Wells Fargo & Co.

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  • Sep. 1, 2015, 2:47 PM
    • The dream of higher interest rates is looking a little fuzzier at the moment, as China leads markets lower again, and the Fed's Eric Rosengren suggests the conditions for a rate hike have still yet to be met. If Friday's payroll number disappoints - and there's at least some reason to expect that - a Sept. move looks off the table.
    • The Financial SPDR (NYSEARCA:XLE) is down 3% vs. the S&P 500's 2.3%.
    • Life insurers: MetLife (MET -3.7%), Prudential (PRU -3.9%), Lincoln National (LNC -4.2%)
    • Money-center banks: Citigroup (C -4.4%), JPMorgan (JPM -3.6%), Wells Fargo (WFC -3.8%)
    • Regional banks: U.S. Bancorp (USB -4.3%), Regions Financial (RF -4.1%), KeyCorp (KEY -4.3%), SunTrust (STI -4.2%), M&T Bank (MTB -4.2%)
    • Online brokerage: E*Trade (ETFC -4.8%), Schwab (SCHW -3.8%), Ameritrade (AMTD -3.4%)
    | Sep. 1, 2015, 2:47 PM | 14 Comments
  • Sep. 1, 2015, 3:45 AM
    • In a last-ditch effort to get repaid, RadioShack's (OTCPK:RSHCQ) junior creditors are suing hedge fund Standard General, the company's largest pre-bankruptcy shareholder and current owner.
    • The lawsuit also names Wells Fargo (NYSE:WFC) and former Chief Executive Officer Joseph Magnacca, alleging they helped Standard General take over the company at creditors' expense.
    | Sep. 1, 2015, 3:45 AM
  • Aug. 27, 2015, 11:57 PM
    • Wells Fargo (NYSE:WFC) is the leader in the hunt to buy General Electric's (NYSE:GE) railcar financing unit, in a deal that could come by Labor Day, Bloomberg is reporting.
    • Wells Fargo would outpace Sumitomo Mitsui Financial Group in that case.
    • The sale is another step in GE's divestment of financial services in order to focus on core manufacturing.
    • The railcar financing business has more than $4B in assets.
    | Aug. 27, 2015, 11:57 PM | 8 Comments
  • Aug. 27, 2015, 10:06 AM
    • A rare growth business for Wall Street banks has been loans backed by investment portfolios, but with margin calls being issued this week, profits could take a hit if clients pull back from borrowing.
    • Morgan Stanley (MS +1.6%) had $25.3B in securities-based loans outstanding as of June 30, up 37% year-over-year. Bank of America (BAC +0.2%) had $38.6B of the loans, up 14.2%. Wells Fargo (WFC +1.1%) had $59.3B, up 16%.
    • The amounts are small compared to overall bank lending, but change comes at the margin, and the largest brokerage firms have reported higher securities-based loan balances each quarter for more than two years.
    • Look for profits at bank wealth-management units to decline in coming quarters, says Portales Partners' Charles Peabody, in part thanks to declines in securities lending.
    • Source: WSJ
    | Aug. 27, 2015, 10:06 AM | 8 Comments
  • Aug. 14, 2015, 5:56 PM
    • Berkshire Hathaway (BRK.A, BRK.B) disclosed in its latest 13F filing that it sold off its shares in Phillips 66 (NYSE:PSX) and National Oilwell Varco (NYSE:NOV) during Q2, as it continued to cut its positions in energy companies.
    • Meanwhile, BRK kept unchanged its stakes in its “Big Four” holdings American Express (NYSE:AXP), Coca Cola (NYSE:KO), Wells Fargo (NYSE:WFC) and IBM.
    • Warren Buffett seemed to hint during a CNBC interview this week that BRK may have built up its IBM stake in the current quarter, saying "I love it when it goes down" when asked whether he was concerned about the stock’s recent performance.
    • Buffett’s only new stake in the quarter was a 20M-share investment in auto paint maker Axalta Coating Systems (NYSE:AXTA), which BRK bought from Carlyle Group.
    | Aug. 14, 2015, 5:56 PM | 67 Comments
  • Aug. 12, 2015, 12:27 PM
    • Michael Heid has been with Wells Fargo (WFC -1.1%) for 28 years, and had been president of Wells Fargo Home Mortgage since 2011 (and co-president from 2004-2011).
    • He'll be succeeded, effective Oct. 1, by Franklin Codel who is currently head of mortgage production.
    | Aug. 12, 2015, 12:27 PM
  • Aug. 11, 2015, 6:05 PM
    • Reuters reports Wells Fargo (NYSE:WFC) has begun an auction for its crop insurance unit, and could get over $1B. A spokeswoman has confirmed Wells Fargo is exploring options for the business that may include a sale, while adding the bank plans to keep its crop insurance brokerage arm.
    • The business collects over $2B/year in insurance premiums from farmers, and has over 4K licensed agents. Potential bidders are said to include PartnerRe, Axis Capital, and Allianz.
    • Low interest rates and extreme weather have weighed on the crop insurance market. Meanwhile, regulatory pressure has led various banks to lower their insurance exposure.
    | Aug. 11, 2015, 6:05 PM | 1 Comment
  • Jul. 30, 2015, 3:27 PM
    • An uncertain regulatory environment - the CFPB has been busy going after lenders for any number of MSA-related violations - is to blame, says Wells Fargo (WFC +0.3%). The move is effective August 1 and the wind down will take place over the next 90 days.
    • "Real estate firms and builders always have been and will continue to be very important to Wells Fargo's retail mortgage operations, and we are exploring a number of new options for enhancing and strengthening those relationships over the long term," says the bank's Franklin Codel.
    • "It's very difficult to operate MSAs in the regulatory environment we're in right now," says attorney Mitchell Kider. "The CFPB has created a situation where MSAs are not a viable solution for marketing in today’s environment."
    • Prospect Mortgage is also exiting MSAs and expects its action to be done by the end of the quarter.
    | Jul. 30, 2015, 3:27 PM | 7 Comments
  • Jul. 28, 2015, 3:05 PM
    • Wells Fargo (NYSE:WFC) declares $0.375/share quarterly dividend, in line with previous.
    • Forward yield 2.61%
    • Payable Sept. 1; for shareholders of record Aug. 7; ex-div Aug. 5.
    | Jul. 28, 2015, 3:05 PM
  • Jul. 28, 2015, 2:16 PM
    • Wells Fargo's (NYSE:WFC) wealth management division is beating the bushes for individuals who can afford the minimum $100K investment into The Apollo Natural Resources II ASP Fund, and it's already raised about $7M.
    • Launched in December, the Wells Fargo Investment Institute will be managing the fund, and sees "an improving outlook" for commodities in its mid-year outlook.
    • The Bloomberg Commodity Index is off 28% Y/Y, and at about a 13-year low.
    • It was earlier reported that Wells was partnering with Apollo Global and the fund was trying to raise $3B.
    • Source: Bloomberg
    | Jul. 28, 2015, 2:16 PM | 2 Comments
  • Jul. 20, 2015, 2:55 PM
    • JPMorgan (JPM +0.4%) faces the largest capital "surcharge" or 4.5% of its risk-weighted assets, with the other seven lenders falling in the 1-3.5% range.
    • Citigroup's (NYSE:C) surcharge is 3.5%, BofA (NYSE:BAC), Goldman Sachs (NYSE:GS), and Morgan Stanley (NYSE:MS) 3%, Wells Fargo (NYSE:WFC) 2%, State Street (NYSE:STT) 1.5%, and Bank of New York Mellon (NYSE:BK) 1%. Taken together, the group's capital cushion will more than $200B larger than if the surcharge was not implemented.
    • The surcharges will begin to be implemented on January 1, and fully phased in by January 2019. JPMorgan has taken steps to boost its capital levels, and Fed officials indicate the bank is about $12.5B shy of the full surcharge, reports the WSJ.
    • The other lenders currently have the necessary capital.
    • This new requirement comes on top of the existing base 7% common-equity capital standard necessary for most banks.
    | Jul. 20, 2015, 2:55 PM | 12 Comments
  • Jul. 20, 2015, 12:45 PM
    • With Q2 results for the nation's largest banks now all in, Dick Bove says the key takeaway is operating earnings - which eliminates taxes, and the impact from loan losses and reserve releases - are not just growing, they're jumping. By his calculation, the operating earnings for BAC, C, JPM, and WFC are up 23% for the last twelve months compared to the previous period.
    • Asset quality is far better nowadays as well, he says, noting the new regulatory regime has forced lenders to hold a higher amount of government-guaranteed paper on their books. "The addition of capital, cash, and government-backed securities means that the book value of these companies is very real. Yet, at least two of the big banks sell at a discount to this value."
    • More bullish points: The most onerous and costly of the new regulations are already out there, litigation - while continuing - won't be nearly as expensive going forward, M&A is on the rise, and trading activity is coming back.
    • Most importantly, says Bove, is that investment psychology is shifting. "The attitude that banks are utilities that can never show earnings gains is disappearing. The view that bank asset values are overstated is gone or should be gone. The view that the government has multiple new ways to attack these companies is also disappearing."
    | Jul. 20, 2015, 12:45 PM | 18 Comments
  • Jul. 15, 2015, 2:57 AM
    • Wells Fargo (NYSE:WFC) is looking at more financial assets being unloaded by GE Capital after it bought $9B of real estate loans from the conglomerate in the second quarter.
    • Portions of GE's commercial loans portfolio "fit nicely with the businesses at Wells Fargo," CFO John Shrewsberry said in an interview.
    • He also singled out GE's railcar leasing business, saying it might complement Wells Fargo's First Union Rail.
    | Jul. 15, 2015, 2:57 AM
  • Jul. 14, 2015, 3:30 PM
    • Strong earnings at the bank's wealth unit - Q2 income of $602M, up 11% Y/Y on revenue of $3.74B up 5.3% - helped offset weaker results in other key units.
    • Managed account assets of $434B gained 6% Y/Y, while average loans were up 16% to $59.3B.
    • Like other major brokerages, Wells (WFC +1%) has been pushing clients into flat-fee managed accounts, favoring the steadier income of that model over traditional transaction-fee accounts.
    • Speaking on the earnings call this morning, CFO John Shrewsberry said the bank is investing in a number of new technology initiatives for the wealth unit, and is considering a product using automation to select investments for clients based on their profile.
    • Schwab, of course, has already launched such a service and Bank of America is also mulling a similar offering.
    • Source: WSJ
    • Previously: Wells Fargo earnings call: Interest rates don't drive business decisions (July 14)
    • Previously: Wells Fargo slips after top-line miss (July 14)
    • Previously: Wells Fargo EPS in-line, misses on revenue (July 14)
    | Jul. 14, 2015, 3:30 PM | 2 Comments
  • Jul. 14, 2015, 11:16 AM
    • We don't look for higher rates as a justification for investing in anything, says Wells Fargo (WFC +1%) CEO John Stumpf, speaking on the earnings call. If rates do go up, it will be of benefit to the bank, but management wants to stay away from forecasting, and notes higher rates have been on the agenda for about five years now.
    • Webcast and Q2 supplement
    • A portion of the bank's loan growth in Q2 came from its purchase of GE Capital loans, says CFO John Shrewsberry. The loans, he said, came from 145 different customers and give Wells "a meaningful number of new relationships." As the deal was finalized late in Q2, most of the benefits will be seen in Q3.
    • With an operation just a fraction the size of its peers, Wells doesn't often enter the conversation for investment banking, but the unit was a sore spot in Q2, with earnings lower by 8% Y/Y, notes Peter Rudegeair. Its market share of U.S. investment banking fees of 4.7% slipped 10 basis points from last year.
    • Previously: Wells Fargo slips after top-line miss (July 14)
    • Previously: Wells Fargo EPS in-line, misses on revenue (July 14)
    | Jul. 14, 2015, 11:16 AM
  • Jul. 14, 2015, 8:18 AM
    • Q2 net income of $5.7B flat from one year ago. EPS of $1.03 up from $1.01.
    • Net interest income of $11.3B up $284M from Q1. Net interest margin of 2.97% up two basis points.
    • Noninterest income of $10B slips $300M from Q1. Mortgage banking noninterest income of $1.7B up $158M. Originations of $62B up $13B, with gain on sale ratio of 1.88% down 18 basis points.
    • Noninterest expense of $12.5B down $38M. Efficiency ratio of 58.5% improves from 58.8%. The bank expects the range to remain at 55-59% for all 2015.
    • Total loans of $888.5B up $27.2B from Q1. Core loans of $832.1B up from $802.7B.
    • Credit losses of $708M in Q2, an improvement of 8%. Net loan charge-offs of $650M or 0.30% of average loans vs. $708M and 0.33% in Q1.
    • CET 1 ratio of 10.5%. 36.3M shares repurchased during quarter.
    • Conference call at 10 ET
    • Previously: Wells Fargo EPS in-line, misses on revenue (July 14)
    • WFC -1.3% premarket
    | Jul. 14, 2015, 8:18 AM | 1 Comment
Company Description
Wells Fargo & Co is a diversified financial services company. It provides retail, corporate and commercial banking services through banking stores and offices, the internet and other distribution channels to individuals, businesses and institutions.
Sector: Financial
Country: United States