WELLS FARGO COMPANYMN
For the period ended Mar 31, 2025. Filed Apr 29, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed Apr 29, 2025
WFC$83.94-1.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0000072971-24-000243
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Financial Review)Current report: 10-Q
Period ended 2025-03-31; filed 2025-04-29.
0000072971-25-000129
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Financial Review)The baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 608 previous paragraphs and 517 current paragraphs.
283 unchanged; 156 reworded; 56 added; 137 removed; 32 previous and 22 current paragraphs rearranged.
Tables are not compared: 109 previous and 103 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (56)
Current report
•average loans decreased due to declines in our commercial real estate and residential mortgage portfolios; and
Current report
•average deposits decreased driven by a decline in our interest-bearing deposits, partially offset by an increase in our noninterest-bearing deposits.
Current report
We maintained a strong capital and liquidity position in first quarter 2025, which included the following:
Current report
•Our provision for credit losses for loans was $925 million in first quarter 2025, compared with $926 million in the same period a year ago, reflecting a decrease in net loan charge-offs, which was partially offset by the change in allowance for credit losses for loans driven by a lower allowance for commercial real estate loans on lower loan balances, partially offset by a higher allowance for commercial and industrial loans.
Current report
•Nonperforming assets (NPAs) of $8.2 billion at March 31, 2025, increased $289 million, or 4%, from December 31, 2024, driven by an increase in commercial and industrial nonaccrual loans. NPAs represented 0.90% of total loans at March 31, 2025.
Current report
Net interest income and net interest margin decreased in first quarter 2025, compared with the same period a year ago, driven by the impact of lower interest rates on floating rate assets, deposit mix and pricing changes, lower loan balances, and one fewer day in the quarter, partially offset by lower market funding costs.
Current report
Investment banking fees increaseddue tohigher debt underwriting fees.
Current report
Net gains (losses) from equity securities decreased driven byhigher unrealized losses from our venture capital investments.
Current report
Lease income decreased driven by a gain associated with the resolution of a legacy lease transaction in first quarter 2024.
Current report
Other income increased driven by a $263 million gain on the sale ofthe non-agency portion ofour commercial mortgage third-party servicing business. For additional information, see the “Earnings Performance – Operating Segment Results – Corporate and Investment Banking” section in this Report.
Current report
Other expense decreased reflecting lower expense for the FDIC special assessment.
Current report
The decrease in the effective income tax rate for first quarter 2025, compared with the same period a year ago, was driven by the impact of increased discrete tax benefits related to the resolution of prior period tax matters, as well as the impact of annual vesting of stock-based compensation.
Current report
venture, Wells Fargo Merchant Services. As a result of the acquisition, we expect increased expense related to the amortization of an intangible asset associated with the acquired merchant contracts.
Current report
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Current report
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Current report
Noninterest expense decreased driven by:
Current report
•lower operating losses; and
Current report
•higher branch personnel and occupancy expense reflecting investments in our branch network.
Current report
•a decline in loan balances in our Home Lending business reflecting our more focused strategy for Home Lending, including paydowns of legacy residential mortgage loans; and
Current report
Revenue decreased driven by:
Current report
Provision for credit losses increased reflecting macroeconomic uncertainty.
Current report
Revenue increased driven by:
Current report
•a $263 million gain on the sale ofthe non-agency portion ofour commercial mortgage third-party servicing business, which was included in the Commercial Real Estate line of business. The sale closed in March 2025 and included the related servicer advances and MSRs; and
Current report
•lower net interest income driven by lower interest rates and lower loan balances, partially offset by lower deposit pricing.
Current report
Provision for credit losses reflected a lower allowance for commercial real estate loans on lower loan balances, partially offset by a higher allowance for commercial and industrial loans on higher loan balances.
Current report
Noninterest expense increased driven by higher operating costs and incentive compensation expense, partially offset by the impact of efficiency initiatives.
Current report
Total loans (average)decreased driven by commercial real estate loan payoffs exceeding originations and draws on existing loan accounts.
Current report
Total loans (period-end)increased driven by commercial and industrial loan originations and draws on existing loan accounts exceeding loan payoffs.
Current report
Revenue increased driven by:
Current report
•lower net interest income driven by higher deposit costs, partially offset by higher deposit and loan balances.
Current report
Total deposits (average and period-end) increased driven by higher brokerage deposit balances.
Current report
well as results for previously divested businesses. For additional information on our rail car leasing business included in Corporate, see the “Earnings Performance – Operating Segment Results – Corporate” section in our 2024 Form 10-K.
Current report
Revenue decreased driven by:
Current report
Noninterest expense decreased reflecting:
Current report
Table 14: Top 20 Country Exposures (1)
Current report
(1)Top 20 country exposures reflected 90% of our total non-U.S. exposure at both periods.
Current report
(2)Predominantly deposited with central banks.
Current report
(3)Top 20 country exposures to central banks and financial institutions was $65.0 billion.
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(4)The 2024 exposures correspond to the ranking of the top 20 country exposures at March 31, 2025, and do not necessarily reflect our top 20 country exposures at December 31, 2024.
Current report
Table 15: Residential Mortgage Loans
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Removed paragraphs (137)
Previous report
Consent Orders with the Consumer Financial Protection Bureau and Office of the Comptroller of the Currency Regarding Compliance Risk Management Program, Automobile Collateral Protection Insurance Policies, and Mortgage Interest Rate Lock Extensions
Previous report
On April 20, 2018, the Company entered into consent orders with the Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) to pay an aggregate of $1 billion in civil money penalties to resolve matters regarding the Company’s compliance risk management program and past practices involving certain automobile collateral protection insurance policies and certain mortgage interest rate lock extensions. As required by the consent orders, the Company submitted to the CFPB and OCC an enterprise-wide compliance risk management plan and a plan to enhance the Company’s internal audit program with respect to federal consumer financial law and the terms of the consent orders. In addition, as required by the consent orders, the Company submitted for non-objection plans to remediate customers affected by the automobile collateral protection insurance and mortgage interest rate lock matters, as well as a plan for the management of remediation activities conducted by the Company. The Company continues to work to address the provisions of the consent orders. On September 9, 2021, the OCC assessed a $250 million civil money penalty against the Company related to insufficient progress in addressing requirements under the OCC’s April 2018 consent order and loss mitigation activities in the Company’s Home Lending business. On December 20, 2022, the CFPB modified its consent order to clarify how it would terminate.
Previous report
Consent Order with the OCC Regarding Loss Mitigation Activities
Previous report
On September 9, 2021, the Company entered into a consent order with the OCC requiring the Company to improve the execution, risk management, and oversight of loss mitigation activities in its Home Lending business. In addition, the consent order restricts the Company from acquiring certain third-party residential mortgage servicing and limits transfers of certain mortgage loans requiring customer remediation out of the Company’s mortgage servicing portfolio until remediation is provided.
Previous report
Consent Order with the CFPB Regarding Automobile Lending, Consumer Deposit Accounts, and Mortgage Lending
Previous report
On December 20, 2022, the Company entered into a consent order with the CFPB requiring the Company to provide customer remediation for multiple matters related to automobile lending, consumer deposit accounts, and mortgage lending; maintain practices designed to ensure auto lending customers receive refunds for the unused portion of certain guaranteed automobile protection agreements; comply with certain business practice requirements related to consumer deposit accounts; and pay a $1.7 billion civil penalty to the CFPB. The required actions related to many of these matters were already substantially complete at the time we entered into the consent order, and the consent order lays out a path to termination after the Company completes the remainder of the required actions.
Previous report
On September 12, 2024, the Company announced that Wells Fargo Bank, N.A. entered into a formal agreement with the OCC related to the bank’s anti-money laundering (AML) and sanctions risk management practices. The agreement’s requirements include enhancements to AML and sanctions risk management practices, obtaining the OCC’s acceptance of the bank’s program for assessing the AML and sanctions risks of new offerings, and then providing notice to the OCC before expanding certain of those offerings.
Previous report
Customer Remediation Activities
Previous report
Our work to build a better company has included an effort to identify areas or instances where customers may have experienced financial harm, provide remediation as appropriate, and implement additional operational and control procedures. We are working with our regulatory agencies in this effort.
Previous report
We have accrued for the probable and estimable costs related to our customer remediation activities, which amounts may change based on additional facts and information, as well as ongoing reviews and communications with our regulators. We had $241 million and $819 million of accrued liabilities for customer remediation activities as of September 30, 2024, and December 31, 2023, respectively. As our ongoing reviews continue and as we continue to strengthen our risk and control infrastructure, we have identified and may in the future identify additional items or areas of potential concern. To the extent issues are identified, we will continue to assess any customer harm and provide remediation as appropriate.
Previous report
Recent Developments
Previous report
In November 2023, the Federal Deposit Insurance Corporation (FDIC) finalized a rule to recover losses to the FDIC deposit insurance fund as a result of bank failures in the first half of 2023. Under the rule, the FDIC will collect a special assessment based on an insured depository institution’s estimated amount of uninsured deposits. Upon the FDIC’s finalization of the rule, we expensed an estimated amount of our special assessment of $1.9 billion (pre-tax) in fourth quarter 2023. During 2024, the FDIC provided updates on losses to the deposit insurance fund, which resulted in a reversal of expense of $63 million (pre-tax) in third quarter 2024 and an additional expense of $273 million (pre-tax) in the first nine months of 2024 for the estimated amount of the special assessment. We expect the ultimate amount of the special assessment may continue to change as the FDIC determines the actual net losses to the deposit insurance fund.
Previous report
Overdraft Fees Proposal
Previous report
On January 17, 2024, the CFPB issued a proposed rule that would limit overdraft fees charged by certain banks. We expect a significant reduction to our overdraft fees, which are included in deposit-related fees, if the rule is adopted as currently proposed.
Previous report
Debit Card Interchange Fees Proposal
Previous report
On October 25, 2023, the FRB issued a proposed rule that would reduce the amount of debit card interchange fees received by debit card issuers. In addition, the proposed rule would allow for an update to the debit card interchange fee cap every other year based on an analysis of certain costs incurred by debit card issuers. We expect a significant reduction to our debit card interchange fees, which are included in card fees, if the rule is adopted as currently proposed.
Previous report
•provision for credit losses reflected decreases for auto loans, commercial real estate loans, and residential mortgage loans, partially offset by increases for credit card loans;
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•average loans decreased driven by a decline in loans in both our commercial and consumer loan portfolios; and
Previous report
•average deposits increased driven by growth in Corporate and Investment Banking and Commercial Banking, partially offset by reductions in Consumer Banking and Lending and Corporate.
Previous report
In the first nine months of 2024, we generated $14.6 billion of net income and diluted EPS of $3.94, compared with $15.7 billion of net income and diluted EPS of $3.96 in the same period a year ago. Financial performance for the first nine months of 2024, compared with the same period a year ago, included the following:
Previous report
•provision for credit losses reflected decreases for auto loans, commercial real estate loans, and residential mortgage loans, partially offset by increases for credit card loans;
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•noninterest expense increased due to higher operating losses, and technology, telecommunications and equipment expense, partially offset by lower professional and outside services expense;
Previous report
•average loans decreased driven by a decline in loans in both our commercial and consumer loan portfolios; and
Previous report
•average deposits decreased driven by reductions in Consumer Banking and Lending and Wealth and Investment Management, partially offset by growth in Corporate and Investment Banking and Corporate.
Previous report
We maintained a strong capital position in the first nine months of 2024, with total equity of $185.0 billion at September 30, 2024, compared with $187.4 billion at December 31, 2023. In addition, capital and liquidity at September 30, 2024, included the following:
Previous report
•Our provision for credit losses for loans was $3.2 billion in the first nine months of 2024, compared with $4.1 billion in the same period a year ago. The ACL for loans and the provision for credit losses for loans reflected decreases for auto loans, commercial real estate loans, and residential mortgage loans, partially offset by increases for credit card loans.
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Overview(continued)
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•Nonperforming assets (NPAs) of $8.4 billion at September 30, 2024, decreased $59 million, or 1%, from
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December 31, 2023, driven by a decrease in residential mortgage nonaccrual loans, partially offset by an increase in commercial and industrial nonaccrual loans. NPAs represented 0.92% of total loans at September 30, 2024.
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•Criticized loans in the commercial portfolio were $37.6 billion at September 30, 2024, compared with $33.0 billion at December 31, 2023, primarily driven by increases in criticized commercial and industrial loans.
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Net income for the first nine months of 2024 was $14.6 billion ($3.94 diluted EPS), compared with $15.7 billion ($3.96 diluted EPS) in the same period a year ago. Net income decreased in the first nine months of 2024, compared with the same period a year ago, predominantly due to a $3.8 billion decrease in net interest income and a $922 million increase in noninterest expense, partially offset by a $3.6 billion increase in noninterest income.
Previous report
Net interest income and net interest margin decreased in both the third quarter and first nine months of 2024, compared with the same periods a year ago, driven by the impact of higher interest rates on interest-bearing liabilities, including a deposit mix shift to interest-bearing deposits, as well as lower loan balances, partially offset by higher interest rates on interest-earning assets.
Previous report
Deposit-related fees increased reflecting higher treasury management fees on commercial accounts driven by increased transaction service volumes and repricing.
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Commissions and brokerage services fees increased driven by higher brokerage transaction activity.
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Investment banking fees increased due to higher debt underwriting fees driven by increased activity, partially offset by lower advisory fee income.
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Netgains from trading activities increased reflecting higher trading activity across most fixed income asset classes, partially offset by lower revenue in equities.
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Net gains (losses) from debt securities decreased reflecting losses related to a repositioning of our investment securities portfolio.
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Net gains (losses) from equity securities increased driven byhigher realized gains on equity securities from our venture capital investments.
Previous report
Other income increased driven by impacts related to the expanded use of the proportional amortization method of accounting for renewable energy tax credit investments as a result of our adoptionin first quarter 2024 of Accounting Standards Update (ASU) 2023-02 – Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. For additional information on our adoption of ASU 2023-02, see Note 1 (Summary of Significant Accounting Policies) to Financial Statements in this Report.
Previous report
Deposit-related fees increased reflecting higher treasury management fees on commercial accounts driven by increased transaction service volumes and repricing.
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Reworded paragraphs (156)
Previous wording
(4)Tangible common equity is a non-GAAP financial measure and represents total equity less preferred equity, noncontrolling interests, goodwill, certain identifiable intangible assets (other than mortgage servicing rights) and goodwill and other intangibles on investments in consolidated portfolio companies, net of applicable deferred taxes. The methodology of determining tangible common equity may differ among companies. Management believes that return on average tangible common equity and tangible book value per common share, which utilize tangible common equity, are useful financial measures because they enable management, investors, and others to assess the Company’s use of equity. For additional information, including a corresponding reconciliation to generally accepted accounting principles (GAAP) financial measures, see the “Capital Management – Tangible Common Equity” section in this Report.
Current wording
(4)Tangible common equity, tangible book value per common share, and return on average tangible common equity are non-GAAP financial measures. For additional information, including a corresponding reconciliation to generally accepted accounting principles (GAAP) financial measures, see the “Capital Management – Tangible Common Equity” section in this Report.
Previous wording
Wells Fargo & Company is a leading financial services company that has approximately $1.9 trillion in assets. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. Wells Fargo ranked No. 34 on Fortune’s 2024 rankings of America’s largest corporations. We ranked fourth in assets and third in the market value of our common stock among all U.S. banks at September 30, 2024.
Current wording
Wells Fargo & Company is a leading financial services company that has approximately $1.95 trillion in assets. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth and Investment Management. Wells Fargo ranked No. 34 on Fortune’s 2024 rankings of America’s largest corporations. We ranked fourth in assets and third in the market value of our common stock among all U.S. banks at March 31, 2025.
Previous wording
Wells Fargo’s top priority remains building a risk and control infrastructure appropriate for its size and complexity. The Company is subject to a number of consent orders and other regulatory actions, some of which are described below. These regulatory actions may require the Company, among other things, to undertake certain changes to its business, operations, products and services, and risk management practices. Addressing these regulatory actions is expected to take multiple years, and we are likely to continue to experience issues or delays along the way in satisfying their requirements. We are also likely to continue to identify more issues as we implement our risk and control infrastructure, which may result in additional regulatory actions. Regulators have indicated the potential for escalating consequences for banks that do not timely resolve open issues or have repeat issues. Furthermore, issues or delays with one regulatory action could affect our progress on others. Failure to satisfy the requirements of a regulatory action on a timely basis could result in additional fines, penalties, business restrictions, limitations on subsidiary capital distributions, increased capital or liquidity requirements, enforcement actions, and other adverse consequences, which could be significant. While we still have significant work to do and have not yet satisfied certain aspects of these regulatory actions, the Company is committed to devoting the resources necessary to operate with strong business practices and controls, maintain the highest level of integrity, and have an appropriate culture in place.
Current wording
Wells Fargo’s top priority remains building a risk and control infrastructure appropriate for its size and complexity. The Company is subject to a number of consent orders and other regulatory actions, which may require the Company, among
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In third quarter 2024, we generated $5.1 billion of net income and diluted earnings per common share (EPS) of $1.42, compared with $5.8 billion of net income and diluted EPS of $1.48 in the same period a year ago. Financial performance for third quarter 2024, compared with the same period a year ago, included the following:
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In first quarter 2025, we generated $4.9 billion of net income and diluted earnings per share (EPS) of $1.39, compared with $4.6 billion of net income and diluted EPS of $1.20 in the same period a year ago. Financial performance for first quarter 2025, compared with first quarter 2024, included the following:
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•noninterest expense decreased slightly due to lower professional and outside services expense, largely offset by higher technology, telecommunications and equipment expense;
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•noninterest expense decreased due to lower operating losses, lower professional and outside services expense, and lower other expense driven by a lower Federal Deposit Insurance Corporation (FDIC) special assessment, partially offset by higher technology, telecommunications and equipment expense;
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•our Common Equity Tier 1 (CET1) ratio was 11.34% under the Standardized Approach (our binding ratio), which continued to exceed the regulatory minimum and buffers of 8.90%. As of October 1, 2024, our stress capital buffer increased to 3.80%, resulting in a CET1 regulatory minimum and buffers of 9.80%;
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•our Common Equity Tier 1 (CET1) ratio was 11.09% under the Standardized Approach (our binding ratio), which
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•our total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was 25.29%, compared with the regulatory minimum of 21.50%; and
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•our total loss absorbing capacity (TLAC) as a percentage of total risk-weighted assets was 25.11%, compared with the regulatory minimum of 21.50%; and
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•our liquidity coverage ratio (LCR) was 127%, which continued to exceed the regulatory minimum of 100%.
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•our liquidity coverage ratio (LCR) was 125%, which continued to exceed the regulatory minimum of 100%.
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•The allowance for credit losses (ACL) for loans of $14.7 billion at September 30, 2024, decreased $349 million from December 31, 2023.
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•The allowance for credit losses (ACL) for loans of $14.6 billion at March 31, 2025, decreased $84 million from December 31, 2024.
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•The allowance coverage for total loans was 1.62% at September 30, 2024, compared with 1.61% at December 31, 2023.
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•The allowance coverage for total loans was 1.59% at March 31, 2025, compared with 1.60% at December 31, 2024.
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•Commercial portfolio net loan charge-offs were $323 million, or 24 basis points of average commercial loans, in third quarter 2024, compared with net loan charge-offs of $188 million, or 13 basis points, in the same period a year ago, primarily due to higher losses in our commercial real estate portfolio driven by the office property type.
Current wording
•Commercial portfolio net loan charge-offs were $211 million, or 16 basis points of average commercial loans, in first quarter 2025, compared with net loan charge-offs of $341 million, or 25 basis points, in the same period a year ago, due to lower losses in our commercial real estate portfolio driven by the office property type and lower losses in our commercial and industrial portfolio.
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•Consumer portfolio net loan charge-offs were $788 million, or 83 basis points of average consumer loans, in third quarter 2024, compared with net loan charge-offs of $662 million, or 67 basis points, in the same period a year ago, due to higher losses in our credit card portfolio driven by higher loan balances, partially offset by lower losses in our auto portfolio.
Current wording
•Consumer portfolio net loan charge-offs were $798 million, or 86 basis points of average consumer loans, in first quarter 2025, compared with net loan charge-offs of $808 million, or 84 basis points, in the same period a year ago, due to lower losses in our auto and other consumer portfolios, partially offset by higher losses in our credit card portfolio.
Previous wording
Wells Fargo net income for third quarter 2024 was $5.1 billion ($1.42 diluted EPS), compared with $5.8 billion ($1.48 diluted EPS) in the same period a year ago. Net income decreased in third quarter 2024, compared with the same period a year ago, predominantly due to a $1.4 billion decrease in net interest income, partially offset by a $924 million increase in noninterest income.
Current wording
Wells Fargo net income for first quarter 2025 was $4.9 billion ($1.39 diluted EPS), compared with $4.6 billion ($1.20 diluted EPS) in the same period a year ago. Net income increased in first quarter 2025, compared with the same period a year ago, predominantly due to a $447 million decrease in noninterest expense and a $442 million decrease in income tax expense, partially offset by a $732 million decrease in net interest income.
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(1)The average balance amounts represent amortized costs, except for certain held-to-maturity (HTM) debt securities, which exclude unamortized basis adjustments related to the transfer of those securities from available-for-sale (AFS) debt securities. Amortized cost amounts exclude any unrealized gains or losses, which are included in other noninterest-earning assets and other noninterest-bearing liabilities. The average interest rates are based on interest income or expense amounts for the period and are annualized. Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
Current wording
(1)The average balance amounts represent amortized costs, except for certain held-to-maturity (HTM) debt securities, which exclude unamortized basis adjustments related to the transfer of those securities from available-for-sale (AFS) debt securities. Amortized cost amounts exclude any valuation allowances and unrealized gains or losses, which are included in other noninterest-earning assets and other noninterest-bearing liabilities. The average interest rates are based on interest income or expense amounts for the period and are annualized. Interest rates and amounts include the effects of hedge and risk management activities associated with the respective asset and liability categories.
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(3)Includes taxable-equivalent adjustments of $84 million and $104 million for the quarters ended September 30, 2024 and 2023, respectively, and $262 million and $316 million for the first nine months of 2024 and 2023, respectively, predominantly related to tax-exempt income on certain loans and securities.
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(3)Includes taxable-equivalent adjustments of $77 million and $89 million for the quarters ended March 31, 2025 and 2024, respectively, predominantly related to tax-exempt income on certain loans and securities.
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Net servicing income increased driven by higher income from net hedge results related to MSR valuations.
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Mortgage banking increased due to higher income from net hedge results related to mortgage servicing rights (MSR) valuations.
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Netgains from trading activities increased driven by higher revenue in structured products, foreign exchange, and equities.
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Netgains from trading activities decreased driven by lower revenue in structured products and credit trading, partially offset by higher revenue in commodities and foreign exchange.
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•higher net losses from debt securities related to a repositioning of our investment securities portfolio.
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Net losses from debt securities increased driven by higher net losses related to a repositioning of our investment portfolio.
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(2)Represents expenses for assets we lease to customers.
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(1)Represents expenses for assets we lease to customers.
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Personnel expense decreased slightly due tothe impact of efficiency initiatives and lower severance expense, largely offset by higher revenue-related compensation expense driven by higher fees in our Wealth and Investment Management business.
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Personnel expense decreased slightly due to the impact of efficiency initiatives, partially offset by higher revenue-related compensation expense and higher retirement-eligible employee stock compensation expense.
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Technology, telecommunications and equipment expense increaseddue to higher expense for the amortization of internally developed software.
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Technology, telecommunications and equipment expense increaseddue to higher expense for the amortization of internally developed software and higher expense for software maintenance and licenses.
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Operating losses increased driven byhigher expense for legal actions and higher expense for customer remediation activities related to the further refinement of the remediation costs for historical mortgage lending and other consumer products matters. For additional information on customer remediation activities, see the “Overview” section above.
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Operating losses decreased driven bylower expense for customer remediation activities, compared with higher expense in first quarter 2024 related to the further refinement of the remediation costs for historical mortgage lending and other consumer products matters.
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Professional and outside services expense decreased driven by efficiency initiatives to reduce our spending on consultants and contractors.
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Professional and outside services expense decreased driven by lower expense for consulting projects related to our risk and control work, as well as efficiency initiatives to reduce our spending on consultants and contractors.
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Revenue and Expense Sharing When lines of business jointly serve customers, the line of business that is responsible for providing the product or service recognizes revenue or expense with a referral fee paid or an allocation of cost to the other line of
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Revenue Sharing and Expense Allocations. When lines of business jointly serve customers, the line of business that is responsible for providing the product or service recognizes revenue or expense with a referral fee paid or an allocation of cost to the other line of business based on established internal revenue-sharing agreements.
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When a line of business uses a service provided by another line of business or enterprise function (included in Corporate), expense is generally allocated based on the cost and use of the service provided. We periodically assess and update our revenue and expense allocation methodologies.
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When a line of business uses a service provided by another line of business, expense is generally allocated based on the cost and use of the service provided. Enterprise functions, such as operations, technology, and risk management, are included in Corporate with an allocation of their applicable costs to the reportable operating segments based on the level of support provided by the enterprise function. We periodically assess and update our revenue sharing and expense allocation methodologies.
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Consumer Banking and Lending offers diversified financial products and services for consumers and small businesses with annual sales generally up to $10 million. These financial products and services include checking and savings accounts, credit and
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Consumer Banking and Lending offers diversified financial products and services for consumers and small businesses with annual sales generally up to $10 million. These financial products and services include checking and savings accounts, credit and debit cards, as well as home, auto, personal, and small business lending. In April 2025, we completed the acquisition of the remaining interest in our merchant processing services joint
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debit cards, as well as home, auto, personal, and small business lending. Table 6a and Table 6b provide additional information for Consumer Banking and Lending.
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Table 6a and Table 6b provide additional information for Consumer Banking and Lending.
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(7)Excludes residential mortgage loans insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA).
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(7)Excludes residential mortgage loans that are insured or guaranteed by U.S government agencies.
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Revenue decreased driven by lower net interest income due to lower deposit balances and lower loan balances.
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Revenue decreased driven by lower net interest income due to lower loan balances and higher deposit costs, partially offset by higher deposit balances.
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•an increase in loan balances in our Credit Card business due to higher point of sale volume driven by new account growth.
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•an increase in loan balances in our Credit Card business due to higher purchase volume and the impact of new product launches.
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Total deposits (average) decreased driven by customer migration to higher yielding alternatives.
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Total deposits (average and period-end) increased reflecting a reduction in customer migration to higher yielding alternatives.
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Commercial Banking provides financial solutions to private, family owned and certain public companies. Products and services include banking and credit products across multiple
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Commercial Banking provides financial solutions to private, family owned and certain public companies. Products and services include banking and credit products across multiple industry sectors and municipalities, secured lending and lease products, and treasury management.
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industry sectors and municipalities, secured lending and lease products, and treasury management. Table 6c and Table 6d provide additional information for Commercial Banking.
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Table 6c and Table 6d provide additional information for Commercial Banking.
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•lower net interest income reflecting the impact of higher interest rates on deposit costs;
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•lower net interest income reflecting the impact of lower interest rates, partially offset by lower deposit pricing and higher deposit balances;
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•higher deposit-related fees reflecting higher treasury management fees on commercial accounts driven by increased transaction service volumes and repricing; and
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•higher deposit-related fees reflecting higher treasury management fees on commercial accounts due to repricing and the impact of higher earnings credits, partially offset by lower transaction service volumes; and
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•higher other noninterest income related to renewable energy tax credit investments.
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•higher other noninterest income related to tax credit investments.
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Noninterest expense decreased due to lower personnel expense reflecting the impact of efficiency initiatives.
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Noninterest expense decreased slightly due to lower personnel expense reflecting the impact of efficiency initiatives, partially offset by higher operating costs.
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Corporate and Investment Banking delivers a suite of capital markets, banking, and financial products and services to corporate, commercial real estate, government and institutional clients globally. Products and services include corporate banking, investment banking, treasury management, commercial real estate lending and servicing, equity and fixed income solutions as well as sales, trading, and research capabilities. In August 2024,
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Corporate and Investment Banking delivers a suite of capital markets, banking, and financial products and services to corporate, commercial real estate, government and institutional clients globally. Products and services include corporate banking, investment banking, treasury management, commercial real
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we entered into a definitive agreement to sell the non-agency third-party servicing segment of our commercial mortgage servicing business, including the related mortgage servicing rights and servicer advances. We will continue to service agency and government-sponsored enterprise loans and loans held on our balance sheet. Table 6e and Table 6f provide additional information for Corporate and Investment Banking.
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Table 6e and Table 6f provide additional information for Corporate and Investment Banking.
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•higher investment banking fees due to higher debt underwriting fees driven by increased activity, partially offset by lower advisory fee income.
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•higher investment banking fees due tohigher debt underwriting fees;
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other things, to undertake certain changes to its business, operations, products and services, and risk management practices. While we still have work to do and have not yet satisfied certain aspects of these regulatory actions, the Company is committed to devoting the resources necessary to operate with strong business practices and controls, maintain the highest level of integrity, and have an appropriate culture in place. In particular, pursuant to a 2018 consent order entered into with the Board of Governors of the Federal Reserve System (FRB), we are subject to an asset cap whereby the Company’s total consolidated assets as defined under the consent order have been limited to the level as of December 31, 2017. For additional information regarding regulatory actions and the risks related thereto, including additional information on the asset cap, see the “Regulation and Supervision” section in this Report and the “Risk Factors” section in our 2024 Form 10-K.
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continued to exceed the regulatory minimum and buffers of 9.80%;
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For additional information on the FDIC’s special assessment, see Note 18 (Revenue and Expenses) to Financial Statements in this Report.
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estate lending and servicing, equity and fixed income solutions as well as sales, trading, and research capabilities.
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Table 6g and Table 6h provide additional information for Wealth and Investment Management (WIM).
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WIM also manages personal trust and other assets for high net worth clients, with fee income earned based on a percentage of the market value of these assets.
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Table 6i and Table 6j provide additional information for Corporate.
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regulatory guidance at March 31, 2025, compared with $16.5 billion at December 31, 2024.
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mortgage loan portfolio, see the “Risk Management – Credit Risk Management – Residential Mortgage Loans” section in our 2024 Form 10-K.
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(1)Net loan charge-offs (recoveries) as a percentage of average loans are annualized.
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The process for establishing the ACL for loans takes into consideration many factors, including historical and forecasted loss trends, loan-level credit quality ratings and loan grade-specific characteristics. The process involves subjective and
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Credit Losses” section and Note 1 (Summary of Significant Accounting Policies) to Financial Statements in our 2024 Form 10-K.
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We are subject to interest rate risk because:
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Our scenario assumptions reflected the following:
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to HTM, which are subsequently amortized into earnings over the life of the security with no further impact from interest rate changes. See Note 1 (Summary of Significant Accounting Policies) and Note 3 (Available-for-Sale and Held-to-Maturity Debt Securities) to Financial Statements in this Report for additional information on our debt securities portfolio.
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conditions and our liquidity position, we may redeem or repurchase, and subsequently retire, our outstanding debt securities in privately negotiated or open market transactions,
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measurement of risk-weighted assets, including more granular risk weights for credit risk, a new market risk framework, and a new standardized approach for measuring operational risk. Officials from federal banking regulators have since commented that there may be significant changes to the proposed rule.
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(1)Determined by applying the combined federal statutory rate and composite state income tax rates to the difference between book and tax basis of the respective goodwill and intangible assets at period-end.
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(1)Determined by applying the combined federal statutory rate and composite state income tax rates to the difference between book and tax basis of the respective goodwill and intangible assets at period-end.
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Consent Orders and Other Regulatory Actions
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The Company is subject to a number of consent orders and other regulatory actions, which may require the Company, among other things, to undertake certain changes to its business, operations, products and services, and risk management practices, and include the following.
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December 31, 2017. Compliance with this asset cap is measured on a two-quarter daily average basis to allow for management of temporary fluctuations. After removal of the asset cap, a second third-party review must also be conducted to assess the efficacy and sustainability of the enhancements and improvements.
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Federal Reserve Board Consent Order Regarding Governance Oversight and Compliance and Operational Risk Management
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On February 2, 2018, the Company entered into a consent order with the Board of Governors of the Federal Reserve System (FRB). As required by the consent order, the Company’s Board of Directors (Board) submitted to the FRB a plan to further enhance the Board’s governance and oversight of the Company, and the Company submitted to the FRB a plan to further improve the Company’s compliance and operational risk management program. The Company continues to engage with the FRB as the
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Federal Deposit Insurance Corporation Special Assessment
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•total revenue decreased due to lower net interest income, partially offset by higher noninterest income;
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Net servicing income increased driven by higher income from net hedge results related to mortgage servicing rights (MSRs) valuations.
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Investment advisory and other asset-based fees increased driven by higher asset-based fees reflecting higher market valuations.
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Operating losses decreased driven by lower expense for legal actions.
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Technology, telecommunications and equipment expense increaseddue to higher expense for the amortization of internally developed software.
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Professional and outside services expense decreased driven by efficiency initiatives to reduce our spending on consultants and contractors.
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business based on established internal revenue-sharing agreements.
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Revenue decreased driven by lower net interest income due to lower deposit balances and lower loan balances.
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•lower net interest income reflecting the impact of higher interest rates on deposit costs;
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•higher other noninterest income related to renewable energy tax credit investments.
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Noninterest expense decreased due to lower personnel expense reflecting the impact of efficiency initiatives.
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•higher investment advisory and other asset-based fees driven by higher asset-based fees reflecting higher market valuations; and
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•higher personnel expense driven by higher revenue-related compensation; and
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WIM Advisory Assets In addition to transactional accounts, WIM offers advisory account relationships to brokerage customers. Fees from advisory accounts are based on a percentage of the market value of the assets as of the beginning of the quarter, which vary across the account types based on the
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For the third quarter of both 2024 and 2023, the average fee rate by account type ranged from 50 to 120 basis points.
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(2)Outflows include closed advisory account assets, withdrawals, and client management fees.
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includes certain lines of business that management has determined are no longer consistent with the long-term strategic goals of the Company as well as results for previously divested businesses. Table 6i and Table 6j provide additional information for Corporate.
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Noninterest expense increased driven by higher operating losses due to higher expense for customer remediation activities.
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Our largest single country exposure outside the U.S. at September 30, 2024, was the United Kingdom, which totaled
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(2)Consists of 45 states; no state in Other had loans in excess of $550 million and $640 million at September 30, 2024, and December 31, 2023, respectively.
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Accounting Policies) to Financial Statements in our 2023 Form 10-K. Table 18 summarizes nonperforming assets.
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Our interest rate sensitive noninterest income and expense are impacted by mortgage banking activities that may have
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To help achieve this objective, the Board establishes liquidity guidelines that require sufficient asset-based liquidity to cover potential funding requirements and to avoid over-dependence on volatile, less reliable funding markets. These guidelines are
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and certain of its direct and indirect subsidiaries. For additional information on the IHC, see the “Regulatory Matters – ‘Living Will’ Requirements and Related Matters” section in our 2023 Form 10-K. Additional subsidiary funding is provided by deposits, short-term borrowings and long-term debt.
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in the future will be used for the same purposes. Depending on market conditions and our liquidity position, we may redeem or
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capital actions for all large BHCs and also reviews the Company’s proposed capital actions.
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•the fair value of financial instruments;
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•our ability to realize any efficiency ratio or expense target as part of our expense management initiatives, including as a
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For additional information about factors that could cause actual results to differ materially from our expectations, refer to our reports filed with the Securities and Exchange Commission,