Wells Fargo Completes TARP Repayment

Updated to add Wilson comment, latest share price.

SAN FRANCISCO (TheStreet) -- Wells Fargo(WFC) said Wednesday that it has repaid the government's $25 billion investment related to the Troubled Asset Relief Program, along with $131.9 million in accrued dividends.

To date, the firm has paid $1.44 billion in dividends on the preferred stock investment, which was made in October 2008. By repaying its TARP funds, Wells Fargo is avoiding future dividend payments of roughly $1.25 billion a year.

"We thank the U.S. government and taxpayers for their support of our financial system at a critical time for our nation," CEO John Stumpf said in a statement.

The Treasury Department continues to hold warrants that give it the right to purchase 110 million Wells Fargo shares at a price of $34.01 apiece. Linus Wilson, a finance professor at the University of Louisiana at Lafayette who has studied the TARP warrants extensively, estimates that the warrants are worth roughly $775 million.

It's unclear whether Wells Fargo will purchase them outright, as Goldman Sachs (GS) did, or auction them as JPMorgan Chase (JPM) did.

Wells Fargo's move follows Bank of America's(BAC) repayment of $45 billion in TARP funds earlier this month. Citigroup (C) also recently raised $17 billion in a stock offering to repay $20 billion in TARP money, though it has not completed the transaction yet.

In recent trading, the stock was down 33 cents, or 1.2%, at $26.83. Volume of 15.2 million compared to the issue's trailing three-month daily average of 51 million.

-- Written by Lauren Tara LaCapra in New York.

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