Updated from Monday, Dec. 14
SAN FRANCISCO (
late Monday said it would repay the government's $25 billion preferred equity investment after completing a $10.4 billion stock offering, becoming the last of the major banks to repay the U.S. bailout from the height of the financial crisis.
Wells Fargo said in addition to the common stock offering, it will raise $1.35 billion by issuing common stock instead of a portion of cash and other compensation to certain employee benefit plans this year. It also intends to raise another $1.5 billion by selling assets agreed to by the
. If the asset sales aren't completed by the end of 2010, the company will raise a commensurate amount of capital.
The Troubled Asset Relief Program stabilized our country's financial system when confidence in financial markets around the world was being tested unlike any other period in our history," President and CEO John Stumpf said in a statement. "Its success also generated financial returns for taxpayers, including $1.4 billion in dividends paid to the U.S. Treasury by Wells Fargo. Now we're ready to fully repay TARP in a way that serves the interests of the U.S. taxpayer, as well as our customers, team members and investors."
Repaying TARP will eliminate $1.25 billion in annual preferred stock dividends paid to the government, and will be slightly accretive to earnings per share in 2010, the company said.
The announcement from Wells Fargo follows news earlier Monday that
said it would repay $20 billion of bailout aid it received from the U.S. government.
earlier this month said it would repay $45 billion of TARP funds.
Shares of Wells Fargo ended regular trading on Monday at $25.49, up 8 cents. The announcement from Wells Fargo came after trading closed. The shares rose 55 cents, or 2.2%, to $26.04 in after-hours trading.
Written by Michael Gannon in New York
Gannon joined TheStreet.com in March 2007, after spending more than six years as a reporter and editor for The Journal News in Westchester County, N.Y., most recently as an assistant metro editor. He earlier covered several political and government beats as a reporter, including the city of Yonkers. Earlier in his career, he covered venture capital, private equity and the IPO market for Thomson Financial's Venture Capital Journal and advertising for Sales-Fax, a small, independent trade weekly. He earned a B.A. in history from the College of the Holy Cross and an M.S. in journalism from Northwestern University�s Medill School.