EX-12.B 3 wfc-9302016xex12b.htm EXHIBIT 12.B Exhibit


 
 
 
 
 
 
 
 
 
 
 
EXHIBIT 12(b)
WELLS FARGO & COMPANY AND SUBSIDIARIES
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
AND PREFERRED DIVIDENDS
 
 
 
 
 
 
 
 
 
 
 
  
  
 
Quarter ended Sep 30,
 
 
 
Nine months ended Sep 30,
 
(in millions)
 
2016

 
2015

 
 
2016

 
2015

Earnings including interest on deposits (1): 
 
 
 
 
 
 
 
 
 
  
Income before income tax expense
 
$
8,255

 
8,773

 
 
$
24,558

 
25,485

  
Less: Net income from noncontrolling interests
 
10

 
187

 
 
77

 
334

  
Income before income tax expense and after noncontrolling interests
 
8,245

 
8,586

 
 
24,481

 
25,151

  
Fixed charges
 
1,640

 
1,089

 
 
4,565

 
3,222

  
  
 
9,885

 
9,675

 
 
29,046

 
28,373

 
 
 
 
 
 
 
 
 
 
 
Preferred dividend requirement
 
$
401

 
356

 
 
$
1,165

 
1,055

Tax factor (based on effective tax rate)  
 
1.46

 
1.48

 
 
1.47

 
1.45

 
 
 
 
 
 
 
 
 
 
Preferred dividends (2)
 
$
586

 
527

 
 
$
1,711

 
1,532

Fixed charges (1):
 
 
 
 
 
 
 
 
 
  
Interest expense
 
1,535

 
988

 
 
4,253

 
2,921

  
Estimated interest component of net rental expense
 
105

 
101

 
 
312

 
301

  
  
 
1,640

 
1,089

 
 
4,565

 
3,222

  
Fixed charges and preferred dividends
 
$
2,226

 
1,616

 
 
$
6,276

 
4,754

 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges and preferred dividends (3)
 
4.44

 
5.99

 
 
4.63

 
5.97

 
 
 
 
 
 
 
 
 
 
Earnings excluding interest on deposits:
 
 
 
 
 
 
 
 
 
  
Income before income tax expense and after noncontrolling interests
 
$
8,245

 
8,586

 
 
$
24,481

 
25,151

  
Fixed charges
 
1,284

 
857

 
 
3,570

 
2,500

  
  
 
9,529

 
9,443

 
 
28,051

 
27,651

 
 
 
 
 
 
 
 
 
 
 
Preferred dividends (2)
 
586

 
527

 
 
1,711

 
1,532

Fixed charges:
 
 
 
 
 
 
 
 
 
  
Interest expense
 
1,535

 
988

 
 
4,253

 
2,921

  
Less: Interest on deposits
 
356

 
232

 
 
995

 
722

  
Estimated interest component of net rental expense
 
105

 
101

 
 
312

 
301

  
  
 
1,284

 
857

 
 
3,570

 
2,500

  
Fixed charges and preferred dividends
 
$
1,870

 
1,384

 
 
$
5,281

 
4,032

 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges and preferred dividends (3)
 
5.10

 
6.82

 
 
5.31

 
6.86

 
 
 
 
 
 
 
 
 
 
 
(1)
As defined in Item 503(d) of Regulation S-K.
(2)
The preferred dividends were increased to amounts representing the pretax earnings that would be required to cover such dividend requirements.
(3)
These computations are included herein in compliance with Securities and Exchange Commission regulations. However, management believes that fixed charge ratios are not meaningful measures for the business of the Company because of two factors. First, even if there was no change in net income, the ratios would decline with an increase in the proportion of income which is tax-exempt or, conversely, they would increase with a decrease in the proportion of income which is tax-exempt. Second, even if there was no change in net income, the ratios would decline if interest income and interest expense increase by the same amount due to an increase in the level of interest rates or, conversely, they would increase if interest income and interest expense decrease by the same amount due to a decrease in the level of interest rates.


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