This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Expect Quick Wells Fargo Deal on TARP

Rochdale Securities analyst Richard Bove told TheStreet.com that "to assume Citi can get out of this relationship makes no sense whatsoever."

Wells Fargo deal in the works

Wells Fargo owes $25 billion in TARP money, having issued preferred shares to the government after arm-twisting from former Treasury Secretary Henry Paulson. The former Goldman Sachs (GS) chief executive officer enlisted eight other companies, including JPMorgan Chase (JPM), which, like Wells Fargo, said it never needed the money.

According to a report in the Wall Street Journal, Wells Fargo and Citigroup are arguing with government regulators over TARP repayment terms, since Federal Reserve and Treasury officials are requiring the banks to "raise more capital relative to what they are seeking to repay than Bank of America did."

That's understandable for Wells Fargo, since its tangible common equity ratio was 4.51% as of Sept. 30, the second-lowest of the 10 biggest banks yet to repay TARP, save PNC Financial (PNC).

Wells Fargo also has the highest nonperforming-assets ratio, at 4.43%, only exceeded by Zions Bancorp (ZION) and Marshall & Ilsley (MI).

Bank of America's stock price is higher than it was before the company said it was raising money. That said, this would be a good time for Wells Fargo to increase its capital and quickly make a deal to repay TARP, especially since shareholders haven't been massively diluted by previous conversions, as Citigroup's shareholders have.

Comerica and Key

Looking further down the list, Comerica and KeyCorp (KEY) have the highest tangible common equity ratios among the 10 banks -- both above 7.5%.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7870 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs