EX-12.B 6 wfc-6302016xex12b.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 June 30,
 
 
 
Six months ended June 30,
 
(in millions)
 
2016

 
2015

 
 
2016

 
2015

Earnings including interest on deposits (1): 
 
 
 
 
 
 
 
 
 
  
Income before income tax expense
 
$
8,222

 
8,549

 
 
$
16,303

 
16,712

  
Less: Net income from noncontrolling interests
 
15

 
67

 
 
67

 
147

  
Income before income tax expense and after noncontrolling interests
 
8,207

 
8,482

 
 
16,236

 
16,565

  
Fixed charges
 
1,517

 
1,056

 
 
2,925

 
2,133

  
  
 
9,724

 
9,538

 
 
19,161

 
18,698

 
 
 
 
 
 
 
 
 
 
 
Preferred dividend requirement
 
$
386

 
356

 
 
$
764

 
699

Tax factor (based on effective tax rate)  
 
1.48

 
1.48

 
 
1.47

 
1.44

 
 
 
 
 
 
 
 
 
 
Preferred dividends (2)
 
$
570

 
526

 
 
$
1,126

 
1,005

Fixed charges (1):
 
 
 
 
 
 
 
 
 
  
Interest expense
 
1,413

 
956

 
 
2,718

 
1,933

  
Estimated interest component of net rental expense
 
104

 
100

 
 
207

 
200

  
  
 
1,517

 
1,056

 
 
2,925

 
2,133

  
Fixed charges and preferred dividends
 
$
2,087

 
1,582

 
 
$
4,051

 
3,138

 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges and preferred dividends (3)
 
4.66

 
6.03

 
 
4.73

 
5.96

 
 
 
 
 
 
 
 
 
 
Earnings excluding interest on deposits:
 
 
 
 
 
 
 
 
 
  
Income before income tax expense and after noncontrolling interests
 
$
8,207

 
8,482

 
 
$
16,236

 
16,565

  
Fixed charges
 
1,185

 
824

 
 
2,286

 
1,643

  
  
 
9,392

 
9,306

 
 
18,522

 
18,208

 
 
 
 
 
 
 
 
 
 
 
Preferred dividends (2)
 
570

 
526

 
 
1,126

 
1,005

Fixed charges:
 
 
 
 
 
 
 
 
 
  
Interest expense
 
1,413

 
956

 
 
2,718

 
1,933

  
Less: Interest on deposits
 
332

 
232

 
 
639

 
490

  
Estimated interest component of net rental expense
 
104

 
100

 
 
207

 
200

  
  
 
1,185

 
824

 
 
2,286

 
1,643

  
Fixed charges and preferred dividends
 
$
1,755

 
1,350

 
 
$
3,412

 
2,648

 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges and preferred dividends (3)
 
5.35

 
6.89

 
 
5.43

 
6.88

 
 
 
 
 
 
 
 
 
 
 
(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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