5)
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.




- 18 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER SUMMARY FINANCIAL DATA
 
Quarter ended
 
($ in millions, except per share amounts)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

For the Quarter
 
 
 
 
 
 
 
 
 
Wells Fargo net income
$
653

 
2,873

 
4,610

 
6,206

 
5,860

Wells Fargo net income applicable to common stock
42

 
2,546

 
4,037

 
5,848

 
5,507

Diluted earnings per common share
0.01

 
0.60

 
0.92

 
1.30

 
1.20

Profitability ratios (annualized):
 
 
 
 
 
 
 
 
 
Wells Fargo net income to average assets (ROA)
0.13
%
 
0.59

 
0.95

 
1.31

 
1.26

Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders’ equity (ROE)
0.10

 
5.91

 
9.00

 
13.26

 
12.71

Return on average tangible common equity (ROTCE)(1)
0.12

 
7.08

 
10.70

 
15.78

 
15.16

Efficiency ratio (2)
73.6

 
78.6

 
69.1

 
62.3

 
64.4

Total revenue
$
17,717

 
19,860

 
22,010

 
21,584

 
21,609

Pre-tax pre-provision profit (PTPP)(3)
4,669

 
4,246

 
6,811

 
8,135

 
7,693

Dividends declared per common share
0.51

 
0.51

 
0.51

 
0.45

 
0.45

Average common shares outstanding
4,104.8

 
4,197.1

 
4,358.5

 
4,469.4

 
4,551.5

Diluted average common shares outstanding
4,135.3

 
4,234.6

 
4,389.6

 
4,495.0

 
4,584.0

Average loans
$
965,046

 
956,536

 
949,760

 
947,460

 
950,010

Average assets
1,950,659

 
1,941,843

 
1,927,415

 
1,900,627

 
1,883,091

Average total deposits
1,337,963

 
1,321,913

 
1,291,375

 
1,268,979

 
1,262,062

Average consumer and small business banking deposits (4)
779,521

 
763,169

 
749,529

 
742,671

 
739,654

Net interest margin
2.58
%
 
2.53

 
2.66

 
2.82

 
2.91

At Quarter End
 
 
 
 
 
 
 
 
 
Debt securities
$
501,563

 
497,125

 
503,528

 
482,067

 
483,467

Loans
1,009,843

 
962,265

 
954,915

 
949,878

 
948,249

Allowance for loan losses
11,263

 
9,551

 
9,715

 
9,692

 
9,900

Goodwill
26,381

 
26,390

 
26,388

 
26,415

 
26,420

Equity securities
54,047

 
68,241

 
63,884

 
61,537

 
58,440

Assets
1,981,349

 
1,927,555

 
1,943,950

 
1,923,388

 
1,887,792

Deposits
1,376,532

 
1,322,626

 
1,308,495

 
1,288,426

 
1,264,013

Common stockholders' equity
162,654

 
166,669

 
172,827

 
177,235

 
176,025

Wells Fargo stockholders’ equity
182,718

 
187,146

 
193,304

 
199,042

 
197,832

Total equity
183,330

 
187,984

 
194,416

 
200,037

 
198,733

Tangible common equity (1)
134,787

 
138,506

 
144,481

 
148,864

 
147,723

Common shares outstanding
4,096.4

 
4,134.4

 
4,269.1

 
4,419.6

 
4,511.9

Book value per common share (5)
$
39.71

 
40.31

 
40.48

 
40.10

 
39.01

Tangible book value per common share (1)(5)
32.90

 
33.50

 
33.84

 
33.68

 
32.74

Team members (active, full-time equivalent)
262,800

 
259,800

 
261,400

 
262,800

 
262,100

(1)
Tangible common equity, return on average tangible common equity, and tangible book value per common share are non-GAAP financial measures. For additional information, including a corresponding reconciliation to GAAP financial measures, see the “Tangible Common Equity” tables on page 34.
(2)
The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).
(3)
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.
(4)
Consumer and small business banking deposits are total deposits excluding mortgage escrow and wholesale deposits.
(5)
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.



- 19 -

Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
 
Quarter ended March 31,
 
 
%

(in millions, except per share amounts)
2020

 
2019

 
Change

Interest income
 
 
 
 
 
Debt securities
$
3,472

 
3,941

 
(12
)%
Mortgage loans held for sale
197

 
152

 
30

Loans held for sale
12

 
24

 
(50
)
Loans
10,065

 
11,354

 
(11
)
Equity securities
206

 
210

 
(2
)
Other interest income
775

 
1,322

 
(41
)
Total interest income
14,727

 
17,003

 
(13
)
Interest expense
 
 
 
 
 
Deposits
1,742

 
2,026

 
(14
)
Short-term borrowings
291

 
596

 
(51
)
Long-term debt
1,240

 
1,927

 
(36
)
Other interest expense
142

 
143

 
(1
)
Total interest expense
3,415

 
4,692

 
(27
)
Net interest income
11,312

 
12,311

 
(8
)
Provision for credit losses:
 
 
 
 


Debt securities
172

 

 
NM

Loans
3,833

 
845

 
354

Net interest income after provision for credit losses
7,307

 
11,466

 
(36
)
Noninterest income
 
 
 
 
 
Service charges on deposit accounts
1,209

 
1,094

 
11

Trust and investment fees
3,574

 
3,373

 
6

Card fees
892

 
944

 
(6
)
Other fees
632

 
770

 
(18
)
Mortgage banking
379

 
708

 
(46
)
Insurance
95

 
96

 
(1
)
Net gains from trading activities
64

 
357

 
(82
)
Net gains on debt securities
237

 
125

 
90

Net gains (losses) from equity securities
(1,401
)
 
814

 
NM

Lease income
352

 
443

 
(21
)
Other
372

 
574

 
(35
)
Total noninterest income
6,405

 
9,298

 
(31
)
Noninterest expense
 
 
 
 
 
Salaries
4,721

 
4,425

 
7

Commission and incentive compensation
2,463

 
2,845

 
(13
)
Employee benefits
1,130

 
1,938

 
(42
)
Technology and equipment
661

 
661

 

Net occupancy
715

 
717

 

Core deposit and other intangibles
23

 
28

 
(18
)
FDIC and other deposit assessments
118

 
159

 
(26
)
Other
3,217

 
3,143

 
2

Total noninterest expense
13,048

 
13,916

 
(6
)
Income before income tax expense
664

 
6,848

 
(90
)
Income tax expense
159

 
881

 
(82
)
Net income before noncontrolling interests
505

 
5,967

 
(92
)
Less: Net income (loss) from noncontrolling interests
(148
)
 
107

 
NM

Wells Fargo net income
$
653

 
5,860

 
(89
)
Less: Preferred stock dividends and other
611

 
353

 
73

Wells Fargo net income applicable to common stock
$
42

 
5,507

 
(99
)
Per share information
 
 
 
 
 
Earnings per common share
$
0.01

 
1.21

 
(99
)
Diluted earnings per common share
0.01

 
1.20

 
(99
)
Average common shares outstanding
4,104.8

 
4,551.5

 
(10
)
Diluted average common shares outstanding
4,135.3

 
4,584.0

 
(10
)
NM - Not meaningful





- 20 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER CONSOLIDATED STATEMENT OF INCOME
 
Quarter ended
 
(in millions, except per share amounts)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Interest income
 
 
 
 
 
 
 
 
 
Debt securities
$
3,472

 
3,567

 
3,666

 
3,781

 
3,941

Mortgage loans held for sale
197

 
234

 
232

 
195

 
152

Loans held for sale
12

 
15

 
20

 
20

 
24

Loans
10,065

 
10,494

 
10,982

 
11,316

 
11,354

Equity securities
206

 
269

 
247

 
236

 
210

Other interest income
775

 
1,016

 
1,352

 
1,438

 
1,322

Total interest income
14,727

 
15,595

 
16,499

 
16,986

 
17,003

Interest expense
 
 
 
 
 
 
 
 
 
Deposits
1,742

 
2,072

 
2,324

 
2,213

 
2,026

Short-term borrowings
291

 
439

 
635

 
646

 
596

Long-term debt
1,240

 
1,743

 
1,780

 
1,900

 
1,927

Other interest expense
142

 
141

 
135

 
132

 
143

Total interest expense
3,415

 
4,395

 
4,874

 
4,891

 
4,692

Net interest income
11,312

 
11,200

 
11,625

 
12,095

 
12,311

Provision for credit losses:
 
 
 
 
 
 
 
 
 
Debt securities
172

 

 

 

 

Loans
3,833

 
644

 
695

 
503

 
845

Net interest income after provision for credit losses
7,307

 
10,556

 
10,930

 
11,592

 
11,466

Noninterest income
 
 
 
 
 
 
 
 
 
Service charges on deposit accounts
1,209

 
1,279

 
1,219

 
1,206

 
1,094

Trust and investment fees
3,574

 
3,572

 
3,559

 
3,568

 
3,373

Card fees
892

 
1,020

 
1,027

 
1,025

 
944

Other fees
632

 
656

 
858

 
800

 
770

Mortgage banking
379

 
783

 
466

 
758

 
708

Insurance
95

 
98

 
91

 
93

 
96

Net gains from trading activities
64

 
131

 
276

 
229

 
357

Net gains (losses) on debt securities
237

 
(8
)
 
3

 
20

 
125

Net gains (losses) from equity securities
(1,401
)
 
451

 
956

 
622

 
814

Lease income
352

 
343

 
402

 
424

 
443

Other
372

 
335

 
1,528

 
744

 
574

Total noninterest income
6,405

 
8,660

 
10,385

 
9,489

 
9,298

Noninterest expense
 
 
 
 
 
 
 
 
 
Salaries
4,721

 
4,721

 
4,695

 
4,541

 
4,425

Commission and incentive compensation
2,463

 
2,651

 
2,735

 
2,597

 
2,845

Employee benefits
1,130

 
1,436

 
1,164

 
1,336

 
1,938

Technology and equipment
661

 
802

 
693

 
607

 
661

Net occupancy
715

 
749

 
760

 
719

 
717

Core deposit and other intangibles
23

 
26

 
27

 
27

 
28

FDIC and other deposit assessments
118

 
130

 
93

 
144

 
159

Other
3,217

 
5,099

 
5,032

 
3,478

 
3,143

Total noninterest expense
13,048

 
15,614

 
15,199

 
13,449

 
13,916

Income before income tax expense
664

 
3,602

 
6,116

 
7,632

 
6,848

Income tax expense
159

 
678

 
1,304

 
1,294

 
881

Net income before noncontrolling interests
505

 
2,924

 
4,812

 
6,338

 
5,967

Less: Net income (loss) from noncontrolling interests
(148
)
 
51

 
202

 
132

 
107

Wells Fargo net income
$
653

 
2,873

 
4,610

 
6,206

 
5,860

Less: Preferred stock dividends and other
611

 
327

 
573

 
358

 
353

Wells Fargo net income applicable to common stock
$
42

 
2,546

 
4,037

 
5,848

 
5,507

Per share information
 
 
 
 
 
 
 
 
 
Earnings per common share
$
0.01

 
0.61

 
0.93

 
1.31

 
1.21

Diluted earnings per common share
0.01

 
0.60

 
0.92

 
1.30

 
1.20

Average common shares outstanding
4,104.8

 
4,197.1

 
4,358.5

 
4,469.4

 
4,551.5

Diluted average common shares outstanding
4,135.3

 
4,234.6

 
4,389.6

 
4,495.0

 
4,584.0





- 21 -

Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
 
Quarter ended March 31,
 
 
%
(in millions)
2020

 
2019

 
Change
Wells Fargo net income
$
653

 
5,860

 
(89)%
Other comprehensive income (loss), before tax:
 
 
 
 

Debt securities:
 
 
 
 

Net unrealized gains (losses) arising during the period
(110
)
 
2,831

 
NM
Reclassification of net gains to net income
(172
)
 
(81
)
 
112
Derivative and hedging activities:
 
 
 
 

Net unrealized gains (losses) arising during the period
124

 
(35
)
 
NM
Reclassification of net losses to net income
58

 
79

 
(27)
Defined benefit plans adjustments:
 
 
 
 

Net actuarial and prior service gains (losses) arising during the period
3

 
(4
)
 
NM
Amortization of net actuarial loss, settlements and other to net income
36

 
35

 
3
Foreign currency translation adjustments:
 
 
 
 

       Net unrealized gains (losses) arising during the period
(194
)
 
42

 
NM
Other comprehensive income (loss), before tax
(255
)

2,867

 
NM
Income tax benefit (expense) related to other comprehensive income
1

 
(694
)
 
NM
Other comprehensive income (loss), net of tax
(254
)

2,173

 
NM
Less: Other comprehensive loss from noncontrolling interests
(1
)
 

 
Wells Fargo other comprehensive income (loss), net of tax
(253
)

2,173

 
NM
Wells Fargo comprehensive income
400


8,033

 
(95)
Comprehensive income (loss) from noncontrolling interests
(149
)
 
107

 
NM
Total comprehensive income
$
251


8,140

 
(97)
NM – Not meaningful


FIVE QUARTER CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY
 
Quarter ended
 
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Balance, beginning of period
$
187,984

 
194,416

 
200,037

 
198,733

 
197,066

Cumulative effect from change in accounting policies (1)
991

 

 

 

 
(11
)
Wells Fargo net income
653

 
2,873

 
4,610

 
6,206

 
5,860

Wells Fargo other comprehensive income, net of tax
(253
)
 
328

 
585

 
1,458

 
2,173

Noncontrolling interests
(226
)
 
(274
)
 
117

 
94

 
1

Common stock issued
1,677

 
341

 
278

 
399

 
1,139

Common stock repurchased
(3,407
)
 
(7,367
)
 
(7,448
)
 
(4,898
)
 
(4,820
)
Preferred stock redeemed (2)
(2,470
)
 

 
(1,550
)
 

 

Preferred stock released by ESOP

 

 
142

 
193

 

Preferred stock issued (3)
1,968

 

 

 

 

Common stock dividends
(2,096
)
 
(2,145
)
 
(2,230
)
 
(2,015
)
 
(2,054
)
Preferred stock dividends
(339
)
 
(327
)
 
(353
)
 
(358
)
 
(353
)
Stock incentive compensation expense
181

 
181

 
262

 
247

 
544

Net change in deferred compensation and related plans
(1,333
)
 
(42
)
 
(34
)
 
(22
)
 
(812
)
Balance, end of period
$
183,330

 
187,984

 
194,416

 
200,037

 
198,733

(1)
Effective January 1, 2020, we adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments – Credit Losses. Effective January 1, 2019, we adopted ASU 2016-02, Leases, and ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities.
(2)
Represents the impact of the redemption of the remaining shares of Preferred Stock, Series K, in first quarter 2020, the partial redemption of Preferred Stock, Series T, in first quarter 2020, and the partial redemption of Preferred Stock, Series K, in third quarter 2019.
(3)
Represents the issuance of Preferred Stock, Series Z, in first quarter 2020.



- 22 -

Wells Fargo & Company and Subsidiaries
AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)
 
Quarter ended March 31,
 
 
2020
 
 
2019
 
(in millions)
Average
balance

 
Yields/
rates

 
Interest
income/
expense

 
Average
balance

 
Yields/
rates

 
Interest
income/
expense

Earning assets
 
 
 
 
 
 
 
 
 
 
 
Interest-earning deposits with banks
$
129,522

 
1.18
%
 
$
381

 
140,784

 
2.33
%
 
$
810

Federal funds sold and securities purchased under resale agreements
107,555

 
1.42

 
380

 
83,539

 
2.40

 
495

Debt securities (2):
 
 
 
 
 
 
 
 
 
 
 
Trading debt securities
101,062

 
3.05

 
770

 
89,378

 
3.58

 
798

Available-for-sale debt securities:
 
 
 
 
 
 
 
 
 
 
 
Securities of U.S. Treasury and federal agencies
10,781

 
1.40

 
38

 
14,070

 
2.14

 
74

Securities of U.S. states and political subdivisions
38,950

 
3.43

 
334

 
48,342

 
4.02

 
486

Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
158,639

 
2.68

 
1,062

 
151,494

 
3.10

 
1,173

Residential and commercial
4,648

 
2.82

 
33

 
5,984

 
4.31

 
64

Total mortgage-backed securities
163,287

 
2.68

 
1,095

 
157,478

 
3.14

 
1,237

Other debt securities
39,541

 
3.48

 
343

 
46,788

 
4.46

 
517

Total available-for-sale debt securities
252,559

 
2.87

 
1,810

 
266,678

 
3.48

 
2,314

Held-to-maturity debt securities:
 
 
 
 
 
 
 
 
 
 
 
Securities of U.S. Treasury and federal agencies
45,937

 
2.19

 
251

 
44,754

 
2.20

 
243

Securities of U.S. states and political subdivisions
13,536

 
3.84

 
130

 
6,158

 
4.03

 
62

Federal agency and other mortgage-backed securities
98,394

 
2.55

 
628

 
96,004

 
2.74

 
656

Other debt securities
24

 
3.10

 

 
61

 
3.96

 
1

Total held-to-maturity debt securities
157,891

 
2.56

 
1,009

 
146,977

 
2.63

 
962

Total debt securities
511,512

 
2.81

 
3,589

 
503,033

 
3.25

 
4,074

Mortgage loans held for sale (3)
20,361

 
3.87

 
197

 
13,898

 
4.37

 
152

Loans held for sale (3)
1,485

 
3.17

 
12

 
1,862

 
5.25

 
24

Loans:
 
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial - U.S.
288,502

 
3.55

 
2,546

 
286,577

 
4.48

 
3,169

Commercial and industrial - Non-U.S.
70,659

 
3.16

 
556

 
62,821

 
3.90

 
604

Real estate mortgage
121,788

 
3.92

 
1,187

 
121,417

 
4.58

 
1,373

Real estate construction
20,277

 
4.54

 
229

 
22,435

 
5.43

 
301

Lease financing
19,288

 
4.40

 
212

 
19,391

 
4.61

 
224

Total commercial loans
520,514

 
3.65

 
4,730

 
512,641

 
4.48

 
5,671

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
Real estate 1-4 family first mortgage
293,556

 
3.61

 
2,650

 
285,214

 
3.96

 
2,821

Real estate 1-4 family junior lien mortgage
28,905

 
5.14

 
370

 
33,791

 
5.75

 
481

Credit card
39,756

 
12.21

 
1,207

 
38,182

 
12.88

 
1,212

Automobile
48,258

 
4.96

 
596

 
44,833

 
5.19

 
574

Other revolving credit and installment
34,057

 
6.32

 
534

 
35,349

 
7.14

 
623

Total consumer loans
444,532

 
4.83

 
5,357

 
437,369

 
5.26

 
5,711

Total loans (3)
965,046

 
4.20

 
10,087

 
950,010

 
4.84

 
11,382

Equity securities
37,532

 
2.22

 
208

 
33,080

 
2.56

 
211

Other
7,431

 
0.77

 
14

 
4,416

 
1.63

 
18

Total earning assets
$
1,780,444

 
3.35
%
 
$
14,868

 
1,730,622

 
4.00
%
 
$
17,166

Funding sources
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing checking
$
63,086

 
0.86
%
 
$
135

 
56,253

 
1.42
%
 
$
197

Market rate and other savings
762,138

 
0.52

 
978

 
688,568

 
0.50

 
847

Savings certificates
30,099

 
1.47

 
110

 
25,231

 
1.26

 
78

Other time deposits
81,978

 
1.74

 
356

 
97,830

 
2.67

 
645

Deposits in non-U.S. offices
53,335

 
1.23

 
163

 
55,443

 
1.89

 
259

Total interest-bearing deposits
990,636

 
0.71

 
1,742

 
923,325

 
0.89

 
2,026

Short-term borrowings
102,977

 
1.14

 
292

 
108,651

 
2.23

 
597

Long-term debt
229,002

 
2.17

 
1,240

 
233,172

 
3.32

 
1,927

Other liabilities
30,199

 
1.90

 
142

 
25,292

 
2.28

 
143

Total interest-bearing liabilities
1,352,814

 
1.01

 
3,416

 
1,290,440

 
1.47

 
4,693

Portion of noninterest-bearing funding sources
427,630

 

 

 
440,182

 

 

Total funding sources
$
1,780,444

 
0.77

 
3,416

 
1,730,622

 
1.09

 
4,693

Net interest margin and net interest income on a taxable-equivalent basis (4)
 
 
2.58
%
 
$
11,452

 
 
 
2.91
%
 
$
12,473

Noninterest-earning assets
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
20,571

 
 
 
 
 
19,614

 
 
 
 
Goodwill
26,387

 
 
 
 
 
26,420

 
 
 
 
Other
123,257

 
 
 
 
 
106,435

 
 
 
 
Total noninterest-earning assets
$
170,215

 
 
 
 
 
152,469

 
 
 
 
Noninterest-bearing funding sources
 
 
 
 
 
 
 
 
 
 
 
Deposits
$
347,327

 
 
 
 
 
338,737

 
 
 
 
Other liabilities
62,348

 
 
 
 
 
55,565

 
 
 
 
Total equity
188,170

 
 
 
 
 
198,349

 
 
 
 
Noninterest-bearing funding sources used to fund earning assets
(427,630
)
 
 
 
 
 
(440,182
)
 
 
 
 
Net noninterest-bearing funding sources
$
170,215

 
 
 
 
 
152,469

 
 
 
 
Total assets
$
1,950,659

 
 
 
 
 
1,883,091

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average prime rate
 
 
4.41
%
 
 
 
 
 
5.50
%
 
 
Average three-month London Interbank Offered Rate (LIBOR)
 
 
1.53

 
 
 
 
 
2.69

 
 
 
(1)
Yields/rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(2)
Yields and rates are based on interest income/expense amounts for the period, annualized based on the accrual basis for the respective accounts. The average balance amounts represent amortized cost for the periods presented.
(3)
Nonaccrual loans and related income are included in their respective loan categories.
(4)
Includes taxable-equivalent adjustments of $140 million and $162 million for the quarters ended March 31, 2020 and 2019, respectively, predominantly related to tax-exempt income on certain loans and securities. The federal statutory tax rate utilized was 21% for the periods presented.



- 23 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)
 
Quarter ended
 
 
Mar 31, 2020
 
 
Dec 31, 2019
 
 
Sep 30, 2019
 
 
Jun 30, 2019
 
 
Mar 31, 2019
 
($ in billions)
Average
balance

 
Yields/
rates

 
Average
balance

 
Yields/
rates

 
Average
balance

 
Yields/
rates

 
Average
balance

 
Yields/
rates

 
Average
balance

 
Yields/
rates

Earning assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-earning deposits with banks
$
129.5

 
1.18
%
 
$
127.3

 
1.63
%
 
$
134.0

 
2.14
%
 
$
141.0

 
2.33
%
 
$
140.8

 
2.33
%
Federal funds sold and securities purchased under resale agreements
107.6

 
1.42

 
109.2

 
1.72

 
105.9

 
2.24

 
98.1

 
2.44

 
83.5

 
2.40

Debt securities (2):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trading debt securities
101.1

 
3.05

 
103.8

 
3.12

 
94.7

 
3.35

 
86.5

 
3.45

 
89.4

 
3.58

Available-for-sale debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities of U.S. Treasury and federal agencies
10.8

 
1.40

 
15.6

 
1.79

 
16.0

 
2.14

 
15.4

 
2.21

 
14.1

 
2.14

Securities of U.S. states and political subdivisions
39.0

 
3.43

 
39.5

 
3.58

 
43.3

 
3.78

 
45.8

 
4.02

 
48.3

 
4.02

Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal agencies
158.6

 
2.68

 
161.1

 
2.58

 
154.1

 
2.77

 
149.8

 
2.99

 
151.5

 
3.10

Residential and commercial
4.6

 
2.82

 
4.8

 
4.40

 
5.2

 
4.02

 
5.6

 
4.02

 
6.0

 
4.31

Total mortgage-backed securities
163.2

 
2.68

 
165.9

 
2.63

 
159.3

 
2.81

 
155.4

 
3.03

 
157.5

 
3.14

Other debt securities
39.6

 
3.48

 
40.5

 
3.88

 
42.5

 
4.12

 
45.0

 
4.40

 
46.8

 
4.46

Total available-for-sale debt securities
252.6

 
2.87

 
261.5

 
2.92

 
261.1

 
3.14

 
261.6

 
3.39

 
266.7

 
3.48

Held-to-maturity debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Securities of U.S. Treasury and federal agencies
45.9

 
2.19

 
45.1

 
2.19

 
44.8

 
2.18

 
44.8

 
2.19

 
44.7

 
2.20

Securities of U.S. states and political subdivisions
13.5

 
3.84

 
12.8

 
3.88

 
8.7

 
4.01

 
7.0

 
4.06

 
6.2

 
4.03

Federal agency and other mortgage-backed securities
98.4

 
2.55

 
95.3

 
2.49

 
95.4

 
2.54

 
95.4

 
2.64

 
95.9

 
2.74

Other debt securities

 
3.10

 

 
3.28

 
0.1

 
3.58

 
0.1

 
3.86

 
0.1

 
3.96

Total held-to-maturity debt securities
157.8

 
2.56

 
153.2

 
2.51

 
149.0

 
2.52

 
147.3

 
2.57

 
146.9

 
2.63

     Total debt securities
511.5

 
2.81

 
518.5

 
2.84

 
504.8

 
3.00

 
495.4

 
3.16

 
503.0

 
3.25

Mortgage loans held for sale (3)
20.4

 
3.87

 
24.0

 
3.90

 
22.7

 
4.08

 
18.5

 
4.22

 
13.9

 
4.37

Loans held for sale (3)
1.5

 
3.17

 
1.4

 
4.13

 
2.0

 
4.17

 
1.6

 
4.80

 
1.9

 
5.25

Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial - U.S.
288.4

 
3.55

 
283.7

 
3.84

 
284.3

 
4.21

 
285.1

 
4.47

 
286.6

 
4.48

Commercial and industrial - Non-U.S.
70.7

 
3.16

 
67.3

 
3.40

 
64.0

 
3.67

 
62.9

 
3.90

 
62.8

 
3.90

Real estate mortgage
121.8

 
3.92

 
122.1

 
4.07

 
121.8

 
4.36

 
121.9

 
4.58

 
121.4

 
4.58

Real estate construction
20.3

 
4.54

 
20.1

 
4.71

 
20.7

 
5.13

 
21.6

 
5.36

 
22.4

 
5.43

Lease financing
19.3

 
4.40

 
19.4

 
4.41

 
19.3

 
4.34

 
19.1

 
4.71

 
19.4

 
4.61

Total commercial loans
520.5

 
3.65

 
512.6

 
3.90

 
510.1

 
4.22

 
510.6

 
4.47

 
512.6

 
4.48

Consumer loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate 1-4 family first mortgage
293.5

 
3.61

 
292.4

 
3.66

 
288.4

 
3.74

 
286.2

 
3.88

 
285.2

 
3.96

Real estate 1-4 family junior lien mortgage
28.9

 
5.14

 
30.1

 
5.32

 
31.5

 
5.66

 
32.6

 
5.75

 
33.8

 
5.75

Credit card
39.8

 
12.21

 
39.9

 
12.26

 
39.2

 
12.55

 
38.2

 
12.65

 
38.2

 
12.88

Automobile
48.3

 
4.96

 
47.3

 
5.04

 
46.3

 
5.13

 
45.2

 
5.23

 
44.8

 
5.19

Other revolving credit and installment
34.0

 
6.32

 
34.2

 
6.60

 
34.3

 
6.95

 
34.7

 
7.12

 
35.4

 
7.14

Total consumer loans
444.5

 
4.83

 
443.9

 
4.92

 
439.7

 
5.06

 
436.9

 
5.18

 
437.4

 
5.26

Total loans (3)
965.0

 
4.20

 
956.5

 
4.37

 
949.8

 
4.61

 
947.5

 
4.80

 
950.0

 
4.84

Equity securities
37.5

 
2.22

 
38.3

 
2.81

 
37.1

 
2.68

 
35.2

 
2.70

 
33.1

 
2.56

Other
7.4

 
0.77

 
6.4

 
1.36

 
6.6

 
1.77

 
4.7

 
1.76

 
4.4

 
1.63

     Total earning assets
$
1,780.4

 
3.35
%
 
$
1,781.6

 
3.51
%
 
$
1,762.9

 
3.76
%
 
$
1,742.0

 
3.94
%
 
$
1,730.6

 
4.00
%
Funding sources
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing checking
$
63.1

 
0.86
%
 
$
63.3

 
1.09
%
 
$
59.3

 
1.39
%
 
$
57.5

 
1.46
%
 
$
56.3

 
1.42
%
Market rate and other savings
762.1

 
0.52

 
732.7

 
0.59

 
711.3

 
0.66

 
690.7

 
0.59

 
688.6

 
0.50

Savings certificates
30.1

 
1.47

 
32.3

 
1.68

 
32.8

 
1.72

 
30.6

 
1.62

 
25.2

 
1.26

Other time deposits
82.0

 
1.74

 
87.1

 
2.10

 
91.8

 
2.42

 
96.9

 
2.61

 
97.8

 
2.67

Deposits in non-U.S. offices
53.3

 
1.23

 
54.8

 
1.50

 
51.7

 
1.77

 
51.9

 
1.86

 
55.4

 
1.89

Total interest-bearing deposits
990.6

 
0.71

 
970.2

 
0.85

 
946.9

 
0.97

 
927.6

 
0.96

 
923.3

 
0.89

Short-term borrowings
103.0

 
1.14

 
115.9

 
1.50

 
121.8

 
2.07

 
114.8

 
2.26

 
108.6

 
2.23

Long-term debt
229.0

 
2.17

 
230.4

 
3.02

 
229.7

 
3.09

 
236.7

 
3.21

 
233.2

 
3.32

Other liabilities
30.2

 
1.90

 
27.3

 
2.04

 
26.2

 
2.06

 
24.3

 
2.18

 
25.3

 
2.28

Total interest-bearing liabilities
1,352.8

 
1.01

 
1,343.8

 
1.30

 
1,324.6

 
1.46

 
1,303.4

 
1.50

 
1,290.4

 
1.47

Portion of noninterest-bearing funding sources
427.6

 

 
437.8

 

 
438.3

 

 
438.6

 

 
440.2

 

     Total funding sources
$
1,780.4

 
0.77

 
$
1,781.6

 
0.98

 
$
1,762.9

 
1.10

 
$
1,742.0

 
1.12

 
$
1,730.6

 
1.09

Net interest margin on a taxable-equivalent basis
 
 
2.58
%
 
 
 
2.53
%
 
 
 
2.66
%
 
 
 
2.82
%
 
 
 
2.91
%
Noninterest-earning assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
20.6

 
 
 
19.9

 
 
 
19.2

 
 
 
19.5

 
 
 
19.6

 
 
Goodwill
26.4

 
 
 
26.4

 
 
 
26.4

 
 
 
26.4

 
 
 
26.4

 
 
Other
123.3

 
 
 
113.9

 
 
 
118.9

 
 
 
112.7

 
 
 
106.5

 
 
     Total noninterest-earnings assets
$
170.3

 
 
 
160.2

 
 
 
164.5

 
 
 
158.6

 
 
 
152.5

 
 
Noninterest-bearing funding sources
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
$
347.4

 
 
 
351.7

 
 
 
344.5

 
 
 
341.4

 
 
 
338.8

 
 
Other liabilities
62.3

 
 
 
53.9

 
 
 
58.2

 
 
 
56.1

 
 
 
55.6

 
 
Total equity
188.2

 
 
 
192.4

 
 
 
200.1

 
 
 
199.7

 
 
 
198.3

 
 
Noninterest-bearing funding sources used to fund earning assets
(427.6
)
 
 
 
(437.8
)
 
 
 
(438.3
)
 
 
 
(438.6
)
 
 
 
(440.2
)
 
 
        Net noninterest-bearing funding sources
$
170.3

 
 
 
160.2

 
 
 
164.5

 
 
 
158.6

 
 
 
152.5

 
 
          Total assets
$
1,950.7

 
 
 
1,941.8

 
 
 
1,927.4

 
 
 
1,900.6

 
 
 
1,883.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average prime rate
 
 
4.41
%
 
 
 
4.83

 
 
 
5.31

 
 
 
5.50

 
 
 
5.50

Average three-month London Interbank Offered Rate (LIBOR)
 
 
1.53

 
 
 
1.93

 
 
 
2.20

 
 
 
2.51

 
 
 
2.69

(1)
Yields/rates include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(2)
Yields and rates are based on interest income/expense amounts for the period, annualized based on the accrual basis for the respective accounts. The average balance amounts represent amortized cost for the periods presented.
(3)
Nonaccrual loans and related income are included in their respective loan categories.




- 24 -

Wells Fargo & Company and Subsidiaries
NONINTEREST INCOME
 
Quarter ended March 31,
 
 
%

(in millions)
2020

 
2019

 
Change

Service charges on deposit accounts
$
1,209

 
1,094

 
11
 %
Trust and investment fees:
 
 
 
 

Brokerage advisory, commissions and other fees
2,482

 
2,193

 
13

Trust and investment management
701

 
786

 
(11
)
Investment banking
391

 
394

 
(1
)
Total trust and investment fees
3,574


3,373

 
6

Card fees
892

 
944

 
(6
)
Other fees:
 
 
 
 

Lending related charges and fees
328

 
347

 
(5
)
Cash network fees
106

 
109

 
(3
)
Commercial real estate brokerage commissions
1

 
81

 
(99
)
Wire transfer and other remittance fees
110

 
113

 
(3
)
All other fees
87

 
120

 
(28
)
Total other fees
632

 
770

 
(18
)
Mortgage banking:
 
 
 
 

Servicing income, net
271

 
364

 
(26
)
Net gains on mortgage loan origination/sales activities
108

 
344

 
(69
)
Total mortgage banking
379

 
708

 
(46
)
Insurance
95

 
96

 
(1
)
Net gains from trading activities
64

 
357

 
(82
)
Net gains on debt securities
237

 
125

 
90

Net gains (losses) from equity securities
(1,401
)
 
814

 
NM

Lease income
352

 
443

 
(21
)
Life insurance investment income
161

 
159

 
1

All other
211

 
415

 
(49
)
Total
$
6,405

 
9,298

 
(31
)
NM - Not meaningful



NONINTEREST EXPENSE
 
Quarter ended March 31,
 
 
%

(in millions)
2020

 
2019

 
Change

Salaries
$
4,721

 
4,425

 
7
 %
Commission and incentive compensation
2,463

 
2,845

 
(13
)
Employee benefits
1,130

 
1,938

 
(42
)
Technology and equipment
661

 
661

 

Net occupancy (1)
715

 
717

 

Core deposit and other intangibles
23

 
28

 
(18
)
FDIC and other deposit assessments
118

 
159

 
(26
)
Operating losses
464

 
238

 
95

Outside professional services
727

 
678

 
7

Contract services
630

 
563

 
12

Leases (2)
260

 
286

 
(9
)
Advertising and promotion
181

 
237

 
(24
)
Outside data processing
165

 
167

 
(1
)
Travel and entertainment
93

 
147

 
(37
)
Postage, stationery and supplies
129

 
122

 
6

Telecommunications
92

 
91

 
1

Foreclosed assets
29

 
37

 
(22
)
Insurance
25

 
25

 

All other
422

 
552

 
(24
)
Total
$
13,048

 
13,916

 
(6
)
(1)
Represents expenses for both leased and owned properties.
(2)
Represents expenses for assets we lease to customers.



- 25 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER NONINTEREST INCOME
 
Quarter ended
 
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Service charges on deposit accounts
$
1,209

 
1,279

 
1,219

 
1,206

 
1,094

Trust and investment fees:
 
 
 
 
 
 
 
 
 
Brokerage advisory, commissions and other fees
2,482

 
2,380

 
2,346

 
2,318

 
2,193

Trust and investment management
701

 
728

 
729

 
795

 
786

Investment banking
391

 
464

 
484

 
455

 
394

Total trust and investment fees
3,574

 
3,572

 
3,559

 
3,568

 
3,373

Card fees
892

 
1,020

 
1,027

 
1,025

 
944

Other fees:
 
 
 
 
 
 
 
 
 
Lending related charges and fees
328

 
334

 
349

 
349

 
347

Cash network fees
106

 
108

 
118

 
117

 
109

Commercial real estate brokerage commissions
1

 
2

 
170

 
105

 
81

Wire transfer and other remittance fees
110

 
119

 
121

 
121

 
113

All other fees
87

 
93

 
100

 
108

 
120

Total other fees
632

 
656

 
858

 
800

 
770

Mortgage banking:
 
 
 
 
 
 
 
 
 
Servicing income, net
271

 
23

 
(142
)
 
277

 
364

Net gains on mortgage loan origination/sales activities
108

 
760

 
608

 
481

 
344

Total mortgage banking
379

 
783

 
466

 
758

 
708

Insurance
95

 
98

 
91

 
93

 
96

Net gains from trading activities
64

 
131

 
276

 
229

 
357

Net gains (losses) on debt securities
237

 
(8
)
 
3

 
20

 
125

Net gains (losses) from equity securities
(1,401
)
 
451

 
956

 
622

 
814

Lease income
352

 
343

 
402

 
424

 
443

Life insurance investment income
161

 
159

 
173

 
167

 
159

All other
211

 
176

 
1,355

 
577

 
415

Total
$
6,405

 
8,660

 
10,385

 
9,489

 
9,298




FIVE QUARTER NONINTEREST EXPENSE
 
Quarter ended
 
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Salaries
$
4,721

 
4,721

 
4,695

 
4,541

 
4,425

Commission and incentive compensation
2,463

 
2,651

 
2,735

 
2,597

 
2,845

Employee benefits
1,130

 
1,436

 
1,164

 
1,336

 
1,938

Technology and equipment
661

 
802

 
693

 
607

 
661

Net occupancy (1)
715

 
749

 
760

 
719

 
717

Core deposit and other intangibles
23

 
26

 
27

 
27

 
28

FDIC and other deposit assessments
118

 
130

 
93

 
144

 
159

Operating losses
464

 
1,916

 
1,920

 
247

 
238

Outside professional services
727

 
876

 
823

 
821

 
678

Contract services
630

 
653

 
649

 
624

 
563

Leases (2)
260

 
286

 
272

 
311

 
286

Advertising and promotion
181

 
244

 
266

 
329

 
237

Outside data processing
165

 
164

 
167

 
175

 
167

Travel and entertainment
93

 
131

 
139

 
163

 
147

Postage, stationery and supplies
129

 
160

 
117

 
119

 
122

Telecommunications
92

 
92

 
91

 
93

 
91

Foreclosed assets
29

 
39

 
52

 
35

 
37

Insurance
25

 
25

 
25

 
25

 
25

All other
422

 
513

 
511

 
536

 
552

Total
$
13,048

 
15,614

 
15,199

 
13,449

 
13,916

(1)
Represents expenses for both leased and owned properties.
(2)
Represents expenses for assets we lease to customers.




- 26 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER DEFERRED COMPENSATION PLAN INVESTMENT RESULTS
 
 Quarter ended
 
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Net interest income
$
12

 
26

 
13

 
18

 
13

Net gains (losses) from equity securities
(621
)
 
236

 
(4
)
 
87

 
345

Total revenue (losses) from deferred compensation plan investments
(609
)
 
262

 
9

 
105

 
358

Employee benefits expense (1)
(598
)
 
263

 
5

 
114

 
357

Income (loss) before income tax expense
$
(11
)
 
(1
)
 
4

 
(9
)
 
1

(1)
Represents change in deferred compensation plan liability.



- 27 -

Wells Fargo & Company and Subsidiaries
CONSOLIDATED BALANCE SHEET
(in millions, except shares)
Mar 31,
2020

 
Dec 31,
2019

 
%
Change

Assets
 
 
 
 
 
Cash and due from banks
$
22,738

 
21,757

 
5
 %
Interest-earning deposits with banks
128,071

 
119,493

 
7

Total cash, cash equivalents, and restricted cash
150,809

 
141,250

 
7

Federal funds sold and securities purchased under resale agreements
86,465

 
102,140

 
(15
)
Debt securities:
 
 
 
 


Trading, at fair value
80,425

 
79,733

 
1

Available-for-sale, at fair value (includes allowance for credit losses)
251,229

 
263,459

 
(5
)
Held-to-maturity, at amortized cost, net of allowance for credit losses
169,909

 
153,933

 
10

Mortgage loans held for sale
21,795

 
23,342

 
(7
)
Loans held for sale
1,883

 
977

 
93

Loans
1,009,843

 
962,265

 
5

Allowance for loan losses
(11,263
)
 
(9,551
)
 
18

Net loans
998,580

 
952,714

 
5

Mortgage servicing rights:
 
 
 
 


Measured at fair value
8,126

 
11,517

 
(29
)
Amortized
1,406

 
1,430

 
(2
)
Premises and equipment, net
9,108

 
9,309

 
(2
)
Goodwill
26,381

 
26,390

 

Derivative assets
25,023

 
14,203

 
76

Equity securities
54,047

 
68,241

 
(21
)
Other assets
96,163

 
78,917

 
22

Total assets
$
1,981,349


1,927,555

 
3

Liabilities
 
 
 
 


Noninterest-bearing deposits
$
379,678

 
344,496

 
10

Interest-bearing deposits
996,854

 
978,130

 
2

Total deposits
1,376,532

 
1,322,626

 
4

Short-term borrowings
92,289

 
104,512

 
(12
)
Derivative liabilities
15,618

 
9,079

 
72

Accrued expenses and other liabilities
76,238

 
75,163

 
1

Long-term debt
237,342

 
228,191

 
4

Total liabilities
1,798,019


1,739,571

 
3

Equity
 
 
 
 


Wells Fargo stockholders’ equity:
 
 
 
 


Preferred stock
21,347

 
21,549

 
(1
)
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
59,849

 
61,049

 
(2
)
Retained earnings
165,308

 
166,697

 
(1
)
Cumulative other comprehensive income (loss)
(1,564
)
 
(1,311
)
 
19

Treasury stock – 1,385,401,170 shares and 1,347,385,537 shares 
(70,215
)
 
(68,831
)
 
2

Unearned ESOP shares
(1,143
)
 
(1,143
)
 

Total Wells Fargo stockholders’ equity
182,718


187,146

 
(2
)
Noncontrolling interests
612

 
838

 
(27
)
Total equity
183,330


187,984

 
(2
)
Total liabilities and equity
$
1,981,349

 
1,927,555

 
3

















- 28 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER CONSOLIDATED BALANCE SHEET
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Assets
 
 
 
 
 
 
 
 
 
Cash and due from banks
$
22,738

 
21,757

 
22,401

 
20,880

 
20,650

Interest-earning deposits with banks
128,071

 
119,493

 
126,330

 
143,547

 
128,318

Total cash, cash equivalents, and restricted cash
150,809

 
141,250

 
148,731

 
164,427

 
148,968

Federal funds sold and securities purchased under resale agreements
86,465

 
102,140

 
103,051

 
112,119

 
98,621

Debt securities:
 
 
 
 
 
 
 
 

Trading, at fair value
80,425

 
79,733

 
79,113

 
70,208

 
70,378

Available-for-sale, at fair value (includes allowance for credit losses)
251,229

 
263,459

 
271,236

 
265,983

 
268,099

Held-to-maturity, at amortized cost, net of allowance for credit losses
169,909

 
153,933

 
153,179

 
145,876

 
144,990

Mortgage loans held for sale
21,795

 
23,342

 
25,448

 
22,998

 
15,016

Loans held for sale
1,883

 
977

 
1,532

 
1,181

 
1,018

Loans
1,009,843

 
962,265

 
954,915

 
949,878

 
948,249

Allowance for loan losses
(11,263
)
 
(9,551
)
 
(9,715
)
 
(9,692
)
 
(9,900
)
Net loans
998,580

 
952,714

 
945,200

 
940,186

 
938,349

Mortgage servicing rights:
 
 
 
 
 
 
 
 
 
Measured at fair value
8,126

 
11,517

 
11,072

 
12,096

 
13,336

Amortized
1,406

 
1,430

 
1,397

 
1,407

 
1,427

Premises and equipment, net
9,108

 
9,309

 
9,315

 
9,435

 
8,825

Goodwill
26,381

 
26,390

 
26,388

 
26,415

 
26,420

Derivative assets
25,023

 
14,203

 
14,680

 
13,162

 
11,238

Equity securities
54,047

 
68,241

 
63,884

 
61,537

 
58,440

Other assets
96,163

 
78,917

 
89,724

 
76,358

 
82,667

Total assets
$
1,981,349


1,927,555


1,943,950


1,923,388


1,887,792

Liabilities
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
$
379,678

 
344,496

 
355,259

 
340,813

 
341,399

Interest-bearing deposits
996,854

 
978,130

 
953,236

 
947,613

 
922,614

Total deposits
1,376,532


1,322,626


1,308,495


1,288,426


1,264,013

Short-term borrowings
92,289

 
104,512

 
123,908

 
115,344

 
106,597

Derivative liabilities
15,618

 
9,079

 
9,948

 
8,399

 
7,393

Accrued expenses and other liabilities
76,238

 
75,163

 
76,532

 
69,706

 
74,717

Long-term debt
237,342

 
228,191

 
230,651

 
241,476

 
236,339

Total liabilities
1,798,019


1,739,571


1,749,534


1,723,351


1,689,059

Equity
 
 
 
 
 
 
 
 
 
Wells Fargo stockholders’ equity:
 
 
 
 
 
 
 
 
 
Preferred stock
21,347

 
21,549

 
21,549

 
23,021

 
23,214

Common stock
9,136

 
9,136

 
9,136

 
9,136

 
9,136

Additional paid-in capital
59,849

 
61,049

 
60,866

 
60,625

 
60,409

Retained earnings
165,308

 
166,697

 
166,320

 
164,551

 
160,776

Cumulative other comprehensive income (loss)
(1,564
)
 
(1,311
)
 
(1,639
)
 
(2,224
)
 
(3,682
)
Treasury stock
(70,215
)
 
(68,831
)
 
(61,785
)
 
(54,775
)
 
(50,519
)
Unearned ESOP shares
(1,143
)
 
(1,143
)
 
(1,143
)
 
(1,292
)
 
(1,502
)
Total Wells Fargo stockholders’ equity
182,718


187,146


193,304


199,042


197,832

Noncontrolling interests
612

 
838

 
1,112

 
995

 
901

Total equity
183,330


187,984


194,416


200,037


198,733

Total liabilities and equity
$
1,981,349


1,927,555


1,943,950


1,923,388


1,887,792




- 29 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER TRADING ASSETS AND LIABILITIES
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Trading assets
 
 
 
 
 
 
 
 
 
Debt securities
$
80,425

 
79,733

 
79,113

 
70,208

 
70,378

Equity securities
13,573

 
27,440

 
24,436

 
23,327

 
20,933

Loans held for sale
1,673

 
972

 
1,501

 
1,118

 
998

Gross trading derivative assets
72,527

 
34,825

 
39,926

 
34,683

 
30,002

Netting (1)
(49,821
)
 
(21,463
)
 
(26,414
)
 
(22,827
)
 
(20,809
)
Total trading derivative assets
22,706

 
13,362

 
13,512

 
11,856

 
9,193

Total trading assets
118,377

 
121,507

 
118,562

 
106,509

 
101,502

Trading liabilities
 
 
 
 
 
 
 
 
 
Short sales
17,603

 
17,430

 
18,290

 
15,955

 
21,586

Gross trading derivative liabilities
67,891

 
33,861

 
38,308

 
33,458

 
28,994

Netting (1)
(53,598
)
 
(26,074
)
 
(29,708
)
 
(26,417
)
 
(22,810
)
Total trading derivative liabilities
14,293

 
7,787

 
8,600

 
7,041

 
6,184

Total trading liabilities
$
31,896

 
25,217

 
26,890

 
22,996

 
27,770

(1)
Represents balance sheet netting for trading derivative asset and liability balances, and trading portfolio level counterparty valuation adjustments.
FIVE QUARTER DEBT SECURITIES
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Trading debt securities
$
80,425

 
79,733

 
79,113

 
70,208

 
70,378

Available-for-sale debt securities:
 
 
 
 
 
 
 
 
 
Securities of U.S. Treasury and federal agencies
11,036

 
14,960

 
16,549

 
15,319

 
15,106

Securities of U.S. states and political subdivisions
38,144

 
40,337

 
40,503

 
45,095

 
49,700

Mortgage-backed securities:
 
 
 
 
 
 
 
 
 
Federal agencies
160,214

 
162,453

 
167,535

 
155,858

 
150,663

Residential and commercial
4,430

 
4,761

 
5,079

 
5,443

 
5,828

Total mortgage-backed securities
164,644

 
167,214

 
172,614

 
161,301

 
156,491

Other debt securities
37,405

 
40,948

 
41,570

 
44,268

 
46,802

Total available-for-sale debt securities
251,229

 
263,459

 
271,236

 
265,983

 
268,099

Held-to-maturity debt securities:
 
 
 
 
 
 
 
 
 
Securities of U.S. Treasury and federal agencies
48,569

 
45,541

 
44,774

 
44,766

 
44,758

Securities of U.S. states and political subdivisions
14,304

 
13,486

 
12,719

 
7,948

 
6,163

Federal agency and other mortgage-backed securities (1)
107,013

 
94,869

 
95,637

 
93,105

 
94,009

Other debt securities
23

 
37

 
49

 
57

 
60

Total held-to-maturity debt securities
169,909

 
153,933

 
153,179

 
145,876

 
144,990

Total debt securities
$
501,563


497,125


503,528


482,067


483,467

Allowance for credit losses for debt securities (2):
 
 
 
 
 
 
 
 
 
Available-for-sale debt securities (included in fair value)
$
161

 

 

 

 

Held-to-maturity debt securities (netted against amortized cost)
11

 

 

 

 

Total allowance for credit losses for debt securities
$
172

 

 

 

 

(1)
Predominantly consists of federal agency mortgage-backed securities.
(2)
Represents the allowance for credit losses for debt securities as a result of our adoption of ASU 2016-13, Financial Instruments – Credit Losses, on January 1, 2020.



- 30 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER EQUITY SECURITIES
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Held for trading at fair value:
 
 
 
 
 
 
 
 
 
Marketable equity securities
$
13,573

 
27,440

 
24,436

 
23,327

 
20,933

Not held for trading:
 
 
 
 
 
 
 
 
 
Fair value:
 
 
 
 
 
 
 
 
 
Marketable equity securities (1)
7,708

 
6,481

 
6,639

 
5,379

 
5,135

Nonmarketable equity securities
6,895

 
8,015

 
7,293

 
7,244

 
6,518

Total equity securities at fair value
14,603

 
14,496

 
13,932

 
12,623

 
11,653

Equity method:
 
 
 
 
 
 
 
 
 
Low-income housing tax credit investments
11,290

 
11,343

 
11,068

 
11,162

 
10,925

Private equity
3,351

 
3,459

 
3,425

 
3,352

 
3,890

Tax-advantaged renewable energy
3,991

 
3,811

 
3,143

 
3,051

 
3,041

New market tax credit and other
387

 
387

 
390

 
294

 
305

Total equity method
19,019

 
19,000

 
18,026

 
17,859

 
18,161

Other:
 
 
 
 
 
 
 
 
 
Federal Reserve Bank stock and other at cost (2)
4,512

 
4,790

 
5,021

 
5,622

 
5,732

Private equity (3)
2,340

 
2,515

 
2,469

 
2,106

 
1,961

Total equity securities not held for trading
40,474

 
40,801

 
39,448

 
38,210

 
37,507

Total equity securities
$
54,047


68,241

 
63,884

 
61,537

 
58,440

(1)
Includes $3.1 billion, $3.8 billion, $3.5 billion, $3.5 billion and $3.5 billion at March 31, 2020, and December 31, September 30, June 30 and March 31, 2019, respectively, related to securities held as economic hedges of our deferred compensation plan obligations.
(2)
Includes $4.5 billion, $4.8 billion, $5.0 billion, $5.6 billion and $5.7 billion at March 31, 2020, and December 31, September 30, June 30 and March 31, 2019, respectively, related to investments in Federal Reserve Bank and Federal Home Loan Bank stock.
(3)
Represents nonmarketable equity securities accounted for under the measurement alternative.




- 31 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER LOANS
(in millions)
Mar 31,
2020


Dec 31,
2019


Sep 30,
2019


Jun 30,
2019


Mar 31,
2019

Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
405,020

 
354,125

 
350,875

 
348,846

 
349,134

Real estate mortgage
122,767

 
121,824

 
121,936

 
123,008

 
122,113

Real estate construction
20,812

 
19,939

 
19,921

 
21,067

 
21,857

Lease financing
19,136

 
19,831

 
19,600

 
19,324

 
19,122

Total commercial
567,735

 
515,719

 
512,332

 
512,245

 
512,226

Consumer:
 
 
 
 
 
 
 
 
 
Real estate 1-4 family first mortgage
292,920

 
293,847

 
290,604

 
286,427

 
284,545

Real estate 1-4 family junior lien mortgage
28,527

 
29,509

 
30,838

 
32,068

 
33,099

Credit card
38,582

 
41,013

 
39,629

 
38,820

 
38,279

Automobile
48,568

 
47,873

 
46,738

 
45,664

 
44,913

Other revolving credit and installment
33,511

 
34,304

 
34,774

 
34,654

 
35,187

Total consumer
442,108

 
446,546

 
442,583

 
437,633

 
436,023

Total loans
$
1,009,843

 
962,265

 
954,915

 
949,878

 
948,249


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. The following table presents total non-U.S. commercial loans outstanding by class of financing receivable.
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Non-U.S. commercial loans:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
78,753

 
70,494

 
64,418

 
63,296

 
63,158

Real estate mortgage
6,309

 
7,004

 
7,056

 
6,801

 
7,049

Real estate construction
1,478

 
1,434

 
1,262

 
1,287

 
1,138

Lease financing
1,120

 
1,220

 
1,197

 
1,215

 
1,167

Total non-U.S. commercial loans
$
87,660

 
80,152

 
73,933

 
72,599

 
72,512






- 32 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER NONPERFORMING ASSETS (NONACCRUAL LOANS AND FORECLOSED ASSETS)
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Nonaccrual loans:
 
 
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
1,779

 
1,545

 
1,539

 
1,634

 
1,986

Real estate mortgage
944

 
573

 
669

 
737

 
699

Real estate construction
21

 
41

 
32

 
36

 
36

Lease financing
131

 
95

 
72

 
63

 
76

Total commercial
2,875

 
2,254

 
2,312

 
2,470

 
2,797

Consumer:
 
 
 
 
 
 
 
 
 
Real estate 1-4 family first mortgage (1) (2)
2,372

 
2,150

 
2,261

 
2,425

 
3,026

Real estate 1-4 family junior lien mortgage (2)
769

 
796

 
819

 
868

 
916

Automobile
99

 
106

 
110

 
115

 
116

Other revolving credit and installment
41

 
40

 
43

 
44

 
50

Total consumer
3,281

 
3,092

 
3,233

 
3,452

 
4,108

Total nonaccrual loans
$
6,156

 
5,346

 
5,545

 
5,922

 
6,905

As a percentage of total loans
0.61
%
 
0.56

 
0.58

 
0.62

 
0.73

Foreclosed assets:
 
 
 
 
 
 
 
 
 
Government insured/guaranteed
$
43

 
50

 
59

 
68

 
75

Non-government insured/guaranteed
209

 
253

 
378

 
309

 
361

Total foreclosed assets
252

 
303

 
437

 
377

 
436

Total nonperforming assets
$
6,408

 
5,649

 
5,982

 
6,299

 
7,341

As a percentage of total loans
0.63
%
 
0.59

 
0.63

 
0.66

 
0.77

(1)
Amounts are not comparative due to our adoption of ASU 2016-13, Financial Instruments – Credit Losses, on January 1, 2020. Prior to January 1, 2020, pools of individual PCI loans were excluded because they continued to earn interest income from the accretable yield at the pool level. With the adoption of ASU 2016-13, the pools were discontinued and performance is based on contractual terms for individual loans.
(2)
Real estate 1-4 family mortgage loans predominantly insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) are not placed on nonaccrual status because they are insured or guaranteed.


LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Total:
$
7,023

 
7,285

 
7,130

 
7,258

 
7,870

Less: FHA insured/VA guaranteed (1)
6,142

 
6,352

 
6,308

 
6,478

 
6,996

Total, not government insured/guaranteed
$
881

 
933

 
822

 
780

 
874

By segment and class, not government insured/guaranteed:
 
 
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
$
24

 
47

 
6

 
17

 
42

Real estate mortgage
28

 
31

 
28

 
24

 
20

Real estate construction
1

 

 

 

 
5

Total commercial
53


78


34


41


67

Consumer:
 
 
 
 
 
 
 
 
 
Real estate 1-4 family first mortgage (2)
128

 
112

 
100

 
108

 
117

Real estate 1-4 family junior lien mortgage (2)
25

 
32

 
35

 
27

 
28

Credit card
528

 
546

 
491

 
449

 
502

Automobile
69

 
78

 
75

 
63

 
68

Other revolving credit and installment
78

 
87

 
87

 
92

 
92

Total consumer
828


855


788


739


807

Total, not government insured/guaranteed
$
881


933


822


780


874

(1)
Represents loans whose repayments are predominantly insured by the FHA or guaranteed by the VA.
(2)
Amounts are not comparative due to our adoption of ASU 2016-13, Financial Instruments – Credit Losses, on January 1, 2020. Total loans 90 days or more past due and still accruing exclude PCI loans of $102 million, $119 million, $156 million, and $243 million at December 31, September 30, June 30 and March 31, 2019, respectively.






- 33 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER CHANGES IN ALLOWANCE FOR CREDIT LOSSES FOR LOANS
 
Quarter ended
 
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Balance, beginning of quarter
$
10,456

 
10,613

 
10,603

 
10,821

 
10,707

Cumulative effect from change in accounting policies (1)
(1,337
)
 

 

 

 

Allowance for purchased credit-deteriorated (PCD) loans (2)
8

 

 

 

 

Balance, beginning of quarter, adjusted
9,127

 
10,613

 
10,603

 
10,821

 
10,707

Provision for credit losses
3,833

 
644

 
695

 
503

 
845

Interest income on certain loans (3)
(38
)
 
(35
)
 
(34
)
 
(39
)
 
(39
)
Loan charge-offs:
 
 
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
(377
)
 
(212
)
 
(209
)
 
(205
)
 
(176
)
Real estate mortgage
(3
)
 
(10
)
 
(2
)
 
(14
)
 
(12
)
Real estate construction

 

 

 

 
(1
)
Lease financing
(13
)
 
(35
)
 
(12
)
 
(12
)
 
(11
)
Total commercial
(393
)
 
(257
)
 
(223
)
 
(231
)
 
(200
)
Consumer:
 
 
 
 
 
 
 
 
 
Real estate 1-4 family first mortgage
(23
)
 
(28
)
 
(31
)
 
(27
)
 
(43
)
Real estate 1-4 family junior lien mortgage
(30
)
 
(28
)
 
(27
)
 
(29
)
 
(34
)
Credit card
(471
)
 
(436
)
 
(404
)
 
(437
)
 
(437
)
Automobile
(156
)
 
(162
)
 
(156
)
 
(142
)
 
(187
)
Other revolving credit and installment
(165
)
 
(177
)
 
(168
)
 
(167
)
 
(162
)
Total consumer
(845
)
 
(831
)
 
(786
)
 
(802
)
 
(863
)
Total loan charge-offs
(1,238
)
 
(1,088
)
 
(1,009
)
 
(1,033
)
 
(1,063
)
Loan recoveries:
 
 
 
 
 
 
 
 
 
Commercial:
 
 
 
 
 
 
 
 
 
Commercial and industrial
44

 
44

 
62

 
46

 
43

Real estate mortgage
5

 
6

 
10

 
10

 
6

Real estate construction
16

 

 
8

 
2

 
3

Lease financing
4

 
4

 
4

 
8

 
3

Total commercial
69

 
54

 
84

 
66

 
55

Consumer:
 
 
 
 
 
 
 
 
 
Real estate 1-4 family first mortgage
26

 
31

 
36

 
57

 
55

Real estate 1-4 family junior lien mortgage
35

 
44

 
49

 
48

 
43

Credit card
94

 
86

 
85

 
88

 
85

Automobile
74

 
75

 
80

 
90

 
96

Other revolving credit and installment
31

 
29

 
30

 
31

 
34

Total consumer
260

 
265

 
280

 
314

 
313

Total loan recoveries
329

 
319

 
364

 
380

 
368

Net loan charge-offs
(909
)
 
(769
)
 
(645
)
 
(653
)
 
(695
)
Other
9

 
3

 
(6
)
 
(29
)
 
3

Balance, end of quarter
$
12,022

 
10,456

 
10,613

 
10,603

 
10,821

Components:
 
 
 
 
 
 
 
 
 
Allowance for loan losses
$
11,263

 
9,551

 
9,715

 
9,692

 
9,900

Allowance for unfunded credit commitments
759

 
905

 
898

 
911

 
921

Allowance for credit losses for loans
$
12,022

 
10,456

 
10,613

 
10,603

 
10,821

Net loan charge-offs (annualized) as a percentage of average total loans
0.38
%
 
0.32

 
0.27

 
0.28

 
0.30

Allowance for loan losses as a percentage of:
 
 
 
 
 
 
 
 
 
Total loans
1.12

 
0.99

 
1.02

 
1.02

 
1.04

Nonaccrual loans
183

 
179

 
175

 
164

 
143

Nonaccrual loans and other nonperforming assets
176

 
169

 
162

 
154

 
135

Allowance for credit losses for loans as a percentage of:
 
 
 
 
 
 
 
 
 
Total loans
1.19

 
1.09

 
1.11

 
1.12

 
1.14

Nonaccrual loans
195

 
196

 
191

 
179

 
157

Nonaccrual loans and other nonperforming assets
188

 
185

 
177

 
168

 
147

(1)
Represents the overall decrease in our allowance for credit losses for loans as a result of our adoption of ASU 2016-13, Financial Instruments – Credit Losses, on January 1, 2020.
(2)
Represents the allowance for purchased credit-impaired loans that automatically became purchased credit-deteriorated (PCD) loans with the adoption of ASU 2016-13.
(3)
Loans with an allowance measured by discounting expected cash flows using the loan’s effective interest rate over the remaining life of the loan recognize changes in allowance attributable to the passage of time as interest income.



- 34 -

Wells Fargo & Company and Subsidiaries
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 mortgage servicing rights) and goodwill and other intangibles on nonmarketable equity securities, net of applicable deferred taxes. These tangible common equity ratios are as follows:
Tangible book value per common share, which represents tangible common equity divided by common shares outstanding; and
Return on average tangible common equity (ROTCE), which represents our annualized earnings contribution 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 investors and others to assess the Company’s use of equity.
The tables below provide a reconciliation of these non-GAAP financial measures to GAAP financial measures.
(in millions, except ratios)
 

Mar 31,
2020

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Tangible book value per common share:
 

 




Total equity
 

$
183,330

187,984

194,416

200,037

198,733

Adjustments:
 
 
 
 
 
 
 
Preferred stock
 

(21,347
)
(21,549
)
(21,549
)
(23,021
)
(23,214
)
Additional paid-in capital on preferred stock
 

140

(71
)
(71
)
(78
)
(95
)
Unearned ESOP shares
 

1,143

1,143

1,143

1,292

1,502

Noncontrolling interests
 

(612
)
(838
)
(1,112
)
(995
)
(901
)
Total common stockholders' equity
(A)

162,654

166,669

172,827

177,235

176,025

Adjustments:
 
 
 
 
 
 
 
Goodwill
 

(26,381
)
(26,390
)
(26,388
)
(26,415
)
(26,420
)
Certain identifiable intangible assets (other than MSRs)
 

(413
)
(437
)
(465
)
(493
)
(522
)
Goodwill and other intangibles on nonmarketable equity securities (included in other assets)
 

(1,894
)
(2,146
)
(2,295
)
(2,251
)
(2,131
)
Applicable deferred taxes related to goodwill and other intangible assets (1)
 

821

810

802

788

771

Tangible common equity
(B)

$
134,787

138,506

144,481

148,864

147,723

Common shares outstanding
(C)

4,096.4

4,134.4

4,269.1

4,419.6

4,511.9

Book value per common share
(A)/(C)

$
39.71

40.31

40.48

40.10

39.01

Tangible book value per common share
(B)/(C)

32.90

33.50

33.84

33.68

32.74

 
 
 
Quarter ended
 
(in millions, except ratios)
 
 
Mar 31,
2020

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Return on average tangible common equity:
 
 
 
 
 
 
 
Net income applicable to common stock
(A)
 
$
42

2,546

4,037

5,848

5,507

Average total equity
 
 
188,170

192,393

200,095

199,685

198,349

Adjustments:
 
 

 
 
 
 
Preferred stock
 
 
(21,794
)
(21,549
)
(22,325
)
(23,023
)
(23,214
)
Additional paid-in capital on preferred stock
 
 
135

(71
)
(78
)
(78
)
(95
)
Unearned ESOP shares
 
 
1,143

1,143

1,290

1,294

1,502

Noncontrolling interests
 
 
(785
)
(945
)
(1,065
)
(939
)
(899
)
Average common stockholders’ equity
(B)
 
166,869

170,971

177,917

176,939

175,643

Adjustments:
 
 

 
 
 
 
Goodwill
 
 
(26,387
)
(26,389
)
(26,413
)
(26,415
)
(26,420
)
Certain identifiable intangible assets (other than MSRs)
 
 
(426
)
(449
)
(477
)
(505
)
(543
)
Goodwill and other intangibles on nonmarketable equity securities (included in other assets)
 
 
(2,152
)
(2,223
)
(2,159
)
(2,155
)
(2,159
)
Applicable deferred taxes related to goodwill and other intangible assets (1)
 
 
818

807

797

780

784

Average tangible common equity
(C)
 
$
138,722

142,717

149,665

148,644

147,305

Return on average common stockholders' equity (ROE) (annualized)
(A)/(B)
 
0.10

5.91

9.00

13.26

12.71

Return on average tangible common equity (ROTCE) (annualized)
(A)/(C)
 
0.12

7.08

10.70

15.78

15.16

(1)
Determined by applying the combined federal statutory rate and composite state income tax rates to the difference between book and tax basis of the respective goodwill and intangible assets at period end.



- 35 -

Wells Fargo & Company and Subsidiaries
COMMON EQUITY TIER 1 UNDER BASEL III (1)
 
 
Estimated

 
 
 
 
(in billions, except ratio)
 
Mar 31,
2020

Dec 31,
2019

Sep 30,
2019

Jun 30,
2019

Mar 31,
2019

Total equity
 
$
183.3

188.0

194.4

200.0

198.7

Adjustments:
 
 
 
 
 
 
Preferred stock
 
(21.3
)
(21.5
)
(21.5
)
(23.0
)
(23.2
)
Additional paid-in capital on preferred stock
 
0.1

(0.1
)
(0.1
)
(0.1
)
(0.1
)
Unearned ESOP shares
 
1.1

1.1

1.1

1.3

1.5

Noncontrolling interests
 
(0.6
)
(0.8
)
(1.1
)
(1.0
)
(0.9
)
Total common stockholders' equity
 
162.6

166.7

172.8

177.2

176.0

Adjustments:
 
 
 
 
 
 
Goodwill
 
(26.4
)
(26.4
)
(26.4
)
(26.4
)
(26.4
)
Certain identifiable intangible assets (other than MSRs)
 
(0.4
)
(0.4
)
(0.5
)
(0.5
)
(0.5
)
Goodwill and other intangibles on nonmarketable equity securities (included in other assets)
 
(1.9
)
(2.1
)
(2.3
)
(2.3
)
(2.1
)
Applicable deferred taxes related to goodwill and other intangible assets (2)
 
0.8

0.8

0.8

0.8

0.8

Other
 

0.2

0.3

0.4

0.3

Common Equity Tier 1 under Basel III
(A)
134.7

138.8

144.7

149.2

148.1

Total risk-weighted assets (RWAs) anticipated under Basel III (3)(4)
(B)
$
1,264.7

1,245.8

1,246.2

1,246.7

1,243.1

Common Equity Tier 1 to total RWAs anticipated under Basel III (4)
(A)/(B)
10.7
%
11.1

11.6

12.0

11.9

(1)
Basel III capital rules, adopted by the Federal Reserve Board on July 2, 2013, revised the definition of capital, increased minimum capital ratios, and introduced a minimum Common Equity Tier 1 (CET1) ratio. The rules are being phased in through the end of 2021. The Basel III capital requirements for calculating CET1 and tier 1 capital, along with RWAs, are fully phased-in.
(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)
The final Basel III capital rules provide for two capital frameworks: the Standardized Approach and the Advanced Approach applicable to certain institutions. Accordingly, in the assessment of our capital adequacy, we must report the lower of our CET1, tier 1 and total capital ratios calculated under the Standardized Approach and under the Advanced Approach. Because the final determination of our CET1 ratio and which approach will produce the lower CET1 ratio as of March 31, 2020, is subject to detailed analysis of considerable data, our CET1 ratio at that date has been estimated using the Basel III definition of capital under the Basel III Standardized Approach RWAs. The capital ratio for December 31, September 30, June 30 and March 31, 2019, was calculated under the Basel III Standardized Approach RWAs.
(4)
The Company’s March 31, 2020, RWAs and capital ratio are preliminary estimates.




- 36 -

Wells Fargo & Company and Subsidiaries
OPERATING SEGMENT RESULTS (1)
(income/expense in millions,
average balances in billions)
Community
Banking
 
 
Wholesale
Banking
 
 
Wealth and Investment Management
 
 
Other (2)
 
 
Consolidated
Company
 
 
2020

 
2019

 
2020

 
2019

 
2020

 
2019

 
2020

 
2019

 
2020

 
2019

Quarter ended Mar 31,
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income (3)
$
6,787

 
7,248

 
4,136

 
4,534

 
867

 
1,101

 
(478
)
 
(572
)
 
11,312

 
12,311

Provision (reversal of provision) for credit losses
1,718

 
710

 
2,288

 
134

 
8

 
4

 
(9
)
 
(3
)
 
4,005

 
845

Noninterest income
2,709

 
4,502

 
1,681

 
2,577

 
2,848

 
2,978

 
(833
)
 
(759
)
 
6,405

 
9,298

Noninterest expense
7,116

 
7,689

 
3,763

 
3,838

 
3,103

 
3,303

 
(934
)
 
(914
)
 
13,048

 
13,916

Income (loss) before income tax expense (benefit)
662

 
3,351

 
(234
)
 
3,139

 
604

 
772

 
(368
)
 
(414
)
 
664

 
6,848

Income tax expense (benefit) (4)
644

 
424

 
(546
)
 
369

 
153

 
192

 
(92
)
 
(104
)
 
159

 
881

Net income (loss) before noncontrolling interests
18

 
2,927

 
312

 
2,770

 
451

 
580

 
(276
)
 
(310
)
 
505

 
5,967

Less: Net income (loss) from noncontrolling interests
(137
)
 
104

 
1

 

 
(12
)
 
3

 

 

 
(148
)
 
107

Net income (loss)
$
155

 
2,823

 
311

 
2,770

 
463

 
577

 
(276
)
 
(310
)
 
653

 
5,860

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average loans
$
462.6

 
458.2

 
484.5

 
476.4

 
78.5

 
74.4

 
(60.6
)
 
(59.0
)
 
965.0

 
950.0

Average assets
1,039.2

 
1,015.4

 
885.0

 
844.5

 
88.1

 
83.2

 
(61.6
)
 
(60.0
)
 
1,950.7

 
1,883.1

Average deposits
798.6

 
765.6

 
456.6

 
409.8

 
151.4

 
153.2

 
(68.6
)
 
(66.5
)
 
1,338.0

 
1,262.1

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
The management accounting process measures the performance of the operating segments based on our management structure and is not necessarily comparable with other similar information for other financial services companies. We define our operating segments by product type and customer segment.
(2)
Includes the elimination of certain items that are included in more than one business segment, substantially all of which represents products and services for Wealth and Investment Management customers served through Community Banking distribution channels.
(3)
Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets as well as interest credits for any funding of a segment available to be provided to other segments. The cost of liabilities includes actual interest expense on segment liabilities as well as funding charges for any funding provided from other segments.
(4)
Income tax expense (benefit) for our Wholesale Banking operating segment included income tax credits related to low-income housing and renewable energy investments of $491 million and $427 million for first quarter 2020 and 2019, respectively.




- 37 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER OPERATING SEGMENT RESULTS (1)
 
 
 
 
 
 
 
Quarter ended
 
(income/expense in millions, average balances in billions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

COMMUNITY BANKING
 
 
 
 
 
 
 
 
 
Net interest income (2)
$
6,787

 
6,527

 
6,769

 
7,066

 
7,248

Provision for credit losses
1,718

 
522

 
608

 
479

 
710

Noninterest income
2,709

 
3,995

 
4,470

 
4,739

 
4,502

Noninterest expense
7,116

 
9,029

 
8,766

 
7,212

 
7,689

Income before income tax expense
662

 
971

 
1,865

 
4,114

 
3,351

Income tax expense
644

 
497

 
667

 
838

 
424

Net income before noncontrolling interests
18

 
474

 
1,198

 
3,276

 
2,927

Less: Net income (loss) from noncontrolling interests
(137
)
 
45

 
199

 
129

 
104

Segment net income
$
155

 
429

 
999

 
3,147

 
2,823

Average loans
$
462.6

 
462.5

 
459.0

 
457.7

 
458.2

Average assets
1,039.2

 
1,039.3

 
1,033.9

 
1,024.8

 
1,015.4

Average deposits
798.6

 
794.6

 
789.7

 
777.6

 
765.6

WHOLESALE BANKING
 
 
 
 
 
 
 
 
 
Net interest income (2)
$
4,136

 
4,248

 
4,382

 
4,535

 
4,534

Provision for credit losses
2,288

 
124

 
92

 
28

 
134

Noninterest income
1,681

 
2,311

 
2,560

 
2,530

 
2,577

Noninterest expense
3,763

 
3,743

 
3,889

 
3,882

 
3,838

Income (loss) before income tax expense
(234
)
 
2,692

 
2,961

 
3,155

 
3,139

Income tax expense (benefit) (3)
(546
)
 
197

 
315

 
365

 
369

Net income before noncontrolling interests
312

 
2,495

 
2,646

 
2,790

 
2,770

Less: Net income from noncontrolling interests
1

 
2

 
2

 
1

 

Segment net income
$
311

 
2,493

 
2,644

 
2,789

 
2,770

Average loans
$
484.5

 
476.5

 
474.3

 
474.0

 
476.4

Average assets
885.0

 
877.6

 
869.2

 
852.2

 
844.5

Average deposits
456.6

 
447.4

 
422.0

 
410.4

 
409.8

WEALTH AND INVESTMENT MANAGEMENT
 
 
 
 
 
 
 
 
 
Net interest income (2)
$
867

 
910

 
989

 
1,037

 
1,101

Provision (reversal of provision) for credit losses
8

 
(1
)
 
3

 
(1
)
 
4

Noninterest income
2,848

 
3,161

 
4,152

 
3,013

 
2,978

Noninterest expense
3,103

 
3,729

 
3,431

 
3,246

 
3,303

Income before income tax expense
604

 
343

 
1,707

 
805

 
772

Income tax expense
153

 
85

 
426

 
201

 
192

Net income before noncontrolling interests
451

 
258

 
1,281

 
604

 
580

Less: Net income (loss) from noncontrolling interests
(12
)
 
4

 
1

 
2

 
3

Segment net income
$
463

 
254

 
1,280

 
602

 
577

Average loans
$
78.5

 
77.1

 
75.9

 
75.0

 
74.4

Average assets
88.1

 
85.5

 
84.7

 
83.8

 
83.2

Average deposits
151.4

 
145.0

 
142.4

 
143.5

 
153.2

OTHER (4)
 
 
 
 
 
 
 
 
 
Net interest income (2)
$
(478
)
 
(485
)
 
(515
)
 
(543
)
 
(572
)
Provision (reversal of provision) for credit losses
(9
)
 
(1
)
 
(8
)
 
(3
)
 
(3
)
Noninterest income
(833
)
 
(807
)
 
(797
)
 
(793
)
 
(759
)
Noninterest expense
(934
)
 
(887
)
 
(887
)
 
(891
)
 
(914
)
Loss before income tax benefit
(368
)
 
(404
)
 
(417
)
 
(442
)
 
(414
)
Income tax benefit
(92
)
 
(101
)
 
(104
)
 
(110
)
 
(104
)
Net loss before noncontrolling interests
(276
)
 
(303
)
 
(313
)
 
(332
)
 
(310
)
Less: Net income from noncontrolling interests

 

 

 

 

Other net loss
$
(276
)
 
(303
)
 
(313
)
 
(332
)
 
(310
)
Average loans
$
(60.6
)
 
(59.6
)
 
(59.4
)
 
(59.2
)
 
(59.0
)
Average assets
(61.6
)
 
(60.6
)
 
(60.4
)
 
(60.2
)
 
(60.0
)
Average deposits
(68.6
)
 
(65.1
)
 
(62.7
)
 
(62.5
)
 
(66.5
)
CONSOLIDATED COMPANY
 
 
 
 
 
 
 
 
 
Net interest income (2)
$
11,312

 
11,200

 
11,625

 
12,095

 
12,311

Provision for credit losses
4,005

 
644

 
695

 
503

 
845

Noninterest income
6,405

 
8,660

 
10,385

 
9,489

 
9,298

Noninterest expense
13,048

 
15,614

 
15,199

 
13,449

 
13,916

Income before income tax expense
664

 
3,602

 
6,116

 
7,632

 
6,848

Income tax expense
159

 
678

 
1,304

 
1,294

 
881

Net income before noncontrolling interests
505

 
2,924

 
4,812

 
6,338

 
5,967

Less: Net income (loss) from noncontrolling interests
(148
)
 
51

 
202

 
132

 
107

Wells Fargo net income
$
653

 
2,873

 
4,610

 
6,206

 
5,860

Average loans
$
965.0

 
956.5

 
949.8

 
947.5

 
950.0

Average assets
1,950.7

 
1,941.8

 
1,927.4

 
1,900.6

 
1,883.1

Average deposits
1,338.0

 
1,321.9

 
1,291.4

 
1,269.0

 
1,262.1

(1)
The management accounting process measures the performance of the operating segments based on our management structure and is not necessarily comparable with other similar information for other financial services companies. We define our operating segments by product type and customer segment.
(2)
Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets as well as interest credits for any funding of a segment available to be provided to other segments. The cost of liabilities includes actual interest expense on segment liabilities as well as funding charges for any funding provided from other segments.
(3)
Income tax expense (benefit) for our Wholesale Banking operating segment included income tax credits related to low-income housing and renewable energy investments of $491 million, $478 million, $422 million, $423 million, and $427 million for the quarters ended March 31, 2020, and December 31, September 30, June 30 and March 31, 2019, respectively.
(4)
Includes the elimination of certain items that are included in more than one business segment, substantially all of which represents products and services for Wealth and Investment Management customers served through Community Banking distribution channels.




- 38 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING

 Quarter ended
 
(in millions)
Mar 31,
2020


Dec 31,
2019


Sep 30,
2019


Jun 30,
2019


Mar 31,
2019

MSRs measured using the fair value method:









Fair value, beginning of quarter
$
11,517


11,072


12,096


13,336


14,649

Servicing from securitizations or asset transfers (1)
461


654


538


400


341

Sales and other (2)
(31
)



(4
)

(1
)

(281
)
Net additions
430


654


534


399


60

Changes in fair value:









Due to changes in valuation model inputs or assumptions:









Mortgage interest rates (3)
(3,022
)

405


(718
)

(1,153
)

(940
)
Servicing and foreclosure costs (4)
(73
)

45


13


(22
)

12

Discount rates (5)
27


(34
)

188


(109
)

100

Prepayment estimates and other (6)
(189
)

(54
)

(445
)

206


(63
)
Net changes in valuation model inputs or assumptions
(3,257
)

362


(962
)

(1,078
)

(891
)
Changes due to collection/realization of expected cash flows over time (7)
(564
)

(571
)

(596
)

(561
)

(482
)
Total changes in fair value
(3,821
)

(209
)

(1,558
)

(1,639
)

(1,373
)
Fair value, end of quarter
$
8,126


11,517


11,072


12,096


13,336

(1)
Includes impacts associated with exercising cleanup calls on securitizations as well as our right to repurchase delinquent loans from Government National Mortgage Association (GNMA) loan securitization pools. Total reported 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 of total reported MSRs if the sales or transfers are related to nonperforming loan portfolios or portfolios with servicing liabilities.
(3)
Includes prepayment speed changes as well as other valuation changes due to changes in mortgage interest rates (such as changes in estimated interest earned on custodial deposit balances).
(4)
Includes costs to service and unreimbursed foreclosure costs.
(5)
Reflects discount rate assumption change, excluding portion attributable to changes in mortgage interest rates.
(6)
Represents changes driven by other valuation model inputs or assumptions including prepayment speed estimation changes and other assumption updates. Prepayment speed estimation changes are influenced by observed changes in borrower behavior and other external factors that occur independent of interest rate changes.
(7)
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.


 
Quarter ended
 
(in millions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Amortized MSRs:
 
 
 
 
 
 
 
 
 
Balance, beginning of quarter
$
1,430

 
1,397

 
1,407

 
1,427

 
1,443

Purchases
8

 
35

 
25

 
16

 
24

Servicing from securitizations or asset transfers
34

 
69

 
33

 
33

 
26

Amortization
(66
)
 
(71
)
 
(68
)
 
(69
)
 
(66
)
Balance, end of quarter (1)
$
1,406

 
1,430

 
1,397

 
1,407

 
1,427

Fair value of amortized MSRs:
 
 
 
 
 
 
 
 
 
Beginning of quarter
$
1,872

 
1,813

 
1,897

 
2,149

 
2,288

End of quarter
1,490

 
1,872

 
1,813

 
1,897

 
2,149

(1)
Commercial amortized MSRs are evaluated for impairment purposes by the following risk strata: agency (GSEs) for multi-family properties and non-agency. There was no valuation allowance recorded for the periods presented on the commercial amortized MSRs.



- 39 -

Wells Fargo & Company and Subsidiaries
FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING (CONTINUED)
 
 
Quarter ended
 
(in millions)
 
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Servicing income, net:
 
 
 
 
 
 
 
 
 
 
Servicing fees (1)
 
$
758

 
780

 
806

 
830

 
841

Changes in fair value of MSRs carried at fair value:
 
 
 
 
 
 
 
 
 
 
Due to changes in valuation model inputs or assumptions (2)
(A)
(3,257
)
 
362

 
(962
)
 
(1,078
)
 
(891
)
Changes due to collection/realization of expected cash flows over time (3)
 
(564
)
 
(571
)
 
(596
)
 
(561
)
 
(482
)
Total changes in fair value of MSRs carried at fair value
 
(3,821
)
 
(209
)
 
(1,558
)
 
(1,639
)
 
(1,373
)
Amortization
 
(66
)
 
(71
)
 
(68
)
 
(69
)
 
(66
)
Net derivative gains (losses) from economic hedges (4)
(B)
3,400

 
(477
)
 
678

 
1,155

 
962

Total servicing income, net
 
$
271

 
23

 
(142
)
 
277

 
364

Market-related valuation changes to MSRs, net of hedge results (2)(4)
(A)+(B)
$
143

 
(115
)
 
(284
)
 
77

 
71

(1)
Includes contractually specified servicing fees, late charges and other ancillary revenues, net of unreimbursed direct servicing costs.
(2)
Refer to the changes in fair value MSRs table on the previous page for more detail.
(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)
Represents results from economic hedges used to hedge the risk of changes in fair value of MSRs.



(in billions)
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019

 
Mar 31,
2019

Managed servicing portfolio (1):
 
 
 
 
 
 
 
 
 
Residential mortgage servicing:
 
 
 
 
 
 
 
 
 
Serviced for others
$
1,038

 
1,063

 
1,083

 
1,107

 
1,125

Owned loans serviced (2)
341

 
343

 
346

 
340

 
331

Subserviced for others
3

 
2

 
3

 
5

 
26

Total residential servicing
1,382

 
1,408

 
1,432

 
1,452

 
1,482

Commercial mortgage servicing:
 
 
 
 
 
 
 
 
 
Serviced for others
564

 
566

 
551

 
548

 
552

Owned loans serviced
124

 
124

 
122

 
123

 
122

Subserviced for others
9

 
9

 
9

 
9

 
9

Total commercial servicing
697

 
699

 
682

 
680

 
683

Total managed servicing portfolio
$
2,079

 
2,107

 
2,114

 
2,132

 
2,165

Total serviced for others
$
1,602

 
1,629

 
1,634

 
1,655

 
1,677

Ratio of MSRs to related loans serviced for others
0.60
%
 
0.79

 
0.76

 
0.82

 
0.88

Weighted-average note rate (mortgage loans serviced for others)
4.20

 
4.25

 
4.29

 
4.33

 
4.34

(1)
The components of our managed servicing portfolio are presented at unpaid principal balance for loans serviced and subserviced for others and at book value for owned loans serviced.
(2)
Excludes loans serviced by third parties.



- 40 -

Wells Fargo & Company and Subsidiaries
SELECTED FIVE QUARTER RESIDENTIAL MORTGAGE PRODUCTION DATA
 
 
Quarter ended
 
 
 
Mar 31,
2020

 
Dec 31,
2019

 
Sep 30,
2019

 
Jun 30,
2019


Mar 31,
2019

Net gains on mortgage loan origination/sales activities (in millions):
 
 
 
 
 
 
 
 
 
 
Residential
(A)
$
360

 
503

 
461

 
322

 
232

Commercial
 
23

 
101

 
106

 
83

 
47

Residential pipeline and unsold/repurchased loan management (1)
 
(275
)
 
156

 
41

 
76

 
65

Total
 
$
108

 
760

 
608

 
481

 
344

Application data (in billions):
 
 
 
 
 
 
 
 
 
 
Wells Fargo first mortgage quarterly applications
 
$
108

 
72

 
85

 
90

 
64

Refinances as a percentage of applications
 
65
%
 
51

 
50

 
44

 
44

Wells Fargo first mortgage unclosed pipeline, at quarter end
 
$
62

 
33

 
44

 
44

 
32

Residential real estate originations:
 
 
 
 
 
 
 
 
 
 
Purchases as a percentage of originations
 
48
%
 
50

 
60

 
68

 
70

Refinances as a percentage of originations
 
52

 
50

 
40

 
32

 
30

Total
 
100
%
 
100

 
100

 
100

 
100

Wells Fargo first mortgage loans (in billions):
 
 
 
 
 
 
 
 
 
 
Retail
 
$
23

 
27

 
27

 
26

 
14

Correspondent
 
25

 
33

 
30

 
27

 
18

Other (2)
 

 

 
1

 

 
1

Total quarter-to-date
 
$
48

 
60

 
58

 
53

 
33

Held-for-sale
(B)
$
33

 
42

 
38

 
33

 
22

Held-for-investment
 
15

 
18

 
20

 
20

 
11

Total quarter-to-date
 
$
48

 
60

 
58

 
53

 
33

Total year-to-date
 
$
48

 
204

 
144

 
86

 
33

Production margin on residential held-for-sale mortgage originations
(A)/(B)
1.08
%
 
1.21

 
1.21

 
0.98

 
1.05

(1)
Predominantly includes the results of sales of modified GNMA loans, interest rate management activities and changes in estimate to the liability for mortgage loan repurchase losses.
(2)
Consists of home equity loans and lines.

Exhibit 99.2 1Q20 Quarterly Supplement April 14, 2020 © 2020 Wells Fargo Bank, N.A. All rights reserved.


 
Table of contents 1Q20 Results Providing support for our customers Pages 2 Wholesale Banking 28 Providing support for our employees 3 Wealth and Investment Management 29 Providing support for our communities 4 Credit quality of the loan portfolio 30 Supporting The CARES Act 5 Oil and gas loan portfolio performance 31 1Q20 Earnings 6 Current expected credit losses (CECL) 32 Strong capital and liquidity positions 7 Capital 33 Income Statement overview (linked quarter) 8 Balance Sheet and credit overview (linked quarter) 9 Appendix Managing under the asset cap 10 Real estate 1-4 family mortgage portfolio 35 Average loans 11 Consumer credit card portfolio 36 Period-end loans 12 Auto portfolios 37 Consumer loan trends 13 Student lending portfolio 38 Commercial loan trends 14 Trading-related revenue 39 Commercial & Industrial loans and lease financing by industry 15 Wholesale Banking adjusted efficiency ratio for income tax credits 40 Industries with escalated monitoring: Oil and gas, and Retail 16 Common Equity Tier 1 41 Industries with escalated monitoring: Entertainment and recreation, and Transportation services 17 Forward-looking statements 42 Industries with escalated monitoring: Commercial Real Estate loans by property type 18 Average deposit trends and costs 19 Period-end deposit trends 20 Net interest income 21 Noninterest income 22 Net losses from equity securities including deferred compensation 23 Noninterest expense and efficiency ratio 24 Community Banking 25 Community Banking metrics 26-27 Financial results reported in this document are preliminary. Final financial results and other disclosures will be reported in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, and may differ materially from the results and disclosures in this document due to, among other things, the completion of final review procedures, the occurrence of subsequent events, or the discovery of additional information. Wells Fargo 1Q20 Supplement 1


 
Providing support for our customers COVID-19 actions: . Offering fee waivers, payment deferrals and other expanded assistance for credit card, auto, mortgage, small business and personal lending customers who contact us . Granting immediate 90-day payment suspension for any Wells Fargo Home Lending customer who requests assistance . Suspended residential property foreclosures and evictions . Suspended involuntary auto repossessions . In the month of March alone, commercial customers utilized over $80 billion of their loan commitments . From March 9 through April 10: - Helped more than 1.3 million consumer and small business customers by deferring payments and waiving fees - Deferred over 1 million payments, representing $2.8 billion of principal and interest payments for loans that we service or hold on our balance sheet - Provided over 900,000 fee waivers, exceeding $30 million Additional actions taken in first quarter: . Announced plans to introduce a new checkless account which will limit spending to the amount available in the account and customers will not incur overdrafts or insufficient fund fees; expected to be available early next year . Announced plans to introduce an account that includes checks and will cap overdraft or insufficient funds fees at once per month; expected to be available early next year Wells Fargo 1Q20 Supplement 2


 
Providing support for our employees COVID-19 actions: . For certain qualifying employees, we are making up to $1,600 in combined payments: - A one-time cash award to approximately 165,000 employees, which will be reflected in their paychecks this week - For employees whose roles require they come into the office to serve customers or other employees, we are making additional cash payments . Eliminated the seven-day waiting period under our short-term disability plan for U.S.-based employees so that, if they get a positive COVID-19 diagnosis, they will not need to use PTO . Updated our U.S. medical plan to eliminate coinsurance and fully cover the cost of any medically necessary screening and testing for COVID-19 . Providing financial support for eligible employees of $100 per day for those seeking child care through their own personal networks for up to 20 days . Supporting front-line employees by paying employees for hours of work lost due to facility closures . Enabled approximately 180,000 employees to work remotely . Made $10 million grant to the WE Care Employee relief fund Additional actions taken in first quarter: . Announced plans to raise minimum hourly pay levels in the majority of our U.S. markets ranging from $15 to $20. This change will increase pay for more than 20,000 employees and will take effect by the end of 2020 Wells Fargo 1Q20 Supplement 3


 
Providing support for our communities COVID-19 actions: . Directing $175 million in charitable donations from the Wells Fargo Foundation to help address food, shelter, small business and housing stability, as well as to provide help to public health organizations fighting to contain the spread of COVID-19 . Providing $1 million to Feeding America to support their 200 member foodbanks as they work to feed people during this time of crisis . Providing $1 million to the CDC Foundation to meet emerging needs . Providing $250,000 to the International Medical Corps . Giving substantial fees received under the Payroll Protection Program to nonprofits focused on small businesses Additional actions taken in first quarter: . Announced that we are seeking to invest up to $50 million in African American Minority Depository Institutions as part of our commitment to supporting economic growth in African American communities . Announced plans to expand our credit offering to provide DACA recipients access to education loans; personal lines and loans; credit cards; auto loans and small business credit. Additionally, we will make mortgage and home equity loans to eligible DACA customers except where prohibited by specific investors Wells Fargo 1Q20 Supplement 4


 
Supporting The CARES Act Consumers: . We are working with industry trade groups and the U.S. Treasury in preparation to distribute millions of Economic Impact Payments to Americans as quickly as possible . We expect the distribution of payments to be made to our customers beginning early this week . For those that receive checks, we have implemented changes to our ATMs and mobile app to make it more convenient to use those depository options instead of going into a branch Small Businesses: . Payroll Protection Program (PPP) includes fully forgivable loans to help small businesses maintain payrolls during the COVID-19 pandemic . We have expanded our participation in the PPP to provide additional relief for our customers and our communities . Customers must meet the overall Small Business Administration program requirements, have a Wells Fargo Business checking account as of Feb. 15, 2020, and be enrolled in business online banking . Through April 10, we have received more than 370,000 indications of interest from our customers Wells Fargo 1Q20 Supplement 5


 
1Q20 Earnings Wells Fargo Net Income . Earnings of $653 million included: ($ in millions, except EPS) - $4.0 billion of provision expense for credit losses: • $2.9 billion reserve build for loans (1) 6,206 • $909 million of net charge-offs for loans 5,860 • $172 million of provision expense for debt securities, including $141 million reserve build (1) and $31 million in net charge-offs 4,610 - $950 million of securities impairment (recognized in net gains (losses) from equity securities and debt securities) - $621 million of net losses on equity securities from deferred compensation plan investment results, which $1.30 were largely offset by a $598 million decline in employee $1.20 2,873 benefits expense (net gains (losses) from equity securities and employee benefits expense) $0.92 • Please see page 23 for additional information - $464 million of operating losses (operating losses) $0.60 - $463 million gain on the sale of residential mortgage loans, reclassified to held for sale in 2019 (other 653 noninterest income) $0.01 - $379 million of mortgage banking income vs. $783 million in 4Q19 on higher losses on loans held for sale, and higher losses on the valuation of our mortgage servicing rights 1Q19 2Q19 3Q19 4Q19 1Q20 asset as a result of assumption updates, primarily Diluted earnings per common share prepayment assumptions (mortgage banking income) . Diluted earnings per common share (EPS) of $0.01 included: - The redemption of our remaining Series K Preferred Stock, which reduced EPS by $0.06 per share as a result of the elimination of the purchase accounting discount (1) Reserve build represents the amount by which the provision for credit losses exceeds net charge-offs, while reserve release represents the amount by which net charge-offs exceed the recorded on these shares at the time of the Wachovia provision for credit losses. acquisition (preferred stock dividends) Wells Fargo 1Q20 Supplement 6


 
Strong capital and liquidity positions . Capital and liquidity positions well in excess of regulatory minimums 1Q20 Common Equity Tier 1 Ratio (1) 1Q20 Liquidity Coverage Ratio (LCR) (2) 121% 21% 10.7% above 10% 170 bps 100% regulatory above minimum 9% regulatory minimum Regulatory Minimum Current Internal Target 1Q20 Estimate Regulatory Minimum 1Q20 Estimate (1) 1Q20 capital ratio is a preliminary estimate. See page 41 for additional information regarding the Common Equity Tier 1 capital ratio. (2) 1Q20 liquidity coverage ratio (LCR) is a preliminary estimate. LCR is calculated as high-quality liquid assets divided by projected net cash outflows, as each is defined under the LCR rule. Wells Fargo 1Q20 Supplement 7


 
Income Statement overview (linked quarter (LQ)) Total revenue . Revenue of $17.7 billion Net interest income . NII up $112 million, and NIM up 5 bps to 2.58% predominantly reflecting the benefit of hedge ineffectiveness accounting results and lower MBS premium amortization, which was largely offset by balance sheet repricing driven by the impact of the lower interest rate environment and one fewer day in the quarter Noninterest income . Noninterest income down $2.3 billion - Market sensitive revenue (1) down $1.7 billion, including $1.9 billion of lower net gains from equity securities on an $811 million increase in impairment and an $857 million decline in deferred compensation plan investment results (P&L neutral) . Please see page 23 for additional information on net losses from equity securities, including deferred compensation - Mortgage banking down $404 million on unrealized losses on residential and commercial mortgage loans held for sale (HFS) of ~ $143 million and ~ $62 million, respectively, due to illiquid market conditions and a widening of credit spreads, as well as $192 million of higher losses on the valuation of our mortgage servicing rights (MSR) asset as a result of assumption updates, primarily prepayment assumptions - Card fees down $128 million on lower interchange income due to seasonality and the impact of COVID-19 on consumer spending - Other income relatively flat as $349 million higher gains from loan sales were offset by lower gains on the sale of businesses from a 4Q19 which included a $362 million gain from the sale of Eastdil Noninterest expense . Noninterest expense down $2.6 billion - Operating losses down $1.5 billion on lower litigation accruals - Employee benefits expense down $306 million, as $861 million of lower deferred compensation expense (largely offset by higher net losses from equity securities) was partially offset by seasonally higher payroll tax and 401(k) expense - Other expense categories down in the quarter included outside professional services, and technology and equipment Income tax expense . 19.5% effective income tax rate included net discrete income tax expense of $141 million driven by the accounting for stock compensation activity, the net impact of accounting for uncertain tax positions, and the outcome of U.S. federal income tax examinations All comparisons are 1Q20 compared with 4Q19. (1) Consists of net gains (losses) from trading activities, debt securities and equity securities. Wells Fargo 1Q20 Supplement 8


 
Balance Sheet and credit overview (linked quarter) Loans . Up $47.6 billion - Commercial loans up $52.0 billion on growth in commercial & industrial loans, and commercial real estate loans - Consumer loans down $4.4 billion despite growth in auto loans Cash and short-term . Down $6.1 billion investments Debt and equity . Trading assets down $3.1 billion driven by lower equity securities valuations securities . Debt securities (AFS and HTM) up $3.7 billion as purchases were partially offset by run-off and sales; ~$38.9 billion of gross purchases in 1Q20, largely federal agency mortgage- backed securities (MBS), vs. ~$15.6 billion in 4Q19 Deposits . Up $53.9 billion reflecting growth in both commercial and consumer deposits Short-term borrowings . Down $12.2 billion on actions taken to manage to the asset cap Long-term debt . Up $9.2 billion as $18.5 billion of issuances were partially offset by $15.7 billion of redemptions and maturities Total stockholders’ . Down $4.4 billion to $182.7 billion driven by dividends and net share repurchases equity . Common shares outstanding down 38.0 million shares, or 1%, on net share repurchases of $2.9 billion Credit . Net loan charge-offs of $909 million, or 38 bps of average loans (annualized), up $140 million, or 6 bps . Nonperforming assets of $6.4 billion, up $759 million predominantly on higher commercial nonaccruals . $3.1 billion reserve build reflects forecasted credit deterioration due to the COVID-19 pandemic, credit weakness in oil and gas, and stronger than expected loan growth including draws on loan commitments, and includes a $2.9 billion reserve build for loans and a $141 million reserve build for debt securities Period-end balances. All comparisons are 1Q20 compared with 4Q19. Wells Fargo 1Q20 Supplement 9


 
Managing under the asset cap As expected in an uncertain economy like our customers are facing today due to the COVID-19 pandemic, we have experienced significant loan draws and meaningful deposit inflows, which has resulted in our balance sheet expanding LQ Change in period-end Assets ($ in billions) LQ Change in period-end Liabilities and Equity ($ in billions) 65 55 54 48 55 45 45 35 35 25 17 25 15 11 10 15 7 9 7 5 5 1 (5) (5) (5) (15) (15) (13) (16) (12) (25) (25) Cash & Fed Funds AFS & HTM Trading Loans Derivatives Other Deposits Short-Term Long-Term Derivatives Equity Other Equivalents Sold Securities Securities Borrowings Debt & Repo . While period-end assets were $1.981 trillion, we continued to operate in compliance with the asset cap of $1.952 trillion which is measured at each quarter-end based on a two-quarter daily average (1) . As of March 31, 2020, the two-quarter daily average for our assets was $1.943 trillion (1) (2) . We are actively working to create balance sheet capacity to lend and help our customers during these unprecedented and challenging times (1) Assets calculated under the FRB consent order imposing the asset cap are equal to total assets excluding a portion of OCI. (2) The two-quarter daily average for our assets as of March 31, 2020 is a preliminary estimate. Wells Fargo 1Q20 Supplement 10


 
Average loans Average Loans Outstanding . Total average loans of $965.0 billion, up $15.0 billion ($ in billions) year-over-year (YoY) and $8.5 billion linked quarter (LQ) - Commercial loans up $7.9 billion LQ on higher commercial 965.0 and industrial loans 950.0 956.5 947.5 949.8 - Consumer loans up $586 million LQ on growth in first mortgage loans and auto loans . Total average loan yield of 4.20%, down 17 bps LQ and 64 bps YoY reflecting the repricing impacts of lower interest rates and continued loan mix changes 4.84% 4.80% 4.61% 4.37% 4.20% 1Q19 2Q19 3Q19 4Q19 1Q20 Total average loan yield Wells Fargo 1Q20 Supplement 11


 
Period-end loans Period-end Loans Outstanding . Total period-end loans of $1.0 trillion, up $61.6 billion, or ($ in billions) 6%, YoY on growth in commercial and industrial (C&I) loans, first mortgage loans, auto loans, and credit card 1,009.8 loans 948.2 949.9 954.9 962.3 - Commercial loan growth of $55.5 billion driven by growth in C&I loans - Consumer loans up $6.1 billion as growth in first mortgage loans, auto loans and credit card loans was partially offset by declines in junior lien mortgage loans and other revolving credit and installment loans . Total period-end loans up $47.6 billion, or 5%, LQ on growth in commercial and industrial loans, commercial real estate loans, and auto loans - Commercial loan growth of $52.0 billion included more than $80 billion of gross draws on Commercial Banking and Corporate & Investment Banking loans in the month of March 1Q19 2Q19 3Q19 4Q19 1Q20 • Wholesale Banking revolving loan utilization in March (1) of Commercial Consumer 48.6%, up 860 bps LQ – Consumer loans down $4.4 billion as declines in credit card loans, consumer real estate loans, and other revolving credit and installment loans were partially offset by growth in auto loans • Draws on first and junior lien mortgage loans (2) were $2.7 billion in 1Q20, up 25% YoY, with draws in March of $1.2 billion, up 80% YoY - Please see pages 13 and 14 for additional information (1) Preliminary estimate. (2) Reflects draws on first and junior lien mortgage loans performed more than 90 days after origination. Wells Fargo 1Q20 Supplement 12


 
Consumer loan trends Consumer loans up $6.1 billion YoY; down $4.4 billion LQ as declines in credit card, consumer real estate, and other revolving credit were partially offset by growth in auto loans ($ in billions, Period-end balances) B= billion, MM = million . First mortgage loans up $8.4B YoY Consumer Real Estate 1-4 Credit Card . Credit card up Family First & Junior Lien and down $927MM LQ 40 $303MM YoY on - LQ decrease driven by paydowns, Mortgage purchase volume 300 partially offset by $14.3B of 36 growth, and down originations 250 $2.4B LQ driven by . Junior lien mortgage loans down 32 seasonality and fewer 200 $4.6B YoY and $982MM LQ as new account openings 150 continued paydowns more than 28 offset new originations and $1.8B of 100 customer draws (1) 24 50 20 0 1Q19 4Q19 1Q20 1Q19 4Q19 1Q20 1-4 Family First Junior Lien Other Revolving Credit and Automobile 50 36 Installment . Auto loans up $3.7B YoY and . Other revolving credit $695MM LQ 32 and installment loans 45 . Originations of auto loans up down $1.7B YoY on 19% YoY reflecting a continued lower student loans and 28 40 emphasis on growing auto margin loans, and down loans following the $793MM LQ 35 restructuring of the business, 24 and down 5% LQ reflecting a 30 slowdown in March due to 20 1Q19 4Q19 1Q20 COVID-19 1Q19 4Q19 1Q20 (1) Reflects draws on junior lien mortgage loans performed more than 90 days after origination. Wells Fargo 1Q20 Supplement 13


 
Commercial loan trends Commercial loans up $55.5 billion YoY and $52.0 billion LQ ($ in billions, Period-end balances) B= billion, MM = million Commercial and industrial (C&I) loans up $50.9B LQ on broad-based growth 430 Commercial and Industrial across the lines of business largely driven by draws of revolving lines due to 410 the economic slowdown associated with the COVID-19 pandemic, 390 including growth of 370 . $28.4B in Corporate & Investment Banking on growth in Corporate Transactional 350 Banking reflecting higher draws across all industry verticals, and growth in Asset 330 Backed Finance on higher mortgage banking financing, subscription finance, and higher draws 310 . $10.2B in Commercial Banking on higher draws in Middle Market Banking and 290 Government & Institutional Banking 270 . $7.1B in Commercial Capital as higher draws were partially offset by seasonal 250 paydowns 1Q19 4Q19 1Q20 . $4.2B in Commercial Real Estate credit facilities to REITs and other non-depository financial institutions Commercial Real Estate 150 145 Commercial real estate loans up $1.8B LQ . 140 CRE mortgage up $943MM on higher Structured Real Estate mortgage originations . CRE construction up $873MM on higher line usage 135 130 125 120 Lease financing down $695MM LQ predominantly driven by declines in Equipment 115 Finance, Renewable Energy, and other energy lending 110 105 100 1Q19 4Q19 1Q20 Wells Fargo 1Q20 Supplement 14


 
Commercial & Industrial loans and lease financing by industry (1) ($ in millions) Loans Outstanding Total Commitments Financials except banks $ 126,270 30% $ 204,143 28% Retail 27,844 7% 43,801 6% Real estate and construction 27,222 6% 48,977 7% Technology, telecom and media 26,896 6% 56,462 8% Equipment, machinery and parts manufacturing 25,054 6% 44,641 6% Banks 20,282 5% 20,948 3% Materials and commodities 19,118 5% 39,385 5% Health care and pharmaceuticals 18,785 4% 32,230 4% Automobile related 17,436 4% 26,032 4% Food and beverage manufacturing 16,908 4% 31,004 4% Entertainment and recreation 16,163 4% 20,532 3% Oil, gas and pipelines 14,287 3% 34,443 5% Commercial services 12,684 3% 22,989 3% Transportation services 11,901 3% 17,853 2% Utilities 8,598 2% 21,545 3% Insurance and fiduciaries 7,292 2% 16,481 2% Agribusiness 6,994 2% 12,137 2% Government and education 5,548 1% 11,918 2% Other 14,877 4% 22,093 3% Total $ 424,156 100% $ 727,615 100% Not all unfunded loan commitments are unilaterally exercisable by borrowers. For example, certain revolving loans contain features that require the customer to post additional collateral in order to access the full amount of the commitment As of March 31, 2020. Industry classifications based on NAICS classifications. (1) Total Commitments = loans outstanding + unfunded commitments, excluding issued letters of credit. Wells Fargo 1Q20 Supplement 15


 
Industries with escalated monitoring: Oil and gas, and Retail $14.3 billion of Oil and Gas Loans $27.8 billion of Retail Loans Outstanding (3/31/20) Outstanding (3/31/20) Sectors: Building Materials, Exploration & Garden Equipment & Field Service Supply Dealers Production Restaurants Contract Drilling Midstream 10% 12% 2% Services 21% Clothing Stores Oil & Gas Pipeline 8% 10% 47% Extraction Non-store 10% Natural Gas Retailers 18% Department Pipeline 13% Stores 12% 17% 5% Miscellaneous 14% Wholesalers Specialty Stores Food, Drug & Refining Beverage Stores . $14.3 billion of oil and gas outstandings includes . $27.8 billion in outstandings and $43.8 billion $9.5 billion of senior secured loans of total commitments (1) to the retail industry - 47% Exploration & Production - Restaurant outstandings of $5.8 billion, or 21% of - 41% Midstream retail industry outstandings, includes $3.9 billion - 12% Services to limited service restaurants . See page 31 for credit performance of the oil and gas portfolio Industry classifications based on NAICS classifications. (1) Commitments = Loans outstanding + unfunded commitments, excluding issued letters of credit. .Wells Fargo 1Q20 Supplement 16


 
Industries with escalated monitoring: Entertainment and recreation, and Transportation services $16.2 billon of Entertainment and Recreation $11.9 billion of Transportation Services Loans Outstanding (3/31/20) Loans Outstanding (3/31/20) Amusement Parks & Cruise lines & Other Air 1% <1% Misc. Recreation Water Passenger Transportation Gambling Industries Truck Transportation 20% 17% & Warehouse 38% All Other Golfing, Skiing & Transportation Fitness Centers 8% 8% Services 1% Performing Arts, 8% Sporting 4% Performers & Agents Bus & Limo Goods, Boats, 68% Spectator Sports Transportation 9% RVs, 10% Motorcycles, Cargo Ship Transportation <1% Other Rec Taxi Services Rail 2% Couriers & Messengers Transportation 4% Freight Transportation Arrangement . $16.2 billion in outstandings and $20.5 billion . $11.9 billion in outstandings and $17.9 billion of of total commitments (1) to the entertainment total commitments (1) to the transportation and recreation industry services industry – Less than 1% of outstandings and 1% of – Air transportation outstandings of $2.4 billion commitments (1) are to cruise lines Industry classifications based on NAICS classifications (1) Commitments = Loans outstanding + unfunded commitments, excluding issued letters of credit. Wells Fargo 1Q20 Supplement 17


 
Industries with escalated monitoring: Commercial Real Estate (CRE) loans by property type $122.8 billion of CRE Mortgage Loans $20.8 billion of CRE Construction Loans Outstanding (3/31/20) Outstanding (3/31/20) Agriculture Collateral Pool 2% Mixed Use 2% Properties Other Other 1-4 Family Land Institutional Land (Excluding 1-4 4% Mixed Use Properties 3% 3% Office Family) 2% 3% Buildings 5% 5% Industrial/ Apartments 28% Hotel/Motel Warehouse 7% 34% 9% 1-4 Family 7% Structure Shopping 9% Center 7% Hotel/Motel 15% 11% Apartments Retail excluding 7% 14% Shopping Center 10% Shopping Center 13% Office Buildings Industrial/Warehouse Institutional . $122.8 billion in outstandings and $131.2 . $20.8 billion in outstandings and $37.9 billion of billion of total commitments (1) total commitments (1) - $14.1 billion of outstandings in retail excluding - $7.1 billion of outstandings in apartments shopping center - $10.6 billion of outstandings in hotel/motel (1) Commitments = Loans outstanding + unfunded commitments. Wells Fargo 1Q20 Supplement 18


 
Average deposit trends and costs Average Deposits and Rates . Average deposits of $1.3 trillion, up $75.9 billion, or 6%, ($ in billions) YoY on growth across the deposit gathering businesses reflecting customers’ flight to quality due to COVID-19 1,338.0 1,262.1 1,321.9 - Noninterest-bearing deposits up $8.6 billion, or 3% - Interest-bearing deposits up $67.3 billion, or 7% 351.7 347.4 . 338.8 Average deposit cost of 52 bps, down 13 bps YoY, reflecting the lower interest rate environment - Retail banking up 15 bps reflecting higher interest rate deposit campaign pricing for new deposits in early 2019 - Wholesale Banking down 29 bps 923.3 970.2 990.6 - WIM down 18 bps . Average deposits up $16.1 billion, or 1%, LQ on growth 0.65% 0.62% across the deposit gathering businesses reflecting 0.52% customers’ flight to quality due to COVID-19 - Noninterest-bearing deposits down $4.3 billion, or 1% - Interest-bearing deposits up $20.4 billion, or 2% 1Q19 4Q19 1Q20 . Average deposit cost down 10 bps LQ reflecting the lower interest rate environment Noninterest-bearing deposits Interest-bearing deposits - Wholesale Banking down 15 bps Average deposit cost - WIM down 9 bps - Retail banking down 3 bps Wells Fargo 1Q20 Supplement 19


 
Period-end deposit trends Period-end Deposits . Period-end deposits of $1.4 trillion, up $112.5 billion, or ($ in billions) 9%, YoY on growth across the deposit gathering 1,376.5 businesses reflecting customers’ flight to quality due to 1,322.6 1,264.0 COVID-19 . Period-end deposits up $53.9 billion, or 4%, LQ reflecting 466.1 customers’ flight to quality due to COVID-19 392.7 452.6 - Wholesale Banking deposits up $13.5 billion, or 3%, largely 67.1 reflecting growth in Commercial Banking and Commercial 91.7 72.5 27.8 Real Estate deposits as customers drew on their revolving 21.1 23.1 lines, partially offset by lower Financial Institution deposits reflecting actions taken to manage to the asset cap - Corporate Treasury deposits including brokered CDs down $5.4 billion, or 7% 758.5 774.4 815.5 - Mortgage escrow deposits up $4.7 billion, or 20%, predominantly reflecting higher mortgage payoffs and seasonality of property tax payments - Consumer and small business banking deposits (1) of $815.5 1Q19 4Q19 1Q20 billion, up $41.1 billion, or 5%, and included: Wholesale Banking • Higher retail banking deposits largely driven by growth in high- Corporate Treasury including brokered CDs yield savings and interest-bearing checking Mortgage Escrow • Higher WIM deposits due to growth in brokerage clients’ cash Consumer and Small Business Banking Deposits(1) balances (1) Total deposits excluding mortgage escrow and wholesale deposits (Wholesale Banking, and Corporate Treasury including brokered CDs). Wells Fargo 1Q20 Supplement 20


 
Net interest income Net Interest Income . Net interest income decreased $1.0 billion, or 8%, YoY ($ in millions) reflecting the lower interest rate environment . Net Interest income increased $112 million, or 1%, LQ 12,311 12,095 reflecting: 11,625 11,200 11,312 - $356 million higher hedge ineffectiveness accounting results (2) reflecting large interest rate changes in the quarter - $84 million lower MBS premium amortization resulting from lower prepays (1Q20 MBS premium amortization was $361 million vs. $445 million in 4Q19) - Partially offset by balance sheet repricing, including the 2.91% 2.82% impact of the lower interest rate environment, and one fewer day in the quarter 2.66% 2.58% 2.53% . Average earning assets down $1.2 billion LQ: - Debt securities down $7.0 billion - Mortgage loans held for sale down $3.6 billion - Short-term investments / fed funds sold down $1.6 billion - Equity securities down $746 million 1Q19 2Q19 3Q19 4Q19 1Q20 Net Interest Margin (NIM) - Loans up $8.5 billion . NIM of 2.58% up 5 bps LQ and included: Average rates 1Q19 2Q19 3Q19 4Q19 1Q20 - ~8 bps from hedge ineffectiveness accounting results 1 Month LIBOR 2.50 % 2.44 % 2.17 % 1.79 % 1.41 % - ~2 bps from MBS premium amortization 3 Month LIBOR 2.69 2.51 2.20 1.93 1.53 - ~(5) bps from balance sheet mix and repricing Fed Funds Target Rate 2.50 2.50 2.29 1.83 1.41 (1) CMT = Constant Maturity Treasury rate. 10 Year (2) Total hedge ineffectiveness accounting (including related economic hedges) of $266 million CMT (1) 2.65 2.33 1.79 1.80 1.38 in the quarter included $287 million in net interest income and $(21) million in other income. In 4Q19 total hedge ineffectiveness accounting (including related economic hedges) was $(58) million and included $(69) million in net interest income and $11 million in other income. Changes in the level of market rates, basis relationships, hedge notional, and the size of hedged portfolios contribute to differing levels of hedge ineffectiveness each quarter. Wells Fargo 1Q20 Supplement 21


 
Noninterest income vs vs . Deposit service charges down $70 million LQ and included seasonally ($ in millions) 1Q20 4Q19 1Q19 lower overdraft fees Noninterest income - Consumer was 58% and commercial was 42% of total Service charges on deposit accounts $ 1,209 (5) % 11 • Earnings credit rate (ECR) offset (results in lower fees for commercial Trust and investment fees: customers) was down $40 million LQ, and down $26 million YoY Brokerage advisory, commissions . Trust and investment fees up $2 million and other fees 2,482 4 13 - Trust and investment management 701 (4) (11) Brokerage advisory, commissions and other fees up $102 million on higher retail brokerage advisory fees (priced at the beginning of the Investment banking 391 (16) (1) quarter) and higher brokerage transaction revenue Card fees 892 (13) (6) - Other fees 632 (4) (18) Investment banking fees down $73 million on a lower number of deals and smaller deal sizes Mortgage banking 379 (52) (46) Insurance 95 (3) (1) . Card fees down $128 million on lower interchange income due to Net gains from trading activities 64 (51) (82) seasonality, as well as the impact of COVID-19 on consumer spending Net gains on debt securities 237 n.m. 90 . Mortgage banking down $404 million Net gains (losses) from equity securities (1,401) n.m. n.m. - Net gains on mortgage loan originations down $652 million and Lease income 352 3 (21) reflected unrealized losses on residential and commercial mortgage Other 372 11 (35) loans held for sale of approximately $143 million and $62 million, Total noninterest income $ 6,405 (26) % (31) respectively, due to illiquid market conditions and a widening of credit spreads - Servicing income up $248 million as $192 million of higher losses on 10,385 the valuation of our MSR asset as a result of assumption updates, 9,298 9,489 primarily prepayments, was more than offset by net economic hedge 8,660 results . Net gains from trading activities down $67 million on higher trading losses in asset-backed trading and credit trading (Please see page 39 for additional information) 6,405 . Net gains from debt securities up $245 million . Net gains from equity securities down $1.9 billion and included $935 million of securities impairment and $857 million lower deferred compensation plan investment results (P&L neutral) (Please see page 23 for additional information) . Other income up $37 million and included higher gains on the sale of 1Q19 2Q19 3Q19 4Q19 1Q20 loans ($463 million in 1Q20 vs. $134 million in 4Q19) compared with a 4Q19 that had a $362 million gain from the sale of Eastdil Wells Fargo 1Q20 Supplement 22


 
Net losses from equity securities including deferred compensation . $1.4 billion of net losses from equity securities in the first quarter, including $621 million of largely P&L neutral deferred compensation plan investment losses – $935 million of securities impairment reflecting lower market valuations • Impairments on venture capital, private equity, and certain wholesale businesses (Norwest Venture Partners, Norwest Equity Partners, Wells Fargo Strategic Capital) represented 17% of the carrying values of these businesses’ portfolio investments that are subject to impairment assessments – $621 million of losses on marketable equity securities held to economically hedge deferred compensation obligations. As detailed below, deferred compensation plan investment results are largely P&L neutral, as we attempt to neutralize the impact of market fluctuations from employee elections, which are recognized in employee benefits expense, by entering into economic hedges ($ in millions) 1Q20 4Q19 3Q19 2Q19 1Q19 vs 4Q19 vs 1Q19 Net interest income $ 12 26 13 18 13 $ (14) (1) Net gains (losses) from equity securities (621) 236 (4) 87 345 (857) (966) Total revenue (losses) from deferred compensation plan investments (609) 262 9 105 358 (871) (967) Employee benefits expense (1) (598) 263 5 114 357 (861) (955) Income (loss) before income tax expense $ (11) (1) 4 (9) 1 $ (10) (12) (1) Represents change in deferred compensation plan liability. Wells Fargo 1Q20 Supplement 23


 
Noninterest expense and efficiency ratio (1) vs vs . Noninterest expense down $2.6 billion LQ ($ in millions) 1Q20 4Q19 1Q19 - Personnel expense down $494 million Noninterest expense Salaries $ 4,721 - % 7 • Salaries flat Commission and incentive compensation 2,463 (7) (13) • Commission and incentive compensation down $188 million on Employee benefits 1,130 (21) (42) lower restricted stock award expense, as well as lower revenue- Technology and equipment 661 (18) - related incentive compensation Net occupancy 715 (5) - • Employee benefits expense down $306 million as a $861 million Core deposit and other intangibles 23 (12) (18) decline in deferred compensation expense (P&L neutral) was FDIC and other deposit assessments 118 (9) (26) partially offset by $544 million in seasonally higher payroll taxes Outside professional services (2) 727 (17) 7 and 401(k) matching expenses Operating losses (2) 464 (76) 95 . Please see page 23 for additional information on deferred (2) compensation expense Other 2,026 (12) (9) Total noninterest expense $ 13,048 (16) % (6) - Technology and equipment expense down $141 million from a 4Q19 that included a capitalized software impairment expense - Outside professional services expense (2) down $149 million 15,614 15,199 on lower project-related expenses, as well as lower legal expense 13,916 78.6% 13,449 (2) 13,048 - Operating losses down $1.5 billion on lower litigation accruals 69.1% 73.6% 64.4% 62.3% 1Q19 2Q19 3Q19 4Q19 1Q20 Efficiency Ratio (1) Efficiency ratio defined as noninterest expense divided by total revenue (net interest income and noninterest income). (2) The sum of Outside professional services expense, Operating losses and Other expense equals Other noninterest expense in the Consolidated Statement of Income, pages 19 and 20 of the press release. Wells Fargo 1Q20 Supplement 24


 
Community Banking vs vs . Net income of $155 million, down 95% YoY and 64% LQ ($ in millions) 1Q20 4Q19 1Q19 primarily reflecting higher provision expense including a Net interest income $ 6,787 4 % (6) reserve build, as well as net losses from equity securities Noninterest income 2,709 (32) (40) Provision for credit losses 1,718 n.m. n.m. Key metrics Noninterest expense 7,116 (21) (7) Income tax expense 644 30 52 . See pages 26 and 27 for additional information Segment net income $ 155 (64) % (95) . 5,329 retail bank branches reflects 24 branch ($ in billions) consolidations in 1Q20 Avg loans $ 462.6 - 1 . Consumer auto originations of $6.5 billion, down 5% LQ Avg deposits 798.6 1 4 and up 19% YoY 1Q20 4Q19 1Q19 . Mortgage originations of $48 billion (held-for-sale = Key Metrics: $33 billion and held-for-investment = $15 billion), down Total Retail Banking branches 5,329 5,352 5,479 20% LQ and up 45% YoY - 48% of originations were for purchases, compared with ($ in billions) 1Q20 4Q19 1Q19 50% in 4Q19 and 70% in 1Q19 Auto originations $ 6.5 6.8 5.4 - (1) Home Lending 1.08% residential held for sale production margin , Applications $ 108 72 64 down 13 bps LQ and up 3 bps YoY Application pipeline 62 33 32 - $780 million of originations directed to held-for-sale for Originations 48 60 33 future securitizations (1) Residential HFS production margin 1.08 % 1.21 % 1.05 (1) Production margin represents net gains on residential mortgage loan origination/sales activities divided by total residential held for sale mortgage originations. Wells Fargo 1Q20 Supplement 25


 
Community Banking metrics Customers and Active Accounts (in millions) 1Q20 4Q19 3Q19 2Q19 1Q19 vs. 4Q19 vs. 1Q19 Digital (online and mobile) Active Customers (1) (2) 30.9 30.3 30.2 30.0 29.8 2% 3% Mobile Active Customers (1) (2) 24.7 24.4 24.2 23.7 23.3 1% 6% Primary Consumer Checking Customers (1) (3) 24.4 24.4 24.3 24.3 23.9 0.2% 1.9% Consumer General Purpose Credit Card Active Accounts (4) (5) 7.9 8.1 8.1 8.0 7.8 -3% 1% . Digital (online and mobile) active customers (1) (2) of 30.9 million, up 2% LQ and 3% YoY reflecting improvements in user experience and increased customer awareness of digital services – Mobile active customers (1) (2) of 24.7 million, up 1% LQ and 6% YoY reflecting improvements in user experience and increased customer awareness of digital services . Primary consumer checking customers (1) (3) of 24.4 million, up 1.9% YoY . Consumer general purpose credit card active accounts (4) (5) of 7.9 million, down 3% LQ and up 1% YoY (1) Metrics reported on a one-month lag from reported quarter-end; for example, 1Q20 data as of February 2020 compared with February 2019. (2) Digital and mobile active customers is the number of consumer and small business customers who have logged on via a digital or mobile device in the prior 90 days. (3) Customers who actively use their checking account with transactions such as debit card purchases, online bill payments, and direct deposit. Management uses this metric to help monitor trends in checking customer engagement with the Company. (4) Accounts having at least one POS transaction, including POS reversal, during the period. (5) Credit card metrics shown in the table are for general purpose cards only. Wells Fargo 1Q20 Supplement 26


 
Community Banking metrics Balances and Activity (in millions, except where noted) 1Q20 4Q19 3Q19 2Q19 1Q19 vs. 4Q19 vs. 1Q19 Consumer and Small Business Banking Deposits (Average) ($ in billions) $ 779.5 763.2 749.5 742.7 739.7 2% 5% Teller and ATM Transactions (1) 289.4 315.1 324.3 327.3 313.8 -8% -8% [Purchase] Volume ?? #DIV/0! Debit Cards (2) POS Transactions 2,195 2,344 2,344 2,336 2,165 -6% 1% POS Purchase Volume (billions) $ 90.6 95.2 92.6 93.2 86.6 -5% 5% Consumer General Purpose Credit Cards (3) ($ in billions) POS Purchase Volume $ 18.2 21.0 20.4 20.4 18.3 -13% -1% Outstandings (Average) 32.3 32.3 31.7 30.9 30.7 0% 5% . Average consumer and small business banking deposit balances up 2% LQ and 5% YoY . Teller and ATM transactions (1) of 289.4 million in 1Q20, down 8% both LQ and YoY primarily due to the temporary closure of approximately 1,400 branches, which is about one-fourth of our nationwide network, as a result of the impact of COVID- 19, as well as the continued customer migration to digital channels . Debit cards (2) and consumer general purpose credit cards (3): - Point-of-sale (POS) debit card transactions down 6% LQ due to normal post-holiday seasonality, as well as the impact of COVID- 19, and up 1% YoY despite reduced spending due to COVID-19 - POS debit card purchase volume down 5% LQ and up 5% YoY due to the same impacts listed above under POS debit card transactions - POS consumer general purpose credit card purchase volume down 13% LQ reflecting reductions in customer spending due to COVID-19, as well as seasonality, and down 1% YoY - Consumer general purpose credit card average balances of $32.3 billion, stable LQ and up 5% YoY reflecting an increase in POS spend during the first two months of 2020 compared with the first two months of 2019 (1) Teller and ATM transactions reflect customer transactions completed at a branch teller line or ATM and does not include customer interactions with a branch banker. Management uses this metric to help monitor customer traffic trends within the Company’s Retail Banking business. (2) Combined consumer and business debit card activity. (3) Credit card metrics shown in the table are for general purpose cards only. Wells Fargo 1Q20 Supplement 27


 
Wholesale Banking . Net income of $311 million, down 89% YoY and 88% LQ vs vs ($ in millions) 1Q20 4Q19 1Q19 predominantly reflecting higher provision expense and lower revenue Net interest income $ 4,136 (3) % (9) . Net interest income down 3% LQ as the impact of the lower Noninterest income 1,681 (27) (35) interest rate environment was partially offset by higher loan Provision for credit losses 2,288 n.m. n.m. and deposit balances Noninterest expense 3,763 1 (2) . Noninterest income down 27% LQ from a 4Q19 that included a $362 million gain on the sale of Eastdil; 1Q20 results Income tax benefit (546) n.m. n.m. included $180 million of securities impairment, and lower Segment net income $ 311 (88) % (89) mortgage banking results, partially offset by higher LIHTC investment income ($ in billions) . Provision for credit losses increased $2.2 billion LQ driven by a Avg loans $ 484.5 2 2 $1.9 billion reserve build for loans, higher net charge-offs Avg deposits 456.6 2 11 driven by losses in the oil and gas portfolio, and $171 million of provision expense for debt securities 1Q20 4Q19 1Q19 . (1) Noninterest expense up 1% LQ driven by seasonally higher Efficiency ratio 64.7 57.1 % 54.0 personnel expense Adjusted efficiency ratio for income tax (2) 58.2 52.0 50.0 Lending-related credits . Unfunded lending commitments down 7% YoY and 13% LQ (6) vs vs . Revolving loan utilization in March of 48.6% , up 720 bps ($ or # in billions) 1Q20 4Q19 1Q19 YoY and 860 bps LQ reflecting an increase in draws due to Key Metrics: COVID-19 Lending-related . Total assets under lease down 3% LQ Unfunded lending commitments $ 300 (13) % (7) Treasury Management Assets under lease 27 (3) (2) . Treasury management revenue flat YoY and down 3% LQ Commercial mortgage servicing - 3rd party . ACH payment transactions originated (3) up 12% YoY on large unpaid principal balance 564 - 1 customer volume growth and down 2% LQ driven by Treasury Management seasonality ACH payment transactions originated (#) (3) 2.0 (2) 12 . Commercial card spend volume (4) of $8.1 billion, down 4% YoY Commercial card spend volume (4) $ 8.1 (7) (4) and 7% LQ on reduced business travel due to COVID-19 (5) Investment Banking (5) Investment Banking Total U.S. market share (%) 4.0 30 80 bps . 1Q20 U.S. investment banking market share of 4.0% vs. 1Q19 High grade DCM U.S. market share (%) 9.2 150 180 bps of 3.2% on record high grade debt capital markets (DCM) Loan syndications U.S. market share (%) 3.4 (150) (80) bps results (1) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income). (2) The adjusted efficiency ratio for income tax credits, which includes tax equivalent adjustments for income tax credits related to our low-income housing and renewable energy investments, is a non-GAAP financial measure. For additional information, including a corresponding reconciliation to GAAP financial measures, see page 40. (3) Includes ACH payment transactions originated by the entire company. (4) Includes commercial card volume for the entire company. (5) Source: Dealogic U.S. investment banking fee market share. (6) Preliminary estimate. Wells Fargo 1Q20 Supplement 28


 
Wealth and Investment Management vs vs . Net income of $463 million, down 20% YoY and up 82% LQ ($ in millions) 1Q20 4Q19 1Q19 . Net interest income down 5% LQ primarily due to the lower Net interest income $ 867 (5) % (21) interest rate environment, partially offset by higher deposit Noninterest income 2,848 (10) (4) balances Provision for credit losses 8 n.m. n.m. . Noninterest income down 10% LQ largely driven by net losses Noninterest expense 3,103 (17) (6) from equity securities on a $359 million decline in deferred Income tax expense 153 80 (20) compensation plan investment results (P&L neutral), partially offset by higher retail brokerage advisory fees (priced at the Segment net income $ 463 82 % (20) beginning of the quarter) and higher brokerage transaction ($ in billions) revenue Avg loans $ 78.5 2 6 . Noninterest expense down 17% LQ, primarily due to a $362 Avg deposits 151.4 4 (1) million decline in deferred compensation plan expense, lower operating losses, and lower technology and equipment expense vs vs ($ in billions, except where noted) 1Q20 4Q19 1Q19 due to a capitalized software expense in 4Q19, partially offset by Key Metrics: seasonally higher personnel expenses and higher broker (1) commissions WIM Client assets ($ in trillions) $ 1.6 (15) % (12) Retail Brokerage WIM Segment Highlights Client assets ($ in trillions) $ 1.4 (15) (13) . WIM total client assets of $1.6 trillion, down 12% YoY primarily Advisory assets 499 (15) (9) driven by lower market valuations and net outflows in the Correspondent Clearing business IRA assets 367 (15) (9) . 1Q20 closed referred investment assets (referrals resulting from Financial advisors (#) 13,450 - (3) the WIM/Community Banking partnership) of $2.8 billion were up Wealth Management 5% LQ and up 16% YoY Client assets $ 213 (11) (8) Retail Brokerage Wells Fargo Asset Management (2) . Advisory assets of $499 billion, down 9% YoY, primarily driven by Total AUM 518 2 9 lower market valuations and net outflows in the Correspondent Wells Fargo Funds AUM 238 8 22 Clearing business Wells Fargo Asset Management (1) WIM Client Assets reflect Brokerage & Wealth assets, including Wells Fargo Funds holdings and deposits. . Total AUM (2) of $518 billion, up 9% YoY primarily driven by higher (2) Wells Fargo Asset Management Total AUM not held in Brokerage & Wealth client assets money market fund net inflows, partially offset by equity and excluded from WIM Client Assets. Wells Fargo 1Q20 Supplement fixed income net outflows 29


 
Credit quality of the loan portfolio Provision Expense and Net Charge-offs on Loans . Net charge-offs on loans of $909 million, up $140 million ($ in millions) 3,833 LQ . 0.38% net charge-off rate (annualized), up 6 bps LQ - Commercial losses of 25 bps, up 9 bps LQ on higher commercial and industrial losses primarily related to higher oil and gas net charge-offs reflecting significant declines in oil prices • See page 31 for additional information on the oil and gas 845 909 portfolio 695 653 695 645 644 769 503 0.38% - Consumer losses of 53 bps, up 2 bps LQ driven by higher 0.32% 0.30% 0.28% 0.27% losses in credit card . NPAs increased $759 million LQ 1Q19 2Q19 3Q19 4Q19 1Q20 - Nonaccrual loans increased $810 million Provision Expense Net Charge-offs • Commercial nonaccruals increased $621 million Net Charge-off Rate predominantly driven by the commercial real estate, and commercial and industrial portfolios as the effect of the COVID-19 pandemic on market conditions began to Nonperforming Assets impact our customer base ($ in billions) • Consumer nonaccrual loans increased $189 million predominantly driven by higher nonaccruals in the real 7.3 estate 1-4 family first mortgage loan portfolio as the 0.4 implementation of CECL required purchased credit- 6.4 6.3 impaired (PCI) loans to be classified as nonaccruing 6.0 0.2 0.4 based on performance 0.5 5.6 0.3 - Foreclosed assets down $51 million 6.9 . Allowance for credit losses for loans = $12.0 billion 5.9 6.2 - Allowance coverage for total loans = 1.19% 5.5 5.3 - Allowance covered 3.3x annualized 1Q20 net charge-offs on loans - Allowance coverage for nonaccrual loans = 195% 1Q19 2Q19 3Q19 4Q19 1Q20 - See page 32 for additional information Nonaccrual loans Foreclosed assets Wells Fargo 1Q20 Supplement 30


 
Oil and gas loan portfolio performance . Oil and gas loans outstanding up 5% LQ and 7% Credit performance overview YoY reflecting increased utilization driven by . $186 million of net charge-offs in 1Q20, up the impact of COVID-19 and the decline in oil $112 million LQ prices in 1Q20, and total commitments (1) - 89% of net charge-offs from the exploration & down 3% LQ and 2% YoY reflecting a weaker production (E&P) sector credit environment . Nonaccrual loans of $549 million, down $66 million LQ as higher net charge-offs, as well as Loans Outstanding and Total Commitments (1) loan payments, were partially offset by new ($ in billions) downgrades to nonaccrual status in the quarter 35.6 35.1 34.4 - ~84% of nonaccruals current on payments - 99% of nonaccruals from the E&P and services sectors - Substantially all nonaccruals were senior secured . Criticized loans of $3.1 billion, up $591 million, 13.3 13.6 14.3 or 23%, LQ predominantly reflecting increases from the E&P sector 1Q19 4Q19 1Q20 Loans outstanding Total commitments (1) (1) Total commitments = Loans outstanding + unfunded commitments, excluding issued letters of credit. Wells Fargo 1Q20 Supplement 31


 
Current expected credit losses (CECL) . Total allowance for credit losses (ACL) for loans and debt securities = $12.2 billion - Total ACL for loans and unfunded commitments = $12.0 billion, or 1.19% of loans, up $1.6 billion LQ • Commercial ACL down $967 million to $5.3 billion • Consumer ACL up $2.5 billion to $6.7 billion - Total ACL for AFS and HTM debt securities = $172 million . Upon adoption of CECL on January 1, 2020, we recognized a $1.3 billion reduction in our allowance for credit losses (ACL) and a corresponding increase (pre-tax) in retained earnings, predominantly reflecting: - $2.9 billion decline in commercial ACL reflecting shorter contractual maturities given limitation to contractual terms - $1.5 billion increase in consumer ACL reflecting longer contractual terms or indeterminate maturities, offset by expectation of recoveries in collateral value on residential mortgage loans previously written down significantly below current recovery value . From January 2, 2020 to March 31, 2020, we added $3.1 billion to our ACL for loans and debt securities driven by the following: - Economic sensitivity due to COVID-19 pandemic • Internal economic model reflects associated impacts to our portfolios - Industries most adversely affected in the near term by the COVID-19 pandemic • Sensitivity analysis on several commercial industries designated with high, medium and low sensitivities - Oil and gas industry exposure • Reflects lower oil prices and deteriorating credit trends; see page 31 for additional information - Draws on loan commitments • $52.0 billion of commercial loan growth in 1Q20 was driven by loan draws - $141 million reserve build for debt securities reflecting economic and market conditions Wells Fargo 1Q20 Supplement 32


 
Capital Common Equity Tier 1 Ratio (1) Capital Position . After a multi-year program to return excess capital to shareholders, the Common Equity Tier 1 ratio of 10.7% 11.9% 12.0% 11.6% at 3/31/20 (1) continued to be above both the 11.1% regulatory minimum of 9% and our current internal 10.7% target of 10% Capital Return . Period-end common shares outstanding down 38.0 million shares, or 1%, LQ - Settled 75.4 million common share repurchases • Suspended share repurchases on 3/15/20 - Issued 37.4 million common shares . Returned $5.0 billion to shareholders in 1Q20 - Net share repurchases of $2.9 billion - Quarterly common stock dividend of $0.51 per share, up 13% YoY . Issued $2.0 billion of Non-Cumulative Perpetual Class A 1Q19 2Q19 3Q19 4Q19 1Q20 Preferred Stock, Series Z Estimated . Redeemed the remaining $1.8 billion of our Fixed-to- Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series K . Redeemed $668 million of our Non-Cumulative Perpetual Class A Preferred Stock, Series T Total Loss Absorbing Capacity (TLAC) Update . As of 3/31/20, our eligible external TLAC as a percentage of total risk-weighted assets was 23.2% (2) compared with the required minimum of 22.0% (1) 1Q20 capital ratio is a preliminary estimate. See page 41 for additional information regarding the Common Equity Tier 1 capital ratio. (2) 1Q20 TLAC ratio is a preliminary estimate. Wells Fargo 1Q20 Supplement 33


 
Appendix


 
Real estate 1-4 family mortgage portfolio ($ in millions) 1Q20 4Q19 1Q19 Linked Quarter Change Year-over-Year Change Real estate 1-4 family first mortgage loans: $ 292,920 293,847 284,545 $ (927) - % $ 8,375 3 % Nonaccrual loans 2,372 2,150 3,026 222 10 (654) (22) as % of loans 0.81 % 0.73 % 1.06 % 8 bps (25) bps Net charge-offs/(recoveries) $ (3) (3) (12) $ - - $ 9 (75) as % of average loans (0.00) % (0.00) % (0.02) % (0) bps 2 bps Real estate 1-4 family junior lien mortgage loans: $ 28,527 29,509 33,099 $ (982) (3) $ (4,572) (14) Nonaccrual loans 769 796 916 (27) (3) (147) (16) as % of loans 2.70 % 2.70 % 2.77 % (0) bps (7) bps Net charge-offs/(recoveries) $ (5) (16) (9) $ 11 (69) % $ 4 (44) % as % of average loans (0.07) % (0.20) % (0.10) % 13 bps 3 bps . First mortgage loans down $927 million LQ as $14.3 . Junior lien mortgage loans down $982 million, or 3%, LQ billion of originations were more than offset by as paydowns more than offset new originations paydowns - Net charge-offs flat LQ - Nonaccrual loans increased $222 million, or 10%, LQ • $275 million increase as the implementation of CECL required PCI loans to be classified as nonaccruing based on performance - First lien home equity lines of $10.2 billion, down $190 million Loan balances as of period-end. Wells Fargo 1Q20 Supplement 35


 
Consumer credit card portfolio ($ in millions, except where noted) 1Q20 4Q19 1Q19 Linked Quarter Change Year-over-Year Change Credit card outstandings $ 38,582 41,013 38,279 $ (2,431) (6) % $ 303 1 % Net charge-offs 377 350 352 27 8 25 7 as % of avg loans 3.81 % 3.48 % 3.73 % 33 bps 8 bps 30+ days past due $ 1,003 1,078 945 $ (75) (7) $ 58 6 as % of loans 2.60 % 2.63 % 2.47 (3) bps 13 bps - Key Metrics: Purchase volume $ 19,907 23,126 20,062 $ (3,219) (14) $ (155) (1) POS transactions (millions) 298 341 299 (43) (13) (1) - New accounts (1) (thousands) 315 366 507 (51) (14) (192) (38) POS active accounts (thousands) (2) 8,635 8,998 8,663 (363) (4) % (28) - % . Credit card outstandings down 6% LQ reflecting seasonality, as well as lower POS volumes and payment rates due to the impact of COVID-19, and up 1% YoY - General purpose credit card outstandings down 6% LQ and up 1% YoY - Purchase dollar volume down 14% LQ reflecting the impact of COVID-19 on consumer spending, as well as seasonality, and down 1% YoY - New accounts (1) down 14% LQ due to the impact of COVID-19, and down 38% YoY as we reduced new accounts generated through digital channels to optimize for risk, growth and profitability . Net charge-offs up $27 million, or 33 bps, LQ driven by seasonality, and up $25 million, or 8 bps, YoY . 30+ days past due were down $75 million, or 3 bps, LQ on seasonality, and up $58 million, or 13 bps, YoY Loan balances as of period-end. (1) Includes consumer general purpose credit card as well as certain co-brand and private label relationship new account openings. (2) Accounts having at least one POS transaction, including POS reversal, during the period. Wells Fargo 1Q20 Supplement 36


 
Auto portfolios ($ in millions) 1Q20 4Q19 1Q19 Linked Quarter Change Year-over-Year Change Consumer: Auto outstandings $ 48,568 47,873 44,913 $ 695 1 % $ 3,655 8 % Nonaccrual loans 99 106 116 (7) (7) (17) (15) as % of loans 0.20 % 0.22 % 0.26 % (2) bps (6) bps Net charge-offs $ 82 87 91 $ (5) (6) $ (9) (10) as % of avg loans 0.68 % 0.73 % 0.82 % (5) bps (14) bps 30+ days past due $ 1,116 1,229 1,040 $ (113) (9) $ 76 7 as % of loans 2.30 % 2.57 % 2.32 % (27) bps (2) bps Commercial: Auto outstandings $ 10,784 10,740 11,088 $ 44 - $ (304) (3) Nonaccrual loans 13 14 15 (1) (7) (2) (13) as % of loans 0.12 % 0.13 % 0.14 % (1) bps (2) bps Net charge-offs $ 4 2 2 $ 2 100 % $ 2 100 % as % of avg loans 0.09 % 0.09 % 0.07 % - bps 2 bps Consumer Portfolio Commercial Portfolio . Auto outstandings of $48.6 billion, up 1% LQ and 8% YoY . Loans of $10.8 billion, flat LQ on seasonality and - 1Q20 originations of $6.5 billion, down 5% LQ influenced by a down 3% YoY due to lower floorplan utilization as national slowdown late in 1Q20 due to COVID-19, but up 19% YoY dealers held less inventory . Nonaccrual loans decreased $7 million LQ on seasonality and $17 million YoY . Net charge-offs down $5 million LQ on seasonality, and down $9 million YoY predominantly driven by lower early losses from higher quality originations . 30+ days past due decreased $113 million LQ on seasonality and increased $76 million YoY on growth in loan balances Loan balances as of period-end. Wells Fargo 1Q20 Supplement 37


 
Student lending portfolio ($ in millions) 1Q20 4Q19 1Q19 Linked Quarter Change Year-over-Year Change Private outstandings $ 10,555 10,608 11,139 $ (53) - % $ (584) (5) % Net charge-offs 32 37 27 (5) (14) 5 19 as % of avg loans 1.21 % 1.38 % 0.94 % (17) bps 27 bps 30+ days past due $ 172 187 176 $ (15) (8) % $ (4) (2) % as % of loans 1.63 % 1.75 % 1.58 % (12) bps 5 bps . $10.6 billion private loan outstandings, flat LQ and down 5% YoY on higher paydowns - Average FICO of 761, and 84% of the total outstandings have been co-signed - Originations were flat YoY . Net charge-offs decreased $5 million LQ due to seasonality of repayments, and increased $5 million YoY . 30+ days past due decreased $15 million LQ and decreased $4 million YoY Loan balances as of period-end. Wells Fargo 1Q20 Supplement 38


 
Trading-related revenue ($ in millions) 1Q20 4Q19 1Q19 Linked Quarter Change Year-over-Year Change Trading-related revenue Net interest income $ 774 852 795 $ (78) (9) % $ (21) (3) % Net gains from trading activities 64 131 357 (67) (51) (293) (82) Trading-related revenue $ 838 983 1,152 $ (145) (15) % $ (314) (27) % . Fixed income, currencies and commodity trading (FICC) generated 76% of total trading-related revenue in 1Q20 . Trading-related revenue of $838 million was down $145 million, or 15%, LQ: - Net interest income decreased $78 million, or 9%, reflecting lower average trading assets and lower yields - Net gains from trading activities down $67 million, or 51%, as higher trading losses in asset-backed securities and lower credit trading were partially offset by higher rates and commodities trading and a higher equity derivatives valuation adjustment . Trading-related revenue was down $314 million, or 27%, YoY: - Net interest income decreased $21 million, or 3%, primarily driven by lower yields on residential mortgage-backed securities and loan trading - Net gains from trading activities down $293 million reflecting losses in asset-backed trading and credit trading, partially offset by higher rates and commodities results Wells Fargo 1Q20 Supplement 39


 
Wholesale Banking adjusted efficiency ratio for income tax credits We also evaluate our Wholesale Banking operating segment based on an adjusted efficiency ratio for income tax credits. The adjusted efficiency ratio for income tax credits is a non-GAAP financial measure and represents noninterest expense divided by total revenue plus income tax credits related to our low-income housing and renewable energy investments and related tax equivalent adjustments Management believes that the adjusted efficiency ratio for income tax credits is a useful financial measure because it enables investors and others to compare efficiency results from both taxable and tax-advantaged sources on a consistent basis The table below provides a reconciliation of this non-GAAP financial measure to GAAP financial measures ($ in millions) 1Q20 4Q19 3Q19 2Q19 1Q19 Wholesale Banking adjusted efficiency ratio for income tax credits: Total revenue (A) $ 5,817 6,559 6,942 7,065 7,111 Adjustments: Income tax credits related to our low-income housing and renewable 491 478 422 423 427 energy investments (included in income tax expense) Tax equivalent adjustments related to income tax credits (1) 163 160 141 141 142 Adjusted total revenue (B) 6,471 7,197 7,505 7,629 7,680 Noninterest expense (C) 3,763 3,743 3,889 3,882 3,838 Efficiency ratio (C)/(A) 64.7 % 57.1 56.0 54.9 54.0 Adjusted efficiency ratio for income tax credits (C)/(B) 58.2 % 52.0 51.8 50.9 50.0 (1) Based on our combined federal statutory rate and composite state income tax rates. Wells Fargo 1Q20 Supplement 40


 
Common Equity Tier 1 - 1 - Wells Fargo & Company and Subsidiaries COMMON EQUITY TIER 1 UNDER BASEL III (1) Estimated Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, (in billions, except ratio) 2020 2019 2019 2019 2019 Total equity $ 183.3 188.0 194.4 200.0 198.7 Adjustments: Preferred stock (21.3 ) (21.5 ) (21.5 ) (23.0 ) (23.2 ) Additional paid-in capital on preferred stock 0.1 (0.1 ) (0.1 ) (0.1 ) (0.1 ) Unearned ESOP shares 1.1 1.1 1.1 1.3 1.5 Noncontrolling interests (0.6 ) (0.8 ) (1.1 ) (1.0 ) (0.9 ) Total common stockholders' equity 162.6 166.7 172.8 177.2 176.0 Adjustments: Goodwill (26.4 ) (26.4 ) (26.4 ) (26.4 ) (26.4 ) Certain identifiable intangible assets (other than MSRs) (0.4 ) (0.4 ) (0.5 ) (0.5 ) (0.5 ) Goodwill and other intangibles on nonmarketable equity securities (included in other assets) (1.9 ) (2.1 ) (2.3 ) (2.3 ) (2.1 ) Applicable deferred taxes related to goodwill and other intangible assets (2) 0.8 0.8 0.8 0.8 0.8 Other — 0.2 0.3 0.4 0.3 Common Equity Tier 1 under Basel III (A) 134.7 138.8 144.7 149.2 148.1 Total risk-weighted assets (RWAs) anticipated under Basel III (3)(4) (B) $ 1,264.7 1,245.8 1,246.2 1,246.7 1,243.1 Common Equity Tier 1 to total RWAs anticipated under Basel III (4) (A)/(B) 10.7 % 11.1 11.6 12.0 11.9 (1) Basel III capital rules, adopted by the Federal Reserve Board on July 2, 2013, revised the definition of capital, increased minimum capital ratios, and introduced a minimum Common Equity Tier 1 (CET1) ratio. The rules are being phased in through the end of 2021. The Basel III capital requirements for calculating CET1 and tier 1 capital, along with RWAs, are fully phased-in. (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) The final Basel III capital rules provide for two capital frameworks: the Standardized Approach and the Advanced Approach applicable to certain institutions. Accordingly, in the assessment of our capital adequacy, we must report the lower of our CET1, tier 1 and total capital ratios calculated under the Standardized Approach and under the Advanced Approach. Because the final determination of our CET1 ratio and which approach will produce the lower CET1 ratio as of March 31, 2020, is subject to detailed analysis of considerable data, our CET1 ratio at that date has been estimated using the Basel III definition of capital under the Basel III Standardized Approach RWAs. The capital ratio for December 31, September 30, June 30 and March 31, 2019, was calculated under the Basel III Standardized Approach RWAs. (4) The Company’s March 31, 2020, RWAs and capital ratio are preliminary estimates. Wells Fargo 1Q20 Supplement 41


 
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 SEC, 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 and our allowance for credit losses; (iv) the appropriateness of the allowance for credit losses; (v) our expectations regarding net interest income and net interest margin; (vi) loan growth or the reduction or mitigation of risk in our loan portfolios; (vii) future capital or liquidity levels, ratios or targets; (viii) the performance of our mortgage business and any related exposures; (ix) the expected outcome and impact of legal, regulatory and legislative developments, as well as our expectations regarding compliance therewith; (x) future common stock dividends, common share repurchases and other uses of capital; (xi) our targeted range for return on assets, return on equity, and return on tangible common equity; (xii) expectations regarding our effective income tax rate; (xiii) the outcome of contingencies, such as legal proceedings; 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. Investors are urged to not unduly rely on forward-looking statements as actual results could differ materially from expectations. Forward-looking statements speak only as of the date made, and we do not undertake to update them to reflect changes or events that occur after that date. For more information about factors that could cause actual results to differ materially from expectations, refer to the “Forward-Looking Statements” discussion in Wells Fargo’s press release announcing our first quarter 2020 results and in our most recent Quarterly Report on Form 10-Q, as well as to Wells Fargo’s other 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, 2019, as supplemented by our Current Report on Form 8-K filed on April 14, 2020. Wells Fargo 1Q20 Supplement 42