Wells Fargo Bank, N.A. Certificates of Deposit Fixed to Floating Rate CDs due July 19, 2024 Linked to the Consumer Price Index

Transcription

1 Wells Fargo Bank, N.A. Certificates of Deposit Fixed to Floating Rate CDs due July 19, 2024 Linked to the Consumer Price Index Subject to Completion Preliminary Terms Supplement dated June 28, 2017 Terms Supplement dated, 2017 to Disclosure Statement dated December 1, 2016 The final terms of the CDs will be determined on the pricing date and will be set forth in the final terms supplement which will be delivered to you after the pricing date. The CDs have a term of seven years. The CDs pay interest monthly at a rate that will be fixed at 2.00% per annum for the first year and thereafter at a floating rate that will be reset each month and will be equal to the lagging year-over-year percentage change in the Consumer Price Index, subject to the minimum interest rate, as set forth below. Because the Consumer Price Index is one measure of price inflation in the United States, the return on your CDs after the first year will depend on U.S. inflation levels, as measured by the Consumer Price Index. Early withdrawal of a CD will only be available in the event of death or adjudication of incompetence of a beneficial owner of a CD. See Description of the Certificates of Deposit Additions or Withdrawals in the accompanying disclosure statement. You should read this terms supplement together with the disclosure statement dated December 1, 2016 for additional information about the CDs. Information included in this terms supplement supersedes information in the disclosure statement to the extent it is different from that information. Certain defined terms used but not defined herein have the meanings set forth in the disclosure statement. Issuer: Issue Price: Terms of the CDs Wells Fargo Bank, N.A. ( Wells Fargo Bank or the Bank ). 100% of the deposit amount. Deposit Amount: $1,000 per CD. References in this terms supplement to a CD are to a CD with a deposit amount of $1,000. Pricing Date: July 14, 2017.* Issue Date: July 19, 2017.* (T+3) Stated Maturity Date: July 19, 2024.* Payment at Maturity: Interest Payment Dates: Interest Rate: CPI Rate: Consumer Price Index or CPI: Interest Determination Date: Minimum Interest Rate: A holder will be entitled to receive on the stated maturity date a cash payment in U.S. dollars equal to $1,000 per CD, plus any accrued and unpaid interest. Monthly, on the 19 th day of each month, commencing August 19, 2017, and at maturity.* Except as described below for the first interest period, on each interest payment date, interest will be paid for the period commencing on and including the immediately preceding interest payment date and ending on and including the day immediately preceding that interest payment date. This period is referred to as an interest period. The first interest period will commence on and include the issue date and end on and include August 18, Interest payable with respect to an interest period will be computed on the basis of a 360-day year of twelve 30-day months. If a scheduled interest payment date is not a business day, interest will be paid on the next business day, and interest on that payment will not accrue during the period from and after the scheduled interest payment date. The interest rate that will apply during the first twelve interest periods (up to and including the interest period ending July 18, 2018) will be equal to 2.00% per annum. For all interest periods commencing on or after July 19, 2018, the interest rate that will apply during an interest period will be equal to the CPI Rate on the interest determination date for such interest period, subject to the minimum interest rate. The CPI Rate, on any interest determination date, will be equal to the lagging year-over-year percentage change in the CPI, calculated as set forth under Additional Terms of the CDs on page PRS-2 of this terms supplement. The Consumer Price Index or CPI means the All Items Consumer Price Index for All Urban Consumers (CPI-U) U.S. City Average before seasonal adjustment published by the Bureau of Labor Statistics of the U.S. Department of Labor (the BLS ) (Bloomberg: CPURNSA), as determined by us in accordance with the procedures set forth under Additional Terms of The CDs. The interest determination date for an interest period commencing on or after July 19, 2018 is the first day of such interest period. 0.00% per annum. Denominations: $1,000 and any integral multiples of $1,000 CUSIP Number: 94986TV95 FDIC Insurance: The deposit amount of a CD is insured by the Federal Deposit Insurance Corporation (the FDIC ), subject to applicable FDIC insurance limits. See FDIC Insurance on page PRS-3 of this terms supplement. Material Tax Consequences: In the opinion of Faegre Baker Daniels LLP, our special tax counsel, the CDs will be subject to U.S. Treasury regulations that apply to variable debt instruments for U.S. federal income tax purposes. See United States Federal Income Tax Consequences in the accompanying disclosure statement. *To the extent that we make any change to the expected pricing date or expected issue date, the interest payment dates and stated maturity date may also be changed in our discretion to ensure that the term of the CDs remains the same. On the date of this preliminary terms supplement, the estimated value of the CDs is approximately $ per $1,000 Deposit Amount. While the estimated value of the CDs on the pricing date may differ from the estimated value set forth above, we do not expect it to differ significantly absent a material change in market conditions or other relevant factors. In no event will the estimated value of the CDs on the pricing date be less than $ per $1,000 Deposit Amount. We determined the estimated value of the CDs using our proprietary pricing models. The estimated value of the CDs is not an indication of actual profit to us or any of our affiliates, nor is it an indication of the price, if any, at which we or any other person may be willing to buy the CDs from you at any time after issuance. See Estimated Value of the CDs in this terms supplement. The CDs have complex features and investing in the CDs involves risks not associated with an investment in conventional certificates of deposit. See Risk Factors on page PRS-6.

2 ADDITIONAL TERMS OF THE CDs The CPI Rate means, for any interest determination date, the lagging year-over-year percentage change in the CPI (which may be negative), calculated as follows: Ref CPIt Ref CPIt-12 Ref CPIt-12 where, the Ref CPIt is the level of the CPI for the third calendar month prior to the calendar month of such interest determination date (the reference month ) and the Ref CPIt-12 is the level of the CPI for the twelfth calendar month prior to such reference month. For example, with respect to the interest determination date occurring on July 19, 2018 (i.e., the interest determination date for the interest period commencing on and including July 19, 2018 and ending on and including August 18, 2018), the Ref CPIt is the level of the CPI for April 2018 and the Ref CPI t-12 is the level of the CPI for April We refer to the twelve-month period from Ref CPI t-12 to Ref CPI t as the year-over-year reference period. If by 3:00 p.m., New York City time, on any interest determination date the CPI is not published on Bloomberg screen CPURNSA for any relevant month, but has otherwise been published by the BLS, we will determine the CPI as reported by the BLS for such month using such other source as appears on its face to accurately set forth the CPI as reported by the BLS, as determined by us. In calculating Ref CPI t and Ref CPI t-12, we will use the most recently available value of the CPI determined as described above on the applicable interest determination date, even if such value has been adjusted from a prior reported value for the relevant month. However, if a value of Ref CPI t and Ref CPI t-12 used by us on any interest determination date to determine the interest rate on the CDs (an original CPI level ) is subsequently revised by the BLS, we will continue to use the original CPI level, and the interest rate determined on such interest determination date will not be revised. The current base reference period used by BLS is CPI. If the CPI is rebased to a different year or period and the CPI is no longer used, the base reference period for the CDs will continue to be the reference period as long as the CPI continues to be published. If, while the CDs are outstanding, the CPI is discontinued or substantially altered, as determined by us in our sole discretion, we will determine the interest rate on the CDs for all interest periods commencing on or after July 19, 2018 by reference to the applicable substitute index that is chosen by the Secretary of the Treasury for the Department of the Treasury s Inflation-Linked Treasuries as described at 62 Federal Register (January 6, 1997) or, if no such securities are outstanding, the substitute index will be determined by us in accordance with general market practice at the time; provided that the procedure for determining the resulting interest rate is administratively acceptable to us. PRS-2

3 FDIC INSURANCE The deposit amount of a CD is insured by the FDIC, subject to applicable FDIC insurance limits. As discussed in the accompanying disclosure statement, the FDIC standard maximum deposit insurance amount (the MDIA ) is $250,000 per depositor per insured bank. The CDs are eligible for FDIC insurance up to $250,000 for deposits held in the same ownership category (for example, individual accounts are insured separately from joint accounts, self-directed retirement accounts and/or revocable trust accounts). The FDIC has taken the position that any interest that has not yet been ascertained and become due and any secondary market premium paid by you above the deposit amount of the CDs is not insured by the FDIC. See Deposit Insurance in the accompanying disclosure statement. Any deposit amount of a CD that exceeds the applicable FDIC insurance limits, as well as any amounts payable under the CDs that are not insured by FDIC insurance, are subject to our creditworthiness. See Risk Factors The CDs Are Subject To The Credit Risk Of Wells Fargo Bank. ESTIMATED VALUE OF THE CDs The issue price of each CD of $1,000 includes certain costs that are borne by you. Because of these costs, the estimated value of the CDs on the pricing date will be less than the deposit amount. The costs included in the issue price relate to selling, structuring, hedging and issuing the CDs, as well as to our funding considerations for certificates of deposit of this type. The costs related to selling, structuring, hedging and issuing the CDs include (i) the placement fees, (ii) the projected profit that we or our hedge counterparty (which may be one of our affiliates) expects to realize for assuming risks inherent in hedging our obligations under the CDs and (iii) hedging and other costs relating to the offering of the CDs, including the costs of FDIC insurance. Our funding considerations take into account the higher issuance, operational and ongoing management costs of market-linked certificates of deposit such as the CDs as compared to our conventional debt securities of the same maturity, as well as our liquidity needs and preferences. Our funding considerations are reflected in the fact that we determine the economic terms of the CDs based on an assumed funding rate that is generally lower than our estimated secondary market rate, which is described below and is used in determining the estimated value of the CDs. If the costs relating to selling, structuring, hedging and issuing the CDs were lower, or if the assumed funding rate we use to determine the economic terms of the CDs were higher, the economic terms of the CDs would be more favorable to you and the estimated value would be higher. The estimated value of the CDs as of the pricing date will be set forth in the final terms supplement. Determining the estimated value We calculated the estimated value of the CDs set forth on the cover page of this terms supplement based on our proprietary pricing models. Based on these pricing models and related market inputs and assumptions referred to in this section below, we determined an estimated value for the CDs by estimating the value of the combination of hypothetical financial instruments that would replicate the payout on the CDs, which combination consists of a non-interest bearing, fixed-income bond (the debt component ) and one or more derivative instruments underlying the economic terms of the CDs (the derivative component ). The estimated value of the debt component is based on a reference interest rate that is our good faith estimate of the implied interest rate at which our debt securities of the same maturity would trade in the secondary market, as determined as of a recent date. While the CDs are not debt securities, we use this estimated secondary market rate for debt securities for purposes of determining the estimated value of the CDs since we expect secondary market prices, if any, for the CDs that are provided by us or any of our affiliates to generally reflect such rate, and not the rate at which brokered CDs issued by us may trade. We determine the estimated value of the CDs based on this estimated secondary market rate, rather than the assumed funding rate that we use to determine the economic terms of the CDs, for the same reason. As we are principally a deposit-taking institution, secondary market activities in our debt securities are limited and, accordingly, we determine this estimated secondary market rate based on a number of factors that involve our good faith discretionary judgment, as well as a limited number of market-observable inputs. Because we do not continuously calculate our reference interest rate, the reference interest rate used in the calculation of the estimated value of the debt component may be higher or lower than our estimated secondary market rate at the time of that calculation. PRS-3

4 We calculated the estimated value of the derivative component based on a proprietary derivative-pricing model, which generated a theoretical price for the derivative instruments that constitute the derivative component based on various inputs, including the derivative component factors identified in Risk Factors You May Be Unable To Sell Your CDs Prior To Their Stated Maturity Date And The Value Of The CDs Prior To Their Stated Maturity Date Will Be Affected By Numerous Factors, Some Of Which Are Related In Complex Ways. These inputs may be market-observable or may be based on assumptions made by us in our discretion. The estimated value of the CDs determined by us is subject to important limitations. See Risk Factors The Estimated Value Of The CDs Is Determined By Our Pricing Models, Which May Differ From Those Of Other Market Participants and Our Economic Interests And Those Of Any Broker Are Potentially Adverse To Your Interests. Valuation of the CDs after issuance The estimated value of the CDs is not an indication of the price, if any, at which we or any other person may be willing to buy the CDs from you in the secondary market. The price, if any, at which we or any of our affiliates may purchase the CDs in the secondary market will be based upon our proprietary pricing models and will fluctuate over the term of the CDs due to changes in market conditions and other relevant factors. However, absent changes in these market conditions and other relevant factors, except as otherwise described in the following paragraph, any secondary market price will be lower than the estimated value on the pricing date because the secondary market price will be reduced by a bid-offer spread, which may vary depending on the aggregate deposit amount of the CDs to be purchased in the secondary market transaction, and the expected cost of unwinding any related hedging transactions. Accordingly, unless market conditions and other relevant factors change significantly in your favor, any secondary market price for the CDs is likely to be less than the deposit amount. If we or any of our affiliates make a secondary market in the CDs at any time up to the issue date or during the 6- month period following the issue date, the secondary market price offered by us or any of our affiliates will be increased by an amount reflecting a portion of the costs associated with selling, structuring, hedging and issuing the CDs that are included in the issue price. Because this portion of the costs is not fully deducted upon issuance, any secondary market price offered by us or any of our affiliates during this period will be higher than it would be if it were based solely on our proprietary pricing models less the bid-offer spread and hedging unwind costs described above. The amount of this increase in the secondary market price will decline steadily to zero over this 6-month period. If you hold the CDs through an account at Wells Fargo Advisors ( WFA ) (the trade name of the retail brokerage business of our affiliates, Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC) or any of its affiliates, we expect that this increase will also be reflected in the value indicated for the CDs on your account statement. If we or any of our affiliates make a secondary market in the CDs, we expect to provide those secondary market prices to any unaffiliated brokers through which the CDs are held and to commercial pricing vendors. If you hold your CDs through an account at a broker other than WFA or any of its affiliates, that broker may obtain market prices for the CDs from us (directly or indirectly), but could also obtain such market prices from other sources, and may be willing to purchase the CDs at any given time at a price that differs from the price at which we or any of our affiliates are willing to purchase the CDs. As a result, if you hold your CDs through an account at a broker other than WFA or any of its affiliates, the value of the CDs on your account statement may be different than if you held your CDs at WFA or any of its affiliates. The CDs will not be listed or displayed on any exchange or any automated quotation system. Although we and/or our affiliates may buy the CDs from investors, we and/or our affiliates are not obligated to do so and are not required to make a market for the CDs. There can be no assurance that a secondary market will develop. PRS-4

5 We have designed the CDs for investors who: INVESTOR CONSIDERATIONS seek current income at a fixed rate of interest of 2.00% per annum for the first year and are willing to accept a floating rate of interest thereafter based on lagging year-over-year percentage changes in the CPI; seek an investment with a per annum interest rate that will be reset monthly after the first year and will be equal to the CPI Rate, subject to the minimum interest rate, for any monthly interest period; understand that during periods of no inflation or deflation, as measured by the CPI, the interest rate on the CDs after the first year will be 0.00%; and are willing to hold the CDs until maturity. The CDs are not designed for, and may not be a suitable investment for, investors who: seek a liquid investment or are unable or unwilling to hold the CDs to maturity; expect no inflation or deflation, as measured by the CPI, during the term of the CDs; expect interest rates to increase beyond the interest rates provided by the CDs; are unwilling to purchase CDs with an estimated value as of the pricing date that is lower than the issue price and that may be as low as the lower estimated value set forth on the cover page; are unwilling to accept the credit risk of Wells Fargo Bank, to the extent their investment exceeds applicable FDIC insurance limits or in respect of any amounts not insured by FDIC insurance; or prefer the certainty of investments with fixed coupons for the entire term of the investment and with comparable maturities issued by banks with comparable credit ratings. PRS-5

6 RISK FACTORS The CDs have complex features and investing in the CDs will involve risks not associated with an investment in conventional certificates of deposit. You should carefully consider the risk factors set forth below as well as the other information contained in this terms supplement and the accompanying disclosure statement. You should reach an investment decision only after you have carefully considered with your advisors the suitability of an investment in the CDs in light of your particular circumstances. In Periods Of No Inflation Or Deflation, The Interest Rate After The First Year Could Be As Low As Zero. Interest payable on the CDs after the first year is linked to year-over-year changes in the level of the CPI for the lagging year-over-year reference period relating to each interest determination date. If the CPI remains constant over a particular year-over-year reference period, which is likely to occur when there is no inflation, or if the CPI decreases in a particular year-over-year reference period, which is likely to occur when there is deflation, investors in the CDs will not receive any interest on the related interest payment date. The Interest Rate On The CDs May Be Lower Than The Rate Otherwise Payable On Traditional Certificates of Deposit Issued By Us With Similar Maturities. If there are only minimal increases, no changes or decreases in the CPI measured monthly on a lagging year-overyear basis, the interest rate on the CDs after the first year will be below what we would currently expect to pay as of the date of this terms supplement if we issued a traditional certificate of deposit with the same maturity as the CDs. The Board of Governors of the Federal Reserve System (the FRB ) currently targets an inflation rate of 2.00% per year, as measured by core inflation measures (excluding items that tend to fluctuate often or dramatically, such as food and energy items). You should understand that if the FRB is successful in reaching and maintaining a stable target rate, and if changes in the level of the CPI correspond to this target rate, the effective yield on your CDs will be less than that which we would expect to pay on a traditional interest-bearing certificate of deposit of comparable maturity. An Investment In The CDs May Be More Risky Than An Investment In CDs With A Shorter Term. The CDs have a term of seven years. By purchasing CDs with a longer term, you will bear greater exposure to fluctuations in interest rates than if you purchased a certificate of deposit with a shorter term. In particular, you may be negatively affected if interest rates begin to rise because the interest rate applicable to your CDs during a particular interest period after the first year may be less than the amount of interest you could earn on other investments available at such time. In addition, if you tried to sell your CDs at such time, the value of your CDs in any secondary market transaction would also be adversely affected. Our Insolvency May Result In Early Payment Of Your CDs. If the FDIC is appointed as conservator or receiver for us, the FDIC is authorized to disaffirm or repudiate any contract to which we are a party, the performance of which is determined to be burdensome, and the disaffirmance or repudiation of which is determined to promote the orderly administration of our affairs. It appears very likely that for this purpose deposit obligations, such as the CDs, are contracts within the meaning of the foregoing and that the CDs could be repudiated by the FDIC in its capacity as conservator or receiver of us. As a result of any such repudiation, a holder of the CDs could be required to make a claim against the FDIC for the deposit amount of the CDs and follow the FDIC s claims procedures, which may result in a delay in receiving payment, or the FDIC as conservator or receiver could also transfer the CDs to another insured depository institution, without approval or consent of the holder of the CDs. A transferee depository institution would likely be permitted to offer holders of the CDs the choice of (i) repayment of the deposit amount of the CDs or (ii) less favorable terms. If a CD is paid off prior to maturity, either by a transferee depository institution or the FDIC, you may be unable to reinvest the funds at the same anticipated rate of return as the rate on the original CD. In any case, no claim would likely be available for any secondary market premium paid by you above the deposit amount, any interest that has not yet been ascertained and become due or other damages such as lost profit or opportunity. PRS-6

7 You Do Not Have The Right To Withdraw The Deposit Amount Of A CD Prior To The Stated Maturity Date. When you purchase a CD, you agree with us to keep your funds on deposit for the term of the CD, and you will not have the right to withdraw any portion of the deposit amount prior to the stated maturity date. Therefore, you should not rely on the possibility of early withdrawal for gaining access to your funds prior to the stated maturity date. In the event of your death or adjudication of incompetence, the deposit amount of your CDs may be withdrawn before the stated maturity date without an early withdrawal penalty. The CDs Are Subject To The Credit Risk Of Wells Fargo Bank. The CDs are our deposit obligations and are not, either directly or indirectly, an obligation of any third party. Any deposit amount of a CD that exceeds the applicable FDIC insurance limits, as well as any amounts payable under the CDs that are not insured by FDIC insurance, are subject to our creditworthiness. As a result, our actual and perceived creditworthiness may affect the value of the CDs and, in the event we were to default on our obligations, you may not receive any amounts owed to you under the terms of the CDs in excess of the amounts covered by the applicable FDIC insurance. See Deposit Insurance in the accompanying Disclosure Statement. The Estimated Value Of The CDs On The Pricing Date, Based On Our Proprietary Pricing Models, Will Be Less Than The Deposit Amount. The issue price of the CDs includes certain costs that are borne by you. Because of these costs, the estimated value of the CDs on the pricing date will be less than the deposit amount. The costs included in the issue price relate to selling, structuring, hedging and issuing the CDs, as well as to our funding considerations for certificates of deposit of this type. The costs related to selling, structuring, hedging and issuing the CDs include (i) the placement fees, (ii) the projected profit that we or our hedge counterparty (which may be one of our affiliates) expect to realize for assuming risks inherent in hedging our obligations under the CDs and (iii) hedging and other costs relating to the offering of the CDs, including the costs of FDIC insurance. Our funding considerations are reflected in the fact that we determine the economic terms of the CDs based on an assumed funding rate that is generally lower than our estimated secondary market rate. If the costs relating to selling, structuring, hedging and issuing the CDs were lower, or if the assumed funding rate we use to determine the economic terms of the CDs were higher, the economic terms of the CDs would be more favorable to you and the estimated value would be higher. The Estimated Value Of The CDs Is Determined By Our Pricing Models, Which May Differ From Those Of Other Market Participants. We determined the estimated value of the CDs using our proprietary pricing models and related market inputs and assumptions referred to above under Estimated Value of the CDs Determining the estimated value. Certain inputs to these models may be determined by us in our discretion. Our views on these inputs may differ from other market participants views, and our estimated value of the CDs may be higher, and perhaps materially higher, than the estimated value of the CDs that would be determined by other market participants. Our models and their inputs and related assumptions may prove to be wrong and therefore not an accurate reflection of the value of the CDs. The Estimated Value Of The CDs Is Not An Indication Of The Price, If Any, At Which We Or Any Other Person May Be Willing To Buy The CDs From You In The Secondary Market. The price, if any, at which we or any of our affiliates may purchase the CDs in the secondary market will be based on our proprietary pricing models and will fluctuate over the term of the CDs as a result of changes in the market and other factors described in the next risk factor. Any such secondary market price for the CDs will also be reduced by a bid-offer spread, which may vary depending on the aggregate deposit amount of the CDs to be purchased in the secondary market transaction, and the expected cost of unwinding any related hedging transactions. Unless the factors described in the next risk factor change significantly in your favor, any such secondary market price for the CDs is likely to be less than the deposit amount. If we or any of our affiliates make a secondary market in the CDs at any time up to the issue date or during the 6- month period following the issue date, the secondary market price offered by us or any of our affiliates will be increased by an amount reflecting a portion of the costs associated with selling, structuring, hedging and issuing the CDs that are included in the deposit amount. Because this portion of the costs is not fully deducted upon issuance, any secondary market price that we or any of our affiliates offer during this period will be higher than it would be if it were based solely on our proprietary pricing models less the bid-offer spread and hedging unwind PRS-7

8 costs described above. The amount of this increase in the secondary market price will decline steadily to zero over this 6-month period. If you hold the CDs through an account at WFA or any of its affiliates, we expect that this increase will also be reflected in the value indicated for the CDs on your account statement. If you hold your CDs through an account at a broker other than WFA or any of its affiliates, the value of the CDs on your account statement may be different than if you hold your CDs at WFA or any of its affiliates, as discussed above under Estimated Value of the CDs Valuation of the CDs after issuance. You May Be Unable To Sell Your CDs Prior To Their Stated Maturity Date And The Value Of The CDs Prior To Their Stated Maturity Date Will Be Affected By Numerous Factors, Some Of Which Are Related In Complex Ways. Although we or our affiliates may purchase the CDs from you, we and they are not obligated to do so. We and our affiliates are not required to, and do not intend to, make a market for the CDs. There can be no assurance that a secondary market will develop. Because the rate of return of the CDs is tied to the performance of the CPI, any secondary market for the CDs may not be as liquid as the secondary market for CDs with a fixed rate of return. As a result, you may not be able to sell your CDs prior to their stated maturity date. You should therefore not rely on any such ability to sell your CDs for any benefits, including achieving trading profits, limiting trading or other losses, realizing income prior to the stated maturity date, or having access to proceeds prior to the stated maturity date. The value of the CDs prior to stated maturity will be affected by current and projected year-over-year changes in the level of the CPI, interest rates at that time and a number of other factors, some of which are interrelated in complex ways. The effect of any one factor may be offset or magnified by the effect of another factor. The following factors (the derivative component factors ) are expected to affect the value of the CDs: the current and projected year-over-year changes in the level of the CPI; interest rates; volatility of the level of the CPI; and time remaining to maturity. In addition to the derivative component factors, the value of the CDs will be affected by actual or anticipated changes in our creditworthiness, as reflected in our estimated secondary market rate. Because numerous factors are expected to affect the value of the CDs, a change in the level of the CPI may not result in a comparable change in the value of the CDs. If you are able to sell your CDs prior to the stated maturity date in the secondary market, the amount you receive may be less than the deposit amount. Many Factors, Including United States Monetary Policy, May Influence U.S. Inflation Rates, And Could Materially And Adversely Affect The Value Of The CDs. The FRB uses the tools of monetary policy, including conducting open market operations, imposing reserve requirements, permitting depository institutions to hold contractual clearing balances and extending credit through its discount window facility, to alter the federal funds rate, which in turn affects the U.S. money supply, interest rates and rates of inflation. One way that the FRB might foster price stability and reduce inflation is to raise the target federal funds rate. If the FRB employs monetary policy to reduce inflation, the level of the CPI may decrease or experience a lower rate of change, which would adversely affect the amount of one or more interest payments to you. Although we expect U.S. monetary policy to influence the rate of inflation and, accordingly, the level of the CPI, inflation is influenced by a number of unpredictable factors and there can be no assurance that the FRB s policies or actions will be effective. For example, in 2009, despite multiple measures taken by the FRB to provide liquidity to the economy, inflation rates remained extremely low. Other factors that influence interest rates or inflation rates generally may include sentiment regarding underlying strength in the U.S., European and global economies, expectations regarding the level of price inflation, sentiment regarding credit quality in U.S., European and global credit markets, supply and demand of various consumer goods, services and energy resources and the performance of capital markets generally. The Manner In Which The BLS Calculates The CPI May Change In The Future And Any Such Change May Affect The Value Of The CDs. There can be no assurance that the BLS will not change the method by which it calculates the CPI. In addition, changes in the way the CPI is calculated could reduce the level of the CPI and lower the interest payments with respect to the CDs. Accordingly, the amount of interest, if any, payable on the CDs after the first year, and therefore the value of the CDs, may be significantly reduced. If the CPI is substantially altered or discontinued, a modified or substitute index may be employed to calculate the interest payable on the CDs, and any such modification or substitution may adversely affect the value of the CDs. PRS-8

9 The Manner In Which Inflation Is Measured For Purposes Of The CDs May Differ From Other Measures Of Inflation In Important Ways. The year-over-year percentage change in the level of the CPI is just one measure of price inflation in the United States. This measure may not reflect the actual levels of inflation affecting holders of the CDs. Moreover, this measure may be more volatile than other measures of inflation. The CPI includes prices of all items measured by the BLS, including items that may be particularly volatile such as energy and food items. Significant fluctuations in the prices of these items may have a significant effect on changes in the CPI and may cause the CPI to be more volatile than similar indices excluding these items. Moreover, measuring the year-over-year percentage change in the level of the CPI each month may result in a more volatile measure of inflation than alternative measures, such as the percentage change in the average level of the CPI from one year to the next. The Historical Levels Of The CPI Are Not An Indication Of The Future Levels Of The CPI. The historical levels of the CPI are not an indication of the future levels of the CPI during the term of the CDs. In the past, the CPI has experienced periods of volatility and such volatility may occur in the future. Fluctuations and trends in the CPI that have occurred in the past are not necessarily indicative, however, of fluctuations that may occur in the future. Holders of the CDs will receive interest payments that will be affected by changes in the CPI. Changes in the CPI are a function of the changes in specified consumer prices over time, which result from the interaction of many factors over which we have no control. Our Economic Interests And Those Of Any Broker Participating In The Offering Are Potentially Adverse To Your Interests. You should be aware of the following ways in which our economic interests and those of any broker participating in the distribution of the CDs, which we refer to as a participating broker, are potentially adverse to your interests as an investor in the CDs. In engaging in certain of the activities described below, we or our affiliates or any participating broker or its affiliates may take actions that may adversely affect the value of and your return on the CDs, and in so doing we and they will have no obligation to consider your interests as an investor in the CDs. We or our affiliates or any participating broker or its affiliates may realize a profit from these activities even if investors do not receive a favorable investment return on the CDs. We may be required to make discretionary judgments that affect the return you receive on the CDs. We will determine the level of the CPI on any date of determination and may be required to make other determinations that affect the return on the CDs. In making these determinations, we may be required to make discretionary judgments, including determining the level of the CPI if not published on Bloomberg screen CPURNSA; if the CPI is discontinued or substantially altered, as determined by us, selecting a successor index or, if no successor index is available, determining the interest rate payable on the CDs. In making these discretionary judgments, we may have economic interests that are adverse to your interests as an investor in the CDs, and our determinations may adversely affect your return on the CDs. The estimated value of the CDs was calculated by us and is therefore not an independent third-party valuation. We calculated the estimated value of the CDs set forth on the cover page of this terms supplement, which involved discretionary judgments by us, as described under Risk Factors The Estimated Value Of The CDs Is Determined By Our Pricing Models, Which May Differ From Those Of Other Market Participants above. Accordingly, the estimated value of the CDs set forth on the cover page of this terms supplement is not an independent third-party valuation. A broker or its affiliates may realize hedging profits projected by its proprietary pricing models in addition to the placement fee, creating a further incentive for the broker to sell the CDs to you. If any broker or any of its affiliates conducts hedging activities for us in connection with the CDs, that broker or its affiliates will expect to realize a projected profit from such hedging activities and this projected profit will be in addition to the placement fee that the broker receives for the sale of the CDs to you. This additional projected profit may create a further incentive for the broker to sell the CDs to you. PRS-9

10 HYPOTHETICAL INTEREST RATE ILLUSTRATION BASED ON HISTORICAL CPI LEVELS The chart below sets forth the historical levels of the CPI from January 2007 to May We obtained the historical information included below from Bloomberg Financial Markets, without independent verification. After the chart below is a hypothetical illustration of the interest rate that would have resulted with respect to a hypothetical interest payment date occurring on July 19, 2017 based on the historical levels of CPI. This example is for purposes of illustration only and the values used in the example may have been rounded for ease of analysis. This example is intended to illustrate the effect of general trends in the CPI on the amount of interest payable to you on the CDs after the first year. Fluctuations and trends in the CPI that have occurred in the past are not necessarily indicative, however, of fluctuations that may occur in the future. See Risk Factors The Historical Levels Of The CPI Are Not An Indication Of The Future Levels Of The CPI. As a result, this hypothetical illustration should not be taken as an indication of any actual interest rates that may be payable on the CDs after the first year. Month January February March April May June July August September October November December Hypothetical Illustration of Interest Payment for July 19, 2017 Hypothetical Interest Payment Date. A July 19, 2017 hypothetical interest payment date would relate to a hypothetical interest period commencing on and including June 19, 2017 and ending on and including July 18, 2017, and a hypothetical interest determination date of June 19, 2017 (i.e., the first day of the interest period). Assuming July 19, 2017 was an interest payment date occurring after the 1-year fixed interest period, the hypothetical interest rate on the CDs payable on such hypothetical interest payment date would be calculated as follows: CPI Rate = Ref CPIt Ref CPIt-12 Ref CPIt-12 Ref CPIt is , which is the level of the CPI for March 2017, the third calendar month prior to the calendar month of the June 19, 2017 hypothetical interest determination date, which is the hypothetical reference month; and Ref CPIt-12 is , which is the level of the CPI for March 2016, the twelfth calendar month prior to such hypothetical reference month. CPI Rate = CPI Rate = % Therefore, on the July 19, 2017 hypothetical interest payment date, you would receive an interest payment equal to $1.98 per CD, i.e., $1, % (30/360), rounded to the nearest cent. PRS-10

11 THE CONSUMER PRICE INDEX According to the publicly available information provided by the BLS, the CPI is a measure of the average change over time in the prices paid by urban consumers for a market basket of goods and services, including food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services. User fees (such as water and sewer charges, auto registration fees, and vehicle tolls) and taxes (such as sales and excise taxes) that are directly associated with the prices of specific goods and services are also included in the CPI. Taxes that are not directly associated with the purchase of consumer goods and services (such as income and social security taxes) and investment items such as stocks, bonds, real estate and life insurance are not included. The CPI includes expenditures of almost all residents of urban or metropolitan areas, including professionals, the self-employed, the poor, the unemployed and retired persons, urban wage earners and clerical workers. The CPI does not include the spending patterns of persons living in rural nonmetropolitan areas, farm families, persons in the armed forces, and those in institutions (such as prisons and mental hospitals). In calculating the CPI, price changes for the various items are averaged together with weights that represent their significance in the spending of urban households in the United States. The CPI is a market-accepted measure of inflation. The contents of the market basket of goods and services and the weights assigned to the various items are updated periodically to take into account changes in consumer expenditure patterns. The CPI is expressed in relative terms based on a reference period for which the level is set at 100 (currently the base reference period used by the BLS is ). For example, because the CPI level for the reference period is 100, an increase of 16.5 percent from that period would be shown as All information contained in this terms supplement regarding the CPI is derived from publicly available information published by the BLS or other publicly available sources. Such information reflects the policies of the BLS as stated in such sources, and such policies are subject to change by the BLS. We have not independently verified any information relating to the CPI. The BLS is under no obligation to continue to publish the CPI and may discontinue publication of the CPI at any time. The consequences of the BLS discontinuing the CPI are described above under Additional Terms of the CDs. Historical Information We obtained the levels of the CPI provided below from Bloomberg Financial Markets, without independent verification. The historical performance of the CPI should not be taken as an indication of the future performance of the CPI during the term of the CDs. The following graph sets forth the levels of the CPI for each month in the period from January 2007 through May The level of the CPI for May 2017 was PRS-11

12 The following graph sets forth the levels of the CPI as a percentage change on a rolling twelve-month basis from January 2007 through May PRS-12

13 PLAN OF DISTRIBUTION The CDs will be distributed through brokers, which may include WFA. Brokers will receive a placement fee of up to 2.50% of the aggregate deposit amount of the CDs sold. We or one of our affiliates expect to realize hedging profits projected by our proprietary pricing models to the extent we or they assume the risks inherent in hedging our obligations under the CDs. If any broker or any of its affiliates conducts hedging activities for us in connection with the CDs, that broker or its affiliate will expect to realize a projected profit from such hedging activities. Any such projected profit will be in addition to the placement fee received in connection with the sale of the CDs to you. PRS-13

14 DISCLOSURE STATEMENT WELLS FARGO BANK, N.A. FIXED RATE AND FLOATING RATE CERTIFICATES OF DEPOSIT The certificates of deposit of Wells Fargo Bank, N.A. ( Wells Fargo Bank ) described below ( CDs ) are made available through certain broker-dealers (collectively, the brokers and individually, a broker ) which may include Wells Fargo Advisors ( WFA ) (the trade name of the retail brokerage business of our affiliates, Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial Network, LLC). Each CD is a deposit obligation of Wells Fargo Bank, the deposits and accounts of which are insured by the Federal Deposit Insurance Corporation (the FDIC ). See Deposit Insurance. Purchasing the CDs involves risks. See Risk Factors in the accompanying supplement to this disclosure statement (the terms supplement ). The full amount of the deposit principal of a CD (the deposit amount ) will be returned to you on the stated maturity date. In addition, the CDs will bear interest at a fixed rate or floating rate and will pay interest during the term of the CD on a monthly, quarterly, semi-annual or annual basis on specified interest payment dates (the interest payment dates ) subject to certain terms and conditions. The CDs are not automatically renewable and no interest will be earned after the stated maturity date or any earlier redemption date. The specific terms of the CDs will be set forth in a terms supplement. The FDIC has taken the position that interest that has not yet been ascertained and become due and any secondary market premium paid by you above the deposit amount of the CD is not insured by the FDIC. Unless otherwise specified in the applicable terms supplement, early withdrawal of a CD will only be available in the event of death or adjudication of incompetence of a beneficial owner of the CD. United States holders of the CDs, other than those holding the CDs through a tax advantaged retirement account (such as an IRA), may be subject to tax rules requiring them to include in their taxable income during each tax year in which the CDs are outstanding imputed interest income on the CDs even though interest, if any, may not be paid on the CDs until maturity. See United States Federal Income Tax Consequences. The CDs are being offered by the brokers when, as and if issued by us and received and accepted by the brokers, subject to the right of the brokers to reject orders in whole or in part and subject to certain other conditions. WFA is one of our affiliates. Other brokers offering the CDs may include our affiliates. In making an investment decision, investors must rely on their own examination of Wells Fargo Bank and the terms of the offering, including the merits and risks involved. The CDs are solely our obligations, and are not obligations of and are not guaranteed by Wells Fargo & Company or any other of our affiliates. The CDs are not registered under the Securities Act of 1933, as amended, and are not required to be so registered. The CDs have not been recommended by any federal or state securities commission or regulatory authority. Furthermore, the foregoing authorities have not confirmed the accuracy or determined the adequacy of this disclosure statement or the applicable terms supplement. Any representation to the contrary is a criminal offense. Although we or our affiliates may purchase the CDs from you, neither we nor any of our affiliates is obligated to do so. We and our affiliates are not obligated to, and do not intend to, make a market for the CDs. There is no assurance that a secondary market for the CDs will develop or, if it develops, that it will continue. Consequently, you may not be able to sell your CDs readily or at prices that will enable you to realize your desired yield. Only CDs held to the stated maturity date or CDs that are the subject of a permitted early withdrawal will be entitled to the return of the full deposit amount. December 1, 2016