There’s No Reason to Stress About Wells Fargo & Co (WFC): U.S. Bancorp (USB), BB&T Corporation (BBT)

Given that Wells Fargo & Co (NYSE:WFC)’s capital levels have since increased, it seems safe to assume that it’ll sail past the tests this year even more comfortably. At the end of the third quarter in 2011, its Basel I Tier 1 common capital ratio was 9.34%. By the end of the third quarter last year, this had grown to 9.92%. And as you can see below, it has copious amounts of excess capital regardless of how you measure it.

What this chart shows us is that Wells Fargo has between $52.4 billion and $58.7 billion in capital beyond regulatory minimums depending on which capital ratio is employed. For instance, it has nearly double the amount of Tier 1 common capital than required under the prevailing regulatory scheme — that is, it holds $52.4 billion of capital beyond the minimum $53.4 billion required.

Source: Wells Fargo’s regulatory filings.

In addition to its static capital levels, moreover, Wells Fargo has the capacity to accumulate cash in a short period of time. Despite paying out roughly a third of its net income via dividends and buying back a considerable amount of stock last year, its retained earnings nevertheless grew by 21% from the third quarter of 2011 to the third quarter of 2012. Also, the bank is earning more money than it ever has. Last year, it reported almost $19 billion in net income. That’s more than twice its record before the crisis!

Taken together, in turn, it seems highly unlikely that Wells Fargo would run into any problems passing this round of stress tests. Consequently, the more interesting question will be if, and how much, it increases its dividend when presumably given the approval to do so next week.

The article There’s No Reason to Stress About Wells Fargo originally appeared on Fool.com and is written by John Maxfield.

John Maxfield owns shares of Bank of America. The Motley Fool recommends Wells Fargo. The Motley Fool owns shares of Bank of America, Fifth Third Bancorp, and Wells Fargo.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.