Company: WFC-PC
Filing Date: 2025-10-31
Form Type: 10-Q
Source: 0000072971-25-000253
Chunk: 82

Company: WELLS FARGO & COMPANY/MN
Filing Date: 2025-10-31
Form: 10-Q
Item: Item 1
Chunk 82
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 Company

INVOLVEMENT WITH TAX CREDIT VIES.  In addition to the unconsolidated VIEs in Table 13.4, we may invest in or provide funding to affordable housing, renewable energy or similar projects that are designed to generate a return primarily through the realization of federal income tax credits and other income tax benefits. Our affordable housing investments generate low-income housing tax credits and our renewable energy investments generate either production tax credits, investment tax credits, or both. The projects are typically managed by third-party sponsors who have the power over the VIE’s assets; therefore, we do not consolidate the VIEs. The carrying value of our equity investments in tax credit VIEs was $20.6 billion and $21.7 billion at September 30, 2025, and December 31, 2024, respectively. Additionally, we had loans to tax credit VIEs with a carrying value of $1.8 billion and $1.9 billion at September 30, 2025, and December 31, 2024, respectively.Our maximum exposure to loss for tax credit VIEs at September 30, 2025, and December 31, 2024, was $26.7 billion and $29.1 billion, respectively. Our maximum exposure to loss included total unfunded equity and lending commitments of $4.4 billion and $5.5 billion at September 30, 2025, and December 31, 2024, respectively. Under these commitments, we are required to provide additional financial support during the investment period, at the discretion of project sponsors, or for certain renewable energy investments, on a contingent basis based on the amount of income tax credits earned. For equity investments accounted for using the proportional amortization method, a liability is recognized in accrued expenses and liabilities on our consolidated balance sheet for unfunded commitments that are either legally binding or contingent but probable of funding. The liability recognized for these commitments at September 30, 2025, and December 31, 2024, was $5.4 billion and $6.4 billion, respectively. Substantially all of these commitments are expected to be funded within three years. See Note 14 (Guarantees and Other Commitments) for additional information about unrecognized commitments to purchase equity securities.Table 13.5 summarizes the impacts to our consolidated statement of income related to our affordable housing and renewable energy equity