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 Treasury it did not want TARP funds and when it did, negotiated the takeover of financial giant competitor Wachovia.
Among the lending highlights listed in the internal memo:
Average earning assets, primarily loans and securities, up $119 billion, or 28 percent, since the start of the credit crisis in mid-2007.
New loan commitments to consumer and commercial customers of $187 billion since mid-2007.
Residential real estate originations of $354 billion since mid-2007.
New loan commitments of $22 billion in fourth quarter.
Average loans in fourth quarter up $9.7 billion, or 10 percent.
Residential real estate originations of $50 billion in fourth quarter.
Wells Fargo Home Mortgage is the nation’s second largest mortgage servicer, a leader in developing programs to protect homeowners, helping them modify their mortgages and avoid foreclosure. Through repayment plans and other modifications, Wells Fargo provided 498,000 solutions to customers in 2008, including 143,000 last quarter.
Wells Fargo is aggressively using streamlined approaches and customized solutions to avoid preventable foreclosures for Wachovia mortgage customers, primarily those whose loans are delinquent or are likely to become delinquent -- 478,000 Wachovia customers.
While the internal memo sounds self-serving, Wells Fargo's financial success is a welcome relief to the stigma banks receiving TARP funds are hoarding the money to improve their assets.