Company: WFC-PC
Filing Date: 2025-04-29
Form Type: 10-Q
Source: 0000072971-25-000129
Chunk: 159

Company: WELLS FARGO & COMPANY/MN
Filing Date: 2025-04-29
Form: 10-Q
Item: Item 11
Chunk 159
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Losses) from Derivative Valuation AdjustmentsQuarter ended March 31,(in millions)20252024CVA$(23)52 DVA(18)(21)FVA(21)— Total$(62)31 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)Mar 31,2025Dec 31,2024CVA$(298)(275)DVA208 226 FVA, net(106)(85)Total derivative valuation adjustments$(196)(134)Sold Credit DerivativesCredit derivative contracts are arrangements whose value is derived from the transfer of 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 generally use credit derivatives to assist customers with their risk management objectives by purchasing and selling credit protection on corporate debt obligations through the use of credit default swaps or through risk participation swaps to help manage counterparty exposure. We would be required to perform under the credit derivatives we sold in the event of default by the referenced obligors. Events of default include events such as bankruptcy, capital restructuring or lack of principal and/or interest payment.Table 11.9 provides details of sold credit derivatives.Table 11.9:  Sold Credit Derivatives Notional amount(in millions)Protection soldProtection sold – non-investment gradeMarch 31, 2025Credit default swaps$14,138 1,270 Risk participation swaps5,765 3,655 Total credit derivatives$19,903 4,925 December 31, 2024 Credit default swaps$10,516 684 Risk participation swaps6,007 3,779 Total credit derivatives$16,523 4,463 Protection sold represents the estimated maximum exposure to loss that would be incurred if, upon an event of default, the value of our interests and any associated collateral declined to zero, and does not take into consideration any recovery value from the referenced obligation or offset from collateral held or any economic hedges.The amounts under non-investment grade represent the notional amounts of those credit derivatives on which we have a higher risk of being required to perform under the terms of the credit derivative and are a function of the underlying assets.We consider the credit risk to be low if the underlying assets under the credit derivative have an external rating that is investment grade. If an external rating is