Wells Fargo says repaying TARP will eliminate $1.25 billion in annual preferred stock dividends, and will be slightly accretive to earnings per share in 2010. The repayment will reduce income available to common shareholders in the fourth quarter by $2 billion, it said, because the book value of the preferred stock is less than the amount paid.

"Over the last decade Wells Fargo maintained capital ratios above peer levels, one of the main reasons we have been able to continue to profitably grow our company – including three consecutive quarters of record profits this year – despite the credit crisis of the last two years," said Wells Fargo Chief Financial Officer Howard Atkins. "Upon the acquisition of Wachovia late last year, our capital ratios initially declined – as one might expect when doubling the size of the company and writing down Wachovia's higher risk loans – but having already accounted for that risk to capital, our capital ratios are growing organically as we realize the revenue and expense synergies from the acquisition, and as Wells Fargo's business model continues to generate capital internally – as we historically have. Excluding the impact of TARP funds, stockholders' equity at Sept. 30, 2009 was up $50 billion from a year ago and including today's…capital actions, $63 billion on a pro forma basis."

Wells Fargo Securities and Goldman, Sachs & Co. acted as lead underwriters for the offering. They maintain an option to buy up to an additional $1.56 billion of Wells Fargo common stock, exercisable within 30 days from the date of the offering.