Wells Fargo Issues Shares in U.S. Treasury Capital Purchase

Wells Fargo & Company (NYSE:WFC) announced today it has issued to the U.S. Department of the Treasury 25,000 shares of Wells Fargo’s Fixed Rate Cumulative Perpetual Preferred Stock, Series D without par value. The shares have a liquidation amount per share equal to $1,000,000, for a total price of $25 billion. This issuance is part of the Treasury Department’s Troubled Asset Relief Program (TARP) Capital Purchase Program, under which the Treasury Department is authorized to use appropriated funds under the Emergency Economic Stabilization Act of 2008 to invest in U.S. financial institutions to encourage financing for U.S. businesses and consumers and to support the U.S. economy.

The preferred securities pay cumulative dividends of five percent a year for the first five years and nine percent a year thereafter. Wells Fargo cannot redeem the preferred securities during the first three years after issuance except with the proceeds from a "qualified equity offering.” After three years, Wells Fargo can redeem the preferred securities at par value plus accrued and unpaid dividends. As part of its purchase of the preferred securities, the Treasury Department also received warrants to purchase 110,261,688 shares of Wells Fargo’s common stock at an initial per share exercise price of $34.01. The warrants expire ten years from the issuance date. Both the preferred securities and warrants will be accounted for as components of Wells Fargo’s regulatory Tier 1 capital.

Wells Fargo was among the first nine large financial institutions to participate in the Treasury Department’s capital purchase program. "We believe the Treasury’s plan is a positive step toward providing much needed capital for financial institutions in the best position to deploy it effectively to stimulate the U.S. economy and strengthen confidence in the U.S. banking system,” Chief Financial Officer Howard Atkins. "The strength of our franchise, earnings and balance sheet positions us well to continue lending across all sectors and satisfying all of our customers’ financial needs, which is in the spirit of the Treasury’s plan.” As of September 30, 2008, prior to this new capital investment, Wells Fargo’s Tier 1 regulatory capital ratio was 8.5 percent, one of the strongest among large bank holding companies.

As announced when Wells Fargo signed its definitive agreement with Wachovia Corporation (NYSE:WB), Wells Fargo plans to raise up to $20 billion of capital, primarily common stock. "The combination of the market capital and the capital investment from the government will enable us to finance the Wachovia acquisition, to continue to build our franchise and gain market share as we’ve done throughout the credit crunch and to maintain one of the strongest balance sheets and highest capital ratios among U.S. financial services companies,” Atkins said in Company’s third quarter earnings recorded statement.

Wells Fargo & Company is a diversified financial services company with $622 billion in assets, providing banking, insurance, investments, mortgage and consumer finance through almost 6,000 stores and the internet (wellsfargo.com) across North America and internationally. Wells Fargo Bank, N.A. is the only bank in the U.S., and one of only two banks worldwide, to have the highest possible credit rating from both Moody’s Investors Service, "Aaa,” and Standard & Poor’s Ratings Services, "AAA.”