Wells Fargo & Company Announces Full Redemption of its Series R Preferred Stock and Related Depositary Shares

Rhea-AI Summary

Wells Fargo & Company (NYSE: WFC) announced the redemption of all outstanding shares of its 6.625% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series R. The redemption price will be $25,000.00 per Redeemed Series R Preferred Share and $25.00 per Redeemed Series R Depositary Share. The redemption date is also a dividend payment date, and regular quarterly dividends will be paid separately on March 15, 2024. All regulatory requirements have been satisfied by Wells Fargo & Company.

Insights

Financial Analyst

Wells Fargo's decision to redeem its Series R Preferred Stock represents a strategic financial maneuver that impacts the company's capital structure. By redeeming these shares, Wells Fargo is effectively reducing its outstanding securities and potentially altering its debt-to-equity ratio. This action could indicate the company's confidence in its liquidity and balance sheet strength, as redeeming preferred stock requires a significant cash outlay. For investors, this redemption may signal a shift in Wells Fargo's capital allocation strategy, possibly toward investing in growth opportunities or improving return on equity. It's also noteworthy that the redemption is being conducted at a par value of $25,000 per preferred share and $25 per depositary share, which suggests a return to investors that may or may not align with the current market value of these securities.

Market Research Analyst

The redemption of preferred shares by Wells Fargo could reflect broader market trends where firms seek to optimize their capital structures in a changing interest rate environment. By transitioning from fixed-to-floating rate obligations, Wells Fargo may be looking to benefit from potential interest rate decreases in the future. This move might also be interpreted by the market as an attempt to streamline the company's equity base, making it more attractive to common shareholders. Market reaction to such news typically varies; some investors might view the redemption favorably as it could lead to a more efficient capital structure, while others might be concerned about the redeployment of capital and its impact on future dividend payments.

Legal Expert

The announcement states that all regulatory requirements for the redemption have been met, which is a crucial aspect of such corporate actions. Compliance with regulatory standards ensures that Wells Fargo is adhering to the necessary legal frameworks, which is fundamental for maintaining investor confidence and avoiding potential legal complications. The involvement of a redemption agent, Equiniti Trust Company, in facilitating the payment process, underscores the procedural nature of such transactions and the importance of third-party entities in ensuring that the redemption is conducted smoothly and in accordance with the law.

SAN FRANCISCO--(BUSINESS WIRE)-- Wells Fargo & Company (NYSE: WFC) today announced that on March 15, 2024, it will redeem all 33,600 outstanding shares (the “Redeemed Series R Preferred Shares”) of its 6.625% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series R (the “Series R Preferred Stock”). The redemption of the Redeemed Series R Preferred Shares will trigger the redemption of the 33,600,000 outstanding shares of the related depositary shares (the “Redeemed Series R Depositary Shares”), each representing a 1/1,000 interest in a share of Series R Preferred Stock (the “Series R Depositary Shares”) (NYSE: WFC.PRR). The redemption price will be equal to $25,000.00 per Redeemed Series R Preferred Share and $25.00 per Redeemed Series R Depositary Share. After giving effect to the redemption, no shares of the Series R Preferred Stock or the Series R Depositary Shares will remain outstanding.

Wells Fargo Bank branch located in the Wells Fargo Center (Photo: Wells Fargo)

Because the redemption date is also a dividend payment date for the Series R Preferred Stock and the Series R Depositary Shares, the redemption prices noted herein do not include declared and unpaid dividends. Regular quarterly dividends will be paid separately in the customary manner on March 15, 2024, to holders of record at the close of business on Feb. 29, 2024.

All regulatory requirements relating to the redemption of the Redeemed Series R Preferred Shares and Redeemed Series R Depositary Shares have been satisfied by Wells Fargo & Company. The redemption agent is Equiniti Trust Company, LLC, 1110 Centre Pointe Curve, Suite 101, Mendota Heights, Minnesota 55120. Payment of the redemption price for the Redeemed Series R Depositary Shares will be sent to holders by the redemption agent on the redemption date.

About Wells Fargo

Wells Fargo & Company (NYSE: WFC) is a leading financial services company that has approximately $1.9 trillion in assets. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth & Investment Management. Wells Fargo ranked No. 47 on Fortune’s 2023 rankings of America’s largest corporations. In the communities we serve, the company focuses its social impact on building a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health, and a low-carbon economy. News, insights, and perspectives from Wells Fargo are also available at Wells Fargo Stories.

Additional information may be found at www.wellsfargo.com

LinkedIn: https://www.linkedin.com/company/wellsfargo

News Release Category: WF-CF

View source version on businesswire.com: https://www.businesswire.com/news/home/20240206586528/en/

Media

Beth Richek, 704-374-2545

beth.richek@wellsfargo.com

Investor Relations

Tanya Quinn, 415-396-7495

tanya.quinn@wellsfargo.com

Source: Wells Fargo & Company

FAQ

What is the ticker symbol for Wells Fargo & Company?

The ticker symbol for Wells Fargo & Company is WFC.

What is the redemption price for the Redeemed Series R Preferred Share?

The redemption price will be $25,000.00 per Redeemed Series R Preferred Share.

When will regular quarterly dividends be paid?

Regular quarterly dividends will be paid separately on March 15, 2024.

What is the address of the redemption agent?

The redemption agent is Equiniti Trust Company, LLC, 1110 Centre Pointe Curve, Suite 101, Mendota Heights, Minnesota 55120.