Wells Fargo Reports Fourth Quarter 2017 Net Income of $6.2 Billion; Diluted EPS of $1.16

Full Year 2017 Net Income of $22.2 Billion; Diluted EPS of $4.10

January 12, 2018 08:00 AM Eastern Standard Time

SAN FRANCISCO--(BUSINESS WIRE)--Wells Fargo & Company (NYSE:WFC):

Full year 2017 financial results¹:
- Net income of $22.2 billion, compared with $21.9 billion in 2016
- Diluted earnings per share (EPS) of $4.10, compared with $3.99
- Revenue of $88.4 billion, up from $88.3 billion
  - Net interest income of $49.6 billion, up $1.8 billion, or 4 percent
  - Noninterest income of $38.8 billion, down $1.7 billion, or 4 percent
- Average deposits of $1.3 trillion, up $54.1 billion, or 4 percent
- Average loans of $956.1 billion, up $6.2 billion, or 1 percent
- Return on assets (ROA) of 1.15 percent and return on equity (ROE) of 11.35 percent
- Net charge-offs of 0.31 percent of average loans, down from 0.37 percent
- Nonaccrual loans of $8.0 billion, down $2.3 billion, or 23 percent
- Returned $14.5 billion to shareholders through common stock dividends and net share repurchases, up 16 percent from $12.5 billion
  - Net share repurchases of $6.8 billion, up 42 percent
  - Period-end common shares outstanding of 4.9 billion, down 124.5 million shares, or 2 percent
Fourth quarter 2017 financial results included:
- $3.35 billion after-tax benefit, or $0.67 per share, from the Tax Cuts & Jobs Act (Tax Act)
  - $3.89 billion estimated tax benefit from the reduction to net deferred income taxes
  - $370 million after-tax loss from adjustments related to leveraged leases, low income housing and tax-advantaged renewable energy investments
  - $173 million tax expense from estimated deemed repatriation
- $848 million pre-tax gain, or $0.11 per share, on sale of Wells Fargo Insurance Services USA
- $3.25 billion pre-tax expense, or $(0.59) per share, from litigation accruals for a variety of matters, including mortgage-related regulatory investigations, sales practices, and other consumer-related matters; a majority of this expense was not tax deductible

Final financial results and other disclosures will be reported in our Annual Report on Form 10-K for the year ended December 31, 2017, 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		Year ended Dec. 31,
	Dec 31, 2017			Sep 30, 2017	Dec 31, 2016	2017	2016
Earnings (a)
Diluted earnings per common share	$	1.16		0.83	0.96	4.10	3.99
Wells Fargo net income (in billions)	6.15			4.54	5.27	22.18	21.94
Return on assets (ROA)	1.26		%	0.93	1.08	1.15	1.16
Return on equity (ROE)	12.47			8.96	10.94	11.35	11.49
Return on average tangible common equity (ROTCE) (b)	14.85			10.66	13.16	13.55	13.85
Asset Quality
Net charge-offs (annualized) as a % of average total loans	0.31		%	0.30	0.37	0.31	0.37
Allowance for credit losses as a % of total loans	1.25			1.27	1.30	1.25	1.30
Allowance for credit losses as a % of annualized net charge-offs	401			426	348	408	356
Other
Revenue (in billions) (a)	$	22.1		21.8	21.6	88.4	88.3
Efficiency ratio (a)(c)	76.2		%	65.7	61.2	66.2	59.3
Average loans (in billions)	$	951.8		952.3	964.1	956.1	950.0
Average deposits (in billions)	1,311.6			1,306.4	1,284.2	1,304.6	1,250.6
Net interest margin (a)	2.84		%	2.86	2.87	2.87	2.86
(a) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.
(b) Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, and goodwill and certain identifiable intangible assets (including goodwill and intangible assets associated with certain of our nonmarketable equity investments but excluding mortgage servicing rights), net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity, which utilizes tangible common equity, is a useful financial measure because it enables investors and others to assess the Company's use of equity. For additional information, including a corresponding reconciliation to GAAP financial measures, see the "Tangible Common Equity" tables on page 35.
(c) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).(1) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.

Wells Fargo & Company (NYSE:WFC) reported net income of $6.2 billion, or $1.16 per diluted common share, for fourth quarter 2017, compared with $5.3 billion, or $0.96 per share, for fourth quarter 2016, and $4.5 billion, or $0.83 per share, for third quarter 2017.

Chief Executive Officer Tim Sloan said, “In 2017 we continued executing on our plan to build a better bank for the future, and I'm proud of the hard work and dedication of our team members to put our customers first as we transform Wells Fargo. Over the past year we have invested billions of dollars into our business and capabilities including risk management, accelerated the pace of innovation, increased our commitment to communities, enhanced team member benefits, and continued to execute on our business strategies to provide long-term value to our shareholders. The progress we made over the past year was evident in the fourth quarter in higher deposits, loan growth particularly in commercial loans, increased debit and credit card transactions, and record client assets under management in Wealth and Investment Management. While we faced challenges in 2017, we are a much better company today than we were a year ago, and I am confident that this year Wells Fargo will be even better.”

Chief Financial Officer John Shrewsberry said, “Wells Fargo reported $6.2 billion of net income in the fourth quarter, which included a net benefit from the Tax Cuts & Jobs Act and a gain on the sale of Wells Fargo Insurance Services, partially offset by litigation accruals. Compared with the third quarter we grew both loans and deposits, and our credit performance, liquidity and capital remained exceptionally strong. We returned a record $14.5 billion to shareholders through common stock dividends and net share repurchases in 2017, up 16 percent, and returning more capital to shareholders remains a priority. We've made progress on our efficiency initiatives and remain committed to our target of $2 billion of expense reductions by the end of 2018, which are being used to support our investments in the business, and an additional $2 billion by the end of 2019. In addition, by the beginning of 2019 we expect the amortization of core deposit intangible expense ($769 million in 2018) and the FDIC special assessment to be complete.”

Net Interest Income

Net interest income in fourth quarter 2017 was $12.3 billion, down $136 million, compared with third quarter 2017, driven primarily by a negative $183 million one-time adjustment related to leveraged leases due to the Tax Act, which reduced loan yields in the fourth quarter, partially offset by a modest net benefit from all other growth, repricing and variable items.

Net interest margin was 2.84 percent, down 2 basis points from third quarter 2017. The negative impacts from the one-time adjustment to leveraged leases and growth in average deposits were partially offset by lower average long-term debt and a modest net benefit from all other growth, repricing and variable items.

Noninterest Income

Noninterest income in the fourth quarter was $9.7 billion, compared with $9.4 billion in third quarter 2017. Fourth quarter noninterest income reflected higher other income, trust and investment fees, and market sensitive revenue², partially offset by lower mortgage banking and deposit service charges.

Deposit service charges of $1.2 billion were down $30 million in the fourth quarter driven by the impact of customer-friendly changes including the launch of Overdraft Rewind^SM in November.
Trust and investment fees were $3.7 billion, compared with $3.6 billion in third quarter 2017, as higher asset-based fees and retail brokerage transaction activity were partially offset by lower investment banking fees.
Mortgage banking noninterest income was $928 million, compared with $1.0 billion in third quarter 2017. Residential mortgage loan originations were $53 billion in the fourth quarter, down from $59 billion in the third quarter. The production margin on residential held-for-sale mortgage loan originations³ was 1.25 percent, compared with 1.24 percent in the third quarter. Mortgage servicing income was $262 million in the fourth quarter, down from $309 million in the third quarter.
Market sensitive revenue was $728 million, compared with $649 million in third quarter 2017, driven by higher net gains from equity investments.
Other income was $405 million, compared with $47 million in the third quarter. Fourth quarter 2017 included an $848 million gain on the previously announced sale of Wells Fargo Insurance Services USA, which was partially offset by $414 million of impairments on low income housing and renewable energy investments due to the Tax Act.

Noninterest Expense

Noninterest expense in the fourth quarter was $16.8 billion, compared with $14.4 billion in the prior quarter. Fourth quarter expenses included operating losses of $3.5 billion, up from $1.3 billion in the third quarter, primarily reflecting litigation accruals for a variety of matters, including mortgage-related regulatory investigations, sales practices, and other consumer-related matters. Fourth quarter expenses also included higher charitable donations (up $103 million from the third quarter), commission and incentive compensation expense, outside professional services, and typically higher equipment and advertising expense, which were partially offset by a $117 million gain on the sale of a corporate property. The efficiency ratio was 76.2 percent in fourth quarter 2017, up from 65.7 percent in the third quarter, driven primarily by higher operating losses.

Income Taxes

The Company’s fourth quarter income tax expense was a $1.6 billion benefit and reflected the estimated impact of the Tax Act, including a benefit of $3.89 billion resulting from the re-measurement of the Company's estimated net deferred tax liability as of December 31, 2017, partially offset by $173 million of tax expense relating to the estimated tax impact of the deemed repatriation of the Company's previously undistributed foreign earnings. The fourth quarter income tax benefit was also adversely impacted by a $1.0 billion tax effect relating to the impact of discrete non-deductible items (primarily litigation accruals). The full year 2017 effective income tax rate was 18.1 percent. The Company currently expects its full year 2018 effective income tax rate to be approximately 19 percent.

Loans

Total average loans were $951.8 billion in the fourth quarter, down $521 million from the third quarter. Period-end loan balances were $956.8 billion at December 31, 2017, up $4.9 billion from September 30, 2017. Commercial loans were up $3.2 billion from September 30, 2017 with growth in commercial and industrial loans, partially offset by declines in commercial real estate loans. Consumer loans increased $1.7 billion from the prior quarter, as growth in real estate 1-4 family first mortgage loans and consumer credit card loans was partially offset by expected declines in automobile loans and the junior lien mortgage portfolio.


Period-End Loan Balances
(in millions)	Dec 31, 2017		Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016
Commercial	$	503,388	500,150		505,901		505,004		506,536
Consumer	453,382		451,723		451,522		453,401		461,068
Total loans	$	956,770	951,873		957,423		958,405		967,604
Change from prior quarter	$	4,897	(5,550	)	(982	)	(9,199	)	6,278

Investment Securities

Investment securities were $416.4 billion at December 31, 2017, up $1.8 billion from the third quarter, as approximately $20.9 billion of purchases, mostly federal agency mortgage-backed securities (MBS) in the available-for-sale portfolio, were partially offset by run-off and sales.

Net unrealized gains on available-for-sale securities declined to $1.5 billion at December 31, 2017, compared with $1.8 billion at September 30, 2017, primarily due to gains realized in the fourth quarter. Modestly higher Treasury yields were largely offset by tighter credit and agency MBS spreads during the quarter.

Deposits

Total average deposits for fourth quarter 2017 were $1.3 trillion, up $5.2 billion from the prior quarter. The average deposit cost for fourth quarter 2017 was 28 basis points, up 2 basis points from the prior quarter and 16 basis points from a year ago, primarily driven by an increase in commercial and Wealth and Investment Management deposit rates.

Capital

Capital levels remained strong in the fourth quarter, with a Common Equity Tier 1 ratio (fully phased-in) of 11.9 percent⁴, compared with 11.8 percent in the prior quarter. In fourth quarter 2017, the Company repurchased 51.4 million shares of its common stock, which reduced period-end common shares outstanding by 36.3 million.

Credit Quality

Net Loan Charge-offs

The quarterly loss rate was 0.31 percent (annualized), compared with 0.30 percent in the prior quarter. Commercial and consumer losses were 0.09 percent and 0.56 percent, respectively. Total credit losses were $751 million in fourth quarter 2017, up $34 million from third quarter 2017. Commercial losses were up $2 million on lower recoveries in commercial real estate loans. Consumer losses increased $32 million, as higher recoveries on consumer real estate loans and lower losses on automobile loans were offset by higher credit card losses driven by seasonality and portfolio seasoning.

Net Loan Charge-Offs
	Quarter ended
	December 31, 2017					September 30, 2017					June 30, 2017
($ 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	$	118		0.14	%	$	125		0.15	%	$	78		0.10	%
Real estate mortgage	(10		)	(0.03	)	(3		)	(0.01	)	(6		)	(0.02	)
Real estate construction	(3		)	(0.05	)	(15		)	(0.24	)	(4		)	(0.05	)
Lease financing	10			0.20		6			0.12		7			0.15
Total commercial	115			0.09		113			0.09		75			0.06
Consumer:
Real estate 1-4 family first mortgage	(23		)	(0.03	)	(16		)	(0.02	)	(16		)	(0.02	)
Real estate 1-4 family junior lien mortgage	(7		)	(0.06	)	1			—		(4		)	(0.03	)
Credit card	336			3.66		277			3.08		320			3.67
Automobile	188			1.38		202			1.41		126			0.86
Other revolving credit and installment	142			1.46		140			1.44		154			1.58
Total consumer	636			0.56		604			0.53		580			0.51
Total	$	751		0.31	%	$	717		0.30	%	$	655		0.27	%

(a) Quarterly net charge-offs (recoveries) as a percentage of average loans are annualized. See explanation on page 31 of the accounting for purchased credit-impaired (PCI) loans and the impact on selected financial ratios.

Nonperforming Assets

Nonperforming assets decreased $647 million, or 7 percent, from third quarter 2017 to $8.7 billion. Nonaccrual loans decreased $583 million from third quarter 2017 to $8.0 billion primarily driven by lower commercial and industrial nonaccruals reflecting continued improvement in the oil and gas portfolio, as well as continued declines in consumer real estate nonaccruals.


Nonperforming Assets (Nonaccrual Loans and Foreclosed Assets)
	December 31, 2017					September 30, 2017					June 30, 2017
($ 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	$	1,899		0.57	%	$	2,397		0.73	%	$	2,632		0.79	%
Real estate mortgage	628			0.50		593			0.46		630			0.48
Real estate construction	37			0.15		38			0.15		34			0.13
Lease financing	76			0.39		81			0.42		89			0.46
Total commercial	2,640			0.52		3,109			0.62		3,385			0.67
Consumer:
Real estate 1-4 family first mortgage	4,122			1.45		4,213			1.50		4,413			1.60
Real estate 1-4 family junior lien mortgage	1,086			2.73		1,101			2.68		1,095			2.56
Automobile	130			0.24		137			0.25		104			0.18
Other revolving credit and installment	58			0.15		59			0.15		59			0.15
Total consumer	5,396			1.19		5,510			1.22		5,671			1.26
Total nonaccrual loans	8,036			0.84		8,619			0.91		9,056			0.95
Foreclosed assets:
Government insured/guaranteed	120					137					149
Non-government insured/guaranteed	522					569					632
Total foreclosed assets	642					706					781
Total nonperforming assets	$	8,678		0.91	%	$	9,325		0.98	%	$	9,837		1.03	%
Change from prior quarter:
Total nonaccrual loans	$	(583	)			$	(437	)			$	(703	)
Total nonperforming assets	(647		)			(512		)			(827		)

Allowance for Credit Losses

The allowance for credit losses, including the allowance for unfunded commitments, totaled $12.0 billion at December 31, 2017, down $149 million from September 30, 2017. Fourth quarter 2017 included a $100 million reserve release⁵, reflecting continued strong credit performance. The allowance coverage for total loans was 1.25 percent compared with 1.27 percent in third quarter 2017. The allowance covered 4.0 times annualized fourth quarter net charge-offs, compared with 4.3 times in the prior quarter. The allowance coverage for nonaccrual loans was 149 percent at December 31, 2017, compared with 141 percent at September 30, 2017. The Company believes the allowance was appropriate for losses inherent in the loan portfolio at December 31, 2017.

Business Segment Performance

Wells Fargo defines its operating segments by product type and customer segment. Segment net income for each of the three business segments was:

	Quarter ended
(in millions)	Dec 31, 2017		Sep 30, 2017	Dec 31, 2016
Community Banking (a)	$	3,673	2,176	2,733
Wholesale Banking (a)	2,148		2,045	2,194
Wealth and Investment Management	659		710	653
(a) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.

Community Banking offers a complete line of diversified financial products and services for consumers and small businesses including checking and savings accounts, credit and debit cards, and 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 in support of the other operating segments and results of investments in our affiliated venture capital partnerships.

Selected Financial Information
	Quarter ended
(in millions)	Dec 31, 2017		Sep 30, 2017	Dec 31, 2016
Total revenue (a)	$	12,028	11,984	11,661
Provision for credit losses	636		650	631
Noninterest expense	10,200		7,834	6,985
Segment net income (a)	3,673		2,176	2,733
(in billions)
Average loans	473.5		473.5	488.1
Average assets	974.0		988.9	1,000.7
Average deposits	738.1		734.5	709.8
(a) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.

Community Banking reported net income of $3.7 billion, up $1.5 billion, or 69 percent, from third quarter 2017. Fourth quarter income tax expense reflected the estimated impact of the Tax Act to the Company and the impact of discrete non-deductible items, primarily litigation accruals. Revenue in the fourth quarter was $12.0 billion, flat compared with third quarter 2017, and included lower net interest income, mortgage banking revenue, and service charges on deposit accounts, offset by higher market sensitive revenue and trust and investment fees. Noninterest expense increased $2.4 billion, or 30 percent, compared with third quarter 2017, driven primarily by litigation accruals. The provision for credit losses decreased $14 million from the prior quarter.

Net income was up $940 million, or 34 percent, from fourth quarter 2016, and included the income tax benefit from the Tax Act. Revenue increased $367 million, or 3 percent, compared with a year ago due to higher market sensitive revenue and other income, partially offset by lower mortgage banking revenue, service charges on deposit accounts, and net interest income. Noninterest expense increased $3.2 billion, or 46 percent, from a year ago primarily driven by litigation accruals. The provision for credit losses increased $5 million from a year ago.

Retail Banking and Consumer Payments, Virtual Solutions and Innovation

1.6 million branch customer experience surveys completed during 2017, both ‘Loyalty’ and ‘Overall Satisfaction with Most Recent Visit’ scores improved in fourth quarter from third quarter
5,861 retail bank branches as of the end of fourth quarter 2017, reflecting 214 branch consolidations for full year 2017
For the 15th consecutive year, America's #1 small business lender and #1 lender to small businesses in low-and moderate-income areas (loans under $1 million; 2016 Community Reinvestment Act data, released November 2017)
Primary consumer checking customers^6,7up 0.2 percent year-over-year
Debit card point-of-sale purchase volume⁸ of $83.1 billion in fourth quarter, up 6 percent year-over-year
Credit card point-of-sale purchase volume of $19.1 billion in fourth quarter, up 6 percent year-over-year
Credit card penetration in retail banking households of 45.3 percent⁹
28.1 million digital (online and mobile) active customers, including 21.2 million mobile active users^7,10
Bank Monitor Awards provided Wells Fargo a Gold Medal, the highest level, in Website Design and Usability (December 2017)
Dynatrace (formerly Keynote) ranked Wells Fargo #1 in Functionality, Open Accounts, and Transact in its fourth quarter Online Banking Scorecard (November 2017)

Consumer Lending

Home Lending
- Originations of $53 billion, down from $59 billion in prior quarter
- Applications of $63 billion, down from $73 billion in prior quarter
- Application pipeline of $23 billion at quarter end, down from $29 billion at September 30, 2017

Automobile originations of $4.3 billion in fourth quarter, flat compared with prior quarter and down 33 percent from prior year, as proactive steps to tighten underwriting standards resulted in lower origination volume

Wholesale Banking provides financial solutions to businesses across the United States and globally with annual sales generally in excess of $5 million. Products and businesses include Business Banking, Commercial Real Estate, Corporate Banking, Financial Institutions Group, Government and Institutional Banking, Middle Market Banking, Principal Investments, Treasury Management, Wells Fargo Commercial Capital, and Wells Fargo Securities.

Selected Financial Information
	Quarter ended
(in millions)	Dec 31, 2017		Sep 30, 2017	Dec 31, 2016
Total revenue (a)	$	7,094	7,084	7,153
Provision for credit losses	20		69	168
Noninterest expense	4,204		4,248	4,002
Segment net income (a)	2,148		2,045	2,194
(in billions)
Average loans	463.5		463.8	461.5
Average assets	837.3		824.3	811.9
Average deposits	465.7		463.4	459.2
(a) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.

Wholesale Banking reported net income of $2.1 billion, up $103 million, or 5 percent, from third quarter 2017. Fourth quarter results included the loss from adjustments related to leveraged leases and other tax advantaged businesses due to the Tax Act, as well as a gain related to the completion of the previously announced sale of Wells Fargo Insurance Services USA (WFIS). Revenue of $7.1 billion was flat compared with the prior quarter, as the gain related to the sale of WFIS was offset by the impact of the Tax Act and lower market sensitive revenue. Net interest income decreased $134 million, or 3 percent, as the impact to leveraged leases due to the Tax Act was partially offset by higher trading related income and a modest benefit from higher interest rates. Noninterest income increased $144 million, or 5 percent, as the gain related to the sale of WFIS and higher commercial real estate brokerage fees were partially offset by impairments on low income housing and tax-advantaged renewable energy investments due to the Tax Act, lower market sensitive revenue and one less month of WFIS operating income. Noninterest expense decreased $44 million, or 1 percent, from the prior quarter reflecting one less month of WFIS operating expenses and lower operating lease expense. The provision for credit losses decreased $49 million from the prior quarter, primarily due to a reserve release in the fourth quarter.

Net income of $2.1 billion decreased $46 million, or 2 percent, from fourth quarter 2016. Revenue decreased $59 million, or 1 percent, from fourth quarter 2016, as lower net interest income was partially offset by higher noninterest income. Net interest income decreased $112 million, or 3 percent, from fourth quarter 2016, as the impact to leveraged leases due to the Tax Act was partially offset by the impact of rising interest rates. Noninterest income increased $53 million, or 2 percent, from a year ago as the gain related to the sale of WFIS and higher market sensitive revenue were partially offset by impairments on low income housing and tax-advantaged renewable energy investments due to the Tax Act, lower investment banking results, and one less month of WFIS operating income. Noninterest expense increased $202 million, or 5 percent, from a year ago reflecting increased personnel expense and higher regulatory, risk, cyber and technology expenses. The provision for credit losses decreased $148 million from a year ago primarily due to improvements in the oil and gas portfolio.

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, Wells Fargo Institutional Retirement and Trust, 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 customers’ brokerage needs, supply retirement and trust services to institutional clients 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)	Dec 31, 2017			Sep 30, 2017		Dec 31, 2016
Total revenue	$	4,305		4,246		4,074
Provision (reversal of provision) for credit losses	(7		)	(1	)	3
Noninterest expense	3,244			3,106		3,042
Segment net income	659			710		653
(in billions)
Average loans	72.8			72.4		70.0
Average assets	209.3			213.4		220.4
Average deposits	184.2			188.1		194.9

Wealth and Investment Management reported net income of $659 million, down $51 million, or 7 percent, from third quarter 2017. Revenue of $4.3 billion increased $59 million from the prior quarter, primarily due to higher asset-based fees and transaction revenue, partially offset by lower net interest income. Noninterest expense increased $138 million, or 4 percent, from the prior quarter, primarily due to higher non-personnel expense and broker commissions.

Net income was up $6 million, or 1 percent, from fourth quarter 2016. Revenue increased $231 million, or 6 percent, from a year ago primarily driven by higher asset-based fees, higher net interest income, and higher gains on deferred compensation plan investments (offset in employee benefits expense), partially offset by lower transaction revenue. Noninterest expense increased $202 million, or 7 percent, from a year ago, primarily due to higher regulatory, risk, cyber and technology expenses, as well as higher broker commissions and deferred compensation plan expense (offset in trading revenue), partially offset by lower other non-personnel expense.

WIM total client assets reached a record-high of $1.9 trillion, up 11 percent from a year ago, driven by higher market valuations
Fourth quarter 2017 average closed referred investment assets (referrals resulting from the WIM/Community Banking partnership) were flat compared with the prior quarter and up 12 percent from prior year

Retail Brokerage

Client assets of $1.7 trillion, up 11 percent from prior year
Advisory assets of $543 billion, up 17 percent from prior year, primarily driven by higher market valuations and positive net flows
Continued loan growth, with average balances up 7 percent from prior year largely due to growth in non-conforming mortgage loans

Wealth Management

Client assets of $248 billion, up 7 percent from prior year
Average loan balances up 3 percent from prior year primarily driven by continued growth in non-conforming mortgage loans

Asset Management

Total assets under management of $504 billion, up 5 percent from prior year as higher market valuations, positive fixed income and money market net flows were partially offset by equity net outflows

Retirement

IRA assets of $410 billion, up 8 percent from prior year
Institutional Retirement plan assets of $393 billion, up 12 percent from prior year

Conference Call

The Company will host a live conference call on Friday, January 12, at 7:00 a.m. PT (10:00 a.m. ET). You may participate 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~6099528.

A replay of the conference call will be available beginning at 10:00 a.m. PT (1:00 p.m. ET) on Friday, January 12 through Friday, January 26. Please dial 855-859-2056 (U.S. and Canada) or 404-537-3406 (International) and enter Conference ID #6099528. 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~6099528.

Endnotes

¹ Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.

² Market sensitive revenue represents net gains from trading activities, debt securities and equity investments.

³ 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 41 for more information.

⁴ See table on page 36 for more information on Common Equity Tier 1. Common Equity Tier 1 (fully phased-in) is a preliminary estimate and is calculated assuming the full phase-in of the Basel III capital rules.

⁵ 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.

⁶ Customers who actively use their checking account with transactions such as debit card purchases, online bill payments, and direct deposit.

⁷ Data as of November 2017, comparisons with November 2016.

⁸ Combined consumer and business debit card purchase volume dollars.

⁹ Penetration defined as the percentage of Retail Banking households that have a credit card with Wells Fargo. Retail Banking households reflect only those households that maintain a retail checking account, which we believe provides the foundation for long-term retail banking relationships. Credit card household penetration rates have not been adjusted to reflect the impact of the potentially unauthorized accounts (determined principally based on whether the account was activated by the customer) identified by a third party consulting firm in August 2017 because the maximum impact in any one quarter was not greater than 127 bps.

¹⁰ Primarily includes retail banking, consumer lending, small business and business banking customers.

Forward-Looking Statements

This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. 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 allowance levels; (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 or targets and our estimated Common Equity Tier 1 ratio under Basel III capital standards; (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 and return on equity; (xii) the outcome of contingencies, such as legal proceedings; and (xiii) 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 (including the impact of the Tax Cuts & Jobs Act), geopolitical matters, and the overall slowdown in global economic growth;
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;
the extent of our success in our loan modification efforts, as well as the effects of regulatory requirements or guidance regarding loan modifications;
the amount of mortgage loan repurchase demands that we receive and our ability to satisfy any such demands without having to repurchase loans related thereto or otherwise indemnify or reimburse third parties, and the credit quality of or losses on such repurchased mortgage loans;
negative effects relating to our mortgage servicing and foreclosure practices, as well as changes in industry standards or practices, regulatory or judicial requirements, penalties or fines, increased servicing and other costs or obligations, including loan modification requirements, or delays or moratoriums on foreclosures;
our ability to realize our efficiency ratio 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;
losses related to recent hurricanes, which primarily affected Texas, Florida and Puerto Rico, and related to recent California wildfires, in each case including from damage or loss to our collateral for loans in our consumer and commercial loan portfolios and from the impact on the ability of our borrowers to repay their loans;
the effect of the current low interest rate environment or changes in interest rates on our net interest income, net interest margin and our mortgage originations, mortgage servicing rights and mortgages 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 other-than-temporary impairment on securities held in our investment securities portfolio;
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;
reputational damage from negative publicity, protests, fines, penalties and other negative consequences from regulatory violations and legal actions;
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; 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, 2016.

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, 2016, 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.

About Wells Fargo

Wells Fargo & Company (NYSE: WFC) is a diversified, community-based financial services company with $2.0 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, investments, mortgage, and consumer and commercial finance through more than 8,300 locations, 13,000 ATMs, the internet (wellsfargo.com) and mobile banking, and has offices in 42 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. 25 on Fortune’s 2017 rankings of America’s largest corporations.


Wells Fargo & Company and Subsidiaries
QUARTERLY FINANCIAL DATA
TABLE OF CONTENTS

		Pages

Summary Information
Summary Financial Data		16

Income
Consolidated Statement of Income		18
Consolidated Statement of Comprehensive Income		20
Condensed Consolidated Statement of Changes in Total Equity		20
Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis)		21
Five Quarter Average Balances, Yields and Rates Paid (Taxable-Equivalent Basis)		23
Noninterest Income and Noninterest Expense		24

Balance Sheet
Consolidated Balance Sheet		26
Investment Securities		28

Loans
Loans		28
Nonperforming Assets		29
Loans 90 Days or More Past Due and Still Accruing		30
Purchased Credit-Impaired Loans		31
Pick-A-Pay Portfolio		32
Changes in Allowance for Credit Losses		34

Equity
Tangible Common Equity		35
Common Equity Tier 1 Under Basel III		36

Operating Segments
Operating Segment Results		37

Other
Mortgage Servicing and other related data		39

Wells Fargo & Company and Subsidiaries
SUMMARY FINANCIAL DATA
	Quarter ended					% Change Dec 31, 2017 from				Year ended
($ in millions, except per share amounts)	Dec 31, 2017			Sep 30, 2017	Dec 31, 2016	Sep 30, 2017		Dec 31, 2016		Dec 31, 2017			Dec 31, 2016	% Change
For the Period
Wells Fargo net income (1)	$	6,151		4,542	5,274	35	%	17		$	22,183		21,938	1	%
Wells Fargo net income applicable to common stock (1)	5,740			4,131	4,872	39		18		20,554			20,373	1
Diluted earnings per common share (1)	1.16			0.83	0.96	40		21		4.10			3.99	3
Profitability ratios (annualized) (1):
Wells Fargo net income to average assets (ROA)	1.26		%	0.93	1.08	35		17		1.15		%	1.16	(1	)
Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders’ equity (ROE)	12.47			8.96	10.94	39		14		11.35			11.49	(1	)
Return on average tangible common equity (ROTCE)(2)	14.85			10.66	13.16	39		13		13.55			13.85	(2	)
Efficiency ratio (1)(3)	76.2			65.7	61.2	16		25		66.2			59.3	12
Total revenue (1)	$	22,050		21,849	21,582	1		2		$	88,389		88,267	—
Pre-tax pre-provision profit (PTPP) (1)(4)	5,250			7,498	8,367	(30	)	(37	)	29,905			35,890	(17	)
Dividends declared per common share	0.390			0.390	0.380	—		3		1.540			1.515	2
Average common shares outstanding	4,912.5			4,948.6	5,025.6	(1	)	(2	)	4,964.6			5,052.8	(2	)
Diluted average common shares outstanding	4,963.1			4,996.8	5,078.2	(1	)	(2	)	5,017.3			5,108.3	(2	)
Average loans	$	951,822		952,343	964,147	—		(1	)	$	956,129		949,960	1
Average assets (1)	1,935,318			1,938,461	1,944,250	—		—		1,933,005			1,885,441	3
Average total deposits	1,311,592			1,306,356	1,284,158	—		2		1,304,622			1,250,566	4
Average consumer and small business banking deposits (5)	757,541			755,094	749,946	—		1		758,271			732,620	4
Net interest margin (1)	2.84		%	2.86	2.87	(1	)	(1	)	2.87		%	2.86	—
At Period End
Investment securities	$	416,420		414,633	407,947	—		2		$	416,420		407,947	2
Loans	956,770			951,873	967,604	1		(1	)	956,770			967,604	(1	)
Allowance for loan losses	11,004			11,078	11,419	(1	)	(4	)	11,004			11,419	(4	)
Goodwill	26,587			26,581	26,693	—		—		26,587			26,693	—
Assets (1)	1,951,757			1,934,880	1,930,115	1		1		1,951,757			1,930,115	1
Deposits	1,335,991			1,306,706	1,306,079	2		2		1,335,991			1,306,079	2
Common stockholders' equity (1)	183,134			181,920	176,469	1		4		183,134			176,469	4
Wells Fargo stockholders’ equity (1)	206,936			205,722	199,581	1		4		206,936			199,581	4
Total equity (1)	208,079			206,617	200,497	1		4		208,079			200,497	4
Tangible common equity (1)(2)	153,730			152,694	146,737	1		5		153,730			146,737	5
Common shares outstanding	4,891.6			4,927.9	5,016.1	(1	)	(2	)	4,891.6			5,016.1	(2	)
Book value per common share (1)(6)	$	37.44		36.92	35.18	1		6		$	37.44		35.18	6
Tangible book value per common share (1)(2)(6)	31.43			30.99	29.25	1		7		31.43			29.25	7
Common stock price:
High	62.24			56.45	58.02	10		7		62.24			58.02	7
Low	52.84			49.28	43.55	7		21		49.28			43.55	13
Period end	60.67			55.15	55.11	10		10		60.67			55.11	10
Team members (active, full-time equivalent)	262,700			268,000	269,100	(2	)	(2	)	262,700			269,100	(2	)
(1) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities in fourth quarter 2017. The retrospective application of the changes to certain hedging strategies resulted in a cumulative effect adjustment to opening retained earnings effective January 1, 2017. The adjustment reduced retained earnings by $381 million and increased other comprehensive income by $168 million. The effect of adoption on previously reported September 30, 2017, year-to-date net income resulted in an increase of $169 million ($242 million pre-tax) and a decrease in other comprehensive income of $163 million. Other affected financial information, including financial ratios, has been revised to reflect this adoption.
(2) Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, and goodwill and certain identifiable intangible assets (including goodwill and intangible assets associated with certain of our nonmarketable equity investments but excluding mortgage servicing rights), net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity and tangible book value per common share, which utilize tangible common equity, are useful financial measures because they enable investors and others to assess the Company's use of equity. For additional information, including a corresponding reconciliation to GAAP financial measures, see the "Tangible Common Equity" tables on page 35.
(3) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).
(4) 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.
(5) Consumer and small business banking deposits are total deposits excluding mortgage escrow and wholesale deposits.
(6) 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.

Wells Fargo & Company and Subsidiaries
FIVE QUARTER SUMMARY FINANCIAL DATA
	Quarter ended
($ in millions, except per share amounts)	Dec 31, 2017			Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016
For the Quarter
Wells Fargo net income (1)	$	6,151		4,542	5,856	5,634	5,274
Wells Fargo net income applicable to common stock (1)	5,740			4,131	5,450	5,233	4,872
Diluted earnings per common share (1)	1.16			0.83	1.08	1.03	0.96
Profitability ratios (annualized) (1):
Wells Fargo net income to average assets (ROA)	1.26		%	0.93	1.22	1.18	1.08
Wells Fargo net income applicable to common stock to average Wells Fargo common stockholders’ equity (ROE)	12.47			8.96	12.06	11.96	10.94
Return on average tangible common equity (ROTCE)(2)	14.85			10.66	14.41	14.35	13.16
Efficiency ratio (1)(3)	76.2			65.7	60.9	62.0	61.2
Total revenue (1)	$	22,050		21,849	22,235	22,255	21,582
Pre-tax pre-provision profit (PTPP) (1)(4)	5,250			7,498	8,694	8,463	8,367
Dividends declared per common share	0.39			0.39	0.38	0.38	0.38
Average common shares outstanding	4,912.5			4,948.6	4,989.9	5,008.6	5,025.6
Diluted average common shares outstanding	4,963.1			4,996.8	5,037.7	5,070.4	5,078.2
Average loans	$	951,822		952,343	956,879	963,645	964,147
Average assets (1)	1,935,318			1,938,461	1,927,021	1,931,040	1,944,250
Average total deposits	1,311,592			1,306,356	1,301,195	1,299,191	1,284,158
Average consumer and small business banking deposits (5)	757,541			755,094	760,149	758,754	749,946
Net interest margin (1)	2.84		%	2.86	2.90	2.87	2.87
At Quarter End
Investment securities	$	416,420		414,633	409,594	407,560	407,947
Loans	956,770			951,873	957,423	958,405	967,604
Allowance for loan losses	11,004			11,078	11,073	11,168	11,419
Goodwill	26,587			26,581	26,573	26,666	26,693
Assets (1)	1,951,757			1,934,880	1,930,792	1,951,501	1,930,115
Deposits	1,335,991			1,306,706	1,305,830	1,325,444	1,306,079
Common stockholders' equity (1)	183,134			181,920	181,233	178,209	176,469
Wells Fargo stockholders’ equity (1)	206,936			205,722	205,034	201,321	199,581
Total equity (1)	208,079			206,617	205,949	202,310	200,497
Tangible common equity (1)(2)	153,730			152,694	151,868	148,671	146,737
Common shares outstanding	4,891.6			4,927.9	4,966.8	4,996.7	5,016.1
Book value per common share (1)(6)	$	37.44		36.92	36.49	35.67	35.18
Tangible book value per common share (1)(2)(6)	31.43			30.99	30.58	29.75	29.25
Common stock price:
High	62.24			56.45	56.60	59.99	58.02
Low	52.84			49.28	50.84	53.35	43.55
Period end	60.67			55.15	55.41	55.66	55.11
Team members (active, full-time equivalent)	262,700			268,000	270,600	272,800	269,100
(1) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities in fourth quarter 2017. The retrospective application of the changes to certain hedging strategies resulted in a cumulative effect adjustment to opening retained earnings effective January 1, 2017. The adjustment reduced retained earnings by $381 million and increased other comprehensive income by $168 million. The effect of adoption on previously reported September 30, 2017, year-to-date net income resulted in an increase of $169 million ($242 million pre-tax) and a decrease in other comprehensive income of $163 million. Other affected financial information, including financial ratios, has been revised to reflect this adoption.
(2) Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, and goodwill and certain identifiable intangible assets (including goodwill and intangible assets associated with certain of our nonmarketable equity investments but excluding mortgage servicing rights), net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity and tangible book value per common share, which utilize tangible common equity, are useful financial measures because they enable investors and others to assess the Company's use of equity. For additional information, including a corresponding reconciliation to GAAP financial measures, see the "Tangible Common Equity" tables on page 35.
(3) The efficiency ratio is noninterest expense divided by total revenue (net interest income and noninterest income).
(4) 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.
(5) Consumer and small business banking deposits are total deposits excluding mortgage escrow and wholesale deposits.
(6) 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.


Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
	Quarter ended December 31,					%		Year ended December 31,			%
(in millions, except per share amounts)	2017			2016		Change		2017		2016	Change
Interest income
Trading assets	$	821		745		10	%	$	2,928	2,506	17	%
Investment securities	2,669			2,512		6		10,664		9,248	15
Mortgages held for sale	196			235		(17	)	786		784	—
Loans held for sale	2			2		—		12		9	33
Loans	10,367			10,128		2		41,388		39,505	5
Other interest income	903			436		107		3,131		1,611	94
Total interest income	14,958			14,058		6		58,909		53,663	10
Interest expense
Deposits	931			400		133		3,013		1,395	116
Short-term borrowings	255			101		152		758		330	130
Long-term debt	1,344			1,061		27		5,157		3,830	35
Other interest expense	115			94		22		424		354	20
Total interest expense	2,645			1,656		60		9,352		5,909	58
Net interest income	12,313			12,402		(1	)	49,557		47,754	4
Provision for credit losses	651			805		(19	)	2,528		3,770	(33	)
Net interest income after provision for credit losses	11,662			11,597		1		47,029		43,984	7
Noninterest income
Service charges on deposit accounts	1,246			1,357		(8	)	5,111		5,372	(5	)
Trust and investment fees	3,687			3,698		—		14,495		14,243	2
Card fees	996			1,001		—		3,960		3,936	1
Other fees	913			962		(5	)	3,557		3,727	(5	)
Mortgage banking	928			1,417		(35	)	4,350		6,096	(29	)
Insurance	223			262		(15	)	1,049		1,268	(17	)
Net gains (losses) from trading activities	132			(109	)	NM		1,053		834	26
Net gains on debt securities	157			145		8		479		942	(49	)
Net gains from equity investments	439			306		43		1,268		879	44
Lease income	458			523		(12	)	1,907		1,927	(1	)
Other	558			(382	)	NM		1,603		1,289	24
Total noninterest income	9,737			9,180		6		38,832		40,513	(4	)
Noninterest expense
Salaries	4,403			4,193		5		17,363		16,552	5
Commission and incentive compensation	2,665			2,478		8		10,442		10,247	2
Employee benefits	1,293			1,101		17		5,566		5,094	9
Equipment	608			642		(5	)	2,237		2,154	4
Net occupancy	715			710		1		2,849		2,855	—
Core deposit and other intangibles	288			301		(4	)	1,152		1,192	(3	)
FDIC and other deposit assessments	312			353		(12	)	1,287		1,168	10
Other	6,516			3,437		90		17,588		13,115	34
Total noninterest expense	16,800			13,215		27		58,484		52,377	12
Income before income tax expense	4,599			7,562		(39	)	27,377		32,120	(15	)
Income tax expense (benefit)	(1,642		)	2,258		NM		4,917		10,075	(51	)
Net income before noncontrolling interests	6,241			5,304		18		22,460		22,045	2
Less: Net income from noncontrolling interests	90			30		200		277		107	159
Wells Fargo net income	$	6,151		5,274		17		$	22,183	21,938	1
Less: Preferred stock dividends and other	411			402		2		1,629		1,565	4
Wells Fargo net income applicable to common stock	$	5,740		4,872		18		$	20,554	20,373	1
Per share information
Earnings per common share	$	1.17		0.97		21		$	4.14	4.03	3
Diluted earnings per common share	1.16			0.96		21		4.10		3.99	3
Dividends declared per common share	0.390			0.380		3		1.540		1.515	2
Average common shares outstanding	4,912.5			5,025.6		(2	)	4,964.6		5,052.8	(2	)
Diluted average common shares outstanding	4,963.1			5,078.2		(2	)	5,017.3		5,108.3	(2	)
NM – Not meaningful


Wells Fargo & Company and Subsidiaries
FIVE QUARTER CONSOLIDATED STATEMENT OF INCOME
	Quarter ended
(in millions, except per share amounts)	Dec 31, 2017			Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016
Interest income
Trading assets	$	821		754	710	643	745
Investment securities (1)	2,669			2,650	2,681	2,664	2,512
Mortgages held for sale (1)	196			217	191	182	235
Loans held for sale	2			5	4	1	2
Loans	10,367			10,522	10,358	10,141	10,128
Other interest income	903			896	750	582	436
Total interest income (1)	14,958			15,044	14,694	14,213	14,058
Interest expense
Deposits (1)	931			869	677	536	400
Short-term borrowings	255			226	163	114	101
Long-term debt (1)	1,344			1,391	1,275	1,147	1,061
Other interest expense	115			109	108	92	94
Total interest expense (1)	2,645			2,595	2,223	1,889	1,656
Net interest income (1)	12,313			12,449	12,471	12,324	12,402
Provision for credit losses	651			717	555	605	805
Net interest income after provision for credit losses	11,662			11,732	11,916	11,719	11,597
Noninterest income
Service charges on deposit accounts	1,246			1,276	1,276	1,313	1,357
Trust and investment fees	3,687			3,609	3,629	3,570	3,698
Card fees	996			1,000	1,019	945	1,001
Other fees	913			877	902	865	962
Mortgage banking	928			1,046	1,148	1,228	1,417
Insurance	223			269	280	277	262
Net gains (losses) from trading activities	132			245	237	439	(109	)
Net gains on debt securities	157			166	120	36	145
Net gains from equity investments	439			238	188	403	306
Lease income	458			475	493	481	523
Other (1)	558			199	472	374	(382	)
Total noninterest income (1)	9,737			9,400	9,764	9,931	9,180
Noninterest expense
Salaries	4,403			4,356	4,343	4,261	4,193
Commission and incentive compensation	2,665			2,553	2,499	2,725	2,478
Employee benefits	1,293			1,279	1,308	1,686	1,101
Equipment	608			523	529	577	642
Net occupancy	715			716	706	712	710
Core deposit and other intangibles	288			288	287	289	301
FDIC and other deposit assessments	312			314	328	333	353
Other	6,516			4,322	3,541	3,209	3,437
Total noninterest expense	16,800			14,351	13,541	13,792	13,215
Income before income tax expense (1)	4,599			6,781	8,139	7,858	7,562
Income tax expense (benefit) (1)	(1,642		)	2,181	2,245	2,133	2,258
Net income before noncontrolling interests (1)	6,241			4,600	5,894	5,725	5,304
Less: Net income from noncontrolling interests	90			58	38	91	30
Wells Fargo net income (1)	$	6,151		4,542	5,856	5,634	5,274
Less: Preferred stock dividends and other	411			411	406	401	402
Wells Fargo net income applicable to common stock (1)	$	5,740		4,131	5,450	5,233	4,872
Per share information
Earnings per common share (1)	$	1.17		0.83	1.09	1.05	0.97
Diluted earnings per common share (1)	1.16			0.83	1.08	1.03	0.96
Dividends declared per common share	0.390			0.390	0.380	0.380	0.380
Average common shares outstanding	4,912.5			4,948.6	4,989.9	5,008.6	5,025.6
Diluted average common shares outstanding	4,963.1			4,996.8	5,037.7	5,070.4	5,078.2
(1) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.


Wells Fargo & Company and Subsidiaries
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
	Quarter ended Dec 31,					%	Year ended Dec 31,					%
(in millions)	2017			2016		Change	2017			2016		Change
Wells Fargo net income	$	6,151		5,274		17%	$	22,183		21,938		1%
Other comprehensive income (loss), before tax:
Investment securities:
Net unrealized gains (losses) arising during the period	(106		)	(5,936	)	(98)	2,719			(3,458	)	NM
Reclassification of net gains to net income	(215		)	(239	)	(10)	(737		)	(1,240	)	(41)
Derivatives and hedging activities:
Net unrealized gains (losses) arising during the period	(558		)	(2,434	)	(77)	(540		)	177		NM
Reclassification of net gains on cash flow hedges to net income	(83		)	(246	)	(66)	(543		)	(1,029	)	(47)
Defined benefit plans adjustments:
Net actuarial and prior service gains (losses) arising during the period	45			422		(89)	49			(52	)	NM
Amortization of net actuarial loss, settlements and other to net income	33			43		(23)	153			158		(3)
Foreign currency translation adjustments:
Net unrealized gains (losses) arising during the period	10			(30	)	NM	96			(3	)	NM
Other comprehensive income (loss), before tax	(874		)	(8,420	)	(90)	1,197			(5,447	)	NM
Income tax benefit (expense) related to other comprehensive income	319			3,106		(90)	(434		)	1,996		NM
Other comprehensive income (loss), net of tax	(555		)	(5,314	)	(90)	763			(3,451	)	NM
Less: Other comprehensive income (loss) from noncontrolling interests	(33		)	7		NM	(62		)	(17	)	265
Wells Fargo other comprehensive income (loss), net of tax	(522		)	(5,321	)	(90)	825			(3,434	)	NM
Wells Fargo comprehensive income (loss)	5,629			(47	)	NM	23,008			18,504		24
Comprehensive income from noncontrolling interests	57			37		54	215			90		139
Total comprehensive income (loss)	$	5,686		(10	)	NM	$	23,223		18,594		25
NM – Not meaningful


FIVE QUARTER CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN TOTAL EQUITY
	Quarter ended
(in millions)	Dec 31, 2017			Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016
Balance, beginning of period (1)	$	206,617		205,949		202,310		200,497		203,958
Cumulative effect from change in hedge accounting (1)	—			—		—		(213	)	—
Wells Fargo net income (1)	6,151			4,542		5,856		5,634		5,274
Wells Fargo other comprehensive income (loss), net of tax (1)	(522		)	526		1,005		(184	)	(5,321	)
Noncontrolling interests	247			(20	)	(75	)	75		(13	)
Common stock issued	436			254		252		1,406		610
Common stock repurchased (2)	(2,845		)	(2,601	)	(2,287	)	(2,175	)	(2,034	)
Preferred stock released by ESOP	218			209		406		—		43
Common stock warrants repurchased/exercised	(46		)	(19	)	(24	)	(44	)	—
Preferred stock issued	—			—		677		—		—
Common stock dividends	(1,920		)	(1,936	)	(1,899	)	(1,903	)	(1,909	)
Preferred stock dividends	(411		)	(411	)	(406	)	(401	)	(401	)
Tax benefit from stock incentive compensation (3)	—			—		—		—		74
Stock incentive compensation expense	206			135		145		389		232
Net change in deferred compensation and related plans	(52		)	(11	)	(11	)	(771	)	(16	)
Balance, end of period (1)	$	208,079		206,617		205,949		202,310		200,497
(1) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.
(2) For the quarter ended December 31, 2016, includes $750 million related to a private forward repurchase transaction that settled in first quarter 2017 for 14.7 million shares of common stock.
(3) Effective January 1, 2017, we adopted Accounting Standards Update 2016-09 (Improvements to Employee Share-Based Payment Accounting). Accordingly, tax benefit from stock incentive compensation is reported in income tax expense in the consolidated statement of income.


Wells Fargo & Company and Subsidiaries
AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)
	Quarter ended December 31,
	2017							2016
(in millions)	Average balance			Yields/ rates		Interest income/ expense		Average balance		Yields/ rates		Interest income/ expense
Earning assets
Federal funds sold, securities purchased under resale agreements and other short-term investments	$	264,940		1.25	%	$	835	273,073		0.56	%	$	381
Trading assets	111,213			3.01		838		102,757		2.96		761
Investment securities (3):
Available-for-sale securities:
Securities of U.S. Treasury and federal agencies	6,423			1.66		27		25,935		1.53		99
Securities of U.S. states and political subdivisions	52,390			3.91		513		53,917		4.06		547
Mortgage-backed securities:
Federal agencies	152,910			2.62		1,000		147,980		2.37		875
Residential and commercial	9,371			4.85		114		16,456		5.87		242
Total mortgage-backed securities	162,281			2.75		1,114		164,436		2.72		1,117
Other debt and equity securities	49,138			3.70		456		52,692		3.71		492
Total available-for-sale securities	270,232			3.12		2,110		296,980		3.03		2,255
Held-to-maturity securities:
Securities of U.S. Treasury and federal agencies	44,716			2.19		246		44,686		2.20		246
Securities of U.S. states and political subdivisions	6,263			5.26		83		4,738		5.31		63
Federal agency and other mortgage-backed securities	89,622			2.25		503		46,009		1.81		209
Other debt securities	1,194			2.64		8		3,597		2.26		20
Total held-to-maturity securities	141,795			2.36		840		99,030		2.17		538
Total investment securities	412,027			2.86		2,950		396,010		2.82		2,793
Mortgages held for sale (4)	20,517			3.82		196		27,503		3.43		235
Loans held for sale (4)	114			8.14		2		155		5.42		2
Loans:
Commercial:
Commercial and industrial - U.S.	270,294			3.89		2,649		272,828		3.46		2,369
Commercial and industrial - Non U.S.	59,233			2.96		442		54,410		2.58		352
Real estate mortgage	127,199			3.88		1,244		131,195		3.44		1,135
Real estate construction	24,408			4.38		270		23,850		3.61		216
Lease financing	19,226			0.62		31		18,904		5.78		273
Total commercial	500,360			3.68		4,636		501,187		3.45		4,345
Consumer:
Real estate 1-4 family first mortgage	281,966			4.01		2,826		277,732		4.01		2,785
Real estate 1-4 family junior lien mortgage	40,379			4.96		505		47,203		4.42		524
Credit card	36,428			12.37		1,136		35,383		11.73		1,043
Automobile	54,323			5.13		702		62,521		5.54		870
Other revolving credit and installment	38,366			6.28		607		40,121		5.91		595
Total consumer	451,462			5.10		5,776		462,960		5.01		5,817
Total loans (4)	951,822			4.35		10,412		964,147		4.20		10,162
Other	13,084			2.06		68		6,729		3.27		56
Total earning assets	$	1,773,717		3.43	%	$	15,301	1,770,374		3.24	%	$	14,390
Funding sources
Deposits:
Interest-bearing checking	$	50,483		0.68	%	$	86	46,907		0.17	%	$	19
Market rate and other savings	679,893			0.19		319		676,365		0.07		122
Savings certificates	20,920			0.31		17		24,362		0.30		18
Other time deposits	68,187			1.49		255		49,170		1.16		144
Deposits in foreign offices	124,597			0.81		254		110,425		0.35		97
Total interest-bearing deposits	944,080			0.39		931		907,229		0.18		400
Short-term borrowings	102,142			0.99		256		124,698		0.33		102
Long-term debt	231,598			2.32		1,344		252,162		1.68		1,061
Other liabilities	24,728			1.86		115		17,210		2.15		94
Total interest-bearing liabilities	1,302,548			0.81		2,646		1,301,299		0.51		1,657
Portion of noninterest-bearing funding sources	471,169			—		—		469,075		—		—
Total funding sources	$	1,773,717		0.59		2,646		1,770,374		0.37		1,657
Net interest margin and net interest income on a taxable-equivalent basis (5)				2.84	%	$	12,655			2.87	%	$	12,733
Noninterest-earning assets
Cash and due from banks	$	19,152						18,967
Goodwill	26,579							26,713
Other	115,870							128,196
Total noninterest-earning assets	$	161,601						173,876
Noninterest-bearing funding sources
Deposits	$	367,512						376,929
Other liabilities	57,845							64,775
Total equity	207,413							201,247
Noninterest-bearing funding sources used to fund earning assets	(471,169		)					(469,075	)
Net noninterest-bearing funding sources	$	161,601						173,876
Total assets	$	1,935,318						1,944,250

(1) Our average prime rate was 4.30% and 3.54% for the quarters ended December 31, 2017 and 2016, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 1.46% and 0.92% for the same quarters, respectively.
(2) Yields/rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3) 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.
(4) Nonaccrual loans and related income are included in their respective loan categories.
(5) Includes taxable-equivalent adjustments of $342 million and $331 million for the quarters ended December 31, 2017 and 2016, respectively, predominantly related to tax-exempt income on certain loans and securities. The federal statutory tax rate was 35% for the periods presented.


Wells Fargo & Company and Subsidiaries
AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)
	Year ended December 31,
	2017							2016
(in millions)	Average balance			Yields/ rates		Interest income/ expense		Average balance		Yields/ rates		Interest income/ expense
Earning assets
Federal funds sold, securities purchased under resale agreements and other short-term investments	$	276,561		1.05	%	$	2,897	287,718		0.51	%	$	1,457
Trading assets	101,716			2.93		2,982		88,400		2.89		2,553
Investment securities (3):
Available-for-sale securities:
Securities of U.S. Treasury and federal agencies	15,966			1.49		239		29,418		1.56		457
Securities of U.S. states and political subdivisions	52,658			3.95		2,082		52,959		4.20		2,225
Mortgage-backed securities:
Federal agencies	145,310			2.60		3,782		110,637		2.50		2,764
Residential and commercial	11,839			5.33		631		18,725		5.49		1,029
Total mortgage-backed securities	157,149			2.81		4,413		129,362		2.93		3,793
Other debt and equity securities	49,193			3.73		1,834		53,433		3.44		1,841
Total available-for-sale securities	274,966			3.12		8,568		265,172		3.14		8,316
Held-to-maturity securities:
Securities of U.S. Treasury and federal agencies	44,705			2.19		979		44,675		2.19		979
Securities of U.S. states and political subdivisions	6,268			5.32		334		2,893		5.32		154
Federal agency and other mortgage-backed securities	78,330			2.34		1,832		39,330		2.00		786
Other debt securities	2,194			2.50		55		4,043		2.01		81
Total held-to-maturity securities	131,497			2.43		3,200		90,941		2.20		2,000
Total investment securities	406,463			2.90		11,768		356,113		2.90		10,316
Mortgages held for sale (4)	20,780			3.78		786		22,412		3.50		784
Loans held for sale (4)	147			8.38		12		218		4.01		9
Loans:
Commercial:
Commercial and industrial - U.S.	272,034			3.75		10,196		268,182		3.45		9,243
Commercial and industrial - Non U.S.	57,198			2.86		1,639		51,601		2.36		1,219
Real estate mortgage	129,990			3.74		4,859		127,232		3.44		4,371
Real estate construction	24,813			4.10		1,017		23,197		3.55		824
Lease financing	19,128			3.74		715		17,950		5.10		916
Total commercial	503,163			3.66		18,426		488,162		3.39		16,573
Consumer:
Real estate 1-4 family first mortgage	277,751			4.03		11,206		276,712		4.01		11,096
Real estate 1-4 family junior lien mortgage	42,780			4.82		2,062		49,735		4.39		2,183
Credit card	35,600			12.23		4,355		34,178		11.62		3,970
Automobile	57,900			5.34		3,094		61,566		5.62		3,458
Other revolving credit and installment	38,935			6.18		2,408		39,607		5.93		2,350
Total consumer	452,966			5.11		23,125		461,798		4.99		23,057
Total loans (4)	956,129			4.35		41,551		949,960		4.17		39,630
Other	11,445			2.06		237		6,262		2.51		157
Total earning assets	$	1,773,241		3.40	%	$	60,233	1,711,083		3.21	%	$	54,906
Funding sources
Deposits:
Interest-bearing checking	$	49,474		0.49	%	$	242	42,379		0.14	%	$	60
Market rate and other savings	682,053			0.14		983		663,557		0.07		449
Savings certificates	22,190			0.30		67		25,912		0.35		91
Other time deposits	61,625			1.43		880		55,846		0.91		508
Deposits in foreign offices	123,816			0.68		841		103,206		0.28		287
Total interest-bearing deposits	939,158			0.32		3,013		890,900		0.16		1,395
Short-term borrowings	98,922			0.77		761		115,187		0.29		333
Long-term debt	246,195			2.09		5,157		239,471		1.60		3,830
Other liabilities	21,872			1.94		424		16,702		2.12		354
Total interest-bearing liabilities	1,306,147			0.72		9,355		1,262,260		0.47		5,912
Portion of noninterest-bearing funding sources	467,094			—		—		448,823		—		—
Total funding sources	$	1,773,241		0.53		9,355		1,711,083		0.35		5,912
Net interest margin and net interest income on a taxable-equivalent basis (5)				2.87	%	$	50,878			2.86	%	$	48,994
Noninterest-earning assets
Cash and due from banks	$	18,622						18,617
Goodwill	26,629							26,700
Other	114,513							129,041
Total noninterest-earning assets	$	159,764						174,358
Noninterest-bearing funding sources
Deposits	$	365,464						359,666
Other liabilities	55,740							62,825
Total equity	205,654							200,690
Noninterest-bearing funding sources used to fund earning assets	(467,094		)					(448,823	)
Net noninterest-bearing funding sources	$	159,764						174,358
Total assets	$	1,933,005						1,885,441

(1) Our average prime rate was 4.10% and 3.51% for the 2017 and 2016, respectively. The average three-month London Interbank Offered Rate (LIBOR) was 1.26% and 0.74% for the same periods, respectively.
(2) Yields/rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3) The average balance amounts represent amortized cost for the periods presented.
(4) Nonaccrual loans and related income are included in their respective loan categories.
(5) Includes taxable-equivalent adjustments of $1.3 billion and $1.2 billion for the 2017 and 2016, respectively, predominantly related to tax-exempt income on certain loans and securities. The federal statutory tax rate was 35% for the periods presented.


Wells Fargo & Company and Subsidiaries FIVE QUARTER AVERAGE BALANCES, YIELDS AND RATES PAID (TAXABLE-EQUIVALENT BASIS) (1)(2)
	Quarter ended
	Dec 31, 2017					Sep 30, 2017					Jun 30, 2017					Mar 31, 2017					Dec 31, 2016
($ in billions)	Average balance			Yields/ rates		Average balance			Yields/ rates		Average balance			Yields/ rates		Average balance			Yields/ rates		Average balance			Yields/ rates
Earning assets
Federal funds sold, securities purchased under resale agreements and other short-term investments	$	264.9		1.25	%	$	276.1		1.20	%	$	281.6		0.99	%	$	283.8		0.76	%	$	273.1		0.56	%
Trading assets	111.2			3.01		103.6			2.96		98.1			2.95		93.8			2.80		102.8			2.96
Investment securities (3):
Available-for-sale securities:
Securities of U.S. Treasury and federal agencies	6.4			1.66		14.5			1.31		18.1			1.53		25.0			1.54		25.9			1.53
Securities of U.S. states and political subdivisions (4)	52.4			3.91		52.5			4.08		53.5			3.89		52.2			3.93		53.9			4.06
Mortgage-backed securities:
Federal agencies	152.9			2.62		139.8			2.58		132.0			2.63		156.6			2.58		148.0			2.37
Residential and commercial (4)	9.4			4.85		11.0			5.44		12.6			5.55		14.5			5.34		16.5			5.87
Total mortgage-backed securities	162.3			2.75		150.8			2.79		144.6			2.89		171.1			2.81		164.5			2.72
Other debt and equity securities (4)	49.1			3.70		48.1			3.74		49.0			3.87		50.7			3.61		52.7			3.71
Total available-for-sale securities (4)	270.2			3.12		265.9			3.14		265.2			3.18		299.0			3.04		297.0			3.03
Held-to-maturity securities:
Securities of U.S. Treasury and federal agencies	44.7			2.19		44.7			2.18		44.7			2.19		44.7			2.20		44.7			2.20
Securities of U.S. states and political subdivisions	6.3			5.26		6.3			5.44		6.3			5.29		6.3			5.30		4.7			5.31
Federal agency and other mortgage-backed securities	89.6			2.25		88.3			2.26		83.1			2.44		51.8			2.51		46.0			1.81
Other debt securities	1.2			2.64		1.4			3.05		2.8			2.34		3.3			2.34		3.6			2.26
Total held-to-maturity securities	141.8			2.36		140.7			2.38		136.9			2.49		106.1			2.54		99.0			2.17
Total investment securities (4)	412.0			2.86		406.6			2.88		402.1			2.94		405.1			2.91		396.0			2.82
Mortgages held for sale (4)	20.5			3.82		22.9			3.79		19.8			3.87		19.9			3.67		27.5			3.43
Loans held for sale	0.1			8.14		0.2			13.35		0.2			6.95		0.1			4.44		0.2			5.42
Loans:
Commercial:
Commercial and industrial - U.S.	270.3			3.89		270.1			3.81		273.1			3.70		274.8			3.59		272.8			3.46
Commercial and industrial - Non U.S. (4)	59.2			2.96		57.7			2.89		56.4			2.86		55.3			2.73		54.4			2.58
Real estate mortgage	127.2			3.88		129.1			3.83		131.3			3.68		132.4			3.56		131.2			3.44
Real estate construction	24.4			4.38		25.0			4.18		25.3			4.10		24.6			3.72		23.9			3.61
Lease financing	19.3			0.62		19.2			4.59		19.0			4.82		19.1			4.94		18.9			5.78
Total commercial	500.4			3.68		501.1			3.76		505.1			3.67		506.2			3.54		501.2			3.45
Consumer:
Real estate 1-4 family first mortgage	282.0			4.01		278.4			4.03		275.1			4.08		275.5			4.02		277.7			4.01
Real estate 1-4 family junior lien mortgage	40.4			4.96		41.9			4.95		43.6			4.78		45.3			4.60		47.2			4.42
Credit card	36.4			12.37		35.6			12.41		34.9			12.18		35.4			11.97		35.4			11.73
Automobile	54.3			5.13		56.7			5.34		59.1			5.43		61.5			5.46		62.5			5.54
Other revolving credit and installment	38.3			6.28		38.6			6.31		39.1			6.13		39.7			6.02		40.1			5.91
Total consumer	451.4			5.10		451.2			5.14		451.8			5.13		457.4			5.06		462.9			5.01
Total loans	951.8			4.35		952.3			4.41		956.9			4.36		963.6			4.26		964.1			4.20
Other	13.2			2.06		15.1			1.69		10.6			2.00		6.8			2.96		6.7			3.27
Total earning assets (4)	$	1,773.7		3.43	%	$	1,776.8		3.44	%	$	1,769.3		3.40	%	$	1,773.1		3.30	%	$	1,770.4		3.24	%
Funding sources
Deposits:
Interest-bearing checking	$	50.5		0.68	%	$	48.3		0.57	%	$	48.5		0.41	%	$	50.7		0.29	%	$	46.9		0.17	%
Market rate and other savings	679.9			0.19		681.2			0.17		683.0			0.13		684.2			0.09		676.4			0.07
Savings certificates	20.9			0.31		21.8			0.31		22.6			0.30		23.5			0.29		24.4			0.30
Other time deposits (4)	68.2			1.49		66.1			1.51		57.1			1.39		54.9			1.30		49.2			1.16
Deposits in foreign offices	124.6			0.81		124.7			0.76		123.7			0.65		122.2			0.49		110.4			0.35
Total interest-bearing deposits	944.1			0.39		942.1			0.37		934.9			0.29		935.5			0.23		907.3			0.18
Short-term borrowings	102.1			0.99		99.2			0.91		95.8			0.69		98.5			0.47		124.7			0.33
Long-term debt (4)	231.6			2.32		243.5			2.28		249.9			2.04		260.1			1.77		252.2			1.68
Other liabilities	24.7			1.86		24.8			1.74		21.0			2.05		16.8			2.22		17.1			2.15
Total interest-bearing liabilities (4)	1,302.5			0.81		1,309.6			0.79		1,301.6			0.68		1,310.9			0.58		1,301.3			0.51
Portion of noninterest-bearing funding sources (4)	471.2			—		467.2			—		467.7			—		462.2			—		469.1			—
Total funding sources (4)	$	1,773.7		0.59		$	1,776.8		0.58		$	1,769.3		0.50		$	1,773.1		0.43		$	1,770.4		0.37
Net interest margin on a taxable-equivalent basis (4)				2.84	%				2.86	%				2.90	%				2.87	%				2.87	%
Noninterest-earning assets
Cash and due from banks	$	19.2				18.5					18.2					18.7					19.0
Goodwill	26.6					26.6					26.7					26.7					26.7
Other (4)	115.8					116.6					112.8					112.5					128.2
Total noninterest-earnings assets (4)	$	161.6				161.7					157.7					157.9					173.9
Noninterest-bearing funding sources
Deposits	$	367.5				364.3					366.3					363.7					376.9
Other liabilities (4)	57.8					56.8					53.4					54.8					64.9
Total equity (4)	207.4					207.7					205.8					201.6					201.2
Noninterest-bearing funding sources used to fund earning assets (4)	(471.1		)			(467.1		)			(467.8		)			(462.2		)			(469.1		)
Net noninterest-bearing funding sources (4)	$	161.6				161.7					157.7					157.9					173.9
Total assets (4)	$	1,935.3				1,938.5					1,927.0					1,931.0					1,944.3

(1) Our average prime rate was 4.30% for the quarter ended December 31, 2017, 4.25% for the quarter ended September 30, 2017, 4.05% for the quarter ended June 30, 2017, 3.80% for the quarter ended March 31, 2017 and 3.54% for the quarter ended December 31, 2016. The average three-month London Interbank Offered Rate (LIBOR) was 1.46%, 1.31%, 1.21%, 1.07% and 0.92% for the same quarters, respectively.
(2) Yields/rates include the effects of hedge and risk management activities associated with the respective asset and liability categories.
(3) 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.
(4) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.


Wells Fargo & Company and Subsidiaries NONINTEREST INCOME
	Quarter ended December 31,				%		Year ended December 31,			%
(in millions)	2017		2016		Change		2017		2016	Change
Service charges on deposit accounts	$	1,246	1,357		(8	)%	$	5,111	5,372	(5	)%
Trust and investment fees:
Brokerage advisory, commissions and other fees	2,401		2,342		3		9,358		9,216	2
Trust and investment management	866		837		3		3,372		3,336	1
Investment banking	420		519		(19	)	1,765		1,691	4
Total trust and investment fees	3,687		3,698		—		14,495		14,243	2
Card fees	996		1,001		—		3,960		3,936	1
Other fees:
Charges and fees on loans	313		305		3		1,263		1,241	2
Cash network fees	120		130		(8	)	506		537	(6	)
Commercial real estate brokerage commissions	159		172		(8	)	462		494	(6	)
Letters of credit fees	78		79		(1	)	305		321	(5	)
Wire transfer and other remittance fees	115		105		10		448		401	12
All other fees	128		171		(25	)	573		733	(22	)
Total other fees	913		962		(5	)	3,557		3,727	(5	)
Mortgage banking:
Servicing income, net	262		196		34		1,427		1,765	(19	)
Net gains on mortgage loan origination/sales activities	666		1,221		(45	)	2,923		4,331	(33	)
Total mortgage banking	928		1,417		(35	)	4,350		6,096	(29	)
Insurance	223		262		(15	)	1,049		1,268	(17	)
Net gains (losses) from trading activities	132		(109	)	NM		1,053		834	26
Net gains on debt securities	157		145		8		479		942	(49	)
Net gains from equity investments	439		306		43		1,268		879	44
Lease income	458		523		(12	)	1,907		1,927	(1	)
Life insurance investment income	153		132		16		594		587	1
All other	405		(514	)	NM		1,009		702	44
Total	$	9,737	9,180		6		$	38,832	40,513	(4	)
NM – Not meaningful


NONINTEREST EXPENSE
	Quarter ended December 31,			%		Year ended December 31,			%
(in millions)	2017		2016	Change		2017		2016	Change
Salaries	$	4,403	4,193	5	%	$	17,363	16,552	5	%
Commission and incentive compensation	2,665		2,478	8		10,442		10,247	2
Employee benefits	1,293		1,101	17		5,566		5,094	9
Equipment	608		642	(5	)	2,237		2,154	4
Net occupancy	715		710	1		2,849		2,855	—
Core deposit and other intangibles	288		301	(4	)	1,152		1,192	(3	)
FDIC and other deposit assessments	312		353	(12	)	1,287		1,168	10
Operating losses	3,531		243	NM		5,492		1,608	242
Outside professional services	1,025		984	4		3,813		3,138	22
Contract services	344		325	6		1,369		1,203	14
Operating leases	325		379	(14	)	1,351		1,329	2
Outside data processing	208		222	(6	)	891		888	—
Travel and entertainment	183		195	(6	)	687		704	(2	)
Advertising and promotion	200		178	12		614		595	3
Postage, stationery and supplies	137		156	(12	)	544		622	(13	)
Telecommunications	92		96	(4	)	364		383	(5	)
Foreclosed assets	47		75	(37	)	251		202	24
Insurance	28		23	22		100		179	(44	)
All other	396		561	(29	)	2,112		2,264	(7	)
Total	$	16,800	13,215	27		$	58,484	52,377	12
NM – Not meaningful


Wells Fargo & Company and Subsidiaries FIVE QUARTER NONINTEREST INCOME
	Quarter ended
(in millions)	Dec 31, 2017		Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016
Service charges on deposit accounts	$	1,246	1,276	1,276	1,313	1,357
Trust and investment fees:
Brokerage advisory, commissions and other fees	2,401		2,304	2,329	2,324	2,342
Trust and investment management	866		840	837	829	837
Investment banking	420		465	463	417	519
Total trust and investment fees	3,687		3,609	3,629	3,570	3,698
Card fees	996		1,000	1,019	945	1,001
Other fees:
Charges and fees on loans	313		318	325	307	305
Cash network fees	120		126	134	126	130
Commercial real estate brokerage commissions	159		120	102	81	172
Letters of credit fees	78		77	76	74	79
Wire transfer and other remittance fees	115		114	112	107	105
All other fees	128		122	153	170	171
Total other fees	913		877	902	865	962
Mortgage banking:
Servicing income, net	262		309	400	456	196
Net gains on mortgage loan origination/sales activities	666		737	748	772	1,221
Total mortgage banking	928		1,046	1,148	1,228	1,417
Insurance	223		269	280	277	262
Net gains (losses) from trading activities	132		245	237	439	(109	)
Net gains on debt securities	157		166	120	36	145
Net gains from equity investments	439		238	188	403	306
Lease income	458		475	493	481	523
Life insurance investment income	153		152	145	144	132
All other (1)	405		47	327	230	(514	)
Total	$	9,737	9,400	9,764	9,931	9,180
(1) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.


FIVE QUARTER NONINTEREST EXPENSE
	Quarter ended
(in millions)	Dec 31, 2017		Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016
Salaries	$	4,403	4,356	4,343	4,261	4,193
Commission and incentive compensation	2,665		2,553	2,499	2,725	2,478
Employee benefits	1,293		1,279	1,308	1,686	1,101
Equipment	608		523	529	577	642
Net occupancy	715		716	706	712	710
Core deposit and other intangibles	288		288	287	289	301
FDIC and other deposit assessments	312		314	328	333	353
Operating losses	3,531		1,329	350	282	243
Outside professional services	1,025		955	1,029	804	984
Contract services	344		351	349	325	325
Operating leases	325		347	334	345	379
Outside data processing	208		227	236	220	222
Travel and entertainment	183		154	171	179	195
Advertising and promotion	200		137	150	127	178
Postage, stationery and supplies	137		128	134	145	156
Telecommunications	92		90	91	91	96
Foreclosed assets	47		66	52	86	75
Insurance	28		24	24	24	23
All other	396		514	621	581	561
Total	$	16,800	14,351	13,541	13,792	13,215


Wells Fargo & Company and Subsidiaries CONSOLIDATED BALANCE SHEET
(in millions, except shares)	Dec 31, 2017			Dec 31, 2016		% Change
Assets
Cash and due from banks	$	23,367		20,729		13	%
Federal funds sold, securities purchased under resale agreements and other short-term investments	272,605			266,038		2
Trading assets	92,329			74,397		24
Investment securities:
Available-for-sale, at fair value	277,085			308,364		(10	)
Held-to-maturity, at cost	139,335			99,583		40
Mortgages held for sale	20,070			26,309		(24	)
Loans held for sale	108			80		35
Loans	956,770			967,604		(1	)
Allowance for loan losses	(11,004		)	(11,419	)	(4	)
Net loans	945,766			956,185		(1	)
Mortgage servicing rights:
Measured at fair value	13,625			12,959		5
Amortized	1,424			1,406		1
Premises and equipment, net	8,847			8,333		6
Goodwill	26,587			26,693		—
Derivative assets	12,228			14,498		(16	)
Other assets	118,381			114,541		3
Total assets	$	1,951,757		1,930,115		1
Liabilities
Noninterest-bearing deposits	$	373,722		375,967		(1	)
Interest-bearing deposits	962,269			930,112		3
Total deposits	1,335,991			1,306,079		2
Short-term borrowings	103,256			96,781		7
Derivative liabilities	8,796			14,492		(39	)
Accrued expenses and other liabilities	70,615			57,189		23
Long-term debt	225,020			255,077		(12	)
Total liabilities	1,743,678			1,729,618		1
Equity
Wells Fargo stockholders’ equity:
Preferred stock	25,358			24,551		3
Common stock – $1-2/3 par value, authorized 9,000,000,000 shares; issued 5,481,811,474 shares	9,136			9,136		—
Additional paid-in capital	60,893			60,234		1
Retained earnings	145,263			133,075		9
Cumulative other comprehensive income (loss)	(2,144		)	(3,137	)	(32	)
Treasury stock – 590,194,846 shares and 465,702,148 shares	(29,892		)	(22,713	)	32
Unearned ESOP shares	(1,678		)	(1,565	)	7
Total Wells Fargo stockholders’ equity	206,936			199,581		4
Noncontrolling interests	1,143			916		25
Total equity	208,079			200,497		4
Total liabilities and equity	$	1,951,757		1,930,115		1


Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED BALANCE SHEET
(in millions)	Dec 31, 2017			Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016
Assets
Cash and due from banks	$	23,367		19,206		20,248		19,698		20,729
Federal funds sold, securities purchased under resale agreements and other short-term investments	272,605			273,105		264,706		308,747		266,038
Trading assets	92,329			88,404		83,607		80,326		74,397
Investment securities:
Available-for-sale, at fair value	277,085			272,210		269,202		299,530		308,364
Held-to-maturity, at cost	139,335			142,423		140,392		108,030		99,583
Mortgages held for sale	20,070			20,009		24,807		17,822		26,309
Loans held for sale	108			157		156		253		80
Loans	956,770			951,873		957,423		958,405		967,604
Allowance for loan losses	(11,004		)	(11,078	)	(11,073	)	(11,168	)	(11,419	)
Net loans	945,766			940,795		946,350		947,237		956,185
Mortgage servicing rights:
Measured at fair value	13,625			13,338		12,789		13,208		12,959
Amortized	1,424			1,406		1,399		1,402		1,406
Premises and equipment, net	8,847			8,449		8,403		8,320		8,333
Goodwill	26,587			26,581		26,573		26,666		26,693
Derivative assets	12,228			12,580		13,273		12,564		14,498
Other assets (1)	118,381			116,217		118,887		107,698		114,541
Total assets (1)	$	1,951,757		1,934,880		1,930,792		1,951,501		1,930,115
Liabilities
Noninterest-bearing deposits	$	373,722		366,528		372,766		365,780		375,967
Interest-bearing deposits	962,269			940,178		933,064		959,664		930,112
Total deposits	1,335,991			1,306,706		1,305,830		1,325,444		1,306,079
Short-term borrowings	103,256			93,811		95,356		94,871		96,781
Derivative liabilities	8,796			9,497		11,636		12,461		14,492
Accrued expenses and other liabilities (1)	70,615			78,993		72,799		59,629		57,189
Long-term debt (1)	225,020			239,256		239,222		256,786		255,077
Total liabilities (1)	1,743,678			1,728,263		1,724,843		1,749,191		1,729,618
Equity
Wells Fargo stockholders’ equity:
Preferred stock	25,358			25,576		25,785		25,501		24,551
Common stock	9,136			9,136		9,136		9,136		9,136
Additional paid-in capital	60,893			60,759		60,689		60,585		60,234
Retained earnings (1)	145,263			141,549		139,366		135,828		133,075
Cumulative other comprehensive income (loss) (1)	(2,144		)	(1,622	)	(2,148	)	(3,153	)	(3,137	)
Treasury stock	(29,892		)	(27,772	)	(25,675	)	(24,030	)	(22,713	)
Unearned ESOP shares	(1,678		)	(1,904	)	(2,119	)	(2,546	)	(1,565	)
Total Wells Fargo stockholders’ equity (1)	206,936			205,722		205,034		201,321		199,581
Noncontrolling interests	1,143			895		915		989		916
Total equity (1)	208,079			206,617		205,949		202,310		200,497
Total liabilities and equity (1)	$	1,951,757		1,934,880		1,930,792		1,951,501		1,930,115
(1) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.


Wells Fargo & Company and Subsidiaries FIVE QUARTER INVESTMENT SECURITIES
(in millions)	Dec 31, 2017		Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016
Available-for-sale securities:
Securities of U.S. Treasury and federal agencies	$	6,319	6,350	17,896	24,625	25,819
Securities of U.S. states and political subdivisions	51,326		52,774	52,013	52,061	51,101
Mortgage-backed securities:
Federal agencies	160,219		150,181	135,938	156,966	161,230
Residential and commercial	9,173		11,046	12,772	14,233	16,318
Total mortgage-backed securities	169,392		161,227	148,710	171,199	177,548
Other debt securities	49,370		50,966	49,555	50,520	52,685
Total available-for-sale debt securities	276,407		271,317	268,174	298,405	307,153
Marketable equity securities	678		893	1,028	1,125	1,211
Total available-for-sale securities	277,085		272,210	269,202	299,530	308,364
Held-to-maturity securities:
Securities of U.S. Treasury and federal agencies	44,720		44,712	44,704	44,697	44,690
Securities of U.S. states and political subdivisions	6,313		6,321	6,325	6,331	6,336
Federal agency and other mortgage-backed securities (1)	87,527		90,071	87,525	53,778	45,161
Other debt securities	775		1,319	1,838	3,224	3,396
Total held-to-maturity debt securities	139,335		142,423	140,392	108,030	99,583
Total investment securities	$	416,420	414,633	409,594	407,560	407,947
(1) Predominantly consists of federal agency mortgage-backed securities.


FIVE QUARTER LOANS
(in millions)	Dec 31, 2017		Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016
Commercial:
Commercial and industrial	$	333,125	327,944	331,113	329,252	330,840
Real estate mortgage	126,599		128,475	130,277	131,532	132,491
Real estate construction	24,279		24,520	25,337	25,064	23,916
Lease financing	19,385		19,211	19,174	19,156	19,289
Total commercial	503,388		500,150	505,901	505,004	506,536
Consumer:
Real estate 1-4 family first mortgage	284,054		280,173	276,566	274,633	275,579
Real estate 1-4 family junior lien mortgage	39,713		41,152	42,747	44,333	46,237
Credit card	37,976		36,249	35,305	34,742	36,700
Automobile	53,371		55,455	57,958	60,408	62,286
Other revolving credit and installment	38,268		38,694	38,946	39,285	40,266
Total consumer	453,382		451,723	451,522	453,401	461,068
Total loans (1)	$	956,770	951,873	957,423	958,405	967,604
(1) Includes $12.8 billion, $13.6 billion, $14.3 billion, $15.7 billion, and $16.7 billion of purchased credit-impaired (PCI) loans at December 31, September 30, June 30, and March 31, 2017 and December 31, 2016, respectively.


Our foreign loans are reported by respective class of financing receivable in the table above. Substantially all of our foreign loan portfolio is commercial loans. Loans are classified as foreign primarily based on whether the borrower's primary address is outside of the United States. The following table presents total commercial foreign loans outstanding by class of financing receivable.

(in millions)	Dec 31, 2017		Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016
Commercial foreign loans:
Commercial and industrial	$	60,106	58,570	57,825	56,987	55,396
Real estate mortgage	8,033		8,032	8,359	8,206	8,541
Real estate construction	655		647	585	471	375
Lease financing	1,126		1,141	1,092	986	972
Total commercial foreign loans	$	69,920	68,390	67,861	66,650	65,284


Wells Fargo & Company and Subsidiaries FIVE QUARTER NONPERFORMING ASSETS (NONACCRUAL LOANS AND FORECLOSED ASSETS)
(in millions)	Dec 31, 2017			Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016
Nonaccrual loans:
Commercial:
Commercial and industrial	$	1,899		2,397	2,632	2,898	3,216
Real estate mortgage	628			593	630	672	685
Real estate construction	37			38	34	40	43
Lease financing	76			81	89	96	115
Total commercial	2,640			3,109	3,385	3,706	4,059
Consumer:
Real estate 1-4 family first mortgage	4,122			4,213	4,413	4,743	4,962
Real estate 1-4 family junior lien mortgage	1,086			1,101	1,095	1,153	1,206
Automobile	130			137	104	101	106
Other revolving credit and installment	58			59	59	56	51
Total consumer	5,396			5,510	5,671	6,053	6,325
Total nonaccrual loans (1)(2)(3)	$	8,036		8,619	9,056	9,759	10,384
As a percentage of total loans	0.84		%	0.91	0.95	1.02	1.07
Foreclosed assets:
Government insured/guaranteed	$	120		137	149	179	197
Non-government insured/guaranteed	522			569	632	726	781
Total foreclosed assets	642			706	781	905	978
Total nonperforming assets	$	8,678		9,325	9,837	10,664	11,362
As a percentage of total loans	0.91		%	0.98	1.03	1.11	1.17
(1) Includes nonaccrual mortgages held for sale and loans held for sale in their respective loan categories.
(2) Excludes PCI loans because they continue to earn interest income from accretable yield, independent of performance in accordance with their contractual terms.
(3) Real estate 1-4 family mortgage loans predominantly insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) and student loans largely guaranteed by agencies on behalf of the U.S. Department of Education under the Federal Family Education Loan Program are not placed on nonaccrual status because they are insured or guaranteed. All remaining student loans guaranteed under the FFELP were sold as of March 31, 2017.


Wells Fargo & Company and Subsidiaries LOANS 90 DAYS OR MORE PAST DUE AND STILL ACCRUING
(in millions)	Dec 31, 2017		Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016
Total (excluding PCI)(1):	$	11,997	10,227	9,716	10,525	11,858
Less: FHA insured/guaranteed by the VA (2)(3)	10,934		9,266	8,873	9,585	10,883
Less: Student loans guaranteed under the FFELP (4)	—		—	—	—	3
Total, not government insured/guaranteed	$	1,063	961	843	940	972
By segment and class, not government insured/guaranteed:
Commercial:
Commercial and industrial	$	26	27	42	88	28
Real estate mortgage	23		11	2	11	36
Real estate construction	—		—	10	3	—
Total commercial	49		38	54	102	64
Consumer:
Real estate 1-4 family first mortgage (3)	219		190	145	149	175
Real estate 1-4 family junior lien mortgage (3)	60		49	44	42	56
Credit card	492		475	411	453	452
Automobile	143		111	91	79	112
Other revolving credit and installment	100		98	98	115	113
Total consumer	1,014		923	789	838	908
Total, not government insured/guaranteed	$	1,063	961	843	940	972
(1) PCI loans totaled $1.4 billion, $1.4 billion, $1.5 billion, $1.8 billion and $2.0 billion, at December 31, September 30, June 30, and March 31, 2017 and December 31, 2016, respectively.
(2) Represents loans whose repayments are predominantly insured by the FHA or guaranteed by the VA.
(3) Includes mortgages held for sale 90 days or more past due and still accruing.
(4) Represents loans whose repayments are largely guaranteed by agencies on behalf of the U.S. Department of Education under the FFELP. All remaining student loans guaranteed under the FFELP were sold as of March 31, 2017.


Wells Fargo & Company and Subsidiaries CHANGES IN ACCRETABLE YIELD RELATED TO PURCHASED CREDIT-IMPAIRED (PCI) LOANS

Loans purchased with evidence of credit deterioration since origination and for which it is probable that all contractually required payments will not be collected are considered to be credit impaired. PCI loans predominantly represent loans acquired from Wachovia that were deemed to be credit impaired. Evidence of credit quality deterioration as of the purchase date may include statistics such as past due and nonaccrual status, recent borrower credit scores and recent LTV percentages. PCI loans are initially measured at fair value, which includes estimated future credit losses expected to be incurred over the life of the loan. Accordingly, the associated allowance for credit losses related to these loans is not carried over at the acquisition date. As a result of PCI loan accounting, certain credit-related ratios cannot be used to compare a portfolio that includes PCI loans against one that does not, or to compare ratios across quarters or years. The ratios particularly affected include the allowance for loan losses and allowance for credit losses as percentages of loans, of nonaccrual loans and of nonperforming assets; nonaccrual loans and nonperforming assets as a percentage of total loans; and net charge-offs as a percentage of loans. The excess of cash flows expected to be collected over the carrying value of PCI loans is referred to as the accretable yield and is accreted into interest income over the estimated lives of the PCI loans using the effective yield method. The accretable yield is affected by: Changes in interest rate indices for variable rate PCI loans - Expected future cash flows are based on the variable rates in effect at the time of the quarterly assessment of expected cash flows; Changes in prepayment assumptions - Prepayments affect the estimated life of PCI loans which may change the amount of interest income, and possibly principal, expected to be collected; and Changes in the expected principal and interest payments over the estimated life - Updates to changes in expected cash flows are driven by the credit outlook and actions taken with borrowers. Changes in expected future cash flows from loan modifications are included in the regular evaluations of cash flows expected to be collected. The change in the accretable yield related to PCI loans since the merger with Wachovia is presented in the following table.

(in millions)	Quarter ended Dec 31, 2017			Year ended Dec 31, 2017		2009-2016
Balance, beginning of period	$	9,243		11,216		10,447
Change in accretable yield due to acquisitions	—			2		159
Accretion into interest income (1)	(335		)	(1,406	)	(15,577	)
Accretion into noninterest income due to sales (2)	—			(334	)	(467	)
Reclassification from nonaccretable difference for loans with improving credit-related cash flows (3)	2			642		10,955
Changes in expected cash flows that do not affect nonaccretable difference (4)	(23		)	(1,233	)	5,699
Balance, end of period	$	8,887		8,887		11,216
(1) Includes accretable yield released as a result of settlements with borrowers, which is included in interest income.
(2) Includes accretable yield released as a result of sales to third parties, which is included in noninterest income.
(3) At December 31, 2017, our carrying value for PCI loans totaled $12.8 billion and the remainder of nonaccretable difference established in purchase accounting totaled $474 million. The nonaccretable difference absorbs losses of contractual amounts that exceed our carrying value for PCI loans.
(4) Represents changes in cash flows expected to be collected due to the impact of modifications, changes in prepayment assumptions, changes in interest rates on variable rate PCI loans and sales to third parties.


Wells Fargo & Company and Subsidiaries PICK-A-PAY PORTFOLIO (1)
	December 31, 2017
	PCI loans								All other loans
(in millions)	Adjusted unpaid principal balance (2)		Current LTV ratio (3)		Carrying value (4)		Ratio of carrying value to current value (5)		Carrying value (4)		Ratio of carrying value to current value (5)
California	$	11,286	60	%	$	8,632	45	%	$	6,365	43	%
Florida	1,436		67		1,065		49		1,372		53
New Jersey	565		74		410		53		909		61
New York	434		67		348		50		458		57
Texas	130		48		98		36		545		37
Other states	2,818		67		2,086		49		3,750		54
Total Pick-a-Pay loans	$	16,669	62		$	12,639	46		$	13,399	48

(1) The individual states shown in this table represent the top five states based on the total net carrying value of the Pick-a-Pay loans at the beginning of 2017.
(2) Adjusted unpaid principal balance includes write-downs taken on loans where severe delinquency (normally 180 days) or other indications of severe borrower financial stress exist that indicate there will be a loss of contractually due amounts upon final resolution of the loan.
(3) The current LTV ratio is calculated as the adjusted unpaid principal balance divided by the collateral value. Collateral values are generally determined using automated valuation models (AVM) and are updated quarterly. AVMs are computer-based tools used to estimate market values of homes based on processing large volumes of market data including market comparables and price trends for local market areas.
(4) Carrying value, which does not reflect the allowance for loan losses, includes remaining purchase accounting adjustments, which, for PCI loans may include the nonaccretable difference and the accretable yield and, for all other loans, an adjustment to mark the loans to a market yield at date of merger less any subsequent charge-offs.
(5) The ratio of carrying value to current value is calculated as the carrying value divided by the collateral value.


Wells Fargo & Company and Subsidiaries CHANGES IN ALLOWANCE FOR CREDIT LOSSES
	Quarter ended December 31,					Year ended December 31,
(in millions)	2017			2016		2017		2016
Balance, beginning of period	$	12,109		12,694		12,540		12,512
Provision for credit losses	651			805		2,528		3,770
Interest income on certain impaired loans (1)	(49		)	(52	)	(186	)	(205	)
Loan charge-offs:
Commercial:
Commercial and industrial	(181		)	(309	)	(789	)	(1,419	)
Real estate mortgage	(4		)	(14	)	(38	)	(27	)
Real estate construction	—			—		—		(1	)
Lease financing	(14		)	(16	)	(45	)	(41	)
Total commercial	(199		)	(339	)	(872	)	(1,488	)
Consumer:
Real estate 1-4 family first mortgage	(49		)	(86	)	(240	)	(452	)
Real estate 1-4 family junior lien mortgage	(54		)	(110	)	(279	)	(495	)
Credit card	(398		)	(329	)	(1,481	)	(1,259	)
Automobile	(261		)	(243	)	(1,002	)	(845	)
Other revolving credit and installment	(169		)	(200	)	(713	)	(708	)
Total consumer	(931		)	(968	)	(3,715	)	(3,759	)
Total loan charge-offs	(1,130		)	(1,307	)	(4,587	)	(5,247	)
Loan recoveries:
Commercial:
Commercial and industrial	63			53		297		263
Real estate mortgage	14			26		82		116
Real estate construction	3			8		30		38
Lease financing	4			1		17		11
Total commercial	84			88		426		428
Consumer:
Real estate 1-4 family first mortgage	72			89		288		373
Real estate 1-4 family junior lien mortgage	61			66		266		266
Credit card	62			54		239		207
Automobile	73			77		319		325
Other revolving credit and installment	27			28		121		128
Total consumer	295			314		1,233		1,299
Total loan recoveries	379			402		1,659		1,727
Net loan charge-offs	(751		)	(905	)	(2,928	)	(3,520	)
Other	—			(2	)	6		(17	)
Balance, end of period	$	11,960		12,540		11,960		12,540
Components:
Allowance for loan losses	$	11,004		11,419		11,004		11,419
Allowance for unfunded credit commitments	956			1,121		956		1,121
Allowance for credit losses	$	11,960		12,540		11,960		12,540
Net loan charge-offs (annualized) as a percentage of average total loans	0.31		%	0.37		0.31		0.37
Allowance for loan losses as a percentage of total loans	1.15			1.18		1.15		1.18
Allowance for credit losses as a percentage of total loans	1.25			1.30		1.25		1.30
(1) Certain impaired loans with an allowance calculated 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.


Wells Fargo & Company and Subsidiaries FIVE QUARTER CHANGES IN ALLOWANCE FOR CREDIT LOSSES
	Quarter ended
(in millions)	Dec 31, 2017			Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016
Balance, beginning of quarter	$	12,109		12,146		12,287		12,540		12,694
Provision for credit losses	651			717		555		605		805
Interest income on certain impaired loans (1)	(49		)	(43	)	(46	)	(48	)	(52	)
Loan charge-offs:
Commercial:
Commercial and industrial	(181		)	(194	)	(161	)	(253	)	(309	)
Real estate mortgage	(4		)	(21	)	(8	)	(5	)	(14	)
Real estate construction	—			—		—		—		—
Lease financing	(14		)	(11	)	(13	)	(7	)	(16	)
Total commercial	(199		)	(226	)	(182	)	(265	)	(339	)
Consumer:
Real estate 1-4 family first mortgage	(49		)	(67	)	(55	)	(69	)	(86	)
Real estate 1-4 family junior lien mortgage	(54		)	(70	)	(62	)	(93	)	(110	)
Credit card	(398		)	(337	)	(379	)	(367	)	(329	)
Automobile	(261		)	(274	)	(212	)	(255	)	(243	)
Other revolving credit and installment	(169		)	(170	)	(185	)	(189	)	(200	)
Total consumer	(931		)	(918	)	(893	)	(973	)	(968	)
Total loan charge-offs	(1,130		)	(1,144	)	(1,075	)	(1,238	)	(1,307	)
Loan recoveries:
Commercial:
Commercial and industrial	63			69		83		82		53
Real estate mortgage	14			24		14		30		26
Real estate construction	3			15		4		8		8
Lease financing	4			5		6		2		1
Total commercial	84			113		107		122		88
Consumer:
Real estate 1-4 family first mortgage	72			83		71		62		89
Real estate 1-4 family junior lien mortgage	61			69		66		70		66
Credit card	62			60		59		58		54
Automobile	73			72		86		88		77
Other revolving credit and installment	27			30		31		33		28
Total consumer	295			314		313		311		314
Total loan recoveries	379			427		420		433		402
Net loan charge-offs	(751		)	(717	)	(655	)	(805	)	(905	)
Other	—			6		5		(5	)	(2	)
Balance, end of quarter	$	11,960		12,109		12,146		12,287		12,540
Components:
Allowance for loan losses	$	11,004		11,078		11,073		11,168		11,419
Allowance for unfunded credit commitments	956			1,031		1,073		1,119		1,121
Allowance for credit losses	$	11,960		12,109		12,146		12,287		12,540
Net loan charge-offs (annualized) as a percentage of average total loans	0.31		%	0.30		0.27		0.34		0.37
Allowance for loan losses as a percentage of:
Total loans	1.15			1.16		1.16		1.17		1.18
Nonaccrual loans	137			129		122		114		110
Nonaccrual loans and other nonperforming assets	127			119		113		105		101
Allowance for credit losses as a percentage of:
Total loans	1.25			1.27		1.27		1.28		1.30
Nonaccrual loans	149			141		134		126		121
Nonaccrual loans and other nonperforming assets	138			130		123		115		110
(1) Certain impaired loans with an allowance calculated 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.


Wells Fargo & Company and Subsidiaries TANGIBLE COMMON EQUITY (1)
(in millions, except ratios)		Dec 31, 2017			Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016
Tangible book value per common share (1):
Total equity (2)		$	208,079		206,617		205,949		202,310		200,497
Adjustments:
Preferred stock		(25,358		)	(25,576	)	(25,785	)	(25,501	)	(24,551	)
Additional paid-in capital on ESOP preferred stock		(122		)	(130	)	(136	)	(157	)	(126	)
Unearned ESOP shares		1,678			1,904		2,119		2,546		1,565
Noncontrolling interests		(1,143		)	(895	)	(915	)	(989	)	(916	)
Total common stockholders' equity (2)	(A)	183,134			181,920		181,232		178,209		176,469
Adjustments:
Goodwill		(26,587		)	(26,581	)	(26,573	)	(26,666	)	(26,693	)
Certain identifiable intangible assets (other than MSRs)		(1,624		)	(1,913	)	(2,147	)	(2,449	)	(2,723	)
Other assets (3)		(2,155		)	(2,282	)	(2,268	)	(2,121	)	(2,088	)
Applicable deferred taxes (4)		962			1,550		1,624		1,698		1,772
Tangible common equity (2)	(B)	$	153,730		152,694		151,868		148,671		146,737
Common shares outstanding	(C)	4,891.6			4,927.9		4,966.8		4,996.7		5,016.1
Book value per common share (2)	(A)/(C)	$	37.44		36.92		36.49		35.67		35.18
Tangible book value per common share (2)	(B)/(C)	31.43			30.99		30.58		29.75		29.25


		Quarter ended											Year ended
(in millions, except ratios)		Dec 31, 2017			Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016		Dec 31, 2017		Dec 31, 2016
Return on average tangible common equity (1):
Net income applicable to common stock (2)	(A)	$	5,740		4,131		5,450		5,233		4,872		20,554		20,373
Average total equity (2)		207,413			207,723		205,755		201,559		201,247		205,654		200,690
Adjustments:
Preferred stock		(25,569		)	(25,780	)	(25,849	)	(25,163	)	(24,579	)	(25,592	)	(24,363	)
Additional paid-in capital on ESOP preferred stock		(129		)	(136	)	(144	)	(146	)	(128	)	(139	)	(161	)
Unearned ESOP shares		1,896			2,114		2,366		2,198		1,596		2,143		2,011
Noncontrolling interests		(998		)	(926	)	(910	)	(957	)	(928	)	(948	)	(936	)
Average common stockholders’ equity (2)	(B)	182,613			182,995		181,218		177,491		177,208		181,118		177,241
Adjustments:
Goodwill		(26,579		)	(26,600	)	(26,664	)	(26,673	)	(26,713	)	(26,629	)	(26,700	)
Certain identifiable intangible assets (other than MSRs)		(1,767		)	(2,056	)	(2,303	)	(2,588	)	(2,871	)	(2,176	)	(3,254	)
Other assets (3)		(2,245		)	(2,231	)	(2,160	)	(2,095	)	(2,175	)	(2,184	)	(2,117	)
Applicable deferred taxes (4)		1,332			1,579		1,648		1,722		1,785		1,570		1,897
Average tangible common equity (2)	(C)	$	153,354		153,687		151,739		147,857		147,234		151,699		147,067
Return on average common stockholders' equity (ROE) (annualized) (2)	(A)/(B)	12.47		%	8.96		12.06		11.96		10.94		11.35		11.49
Return on average tangible common equity (ROTCE) (annualized) (2)	(A)/(C)	14.85			10.66		14.41		14.35		13.16		13.55		13.85
(1) Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, and goodwill and certain identifiable intangible assets (including goodwill and intangible assets associated with certain of our nonmarketable equity investments but excluding mortgage servicing rights), net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity and tangible book value per common share, which utilize tangible common equity, are useful financial measures because they enable investors and others to assess the Company's use of equity.
(2) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.
(3) Represents goodwill and other intangibles on nonmarketable equity investments, which are included in other assets.
(4) Applicable deferred taxes relate to goodwill and other intangible assets. They were 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.


Wells Fargo & Company and Subsidiaries COMMON EQUITY TIER 1 UNDER BASEL III (FULLY PHASED-IN) (1)
		Estimated
(in billions, except ratio)		Dec 31, 2017			Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016
Total equity (2)		$	208.1		206.6		205.9		202.3		200.5
Adjustments:
Preferred stock		(25.4		)	(25.6	)	(25.8	)	(25.5	)	(24.6	)
Additional paid-in capital on ESOP preferred stock		(0.1		)	(0.1	)	(0.1	)	(0.2	)	(0.1	)
Unearned ESOP shares		1.7			1.9		2.1		2.5		1.6
Noncontrolling interests		(1.1		)	(0.9	)	(0.9	)	(1.0	)	(0.9	)
Total common stockholders' equity (2)		183.2			181.9		181.2		178.1		176.5
Adjustments:
Goodwill		(26.6		)	(26.6	)	(26.6	)	(26.7	)	(26.7	)
Certain identifiable intangible assets (other than MSRs)		(1.6		)	(1.9	)	(2.1	)	(2.4	)	(2.7	)
Other assets (3)		(2.2		)	(2.3	)	(2.2	)	(2.1	)	(2.1	)
Applicable deferred taxes (4)		1.0			1.6		1.6		1.7		1.8
Investment in certain subsidiaries and other		0.2			(0.1	)	(0.2	)	(0.1	)	(0.4	)
Common Equity Tier 1 (Fully Phased-In) under Basel III	(A)	154.0			152.6		151.7		148.5		146.4
Total risk-weighted assets (RWAs) anticipated under Basel III (5)(6)	(B)	$	1,292.3		1,292.8		1,310.5		1,324.5		1,358.9
Common Equity Tier 1 to total RWAs anticipated under Basel III (Fully Phased-In) (6)	(A)/(B)	11.9		%	11.8		11.6		11.2		10.8
(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. These rules established a new comprehensive capital framework for U.S. banking organizations that implements the Basel III capital framework and certain provisions of the Dodd-Frank Act. The rules are being phased in through the end of 2021. Fully phased-in capital amounts, ratios and RWAs are calculated assuming the full phase-in of the Basel III capital rules. Fully phased-in regulatory capital amounts, ratios and RWAs are considered non-GAAP financial measures that are used by management, bank regulatory agencies, investors and analysts to assess and monitor the Company’s capital position.
(2) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.
(3) Represents goodwill and other intangibles on nonmarketable equity investments, which are included in other assets.
(4) Applicable deferred taxes relate to goodwill and other intangible assets. They were 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.
(5) The final Basel III capital rules provide for two capital frameworks: the Standardized Approach, which replaced Basel I, and the Advanced Approach applicable to certain institutions. Under the final rules, we are subject to the lower of our CET1 ratio calculated under the Standardized Approach and under the Advanced Approach in the assessment of our capital adequacy. Because the final determination of our CET1 ratio and which approach will produce the lower CET1 ratio as of December 31, 2017, 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 September 30, June 30 and March 31, 2017, and December 31, 2016, was calculated under the Basel III Standardized Approach RWAs.
(6) The Company’s December 31, 2017, RWAs and capital ratio are preliminary estimates.


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
(income/expense in millions, average balances in billions)	2017			2016	2017		2016		2017		2016		2017		2016		2017		2016
Quarter ended December 31,
Net interest income (3)	$	7,537		7,556	4,211		4,323		1,133		1,061		(568	)	(538	)	12,313		12,402
Provision (reversal of provision) for credit losses	636			631	20		168		(7	)	3		2		3		651		805
Noninterest income	4,491			4,105	2,883		2,830		3,172		3,013		(809	)	(768	)	9,737		9,180
Noninterest expense	10,200			6,985	4,204		4,002		3,244		3,042		(848	)	(814	)	16,800		13,215
Income (loss) before income tax expense (benefit)	1,192			4,045	2,870		2,983		1,068		1,029		(531	)	(495	)	4,599		7,562
Income tax expense (benefit)	(2,560		)	1,272	716		795		404		380		(202	)	(189	)	(1,642	)	2,258
Net income (loss) before noncontrolling interests	3,752			2,773	2,154		2,188		664		649		(329	)	(306	)	6,241		5,304
Less: Net income (loss) from noncontrolling interests	79			40	6		(6	)	5		(4	)	—		—		90		30
Net income (loss)	$	3,673		2,733	2,148		2,194		659		653		(329	)	(306	)	6,151		5,274

Average loans	$	473.5		488.1	463.5		461.5		72.8		70.0		(58.0	)	(55.5	)	951.8		964.1
Average assets	974.0			1,000.7	837.3		811.9		209.3		220.4		(85.3	)	(88.7	)	1,935.3		1,944.3
Average deposits	738.1			709.8	465.7		459.2		184.2		194.9		(76.4	)	(79.7	)	1,311.6		1,284.2

Year ended December 31,
Net interest income (3)	$	30,365		29,833	16,967		16,052		4,493		3,913		(2,268	)	(2,044	)	49,557		47,754
Provision (reversal of provision) for credit losses	2,555			2,691	(19	)	1,073		(5	)	(5	)	(3	)	11		2,528		3,770
Noninterest income	18,342			19,033	11,206		12,490		12,433		12,033		(3,149	)	(3,043	)	38,832		40,513
Noninterest expense	32,478			27,422	16,755		16,126		12,631		12,059		(3,380	)	(3,230	)	58,484		52,377
Income (loss) before income tax expense (benefit)	13,674			18,753	11,437		11,343		4,300		3,892		(2,034	)	(1,868	)	27,377		32,120
Income tax expense (benefit)	1,327			6,182	2,753		3,136		1,610		1,467		(773	)	(710	)	4,917		10,075
Net income (loss) before noncontrolling interests	12,347			12,571	8,684		8,207		2,690		2,425		(1,261	)	(1,158	)	22,460		22,045
Less: Net income (loss) from noncontrolling interests	276			136	(15	)	(28	)	16		(1	)	—		—		277		107
Net income (loss)	$	12,071		12,435	8,699		8,235		2,674		2,426		(1,261	)	(1,158	)	22,183		21,938

Average loans	$	476.7		486.9	464.6		449.3		71.9		67.3		(57.1	)	(53.5	)	956.1		950.0
Average assets	984.2			977.3	821.8		782.0		214.4		211.5		(87.4	)	(85.4	)	1,933.0		1,885.4
Average deposits	729.3			701.2	464.5		438.6		189.0		187.8		(78.2	)	(77.0	)	1,304.6		1,250.6
(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, most 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 and, if the segment has excess liabilities, interest credits for providing funding to other segments. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of excess liabilities from another segment.


Wells Fargo & Company and Subsidiaries FIVE QUARTER OPERATING SEGMENT RESULTS (1)
	Quarter ended
(income/expense in millions, average balances in billions)	Dec 31, 2017			Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016
COMMUNITY BANKING
Net interest income (2)(4)	$	7,537		7,626		7,543		7,659		7,556
Provision for credit losses	636			650		623		646		631
Noninterest income (4)	4,491			4,358		4,810		4,683		4,105
Noninterest expense	10,200			7,834		7,223		7,221		6,985
Income before income tax expense (4)	1,192			3,500		4,507		4,475		4,045
Income tax expense (benefit) (4)	(2,560		)	1,263		1,423		1,201		1,272
Net income before noncontrolling interests (4)	3,752			2,237		3,084		3,274		2,773
Less: Net income from noncontrolling interests	79			61		46		90		40
Segment net income (4)	$	3,673		2,176		3,038		3,184		2,733
Average loans	$	473.5		473.5		477.2		482.7		488.1
Average assets	974.0			988.9		983.4		990.7		1,000.7
Average deposits	738.1			734.5		727.2		717.2		709.8
WHOLESALE BANKING
Net interest income (2)(4)	$	4,211		4,345		4,271		4,140		4,323
Provision (reversal of provision) for credit losses	20			69		(65	)	(43	)	168
Noninterest income (4)	2,883			2,739		2,682		2,902		2,830
Noninterest expense	4,204			4,248		4,078		4,225		4,002
Income before income tax expense (4)	2,870			2,767		2,940		2,860		2,983
Income tax expense (4)	716			729		560		748		795
Net income before noncontrolling interests (4)	2,154			2,038		2,380		2,112		2,188
Less: Net loss from noncontrolling interests	6			(7	)	(9	)	(5	)	(6	)
Segment net income (4)	$	2,148		2,045		2,389		2,117		2,194
Average loans	$	463.5		463.8		464.9		466.3		461.5
Average assets	837.3			824.3		817.3		807.8		811.9
Average deposits	465.7			463.4		463.0		466.0		459.2
WEALTH AND INVESTMENT MANAGEMENT
Net interest income (2)	$	1,133		1,159		1,127		1,074		1,061
Provision (reversal of provision) for credit losses	(7		)	(1	)	7		(4	)	3
Noninterest income	3,172			3,087		3,055		3,119		3,013
Noninterest expense	3,244			3,106		3,075		3,206		3,042
Income before income tax expense	1,068			1,141		1,100		991		1,029
Income tax expense	404			427		417		362		380
Net income before noncontrolling interests	664			714		683		629		649
Less: Net income (loss) from noncontrolling interests	5			4		1		6		(4	)
Segment net income	$	659		710		682		623		653
Average loans	$	72.8		72.4		71.7		70.7		70.0
Average assets	209.3			213.4		213.1		221.9		220.4
Average deposits	184.2			188.1		188.2		195.6		194.9
OTHER (3)
Net interest income (2)	$	(568	)	(681	)	(470	)	(549	)	(538	)
Provision (reversal of provision) for credit losses	2			(1	)	(10	)	6		3
Noninterest income	(809		)	(784	)	(783	)	(773	)	(768	)
Noninterest expense	(848		)	(837	)	(835	)	(860	)	(814	)
Loss before income tax benefit	(531		)	(627	)	(408	)	(468	)	(495	)
Income tax benefit	(202		)	(238	)	(155	)	(178	)	(189	)
Net loss before noncontrolling interests	(329		)	(389	)	(253	)	(290	)	(306	)
Less: Net income from noncontrolling interests	—			—		—		—		—
Other net loss	$	(329	)	(389	)	(253	)	(290	)	(306	)
Average loans	$	(58.0	)	(57.4	)	(56.9	)	(56.1	)	(55.5	)
Average assets	(85.3		)	(88.1	)	(86.8	)	(89.4	)	(88.7	)
Average deposits	(76.4		)	(79.6	)	(77.2	)	(79.6	)	(79.7	)
CONSOLIDATED COMPANY
Net interest income (2)(4)	$	12,313		12,449		12,471		12,324		12,402
Provision for credit losses	651			717		555		605		805
Noninterest income (4)	9,737			9,400		9,764		9,931		9,180
Noninterest expense	16,800			14,351		13,541		13,792		13,215
Income before income tax expense (4)	4,599			6,781		8,139		7,858		7,562
Income tax expense (benefit) (4)	(1,642		)	2,181		2,245		2,133		2,258
Net income before noncontrolling interests (4)	6,241			4,600		5,894		5,725		5,304
Less: Net income from noncontrolling interests	90			58		38		91		30
Wells Fargo net income (4)	$	6,151		4,542		5,856		5,634		5,274
Average loans	$	951.8		952.3		956.9		963.6		964.1
Average assets (4)	1,935.3			1,938.5		1,927.0		1,931.0		1,944.3
Average deposits	1,311.6			1,306.4		1,301.2		1,299.2		1,284.2
(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 and, if the segment has excess liabilities, interest credits for providing funding to other segments. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of excess liabilities from another segment.
(3) Includes the elimination of certain items that are included in more than one business segment, most of which represents products and services for Wealth and Investment Management customers served through Community Banking distribution channels.
(4) Financial information for prior quarters in 2017 has been revised to reflect the impact of the adoption in fourth quarter 2017 of Accounting Standards Update (ASU) 2017-12 – Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. See footnote (1) to the Summary Financial Data table on page 16 for more information.


Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING
	Quarter ended
(in millions)	Dec 31, 2017			Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016
MSRs measured using the fair value method:
Fair value, beginning of quarter	$	13,338		12,789		13,208		12,959		10,415
Purchases		—		541		—		—		—
Servicing from securitizations or asset transfers (1)		639		605		436		583		752
Sales and other (2)		(32	)	64		(8	)	(47	)	(47	)
Net additions		607		1,210		428		536		705
Changes in fair value:
Due to changes in valuation model inputs or assumptions:
Mortgage interest rates (3)		221		(171	)	(305	)	152		2,367
Servicing and foreclosure costs (4)		23		60		(14	)	27		93
Discount rates (5)		13		—		—		—		—
Prepayment estimates and other (6)		(55	)	(31	)	(41	)	(5	)	(106	)
Net changes in valuation model inputs or assumptions		202		(142	)	(360	)	174		2,354
Changes due to collection/realization of expected cash flows over time		(522	)	(519	)	(487	)	(461	)	(515	)
Total changes in fair value		(320	)	(661	)	(847	)	(287	)	1,839
Fair value, end of quarter	$	13,625		13,338		12,789		13,208		12,959
(1) Includes impacts associated with exercising our right to repurchase delinquent loans from GNMA loan securitization pools.
(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.


	Quarter ended
(in millions)	Dec 31, 2017			Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016
Amortized MSRs:
Balance, beginning of quarter	$	1,406		1,399		1,402		1,406		1,373
Purchases		40		31		26		18		34
Servicing from securitizations or asset transfers		43		41		37		45		66
Amortization		(65	)	(65	)	(66	)	(67	)	(67	)
Balance, end of quarter	$	1,424		1,406		1,399		1,402		1,406
Fair value of amortized MSRs:
Beginning of quarter	$	1,990		1,989		2,051		1,956		1,627
End of quarter		2,025		1,990		1,989		2,051		1,956


Wells Fargo & Company and Subsidiaries FIVE QUARTER CONSOLIDATED MORTGAGE SERVICING (CONTINUED)
		Quarter ended
(in millions)		Dec 31, 2017			Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016
Servicing income, net:
Servicing fees (1)		$	833		795		882		882		738
Changes in fair value of MSRs carried at fair value:
Due to changes in valuation model inputs or assumptions (2)	(A)		202		(142	)	(360	)	174		2,354
Changes due to collection/realization of expected cash flows over time			(522	)	(519	)	(487	)	(461	)	(515	)
Total changes in fair value of MSRs carried at fair value			(320	)	(661	)	(847	)	(287	)	1,839
Amortization			(65	)	(65	)	(66	)	(67	)	(67	)
Net derivative gains (losses) from economic hedges (3)	(B)		(186	)	240		431		(72	)	(2,314	)
Total servicing income, net		$	262		309		400		456		196
Market-related valuation changes to MSRs, net of hedge results (2)(3)	(A)+(B)	$	16		98		71		102		40
(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 results from economic hedges used to hedge the risk of changes in fair value of MSRs.


(in billions)		Dec 31, 2017			Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016
Managed servicing portfolio (1):
Residential mortgage servicing:
Serviced for others		$	1,209		1,223		1,189		1,204		1,205
Owned loans serviced			342		340		343		335		347
Subserviced for others			3		3		4		4		8
Total residential servicing			1,554		1,566		1,536		1,543		1,560
Commercial mortgage servicing:
Serviced for others			495		480		475		474		479
Owned loans serviced			127		128		130		132		132
Subserviced for others			9		8		8		7		8
Total commercial servicing			631		616		613		613		619
Total managed servicing portfolio		$	2,185		2,182		2,149		2,156		2,179
Total serviced for others		$	1,704		1,703		1,664		1,678		1,684
Ratio of MSRs to related loans serviced for others			0.88	%	0.87		0.85		0.87		0.85
Weighted-average note rate (mortgage loans serviced for others)			4.23		4.23		4.23		4.23		4.26
(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.


Wells Fargo & Company and Subsidiaries SELECTED FIVE QUARTER RESIDENTIAL MORTGAGE PRODUCTION DATA
		Quarter ended
		Dec 31, 2017			Sep 30, 2017	Jun 30, 2017	Mar 31, 2017	Dec 31, 2016
Net gains on mortgage loan origination/sales activities (in millions):
Residential	(A)	$	504		546	521	569	939
Commercial		95			81	81	101	90
Residential pipeline and unsold/repurchased loan management (1)		67			110	146	102	192
Total		$	666		737	748	772	1,221
Application data (in billions):
Wells Fargo first mortgage quarterly applications		$	63		73	83	59	75
Refinances as a percentage of applications		38		%	37	32	36	48
Wells Fargo first mortgage unclosed pipeline, at quarter end		$	23		29	34	28	30
Residential real estate originations:
Purchases as a percentage of originations		64		%	72	75	61	50
Refinances as a percentage of originations		36			28	25	39	50
Total		100		%	100	100	100	100
Wells Fargo first mortgage loans (in billions):
Retail		$	23		26	25	21	35
Correspondent		30			32	31	22	36
Other (2)		—			1	—	1	1
Total quarter-to-date		$	53		59	56	44	72
Held-for-sale	(B)	$	40		44	42	34	56
Held-for-investment		13			15	14	10	16
Total quarter-to-date		$	53		59	56	44	72
Total year-to-date		$	212		159	100	44	249
Production margin on residential held-for-sale mortgage originations	(A)/(B)	1.25		%	1.24	1.24	1.68	1.68
(1) Predominantly includes the results of GNMA loss mitigation activities, interest rate management activities and changes in estimate to the liability for mortgage loan repurchase losses.
(2) Consists of home equity loans and lines.


CHANGES IN MORTGAGE REPURCHASE LIABILITY
	Quarter ended
(in millions)	Dec 31, 2017			Sep 30, 2017		Jun 30, 2017		Mar 31, 2017		Dec 31, 2016
Balance, beginning of period	$	179		178		222		229		239
Assumed with MSR purchases (1)	—			10		—		—		—
Provision for repurchase losses:
Loan sales	4			6		6		8		10
Change in estimate (2)	2			(12	)	(45	)	(8	)	(7	)
Net additions (reductions) to provision	6			(6	)	(39	)	—		3
Losses	(4		)	(3	)	(5	)	(7	)	(13	)
Balance, end of period	$	181		179		178		222		229
(1) Represents repurchase liability associated with portfolio of loans underlying mortgage servicing rights acquired during the period.
(2) Results from changes in investor demand and mortgage insurer practices, credit deterioration and changes in the financial stability of correspondent lenders.

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Ancel Martinez, 415-222-3858
or
Investors
John M. Campbell, 415-396-0523

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