Wells Fargo to repay $25 billion bailout

Wells Fargo to repay $25 billion bailout

By Ben Rooney, staff reporter December 14, 2009: 8:25 PM ET

http://money.cnn.com/2009/12/14/news/companies/Wells_Fargo_TARP/index.htm

NEW YORK (CNNMoney.com) -- Wells Fargo said Monday it has reached an agreement with the government to return $25 billion in bailout money it received during last year's financial crisis.

The San Francisco-based bank said repayment of the funds is contingent on a $10.4 billion common stock offering.

The move comes on the same day that Citigroup (C, Fortune 500) announced plans to repay the $20 billion it received under the government's Troubled Asset Relief Program, or TARP, while Bank of America (BAC, Fortune 500) returned $45 billion in TARP money last week.

Wells Fargo also said it would raise $1.35 billion by issuing common stock to certain employees instead of cash as part of their 2009 compensation. It also plans to boost equity by selling $1.5 billion worth of assets, pending approval by the Federal Reserve.

The bank expects to have a Tier 1 common equity ratio of 6.2% once the bailout funds are repaid.

Under the TARP program, Wells Fargo said it had paid $1.4 billion in dividends to the U.S. Treasury.

"TARP stabilized our country's financial system when confidence in financial markets around the world was being tested unlike any other period in our history," said John Stumpf, Wells Fargo's president and chief executive, in a statement.

Stumpf was one of 12 bank CEOs present at the White House Monday where president Obama urged them to make more loans to small businesses and modify mortgages to aid struggling homeowners.

In a statement released late Monday, Stumpf said Wells Fargo is committed to serving the financial needs of consumers and businesses as the economy continues its recovery.

"We remain committed to keeping credit flowing, and working closely with financially distressed home owners, as we have throughout this downturn and credit crisis," Stumpf said.

Citigroup strikes deal to repay TARP

Meanwhile earlier in the day, Citigroup said it would raise money to repay the government through a combination of stock and debt, the bulk of which would come from a $17 billion common stock offering.

The New York-based bank also said the government plans to gradually sell the $25 billion worth preferred-stock it owns in Citi over the next 6 to 12 months.

At Citibank, the rush to repay TARP money stems partly from concerns about ongoing government restrictions, including caps on pay packages for executives at the nation's largest bailout firms.

On Friday, White House "pay czar" Kenneth Feinberg capped base salaries for 75 Citigroup executives at $500,000 for the remaining three weeks of 2009.

Those changes were expected to serve as the model for their pay next year as well. But, by paying back the bailout, Citigroup will no longer be required to submit pay packages for its executives to the government for approval.

Wells Fargo was not under the authority of Feineberg's pay restrictions. 

Kenneth Feinberg

Kenneth R. Feinberg was the compensation overseer for the U.S. Department of the Treasury, and is a director at the Human Rights First.

Note: Timothy F. Geithner was the secretary for the U.S. Department of the Treasury for the Barack Obama administration, an overseer at the International Rescue Committee, and is a director at the International Rescue Committee.

Harold E. Ford Jr. was an overseer at the International Rescue Committee, a senior policy adviser for the Bank of America Corp. (Bailout Company), and a 2008 Bilderberg conference participant (think tank).

Foundation to Promote Open Society was a funder for the International Rescue Committee, the Human Rights First, and the Brookings Institution (think tank).

George Soros is the chairman for the Foundation to Promote Open Society, and William D. Zabel was his divorce lawyer.

William D. Zabel was a trustee at the Foundation to Promote Open Society, George Soros’s divorce lawyer, and is the chair for the Human Rights First.

Mona K. Sutphen is a director at the International Rescue Committee, a director at the Human Rights First, and was an assistant to the president and deputy chief of staff for the Barack Obama administration.

Harold H. Koh was a director at the Human Rights First, a trustee at the Brookings Institution (think tank), and the State Department legal adviser for the Barack Obama administration.

James D. Zirin was a director at the Human Rights First, and is a senior counsel at Sidley Austin LLP.

Mark A. Angelson was a director at the Human Rights First, a partner at Sidley Austin LLP, and is a trustee at the Institute of International Education.

R. Eden Martin is counsel at Sidley Austin LLP, and the president of the Commercial Club of Chicago.

Newton N. Minow is a senior counsel at Sidley Austin LLP, and a member of the Commercial Club of Chicago.

Michelle Obama was a lawyer at Sidley Austin LLP.                    

Barack Obama was an intern at Sidley Austin LLP, and is the president of the Barack Obama administration.

Walter E. Massey is a member of the Commercial Club of Chicago, and was the chairman for the Bank of America Corp. (Bailout Company).

Cyrus F. Freidheim Jr. is a member of the Commercial Club of Chicago, and an honorary trustee at the Brookings Institution (think tank).  

Valerie B. Jarrett is a member of the Commercial Club of Chicago, the senior adviser for the Barack Obama administration, and her great uncle is Vernon E. Jordan Jr.

Vernon E. Jordan Jr. is an honorary trustee at the Brookings Institution (think tank), is a trustee at the Institute of International Education, Valerie B. Jarrett’s great uncle, Vickee Jordan Adams’s father, married to Ann Dibble Jordan, a director at the American Friends of Bilderberg (think tank), and a 2008 Bilderberg conference participant (think tank).

Vickee Jordan Adams is Vernon E. Jordan Jr’s daughter, and the VP at Wells Fargo Home Mortgage.

Wells Fargo Home Mortgage is a division of Wells Fargo & Co. (Bailout Company).

John S. Chen is a director at Wells Fargo & Co. (Bailout Company), and was a trustee at the Brookings Institution (think tank).  

Ann Dibble Jordan is married to Vernon E. Jordan Jr., an honorary trustee at the Brookings Institution (think tank), and was a director at Citigroup Inc. (Bailout Company).

Judith Rodin was an honorary trustee at the Brookings Institution (think tank), and is a director at Citigroup Inc. (Bailout Company).

Lawrence H. Summers was a trustee at the Brookings Institution (think tank), the National Economic Council chairman for the Barack Obama administration, is a consultant for Citigroup Inc. (Bailout Company), and a 2008 Bilderberg conference participant (think tank).

Klaus Kleinfeld is a trustee at the Brookings Institution (think tank), was a director at Citigroup Inc. (Bailout Company), and a 2008 Bilderberg conference participant (think tank).

A.W. Clausen was an honorary trustee at the Brookings Institution (think tank), and the chairman & CEO for the Bank of America Corp. (Bailout Company).