Company: WFC-PC
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000072971-25-000253
Chunk: 177

Company: WELLS FARGO & COMPANY/MN
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 11
Chunk 177
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 Class B common stock, which were recorded in other noninterest income.(3)Includes derivatives used to mitigate foreign exchange risk of specified foreign currency-denominated assets and liabilities. Gains and (losses) were recorded in net gains from trading and securities within noninterest income.(4)Includes credit derivatives used to hedge certain loan exposures. Gains and (losses) were recorded in other noninterest income.

96Wells Fargo & Company

DERIVATIVE VALUATION ADJUSTMENTS.  We incorporate certain adjustments in determining the fair value of our derivatives, including credit valuation adjustments (CVA) to reflect counterparty credit risk related to derivative assets, debit valuation adjustments (DVA) to reflect Wells Fargo’s own credit risk related to derivative liabilities, and funding valuation adjustments (FVA) to reflect the funding cost of uncollateralized or partially collateralized derivative assets and liabilities. CVA, which considers the effects of enforceable master netting agreements and collateral arrangements, reflects market-based views of the credit quality of each counterparty. We estimate CVA based on observed credits spreads in the credit default swap market and indices indicative of the credit quality of the counterparties to our derivatives.Table 11.7 presents the impact of derivative valuation adjustments (excluding the effect of any related hedges), which are included in net gains (losses) from trading and securities on the consolidated statement of income. For additional information, see Note 2 (Trading Activities).Table 11.7:  Net Gains (Losses) from Derivative Valuation AdjustmentsQuarter ended September 30,Nine months ended September 30,(in millions)2025202420252024CVA$39 (31)$(20)(7)DVA(10)4 (18)(7)FVA24 — (23)— Total$53 (27)$(61)(14)Table 11.8 presents the impact of derivative valuation adjustments on derivative fair values. Table 11.8:  Derivative Valuation AdjustmentsContra Liability (Contra Asset)(in millions)Sep 30,2025Dec 31,2024CVA$(295)(275)DVA208 226 FVA, net(108)(85)Total derivative valuation adjustments$(195)(134)Credit DerivativesCredit derivative contracts transfer the credit risk of a reference asset or entity from one party (the purchaser of credit protection) to another party (the seller of credit protection). We use credit derivatives to assist customers