Company News »

Wells Fargo Releases Stress Test Results Under Dodd-Frank Act

Business Wire
Share on StockTwits
Published on

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/invest_relations/stress-test-reports.

The Federal Reserve has published the results of its supervisory-run DFA stress tests for thirty-one of the nation’s largest banks, including Wells Fargo, using the DFA standardized capital distribution requirements. Under a hypothetical severely adverse economic scenario developed by the Federal Reserve and using the standardized capital distribution assumptions specified in the DFA, the Federal Reserve estimated that for the nine-quarter test horizon ending December 31, 2016, Wells Fargo’s lowest and ending Common Equity Tier 1 (CET1) ratio under the Basel III standardized approach with transitional arrangements would each be 6.9%. Using the same economic scenario and capital distribution assumptions, we estimate that our lowest and ending Common Equity Tier 1 ratio would be 9.1% and 9.6%, respectively. Under both our and the Federal Reserve’s calculations, Wells Fargo’s CET1 ratio remains above the Federal Reserve’s minimum required ratio of 4.5%.

In addition to the CET1 ratio, other capital ratios are estimated and compared against minimum requirements. Under both our and the Federal Reserve’s calculations, Wells Fargo’s capital ratios also remain above these minimums, as presented in the table below:

Projected minimum DFAST capital ratios under the 2015 Supervisory Severely Adverse scenario

Wells Fargo
Estimate (1)

Federal
Reserve
Estimate

2016
Regulatory
Minimum

Tier 1 common equity 9.5 % 7.5 % 5.0 %
Common Equity Tier 1 9.1 6.9 4.5
Tier 1 risk-based capital 10.5 8.2 6.0
Total risk-based capital 13.5 11.1 8.0
Tier 1 leverage 8.9 6.4 4.0

(1)

Tier 1 common equity ratio calculated under Basel I, all other risk-weighted capital ratios calculated under Basel III standardized approach with transitional arrangements

The Federal Reserve has indicated that on March 11, 2015, it will release its estimates of Wells Fargo’s capital ratios using the same financial assumptions, but with our planned capital actions for the two-year forecast horizon.

About Wells Fargo

Wells Fargo & Company (NYSE:WFC) is a nationwide, diversified, community-based financial services company with $1.7 trillion in assets. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance through more than 8,700 locations, 12,500 ATMs, and the internet (wellsfargo.com) and mobile banking, and has offices in 36 countries to support customers who conduct business in the global economy. With approximately 265,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 29 on Fortune’s 2014 rankings of America’s largest corporations.

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 our 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 the expectations described in this news release 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.

Share on StockTwits