WFC Wells Fargo 10-K 2024-12-31 section summaries

Business overview

At December 31, 2024, Wells Fargo was the fourth-largest U.S. bank holding company by assets. Wells Fargo Bank, N.A.—its principal subsidiary—held $1.7 trillion, or 88%, of consolidated assets, concentrating most of the company’s balance sheet in that bank.

Wells Fargo provides consumer, commercial, mortgage, investment and finance products and services across the U.S. and internationally. It reports four operating segments: Consumer Banking and Lending; Commercial Banking; Corporate and Investment Banking; and Wealth and Investment Management.

The company had approximately 217,000 active employees at year-end, 77% of them based in the U.S. In 2024, it invested approximately $200 million in employee learning and development and provided tuition reimbursement to approximately 2,600 employees.

Competition and regulatory environment

Competition comes from traditional financial institutions and nonbank providers, including online lenders, brokerages, private equity firms and financial-services subsidiaries of commercial companies. Some competitors may have lower costs or face fewer regulatory constraints. Technology is also enabling digital lending, trading and payments, as well as alternative-currency offerings, potentially reducing the role of banks and other traditional intermediaries.

Wells Fargo operates under extensive and evolving regulation. Requirements can increase compliance costs, constrain business activity and affect reported capital ratios or risk-weighted assets. They may limit acquisitions, diversification, dividends and share repurchases; require higher capital or deposit-insurance premiums; or, in some circumstances, require the parent company to support subsidiary banks. As a large, systemically important banking organization, Wells Fargo is subject to enhanced capital, leverage, liquidity, stress-testing, risk-management, governance and resolution requirements. Falling short of capital or management standards could restrict new activities or acquisitions.

The parent’s transactions with subsidiary banks are subject to limits: covered transactions with an individual affiliate are generally capped at 10% of a bank’s capital and surplus, and transactions with all affiliates at 20%. Qualifying collateral and arm’s-length terms are generally required. The parent is also expected to serve as a source of financial and managerial strength to its banks, potentially when its own resources are constrained. In a bank resolution, U.S. depositors and specified FDIC claims have priority over the parent and other unsecured creditors; insured banks may also bear losses connected with the failure or distress of commonly controlled insured institutions.

Other material regulatory and operating exposures include:

• Open banking and customer data: A CFPB rule issued in October 2024 under Dodd-Frank Section 1033 requires customer data to be made available to consumers and authorized third parties, with compliance beginning April 1, 2026. Implementation will require technology, compliance, third-party risk-management and digital-channel changes. Wider data sharing could also increase fraud and misuse and intensify competition.
• Consumer protection: Federal and state requirements and CFPB scrutiny affect mortgages, servicing, credit cards, auto finance, fees, disclosures and unfair or abusive practices, potentially raising costs and constraining products or pricing.
• Climate and sustainability: Regulatory approaches may differ across jurisdictions. SEC climate-disclosure rules are stayed pending litigation; California laws, other state initiatives and EU CSRD/CSDDD requirements may require changes to practices, disclosures or transition planning and could add costs or affect competitiveness.
• Other oversight: Consent orders and regulatory actions may require operational, product, service and risk-management changes. Derivatives activity is extensively regulated, and the company also faces privacy, anti-money-laundering, sanctions and reporting obligations. Changes in monetary policy can materially affect credit and deposit availability, pricing, earnings and financial condition.

Legislative and regulatory changes could alter costs, compensation structures, permitted activities and competitive conditions. Wells Fargo cannot predict whether future proposals will be enacted or their effects.

Resolution planning and capital distributions

On June 21, 2024, the FRB and FDIC determined that Wells Fargo’s latest resolution plan had no shortcomings or deficiencies. Wells Fargo and Wells Fargo Bank must continue submitting resolution and recovery plans; future deficiencies could result in higher capital, leverage or liquidity requirements, growth or activity restrictions, fines, or required asset sales.

The resolution plan uses a single-point-of-entry strategy, under which the Parent is the only material entity intended to enter resolution proceedings, although regulators are not bound to follow that strategy in an actual failure. Under the Parent’s Support Agreement, significant assets—including most of the Parent’s cash, deposits, liquid securities and intercompany loans—are transferred to an intermediate holding company (IHC), which must provide capital or liquidity to key operating entities in distress. The arrangement is intended to preserve the Parent’s ordinary-course access to cash through subordinated notes, a committed credit line and dividends. If specified capital or liquidity triggers are breached, or the Parent’s board authorizes bankruptcy, however, the notes are forgiven, the credit line terminates and IHC dividends to the Parent may be restricted. These provisions could materially weaken Parent liquidity and debt-service capacity, constrain dividends or share repurchases, and potentially accelerate bankruptcy.

Capital distributions are also subject to subsidiary-bank dividend restrictions; FRB capital-plan and stress-test requirements; Basel III, leverage and supplementary leverage requirements; the G-SIB surcharge; and enhanced-supervision triggers. The Parent relies significantly on subsidiary dividends to fund its own dividends and debt principal and interest. FDIC assessments fund the Deposit Insurance Fund, which targets a 2% designated reserve ratio; special assessments may also recover losses from bank failures. Termination of deposit insurance for a subsidiary bank could trigger significant deposit outflows and materially harm liquidity and earnings.

Item 15 — Exhibits and Financial Statement Schedules

Item 15 presents no standalone financial results or additional financial statement schedules. Wells Fargo’s consolidated financial statements and auditor’s report are incorporated from its 2024 Annual Report to Shareholders. The schedules are either included in the financial statements or notes, inapplicable, or not required.

The exhibits include updated 2025 forms of performance-share and restricted-share award agreements; the Bonus Plan, as amended effective January 1, 2025; and non-employee director compensation programs for the company and the bank, effective April 1, 2025. Other filed materials include the company’s insider-trading-related policies, securities issuance and repurchase policy, subsidiary information, and management certifications.

The filing was signed on February 25, 2025, by CEO Charles W. Scharf, CFO Michael P. Santomassimo, and Chief Accounting Officer Muneera S. Carr. This section discloses no material operating, financial, or industry developments.

Other Information

• Sanctions-related activity: In 2024, Wells Fargo identified, blocked, and reported to OFAC consumer accounts held by customers it determined met the definition of the Government of Iran due to employment at Iranian government-owned entities. Some routine account activity occurred before the accounts were closed and any remaining funds were transferred to blocked accounts. Associated 2024 gross revenue was de minimis, and the Company does not intend further activity with these accounts.
• Q4 2024 transaction: Wells Fargo received one $500,000 wire deposit into a customer account related to legal services for or on behalf of persons designated under Executive Order 13224. The transaction was conducted under an OFAC general license and generated no measurable gross revenue. The Company may conduct similar transactions in the future when permitted by U.S. law.
• Insider trading arrangements: During Q4 2024, no Company director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement.

Wells Fargo — 2024 results and financial condition

Consolidated results

Revenue was nearly flat as a 9% decline in net interest income was largely offset by 15% growth in noninterest income. Noninterest expense decreased 1.7%, with lower FDIC special-assessment and professional-services expense partly offset by higher technology costs and operating losses. Net income rose 3%, while diluted EPS increased 11%.

Balance sheet

Loans decreased 3%, while deposits increased 1%; average loans declined, and average deposits fell as lower noninterest-bearing balances more than offset growth in interest-bearing deposits. Long-term debt declined 17%.

Credit quality

Net charge-offs rose, but the provision declined because the loan allowance decreased by $425M in 2024, compared with a $1.949B increase in 2023. Higher commercial losses were driven mainly by commercial real estate, particularly office properties. Consumer losses increased on credit cards and higher balances, partly offset by lower auto losses. Nonperforming assets declined to 0.87% of loans as commercial real estate and residential mortgage nonaccruals fell, partly offset by higher commercial and industrial nonaccruals. Criticized commercial loans increased primarily because of commercial and industrial loans.

Capital, liquidity and shareholder measures

CET1, the binding capital ratio, exceeded the 9.80% minimum and buffers; TLAC exceeded its 21.50% minimum, and LCR remained above its 100% minimum.

Regulatory matters and risks

Regulatory remediation and the Federal Reserve’s asset-growth restriction remain major constraints. The 2018 Federal Reserve consent order remains in place pending completion and satisfactory implementation of governance, compliance and operational-risk improvements, including third-party reviews; the cap is measured using a two-quarter daily average. The OCC terminated its 2018 compliance-risk order in February 2025 and the CFPB terminated its 2022 order in January 2025. A 2021 OCC home-loan loss-mitigation order remains, and a September 2024 OCC formal agreement requires stronger anti-money-laundering and sanctions controls.

Customer-remediation accruals declined to $236M at year-end from $819M, but may change as reviews and regulatory discussions continue. If effective in its current form, the CFPB overdraft rule, scheduled for October 1, 2025 and subject to litigation, would significantly reduce overdraft-service fees. A proposed Federal Reserve debit-interchange rule could also significantly reduce card fees. The FDIC special assessment contributed $243M of pretax expense in 2024, following a $1.9B pretax estimate expensed in Q4 2023; the final assessment may change as FDIC losses are determined.

Wells Fargo — FY2024 results and trends

Consolidated results

Revenue decreased 0.4%, while net income increased 3%. Higher noninterest income, a lower credit-loss provision and lower noninterest expense more than offset weaker net interest income and higher taxes. The effective tax rate rose to 14.7% from 12.0%. FY2024 adoption of ASU 2023-02 expanded proportional amortization accounting for renewable-energy tax-credit investments, shifting investment-cost amortization from noninterest income to income tax expense and affecting reported revenue and taxes.

TE net interest income declined $4.779 billion: interest income rose $5.578 billion, but interest expense rose $10.357 billion. Higher interest-bearing liability costs and a shift from noninterest-bearing to interest-bearing deposits outweighed higher yields on earning assets; lower loan balances also weighed on results. TE net interest margin fell to 2.73% from 3.06%, and the interest-rate spread to 1.92% from 2.31%. Average interest-bearing deposit costs rose to 2.44% from 1.74%, while average noninterest-bearing deposits fell to $352.379 billion from $399.737 billion. Average loans declined to $915.376 billion from $943.916 billion, despite the average loan yield rising to 6.34% from 6.07%.

Noninterest income increased 15% to $34.620 billion from $30.222 billion. Investment advisory and asset-based fees rose 13% to $9.775 billion from $8.670 billion; investment banking fees rose 62% to $2.665 billion from $1.649 billion; and trading gains increased 10% to $5.284 billion from $4.799 billion. Debt securities recorded a $920 million net loss versus a $10 million gain, reflecting portfolio repositioning; equity securities recorded $1.070 billion in gains versus a $441 million loss. Noninterest expense fell 2%. Technology expense rose 17% to $4.583 billion, and operating losses rose 49% to $1.757 billion, including $722 million of customer-remediation expense versus $207 million and $290 million of legal expense versus $179 million. Other expense declined 35%, partly due to a lower FDIC special assessment.

Operating segments

Consumer Banking and Lending revenue fell 5%, as lower deposit and loan balances reduced net interest income to $28.303 billion from $30.185 billion. Net charge-offs rose 27% to $3.546 billion, driven by credit cards; provision increased to $3.561 billion from $3.299 billion. Average loans declined 3% and average deposits 4%, partly reflecting customer migration to higher-yielding products. Credit-card average loans grew 13% to $48.322 billion, while average auto loans fell 13% to $45.048 billion. Credit-card delinquencies increased (30+ days: 2.91% from 2.80%); auto delinquencies improved (2.31% from 2.80%). Digital active customers increased to 36.0 million from 34.8 million.

Commercial Banking revenue declined 5%, mainly from a 9% drop in net interest income to $9.096 billion as deposit costs rose. Higher deposit-related fees partly offset the decline. Provision increased to $290 million from $75 million, with net charge-offs rising to $333 million from $96 million. Average deposits grew 4% to $172.129 billion; period-end deposits rose 16% to $188.650 billion, on customer additions.

Corporate and Investment Banking (CIB) revenue rose 1%. Investment banking fees increased 54% to $2.675 billion and trading gains 12% to $5.091 billion, offsetting lower net interest income ($7.935 billion versus $9.498 billion). Trading results included an $85 million loss from implementing derivative funding valuation adjustments. Provision fell to $521 million from $2.007 billion, largely from a lower commercial real estate allowance, although net charge-offs rose to $909 million from $581 million. Average loans declined 5%; period-end commercial real estate loans fell 12% to $86.107 billion. Wells Fargo agreed to sell its non-agency third-party commercial mortgage servicing business in August 2024.

Wealth and Investment Management (WIM) revenue grew 5%, led by advisory and asset-based fees, up 13% to $9.534 billion, and commissions, up 5% to $2.153 billion. Net interest income fell 12% to $3.473 billion as deposits declined, clients moved cash to higher-yielding alternatives and sweep-deposit pricing costs increased. Noninterest expense rose 7% to $12.884 billion, and the efficiency ratio worsened to 83% from 82%. Period-end client assets increased 10% to $2.293 trillion; advisory assets were $997.7 billion, including $113.2 billion of market gains partly offset by $6.6 billion of net outflows. FY2023 advisory assets had $111.3 billion of market gains and $17.0 billion of net outflows.

Corporate’s net loss narrowed as noninterest income increased on venture-capital gains and lower equity-security impairments, while expense fell 25%, partly due to a lower FDIC assessment. Debt-security losses from portfolio repositioning and customer-remediation losses partly offset these improvements. Corporate held $4.5 billion of net rail-car operating-lease assets at year-end, versus $4.6 billion a year earlier. The fleet averaged 22 years old, was concentrated in four principal uses (66%), and was typically leased for 3–5 years; impairment exposure depends on market conditions, demand, utilization, rental rates and asset-life estimates.

Wells Fargo balance-sheet analysis — FY 2024

Assets and securities

Total assets were $1.93 trillion at December 31, 2024, down $2.6 billion from year-end 2023.

HTM securities are carried at amortized cost, net of allowance; their fair value is disclosed rather than used as the balance-sheet carrying basis. Wells Fargo sold approximately $28.4 billion of AFS securities and reinvested the proceeds in higher-yielding AFS securities. Sales and realized losses from the repositioning partially offset the rise in unrealized losses associated with higher interest rates. Weighted-average expected maturities lengthened to 7.2 years for AFS securities from 4.7 years, and to 8.3 years for HTM securities from 7.6 years. The portfolio is primarily U.S. Treasury, federal agency and agency MBS securities; 99% of combined AFS and HTM holdings were rated AA− or higher. Longer maturities and substantial unrealized losses make fair values sensitive to interest-rate movements.

Loans

Total loans declined 3% year over year. Commercial loans fell 2%, primarily because CRE paydowns exceeded originations and advances. Consumer loans fell 3% as residential mortgage and auto paydowns exceeded originations; credit-card balances increased with higher point-of-sale volume and new product launches. At year-end, residential mortgages were $250.269 billion and CRE loans were $136.505 billion. Of total loans, $302.983 billion matured within one year. Loans maturing after one year included $262.808 billion of fixed-rate balances and $346.954 billion of floating- or variable-rate balances.

Deposits and funding

Deposits grew 1%, reflecting growth in commercial and WIM brokerage deposits and product-mix changes, partly offset by maturities of corporate-treasury-issued CDs. Average deposit cost rose to 1.73% in Q4 2024 from 1.58% in Q4 2023.

Estimated uninsured deposits increased to $550 billion from $505 billion, or approximately 40% of deposits versus 37% in 2023, leaving funding more sensitive to customer confidence and deposit competition. Uninsured time deposits were $20.672 billion; $15.081 billion matured within three months and $19.146 billion within six months.

Off-balance-sheet arrangements

Wells Fargo uses off-balance-sheet arrangements to meet customer financing needs, manage credit, market and liquidity risks, and diversify funding. The arrangements include:

• Unfunded credit commitments: Legally binding agreements to lend. The bank’s maximum credit risk is generally less than the contractual commitment because customers may not draw the funds or may cancel commitments. Wells Fargo monitors exposures by customer and in aggregate, including their size and maturity.
• Special purpose entities: The bank enters into on- and off-balance-sheet transactions with unconsolidated entities, generally formed for securitizations and often considered variable interest entities.
• Guarantees and other commitments: Contingent obligations include letters of credit, written options, recourse obligations, guarantees to exchanges and clearing houses, indemnifications, and commitments to purchase securities under resale agreements.
• Derivatives: Used to manage interest-rate, credit and foreign-currency risks and to support customers’ risk-management needs. Derivatives are recorded at fair value. Their notional amounts generally are not exchanged and are not recorded on the balance sheet, so notional value alone is not a meaningful measure of risk.

The section directs readers to related financial-statement notes for further information on these exposures.

Wells Fargo — Risk Management

Risk governance and principal exposures

Wells Fargo describes strengthening its risk and control infrastructure as a priority. Risk management is integrated into strategy and capital planning: the CEO leads strategic planning, Independent Risk Management (IRM) independently challenges initiatives, and the Board reviews the annual strategic plan and approves the risk appetite statement at least annually. Climate considerations are being incorporated in response to regulatory expectations.

The framework has three lines of defense: the Front Line owns risks arising from its activities; IRM provides independent oversight, challenge and monitoring; and Internal Audit provides independent assurance. The Board Risk Committee oversees the framework and risk appetite. The CRO reports functionally to that committee and may escalate matters directly to the Board. The CEO- and CRO-co-chaired Enterprise Risk & Control Committee addresses significant and emerging risks, controls, escalations and changes to risk appetite. Wells Fargo also emphasizes employee responsibility to challenge decisions and escalate concerns, with risk management incorporated into performance evaluations and incentive design.

Loan portfolio and credit quality

At December 31, 2024, loans totaled $912.745B, down 2.56% year over year. CRE balances declined as paydowns exceeded originations and advances; credit-card balances grew, while residential mortgage and auto loans declined.

Credit indicators were mixed: nonaccrual loans and the allowance declined, but annual net charge-offs increased. Commercial charge-off rates rose mainly amid CRE office losses; consumer charge-offs increased primarily due to credit cards.

FY commercial charge-offs were $1.535B versus $0.923B, including CRE charge-offs of $0.903B versus $0.566B. Consumer charge-offs were $3.237B versus $2.547B; credit-card charge-offs were $2.455B versus $1.680B, while auto losses declined to $0.356B from $0.478B. Q4 net charge-offs were $1.211B versus $1.252B, with an annualized rate of 0.53% in both quarters.

The allowance for loan losses was $14.183B versus $14.606B; the allowance for unfunded commitments was $453M versus $482M. Credit-card allowance increased to $4.869B from $4.223B, while CRE allowance fell to $3.583B from $3.939B. Loan-loss allowance coverage was 2.97x annual net charge-offs, down from 4.21x, and 1.83x nonaccrual loans, up from 1.77x. The forecast used base and downside scenarios, including slower growth, CRE price declines and higher unemployment; management considered the allowance appropriate but noted sensitivity to economic conditions.

Concentrations and mortgage-related risks

C&I and lease-financing commitments were $799.642B versus $784.854B; criticized balances rose to $16.5B from $14.6B, mainly in entertainment and recreation and equipment, machinery and parts manufacturing. CRE criticized mortgage loans increased to $17.8B from $17.5B, and criticized construction loans to $1.5B from $830M, with apartments driving the increase. Office remained a material concern: it was 20% of CRE loans, and $3.136B of its $27.380B balance was nonaccrual. Apartments represented 29% of CRE; California, New York, Florida and Texas together represented 48%. CRE mortgage and construction commitments declined to $5.4B from $7.7B and $7.1B from $13.2B, respectively.

Residential mortgages declined as paydowns exceeded originations. California first-lien exposure was $108.000B; adjustable-rate mortgages were $66.3B versus $66.7B, mostly with initial resets in 2026 or later. Mortgage lines outstanding fell to $12.4B from $15.0B, with unfunded commitments down to $22.5B from $28.6B. Lines entering amortization may face higher delinquency and loss risk. Wells Fargo monitors collateral values and may offer modifications. Mortgage sales, servicing and securitizations can entail repurchase, indemnification, reimbursement or advance obligations; loans repurchased or subject to a unilateral repurchase option totaled $7.5B versus $7.8B, of which $7.1B versus $7.4B were held for investment.

Non-U.S. loans were $67.9B, about 7% of consolidated loans, versus $80.0B, about 9%, a year earlier. Top-20 country exposure was $111.538B versus $107.376B; non-sovereign exposure was $91.5B, including $45.1B to financial institutions and $46.4B to non-financial corporations. The U.K. was the largest foreign country exposure at $28.079B, including $4.3B of sovereign exposure, principally Bank of England deposits.

Market risk

Wells Fargo uses derivatives and securities to manage interest-rate and mortgage exposures. Higher rates can reduce available-for-sale securities’ fair value and regulatory capital through AOCI; mortgage-rate changes affect origination, servicing and mortgage-servicing-rights (MSR) values. MSR assumptions are uncertain and hedges may not fully offset exposures.

The sensitivity reflects assumed balance-sheet composition and deposit repricing; actual outcomes may differ, particularly if deposit betas differ from assumptions.

Trading General VaR is a one-day, 99%-confidence historical-simulation measure. It was $24M at year-end 2024 versus $37M in 2023; average VaR was $29M versus $35M. Period-end category VaR was credit $43M versus $30M, interest rate $34M versus $16M, equity $25M versus $23M, commodity $7M versus $3M, and foreign exchange $2M versus $1M. Diversification reduced period-end VaR by $87M versus $36M. VaR is supplemented by sensitivity analysis and stress tests and does not capture all potential losses.

Liquidity and funding

Year-end primary liquidity included $162.174B of central-bank deposits and $368.508B of high-quality liquid debt securities at fair value. The LCR exceeded its 100% minimum; Q4 average HQLA was $370.101B against projected net cash outflows of $295.537B. Wells Fargo was compliant with the NSFR and reported approximately $577.0B of Federal Reserve Discount Window and FHLB borrowing capacity.

Loans were 67% of deposits, versus 69% a year earlier. Short-term borrowings increased to $108.806B from $89.559B, while long-term debt declined to $173.078B from $207.588B, principally as bank-entity debt fell to $24.709B from $58.466B. The company issued $6.2B and had $5.9B of long-term debt maturities in January–February 2025. Moody’s affirmed ratings in November 2024, with a stable outlook for the parent but negative outlooks for certain bank deposit, issuer and senior unsecured ratings. A downgrade could increase collateral or funding needs on certain derivatives.

Capital position and regulatory ratios

Wells Fargo’s capital position weakened modestly in 2024 but remained above applicable regulatory minimums. The Standardized Approach was binding at year-end.

The 2024 CET1 decline of $6.195B reflected $18.606B of net income applicable to common stock, offset by $5.140B of common dividends and $18.496B of reductions from common-stock issuance, repurchases and stock-compensation-related items. Other reductions included $596M from accumulated other comprehensive income changes, $635M in other adjustments, and $158M from adoption of an accounting policy.

Standardized credit-risk RWAs fell $26.233B to $1.157T, while market-risk RWAs rose $10.711B to $59.574B. Under the Advanced Approach, credit-risk RWAs declined $30.050B to $726.855B and operational-risk RWAs declined $9.925B to $298.588B; market-risk RWAs increased $10.711B to $59.574B.

Leverage, loss-absorbing capacity and equity

At year-end, total leverage exposure was $2.268T and adjusted average assets were $1.891T. Total loss-absorbing capacity (TLAC) was $301.936B: 24.83% of RWAs against a 21.50% minimum, and 13.31% of leverage exposure against a 9.50% minimum. Eligible unsecured long-term debt was 11.12% of RWAs (7.50% minimum) and 5.97% of leverage exposure (4.50% minimum). These TLAC ratios reflect the regulatory CECL transition provision.

The TCE reconciliation deducted $25.167B of goodwill, $73M of identifiable intangible assets other than mortgage servicing rights, and $735M of goodwill and other intangibles on investments in consolidated portfolio companies; it included a $947M offset for applicable deferred taxes. FY2024 return on tangible common equity was 13.44%, compared with 13.13% in FY2023; net income applicable to common stock was $18.606B versus $17.982B.

Capital distributions and planning

During FY2024, Wells Fargo issued $993M of common stock, substantially all for employee compensation and benefits; repurchased 333M common shares for $19.6B; and paid $6.2B in common and preferred dividends. Its only active repurchase program was the Board’s July 2023 authorization for up to $30B. Approximately $7.3B of authority remained at December 31, 2024. The authorization has no stated expiration unless modified or revoked. Repurchase decisions depend on earnings, cash and capital needs, expected customer activity, stress-test results, market conditions, and legal or regulatory requirements; the company may suspend repurchases. Employee benefit-plan share purchases also reduce the remaining authorization.

Capital planning is subject to the annual Comprehensive Capital Analysis and Review (CCAR), in which the Federal Reserve assesses the company’s condition, risk profile and capital adequacy, conducts a supervisory stress test, and reviews proposed capital actions. Regulators also require large banks and bank holding companies to conduct their own stress tests.

Regulatory outlook

The stress capital buffer was 3.80% for October 1, 2024 through September 30, 2025; the G-SIB surcharge remained 1.50% in 2025, and the countercyclical buffer was 0.00% at year-end. Proposed Basel III changes could replace the Advanced Approach with a new expanded risk-based framework, while proposed revisions to G-SIB surcharges and eligible long-term debt calculations could change requirements; the latter proposal was expected to reduce Wells Fargo’s TLAC ratios. The filing notes that regulatory oversight and compliance costs remain business challenges and refers to its Overview and Risk Factors for discussion of consent orders and other regulatory actions.

Critical accounting estimates and valuation risks

Wells Fargo identifies five critical accounting policies involving significant, subjective judgment: the allowance for credit losses (ACL), fair value measurements, income taxes, liabilities for legal actions, and goodwill impairment. Changes in assumptions or estimates can materially affect reported earnings, assets, or liabilities.

Credit losses

The loan ACL estimates expected losses over the remaining contractual term, drawing on historical experience, current conditions, and economic forecasts. Key judgments include forecast scenarios and their weighting, credit ratings, model design and overlays, collateral values, contractual life, and qualitative risk factors. The current forecast period is two years, followed by reversion to long-term average loss expectations over up to two years.

At December 31, 2024, applying 100% weight to a more severe downside scenario would have increased the loan ACL by a hypothetical $5.4 billion. This is a sensitivity analysis—not management’s expected-loss estimate—and excludes qualitative factors; actual economic variables may move differently across portfolios and regions.

Fair value and mortgage servicing rights

Level 3 amounts are before derivative netting adjustments. Reduced market liquidity can limit the availability or reliability of observable prices and increase reliance on models and unobservable assumptions.

Residential mortgage servicing rights (MSRs), the company’s most significant Level 3 asset, are carried at fair value, with periodic valuation changes recognized in earnings. Their valuations depend on modeled future servicing income and judgmental assumptions such as discount rates, prepayment and default speeds, and servicing costs. These assumptions can shift with mortgage rates and market conditions; estimates are periodically benchmarked to independent appraisals.

Goodwill

The December 31, 2024 annual goodwill assessment found no impairment: each reporting unit’s fair value significantly exceeded its carrying amount. Aggregate reporting-unit fair value also exceeded Wells Fargo’s market capitalization, which the company attributed in part to an overall control premium and market volatility. Consumer Lending had significant valuation headroom but was the reporting unit most sensitive to forecast changes.

Goodwill is tested annually in the fourth quarter and more often if indicators warrant, including interest-rate trends, weaker revenue or higher costs, regulatory actions, or a decline in market capitalization. Valuations use discounted cash flow forecasts and comparable-company market multiples. The discounted cash flow approach requires judgments about economic conditions, balance-sheet changes, future business activity, terminal values, and cost-of-equity discount rates. Adverse forecast changes or materially higher discount rates could lead to impairment; risks include weaker revenue, significantly higher credit losses or other expenses, and adverse regulatory actions.

Other estimation risks and accounting standards

Income-tax provisions depend on interpretations of complex tax laws, uncertain tax positions, and forecasts of when items affect taxable income. Updates related to legal or regulatory developments, tax planning, or resolution of controversies may materially affect quarterly results. Legal-action accruals are recorded when losses are probable and estimable, generally at the best estimate within a range or, if no best estimate exists, at the low end. Outcomes may be materially higher or lower, and some probable or reasonably possible losses may not yet be estimable.

ASU 2023-09, effective January 1, 2025, will require more detailed annual income-tax disclosures, including disaggregated effective-tax-rate reconciliation items, jurisdictional information on state and local taxes, income taxes paid by jurisdiction, and domestic versus non-U.S. pretax income; Wells Fargo was evaluating implementation. The company was also evaluating ASU 2024-03, which requires disaggregation of income-statement expenses, but did not expect it to materially affect the consolidated financial statements.

Forward-Looking Statements

Wells Fargo’s forward-looking statements address expectations for operating and financial performance, growth, expenses and efficiency, credit losses and allowance assumptions, net interest income and margin, loans and balance-sheet trends, capital and liquidity, regulation and litigation, capital returns, profitability targets, taxes, ESG commitments, and strategy. These statements reflect management’s expectations, not guarantees; actual results may differ materially. The company undertakes no general obligation to update them.

Key risks and uncertainties

Results could be affected by economic weakness; declines in housing or commercial real estate prices; unemployment; and geopolitical or fiscal conditions. Other risks include the ability to meet regulatory capital and liquidity requirements or generate and raise capital; regulatory changes; failure to achieve expense or efficiency targets; and changes in interest rates or deposit mix that affect funding costs and net interest margin.

Market disruption could reduce funding or loan-sale capacity or lead to asset impairments. Weaker stock markets could lower investment-banking, brokerage, and wealth-management fees. Customer-harm consequences could increase costs, affect products, customer and employee retention, and damage reputation. Existing or new legal and regulatory matters could result in costs, fines, penalties, restrictions, or reputational harm. Cybersecurity incidents and operational failures, at Wells Fargo or third parties, Federal Reserve policy, and tax-law changes or discrete tax items that affect the effective tax rate are additional uncertainties.

Capital returns and forward-looking non-GAAP measures

Future dividends and share repurchases are not assured. They depend on earnings, cash needs, financial condition, customer activity, capital requirements and target structure, stress-test results, market conditions, and legal and regulatory constraints, including potential regulatory approval or conditions.

Management may provide forward-looking non-GAAP targets, including return on average tangible common equity. Wells Fargo cannot reconcile these targets to GAAP without unreasonable effort; the unavailable inputs could be significant to future results.

Risk Factors

Wells Fargo’s results and financial condition are exposed to economic, market, regulatory, operational, and reputational risks. The risks are interconnected: economic weakness can reduce revenue while increasing credit losses and funding pressure; regulatory constraints can limit growth and capital distributions; and operational or customer-related failures can lead to litigation, penalties, and further restrictions.

Economic, credit, market, and mortgage risks

The company’s lending and banking businesses depend substantially on U.S. economic conditions, including employment, borrower finances, and residential and commercial property values. Recession, weak confidence, reduced loan demand, higher unemployment or inflation, or borrower stress could lower net interest and fee income and increase defaults, charge-offs, and provisions for credit losses. The allowance for credit losses depends on complex estimates and forecasts and may prove insufficient, particularly if economic conditions deteriorate or loan growth is significant.

Credit exposure is concentrated in areas vulnerable to local and sector-specific shocks. Wells Fargo is one of the largest U.S. commercial real estate (CRE) lenders; losses could rise with weaker property cash flows, falling values, refinancing difficulties, higher rates, or reduced demand for office space. California is the company’s largest state by loans, creating exposure to local economic and real-estate weakness and natural disasters. Other risks include residential mortgage deterioration, losses as consumer real-estate-secured lines reach end-of-draw and begin amortizing, and losses from non-U.S. weakness or counterparty and central-counterparty clearing exposures.

Interest rates and yield-curve changes can affect net interest income and margin, funding costs, borrower repayment capacity, securities values, trading results, and mortgage servicing rights (MSRs). Margin may be pressured if funding costs rise faster than asset yields, or if the yield curve flattens or inverts. Prolonged low rates can make it difficult to replace higher-yielding assets; high rates can weaken loan demand, increase borrower stress, and raise deposit costs. Hedging is imperfect and may not prevent losses. Changes in rates, spreads, foreign exchange, equities, commodities, issuer credit, or collateral performance may also affect earnings and other comprehensive income. Benchmark transitions, including changes to SOFR, can create valuation, funding, operational, legal, and hedging risks.

Mortgage revenue is rate-sensitive: rising rates generally reduce originations while increasing MSR values, and falling rates generally have the opposite effects, but the offsets are imperfect. The business also depends on government-sponsored enterprises and agencies to purchase, insure, or guarantee eligible loans. Changes in eligibility or reduced purchases could constrain lending and liquidity. Loan-sale representations and warranties, servicing performance, foreclosure and loss-mitigation practices, flood-zone servicing, and the planned reduction in residential mortgage servicing may result in repurchases, indemnities, higher costs, penalties, litigation, or reputational damage.

Funding, capital, regulation, and resolution

Customer deposits are Wells Fargo’s primary, relatively low-cost funding source. Deposit outflows, competition for deposits, higher credit spreads, reduced market access, asset-sale constraints, repo disruption, increased credit-line draws, or tighter liquidity rules could raise funding costs or impair liquidity. Rapid withdrawals—particularly of uninsured or non-operational deposits—remain a risk. U.S. debt-limit uncertainty or sovereign-rating downgrades could disrupt markets and reduce the value or borrowing utility of U.S. government and agency securities. A credit-rating downgrade could also increase borrowing costs, restrict market access, or trigger additional collateral requirements.

The 2018 Federal Reserve consent order caps consolidated assets, as defined in the order, at the December 31, 2017 level until required conditions are met, constraining potential growth and net interest income. Wells Fargo also remains subject to an April 2018 CFPB consent order, a September 2021 OCC consent order concerning Home Lending loss mitigation, and a September 2024 OCC formal agreement concerning AML and sanctions risk management. Remediation may take time, reveal further issues, and lead to additional penalties, business restrictions, higher capital or liquidity requirements, or limits on subsidiary distributions. In September 2021, the OCC assessed a $250 million civil money penalty for insufficient progress under an earlier consent order and Home Lending loss-mitigation matters.

Extensive and evolving U.S. and international regulation can increase compliance, capital, and liquidity costs and restrict products, fees, activities, growth, acquisitions, or capital distributions. Consumer-protection scrutiny, AML and sanctions requirements, privacy obligations, and international political or sanctions risks can also lead to penalties and operational constraints. Basel III and other capital, leverage, liquidity, stress-testing, and resolution requirements may constrain lending, investment, dividends, or repurchases, or require asset sales or new capital; equity issuance could dilute shareholders.

The Parent relies substantially on subsidiary dividends and distributions for its funding needs, including debt service and common and preferred dividends. Law, regulation, contractual arrangements, or Support Agreement triggers can restrict those payments; subsidiary creditors have priority over Parent claims on subsidiary assets. Under the company’s stated single-point-of-entry resolution plan, Parent investors and unsecured creditors could incur significant or total losses even if subsidiary creditors recover substantially or fully. The plan is not binding in an actual resolution, and the FDIC may depart from ordinary bankruptcy claim priorities. Deficient resolution or recovery plans could prompt requirements for additional capital, liquidity, or divestitures.

Operational, cyber, legal, and strategic risks

System failures, service interruptions, delayed transactions, or problems at vendors and other third parties could disrupt customer services, cause losses or remediation costs, and lead to litigation, penalties, or customer attrition. Cyber threats—including ransomware, phishing, fraud, and AI-enabled attacks—could expose data, disrupt operations, or damage reputation. Investigations may take time, insurance may not cover all losses, and response measures can themselves cause disruption. Risk models, controls, and data may fail to identify or manage exposures; AI systems may generate inaccurate or biased outputs, contributing to poor decisions, legal claims, or losses.

Customer remediation issues, past sales practices, and alleged or actual servicing deficiencies may result in further costs, litigation, reputational harm, and regulatory action. Legal proceedings have uncertain outcomes; losses may arise without accrual, and ultimate costs may exceed accrued amounts. Negative public sentiment, including around customer treatment, compliance, data protection, ESG, or contested industries, could weaken customer retention and acquisition.

Competition from banks and technology-enabled or non-depository providers may require greater investment, product changes, or lower prices. Failure to respond to changes in digital banking, payments, e-commerce, digital currencies, or AI could reduce market share and growth. Business-plan execution, efficiency initiatives, and acquisitions may consume resources, disrupt operations, or fail to deliver expected benefits. Climate-related physical and transition risks may disrupt operations, weaken customers or collateral, increase costs, and create legal or reputational exposure. Attracting and retaining specialized talent, labor organizing, accounting judgments, changes in standards, or control weaknesses may also adversely affect results.

Controls

As of December 31, 2024, management concluded that disclosure controls and procedures and internal control over financial reporting were effective under the COSO 2013 framework; KPMG issued an audit report on internal control. No fourth-quarter 2024 change materially affected, or was reasonably likely to materially affect, internal control over financial reporting. These controls have inherent limitations. The filing directs readers to Wells Fargo’s 2025 quarterly reports for material updates to these risk factors.

Independent Auditor’s Report

As of December 31, 2024, Wells Fargo maintained effective internal control over financial reporting in all material respects. The auditor issued unqualified opinions on the company’s consolidated financial statements for 2022–2024. The report, dated February 25, 2025, reported no material weakness or qualification.

The auditor cautioned that internal controls provide reasonable, not absolute, assurance and may not prevent or detect every misstatement. Their effectiveness may also change in future periods as conditions or compliance change.

Wells Fargo FY2024 financial statements

Wells Fargo’s revenue was nearly flat as higher fee and trading income partly offset pressure on net interest income from higher funding costs. Net income and diluted EPS increased, while the loan portfolio contracted and credit-card and commercial-real-estate losses rose. The company continued substantial capital returns through share repurchases.

Consolidated results

($B, except EPS and shares; FY ended December 31)

Interest expense increased sharply, particularly deposit expense ($24.282B versus $16.503B), driving the decline in net interest income. Noninterest income gains included trading-related income of $9.951B ($8.385B in FY2023), investment banking fees of $2.665B ($1.649B), and investment advisory and asset-based fees of $9.775B ($8.670B). Operating losses rose to $1.757B from $1.183B, including $722M of customer-remediation losses, but remained well below FY2022’s $6.984B. The FY2024 effective tax rate rose to 14.7% from 12.0%, partly because tax credits reduced the rate by less than in the prior year.

Segment performance

($B; segment profit measure is net income)

Consumer Banking and Commercial Banking were pressured by lower net interest income. CIB’s higher trading gains and investment banking fees supported revenue and earnings despite lower net interest income; Wealth and Investment Management benefited from asset-based fees. Corporate’s revenue included a $920M net loss on debt securities, partly offset by a $1.017B gain on equity securities.

Cash flow, balance sheet and capital returns

Stockholders’ equity was $179.120B, including $18.608B of preferred stock. Approximate tangible common equity, after subtracting preferred stock, goodwill and mortgage servicing rights, was $127.566B. Wells Fargo repurchased 332.8M shares in FY2024 (272.1M in FY2023), spending $19.448B ($11.851B); common dividends declared were $5.243B ($4.879B). The AFS debt portfolio was carried at $162.978B fair value versus $170.607B amortized cost; HTM securities were carried at $234.948B amortized cost versus $193.779B fair value.

Credit, funding and key exposures

Loans outstanding at principal balance declined to $912.745B from $936.682B. Commercial loans were $534.159B ($547.427B) and consumer loans $378.586B ($389.255B); CRE declined to $136.505B from $150.616B, while credit-card balances rose to $56.542B from $52.230B. Net loan charge-offs increased to $4.772B from $3.470B, and the net charge-off ratio rose to 0.52% from 0.37%, reflecting higher card losses and CRE office losses. The allowance for loan losses was $14.183B versus $14.606B; total loan ACL, including $453M for unfunded commitments, was $14.636B versus $15.088B. Commercial nonaccrual loans declined, but criticized CRE balances rose to $19.277B from $18.330B. Commercial loans 90+ days past due and still accruing increased to $1.005B from $188M.

Time deposits fell to $139.865B from $192.267B; $126.470B contractually mature in 2025. Bank-entity long-term debt declined mainly as FHLB advances fell to $3.000B from $38.000B. The Company’s Standardized CET1 ratio was 11.07%, above its 9.80% requirement, versus 11.43% a year earlier; its supplementary leverage ratio was 6.74% against a 5.00% minimum. Derivative rating-contingent collateral exposure is notable: Wells Fargo had posted $19.8B, and a downgrade below investment grade would require an additional $4.1B.

Other material developments and risks

Tax-credit investments generated a $1.019B net tax benefit in FY2024, versus $1.526B in FY2023; adoption of ASU 2023-02 changed their accounting and reduced comparability. Unfunded tax-credit investment commitments were $5.5B, while recognized liabilities for certain commitments rose to $6.4B. The high end of reasonably possible legal losses above accruals was approximately $2.0B. The OCC’s September 2024 formal agreement addressed AML and sanctions risk management; related inquiries continue.

The auditor issued unqualified opinions on the financial statements and internal control. Critical audit matters included the $14.6B credit-loss allowance, $6.8B fair value of residential MSRs, and Consumer Lending goodwill impairment testing. These matters involve significant estimation judgment; they were not identified misstatements or separate audit opinions.

Q4 2024 results

Q4 revenue was down 0.5% year over year and essentially flat sequentially, compared with Q3 2024 revenue of $20,366 million. Revenue composition shifted: net interest income fell 7.3% year over year, while noninterest income increased 10.8%. Interest income declined 3.4%, while interest expense rose 1.5%, pressuring net interest income. Sequentially, net interest income increased 1.2% from Q3’s $11,690 million as interest expense fell from $11,308 million.

Net income rose 47.4% year over year. Lower credit-loss provision and noninterest expense, together with higher noninterest income, contributed to the improvement. The Q4 2023 noninterest-expense comparison included $2,933 million of “Other” expense, versus $940 million in Q4 2024; the quarterly data does not explain the difference. Net income before noncontrolling interests was $5,263 million in Q4 2024, of which $184 million was attributable to noncontrolling interests. Average common and diluted shares outstanding declined 8.5% and 8.1%, respectively, supporting per-share earnings growth. Personnel expense edged down, while technology, telecommunications and equipment expense increased 19.1%.

Quarterly trends during 2024

Revenue remained within a relatively narrow range of $20,366 million to $20,863 million across the four 2024 quarters. Net interest income was below each corresponding 2023 quarter, but recovered modestly in Q4 after declining through Q3.

Glossary of Acronyms

This section defines acronyms used elsewhere in the filing, covering:

• Credit and asset quality: ACL, CECL, NPA, DPD
• Liquidity and capital regulation: HQLA, LCR, NSFR, CET1, RWAs, SLR, G-SIB, TLAC
• Lending and real estate: CRE, LTV, ARM, MBS
• Valuation and accounting: AFS, HTM, AOCI, OCI, CVA, DVA, FVA
• Wealth management: WIM