Wells Fargo Releases Stress Test Results Under Dodd-Frank Act
June 25 2020 - 7:49PM
Business Wire
Wells Fargo & Company (NYSE: WFC) today released the results
of its company-run stress test conducted in accordance with the
Dodd-Frank Wall Street Reform and Consumer Protection Act
(DFA).
The results can be found at:
https://www.wellsfargo.com/about/investor-relations/stress-test-reports/
The Federal Reserve Board (FRB) has published the results of its
supervisory-run DFA stress tests for the nation’s largest banks,
including Wells Fargo. Wells Fargo’s estimates may differ from the
FRB’s estimates, including because the FRB stress tests assumed no
common stock dividends, while Wells Fargo’s company-run stress test
used the Dodd-Frank Capital Actions1 distribution requirements.
In light of the impact on the global economy of the COVID-19
pandemic and the measures taken in response to the pandemic, the
FRB has determined that the changes in financial markets or the
macroeconomic outlook could have a material effect on banks’ risk
profile and financial condition and require updated capital plans.
As such, the FRB is requiring the nation’s largest banks, including
Wells Fargo, to update and resubmit their capital plans within 45
days after the FRB provides updated scenarios.
Requiring resubmission will prohibit each bank from making any
capital distribution (excluding any capital distribution arising
from the issuance of a capital instrument eligible for inclusion in
the numerator of a regulatory capital ratio), unless otherwise
approved by the FRB. Through the end of the third quarter of 2020,
the FRB is authorizing each bank to:
- Make share repurchases relating to issuances of common stock
related to employee stock ownership plans.
- Provided that the bank does not increase the amount of its
common stock dividends, pay common stock dividends that do not
exceed an amount equal to the average of the bank’s net income for
the four preceding calendar quarters, unless otherwise specified by
the FRB.
- Make scheduled payments on additional tier 1 and tier 2 capital
instruments.
These provisions may be extended by the FRB
quarter-by-quarter.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified,
community-based financial services company with $1.98 trillion in
assets. Wells Fargo’s vision is to satisfy our customers’ financial
needs and help them succeed financially. Founded in 1852 and
headquartered in San Francisco, Wells Fargo provides banking,
investment and mortgage products and services, as well as consumer
and commercial finance, through 7,400 locations, more than 13,000
ATMs, the internet (wellsfargo.com) and mobile banking, and has
offices in 31 countries and territories to support customers who
conduct business in the global economy. With approximately 263,000
team members, Wells Fargo serves one in three households in the
United States. Wells Fargo & Company was ranked No. 30 on
Fortune’s 2020 rankings of America’s largest corporations. News,
insights and perspectives from Wells Fargo are also available at
Wells Fargo Stories.
Cautionary Statement about Forward-Looking Statements
This news release contains forward-looking statements about our
future regulatory capital levels, which will be an important factor
in determining the extent we may pay common stock dividends and
repurchase common stock. Forward-looking statements speak only as
of the date made, and we do not undertake to update them. Actual
capital levels and capital actions may vary materially from
expectations due to a number of factors, including those described
in our reports filed with the Securities and Exchange Commission
and available at www.sec.gov. The amount and timing of any future
common stock dividends or repurchases will depend on the earnings,
cash requirements and financial condition of the Company, market
conditions, capital requirements (including under Basel capital
standards), common stock issuance requirements, applicable law and
regulations (including federal securities laws and federal banking
regulations), and other factors deemed relevant by the Company’s
Board of Directors, and may be subject to regulatory approval or
conditions.
1. Capital actions that are prescribed by the DFA stress test
rule, which included estimated Q1 2020 capital actions taken by the
Company, and for quarters two through nine of the test horizon, no
issuance of regulatory capital other than assumed issuance of
common stock for employee compensation; payments of common stock
dividends equal to the quarterly average dollar amount paid by the
Company from Q2 2019 through Q1 2020; payments on all other
regulatory capital instruments equal to the stated dividend,
interest, or principal due during the quarter; and no capital
redemptions or purchases.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200625005935/en/
Media Peter Gilchrist, (704) 715-3213
Peter.gilchrist@wellsfargo.com
Investor Relations John Campbell, (415) 396-0523
john.m.campbell@wellsfargo.com
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