Free Markets, Free People


TARP News: Wells Fargo to Pay Back U.S.

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According to this report, Wells Fargo is prepared to put some money back into the federal coffers:

Good news out of the failing financial sector, finally. Wells Fargo Bank reports it will pay back the federal government $371.5 million in its first quarterly bailout installment.

Wells Fargo is believed to be the first major bank receiving TARP (Troubled Assets Relief Program) to do so.

In an internal memo obtained by The Remmers Report, Wells Fargo said the quarterly dividend of $14,861.11 per share is payable Feb. 15. The feds purchased 25,000 shares of Fixed Rate Cumulative Perpetual Preferred Stock last September and is the only holder of record of the Series D preferred stock.

“Since credit began contracting 18 months ago, Wells Fargo has made almost half a trillion dollars in new loan commitments and mortgage originations,” said Chief Financial Officer Howard Atkins. “Last quarter alone, we made $22 billion in loan commitments and $50 billion in mortgage originations. That’s more than $70 billion or almost three times the amount of the U.S. Treasury’s investment in Wells Fargo. We believe we’re leading our industry in lending to creditworthy customers during this difficult economy.”

It is ironic that initially Wells Fargo signalled (sic) Treasury it did not want TARP funds and when it did, negotiated the takeover of financial giant competitor Wachovia.

The payment would represent only about 1.5% of the TARP funds given to Wells Fargo, but it’s a start I guess.

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21 Responses to TARP News: Wells Fargo to Pay Back U.S.

  • My buddy works for Wells Fargo. The word around the office is they were forced by the administration to take the bailout, even though they had no desire. The plan was to pay it off ASAP… this would appear to be the first installment.

  • They’re not “paying anything off”.  This is the quarterly dividend due on the lump sum they received from the US govt.  The amount outstanding is still the same.

  • Can’t they just forget to pay and invoke the Rangel Rule?

  • My buddy works for Wells Fargo. The word around the office is they were forced by the administration to take the bailout, even though they had no desire. The plan was to pay it off ASAP… this would appear to be the first installment.

    That’s correct. They never wanted it. They were told they were going to take it.

  • For taking over that nightmare called Wachovia, the government should have paid Wells Fargo. At least thats what my wife says (former employee), according to her upper management was a real cluster..

    She thankfully got out a couple of years before the SHTF.

  • Forgive me if I don’t buy the idea “they were forced to take it” as a given.  Taking this money became toxic to the public image.  And the goal of giving the money was shore up these institutions and the public’s trust in some of these companies.  So there’s motive in allowing people to believe it was ‘forced’ whether it was or it wasn’t.

  • KMan is right – this is just a dividend payment – not a return of principal.  Don’t think it will happen for a few quarters at minimum, because frankly it’s cheap money, good insurance for Wells and only 5% cost of money – much lower than they could get by lending it out.

  • As talk shows rail against Wells Fargo today for its Las Vegas trip – am I wrong to think Wells Fargo was FORCED to take the money by the Feds?  I thought it had something to do with the CEO missing out of a $100m bonus.
    OLE

    • I bank with WFB. I am a preferred customer with several business accounts. I went to deposit a check today, which they started to put on hold while the branch mgr was crafting a reply RE: TARP money.
      “forced” to take $$…please. Paulsen wanted  a distressed asset, Wachovia, bought, and financed it with cheap Fed funds – but not the discount window….
      Grow Up everyone, this is banking it its least transpearent hour – the govt is trying to get the big banks to buy the dirty assets, and financing it. Sarbanes Oxley Rules apply to publicly traded stock, so you are getting Spin!

    • I bank with WFB. I am a preferred customer with several business accounts. I went to deposit a check today, which they started to put on hold while the branch mgr was crafting a reply RE: TARP money.
      “Forced” to take $$…please. Paulsen wanted  a distressed asset, Wachovia, bought and financed it with cheap Fed funds – but not the discount window….
      Grow Up everyone, this is banking in its least transparent hour – the govt is trying to get the big banks to buy the dirty assets, and financing it. Sarbanes Oxley Rules apply to publicly traded stock, so you are getting  “Spin”!

  • In the interest of full disclosure, my wife works for WFB and we have both been on these “lavish” trips but were not scheduled for the cancelled trips. The trips are nice but lavish is not an accurate description. They are reward trips for top performers and must be earned. As far as I have ever seen, WFB is the only company which awards such trips to employees as low on the totem pole as tellers, and yes there are always several tellers on each trip. This is done to encourage all levels of employees to perform and are looked forward to by all levels of employees. These so called investigative reporters haven’t got a clue what they are talking about. Much of the reporting speaks of a 12 day junket for the executives when in fact it is 4 different three day trips for 4 different divisions with few executives in attendance. Rooms are standard rooms and currently $149 at the Encore Hotel. Employees (and 1 guest) are given approximately $400-500 dollars for food and miscellaneous expenses and a voucher for one activity worth about $100 per person. Booze, gambling, additional activities are all on the employee. In short, with the awards dinner and miscellaneous expenses, the cost probably comes to less than $2000 per employee and guest.

    As to the reports of high priced entertainment, that is an entirely different trip which is awarded to the national performance winners and is more lavish and again includes employees on the level of tellers; your basic entry level $10-15 per hour employees.

    I have also read that Wells was “forced” to take TARP funds. I have been looking for the news reports I have previously seen but so far haven’t found them. However, even if WFB did accept $25 Billion, how much did it save the Feds by taking over Wachovia WITHOUT any Federal assistance. Just compare it to the Citibank deal brokered by the Feds. 

  • I hope the WF employee that wrote a mortgage for my daughter was fired.  If he is the kind of employee that is being rewarded it’s no wonder homes are being foreclosed.  If she lived to be 200 that mortgage would never be paid off.  They will not modify the loan.  My daughter’s credit score is 800 and sadly she has no choice but to walk away.   After being told that she may just hand the keys back, WF will still not modify the loan.  Obviously, that’s ok with WF.

    • Hey Lynn,

      Maybe your daughter should take some personal accountability and know what she is signing. Nobody forced her to sign the note..

  • $25 billion times 5% dividend rate equals $1.25 billion divided by 4 quarters equals $312,500,000 (dividend for 1 quarter).   So it begs the question:  where does the $371,500,000 come from?  It is $59 million more and equates to 5.94%, not 5%.  The preferred deal was announced on 10/29/08, so I asume this represents the three months dividend for November and December 2008 and January 2009.  What am I missing?  Is the calculation intended to include the two days in October plus 15 days in February?

  • We have a business in town and have been banking with Wells Fargo for 5 years.   We have put close to 3.5 million through the bank since then.  We have 2 mortgages, a credit card, and a credit line with the bank.  Our town ins in the toilet with the economy so when we went to see our “banker” he dis not have a “product” for us, when we wanted a small $60k  SECURED loan so we could buy some inventory and pay some suppliers.    Wells Fargo does not support small businesses and does not understand the concept of relationshp banking.    Without thier support I layed off 2 employees.   

    • I am a small buisness owner and bank with two banks one of which is WF…I was able to get a SB loan from WF without any major problem in 9/2008 (took longer due to this crisis).  They used to put holds on my checks (for the first month or if I use a bank in another town) but don’t any longer and I have had excellent service with them.  They were forced to take “TARP” money as they are one of two banks (also USB) that made money last year.  I beleive it was about 9% in the article I read.  WF stayed away from the risky housing debacle and now they have to appear before Barney Frank to be grilled????  Why is Barney Frank not being grilled for his actions that caused this entire mess.  Hello America get a clue….this plan was meant to nationalize the banks and punish those of us that actually have ambition and work hard and succeed!

  • Hey Joe,

    Maybe WF couldn’t help you out because your way over extended. 2 mortgages, which i would guess the homes have lost value, your probably maxed on your credit card and line. Again, some personal accountability would be nice in this world.  It’s called saving not spending every dime that comes in.  Of course I could be wrong but, I bet I am not

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