On May 14, 2025, Wells Fargo & Company (NYSE: WFC), a leading financial services firm with approximately $1.9 trillion in assets, announced the full redemption of its Series U Preferred Stock and the related depositary shares. This strategic financial maneuver is set for June 16, 2025, following a shift due to a non-business day. The redemption encompasses 80,000 shares of the 5.875% Fixed-to-Floating Rate Non-Cumulative Perpetual Class A Preferred Stock, Series U, alongside 2,000,000 associated depositary shares each representing a 1⁄25 interest.
The redemption price is fixed at \(25,000 per preferred share and \)1,000 per depositary share, culminating in a total redemption outlay of $2 billion by Wells Fargo. Importantly, this payment excludes dividends declared but unpaid, which will be settled separately on the same date. This redemption concludes Wells Fargo’s liability for this class of preferred stock, as no shares will remain outstanding post redemption.
From a financial perspective, the redemption will impact Wells Fargo’s balance sheet by reducing preferred equity by approximately \(2 billion. As of the last fiscal quarter ending September 30, 2024, Wells Fargo reported total liabilities of \)1.737 trillion and total shareholders’ equity of $183.3 billion. The redemption thus slightly adjusts the equity structure but does not materially affect the overall capital base given Wells Fargo’s substantial asset and equity scale.
This move aligns with Wells Fargo’s ongoing capital management strategy to optimize its capital structure and enhance financial flexibility amid an evolving interest rate environment and regulatory landscape. The Series U Preferred Stock bore a fixed coupon of 5.875% transitioning to a floating rate, and retiring this instrument may reflect the firm’s intent to manage interest expense prudently.
In previous earnings calls, Wells Fargo emphasized navigating economic uncertainty and government regulatory efficiency pressures, with a focus on maintaining strong capital adequacy and liquidity. The redemption of these preferred shares complements these objectives by potentially lowering fixed financing costs and simplifying capital allocation.
For investors and market participants, this redemption signals Wells Fargo’s proactive approach to capital management, balancing shareholder returns with regulatory compliance and financial strength. The company remains diversified through its main operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth & Investment Management.
For additional context, Wells Fargo ranked 34th on Fortune’s 2024 list of America’s largest corporations, underscoring its significant footprint in the U.S. financial landscape.
This announcement and its detailed filing can be reviewed in full at the SEC Edgar database: https://sec.gov/Archives/edgar/data/72971/000119312525119411/d55170dex991.htm
Tags: Wells Fargo Capital Management, Series U Preferred Stock Redemption, Bank Capital Structure, Financial Services Equity, Regulatory Compliance Wells Fargo