Wells Fargo & Co. (WFC) - NYSE
  • Mar. 26, 2014, 5:02 PM
    • Given the green light by the Fed, Wells Fargo (WFC) increases its quarterly dividend by a nickel to $0.35 per share for an annualized yield of 2.9%. The 350M share buyback would retire about 6.6% of the float - a whopping amount compared to the other repurchase announcements (generally less than 3%).
    • Shares +0.4% AH
    • Full CCAR results
    • Previous coverage
    | Mar. 26, 2014, 5:02 PM | 4 Comments
  • Mar. 26, 2014, 2:51 AM
    | Mar. 26, 2014, 2:51 AM | 15 Comments
  • Mar. 24, 2014, 2:54 PM
    • Noting Bank of America's (BAC -0.9%) capital ratio in the Fed stress test was the lowest of any bank which passed, Atlantic Equities pulls its Overweight rating on the stock, and cuts the price target to $18.50 from $20. The stress test, says analyst Richard Staite, shows BofA with a $13B buffer over the minimum requirement, meaning maybe just $5B in buybacks and $2.5B dividends this year, "although we are somewhat nervous that it or another bank could be failed on a qualitative basis."
    • Still, Staite expects a boost in the quarterly payout to $0.06 per share from a penny.
    • Staite and team upgrade U.S. Bancorp (USB +0.7%) and Wells Fargo (WFC -0.4%) to Neutral from Underweight, citing the large margins by which they passed the stress test.
    • In other financial sector moves, Sterne Agee boosts First Interstate BancSystem (FIBK +6%) to a Buy, citing the benefits of its impending merger with Mountain West Financial. The team also lifts EverBank Financial (EVER +2.4%) to a Buy from Neutral.
    | Mar. 24, 2014, 2:54 PM | 13 Comments
  • Mar. 20, 2014, 4:13 PM
    • Everybody (except Zions) passed, but among the Too Big To Fail banks, Bank of America (BAC) is the weakest performer under the Fed's severely adverse scenario, with its tier 1 common ratio dropping to 6.3%. Citigroup (C) goes to 7%, Goldman Sachs (GS) to 8.9%, JPMorgan (JPM) to 6.7%, Morgan Stanley (MS) to 7.6%, and Wells Fargo (WFC) to 8.2%.
    • The average tier 1 ratio for all banks tested is 8.4%.
    • There's not a whole lot of after-hours movement in any of the TBTF names.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, SEF, IYG, FXO, PFI, KBWB, FNCL, FINU, RWW, RYF, PSCF, FINZ
    • Full report
    | Mar. 20, 2014, 4:13 PM | 7 Comments
  • Mar. 20, 2014, 10:54 AM
    • Much of the financial sector is lit up bright green, continuing to outperform following yesterday's suggestion by the FOMC and Janet Yellen that rate hikes could come sooner than expected. XLF +1.1%, KBE +1.6%, KRE +1.6%.
    • At new 52-week or even multi-year highs are JPMorgan (JPM +2.3%), Wells Fargo (WFC +1.7%), Morgan Stanley (MS +1.4%), and Bank of America (BAC +1.6%).
    • Regional lenders: U.S. Bancorp (USB +1%), Huntington (HBAN +1.5%), PNC (PNC +1.3%), BB&T (BBT +1.5%), Fifth Third (FITB +1.8%), First Niagara (FNFG +2.1%).
    • Leading among the life insurers are Lincoln National (LNC +1.9%), Protective Life (PL +1.6%), Manulife (MFC +1.2%), and Sun Life (SLF +1.1%).
    • ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, SEF, IYG, IAK, FXO, PFI, KBWB, RKH, QABA, FNCL, FINU, KRU, RWW, KBWR, RYF, PSCF, KBWI, KBWP, KRS, FINZ
    | Mar. 20, 2014, 10:54 AM | 5 Comments
  • Mar. 20, 2014, 6:56 AM
    | Mar. 20, 2014, 6:56 AM
  • Mar. 18, 2014, 3:15 PM
    • "A blueprint for fraud," the lawyer who filed a federal suit against Wells Fargo (WFC +0.6%) says of what she contends is a 150-page manual produced by the bank on how to fabricate missing documents to speed foreclosures.
    • Other than acknowledging existence of the manual and claiming all procedures laid out are legal, Wells has refrained from commenting.
    • Among other things, the manual appears to provide step-by-step instructions for a "Default Docs Team" on what to do if a blank endorsement is in the file and the attorney wants the note executed, reports the NYPost, which has a copy.
    • “It’s an explosive document,” says forensic accountant Jay Patterson. “It creates doubt as to whether an endorsed note was actually done when it was supposed to be done years ago, and they didn’t just order it to prosecute the foreclosure.”
    | Mar. 18, 2014, 3:15 PM | 27 Comments
  • Mar. 18, 2014, 11:04 AM
    • Half a million doesn't buy much anymore. House Ways and Means Committee Chairman Dave Camp (R, Mich.) - a sizable recipient of Wall Street donations - has the large financial institutions displeased with his proposal to levy a tax on them. He says they deserve to pay up for the lower borrowing costs they receive because of their perceived government backstop, a notion the banks dispute.
    • The proposal is part of larger tax reform expected to get serious discussion after the mid-term elections, and a Camp spokeswoman says the overall plan will make banks "some of the biggest winners."
    • In discussions to hold a fundraiser for the NRC, Goldman Sachs (GS +0.9%) reportedly opted out over its concerns. Smaller bankers join in with their much larger brethren: "We're going to beat this like a rented mule," says Cam Fine, who heads the Independent Community Bankers Association. "This is a united effort."
    • Camp's tax would apply to financial firms with assets greater than $500B, levying a 0.035% tax on total assets each year. Among those affected (in addition to Goldman) are AIG, BAC, C, GE Capital, JPM MET, MS, PRU, and WFC. The largest could pay more than $2B per year under the plan.
    | Mar. 18, 2014, 11:04 AM | 19 Comments
  • Mar. 17, 2014, 10:57 AM
    • "We maintain our contention that as the tailwind of credit improvement subsides, banks must renew their focus on core profitability to compensate for the persistent low interest rate environment, increased regulations and modest loan growth," writes RBC Capital, trying to say the easy money's been made for banks and now those with the strongest managements will be the ones to prosper going forward.
    • No surprise, an RBC survey finds Wells Fargo (WFC +1%) and U.S. Bancorp (USB +0.8%) as the best-managed banks (defining this by ROA and ROTCE), with Capital One (COF +1.4%) ranking high as well. The team comes up with a list of seven "up and comers" perhaps poised to join the ranks of "best managed":
    • BB&T (BBT +0.5%), Huntington Bancshares (HBAN +0.9%), Fifth Third (FITB +0.7%), JPMorgan (JPM +0.9%), M&T Bank (MTB), PNC Financial (PNC +1%), and SunTrust (STI +0.7%).
    | Mar. 17, 2014, 10:57 AM | 2 Comments
  • Mar. 11, 2014, 9:21 AM
    • Wells (WFC) last month made news by barring its employees from making loans on peer-to-peer platforms like Prosper and Lending Club. Though growing rapidly, the P2P lending business is but a fraction of the amount of credit extended by Wells Fargo, but the bank's move showed the upstarts are clearly on its mind. Former Morgan Stanley CEO John Mack is on the board of Lending Club and Prosper is headed by former Wells prime brokerage chief Stephan Vermut.
    • A fresh review by Wells found loans made by its staff were not "inconsistent with [its] code of ethics ... The P2P market is not uniform and is evolving and expanding rapidly. We will continue to review our guidance as the market evolves.”
    | Mar. 11, 2014, 9:21 AM
  • Mar. 6, 2014, 1:09 PM
    • Wells (WFC +0.6%) and the two insurance companies where it bought the insurance - Assurant (AIZ +1%) and QBE - agreed to repay certain homeowners up to 11% of the premiums paid. Documents don't show how many homeowners how much the total amount is.
    • The suit stems from mortgage servicer practice of buying homeowners insurance when the homeowner doesn't do so. Banks typically opt for very expensive policies and sometimes get commissions on the policies they force place.
    • The judge overseeing the Wells case last week granted final approval to a similar settlement involving JPMorgan and Assurant. He's also ordered an agreement be filed within a week on another case against Bank of America, and last month Citigroup and Assurant agreed to pay $110M in another forced-placement suit.
    | Mar. 6, 2014, 1:09 PM
  • Mar. 6, 2014, 9:37 AM
    • At about $49, Ciitgroup's (C +1%) stock sells for more than a 10% discount to tangible book value. Sitting at the top valuation-wise is Wells Fargo (WFC +0.6%), trading for nearly double its tangible book.
    • Citi has been the weakest performer of the TBTFs this year, with its exposure to jittery emerging markets as good of an excuse as any, but the shares were trading below book before that.
    • Trading at about 1.2x tangible book are Bank of America (BAC +1%), Morgan Stanley (MS +0.6%), and Goldman Sachs (GS +0.9%), while JPMorgan (JPM +1.1%) sells for 1.4x tangible book.
    | Mar. 6, 2014, 9:37 AM | 6 Comments
  • Mar. 5, 2014, 3:42 PM
    • Buying the rumor? On a flattish day for the major averages, the Too Big To Fail banks are ignoring a continued slowdown in markets revenue this quarter, and instead partying ahead of what may be the imminent release of the Fed's stress test results (perhaps Friday). About one week later will be CCAR results at which the Fed gives the thumbs up or thumbs down on the banks' capital return plans.
    • Word is the tests are tougher this year, but bank capital levels are also improved.
    • Leading today is Bank of America (BAC +3%) - now within about one percent of a 4-year high. Others: Morgan Stanley (MS +2.8%), Goldman Sachs (GS +1.8%), Ciitgroup (C +1%), JPMorgan (JPM +1.5%), and Wells Fargo (WFC +0.6%).
    • Also subject to the stress tests are a number of regional lenders, not to mention credit card players - they're mixed in today's action.
    • Related ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, FXO, PFI, KBWB, RKH, QABA, FNCL, FINU, KCE, KRU, RWW, KBWR, RYF, PSCF, KRS, FINZ, KBWC
    | Mar. 5, 2014, 3:42 PM | 8 Comments
  • Feb. 26, 2014, 9:39 AM
    • "Purchase applications were little changed on an unadjusted basis last week, but this is the time of a year we would expect a significant pickup in purchase activity, and we are not yet seeing it," says the MBA's Mike Fratantoni, commenting on the latest mortgage application data.
    • Overall applications slipped 8.5% for the week, led by an 11% drop in refinances.
    • The seasonally adjusted purchase application index fell 4% from a year ago to the lowest level since 1995. Bad weather is a convenient excuse, but Diana Olick notes January home sales fell the most in the West where weather was not a factor.
    • "We're going from an investor-led housing market to an end user-led housing market, and that's creating a lot of problems," says housing analyst Mark Hanson.
    • A few names to keep an eye on include: Wells Fargo (WFC), PennyMac Financial Services (PFSI), Nationstar Mortgage (NSM).
    | Feb. 26, 2014, 9:39 AM | 25 Comments
  • Feb. 25, 2014, 12:59 PM
    • With bank capital levels really no longer in question, don't expect any big pops in the banks surrounding the stress tests and CCAR results, says Citi in its "2014 CCAR Playbook." If anything - given that the stress tests are supposedly tougher this year - the risk to banks could be on the downside.
    • The team expects the stress test results - which looks at bank balance sheets under different scenarios - sometime around March 7 and the CCAR results - on which the Fed approves/disapproves capital return plans - about a week later.
    • Look for modestly higher average gross payout ratios of 62% vs. 55% last year. Individual banks: BAC 11% dividend (payout ratio) + 32% buyback for 43%; BBT 33% dividend +19% buyback; FITB 32% dividend + 37% buyback; JPM 27% dividend + 18% buyback; WFC 28% dividend + 43% buyback; GS 14% dividend + 78% buyback for an industry-leading payout ratio of 91%; MTB 34% dividend + 0% buyback; MS 17% dividend + 36% buyback; PNC 31% dividend + 49% buyback; USB 30% dividend +46% buyback.
    • Related ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAI, IAT, SEF, IYG, FXO, PFI, KBWB, RKH, QABA, FINU, FNCL, KCE, KRU, RWW, KBWR, RYF, PSCF, KRS, FINZ, KBWC
    | Feb. 25, 2014, 12:59 PM | 4 Comments
  • Feb. 20, 2014, 3:29 PM
    • Expecting dividends to grow 49% on average for the banks subject to the Fed's stress tests (about the same as last year), Markit, says Citigroup (C) and Bank of America (BAC) will lead the way with 400% boosts. "They are the last of the major banks paying minimal dividends ... change is overdue."
    • While 400% is a big number, Citi and BofA will continue to lag their peers in terms of yield (400% growth on a penny just leads to a nickel).
    • Also expected to have a significant pop is Morgan Stanley (MS) - a doubling of the payout to $0.10 per share and a 1.4% yield. Others in the top 5 in increases are Zions Bancorp (ZION) with a 75% boost to $0.07 and Regions Financial (RF) up 67% to $0.05.
    • The others: KEY +27%, HBAN +20%, BK +20%, STI +20%, COF +17%, DFS +15%, AXP +13%, STT +12%, JPM +11%, CMA +11%, PNC +9%, USB +9%, GS +9%, FITB +8%, WFC +7%, NTRS +6%, and no soup for BBT and MTB where the dividends are expected to be flat at $0.23 and $0.70 per share, respectively.
    • As for ETFs, the dividend jumps are expected to have the biggest impact on the XLF which would see a 25% increase in payout: The ETF has 81 companies, but the top 5 holdings - BofA, Wells, JPM, Citi, USB - make up 41% of assets. In contrast, just two CCAR banks make up the top five holdings of the KBE and it should see a more muted increase of just 18%.
    • Related ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, PFI, KBWB, RKH, QABA, FNCL, FINU, KRU, RWW, KBWR, RYF, PSCF, KRS, FINZ
    | Feb. 20, 2014, 3:29 PM | 13 Comments
Company Description
Wells Fargo & Co. is a nationwide, diversified, community-based financial services and bank holding company. It provides banking, insurance, investments, mortgage, and consumer and commercial finance through its stores, ATMs, the Internet, and other distribution channels across North America and... More
Sector: Financial
Industry: Money Center Banks
Country: United States