Wells Fargo 2011 Annual Report Download - page 232

Note 26: Regulatory and Agency Capital Requirements
The Company and each of its subsidiary banks are subject to
regulatory capital adequacy requirements promulgated by
federal regulatory agencies. The Federal Reserve establishes
capital requirements, including well capitalized standards, for
the consolidated financial holding company, and the OCC has
similar requirements for the Company’s national banks,
including Wells Fargo Bank, N.A.
We do not consolidate our wholly-owned trust (the Trust)
formed solely to issue trust preferred and preferred purchase
securities (the Securities). Securities issued by the Trust
includable in Tier 1 capital were $7.5 billion at
December 31, 2011. Since December 31, 2010, we have called
$9.2 billion of trust preferred securities, and also issued
$2.5 billion in Series I Preferred Stock, replacing certain
preferred purchase securities reflected in the amount of
Securities issued by the Trust includable in Tier 1 capital at
December 31, 2010. The Series I Preferred Stock was included in
preferred stock (Note 18), as a separate component of Tier 1
capital. The junior subordinated debentures held by the Trust
were included in the Company’s long-term debt.
Certain subsidiaries of the Company are approved
seller/servicers, and are therefore required to maintain
minimum levels of shareholders’ equity, as specified by various
agencies, including the United States Department of Housing
and Urban Development, GNMA, FHLMC and FNMA. At
December 31, 2011, each seller/servicer met these requirements.
Certain broker-dealer subsidiaries of the Company are subject to
SEC Rule 15c3-1 (the Net Capital Rule), which requires that we
maintain minimum levels of net capital, as defined. At
December 31, 2011, each of these subsidiaries met these
requirements.
The following table presents regulatory capital information
for Wells Fargo & Company and Wells Fargo Bank, N.A.
Wells Fargo & Company
Wells Fargo Bank, N.A.
Well-
Minimum
December 31,
capitalized
capital
(in billions, except ratios)
2011
2010
2011
2010
ratios (1)
ratios (1)
Regulatory capital:
Tier 1
$
114.0
109.4
92.6
90.2
Total
148.5
147.1
117.9
117.1
Assets:
Risk-weighted
$
1,005.6
980.0
923.2
895.2
Adjusted average (2)
1,262.6
1,189.5
1,115.4
1,057.7
Capital ratios:
Tier 1 capital
11.33
%
11.16
10.03
10.07
6.00
4.00
Total capital
14.76
15.01
12.77
13.09
10.00
8.00
Tier 1 leverage (2)
9.03
9.19
8.30
8.52
5.00
4.00
(1) As defined by the regulations issued by the Federal Reserve, OCC and FDIC.
(2) The leverage ratio consists of Tier 1 capital divided by quarterly average total assets, excluding goodwill and certain other items. The minimum leverage ratio guideline is
3% for banking organizations that do not anticipate significant growth and that have well-diversified risk, excellent asset quality, high liquidity, good earnings, effective
management and monitoring of market risk and, in general, are considered top-rated, strong banking organizations.
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