8-KOther EventsExhibits & Filings

WELLS FARGO & COMPANY/MN 8-K Report, Corporate Update (Feb 26, 2019)

Filed February 26, 2019For Securities:WFCWFC-PDWFC-PCWFC-PYWFC-PAWFC-PLWFCNPWFC-PZ

Summary

Wells Fargo & Company (WFC) filed this Form 8-K on February 26, 2019, primarily to provide revisions to its 2017 Annual Report on Form 10-K. These revisions are being made in anticipation of filing post-effective amendments to its Form S-3 registration statements. The core of the update involves a realignment of the company's operating segments, effective January 1, 2017, due to a change in methodology for assigning funding charges and credits to business lines implemented in the first quarter of 2018. This new methodology provides a more granular approach to considering interest rate risk and liquidity risk. Additionally, the filing incorporates the retrospective adoption of two new Accounting Standards Updates (ASUs) related to the Statement of Cash Flows: ASU 2016-18 (Restricted Cash) and ASU 2016-15 (Classification of Certain Cash Receipts and Cash Payments). While the company emphasizes that its previously reported consolidated financial results were not impacted by the segment realignment methodology change, these revisions are intended to facilitate clearer period-to-period comparisons and ensure compliance for future filings. Investors should note that this 8-K does not update information beyond the original 2017 10-K filing date, except for the adoption of the aforementioned ASUs.

Key Highlights

  • 1Wells Fargo is revising its 2017 Form 10-K disclosures to reflect an operating segment realignment effective January 1, 2017.
  • 2The segment realignment stems from a change in funding charge and credit allocation methodology adopted in Q1 2018, considering interest rate and liquidity risk more granularly.
  • 3The company is retrospectively adopting Accounting Standards Update (ASU) 2016-18 and ASU 2016-15 related to the Statement of Cash Flows.
  • 4These revisions are being made to facilitate period-to-period comparisons and in preparation for filing post-effective amendments to Form S-3 registration statements.
  • 5The filing amends specific items within the 2017 10-K, including Business Description, Market for Registrant's Common Equity, MD&A, and Financial Statements.
  • 6Crucially, Wells Fargo states that its previously reported consolidated financial results were not impacted by the segment realignment methodology change.
  • 7This 8-K does not reflect events occurring after the original March 1, 2018, filing date of the 2017 10-K, except for the adoption of the specified ASUs.

Frequently Asked Questions

The main purpose is to revise and re-disclose certain information previously reported in Wells Fargo's 2017 Form 10-K. This is being done to reflect a realignment of the company's operating segments and the retrospective adoption of new accounting standards for cash flow statements, primarily to ensure consistency and facilitate comparisons in anticipation of future filings.

No, Wells Fargo explicitly states that its previously reported consolidated financial results were not impacted by the operating segment realignment methodology change. The revisions are primarily for disclosure and comparison purposes.

The filing mentions the retrospective adoption of ASU 2016-18 (Restricted Cash) and ASU 2016-15 (Classification of Certain Cash Receipts and Cash Payments), both related to the Statement of Cash Flows. These changes require adjustments to how restricted cash is presented and classified within cash flow statements.

The company realigned its operating segments effective January 1, 2017, due to a change in its methodology for assigning funding charges and credits. This updated methodology, adopted in Q1 2018, considers factors like interest rate risk and liquidity risk on a more granular level across its business lines.