2023 Wells Fargo & Company 165(d) Resolution Plan

2023 Wells Fargo & Company

165(d) Resolution Plan

Public Section

June 2023

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Forward-Looking Statements and Other Disclaimers

This document contains forward-looking statements about our business, including discussion of the Company’s

future plans, objectives, and resolution strategies, including its expectations, assumptions, and projections

regarding the implementation of those strategies and the effectiveness of the Company’s resolution planning

efforts. Because forward-looking statements are based on our current expectations and assumptions regarding

the future, they are subject to inherent risks and uncertainties. Do not unduly rely on forward-looking

statements as actual results could differ materially from expectations. Forward-looking statements speak only

as of the date made, and we do not undertake to update them to reflect changes or events that occur after that

date. For information about factors that could cause actual results to differ materially from our expectations,

refer to our reports filed with the Securities and Exchange Commission, including the discussion under “Risk

Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities

and Exchange Commission and available on its website at www.sec.gov.

The 2023 165(d) Plan is based on many significant assumptions, including assumptions about the actions of

regulators and creditors, the state of the financial markets and the economy, and the impact of a significant loss

event on the Company. While we expect to take the actions described in this 2023 165(d) Plan, some or all of

these assumptions may prove to be incorrect in a resolution situation and our actual actions may differ. The

2023 165(d) Plan is not binding on us, a bankruptcy court, our regulators, or any other resolution authority.

All financial data in this document is as of December 31, 2022, except where otherwise indicated.

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Table of Contents

1. Introduction ........................................................................................................................................................ 5

2. Company Overview .............................................................................................................................................. 13

3. Core Business Lines .............................................................................................................................................. 14

4. Material Entities .................................................................................................................................................. 17

5. Approach to Maintaining Financial Resiliency ............................................................................................................ 24

6. Company's Preferred Resolution Strategy ................................................................................................................ 36

7. Focus Areas and Capabilities .................................................................................................................................. 43

8. Resolution Planning Oversight ............................................................................................................................... 58

9. Financial Information ............................................................................................................................................ 63

10. Identities of Principal Officers ................................................................................................................................ 67

11. Glossary ............................................................................................................................................................. 68

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1. Introduction

In response to the 2008 financial crisis, the U.S. Government passed the Dodd-Frank Wall Street Reform and

Consumer Protection Act (Dodd-Frank Act) to prevent a similar financial crisis from occurring by enhancing

governmental oversight of the banking industry. The Dodd-Frank Act requires large bank holding companies,

including Wells Fargo & Company,

to file resolution plans with the Federal Reserve and Federal Deposit

Insurance Corporation (FDIC) that demonstrate how they could be rapidly and orderly resolved in the event

of material financial distress or failure. Pursuant to regulatory requirements, we also file Recovery Plans,

which show how we would proactively identify and respond to financial stress to avoid failure. In this Public

Section of our 2023 165(d) Plan, we discuss not only resolution concepts, but also recovery concepts to

demonstrate a more extensive picture of our financial resiliency.

Figure 1-1 Resolution Developments

Preparedness to Recover from Financial Stress

At Wells Fargo, we have taken steps to be able to identify and respond early to unanticipated financial stress.

These monitoring and response mechanisms have been in place for many years, and we continue to refine

them to meet evolving economic environments, including the market stress events earlier this year.

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Wells Fargo & Company including its subsidiaries is referred to as the “Company,” “Wells Fargo,” “we,” “our,” or “us,” and, as a stand-alone entity, is

referred to as the “Parent.”

We adhere to strict capital and liquidity requirements that position us to identify and effectively respond

early to unexpected severe financial stress. Some of these requirements include:

• Daily reporting to the Federal Reserve of the liquidity profile for our consolidated Company and

certain legal entities, which includes information on assets, liabilities, and funding activities.

• Liquidity stress testing and daily monitoring of expected short-term cash outflows to demonstrate

that we have sufficient liquidity available to withstand severe financial stress if higher than normal

outflows occurred.

• Annual capital stress testing that is conducted both internally and by regulatory agencies using

hypothetical economic scenarios that test our ability to withstand severe financial stress.

For liquidity positioning, we monitor financial resources at Material Entities

against established metrics that

could indicate deteriorating available liquidity. Our liquid assets include cash, U.S. Treasuries, U.S.

government agency and government sponsored company-issued securities, agency mortgage-backed

securities, and certain other financial instruments. Our liquid assets as a percentage of total assets were more

than 5% higher on December 31, 2022 compared to the beginning of 2014, as illustrated in the following

figure. In addition, we currently maintain liquid assets in excess of our forecasted resolution liquidity

execution need requirement.

Figure 1-2 Liquid Assets

$ Billions, period-end balances

Percent

Cash and Short-Term Investments Government and Agency MBS Liquid Assets to Total Assets (%)

1Q14 3Q14 1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18 1Q19 3Q19 1Q20 3Q20 1Q21 3Q21 1Q22 3Q22

100

200

300

400

500

600

700

800

High-quality liquid assets (HQLAs) are assets that financial institutions hold and can be easily accessed to

meet short-term liquidity needs in times of financial stress. We closely monitor our liquidity coverage ratio,

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A material entity is a subsidiary or foreign office of the covered company that is significant to the activities of an identified critical operation or core

business line, or is financially or operationally significant to the resolution of the covered company. Detail on the Material Entities is provided in Section 4,

Material Entities.

Resolution liquidity execution need (RLEN) is how much liquidity applicable Material Entities would need to continue operating if we reach resolution.

which measures the amount of HQLAs we have compared to our projected net cash outflows over a 30-day

period. As shown in the following figure, we have consistently been above the regulatory minimum

requirement.

Figure 1-3 Liquidity Coverage Ratio

Percent

Liquidity Coverage Ratio Minimum Requirement

2Q17 1Q18 4Q18 3Q19 2Q20 1Q21 4Q21 3Q22

100

110

120

130

140

Preparedness for Resolution

In addition to the monitoring performed to identify financial stress early, we also monitor metrics that help

us identify when failure could occur and what our financial needs could be in a severe financial stress

situation. Those metrics include:

• Total loss-absorbing capacity: the amount of regulatory capital and long-term debt to absorb losses

and recapitalize Material Entities in a resolution event

• Resolution capital execution need: how much capital applicable Material Entities would need to

continue operating or be wound down in an orderly manner in a resolution event

• Resolution liquidity execution need: how much liquidity applicable Material Entities would need to

continue operating if we reach resolution

The U.S. banking industry has focused on the amount of overall loss-absorbing capacity since the Federal

Reserve published its total loss-absorbing capacity (TLAC) rule in 2016 to improve the resiliency of global

systemically important bank holding companies, as well as improve their resolvability in the event of failure

or material financial distress. We maintain TLAC in excess of our regulatory requirements including buffers

and in excess of our resolution capital execution needs. Our current TLAC requirement including buffers is

21.5%. We have consistently maintained TLAC above regulatory requirements including buffers (which have

not exceeded 22.0%) since TLAC reporting began in 2018, as shown in the following figure.

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Figure 1-4 Total Loss-Absorbing Capacity

291.2

290

307.2

285.3

293.2

23.3% 23.3%

25.7%

23.0%

23.3%

TLAC ($ Billions) TLAC (% of Std RWA)

2018 2019 2020 2021 2022

Details about resolution capital execution need and resolution liquidity execution need can be found in

Section 7.1, Capital and Section 7.2, Funding & Liquidity, respectively.

Resolution Capabilities and Strategy

We have resolution-related capabilities in place that we could use if we need to execute our Preferred

Resolution Strategy, described in more detail in Section 6, Company's Preferred Resolution Strategy, which is

designed to only have the Parent file for bankruptcy while other Material Entities continue as going concerns

or are wound down. We believe this strategy is appropriate because:

• It minimizes disruption to the U.S. financial system.

• Our key operations, services, business lines, and legal entities continue to operate.

• We have flexibility to determine the portfolios or businesses to sell as we determine the appropriate

size and focus of the remaining company.

• We reduce the risk that non-U.S. authorities or third parties would take action against our operating

entities because the Parent is the only legal entity that would enter bankruptcy.

Strengthening Governance Mechanisms

We successfully addressed the feedback from the governance mechanisms and liquidity capabilities-related

shortcoming identified in connection with our 2019 165(d) Plan and the Federal Reserve and FDIC did not

identify any shortcomings in our 2021 Targeted 165(d) Resolution Plan. We have continued our efforts to

identify and implement improvements to our processes that increase efficiency, reduce time, and add

automation. The following list identifies some of those changes.

• We automated tools and processes used in crisis management, which include our financial crisis

management reporting package, internal liquidity stress testing, and our resolution liquidity adequacy

and positioning and resolution liquidity execution need processes.

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• We held exercises to confirm preparedness for a stress event. These exercises included simulations

with senior leaders to (1) review metrics, escalation and communication protocols, and actions to

respond to hypothetical stress events, and (2) test our ability to dynamically calculate resolution

liquidity execution need using assumptions that reflect the current operating environment.

Developing and Testing Resolution Preparedness

We integrated our recovery and resolution planning capabilities into our normal operations to support our

resolvability efforts. We developed and strengthened our planning for financial stress to understand what

operations would be essential during times of stress, what existing capabilities we need to enhance, whether

we need to create new capabilities, and how we could identify financial stress early and execute an

appropriate response. We leverage past experiences to understand what worked well and where we could

continue to improve.

We assess and test our recovery and resolution planning capabilities, using a risk-based approach, to confirm

the necessary capabilities perform as intended for a financial stress event. Business Groups,

Enterprise

Functions,

Independent Risk Management, and Internal Audit perform this testing.

Business Groups and Enterprise Functions test controls and lead simulations, tabletops, or other testing

exercises. Controls are designed to mitigate risk or prevent or detect significant errors. Simulations give

participants the opportunity to perform their duties in a simulated operational environment. Tabletops allow

participants to discuss their roles and responses in a particular scenario.

Independent Risk Management tests resolution-related capabilities through its Independent Testing and

Validation team. Internal Audit tests Business Groups, Enterprise Functions, and Independent Risk

Management.

The following examples demonstrate some tests we perform to operationalize our capabilities:

• We test aspects of our Contingency Funding Plans annually to verify the readiness of our senior

leaders for a financial stress event and confirm reporting packages have the data our senior leaders

would use in an actual stress event.

• We populate virtual data rooms for divestiture options annually to build the muscle memory that

would be necessary in a stress event if we would sell a business or portfolio.

• We administer annual contingency exercises with financial market utilities (FMUs) and agent banks to

understand potential impacts to those relationships in financial stress.

• We simulate the employee retention process that would be used in a resolution event to confirm we

can quickly verify the key employees who should be retained.

• We conduct bankruptcy preparedness exercises to mimic aspects of Chapter 11 bankruptcy

preparations.

We identify and mitigate risks, implement well-controlled processes, enhance monitoring and response

capabilities, and simplify the overall structure of the Company as part of our resolution planning. The

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Business Groups are organizational units that are client facing and generate revenue.

Enterprise Functions are organizational units that support and oversee the Company and its Business Groups.

following figure identifies some of our accomplishments over the past 10 years to show the depth of our

preparedness efforts.

Figure 1-5 Details of Resolution Developments

Structural and Operational Abilities

We continue to exit activities that are non-core to focus our efforts on building our core, scaled business. We completed 31 business, hybrid

portfolio, or portfolio divestitures from 2016 to 2021, 15 of which were executed from 2019 to 2021 at significantly increased scale, volume,

and speed, thereby demonstrating the efficacy of our divestiture capability if needed during a time of financial stress.

We created Legal Entity Rationalization Criteria and eliminated over 1,000 legal entities since Wells Fargo acquired Wachovia , simplifying our

legal entity structure.

We created a Service Catalog that provides a detailed mapping of Critical Services to our key operations and businesses.

We identified and mitigated, where possible, recoverability and resolvability risks.

We executed Service Level Attachments between legal entities, which incorporate resolution-resilient language and arm’s length pricing, that

would allow Critical Services to continue during a stress event or resolution.

We analyzed the access requirements to material FMUs and agent banks, ran contingency exercises, and communicated with the FMUs and

agent banks about continued access during a stress event.

We moved employees and vendor contracts to the legal entities that each support, thereby minimizing impediments in the event of a

divestiture.

We enhanced data capabilities to enable accurate and timely reporting for senior leaders during stress.

Financial Stress Monitoring and Response

We increased the amount of liquid assets that could be available in stress and the amount of our total loss-absorbing capacity.

We refined our methodologies for evaluating resolution liquidity and capital needs to improve the timeliness and accuracy of our trigger

reporting and to reduce the possibility of declaring bankruptcy too early or too late.

We took steps to adhere to the International Swaps and Derivatives Association (ISDA) Protocols to prevent counterparties from terminating

qualified financial contracts and thereby generating the associated liquidity outflows in resolution.

We improved our collateral management capabilities by establishing a centralized governance and policy structure, building an in-house trading

system for repurchase agreements and securing lending that multiple Core Business Lines leverage, and consolidating how the Securities

Lending Desks for institutional and retail platforms are managed to provide a unified view.

We strengthened our capital and liquidity trigger frameworks and escalation protocols for financial stress to be able to identify and respond to

stress in an even more timely and appropriate manner.

We expanded and improved our incident management structure to build a consistent approach for how the Company responds to all types of

incidents, including financial stress.

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Resolution Strategy Preparedness

We established an intermediate holding company, WFC Holdings, LLC (WFCH), that provides direct and indirect subsidiaries of the Parent with

capital and funding in the event the Parent files for bankruptcy. This obligation to downstream resources enables those entities to engage in

business as usual activities and receive the necessary resources pursuant to the Company's Preferred Resolution Strategy.

The Parent made an initial contribution of assets to WFCH in exchange for funding notes. This initial contribution and the Parent’s obligation to

make additional contributions provide for WFCH to be able to support the remaining Material Entities upon the Parent’s resolution.

We executed a Secured Support Agreement, which is a contract between the Parent, WFCH, and other Material Entities that, among other

things, obligates WFCH to provide ongoing capital and liquidity support to the Material Entities (other than the Parent) during resolution.

Governance and Oversight

Our chief financial officer is the co-chair of our Recovery & Resolution Committee, a governance committee that reports to the Parent Board of

Directors Finance Committee and oversees the Company’s recovery and resolution planning efforts. The Recovery & Resolution Committee

also includes our chief risk officer, corporate treasurer, and Finance chief risk officer, among other senior leaders.

We integrated recovery and resolution planning oversight into the Independent Risk Management teams that oversee the Front Line’s work on

a daily basis.

We established a dedicated Internal Audit recovery and resolution planning team that tests the control environment and adherence to guidance

for the Front Line and Independent Risk Management.

We educate Board members, senior leaders, and Companywide teams on recovery and resolution planning.

We developed playbooks for Material Entity Boards and senior leaders, financial market utility and agent bank relationships, employee

retention, and stakeholder communications that would guide our actions during a stress event.

Roadmap to the Public Section

Section 2, Company Overview, Section 3, Core Business Lines, and Section 4, Material Entities provide

the framework to understand our recovery and resolution planning efforts. These sections give a high-level

overview of the Company, our presence outside the U.S., how we organize business activity, information

about our predominant U.S. focus, and our processes for designating Core Business Lines and Material

Entities.

Section 5, Approach to Maintaining Financial Resiliency describes how we approach maintaining our

financial health to avoid resolution. This section includes information about how we identify risk, develop our

strategic plan, forecast financials, manage liquidity and capital in business as usual, and update our Recovery

Plans.

In the event our response to financial stress is not effective, Section 6, Company's Preferred Resolution

Strategy describes how we developed a Preferred Resolution Strategy that fits our business model and

corporate structure. This section specifically addresses how our Material Entities would be affected by a

Parent bankruptcy filing, the various parts of our Preferred Resolution Strategy, how the Secured Support

Agreement works, and the resulting organization.

Section 7, Focus Areas and Capabilities describes how each of our Focus Areas prepared for and enhanced

their business as usual processes and capabilities to manage a potential resolution.

Section 8, Resolution Planning Oversight explains the governance structure, senior leader engagement,

resolution planning processes, internal controls, and material supervisory authorities who provide oversight

of our resolution planning efforts.

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Section 9, Financial Information provides our balance sheet, regulatory capital information, and TLAC as of

December 31, 2022.

Section 10, Identities of Principal Officers provides details about our senior leadership team.

Section 11, Glossary includes defined terms and acronyms that are used in this Public Section.

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2. Company Overview

Wells Fargo is a global systemically important bank holding company with approximately $1.9 trillion in total

consolidated assets. We provide a diversified set of banking, investment, and mortgage products and services,

as well as consumer and commercial finance. We provide these products and services with the majority of

activity occurring in Wells Fargo Bank, National Association,

which accounts for $1.7 trillion of the

Company's approximately $1.9 trillion in total consolidated assets.

Our business activity is primarily U.S. focused, largely serving U.S. clients and markets. Our non-U.S. strategy

focuses primarily on serving U.S. customers doing business abroad and foreign multinationals and global

banks doing business in the U.S. This non-U.S. activity is predominantly conducted within Corporate &

Investment Banking. Approximately 90% of our revenues come from U.S. clients or activities of non-U.S.

clients in the U.S. Non-U.S. loans represented $87.5 billion of our $955.9 billion of total loans.

We manage the non-U.S. footprint by regions, which include Asia-Pacific; Europe, Middle East, and Africa;

Canada; and Latin America. WFBNA is the primary service provider to its non-U.S. branches and subsidiaries.

In-region support is provided through regional hubs that primarily include London, Hong Kong, and Canadian

WFBNA branches. Wells Fargo Bank, N.A. - London Branch and Wells Fargo Bank International Unlimited

Company are our only non-U.S. Operating Material Entities. Wells Fargo Bank, N.A. - London Branch was

designated as a Material Entity because of its role allowing WFBNA and Wells Fargo Securities, LLC to use

Wells Fargo Bank, N.A. - London Branch to access its memberships with material financial market utilities.

Wells Fargo Bank International Unlimited Company was designated as a Material Entity because of its

significance to the Company's Europe, Middle East, and Africa region as it is Wells Fargo's only European

Union regulated bank.

Our business activity, for resolution planning purposes, is focused in the following six Core Business Lines: (1)

Consumer & Small Business Banking, (2) Consumer Lending, (3) Commercial Banking, (4) Corporate &

Investment Banking, (5) Wealth & Investment Management, and (6) Corporate Treasury Investments. These

Core Business Lines are detailed in the following section.

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Wells Fargo Bank, National Association is referred to as "WFBNA" or the "Bank."

3. Core Business Lines

A core business line is a business line of the company, including associated operations, services, functions,

and support, that upon failure would result in a material loss of revenue, profit, or franchise value for the

company. These designations align to resolution regulatory requirements and may differ from the operating

segments that we use for our reports filed with the Securities and Exchange Commission (SEC).

3.1 Core Business Line Designation

We evaluate our business lines annually and this analysis includes, among other items, the assets, revenue,

and employee contributions of a business line to the Company. As described in Section 2, Company

Overview, we designated the six Core Business Lines shown in the following figure. Each of these business

lines have sub-business lines.

Figure 3-1 Core Business Lines

As part of our Preferred Resolution Strategy, detailed in Section 6, Company's Preferred Resolution Strategy,

elements of each of our Core Business Lines would be maintained throughout resolution and contribute to the

liquidity needed to support the Company’s Material Entities and Critical Services

through resolution,

thereby mitigating systemic risk that may result from the unlikely event of our failure.

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Services that support Critical Operations or Core Business Lines and must remain operational during the resolution process to facilitate the orderly

execution of the Preferred Resolution Strategy.

3.2 Core Business Line Descriptions

This section describes the products and services each Core Business Line offers.

Consumer & Small Business Banking

Consumer & Small Business Banking (CSBB) provides diversified financial products and services to

consumers and small businesses and a full range of business credit products to small businesses with up to

$10 million in annual revenue through a range of channels, including approximately nearly 4,600 retail

branches and more than 12,000 ATMs. CSBB is organized into four business groups that consist of (1) Branch

Banking, (2) Deposits, (3) Small Business Banking, and (4) Operations (including contact centers).

Consumer Lending

Consumer Lending provides diversified financial products and services to consumers and businesses.

Consumer Lending products and services include mortgage loans, auto loans, personal loans, retail services,

credit cards, and merchant services.

Consumer Lending offers its products and services through a range of channels and other Core Business Lines

including CSBB and WIM (e.g., WIM refers mortgage customers to Home Lending).

Consumer Lending is organized into four business segments consisting of (1) Home Lending, (2) Auto, (3)

Cards & Merchant Services, and (4) Personal Lending, which includes Retail Services. Consumer Lending also

includes one functional support group — Consumer Lending Shared Services — that works across the

business.

Commercial Banking

Commercial Banking provides financial solutions to private, family owned, and certain public companies.

Products and services include banking and credit products across multiple industry sectors and

municipalities, secured lending and lease products, and treasury management.

Corporate & Investment Banking

Corporate & Investment Banking (CIB) delivers a suite of capital markets, banking, and financial products and

services to corporate, commercial real estate, government and institutional clients globally. Products and

services include corporate banking, investment banking, treasury management, commercial real estate

lending and servicing, equity and fixed income solutions as well as sales, trading, and research capabilities.

Wealth & Investment Management

Wealth & Investment Management (WIM) provides personalized wealth management, brokerage, financial

planning, lending, private banking, trust, and fiduciary products and services to affluent, high-net-worth

clients. WIM operates through financial advisors in our brokerage and wealth offices, consumer bank

branches, independent offices, and digitally through WellsTrade® and Intuitive Investor®.

Corporate Treasury Investments

Corporate Treasury Investments consists of Global Funding and the Investment Portfolio. This Core Business

Line helps Wells Fargo maintain a satisfactory financial cushion to protect against stresses stemming from

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the economic environment or the Company's operations. Investments that Corporate Treasury Investments

manages include cash, Fed Funds, debt securities, collateralized loan obligations, and Federal Reserve Bank

capital stock.

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4. Material Entities

A material entity is a subsidiary or foreign office of the company that is significant to the activities of an

identified critical operation

or core business line, or is financially or operationally significant to the resolution

of the company. We do not complete these designations pursuant to any SEC rules or related requirements,

but rather we evaluate them in accordance with applicable resolution planning regulations.

4.1 Material Entity Designation

We evaluate our legal entities and non-U.S. offices at least annually as part of our Material Entity designation

process. This process is conducted through an established governance framework that includes participation

from Business Groups, Enterprise Functions, and Independent Risk Management. The evaluation process, as

shown in the following figure, includes quantitative and qualitative components to assess potential

materiality in the following areas:

• Contributions (financial and labor resource) to Core Business Lines and Critical Operations

• Provision of Critical Services (or components

of Critical Services) to Material Entities

• Holding assets under management and/or custody

• Significance to global treasury operations

• Involvement in derivatives and trading activity

• Interaction with material financial market utilities

Figure 4-1 Material Entity Designation Process

The Recovery & Resolution Program Office leads the Material Entity designation process and partners closely

with select Focus Areas and lines of business to evaluate the legal entities.

Identifying Material Entities is necessary for us to understand which legal entities are financially or

operationally significant to the Company, and would continue as going concerns and receive pre-positioned

resources. Material Entities facilitate our Preferred Resolution Strategy as discussed in Section 6, Company's

Preferred Resolution Strategy.

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Critical operations are those operations of the covered company, including associated services, functions and support, the failure or discontinuance of

which would pose a threat to the financial stability of the United States.

A Critical Service component is a service component essential to support a Critical Service (in the case of employees, facilities, systems, and third parties)

or Critical Operation and Core Business Lines (in the case of Intellectual Property).

The following figure shows the key designation drivers for each of our Material Entities.

Figure 4-2 Material Entity Designation Drivers

Material Entity

Material Entity Designation Driver

Core Business

Line

Critical

Operation

Critical

Services

Global

Treasury

Derivatives

Financial

Market

Utility

Access

(1)

Wells Fargo & Company

ü ü ü

WFC Holdings, LLC

ü ü

Wells Fargo Bank, National Association

ü ü ü ü ü

Wells Fargo Bank, N.A. - London Branch

ü ü

Wells Fargo National Bank West

Wells Fargo Bank International Unlimited

Company

Wells Fargo Clearing Services, LLC

ü ü ü ü

Wells Fargo Securities, LLC

ü ü ü ü ü

Peony Asset Management, Inc.

ü ü ü

Wells Fargo Funding, LLC

Wells Fargo Global Third Party Services LLC

Wells Fargo International Solutions LLC

Wells Fargo International Solutions Private

Limited

Wells Fargo Properties, Inc.

(1)

Financial market utilities, for purposes of this figure, also include agent banks.

Since submitting the 2021 Targeted 165(d) Resolution Plan, we removed Wells Capital Management

Incorporated and Wells Fargo Funds Management, LLC as Material Entities as a result of divesting the Wells

Fargo Asset Management business.

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The following figure shows our current Material Entity structure.

Figure 4-3 Material Entity Structure

4.2 Material Entity Descriptions

The following information provides a summary of each Material Entity and the anticipated actions related to

each one that would occur pursuant to our Preferred Resolution Strategy.

Holding Companies and Operating Material Entities

Wells Fargo & Company

The Parent is a Delaware corporation, publicly traded on the New York Stock Exchange under the ticker

symbol “WFC,” and is a financial holding company. The Parent had assets of $370.0 billion as a stand-alone

legal entity, and approximately $1.9 trillion as a consolidated legal entity. The Parent had liabilities of $190.1

billion as a stand-alone legal entity, and $1.7 trillion as a consolidated legal entity. The Company had total

equity of $181.9 billion. In 2022, the Company generated $73.8 billion in revenue, had noninterest expense of

$57.3 billion, and net income of $13.2 billion. For a summary of capital figures and the Company's balance

sheet, see Section 9, Financial Information.

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As described in Section 6, Company's Preferred Resolution Strategy, at the point of non-viability, the Parent

would file for chapter 11 bankruptcy protection under the U.S. Bankruptcy Code. All Material Entity

subsidiaries, whether held directly or indirectly, would be transferred, with the approval of the U.S.

Bankruptcy Court in which the Parent's bankruptcy case is pending, to a new holding company, and would

remain solvent, liquid, and operational.

WFC Holdings, LLC

WFC Holdings, LLC (WFCH), the intermediate holding company (IHC) between WFBNA and the Parent, is a

Delaware limited liability company and a direct, wholly owned subsidiary of the Parent. WFCH had assets of

$343.9 billion, liabilities of $185.6 billion, and equity of $158.3 billion as a stand-alone legal entity. The

majority of the assets and liabilities were intercompany balances.

As described in Section 6, Company's Preferred Resolution Strategy, in the event of a resolution, WFCH

would be transferred to a new holding company and would continue to provide capital and liquidity support

to the Material Entities, as required under the Secured Support Agreement.

Wells Fargo Bank, National Association

Wells Fargo Bank, National Association (WFBNA) is an FDIC-insured national bank and an indirect, wholly

owned subsidiary of the Parent. WFBNA is the Company's lead insured depository institution. It engages in

retail, commercial, corporate banking, real estate lending, trust, and investment services. With its subsidiaries,

WFBNA held 91% of the Company’s consolidated assets and accounted for over 91% of the Company’s

consolidated revenue and net income. WFBNA also provided more than 99% of the Critical Services it relies

on.

WFBNA held approximately $919.1 billion of loans and leases, composed of loans and leases held for sale plus

loans and leases held for investment net of unearned income and allowance. Of the $919.1 billion, $403.7

billion represented loans secured by real estate. WFBNA's liabilities included $1.4 trillion in domestic

deposits. WFBNA had $1.7 trillion in assets, $1.6 trillion in liabilities, and $161.5 billion in equity, as a

consolidated legal entity. WFBNA had noninterest expense of $45.5 billion and net income of $16.1 billion in

2022. For a summary of capital figures, see Section 9, Financial Information.

As described in Section 6, Company's Preferred Resolution Strategy, WFBNA would continue to operate

throughout resolution, receiving capital and liquidity support from WFCH, as necessary, under the terms of

the Secured Support Agreement.

Wells Fargo Bank, N.A. – London Branch

Wells Fargo Bank, N.A. – London Branch (WFBNA-LB) is a non-U.S. branch of WFBNA. WFBNA-LB operates

in London, England and is the largest branch, by assets, operated by Wells Fargo outside the U.S. and serves as

Wells Fargo’s primary multi-currency platform for lending, treasury management, securities products, and

services. WFBNA-LB is authorized in the U.K. by the Prudential Regulation Authority and is authorized and

regulated by the Financial Conduct Authority. WFBNA-LB serves as an international hub for distributing

corporate and commercial banking products and services to Wells Fargo clients particularly in the U.K.

WFBNA-LB facilitates the Commercial Banking and Corporate & Investment Banking Core Business Lines

and conducts banking activities, including commercial lending, commercial real estate, treasury management,

and trade finance. It does not provide services to retail customers.

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As described in Section 6, Company's Preferred Resolution Strategy, WFBNA-LB would continue to operate

throughout resolution, receiving capital and liquidity support as a branch of WFBNA.

Wells Fargo National Bank West

Wells Fargo National Bank West (WFNBW) is an FDIC-insured national bank domiciled in Nevada that holds

mortgage loans typically purchased from affiliate entities funded by Wealth & Investment Management

sweep deposits and brokered certificates of deposit. These mortgage loans are pledged as collateral to increase

borrowing capacity at the Federal Home Loan Bank of San Francisco. WFNBW had $17.7 billion in assets.

As described in Section 6, Company's Preferred Resolution Strategy, WFNBW would continue to operate

throughout resolution, receiving capital and liquidity support from WFCH, as necessary, under the terms of

the Secured Support Agreement.

Wells Fargo Bank International Unlimited Company

Wells Fargo Bank International Unlimited Company (WFBI) is a public unlimited company and a deposit-

taking entity regulated by the Central Bank of Ireland. It is an indirect, wholly owned subsidiary of WFBNA.

WFBI is the Company's only European Union regulated bank. WFBI provides lending and deposit taking

services to its customers.

As described in Section 6, Company's Preferred Resolution Strategy, WFBI would continue to operate

throughout resolution, receiving capital and liquidity support from WFCH, as necessary, under the terms of

the Secured Support Agreement.

Wells Fargo Clearing Services, LLC

Wells Fargo Clearing Services, LLC (WFCS) is a Delaware limited liability company registered with the SEC as

both a broker-dealer and an investment adviser. It is an indirect, wholly owned, non-bank subsidiary of the

Parent. It is the Company's primary retail broker-dealer and engages in aspects of the Wealth & Investment

Management Core Business Line.

WFCS had $30.8 billion in assets, $18.0 billion in liabilities, and $12.8 billion in equity.

As described in Section 6, Company's Preferred Resolution Strategy, WFCS would continue to operate

throughout resolution, receiving capital and liquidity support from WFCH, as necessary, under the terms of

the Secured Support Agreement.

Wells Fargo Securities, LLC

Wells Fargo Securities, LLC (WFS LLC) is a Delaware limited liability company and an indirect, wholly owned

non-bank subsidiary of the Parent. It is registered with the SEC as a broker-dealer and with the United States

Commodity Futures Trading Commission as a futures commission merchant. WFS LLC is the Company's

primary institutional broker-dealer and engages in aspects of the Corporate & Investment Banking Core

Business Line.

WFS LLC had $115.9 billion in assets, $106.2 billion in liabilities, and $9.6 billion in equity.

As described in Section 6, Company's Preferred Resolution Strategy, WFS LLC would conduct an orderly and

solvent wind-down during resolution, receiving capital and liquidity support from WFCH, as necessary, under

the terms of the Secured Support Agreement. In accordance with the Preferred Resolution Strategy, no

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Material Entities require Critical Services from WFS LLC beyond 12 months following the point of non-

viability.

Peony Asset Management, Inc.

Peony Asset Management, Inc. (Peony) is a Delaware corporation and an indirect, wholly owned subsidiary of

WFBNA. It holds a significant portion of WFBNA’s investment portfolio.

As described in Section 6, Company's Preferred Resolution Strategy, Peony would continue to operate

throughout resolution, receiving capital and liquidity support from WFCH, as necessary, under the terms of

the Secured Support Agreement.

Wells Fargo Funding, LLC

Wells Fargo Funding, LLC (WFF) is a Minnesota LLC and direct, wholly owned subsidiary of WFBNA. It holds

mortgage loan participations of WFBNA’s consumer mortgage portfolio from Consumer & Small Business

Banking and Wealth & Investment Management.

As described in Section 6, Company's Preferred Resolution Strategy, WFF would continue to operate

throughout resolution, receiving capital and liquidity support from WFCH, as necessary, under the terms of

the Secured Support Agreement.

Service Material Entities

Service Material Entities are those Material Entities designated based primarily on the Critical Services (or

Critical Service components) they provide to the other Material Entities. The following descriptions provide

information about these Material Entities. In addition to the following Service Material Entities, WFBNA,

WFBNA-LB, WFS LLC, and WFCS also provide Critical Services to Material Entities. This operational

interconnectedness is discussed in more detail in the Services section in Section 7, Focus Areas and

Capabilities. To keep Critical Services operational in resolution, we pre-position six months of working capital

at each Service Material Entity so services can continue. In addition, we incorporate arm's length pricing and

resolution-resilient language in our intercompany agreements between legal entities. The Service Material

Entities are parties to the Secured Support Agreement. As described in Section 6, Company's Preferred

Resolution Strategy, our Service Material Entities would be transferred to a new holding company and would

continue to operate throughout resolution.

Wells Fargo Global Third Party Services LLC

Wells Fargo Global Third Party Services LLC (WFGTPS) is a Delaware limited liability company and an

indirect, wholly owned, non-bank subsidiary of the Parent. It contracts with a number of external third-party

vendors that provide technology, operations, knowledge services, and voice support, primarily to WFBNA,

but also to other Material Entities.

Wells Fargo International Solutions LLC

Wells Fargo International Solutions LLC (WFIS) is a Delaware limited liability company and a direct, wholly

owned subsidiary of WFBNA, with operations in its branch located in the Philippines. It provides Critical

Services to the Company's Material Entities, Core Business Lines, and Critical Operations.

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Wells Fargo International Solutions Private Limited

Wells Fargo International Solutions Private Limited (WFISP) is a private limited company incorporated and

located in India and an indirect subsidiary of WFBNA. WFCH holds 0.01% ownership interest in WFISP in

compliance with Indian law. The remaining 99.99% is owned by Wells Fargo International Banking

Corporation, a wholly owned subsidiary of WFBNA. WFISP provides Critical Services to the Company's

Material Entities, Core Business Lines, and Critical Operations.

Wells Fargo Properties, Inc.

Wells Fargo Properties, Inc. (WFP) is a Minnesota corporation and an indirect, wholly owned, non-bank

subsidiary of the Parent. It holds, leases, and owns properties that support the provision of Critical Services to

the Company's Material Entities, Core Business Lines, and Critical Operations.

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5. Approach to Maintaining Financial Resiliency

We have a responsibility to our customers, creditors, employees, and the financial system as a whole to

remain financially resilient. We cannot predict which risks, stressors, or future events could damage our

business, but we can plan during business as usual times, set up early warning indicators to help identify the

impacts from events, and be prepared to address them. We have processes to identify and manage risk, design

meaningful triggers and response options, and establish timely and effective response procedures. We believe

we would be prepared to handle a variety of future financial stresses in a manner that maintains our financial

health and, if necessary, returns us to a position of financial strength, minimizes effects to our customers, and

provides a stable future for the institution.

The following figure shows how we integrate risk management, strategic planning, financial forecasting,

capital management, liquidity management, and recovery and resolution planning into our approach to

financial resiliency. The financial resiliency process is used both for forward-looking financial risk

management planning and in our routine monitoring.

Figure 5-1 Key Processes Used to Maintain Financial Resiliency

5.1 Risk Appetite and Risk Identification

Having a resilient foundation begins with a strong risk- and control-focused base. Building a comprehensive

risk and control framework is our top priority. We continue to move forward with the foundational work of

building out a risk and control framework appropriate for our Company. This multi-year journey continues to

be about setting clear priorities, cultural change, and operational execution. In addition to that framework, we

execute processes that identify, mitigate, and measure risk. Our Enterprise Risk Identification and

Assessment and Risk Measurement programs assist with setting and monitoring our risk tolerance.

Enterprise Risk Inventory

The Enterprise Risk Identification and Assessment program leads the process to identify and assess risk

across all financial and non-financial risk types and establishes principles and practices for independent risk

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assessment. This program helps us identify and assess ourmaterial risks, which are captured in the Enterprise

Risk Inventory, a comprehensive list of enterprise risks, descriptions, related attributes, and associated

ratings to prioritize and manage risk across the Company, including risks related to recovery and resolution

planning. The program supports a variety of purposes in both risk and finance. It can both inform and be

informed by our strategic planning process, which is directly connected to risk appetite (discussed below).

Governance committees and the Parent Board of Directors (Board) Risk Committee review and discuss the

Enterprise Risk Inventory.

Risk Appetite (Risk Measurement)

We have a Risk Measurement program that sets expectations regarding how we measure risk for determining

risk appetite and risk capacity, and a Risk Measurement Policy that establishes requirements for measuring

risk and determining our risk appetite and risk capacity. Risk appetite is the amount of risk, within risk

capacity, the we are comfortable taking given our current level of resources. Risk capacity is the maximum

level of risk we can assume given our current level of resources before triggering constraints. We express risk

capacity through capital and liquidity metrics that are informed by regulatory minimums. Risk appetite is

articulated in our Statement of Risk Appetite, which establishes acceptable risks and at what level and

includes risk appetite principles. Our Statement of Risk Appetite is defined by senior management, approved

at least annually by the Board, and helps guide our business and risk leaders. We continuously monitor our

risk appetite, and the Board reviews reports which include risk appetite information and analysis. The Front

Line identifies, measures and assesses, controls, monitors, and reports on risk generated by or associated with

its business activities and balances risk and reward in decision making while operating within our risk

appetite.

5.2 Strategic Planning

The Strategic Plan, which is approved by the Board annually, outlines our overall strategy covering a three-

year period and serves as a high-level basis for potential future business decisions. The strategic planning

process identifies our most significant opportunities and challenges, develops options to address them, and

evaluates the risks and trade-offs of each. This process serves as an input into our financial, liquidity,

operational, and capital plans, as well as well as our Statement of Risk Appetite. Multiple stakeholders are

involved in the process including, but not limited to, Front Line teams, Independent Risk Management,

Internal Audit, the Operating Committee, and the Board.

5.3 Financial Forecasting

We conduct financial forecasting processes to enable senior decision makers, including the Operating

Committee and the Board, to make strategic and operational decisions. Our financial forecasting processes

incorporate the priorities and initiatives we identify in our Strategic Plan. The financial forecasting processes

can both inform and be informed by our approach to maintaining financial resiliency described in this section.

Key forecasting processes include:

• The annual budget process, which involves review and challenge meetings with senior leaders,

including the Corporate Asset/Liability Committee, Operating Committee, lines of business, and

Enterprise Functions, before the final budget is presented to the Board.

• Forecasts used in the quarterly capital adequacy assessments, which are presented to the Board.

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• Interest rate risk sensitivities conducted by Corporate Treasury to support proactive balance sheet

management.

5.4 Capital Management

We manage capital through a comprehensive process to assess our overall capital adequacy. Our objective is

to maintain capital at an amount commensurate with our risk profile and risk tolerance objectives, and to

meet both regulatory and market expectations.

We maintain a capital management framework that includes a rigorous and comprehensive Internal Capital

Adequacy Assessment Process (ICAAP) for assessing our overall capital adequacy in relation to our risk profile

and risk appetite. The process is designed to identify our exposure to risks and evaluate the capital resources

available to absorb potential losses arising from those risks. This process is interconnected with our strategic

planning and risk management activities, requiring a balance between risk and financial objectives. Our

ICAAP is an ongoing process that includes the annual Capital Plan submission as well as quarterly adequacy

assessments and reporting by our Capital Management team to the Finance Committee of the Board. This

process is designed to capture significant changes since the Capital Plan submission and confirms or

recommends changes to capital actions and capital targets, as necessary.

ICAAP's core elements include (1) a comprehensive process of risk identification and direct incorporation of

key risks into capital management, (2) robust measurement of loss and resource estimation under base and

stressed conditions, (3) quarterly assessments and ongoing monitoring of risks and forward capital

projections, and (4) regular reporting to executive management and the Board.

Capital Planning and Stress Testing

Our capital targets are designed to meet regulatory requirements and internal and market expectations. We

believe that our long-term targeted capital structure enables us to invest in and grow our business, satisfy our

customers’ financial needs in varying environments, access markets, and maintain flexibility to return capital

to our shareholders. We also maintain a Capital Contingency Plan (CCP) focused on how to identify and

monitor signs of capital stress as well as the range of potential actions that senior leaders and our Board would

be able to consider to react to capital stress.

The Federal Reserve's capital plan rule establishes capital planning and other requirements that govern capital

distributions, including dividends and share repurchases, by certain bank holding companies, including Wells

Fargo. The Federal Reserve conducts an annual CCAR exercise and has published guidance regarding its

supervisory expectations for capital planning, including capital policies regarding the process relating to

common stock dividend and repurchase decisions. The Parent’s ability to make certain capital distributions is

subject to the requirements of the capital plan rule and is also subject to the Parent meeting or exceeding

certain regulatory capital minimums. The following figure shows how we meet those expectations.

Maintaining processes is critical to our financial strength and resiliency and enables us to absorb unexpected

losses and continue to lend to creditworthy businesses and consumers.

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Figure 5-2 Core Capital Planning Expectations for Wells Fargo

5.5 Liquidity Risk Management

We actively manage our liquidity risk profile in accordance with Wells Fargo's Statement of Liquidity Risk

Appetite, Funding and Liquidity Risk Management Policy, and our Contingency Funding Plan (CFP). Our

liquidity risk management objective is to meet customer loan requests, customer deposit maturities and

withdrawals, and other cash commitments efficiently under both normal operating conditions and under

periods of Company-specific stress and/or market stress.

Deposits have historically provided a sizable source of funds. Long-term debt and short-term borrowings

provide additional funding. We access domestic and international capital markets for long-term funding

(generally greater than one year) through issuances of registered debt securities, private placements, and

asset-backed secured funding.

We manage liquidity to meet internal liquidity targets with the goal of ensuring liquidity reserves remain in

excess of regulatory requirements and applicable internal buffers (set by the Board in excess of minimum

regulatory requirements). We maintain operational and governance processes designed to manage, forecast,

monitor, and report liquidity levels to management and the Board in relation to regulatory requirements and

management metrics and limits. Under this comprehensive process, we perform regulatory-prescribed stress

tests (e.g., the liquidity coverage ratio) and internal liquidity stress tests to evaluate our available liquidity

resources against potential liquidity needs under a range of adverse scenarios and time horizons. The results

of our liquidity stress tests, which consider both market and Company-specific events, are used to inform

management of current liquidity positioning against expected and unexpected future events.

We established a number of management metrics and limits, some of which serve as early warning indicators

of liquidity stress. Broadly, these are grouped into five categories, as shown in the following figure.

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Figure 5-3 Triggers and Limits for Funding and Liquidity Risk Management

Liquidity Coverage Ratio

(LCR)

Net Stable Funding

Ratio (NSFR)

Internal Liquidity Stress

Testing (ILST)

Resolution Liquidity

Adequacy and Positioning

(RLAP)

Resolution Liquidity

Execution Need (RLEN)

• Federal Reserve liquidity

standard requiring banks

to hold enough liquid

assets to cover net

stressed outflows over a

30-day period

• Calculated as the ratio of

the Company's high-

quality liquid assets

compared to its

projected net cash

outflows

• The LCR regulatory

minimum is equal to or

greater than 100%

• Produced daily

• Federal Reserve

liquidity standard

requiring banks to hold

enough stable funding

to cover the duration

of their long-term

assets

• Calculated as the ratio

of Available Stable

Funding to Required

Stable Funding

• The NSFR regulatory

minimum is equal to or

greater than 100%

• Produced daily

• Calculation of liquidity

needs across three

internally defined

liquidity stress

scenarios over a range

of time periods

• Scenarios include

Name-Only, Market-

Only, and Combined

Name and Market

Stress

• Required by Reg YY

guidance

• Calculation of the stand-

alone net liquidity

position of each Material

Entity under an

approximately three-

month stress scenario

consisting of both

market and idiosyncratic

events

• Informs the required

amount of liquidity to be

pre-positioned at

Material Entities or

readily available to meet

unanticipated outflows

• Required by 165(d)

resolution plan guidance

• Produced daily

• Calculation informing the

amount of liquidity needed

at each Material Entity to

successfully execute the

Company’s Preferred

Resolution Strategy

• Includes a runway period

leading up to the point of

non-viability, followed by a

stabilization horizon

• Required by 165(d)

resolution plan guidance

• Produced at least monthly

in business as usual and

daily in Stress

Market Conditions

Measures of market conditions designed to provide information about how the Company is perceived in the

market and the overall availability of liquidity in the market

Operating Conditions

Measures of internal operating conditions such as unusual deposit outflows that help identify whether the

Company is experiencing liquidity stress

Liquidity Risk

Composition

Measures designed to control the composition of the Company’s liabilities to prevent concentrations in sources of

funding, maturities, and off-balance sheet exposures, and include measures designed to monitor intraday liquidity

usage

Buffer Composition

Key principles used to help determine the liquidity buffer in the Company’s liquidity stress testing, designed to

avoid, among other things, undue concentrations and over-reliance on certain markets

If we breach our liquidity stress test outcomes, market conditions, or operating conditions triggers, we would

follow the communication and escalation protocols and action steps contained in the Contingency Funding

Plan. The Contingency Funding Plan is designed to help management and the Board react quickly to a

potential liquidity event by:

• Identifying, calibrating, and monitoring metrics and related processes used to quickly identify

emerging liquidity stress events.

• Describing the liquidity stress event management process by specifying roles and responsibilities and

specific actions that should be taken.

• Outlining testing processes used to confirm operational readiness for liquidity events.

Section 7, Focus Areas and Capabilities contains more information about resolution-focused capital and

liquidity management capabilities.

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5.6 Governance Mechanisms

We designed our governance mechanisms to promptly identify financial stress and facilitate how we execute

actions in an effort to return to financial strength following a stress event. This framework supports our

financial resiliency efforts and includes both financial and non-financial metrics, and, specifically, triggers

related to capital, liquidity, market conditions, and operating conditions. As shown in the following figure,

there are three categories that align to the governance mechanisms framework to support our efforts during

business as usual through resolution: (1) triggers and escalation protocols, (2) pre-bankruptcy Parent support,

and (3) governance-related documents. The governance mechanisms framework is designed to promptly

identify financial stress, facilitate executing contingency plans and recovery options, and improve conditions

so we can return to financial strength.

Figure 5-4 Governance Mechanisms Overview

Trigger and Escalation Protocols Pre-Bankruptcy Parent Support Governance-Related Documents

• Enterprise Financial Assessment Levels

• Triggers

• Escalation protocols

• Maintaining the Secured Support Agreement

• Pre-funding WFC Holdings, LLC

• Pre-positioning financial resources at

Material Entities

• Legal analysis of potential creditor challenge

issues

• Material Entity Governance Playbooks

• Stakeholder Engagement Strategy

• Employee Retention Strategy

• Bankruptcy Playbook

The governance mechanisms framework includes:

• Triggers and Escalation Protocols

◦ Enterprise Financial Assessment Levels (EFALs) and triggers — Triggers are quantitative or

qualitative indicators that help us identify and monitor the onset of financial stress in a timely

manner. EFALs indicate the level of financial stress the Company is experiencing. Triggers are

tied to specific EFALs to guide the Company's response to the level of financial stress it is

experiencing.

◦ Escalation protocols — Aligned to triggers and EFALs for timely reporting of trigger breaches

to the Parent or other Material Entity Boards and senior leaders.

◦ Incident management structure — Facilitates executing actions by the Board and senior

leaders during an incident, including financial stress (as outlined by the EFALs), by enabling

collaboration and timely communication among those groups and our business and functional

areas.

• Pre-bankruptcy Parent support — Provided to WFC Holdings, LLC and the other Material Entities

(except the Parent) to provide capital and liquidity support to Covered Material Entities, pre-position

financial resources, and protect against potential creditor challenges, among other items.

• Governance-related documents — Prepared Governance Playbooks covering Material Entities to

help enable informed decision making and executing pre-determined actions; a Stakeholder

Engagement Strategy to help provide efficient and effective communications in response to stress

events through resolution; an Employee Retention Strategy that guides how we would retain key

employees; and a Bankruptcy Playbook that describes the steps to prepare for the Parent's potential

voluntary bankruptcy case.

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Triggers and Escalation Protocols

Enterprise Financial Assessment Levels

EFALs indicate the magnitude of financial stress we are experiencing. The levels provide a structure that

facilitates a uniform approach to identifying and responding to stress. Upon trigger breaches, our governance

mechanisms require escalation to our Board or senior leaders to declare the appropriate EFAL.The following

figure describes our EFALs.

Figure 5-5 Enterprise Financial Assessment Levels

The process to approve or declare a particular EFAL is based on a breach of a particular trigger or triggers. The

decision to recommend and approve an EFAL is also based on other factors, including but not limited to the

following:

• The pace at which our financial and operational condition is deteriorating

• The proximity of a breached trigger to a subsequent trigger level associated with the next EFAL

• The cumulative financial impact of multiple trigger breaches and the anticipated impact to the lines of

business, Material Entities, or the Company as a whole including potential reputational risks, based on

prevailing market conditions and sentiment

Triggers

We monitor capital, liquidity, market, and operating conditions across Material Entities through triggers that

are designed to provide early warning indicators of stress and inform decision making during the events

leading up to resolution. These triggers are reviewed and updated regularly to help provide the most effective

tools to monitor stress.

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Resolution Trigger Monitoring

Pursuant to the Secured Support Agreement, in the event we enter the Stress EFAL, the Parent would begin

monitoring, on a daily basis, the proximity of the Resolution trigger. To assess the proximity of the Resolution

trigger, we would analyze our financial condition by calculating resolution liquidity execution need and

resolution capital execution need of the Material Entities using assumptions that reflect actual prevailing

stress conditions. These execution needs will be compared to the level of pre-positioned resources at each of

the Material Entities to determine if any shortfalls exist. The sum of any shortfalls would be compared to the

Available Financial Resources of the Parent and WFCH to determine if the Resolution trigger has breached.

Upon a confirmed Resolution trigger breach, we would automatically move to the Resolution EFAL and a

Final Contribution Event would occur under the Secured Support Agreement.

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Figure 5-6 Approach to Determining the Resolution Trigger

Incident Management Structure

Our incident management structure provides communication, coordination, and decision-making support

and logistics throughout the EFALs. The incident management structure is designed to facilitate decision

making by the Board and senior leaders during various incidents, including physical hazards, technology, or

financial stress events (that may be reflected by a change in EFAL). In addition, the incident management

structure facilitates internal and external communications, including to the regulatory agencies that oversee

our work. The incident management structure is incident agnostic and used for various financial and

operational incidents as well as a resolution event, thereby creating a structure that is familiar to its

participants.

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As shown in the following figure, the incident management structure includes three distinct and interrelated

parts: (1) the Board Room, (2) the Situation Room, and (3) the Enterprise Incident Command Center (EICC),

which enable a coordinated Company response to an incident.

Figure 5-7 Incident Management Structure

The Board Room is a forum for the Board's members to oversee our response to incidents and to make timely

and informed decisions that mitigate key vulnerabilities, as needed. The Board chair leads the Board Room

and provides direction on Board actions and decisions. The Board Room’s primary objective is to enable the

Board to perform its oversight and other responsibilities during incidents.

The Situation Room is a forum for members of the Corporate Asset/Liability Committee, the Operating

Committee, and liaisons to the Material Entity Boards of Directors to make decisions, give updates, and

provide recommendations to the Board Room for approvals (where relevant), and activate the EICC to

execute actions in response to an incident.

• As the Situation Room Leader, the chief operating officer is the primary point of contact between the

chief executive officer (CEO) and the Board Room to timely escalate risks and issues.

• The Situation Room includes members of significant Company management committees to enable

action by those committees (or the members of senior management in their respective capacities) in a

coordinated and timely fashion.

• The chief risk officer provides risk management oversight of decisions made through the Situation

Room.

The EICC is a forum that consists of approximately 200 team representatives from various business and

functional areas who are responsible for executing actions as directed by the Board Room and Situation

Room. The EICC is designed to achieve the following:

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• Execute actions based on the direction from the Board Room and Situation Room

• Monitor the results of the executed actions

• Provide status updates to the Situation Room

The EICC includes representatives from the Business Groups and Enterprise Functions, and subject matter

experts in Enterprise Incident Communications, Corporate Properties, Corporate Security, Finance, Human

Resources, Technology, Cyber, and Compromised Data, among others, which convene via a secure video

conferencing application.

The EICC Finance taskforce, led by the head of the Recovery & Resolution Program Office, includes

representatives from Finance and the Recovery & Resolution Program Office, among others, who coordinate

the response to a financial stress event.

Enterprise Incident Management, part of Enterprise Business Resiliency, provides logistical support to the

incident management structure. The incident management structure is scalable and flexible, allowing for each

part to be activated as needed.

We test our emergency management processes and protocols at various levels of the organization to prepare

relevant stakeholders to follow proper processes and protocols. Specifically, we conduct incident

management testing and training, including financial stress incidents, through the incident management

structure.

Pre-Bankruptcy Parent Support

Under the Secured Support Agreement, the Parent made an initial contribution of assets to WFCH and is

required to make certain additional contributions prior to any bankruptcy proceeding. The following list

identifies actions we took in connection with this pre-bankruptcy Parent support:

• We analyzed potential bankruptcy and state law challenges to understand and help mitigate potential

challenges to the Parent's proposed pre-bankruptcy funding of capital and liquidity to Material

Entities and timely execution of the Parent's pre-bankruptcy and bankruptcy filing actions.

• We executed the Security Agreement and Secured Support Agreement to contractually bind the

Parent, WFCH, Related Support Entities, and our other Material Entities to provide capital and

liquidity support and to help mitigate any potential creditor challenges that could impede successfully

executing the Preferred Resolution Strategy.

• We pre-positioned financial resources at various Material Entities and pre-positioned six months of

working capital at our Service Material Entities to continue services during resolution.

Governance-Related Documents

We have Material Entity Governance Playbooks that outline actions that Material Entity board members and

senior leaders could take in response to financial stress, including in a resolution scenario to facilitate our

Preferred Resolution Strategy. The Governance Playbooks include descriptions of the Boards of Directors'

fiduciary responsibilities and how actions would be consistent with those responsibilities, potential conflicts

of interest, and triggers identifying the Runway and Resolution EFALs and any associated escalation

procedures and actions. We also have a Bankruptcy Playbook to guide bankruptcy-related actions leading up

to and shortly after a Parent bankruptcy filing.

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5.7 Recovery Plan

If potential or actual financial stress occurs, we hope to manage the stress event early and return to a business

as usual state. If our efforts are not successful or financial stress escalates quickly, we would rely on our

Recovery Plans, which are updated annually, to respond to the financial stress. A recovery plan identifies

triggers and options for responding to a wide range of severe internal and external stress scenarios to restore a

covered bank to financial strength and viability in a timely manner. A recovery plan includes the following:

• A detailed description of the Company's organizational and legal entity structure

• Detail on the interconnections between our Material Entities, Core Business Lines, and Critical

Operations, including Critical Service provision

• Triggers that serve as warning signs that stress is occurring

• Stress scenarios that help senior leaders identify, develop, calibrate, and validate the appropriateness

of triggers

• Options the Company could undertake to restore its financial strength and viability, which includes

how it would execute each option

• Responsibilities of senior leaders and the Board

We update Recovery Plans for the Company, the Bank, and certain of our affiliates annually. The Recovery

Plans provide our anticipated actions and the Bank's anticipated actions to respond to stress events should

initial capital, liquidity, and risk management responses not immediately return us and the Bank to a normal

operating state. Our goal is to have Recovery Plan actions that would allow us to avoid resolution.

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6. Company's Preferred Resolution Strategy

6.1 Introduction to the Preferred Resolution Strategy

To prepare for resolution, we have a Preferred Resolution Strategy that uses a single point of entry (SPOE)

approach. The Parent would file a chapter 11 bankruptcy case under the U.S. Bankruptcy Code and all other

Material Entities would either remain solvent and operational or be wound down consistent with our

Preferred Resolution Strategy. The continued solvency of these Material Entities would be facilitated by our

Secured Support Agreement (discussed in detail below), which obligates WFCH to provide support to such

entities, as needed to execute our Preferred Resolution Strategy, and enables their continued operation.

We believe the SPOE approach improves our resolvability by:

• Reducing disruption to the U.S. financial system and better promoting continuity by planning to

maintain our Critical Operations, Critical Services, and Core Business Lines operated through our

Material Entities, which are expected to have sufficient capital and liquidity to operate as going

concerns

throughout the Parent's resolution.

• Increasing our flexibility to execute divestiture options over time because all Material Entities, with

the exception of the Parent, would remain operational and solvent when the Parent enters

bankruptcy.

• Reducing risks that non-U.S. authorities or third parties could take actions (or abstain from taking

actions) that could result in separate resolution proceedings or restricting the activities or availability

of assets of our non-U.S. branches or subsidiaries (often referred to as "ring-fencing") because the

Parent would be the only legal entity entering bankruptcy.

• Providing additional optionality during resolution to sell business lines spanning multiple Material

Entities or jurisdictions.

• Providing flexibility if our structure, size, or risk profile should change.

Moreover, since submitting the 2021 Targeted 165(d) Resolution Plan, we strengthened the effectiveness of

our Preferred Resolution Strategy and the associated financial, operational, structural, governance, strategic,

and legal preparedness actions. Some of these actions include:

• Updating our Governance Playbooks, Bankruptcy Playbook, and Employee Retention Strategy.

• Refining our financial forecasting tools.

• Recalibrating our trigger framework and escalation protocols.

• Identifying new divestiture options and modifying existing ones to provide us with optionality that

aligns to our operating model and a different types of financial stress.

The Effects of Resolution Actions on the Company

Consistent with the Preferred Resolution Strategy, after the resolution trigger breaches but prior to the

Parent's bankruptcy filing, the Parent would establish New HoldCo and a Trust to hold New HoldCo for the

benefit of the creditors in the Parent's bankruptcy case. After the Parent files its voluntary Chapter 11

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WFS LLC will commence a solvent wind-down under the Preferred Resolution Strategy, but the legal entity will remain open, i.e., a going concern.

bankruptcy case, the Parent would file an Emergency Transfer Motion asking the Bankruptcy Court to

approve the continued service of the trustees for the Trust and the initial directors and officers of New

HoldCo. In addition to these approvals, we would request through the Emergency Transfer Motion that

certain other relief, including that the Parent's equity interests in WFCH, be transferred to New HoldCo. The

following figure illustrates the legal entity ownership structure after the Trust and New HoldCo have been

established and the transfer of Parent's equity interests in WFCH. As a result of transferring WFCH to New

HoldCo, all of WFCH’s Material Entity subsidiaries would become indirect subsidiaries of New HoldCo.

Figure 6-1 Legal Entity Ownership Structure that would result from Emergency Transfer Motion

Transactions

6.2 Achieving Our Resulting Organization Post-Bankruptcy

After completing the transactions contemplated by the Emergency Transfer Motion described above, we

would begin to reduce our size and complexity through strategic solvent wind-downs and sales of our

businesses, consistent with our Preferred Resolution Strategy. While New HoldCo's balance sheet becomes

smaller during resolution, the Preferred Resolution Strategy retains those businesses that provide the most

value, including strategic synergies, across the franchise and does not target a specific balance sheet size.

All Material Entities would continue as going concerns, including WFBNA as it is our largest insured

depository institution, comprises 91% of our assets, has the most employees, and provides the most Critical

Services.

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After the transfer, we anticipate that the Material Entities (except the Parent) would go through a period of

stabilization, whereby they continue operating and regain market confidence by remaining well-capitalized

and meeting minimum liquidity requirements taking account of customer deposit withdrawals and

counterparty collateral demands. WFS LLC, our institutional broker-dealer, however, would initiate a solvent

wind-down of its business upon commencing the Parent's bankruptcy case. All Core Business Lines would

continue to operate as part of Preferred RemainCo, but would do so on a smaller scale.

We also identified a series of divestiture options that, if executed, would reduce our size and complexity,

while allowing us to retain a national presence and be effectively resolved without interrupting Critical

Operations essential to the continued stability of the U.S. financial system. Our Critical Operations would

remain operational because they receive the necessary funding and Critical Services to continue. We refer to

the resulting organization as the Preferred RemainCo. The Preferred RemainCo would still be a nationally-

focused bank with full-service retail, wealth management, and commercial banking offerings, and some

limited corporate and investment banking capabilities. Moreover, we identified and are prepared to execute

divestiture options that could further reduce our size and complexity. This approach provides us the

flexibility to respond to financial stress in a manner that is most appropriate for the particular circumstances

at such time.

The following figure shows how these actions collectively come together to form our Preferred Resolution

Strategy. The figure depicts the actions that occur after the Parent reaches the point of non-viability, how

operations can continue, when divestiture options are considered, and the resulting organization.

Figure 6-2 Company's Preferred Resolution Strategy

6.3 Secured Support Agreement

The Secured Support Agreement, as amended, is a contract between the Parent, WFCH, and other Material

Entities. The Secured Support Agreement, among other things, obligates WFCH to provide ongoing capital

and liquidity support to the Covered Material Entities

during resolution.

The Secured Support Agreement

was initially executed on June 28, 2017 between the Parent, WFCH, WFBNA, WFS LLC, and WFCS. At the

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A Covered Material Entity is entitled to receive financial support under the Secured Support Agreement, which currently include: WFBNA, WFNBW,

WFBI, WFCS, WFS LLC, Peony, WFF, WFGTPS, WFIS, WFISP, and WFP.

WFBNA-LB is not a party to the Support Agreement because it is not a separate and distinct legal entity. WFBNA-LB’s resolution needs will be provided

through WFBNA.

time the Parent executed the Secured Support Agreement in 2017, it made the Initial Parent Contribution, as

required by the Secured Support Agreement. The Secured Support Agreement was amended and restated on

June 26, 2019 to add parties and to comply with our Preferred Resolution Strategy shift to an SPOE approach.

Actions previously taken under the Secured Support Agreement, including the Initial Parent Contribution, are

unchanged under the amended Secured Support Agreement. Since submitting the 2021 Targeted 165(d)

Resolution Plan, two Material Entities are no longer parties to the Secured Support Agreement as a result of

divesting Wells Fargo Asset Management.

How the Secured Support Agreement Works in a Business as Usual Environment

The Secured Support Agreement (1) facilitates pre-positioning of resources at WFCH by requiring the Parent

to make initial and subsequent contributions to WFCH, (2) verifies WFCH has sufficient assets to fund the

other Material Entities’ capital and liquidity needs in resolution, and (3) provides WFCH with the appropriate

flexibility to determine how to fulfill the Material Entities’ capital and liquidity needs.

Consistent with the Secured Support Agreement, the Parent made an initial contribution of assets to WFCH

in 2017. That initial contribution, which included liquid assets and inter-affiliate loans, was made in exchange

for funding notes issued by WFCH to the Parent. The funding notes are subordinated to WFCH's obligations

to support the Material Entities during resolution, as set forth in the Secured Support Agreement, and would

be forgiven during a resolution scenario. Through the Initial Parent Contribution, the Parent transferred

substantially all of its liquid assets to WFCH.

Notwithstanding the Initial Parent Contribution, during business as usual the Parent is permitted to retain a

cash reserve amount and sufficient cash to cover near-term expenditures, as well as a limited amount of

certain other assets. To avoid the Parent retaining more assets than it needs, the Secured Support Agreement

requires the Parent to repay its line of credit (described below) or make additional contributions to WFCH of

assets in excess of the retained assets that the Secured Support Agreement authorizes the Parent to hold.

Additionally, should the Company experience significant financial stress, the amount of assets that the

Parent may retain is reduced and such assets must be transferred to WFCH.

WFCH has a committed line of credit available to the Parent that the Parent may use to replenish its cash

reserve or pay near-term expenses. The committed line of credit, together with payments made by WFCH

under the funding notes, provides the Parent with ongoing liquidity that can be used to satisfy its debts and

short-term funding needs. During this time, the Parent also continues to receive dividends or distributions

from WFCH. WFCH is obligated to (1) cooperate with the Parent to facilitate the Parent's existing practice of

providing liquidity or capital to its subsidiaries and (2) provide capital and liquidity to the Covered Material

Entities in amounts determined in good faith by the Parent in accordance with the Parent's policies, as those

policies may be amended from time to time consistent with the Secured Support Agreement.

We designed our trigger framework to support our Preferred Resolution Strategy and to allow WFCH to

provide our Material Entities with sufficient resources. Specifically, we designed combined triggers to

determine when to initiate the Runway and Resolution EFALs based on the projected liquidity and capital

needs of all Material Entities (except the Parent) throughout the resolution period (Aggregate Resource

Needs), relative to the amount of resources that the Parent and WFCH would have available to fund such

needs (Available Financial Resources).

To calibrate the Runway and Resolution triggers, we considered key activities that must occur before the

Parent would file a bankruptcy case, which would occur at the point in time when Available Financial

Resources are just adequate to fulfill Aggregate Resource Needs. Such actions include the time required to

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finalize preparations for the Parent’s voluntary bankruptcy filing and to make the Final Parent Contribution

of assets to WFCH.

The following figure reflects the Secured Support Agreement obligations and required Resolution actions.

Figure 6-3 Secured Support Agreement Includes Obligations that Occur Across Enterprise

Financial Assessment Levels

Effect of the Secured Support Agreement on the Parent and WFCH

We designed the Resolution trigger so it would breach at a time when we have sufficient resources to execute

the Preferred Resolution Strategy. The Secured Support Agreement incorporates the Resolution trigger, where

the point of non-viability is projected to occur in less than or equal to two business days. The point of non-

viability is the day before Available Financial Resources are below the Aggregate Resource Need. This

timeframe allows the Company to complete its contractual obligation to make the Final Parent Contribution

of nearly all of its remaining assets and certain other assets to WFCH. The Parent can hold back a limited

amount of cash that is necessary to cover expenses related to the bankruptcy proceeding. The timing would

also allow the Company to obtain any necessary Board approvals prior to filing the bankruptcy case. All of

these actions are intended to occur before Available Financial Resources fall below the Aggregate Resource

Need.

Pursuant to the Secured Support Agreement, upon the Resolution trigger breaching, the funding notes issued

by WFCH are automatically forgiven, the Parent’s committed line of credit is automatically terminated, and

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WFCH is prohibited from paying dividends to the Parent. Thus, once the Resolution trigger occurs and the

Final Contribution is made, the Parent would no longer have access to liquidity to fund its near-term

expenses (other than expenses to support the chapter 11 bankruptcy case) or pay debt, and is expected to file

a chapter 11 bankruptcy case. In addition, WFCH is obligated to begin providing capital and liquidity support

to the Material Entities on an ongoing and as needed basis. The Secured Support Agreement provides WFCH

with flexibility to determine the type and amount of support that is appropriate under the circumstances,

based on observed need. The Secured Support Agreement also provides WFCH with the flexibility to provide

support directly or indirectly, via entities in the ownership chain between WFCH and the Material Entities

requiring support. The Related Support Entities, which are entities in the corporate ownership chain that fall

between WFCH and the Material Entities requiring support, have agreed, under the terms of the Secured

Support Agreement, to facilitate support by WFCH to those Material Entities, in accordance with WFCH's

instructions.

The following figure demonstrates what would happen after the Resolution trigger breaches, the Final

Contribution is made, the committed line of credit terminates, and the funding notes are automatically

forgiven.

Figure 6-4 Secured Support Agreement Actions in SPOE

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Effects of Resolution on the Parent's Creditors

We designed our SPOE approach to preserve the Material Entities (other than the Parent) as going concerns

enabling their value to be maximized for the benefit of the Parent's creditors. The Parent’s primary creditors

are third-party investors in its long-term debt.As of December 31, 2022, the Parent had $111.9 billion of

senior unsecured long-term debt, $21.4 billion of subordinated long-term debt outstanding, and $1.2 billion of

junior subordinated long-term debt outstanding. The Parent had $19.3 billion of preferred stock outstanding.

Under our Preferred Resolution Strategy, we expect the Parent's creditors would be in a loss-absorption

position immediately behind Parent common shareholders and would be entitled to a pro rata share of equity

in New HoldCo. The Trust would, consistent with its obligations under the Trust Agreement, provide its sole

beneficiary, the Parent's bankruptcy estate, with distributions that could include stock in New HoldCo. The

proceeds of such distributions would be paid to the Parent’s creditors pursuant to a confirmed chapter 11 plan

in the Parent’s bankruptcy case. Although our SPOE approach preserves value in the Material Entities, by

enabling such entities to be recapitalized and continue to operate as going concerns, this approach also places

losses in the Parent to be borne by its creditors. In addition to losses that would be borne by the Parent's

creditors, the Parent's equity holders would likely face significant, if not complete, losses.The ultimate

recovery for a particular group of creditors would depend on a number of factors, including the amount and

types of creditor claims against the Parent.

Complying with the Secured Support Agreement

To enable the value of the Material Entities to be maximized in a manner consistent with the Preferred

Resolution Strategy, the Secured Support Agreement incentivizes the Parent and WFCH to comply with their

contribution and support obligations. The Secured Support Agreement contains a liquidated damages

provision, which sets damages for breaches by the Parent of its obligations to make contributions to WFCH,

and by WFCH to provide support following the breach of the Resolution trigger. The obligations of the Parent

and WFCH are secured by security interests in most of the Parent's and WFCH’s respective assets. These

security interests were granted pursuant to the Security Agreement for the benefit of the Covered Material

Entities and perfected during business as usual.

The board of each party to the Secured Support Agreement approved the Secured Support Agreement when

all legal entities who are parties were financially strong and authorized each party to the Secured Support

Agreement to take all necessary and appropriate actions under it, as applicable. Thus, executing the Secured

Support Agreement enabled us to obtain necessary approvals for the Parent’s contributions of financial

resources upon the occurrence of pre-determined circumstances, WFCH’s provision of capital and liquidity

support, intermediate entities’ facilitation of support, and Material Entities’ acceptance of capital and liquidity

support.

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7. Focus Areas and Capabilities

Our successful and orderly resolution requires the commitment of stakeholders across the Company

organized across Focus Areas. These are teams of subject matter experts that produce critical information or

perform functions that are necessary to support our financial resiliency, strategic business profile, and

resolvability. Their primary function is to maintain strong business as usual operations to further our ability

to successfully serve customers and maintain a strong financial position. In addition to leading business as

usual operations, the Focus Areas, as shown in the following figure, assist with preparing our Recovery and

Resolution Plans.

Figure 7-1 Focus Areas

The following information explains how Focus Areas implemented processes to prepare for resolution.

Capital Management, Liquidity Risk Management, Financial Projections, and Governance Mechanisms have

additional processes, beyond those created for resolution, that were previously detailed in Section 5,

Approach to Maintaining Financial Resiliency.

7.1 Capital

We seek to have an adequate amount of loss-absorbing capacity, known as resolution capital adequacy and

positioning (RCAP). We measure RCAP by looking at external and internal total loss-absorbing capacity

(TLAC), which can be used to recapitalize our Material Entities. External TLAC refers to financial instruments

issued and outstanding at the Parent-level and that are available to absorb losses. Internal TLAC refers to

positioning loss-absorbing capacity within the Company in the form of regulatory capital and internal debt.

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Our RCAP framework seeks to position resources at our Material Entities in a manner that balances the

certainty associated with pre-positioning resources directly at the Material Entities with the flexibility of

holding resources at the Parent and WFCH to meet unanticipated losses when and where they occur.

We also seek to reasonably estimate the amount of capital we may need to support Material Entities, known

as resolution capital execution need (RCEN), if the Parent fails and files for bankruptcy. Our Material Entity

RCEN calculations include capital levels that meet or exceed all applicable regulatory capital requirements

and satisfy additional capital needs through resolution. Financial support received based on these estimates is

intended to allow a Material Entity to maintain market confidence, enabling the entity to stabilize and

continue operating through resolution. RCEN estimates are incorporated into our governance framework,

both through the RCAP framework and as part of our trigger framework across our crisis continuum.

Our capability to produce RCAP and RCEN estimates allows us to monitor our capital resources and

execution needs, strive to have sufficient resources, and appropriately position them, which improves our

resolvability and ability to remain in a strong financial state.

Once we enter a Calculation Period,

capital resources will need to be monitored more frequently. During the

Stress and Runway EFALs, the level of capital resources relative to RCEN will be monitored daily so any

applicable capital shortfalls can be included as we assess whether we breached the Runway and Resolution

EFAL triggers.

7.2 Funding & Liquidity

Similar to Capital Management, we have a comprehensive process to evaluate and manage our liquidity needs

in business as usual and in times of stress. Resolution liquidity capabilities form a part of our broader liquidity

risk management program and include resolution liquidity adequacy and positioning (RLAP) and resolution

liquidity execution need (RLEN).

We calculate the stand-alone liquidity position for each Material Entity across a stress scenario consisting of

both market and idiosyncratic events. This calculation determines the amount of liquidity we position at each

Material Entity and is designed to allow us to maintain adequate and appropriately positioned liquidity so it is

readily available on a daily basis to meet deficits. This daily liquidity calculation is known as RLAP. We

maintain a sufficient amount of RLAP, including a surplus across all Material Entities in aggregate. Our

liquidity positioning framework considers the risk profile of each Material Entity and guides the placement of

liquidity resources across our legal entity structure while maintaining the flexibility to respond to a stress

event that may unfold in an unpredictable manner.

We also estimate RLEN, the amount of liquidity that the Covered Material Entities could require after the

Parent's bankruptcy filing to execute our Preferred Resolution Strategy, including minimum operating

liquidity (MOL) and peak funding needs. MOL is the estimated minimum levels of liquidity each Material

Entity requires to continue operations in accordance with our Preferred Resolution Strategy and market

expectations. It includes intraday usage, inter-affiliate funding frictions, working capital needs, and operating

expenses. Peak funding needs are the estimated peak net cash outflow requirement at each Material Entity

throughout the stabilization period, including third-party and inter-affiliate transactions. RLEN incorporates

runway and stabilization period-specific assumptions across products, including third-party transactions,

inter-affiliate transactions, and funding frictions across all Material Entities.

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The period beginning with a Calculation Event and ending with the earlier of (1) a Cessation Event (i.e., a sustained return to the Vigilance or Target

Enterprise Financial Assessment Levels (EFALs) after an escalation to the Stress EFAL) or (2) a Final Contribution Event (i.e., breach of the Resolution

trigger or the Parent’s bankruptcy filing being authorized by the Board).

The objective of calculating RLEN daily during financial stress is to produce a more accurate RLEN forecast

using updated spot balances and dynamic assumptions that reflect prevailing stress conditions. Calibrating

and updating RLEN input assumptions is intended to reduce the likelihood of a false resolution trigger. We

maintain available liquid assets well in excess of our forecasted RLEN requirement and continually monitor

financial resources at each Material Entity against established triggers to identify deteriorating available

liquidity and facilitate timely management actions.

7.3 Legal Entity Rationalization

We use Legal Entity Rationalization (LER) Criteria to provide guidance about legal entity ownership

relationships and to help guide our legal entity structure to facilitate resolvability as structural and relational

changes occur. The LER Criteria include priorities, and clear and actionable parameters, to guide such changes.

Moreover, the LER Criteria contain rules for minimizing risk to the stability of the U.S. financial system in

resolution.

The LER Criteria have five high-level objectives, as shown in the following figure, that promote a more

resolvable legal entity organizational structure and mitigate the resolvability risks that we face in executing

our Preferred Resolution Strategy. We refresh the LER Criteria at least annually, with the last update

occurring in the fourth quarter of 2022.

Figure 7-2 LER Criteria

Objective Title Description

Objective 1. Protect the Insured Depository

Institutions

Protect the Insured Depository Institutions (IDIs) from potentially adverse impacts of the

Company’s direct or indirect non-bank subsidiaries.

Objective 2. Minimize Complexity

Limit the total number of legal entities (including the interposition of redundant or unnecessary

intermediate holding companies), as well as simplifying and minimizing the complexity of the

legal entity structure.

Objective 3. Promote Separability

Promote the separability of businesses and legal entities that are targeted for sale in the

Company’s Recovery and Resolution Plans.

Objective 4. Facilitate Capital and Liquidity

Flows

Facilitate the positioning and maintenance of appropriate levels of capital and liquidity at each

Material Entity in the ordinary course of business and throughout periods of stress, including

the maintenance of resources sufficient to support the execution of the Company’s Preferred

Resolution Strategy and to facilitate flexibility in a resolution or recovery scenario.

Objective 5. Ensure Continuity of Critical

Services

Assure that the legal entities used to provide Critical Services and Critical Service components

can continue to do so. These criteria are designed to mitigate the risk of loss of operational

continuity due to loss of access to Critical Services and/or Critical Service components

(personnel, facilities, third-party vendors, systems, and intellectual property) provided by legal

entities or branches under enhanced supervisory conditions.

The Legal Entity Governance Committee (LEGC) is composed of subject matter experts from across the

Company and is responsible for monitoring how we manage our legal entities. The LEGC can escalate matters,

as appropriate, to multiple governance committees. The LEGC reviews and approves the Company’s LER

Criteria and Justification Principles at least annually, monitors the legal entity assessment processes and

reviews results on an ongoing basis, and oversees processes and functions related to legal entity data

integrity.

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In addition to periodically refreshing the LER Criteria, we perform ongoing business as usual reviews of legal

entity initiations, changes, and dispositions to provide review and credible challenge of legal entity events

against the LER Criteria and to validate the existence of legal entities. We also periodically assess those legal

entities most significant to our resolvability. These assessments review aspects of the Company's

organizational structure, Critical Services Framework, funding model, and other significant activities and

relationships between legal entities. We embed the LER Criteria into applicable Company policies and

processes. The Legal Entity Office monitors and tracks approved LER Criteria exceptions.

For our legal entity rationalization assessments, we identify a subset of legal entities that are most impactful

to our resolvability. We call these legal entities the Resolvability Population. As of the most recent

assessment in 2023, the Resolvability Population consisted of 122 legal entities, which include our Materiel

Entities (detailed in Section 4). As shown in the following figure, this population decreased year over year as

we continue to simplify our legal entity hierarchy, in support of resolvability and our strategic business

divestitures.

Figure 7-3 Resolvability Population Legal Entities: 2016 to 2022

380

199

174

162

142

127

122

12/31/16

12/31/17

12/31/18

12/31/19

12/31/20

12/31/21

12/31/22

Guarantees

In connection with our resolution planning process, our Intercompany Guarantee Policy facilitates our Legal

Entity Rationalization Criteria by promoting the final TLAC rule and clean holding company provisions. As

part of our business as usual efforts to minimize potential matters that could arise in resolution, we have an

Intercompany Guarantee Policy that governs our intercompany guarantees and prohibits the Parent from

entering into new guarantees for the benefit of its subsidiaries, with limited exceptions. Our Intercompany

Guarantee Policy prohibits downstream guarantees by the Parent for the benefit of its subsidiaries that

contain affiliate cross-default provisions, and incorporates other applicable requirements of the final TLAC

rule.

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7.4 Separability

Corporate Development leads the Separability Focus Area. Our Corporate Development team is staffed with

dedicated and experienced mergers and acquisitions specialists that conduct business as usual divestitures

and acquisitions and would continue to do so in recovery and resolution scenarios.

We identify discrete portfolios, hybrid portfolios, and businesses that could be sold during times of financial

stress that could improve our financial position, facilitate recovery, or simplify our operating model and

systemic importance to facilitate resolution. The portfolio, hybrid portfolio, and business sales are collectively

referred to as divestiture options. Maintaining divestiture options across multiple business lines provides

flexibility that enhances our financial resiliency as business lines may be impacted differently in a time of

stress.

We developed execution playbooks for each divestiture option, which identify divestiture attributes, market

and buyer analysis results, valuation analysis results, and key steps, responsibilities, and anticipated timelines

for those divestitures. To provide divestiture options that are actionable, we perform an annual reverse due

diligence reevaluation process, which includes an impediment and mitigant analysis, an impact assessment,

and divestiture playbook documentation, to show that the divestiture option scope is actionable. We consider

operational, legal, and financial separability factors for each divestiture option. The reverse due diligence

process is similar to the acquisition due diligence process, but is performed on the Company’s own business,

rather than on a target company.

As shown in the following figure, Corporate Development manages and coordinates the various internal

parties required to execute a transaction, including senior leaders, lines of business, Enterprise Functions, and

functional subject matter experts.

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Figure 7-4 Stakeholders Involved with Divestiture Option Playbooks

A divestiture option's role within our Preferred Resolution Strategy is to provide optionality under different

market conditions for reducing the complexity and size of Wells Fargo while maximizing franchise value. We

assess numerous avenues to monetize our divestiture options to create substantive optionality and

flexibility. For example, certain loan portfolio sales can be sold in tranches based on credit quality, geography,

industry, or other characteristics to best fit the needs of a broad market of buyers. Our divestiture options

have numerous operating model benefits that will attract a broad universe of strategic and financial buyers.

We maintain the capability to populate virtual data rooms, which contain information to address a

comprehensive set of data requests to facilitate a buyer’s due diligence and valuation efforts. We populate

virtual data rooms annually for divestiture options so there are opportunities to build and maintain the

muscle memory that would be drawn upon in a crisis situation and allow divestiture option virtual data rooms

to be updated in a timely manner.

Corporate Development's operational separability expertise would be leveraged for divestitures. We

completed 31 business, hybrid portfolio, or portfolio divestitures from 2016 to 2021, 15 of which were

executed from 2019 to 2021 at increased scale, volume, and speed, which we believe demonstrates the

efficacy of our divestiture capability. We analyzed lessons learned from these divestitures to refine our

divestiture capabilities, which would be leveraged in a stress event.

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7.5 Payment, Clearing, & Settlement Activities

Financial market utilities (FMUs) are multilateral systems that provide the infrastructure for transferring,

clearing, and settling payments, securities, and other financial transactions among financial institutions or

between financial institutions and the system. These systems are necessary for financial institutions and

their clients to conduct business. To mitigate the risk of losing access to payment, clearing, and settlement

services provided by FMUs and agent banks, we identify those material relationships and conduct outreach

exercises to understand and plan for potential adverse actions an FMU or agent bank could implement in the

event we experience financial stress.

We conduct payment, clearing, and settlement (PCS) activities through FMUs and agent banks across the

following seven instruments:

Figure 7-5 Instrument Definitions

Instrument Services

Automated Clearing House

(ACH)

The Company offers ACH origination and receiving services allowing customers to manage debit and credit

transactions for a wide variety of activities including single and recurring bill payments, online transfers,

collections, disbursements, payrolls, check conversions, and tax/trade payments.

Cards

The Company offers several types of cards to its customers including credit cards, ATM cards, debit cards, and

campus cards. In addition to card products, the Company also provides merchant customers outlets with card

acceptance, point-of-sale systems, gateways, multi-currency capabilities, mobile products, and check acceptance.

Checks

The Company offers check services (electronic and paper), allowing customers to easily manage check payments,

both issued and received. Checks include on-us and transit items, which vary by presentment and settlement

channels.

Instant Payments

The Company uses instant payments processing to accommodate instantaneous, irrevocable, credit-push

transactions, based on dollar limits set by the network, as well as the related payment information, between

sending and receiving participant accounts based in the U.S.

Wires

The Company offers wire payment services allowing customers to send and receive high value, irrevocable,

domestic and global transactions, in U.S. dollar and foreign-currency, as well as the associated payment-related

information.

Securities

The Company offers a full suite of investment banking, capital markets, and advisory products and services

through broker-dealer entities (WFS LLC and WFCS), as well as trust, asset servicing, and transaction processing

services through WFBNA. Products offered include equities, high-grade debt, high-yield debt, loan syndications,

securitizations, and market-linked products.

Derivatives

The Company uses a full suite of derivative contracts to hedge exposure to its market risk, interest rate risk, credit

risk, and foreign currency risk, and to assist customers with their risk management objectives including interest

rate swaps and swap options, futures, options, equity, credit, foreign exchange, and forward agreements.

Establishing memberships with FMUs and agent banks allows us to meet the needs of our clients, manage

risk, and secure funding. Several of our Material Entities participate and maintain memberships with a

number of FMUs. Maintaining continuity of access during resolution is key because our clients rely heavily on

these memberships to meet their financial needs.

Wells Fargo’s PCS activity is largely driven by payment operations, specifically wires and Automated Clearing

House (ACH) movements through WFBNA on behalf of its customers. WFBNA’s check and cards operations

are also significant drivers of payment activity, given our nationwide retail banking presence. Clearing and

settlement activity is concentrated largely in WFCS, the Company's primary retail broker-dealer, and WFS

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LLC, the Company’s institutional broker-dealer. WFCS clears and settles securities and derivatives on behalf

of Wealth & Investment Management clients. WFS LLC clears and settles securities and derivatives on behalf

of Corporate & Investment Banking clients affiliates, and is the only registered futures commission merchant

of the Company’s Material Entities. WFBNA is the only registered derivatives swap clearing dealer, and also

settles foreign exchange currency derivatives.

Identifying Material FMUs and Agent Banks

We monitor our relationships with FMUs and agent banks and maintain contingency plans for the most

material ones. We determine materiality through an assessment process that considers both quantitative and

qualitative criteria to determine the criticality of each FMU or agent bank involved in cash, securities, and

derivative markets. The objective of the assessment is to have an inclusive risk management view that

accounts for market, credit, liquidity, and operational risk, and also considers additional resolvability risks

such as customer and market impact if access to an FMU or agent bank is severed. The results from this

assessment, as shown in the following figure, reflect our most material FMU and agent bank relationships.

Figure 7-6 Material FMU/Agent Bank Memberships

FMU/Agent Bank

Material Entities

Parent WFCH WFBNA WFS LLC WFCS

Payment

Checks

FedChecks

SVPCO

Viewpointe

ACH

Electronic Payments Network (EPN)

FedACH

Wires

Fedwire Funds

Clearing House Interbank Payments System (CHIPS)

Cards

Visa

Clearing

Securities

National Securities Clearing Corporation (NSCC)

ü ü ü

Fixed Income Clearing Corporation (FICC)

ü ü ü

Derivatives

ICE Clear Europe

ICE Clear Credit

ICE Clear U.S.

Chicago Mercantile Exchange (CME)

LCH.Clearnet Ltd

ü ü

Options Clearing Corporation (OCC)

ü ü

Settlement

Securities

Fedwire Securities

Depository Trust Company (DTC)

ü ü ü

Bank of New York Mellon (BNY Mellon)

ü ü ü ü ü

Derivatives

CLS Bank International

Contingency Planning

FMUs and agent banks have broad discretion to modify participant rules in response to financial stress. As a

result, our continuity strategy includes ongoing planning efforts to understand the actions FMUs and agent

banks may take against a stressed member, as well as the financial and operational implications of those

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actions. The Company engages in annual internal and external discussions, which inform the Company's

understanding of potential adverse actions and emphasizes the importance to maintain access to material

FMUs and agent banks. Our contingency planning accounts for coordinating FMU and client-related actions,

including communication protocols in the event of stress or failure. Clients include key clients as determined

by our annual key client assessment, which uses a methodology that considers both quantitative and

qualitative criteria.

7.6 Shared and Outsourced Services

The Company is committed to maintaining continuity of Critical Services during resolution. We define

Critical Services as those services that support Critical Operations or Core Business Lines and must remain

operational during the resolution process to facilitate the orderly execution of our Preferred Resolution

Strategy.

The Company mitigates the risk that Critical Services may be susceptible to disruption by executing

intercompany service agreements with resolution-resilient language and arm’s length pricing for Critical

Services provided from one legal entity to another. The Company further mitigates the risk of Critical Service

disruption by maintaining appropriate levels of working capital at Service Material Entities and Operating

Material Entities to fund Critical Services. The Company also maintains contingency strategies to help

prevent the disruption of Critical Services due to the loss of one or more Critical Service components. For

example, we identify promptly substitutable alternatives for third parties to help prevent the disruption of

Critical Services due to potential discontinued access.

As a final measure to continue services during resolution, our LER Criteria seeks to centralize the majority of

Critical Services and Critical Service components within Material Entities. By following this strategy, the

Company limits the risk of interrupting Critical Services during resolution (and improves resolvability) by

simplifying the interconnections and interdependencies between legal entities, non-U.S. subsidiaries, and

third parties.

The Company maintains a Service Catalog, which is a comprehensive set of services-related inventories. The

Service Catalog includes (1) an inventory used to categorize services performed Companywide (the Service

Taxonomy), (2) an inventory of service components needed to perform each service, including those needed

to support each Critical Service (Critical Service components), such as employees, facilities, systems, third

party engagements, and intellectual property, and (3) a mapping of the legal entities, including Material

Entities, that provide and receive services through intercompany and intra-company legal entity

relationships. Through these inventories, the Service Catalog enables the Company to identify those Critical

Services needed to continue operations of Material Entities, Critical Operations, and Core Business Lines. The

Company identifies and manages the following four types of operational interconnectedness:

• Material Entity interconnectedness – Critical Services provided by Material Entities, supporting

other Material Entities

• External interconnectedness – Reliance on external critical third parties to continue Critical Services

• Core Business Line interconnectedness – Mapping Critical Services to Core Business Lines

• Critical Operation interconnectedness – Critical Services required to continue Critical Operations

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7.7 Management Information Systems

Wells Fargo Technology manages the systems necessary to maintain the Core Business Lines, Critical

Operations, and Material Entities in periods of stress and resolution. The technology required to support

these objectives is segmented into the following three functions: (1) maintaining critical systems, (2)

providing critical reporting, and (3) supplying the technology support and mechanisms necessary to promote

separability.

Critical systems are those systems that are necessary to perform a Critical Service and required to avoid

Critical Service disruptions that might arise from an inability to access such components in resolution.

Identifying these critical systems prior to stress allows us to focus on their continued operation during times

of stress. The systems identified are contained in the Service Catalog, discussed in Section 7.6, Shared and

Outsourced Services.

We identify reports on financial and risk data to include in the Critical Reports Inventory. The Critical Reports

Inventory provides detailed information about the reports necessary to support decision making throughout

the Enterprise Financial Assessment Levels. That reporting presents information at the legal entity level

across financial, operational, structural, and risk-related areas. It includes, but is not limited to, reporting on

trigger monitoring, credit exposures, financial data (such as income statements and balance sheets),

operational risks, and shared services. Reports in the Critical Reports Inventory are subject to heightened data

management and governance requirements per Company policy.

Technology also provides support and systems to enable divestiture execution, which include processes to

produce on-demand reports required for buyer due diligence during a divestiture and the virtual data room

technology that we use to store this documentation and securely share relevant information with potential

buyers.

In addition, the Management Information Systems Focus Area maintains the Use & Access Technology

capability to be used in our divestiture strategy. This capability allows for the logical separation of customer

accounts by product based on the terms of the purchase agreement. Accounts sold as part of a region sale

would be flagged in appropriate systems and access to those accounts would be permitted to avoid service

interruption. Importantly, the Use & Access to Technology permits an earlier Legal Close (i.e., receipt of sale

proceeds) and enables multiple buyers to purchase parts of the region simultaneously. The technology

supporting the Use & Access to Technology capability is embedded in the production environment ready to

be enabled as required. We have a patent for several proprietary aspects of the Use & Access to Technology

capability.

7.8 Collateral Management

The Company maintains a set of collateral management capabilities to improve Company resolvability and

comply with the 165(d) Rule and 2019 165(d) Guidance. This approach incorporates resolution planning

considerations into routine collateral management practices.

We receive and pledge collateral under a variety of transactions across Business Groups and Enterprise

Functions (e.g., Consumer Lending, Commercial Banking, Corporate & Investment Banking, Wealth &

Investment Management, and Corporate Treasury) to mitigate liquidity, credit, counterparty, and other risks.

As a result, we maintain policies, systems, processes, controls, and functional support groups to support the

availability, accuracy, and control of collateral management activities. Core Business Lines manage collateral

sources or use collateral through various activities, including, but not limited to, over-the-counter derivatives

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and to be announced securities, secured financing transactions, margin lending, clearing services, and our

principal investment portfolio. The Company maintains collateral eligible to secure borrowings from the

Federal Home Loan System and Federal Reserve Bank of San Francisco as needed based on funding and

liquidity needs.

We maintain governance and oversight of collateral management through (1) a cross-functional collateral

governance committee and Companywide Collateral Management Policy, (2) Companywide collateral

reporting, (3) client agreement and terms digitization for query and aggregation purposes, and (4) quarterly

collateral stress testing. In addition, the five Core Business Lines that manage collateral have business line-

specific collateral management policies that support the Collateral Management Policy. This approach to

collateral management governance and capabilities, including Business Group- and Enterprise Function-level

policies, is designed to improve risk management and incorporate resolution planning considerations into the

Business Groups' and Enterprise Functions' routine collateral management practices.

7.9 Derivatives & Trading

We use derivatives to manage exposure to market risk, including interest rate risk, credit risk, and foreign

currency risk, and to assist customers with their risk management objectives. This approach involves

modifying the repricing characteristics of certain assets and liabilities so that changes in interest rates, foreign

currency and other exposures, which may cause the hedged assets and liabilities to gain or lose fair value, do

not have a significant adverse effect on the net interest margin, cash flows and earnings. We designate certain

derivatives as hedging instruments in qualifying hedge accounting relationships (fair value or cash flow

hedges). Our remaining derivatives consist of economic hedges that do not qualify for hedge accounting and

derivatives held for customer accommodation trading or other purposes.

We have a comprehensive derivatives booking model framework that articulates the principles, rationales,

and approach to implementing our booking practices across legal entities. WFBNA has the majority of our

derivatives exposures as our provisionally registered swap dealer with the Commodity Futures Trading

Commission and security-based swap dealer with the SEC. Additional derivative and trading activities are

primarily conducted through WFBNA-LB, the Parent, and WFS LLC.

Our derivatives and trading activities comprise approximately 5% of the United States top 25 holding

companies total derivatives exposure in terms of gross notional amount. We have the sixth largest

derivatives notional amount among United States bank holding companies, according to the Office of the

Comptroller of the Currency Quarterly Report on Bank Trading and Derivatives Activities.

Wind-down of Derivatives

To support our strategy for winding down the Company's derivative and trading portfolio, we enhanced and

developed capabilities designed to enable an orderly preferred wind-down, which includes both passive and

active strategies and related capabilities. These capabilities include the following: the ability to manage inter-

affiliate risks, assessments of our operational resource needs and associated costs, our wind-down

capabilities managed through the implementation of our Wind-Down Tool, and our booking model policy and

governance structure.

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We employ four key derivatives wind-down strategies as shown in the following figure.

Figure 7-7 Wind-Down Strategies

Strategy Definition

Termination

Termination reflects our expectation that derivatives-related counterparties will exercise contractual termination rights

whenever beneficial to them (i.e., if the market value of the sum of the transactions under the governing agreement

reflects an unrealized gain to the counterparty, or a loss for the applicable Wells Fargo entity).

Maturation

Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed,

or it will cease to exist. The term is commonly used for derivative transactions that have a contractual maturity date.

Compression

Compression is a way to reduce the number of outstanding contracts (and, therefore, their gross notional amount), but

keep the same economic exposure. Compression can be done on a solo basis where a firm cancels offsetting contracts in

its own portfolios or on a multilateral basis, typically conducted through a third-party vendor, where a firm submits

portfolios to such vendor for matching with two or more counterparties who agree to cancel trades with each other within

agreed parameters. Compression can be done for all or part of the notional amounts concerned.

Novation

Novation is the replacement of a contract between two counterparties with an over-the-counter derivative transaction

with a new contract between the remaining party and a third party.

In our Preferred Resolution Strategy, the active wind-down period is the 12 months following the one month

runway period. It is anticipated that the wind-down will result in approximately 98% of the gross notional

amount of the overall derivatives portfolio exited by the end of the preferred wind-down period. A small

residual portfolio of derivatives would remain that would be more complex to wind down, which would not be

systemically impactful.

We included the impact of the derivative wind-down in our liquidity and capital needs to help assess our

ability to manage the costs of the wind-down activity.

Under the Preferred Resolution Strategy, all Material Entities that enter into derivatives transactions other

than the Parent would remain solvent and operational upon and after beginning chapter 11 proceedings of the

Parent.

We rely in a limited manner on Parent guarantees. If the Bankruptcy Court grants our Emergency

Transfer Motion request, the transfer of equity interests to a solvent New HoldCo would comply with the

creditor protection conditions of the International Swaps and Derivatives Association (ISDA) Protocols (i.e.,

the 2015 ISDA Universal Resolution Stay Protocol (the 2015 Protocol) or the 2018 ISDA U.S. Resolution Stay

Protocol (the U.S. Protocol)).

We developed a policy to restrict the ability of the Parent to enter into customer-facing derivatives

transactions and have actively novated QFCs containing cross-default provisions from the Parent to the

Bank.

As a result of the Secured Support Agreement, our capital and liquidity modeling capabilities, and other

operational enhancements to resolvability, we expect that our non-Parent Material Entities would be able to

continue performing on their derivatives transactions during execution of our Preferred Resolution Strategy,

minimizing impacts on customers, counterparties, and the markets generally. Additionally, as all derivatives

booking Material Entities adhere to the ISDA Protocols, we confirmed that all of our major external

counterparties also have adhered. Accordingly, the Qualified Financial Contract Stay Rules and adherence to

the ISDA Protocols would prevent the closeout of a majority of non-Parent Material Entity derivatives

pursuant to certain cross-defaults that would otherwise be triggered in connection with the Parent’s

bankruptcy. If the Bankruptcy Court declined to provide the relief requested, we do not anticipate this would

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As previously explained, WFS LLC would undergo a solvent wind-down.

have a significant impact on the implementation of our Preferred Resolution Strategy or our Preferred

Derivatives & Trading Wind-Down Strategy, given our limited use of Parent guarantees for Material Entities'

Qualified Financial Contracts.

The following figure shows the notional or contractual amounts and fair value of derivatives as shown in

Exhibit 13 of our form 10-K.

Figure 7-8 Notional or Contractual Amounts and Fair Value of Derivatives

$ Millions

December 31, 2022 Fair Value

Notional or Contractual

Amount

Derivative

Assets

Derivative

Liabilities

Derivatives designated as hedging instruments

Interest rate contracts $ 263,876 $ 670 $ 579

Commodity contracts 1,681 9 25

Foreign exchange contracts 15,544 161 1,015

Total derivatives designated as qualifying hedging instruments 840 1,619

Derivatives not designated as hedging instruments

Economic hedges:

Interest rate contracts 65,727 410 253

Equity contracts 3,884 — 260

Foreign exchange contracts 38,139 490 968

Credit contracts 290 14 —

Subtotal 914 1,481

Customer accommodation trading and other derivatives

Interest rate contracts 10,156,300 40,006 42,641

Commodity contracts 96,001 5,991 3,420

Equity contracts 390,427 9,573 8,012

Foreign exchange contracts 1,475,224 21,562 24,703

Credit contracts 45,359 52 36

Subtotal 77,184 78,812

Total derivatives not designated as hedging instruments 78,098 80,293

Total derivatives before netting 78,938 81,912

Netting (56,164) (61,827)

Total $ 22,774 $ 20,085

Prime Brokerage

Our Prime Brokerage (Prime Brokerage) line of business developed tools to segment the client base and

monitor its client's risk exposures on a daily basis, and it conducts operational capacity assessments to help

demonstrate that it has the resources to provide its client base with a rapid and orderly exit under a solvent

wind-down in a time of stress. Due to the severity of the resolution scenario and the collective experience of

our clients during the 2008 financial crisis, it is expected that clients will protect their assets and trading

strategies by exiting the Prime Brokerage platform as soon as possible in line with the segmentation analysis

after a stress event.

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Most Prime Brokerage clients have multiple prime brokerage relationships and would be able to easily

transition to alternative service providers. Those Prime Brokerage clients without existing alternative

providers are generally smaller, less complex funds, running lower leverage levels and financing liquid

collateral with wider financing spreads, which will provide attractive economics to other prime brokers.

Accordingly, we believe that Prime Brokerage would be able to successfully transfer all of its clients to

alternative providers during the runway period in the event of an idiosyncratic stress event.

7.10 Financial Projections

The Company’s Financial Projections team works with Corporate Treasury, Corporate Development, and

finance teams across the Company to generate financial statements that accompany Recovery and

Resolution Plans. Partner groups rely on these financial statements to generate metrics, most notably

resolution capital execution need. The team also verifies there is appropriate governance for financial

statements and processes that accompany each regulatory submission. The Financial Projections team helps

demonstrate the feasibility of the Company's Preferred Resolution Strategy and addresses regulatory

expectations, which includes pro forma financial statements for each Material Entity.

We run a series of forecasting processes during normal and stressed conditions that enable the Operating

Committee and the Boards to make strategic and operational decisions. In a stress situation, Corporate

Financial Planning & Analysis coordinates with line of business finance teams and Corporate Treasury to

understand the nature and severity of the financial stress and determine appropriate updates to the

Company’s current business forecasts. This includes discussions about updates to forecast assumptions in

light of prevailing conditions and frequency of our forecasts, which can be accelerated during stress situations.

Corporate Financial Planning & Analysis and Corporate Treasury also coordinate on management actions that

need to be evaluated and then recommended to management committees and the Board, as appropriate. This

coordination allows Capital Management and Liquidity Risk Management to use appropriate forecasts as key

inputs in their resolution metrics updates.

7.11 Legal Analysis

The Legal Analysis Focus Area advises on and, as needed, periodically updates certain recovery and resolution

planning-related documents, including those that support or facilitate the Company’s Preferred Resolution

Strategy and guide senior leaders and Boards during periods of financial stress. These documents include the

Secured Support Agreement, a memorandum analyzing the potential state law and bankruptcy law challenges

and mitigants to capital and liquidity support, and the Bankruptcy Playbook that describes bankruptcy-

related actions that the Board, senior management, advisors, and others would take when the Company is

experiencing financial distress and failure is possible, and shortly after the Parent files its bankruptcy case.

7.12 Human Resources

The Company’s Human Resources team maintains a comprehensive employee retention strategy to retain

key employees during a period of financial stress. The Human Resources team designed the strategy to

identify and retain key employees necessary to maintain Critical Operations, Critical Services, and Core

Business Lines, to support the Preferred Resolution Strategy and Recovery Plans, and to deploy retention

packages and payments to those identified employees. These key employees would provide senior leaders

with the necessary leadership, management, and operational skills to assist through a financial stress event.

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We regularly review and update the list of key employees and retention packages so information remains

current should financial stress occur.

The process to identify key employees requires data from various sources that is automatically aggregated

into a Human Resources data warehouse and is used to create reporting. Leaders use these reports to analyze

their respective organization's key employee designations. We conduct this process annually and administer

maintenance refreshes between annual cycles.

7.13 Stakeholder Engagement

Efficient and effective communications can help mitigate the impacts that stress events may have on

the Company. The Company coordinates its communications processes across business and

functional areas by defining roles and responsibilities, identifying a core executive leadership team for

decision-making, and confirming proper resources are available to rapidly mobilize communications

in response to stress. The Company's communications strategy contains processes and controls to

provide effective and timely communication to external and internal stakeholders throughout each

Enterprise Financial Assessment Level.

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8. Resolution Planning Oversight

Oversight for the resolution planning process is integral and occurs through the following categories: (1)

ownership and execution, (2) governance bodies’ review, (3) internal controls and independent review, and (4)

external oversight.

8.1 Ownership and Execution

Our chief financial officer (CFO) is the executive sponsor of our Resolution Plans. The head of the Recovery &

Resolution Program Office is responsible for coordinating resolution preparedness and leading how our

Resolution Plans are developed. Accountability for resolution capabilities is aligned to senior leaders who are

responsible for functions and processes where the capabilities are embedded in business as usual activities.

Additional information on the Recovery & Resolution Program Office and our Front Line ownership is

explained below.

Recovery & Resolution Program Office

The Recovery & Resolution Program Office is primarily responsible for coordinating resolution

preparedness at the Company and managing the end to end process to develop the Company’s Resolution

Plans. The Recovery & Resolution Program Office has the following key responsibilities:

• Conducting activities to support resolution planning, coordinating Plan drafting, communications with

stakeholders, and controls

• Monitoring resolution planning developments, including changes to applicable laws, regulations,

guidance, and industry best practices

• Understanding and communicating regulatory requirements and guidance necessary to develop the

Resolution Plans and coordinating internal gap assessments to verify that the Plan aligns to

requirements

• Designing and delivering training related to resolution planning

• Coordinating the process to identify, review, and obtain approval of the Company’s Material Entities,

Core Business Lines, and Critical Operations

• Escalating strategic issues and material developments with respect to resolution planning

Front Line

Additionally, various Front Line businesses and Company functions own the underlying activities and

capabilities needed to produce successful and executable Resolution Plans, with the RRPO acting as a

centralized office facilitating and aggregating their work to oversee prompt Plan submission. This ownership

approach places recoverability and resolvability oversight at the forefront of business as usual operations and

our day to day risk management. We designated "owners" to lead each of our resolution Focus Areas, Core

Business Lines, Critical Operations, Material Entities, and divestiture options, using specific criteria so owners

have the requisite seniority and knowledge.

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8.2 Governance Bodies

Our Board and senior leaders oversee the governance structure with clearly defined roles for key decision-

makers and established reporting and communication protocols. These protocols are designed to allow for

effective communication about Resolution Plan decisions, incorporate feedback from the Board, and help to

adapt the Resolution Plan as our business structure and activities evolve. The following three main

governance bodies are chartered with specific tasks in the governance structure:

• The Board oversees the Company's resolution planning process and approves the Resolution Plan.

• The Finance Committee of the Board receives regular updates from senior leaders on our resolution

planning progress, including actions taken to mitigate resolvability risks, and recommends approval of

the Resolution Plan to the Board.

• The Recovery & Resolution Committee (RRC) is a governance committee that operates under the

authority of our CFO and is co-chaired by the CFO and head of the Recovery & Resolution Program

Office. The RRC oversees our Preferred Resolution Strategy and related initiatives. In addition to the

CFO and the head of the Recovery & Resolution Program Office, members of the RRC also include our

chief risk officer; corporate treasurer; Finance chief risk officer, head of Corporate Finance, and head of

Enterprise Business Resiliency.

The following figure shows our resolution planning governance structure.

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Figure 8-1 Recovery and Resolution Planning Governance Structure

Our executive management and senior leaders support the governance structure presented in the previous

figure with coordinated oversight and quality control. We clearly define roles for key stakeholders and use

well-established reporting and communication protocols. These protocols enable us to communicate

decisions about our Resolution Plans generally throughout the Company, receive guidance specifically from

the Board, and adapt our Resolution Plans as our business structure and activities evolve.

The following figure provides more information about the roles and responsibilities of the key stakeholders in

resolution planning and risk management.

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Figure 8-2 Key Resolution Planning Stakeholders and Responsibilities

Board

The Board oversees the Company's 165(d) resolution planning process and approves the 165(d) Plan. The Board

delegated the responsibility of providing ongoing oversight of resolution planning to the Finance Committee.

Board Finance Committee

The Finance Committee is responsible for the review and recommendation of the 165(d) Plan to the Board for

approval. Having been delegated responsibility by the Board, the Finance Committee provides ongoing

oversight of resolution planning activities. The Finance Committee receives regular updates on the Company’s

resolution planning progress, including remediation actions addressing resolvability impediments.

Recovery & Resolution

Committee

The RRC, a governance committee, oversees all significant resolution planning-related initiatives, including Plan

development and resolution Focus Areas' readiness. Oversight responsibilities include, among other things,

approving the Recovery and Resolution Planning Policy; approving changes to the designation of Critical

Operations, Core Business Lines, and Material Entities; and approving significant changes to key strategic

assumptions supporting the Preferred Resolution Strategy and significant changes to the Preferred Resolution

Strategy.

Recovery & Resolution

Planning Core Group

(Core Group)

The Core Group serves as the cross-functional working group for resolution planning at the Company and

provides an opportunity for integration across functional areas that support the Resolution Plan's coordination.

The Core Group discusses resolution planning developments, strategic issues that impact multiple Focus Areas,

and cross-functional program risks, issues, and dependencies that may merit escalation to the RRC. Core Group

membership includes members of the Recovery & Resolution Program Office, the Legal Department, and

management-level employees from the resolution Focus Areas, lines of business, and support functions.

Stakeholder Roles and Responsibilities

8.3 Internal Controls and Independent Review

We maintain a framework for resolution planning, supported with policies and procedures, designed to meet

and sustain resolution planning requirements.Features of this framework include the following:

• We developed a catalog of foundational assumptions and a formalized process for designating Material

Entities, Critical Operations, and Core Business Lines.

• Independent Risk Management (IRM) is responsible for establishing and maintaining the Company's

risk management program and providing oversight, which includes challenge to and independent

assessment of the Front Line's execution of its risk management responsibilities. The program

includes identifying, assessing, monitoring, and reporting of all risks, including recovery and resolution

risks. IRM independently monitors and evaluates the effectiveness of Front Line recovery and

resolution activities, plans, policies, procedures, controls, and capabilities. IRM aligns subject matter

experts to each Focus Area, Core Business Line, Critical Operation, and Material Entity, and engages

additional subject matter experts for relevant topics, as appropriate.

• Internal Audit independently tests the risk management, systems of internal controls, and governance

processes for Resolution Planning through execution of audits in alignment with the coverage

horizons established in the Internal Audit methodology. Specific to resolution planning, Internal Audit

has a centralized, dedicated recovery and resolution planning audit team within the larger Enterprise

Functions audit team. The recovery and resolution planning audit team provides focused, recurring

coverage of resolution planning processes, related Focus Areas, and risks. That team consists of a

dedicated senior audit manager and employees with subject matter knowledge in key resolution

planning capability areas, data analytics, and project management. Coverage by the recovery and

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resolution planning audit team is supplemented by testing performed by other Internal Audit teams,

as needed, through a hybrid-centralized approach.

8.4 External Oversight

The following authorities exercise material supervisory or regulatory authority over our Material Entities:

U.S. Authorities

• Federal Deposit Insurance Corporation

• Board of Governors of the Federal Reserve System

• Office of the Comptroller of the Currency

• Securities and Exchange Commission

• Commodity Futures Trading Commission

• Consumer Financial Protection Bureau

• Municipal Securities Rulemaking Board

• National Futures Association

• Financial Industry Regulatory Authority

• Securities Investor Protection Corporation

U.K. Authorities

• Prudential Regulation Authority/Bank of England

• Financial Conduct Authority

Irish Authorities

• Central Bank of Ireland

Philippines Authorities

• Philippine Economic Zone Authority

• Department of Labor and Employment

• City Government - City of Taguig

Indian Authorities

• Reserve Bank of India

• Ministry of Commerce and Industry (Special Economic Zone Authority)

• Indian Companies Act Administrator

• Labor Department of the states of Telangana, Karnataka, and Tamil Nadu

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In addition to Wells Fargo Bank, N.A. - London Branch, WFBNA has branches in other jurisdictions, which are not designated as Material Entities, that

are subject to other regulatory bodies.

9. Financial Information

This section provides additional financial information, including our balance sheet, regulatory capital

information, and total loss-absorbing capacity.

For additional financial information, please refer to our reports filed with the SEC and available on the SEC's

website at www.sec.gov,

including our Annual Report on Form 10-K for the year ended December 31, 2022.

Figure 10-1 Company Balance Sheet

Assets

Cash and due from banks 34,596

Interest-earning deposits with banks 124,561

Total cash, cash equivalents, and restricted cash 159,157

Federal funds sold and securities purchased under resale agreements 68,036

Debt securities:

Trading, at fair value (includes assets pledged as collateral of $26,932) 86,155

Available-for-sale, at fair value (includes amortized cost of $121,725, net of allowance for credit losses) 113,594

Held-to-maturity, at amortized cost, net of allowance for credit losses (fair value $255,521) 297,059

Loans held for sale (includes $4,220 carried at fair value) 7,104

Loans 955,871

Allowance for loan losses (12,985)

Net loans 942,886

Mortgage servicing rights (includes $9,310 carried at fair value) 10,480

Premises and equipment, net 8,350

Goodwill 25,173

Derivative assets 22,774

Equity securities (includes $28,383 carried at fair value; and assets pledged as collateral of $747) 64,414

Other assets 75,834

Total assets

(1)

1,881,016

Liabilities

Noninterest-bearing deposits 458,010

Interest-bearing deposits 925,975

Total deposits 1,383,985

Short-term borrowings (includes $181 carried at fair value) 51,145

Derivative liabilities 20,085

Accrued expenses and other liabilities (includes $20,123 carried at fair value) 69,056

Long-term debt (includes $1,346 carried at fair value) 174,870

Total Liabilities

(2)

1,699,141

$ Millions (except shares)

Wells Fargo & Company and Subsidiaries Consolidated Balance Sheet

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Equity

Wells Fargo stockholders' equity:

Preferred stock - aggregate liquidation preference of $20,216 19,448

Common stock - $1-2/3 par value, authorized 9,000,000,000 shares; issued 5,481,811,474 shares 9,136

Additional paid-in capital 60,319

Retained earnings 187,649

Accumulated other comprehensive loss (13,381)

Treasury stock - 1,648,007,022 shares (82,853)

Unearned ESOP shares (429)

Total Wells Fargo stockholders' equity 179,889

Noncontrolling interests 1,986

Total equity 181,875

Total liabilities and equity 1,881,016

$ Millions (except shares)

Wells Fargo & Company and Subsidiaries Consolidated Balance Sheet

(1)

Our consolidated assets at December 31, 2022, included the following assets of certain variable interest entities (VIEs) that can only be used to settle the liabilities of those

VIEs: Debt securities, $71 million; Loans, $4.8 billion; All other assets, $191 million; and Total assets, $5.1 billion.

(2)

Our consolidated liabilities at December 31, 2022, included the following VIE liabilities for which the VIE creditors do not have recourse to Wells Fargo: Long-term debt, $0

million; All other liabilities, $201 million; and Total liabilities, $201 million.

We are subject to rules issued by federal banking regulators to implement Basel III capital requirements for

U.S. banking organizations. For additional information on the Basel III requirements we are subject to, please

refer to the "Capital Management" section of our Annual Report on Form 10-K for the year ended December

31, 2022 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023.

The following figure provides information about our risk-based capital and related ratios as calculated under

Basel III capital guidelines.

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Figure 10-2 Regulatory Capital Information as of 12/31/22

$ Millions (except ratios)

Wells Fargo & Company WFBNA

Advanced Approach Standardized Approach Advanced Approach Standardized Approach

Regulatory capital:

Common equity tier 1 $ 133,527 $ 133,527 $ 140,644.00 $ 140,644.00

Tier 1 152,567 152,567 140,644 140,644

Total 177,258 186,747 154,292 163,885

Assets:

Risk-weighted 1,112,307 1,259,889 977,713 1,177,300

Adjusted average 1,846,954 1,846,954 1,685,401 1,685,401

Capital ratios:

Common equity tier 1 capital 12.00 % 10.60%

(1)

14.39 % 11.95%

(1)

Tier 1 capital 13.72 % 12.11%

(1)

14.39 % 11.95%

(1)

Total capital 15.94% 14.82%

(1)

15.78 % 13.92%

(1)

Wells Fargo & Company WFBNA

Regulatory leverage:

Total leverage exposure

(2)

$ 2,224,789 $ 2,058,568

Supplementary leverage ratio

(2)

6.86 % 6.83 %

Tier 1 leverage ratio

(3)

8.26 % 8.34 %

(1)

Denotes the binding ratio under the Standardized and Advanced Approaches at December 31, 2022.

(2)

The supplementary leverage ratio consists of tier 1 capital divided by total leverage exposure. Total leverage exposure consists of total average assets, less goodwill and other

permitted tier 1 capital deductions (net of deferred tax liabilities), plus certain off-balance sheet exposures.

(3)

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

As a global systemically important bank holding company, we are required to have a minimum amount of

equity and unsecured long-term debt for purposes of resolvability and resiliency, often referred to as total

loss-absorbing capacity. For additional information on the total loss-absorbing capacity rule and the

requirements we are subject to, please refer to the "Capital Management" section of our Annual Report on

Form 10-K for the year ended December 31, 2022 and our Quarterly Report on Form 10-Q for the quarter

ended March 31, 2023.

As of December 31, 2022, our eligible external total loss-absorbing capacity as a percentage of total risk-

weighted assets was 23.27% compared with a required minimum of 21.50%. The following figure

demonstrates the breakdown of our external total loss-absorbing capacity compared to the regulatory

requirement.

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Figure 10-3 Total Loss-Absorbing Capacity and Eligible Unsecured Long-Term Debt as of 12/31/22

$ Millions

TLAC

(1)

Regulatory

Minimum

(2)

Eligible Unsecured

Long-Term Debt

Regulatory

Minimum

Total Eligible Amount $ 293,152 $ 134,521

Percentage of Risk-Weighted Assets

(3)

23.27 % 21.50 % 10.68 % 7.50 %

Percentage of Total Leverage Exposure 13.18 % 9.50 % 6.05 % 4.50 %

(1)

Total-loss absorbing capacity ratios are calculated using the CECL transaction provision issued by federal banking regulators.

(2)

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

(3)

Our minimum total loss-absorbing capacity and eligible unsecured long-term debt requirements are calculated based on the greater of risk-weighted assets determined under

the Standardized and Advanced Approaches.

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10. Identities of Principal Officers

The following figure identifies our principal officers and their positions as of June 27, 2023.

Name Position

Muneera S. Carr Executive vice president, chief accounting officer, and controller

William H. Daley Vice chairman of Public Affairs

Kristy Fercho Senior executive vice president, head of Diverse Segments, Representation and Inclusion

Derek A. Flowers Senior executive vice president and chief risk officer

Kyle G. Hranicky Senior executive vice president and CEO of Commercial Banking

Tracy Kerrins Senior executive vice president and head of Technology

Bei Ling Senior executive vice president and head of Human Resources

Ellen R. Patterson Senior executive vice president and general counsel

Scott E. Powell Senior executive vice president and chief operating officer

Paul Ricci Senior executive vice president and chief auditor

Michael P. Santomassimo Senior executive vice president and chief financial officer

Kleber R. Santos Senior executive vice president and CEO of Consumer Lending

Charles W. Scharf Chief executive officer and president

Barry Sommers Senior executive vice president and CEO of Wealth & Investment Management

Saul Van Beurden Senior executive vice president and CEO of Consumer & Small Business Banking

Jonathan G. Weiss Senior executive vice president and CEO of Corporate & Investment Banking

Ather Williams III Senior executive vice president and head of Strategy, Digital, and Innovation

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11. Glossary

165(d) Rule

Regulation QQ of the Federal Reserve Board of Governors (12 C.F.R. Part 243) and Part 381 of the

regulations of the FDIC (12 C.F.R. Part 381), collectively.

2019 165(d) Guidance

The final guidance, published by the Federal Reserve and FDIC in December 2018, for the 2019 and

subsequent resolution plan submissions by the eight largest, complex U.S. banking organizations.

2021 Targeted 165(d) Resolution Plan

The Company's required Resolution Plan, submitted by July 1, 2021, submitted to the Federal

Reserve and FDIC pursuant to Section 165(d) of Title I of the Dodd-Frank Act.

Advanced Approach

Method of calculating risk-weighted assets using internal models to determine and assign risk

weights. As an Advanced Approach bank holding company, we are required to report capital ratios

reflecting the lower of Advanced Approach or Standardized Approach.

Aggregate Resource Needs

The combined capital and liquidity resolution needs net of pre-positioned resources (i.e., RCEN and

RLEN shortfalls) of the Covered Material Entities.

Available Financial Resources

Available Financial Resources include the sum of the value of all liquid assets owned by the Parent

and IHC, minus the Parent Holdback, the operational continuity buffer, and certain excluded liquid

assets as specified in the Secured Support Agreement.

Bank Wells Fargo Bank, National Association; it is also referred to as “WFBNA.”

bankruptcy Refers to proceedings under the Bankruptcy Code.

Bankruptcy Code The United States Bankruptcy Code, codified at 11 U.S.C. § 101, et seq.

Bankruptcy Court

The United States Bankruptcy Court for the District of Delaware, where the Parent would be

expected to file its Chapter 11 Petition.

Bankruptcy Playbook

Describes select actions Wells Fargo & Company teams (both internal and external) have taken or

would take at each Enterprise Financial Assessment Level to prepare for and execute the Parent’s

Chapter 11 Case in accordance with the Company’s Preferred Resolution Strategy, which includes

sample motions and draft documents that would be presented to the Bankruptcy Court.

Basel III

A comprehensive set of reform measures, developed by the Basel Committee on Banking

Supervision, to strengthen the regulation, supervision, and risk management of the banking sector.

Board The Parent's Board of Directors

Boards or “Boards of Directors”

In its plural form, Boards of Directors may refer to the boards of directors or equivalent bodies of

the Parent, WFBNA, and other Material Entities.

Business Groups

Organizational units that are client-facing and generate revenue.

Calculation Event

Means any of the following events: (1) the onset of the Stress Enterprise Financial Assessment

Level; or (2) any other event that senior management or the Board of Directors of the Parent

determines constitutes material financial distress warranting a Calculation Period.

Calculation Period

The period beginning with a Calculation Event and ending with the earlier of (1) a Cessation Event

(i.e., a sustained return to the Vigilance or Target Enterprise Financial Assessment Levels (EFALs)

after an escalation to the Stress EFAL) or (2) a Final Contribution Event (i.e., breach of the

Resolution trigger or the Parent’s bankruptcy filing being authorized by the Board).

Capital Plan

A plan prepared by the Company that establishes the amount and composition of capital to be

maintained over a certain planning horizon.

CCAR

Comprehensive Capital Analysis and Review, a set of requirements introduced by the Federal

Reserve that allows for regulatory oversight of bank holding companies’ capital adequacy, capital

distribution, and capital planning process under various base and stress economic scenarios.

Term Definition

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CCP

Capital Contingency Plan, describes how the Company and WFBNA would identify and monitor a

capital event, and the range of potential actions that senior management, the Board, and the

WFBNA Board would consider taking, if necessary.

CEO chief executive officer

CFO chief financial officer

CFP

Contingency Funding Plan, describes the liquidity stress event management process by specifying

roles and responsibilities and specific actions to be taken should a liquidity stress event occur,

including Corporate Treasury’s responsibilities to escalate and communicate trigger breaches,

recommend mitigating actions, and monitor and report on the status of liquidity-related actions.

Chapter 11 Case Proceedings under chapter 11 of the Bankruptcy Code that would be initiated by Parent.

Committed Line of Credit

Committed line of credit between the Parent, as borrower, and WFCH, as lender, established by the

Secured Support Agreement, through which the Parent can access funding from WFCH, subject to

certain conditions, until the date of a Final Contribution Event.

Company

Wells Fargo & Company together with its consolidated subsidiaries, also referred to as “Wells

Fargo,” “we,” “us,” or “our.”

component

An asset or resource used to deliver a service and includes five categories(1) personnel, (2)

facilities, (3) systems, (4) third parties and financial market utilities, and (5) intellectual property.

Core Business Line

Business lines of the covered company (Wells Fargo & Company), including associated operations,

services, functions, and support that in the view of the covered company, upon failure would result

in a material loss of revenue, profit, or franchise value.

Core Group

Recovery & Resolution Planning Core Group; a cross-functional working group responsible for

recovery and resolution planning at the Company, composed of senior leaders representing Focus

Areas, lines of business, and Enterprise Functions.

Corporate ALCO

Corporate Asset/Liability Committee; a governance committee that provides oversight of the

Company’s balance sheet, interest rate exposure, liquidity, and capital. Corporate ALCO sets

strategies that enable the Company to achieve its short- and long-term financial objectives (e.g.,

growth, returns, and profitability) while maintaining strong liquidity and capital levels.

Covered Material Entities

An entity entitled to receive financial support under the Secured Support Agreement, which

currently include: WFBNA, WFNBW, WFBI, WFCS, WFS LLC, Peony, WFF, WFGTPS, WFIS, WFISP,

and WFP.

Critical Operation

An operation, including associated operations, services, functions, and support that, if it were to fail

or be discontinued, could pose a threat to the financial stability of the United States.

Critical Services

Services that support Critical Operations or Core Business Lines and must remain operational during

the resolution process to facilitate the orderly execution of the Preferred Resolution Strategy.

Critical Services Framework

The Critical Services Framework identifies what services are performed across the Company, how

they are performed, and who provides and receives the services.

D&T Derivatives & Trading

Dodd-Frank Act Dodd-Frank Wall Street Reform and Consumer Protection Act (of 2010)

EFAL Enterprise Financial Assessment Level

Emergency Transfer Motion

An emergency motion to transfer the stock of substantially all of the Parent’s direct subsidiaries to

New HoldCo, including any Material Entities that are Parent’s direct subsidiaries, in support of the

SPOE approach to the Preferred Resolution Strategy, to be filed immediately after commencement

of the Parent’s Chapter 11 Case.

Enterprise Functions

Organizational units that support and oversee the Company and its Business Groups.

Term Definition

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Enterprise Services Governance Office

Oversees the Company’s Critical Services Framework to help provide the efficient, effective, and

sustainable delivery of services across the Company by maintaining the Companywideinventory of

services and the components required for service delivery, facilitating the identification ofCritical

Services, identifying theinterconnectedness of servicesacross legal entities, mitigating

identifiedservice continuity risks, and documenting allintercompany service relationshipsacross

the Company.

ERIA

Enterprise Risk Identification and Assessment, a program that sets expectations for risk

identification and assessment across all financial and non-financial risk types and establishes

principles and practices for independent risk assessment.

external TLAC

external total loss-absorbing capacity: the minimum amount of total loss-absorbing capital, as well

as a minimum amount of long-term debt, so the Company has adequate capacity to recapitalize its

Material Entities once the Parent files for bankruptcy.

FDIC Federal Deposit Insurance Corporation

Federal Reserve Board of Governors of the Federal Reserve System

Final Contribution Event

The Final Contribution Event is an event triggering the final contribution of assets by the Parent to

WFCH, and WFCH's obligation to provide capital and liquidity support under the Secured Support

Agreement to the Covered Material Entities to allow for their continued operation throughout the

Chapter 11 Case.

Final Parent Contribution The Parent's contribution of Retained BAU Assets upon occurrence of a Final Contribution Event.

Finance Committee Finance Committee of the Parent Board

FMU

financial market utility; multilateral systems that provide the infrastructure for transferring,

clearing, and settling payments, securities, and other financial transactions among financial

institutions or between financial institutions and the system.

FMU materiality assessment

An annual review of each FMU using the certain materiality criteria that separates material FMUs

from non-material FMUs.

Focus Areas

Teams of subject matter experts that produce critical information or perform functions that are

necessary to support the Company's financial resiliency, strategic business profile, and resolvability,

which includes assisting with preparing or executing the Recovery or Resolution Plans.

Front Line

First line of defense, which is composed of Business Groups and certain activities of the Enterprise

Functions.

G-SIB global systemically important bank holding company

Governance Playbooks

Guides for the Material Entity boards and senior leaders to detect, monitor, and respond to stress

events and to take actions to prepare and, if necessary, to execute the Company’s Recovery and

Resolution Plans.

HQLA high-quality liquid asset

ICAAP Internal Capital Adequacy Assessment Process

IHC Intermediate Holding Company

ILST Internal Liquidity Stress Test

Initial Parent Contribution

Initial contribution of assets that were made by the Parent to WFCH under the Secured Support

Agreement in June 2017.

Internal Audit

The Company’s independent oversight function, which in accordance with the Institute of Internal

Auditors Standards for the Professional Practice of Internal Auditing, develops an annual audit plan

to determine whether the risk management, system of controls, and governance processes for

resolution planning are adequate and functioning as intended.

Term Definition

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IRM

Independent Risk Management; group that provides independent assessment, monitoring, and

oversight of the Company's recovery and resolution planning activities.

ISDA International Swaps and Derivatives Association

ISDA Protocols

ISDA Protocols means the Universal Resolution Stay Protocol published by ISDA in 2015, together

with the U.S. Resolution Stay Protocol published by ISDA in 2018 to facilitate compliance with the

U.S. QFC Stay Rules.

LCR liquidity coverage ratio

Legal Entity

Refers to any of the following in which the Company has an interest: a corporation, general or

limited partnership, limited liability company, bank, equity joint venture, association, nonprofit

organization, business trust or any other trust, or any similar organization formed under U.S. or non-

U.S. law, including any investment fund (or any segregated compartment or series of a fund)

sponsored or advised by the Company or any subsidiary of the Company.

LER

Legal Entity Rationalization; the process by which the Company justifies its legal entity structure in

light of resolvability requirements.

LER Criteria

Legal Entity Rationalization Criteria; a set of criteria used so the Company’s legal entity

organizational structure that (1) promotes the alignment of legal entities and business lines and (2)

facilities the execution of the Company’s Preferred Resolution Strategy.

LLC Limited Liability Company

Material Entity

Under the 165(d) Rule, a material entity is a subsidiary or foreign office of the covered company

that is significant to the activities of an identified critical operation or core business line, or is

financially or operationally significant to the resolution of the covered company.

Material Entity Board

The Board of Directors (or Managers) for each Material Entity.

MIS management information systems

MOL minimum operating liquidity

New HoldCo

A new holding company owned by the Trust that would be created, and after the Parent's

bankruptcy case has been filed and the Transfer Assets transferred, under which each Material

Entity other than the Parent would continue to operate as a going concern.

NSFR net stable funding ratio

Operating Committee

Operating Committee refers to the CEO, his direct reports, and select additional leaders as

determined by the CEO, including the chief risk officer and the chief auditor who report

administratively to the CEO and functionally and respectively to the Risk Committee and Audit

Committee of the Board of Directors.

Operating Material Entities WFBNA, WFBNA-LB, WFNBW, WFBI, WFCS, WFS LLC, Peony, and WFF.

Parent

Wells Fargo & Company, the bank holding company and the “covered company” under the 165(d)

Rule.

PCS Payment, Clearing, & Settlement Activities

Peony Peony Asset Management, Inc.

PNV

point of non-viability; the earliest business day on which Available Financial Resources are less than

Aggregate Resource Need.

Preferred RemainCo

The resulting company after the Parent files for bankruptcy, which would be a nationally-focused

bank with full-service retail, wealth management, and commercial banking offerings, and some

limited corporate and investment banking capabilities

Term Definition

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Preferred Resolution Strategy

Refers to the entire set of assumptions, strategic choices, processes, and predetermined actions by

which Wells Fargo & Company would move through the resolution process, using a single point of

entry approach, in the event financial stress leads to its failure.

QFC

qualified financial contract; a financial agreement used for derivatives, securities lending, and short-

term funding transactions such as repurchase agreements. These contracts can be amended to

prevent immediate cancellation if the Company enters bankruptcy or resolution.

QFC Stay Rules

Regulations promulgated by the Federal Reserve, FDIC, and the Office of the Comptroller of the

Currency imposing certain restrictions on the terms of QFCs of U.S. G-SIBs and the U.S. operations

of foreign G-SIBs, which are codified at 12 CFR part 47, 252.81-.88, and part 382.

RCAP

resolution capital adequacy and positioning; the concept for detailing the requirements for the

amounts and positioning of capital required to support the Company's Preferred Resolution

Strategy.

RCEN

resolution capital execution need; the amount of capital needed at the time of failure to support

each Material Entity after the Parent's bankruptcy filing, which includes ensuring the Material

Entities can operate or be wound down as provided for under the Preferred Resolution Strategy.

Recovery and Resolution Planning Policy

The policy adopted by the Company and administered by the Recovery & Resolution Program Office

that provides the framework to help the Company satisfy its resolution planning obligations.

Recovery Plan

A plan that identifies triggers and options for responding to a wide range of severe internal and

external stress scenarios to restore a covered company or bank to financial strength and viability in

a timely manner.

Related Support Entities

The term Related Support Entities shall have the meaning given to such term in the Secured

Support Agreement. Related Support Entities include entities in the ownership chain between

WFCH and the Covered Material Entities, which have an obligation under the Secured Support

Agreement to facilitate support provided by WFCH to Covered Material Entities, consistent with

WFCH's instructions.

Resolution

Represents the EFAL whereby failure is imminent, the Company begins executing the Resolution

Plan, and initiates the Parent’s Chapter 11 bankruptcy case.

resolution period

The time that begins immediately after the Parent's bankruptcy filing and extends through the

completion of the Preferred Resolution Strategy.

ring-fencing

Separate actions taken with respect to a non-U.S. branch or subsidiary that would be initiated by a

non-U.S. resolution authority.

Risk Committee

A committee of the Board of Directors that assists the Board in fulfilling its responsibilities to

oversee the Company's Risk Management Framework and Independent Risk Management function.

RLAP

resolution liquidity adequacy and positioning; a calculation of the liquidity position of Material

Entities, individually and in the aggregate, designed to ensure that liquidity is adequately and

appropriately positioned to meet liquidity needs in stress.

RLEN

resolution liquidity execution need; a measure of the estimated liquidity need of each Material

Entity post-failure to successfully execute the Company's Preferred Resolution Strategy.

Term Definition

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RRC

Recovery & Resolution Committee; Oversees the management of the Company's Resolution Plan

and associated resolvability risks. As a governance committee, it has the authority to direct certain

business activities related to recovery and resolution planning on behalf of the executive

management or the Board. Key responsibilities of the RRC include oversight of the Company's

Recovery and Resolution Planning Policy; approving changes to Core Business Lines, Critical

Operations, and Material Entities; approving changes to the Resolution Plan; and approving key

assumptions supporting the Resolution Plan. The RRC is sponsored by and operates under the chief

financial officer and the Finance Committee.

RRPO

Recovery & Resolution Program Office; part of Finance, the RRPO leads recovery and resolution

planning. The RRPO develops and maintains Wells Fargo’s Plan strategies, evaluates if the Company

maintains the necessary capabilities to execute its strategies, prepares required Plan

documentation, and verifies the Company operates within a well-defined governance framework.

The RRPO relies upon an extensive network of senior leaders across the Company who are

responsible for executing recovery and resolution planning requirements. These requirements

impact a wide range of Company activities, including finance, legal, treasury, operations, risk

management, and strategic planning.

Runway

Represents the Enterprise Financial Assessment Level whereby the Company’s failure is possible

and it prepares to execute the Resolution Plan.

RWA

risk-weighted assets; a measurement of a bank’s on- and off-balance sheet exposures, including

credit risk, market risk, and operational risk according to U.S. Basel III rules; measured under both

the Standardized and Advanced approaches.

SEC U.S. Securities and Exchange Commission

Section 165(d) Section 165(d) of the Dodd-Frank Act.

Secured Support Agreement

Secured Support Agreement means the Wells Fargo Support Agreement dated as of June 28, 2017,

as amended or otherwise modified from time to time, including by the Wells Fargo Amended and

Restated Support Agreement dated as of June 26, 2019.

Security Agreement

The Security Agreement dated as of June 28, 2017, as amended or otherwise modified from time to

time, including by that certain Amended and Restated Security Agreement dated as of June 26,

2019, among the Parent WFCH and the Related Support Entities, as grantors, WFCH and the

Covered Material Entities, as secured parties, and WFBNA, as the collateral agent.

Service

A means of delivering value to customers (internal or external) by facilitating outcomes customers

want to achieve without the ownership of specific costs and risks. Customers expect to pay a fee for

services (in line with the value of the outcome) while the provider considers the specific costs and

risks, along with a profit, if applicable.

Service Catalog

The Service Catalog is a comprehensive set of services-related inventories, including the Service

Taxonomy, Service Components, and Legal Entity relationships.

Service Material Entities

The legal entities that are designated as Material Entities for resolution planning purposes because

of their role in the provision of Critical Services, including WFGTPS, WFIS, WFISP, and WFP.

service provider

The second (or middle) of three roles in the service component provider – service provider – service

receiver construct. A service provider is a legal entity that provides a service and is responsible for

the management and decision-making governing the service. The service provider receives service

components from service component providers and uses them to deliver a service (holistically) to

service receivers.

Term Definition

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service receiver

The last of three roles in the service component provider – service provider – service receiver

construct. A service receiver is a legal entity that receives a service from a service provider. The

service receiver does not have a direct relationship with any service component provider as they

receive the service (holistically) from the service provider and not any one specific service

component from a service component provider.

SPOE

single point of entry; meaning the commencement of Chapter 11 proceedings in respect of the

Parent (and possibly certain immaterial subsidiaries) only, while all other Material Entities remain

outside of bankruptcy or resolution proceedings and continue to operate as going concerns.

Standardized Approach

Method of calculating risk-weighted assets using regulatory-prescribed "standard" risk

weights. The Standardized Approach serves as a "floor" to the Advanced Approach.

Statement of Risk Appetite

The Statement of Risk Appetite describes the nature and level of risks that the Company is willing

to take as the Company pursues its strategic and business objectives. The Statement of Risk

Appetite is updated annually and approved by the Board.

Strategic Plan

A plan that outlines the Company's long-term goals and overall strategy and serves as a high-level

basis for future business decisions.

Stress

Represents the Enterprise Financial Assessment Level whereby the Company is experiencing

increased stress and its financial condition has deteriorated such that access to capital and debt

markets has been impaired, including substantially increased funding costs, and recovery triggers

may be breached.

Target

Represents the Enterprise Financial Assessment Level whereby the Company is financially strong

and operating under target operating conditions.

Technology Wells Fargo Technology organization.

TLAC

total loss-absorbing capacity; long-term debt, and Clean Holding Company Requirements for

Systemically Important U.S. Bank Holding Companies and Intermediate Holding Companies of

Systemically Important Foreign Banking Organizations, 82 Fed. Reg. 8266 (January 24, 2017)

(codified at 12 C.F.R. Part 252).

trigger

An indicator of financial stress or potential financial stress, which, if breached, will result in

escalation and possibly consideration of contingency plan or recovery options to restore the

Company's financial strength.

trigger framework The Company’s trigger framework includes monitoring of capital, liquidity, and other key metrics.

Trust

The private trust that would hold 100% of the equity of New HoldCo and oversee New HoldCo and

its subsidiaries for the sole benefit of the Parent’s Chapter 11 estate.

Vigilance

Represents the Enterprise Financial Assessment Level whereby signs of remediable stress and

deterioration of financial condition begin to occur, the Company’s risk appetite or other boundaries

are exceeded as part of the normal course of business, and Corporate ALCO may take actions

outlined in the CCP, CFP, or the Recovery Plan.

Wells Fargo & Company

Wells Fargo & Company including its subsidiaries is referred to as the "Company" and, as a stand-

alone entity, referred to as the "Parent."

WFBI Wells Fargo Bank International Unlimited Company

WFBNA Wells Fargo Bank, National Association; it is also referred to as "the Bank"

WFBNA-LB Wells Fargo Bank, N.A. - London Branch

WFCH WFC Holdings, LLC

WFCS Wells Fargo Clearing Services, LLC

WFF Wells Fargo Funding, LLC

Term Definition

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WFGTPS Wells Fargo Global Third Party Services LLC

WFIS Wells Fargo International Solutions LLC

WFISP Wells Fargo International Solutions Private Limited

WFNBW Wells Fargo National Bank West

WFP Wells Fargo Properties, Inc.

WFS LLC Wells Fargo Securities, LLC

WIM Wealth & Investment Management

Wind-Down Tool

Refers to the D&T technology application that is used for calculating the wind-down period for the

Company's derivatives portfolio. The D&T Wind-Down Tool is governed under the Company's model

risk policies.

Term Definition

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