Wells Fargo & Co. (WFC) - NYSE
  • Wed, Apr. 13, 8:12 AM
    • As leaked last night, regulators have sent so-called living wills by five major U.S. banks back to the drawing board. JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC), BNY Mellon (NYSE:BK), and State Street (NYSE:STT) have until Oct. 1 to revise their plans or face potential penalties.
    • Official announcement
    • Regulators were split on Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS), with the FDIC giving Goldman a thumbs down, but the Fed not, and just the opposite for Morgan.
    • Citigroup (NYSE:C) is the only one of the major banks not to have their plan rejected, though both the Fed and FDIC found "shortcomings" that need to be addressed by July 2017.
    • The next time you're thinking about complaining over some silly fee charged by your lender, have a thought for the armies of accountants, analysts, and lawyers the bank is paying to comply with D.C.'s whims.
    • ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, BTO, IYG, FNCL, SEF, FXO, RYF, FINU, RWW, XLFS, FINZ, FAZZ
    • Now read: Financials Are Set To Miss Already Lowered Earnings Estimates
    | Wed, Apr. 13, 8:12 AM | 97 Comments
  • Wed, Apr. 13, 4:42 AM
    • At least half of the eight U.S. banks labeled "systemically important" are expected to receive "harsh verdicts" regarding their so-called living wills, sending them scrambling to revise plans about how they would handle a potential bankruptcy, WSJ reports.
    • The move, which could come as soon as this week, would raise the prospect of higher capital requirements or other regulatory sanctions for some of the institutions, and underscore fears that the firms remain "too big to fail" without a taxpayer bailout.
    • Related tickers: BK, STT, BAC, JPM, C, GS, MS, WFC
    | Wed, Apr. 13, 4:42 AM | 33 Comments
  • Tue, Apr. 12, 3:05 PM
    • “Let’s not sugarcoat it, this is not necessarily a loan a bank wants to make at this point,” says Evercore ISI's Glenn Schorr, talking about loans banks have committed to for energy companies, but upon which those firms have not yet drawn.
    • In Q1, energy borrowers announced draws of more than $3B on these loans, saddling banks with maybe more exposure to the sector than they or their investors would like right now.
    • Citigroup (NYSE:C), for example, has about $20B in funded energy loan exposure, but commitments for nearly another $40B. Bank of America (NYSE:BAC) has loans of just over $20B and commitments for another $20B-plus. Wells Fargo (NYSE:WFC), Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS), SunTrust (NYSE:STI), Comerica (NYSE:CMA), Regions Financial (NYSE:RF), and KeyCorp (NYSE:KEY) are showing similar stories (though mostly smaller amounts). Add it up, and there's $147B of unfunded loans disclosed by the ten of the largest U.S. banks.
    | Tue, Apr. 12, 3:05 PM | 21 Comments
  • Tue, Apr. 12, 8:40 AM
    • At its annual investor conference two years ago - with oil changing hands at $102 per barrel - Wells Fargo (NYSE:WFC) boasted of having doubled energy exposure in just the previous two years, and of having risen to the top of Wall Street rankings of oil and gas bankers.
    • Source: Bloomberg
    • That pretty much rang a bell for the top of the oil market, and the bank has since downgraded 38% of its energy lans and provisioned $1.2B for potential losses.
    • “The perception was the risk was reasonably low,” says oil and gas consultant Dennis Cassidy. “The volume and velocity of deal flow was such that it was a rubber stamp. They were not scrutinizing price assumptions and forecasts. Everyone was open for business. It was full on, full throttle.” He's obviously talking about reserved-based loans, but substitute whatever hot asset you like (housing, for instance), and the thought still works.
    • For its part, Wells Fargo is in the midst of semiannual re-evaluations of reserves-based loans, and is cutting credit lines to reflect lower collateral value.
    • Now read: Wells Fargo And Forgetting About Short-Term Fear (April 12)
    | Tue, Apr. 12, 8:40 AM | 8 Comments
  • Mon, Apr. 11, 1:02 PM
    • Still clearly fans of Wells Fargo (WFC +0.7%), Sandler O'Neill's Scott Siefers and Brendan Nosal nevertheless take note of the stock's "deserved premium" to its big bank peers, not to mention its (smaller) premium to other regional lenders.
    • They're not seeing a catalyst which would expand either the group's multiple or Wells' existing premium to peers.
    • Also a worry - Sandler's full-year 2016 and 2017 estimates are 4-5% lower than consensus. If Sandler proves correct, this could end up pressuring the stock.
    • They downgrade to Hold from Buy.
    • Now read: Banks Become Utilities, Without Pricing Power (April 11)
    | Mon, Apr. 11, 1:02 PM | 16 Comments
  • Mon, Apr. 11, 11:32 AM
    • Focusing on "too big to fail" is too narrow a lens with which to analyze and make decisions about bank size and concentration, says the team at KBW, taking note of increased chatter of late about a forced breakup of the nation's largest lenders.
    • Returns are part of the mix too, and if they're poor at the mega-banks, this limits credit creation in the economy - a signal, says KBW, that companies must "radically restructure" to get their stock prices above at least tangible book value.
    • Looking at the stock prices of Wells Fargo (NYSE:WFC), JPMorgan (NYSE:JPM), Bank of America (NYSE:BAC), and Citigroup (NYSE:C) during the past five years, KBW says Wells has traded above TBV throughout the time period - suggesting the bank is consistently creating returns above its cost of capital. Citi, on the other hand, has not traded above TBV for the whole period - "a clear market signal that the company should consider much more radical restructuring to create profitable business that can grow."
    | Mon, Apr. 11, 11:32 AM | 51 Comments
  • Sun, Apr. 10, 7:49 AM
    • Wells Fargo (NYSE:WFC) has reached a deal to pay $1.2B to the Federal Housing Administration, in what is now the biggest recovery for loan origination violations in FHA history.
    • According to the settlement, which covers the 2000-2010 period, the lender "admits, acknowledges, and accepts responsibility" for having falsely certified many of its home loans and for failing to file timely reports that had material defects or were badly underwritten.
    | Sun, Apr. 10, 7:49 AM | 65 Comments
  • Wed, Apr. 6, 10:01 AM
    • Both stalwarts have bounced nicely since mid-February but remain lower - Wells Fargo (NYSE:WFCby 12.8% and U.S. Bancorp (NYSE:USBby 6.8% - for 2016.
    • On a year-over-year basis, Wells is down 12% and USB 8%.
    • The stocks are modestly lower early in the session.
    • Now read: My K.I.S.S. Dividend Portfolio: 1st Quarter 2016 Update (April 6)
    | Wed, Apr. 6, 10:01 AM | 21 Comments
  • Thu, Mar. 31, 12:24 PM
    • With everybody expecting continued capital markets weakness and additional energy-related loan loss reserve builds, it may not take much positive news - better than hoped top line growth, efficiency gains, limited credit deterioration - to send bank stocks higher, say Credit Suisse's Susan Katzke and team.
    • There's also the chance of numbers dampening sentiment even further, they say, as perhaps results turn out even worse than the current low expectations.
    • The team continues to favor Bank of America (NYSE:BAC), Citigroup (NYSE:C), JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS), and Wells Fargo (NYSE:WFC) among the large caps.
    • Now read: Bank Of America: To Buy Or Not To Buy (March 31)
    | Thu, Mar. 31, 12:24 PM | 34 Comments
  • Wed, Mar. 30, 7:48 AM
    • The bid for more capital markets business - from advising on deals to trading derivatives - is a risky one, writes Dan Freed, as it exposes Wells Fargo (NYSE:WFC) to the risks and volatility of those activities. It's also potentially lucrative should the bank pick up business left behind by others in the wake of the financial crisis.
      "We're not getting into things that are going to rapidly or dramatically change our business," says Jonathan Weiss, who leads Wells' investment banking and trading unit. "It's just a consistent, slow build-out. Add a person here, add a person there."
    • The bank, however, late last year announced a deal to buy 500K square feet of trading and office space in Manhattan's Hudson Yards development.
    • What do the bank's investors - currently basking in Wells Fargo's stock trading at a premium to its peers - have to say? "If I felt the bank were making a big investment banking push, they would need to do a good job of explaining why it has not made them riskier," says Thomas Russo, managing partner of Wells' 43rd-largest shareholder. "Otherwise, I would have to revisit the holdings."
    | Wed, Mar. 30, 7:48 AM | 1 Comment
  • Tue, Mar. 29, 2:49 PM
    | Tue, Mar. 29, 2:49 PM | 10 Comments
  • Mon, Mar. 28, 4:13 PM
    • Warren Buffett's stake in Wells Fargo (NYSE:WFC) hit 9.9% as of Dec. 31. Most of that is held by Berkshire Hathaway (NYSE:BRK.A).
    • At 10%, Buffett would have to pass a review by the Federal Reserve in order to keep accumulating shares.
    • His stake in WFC has climbed steadily from 6.7% since 2009 through stock purchases, and due to WFC's share repurchases.
    • While the Fed typically tries to limit the ties between non-financial companies and banks, it has at times accepted a pledge by investors that they don't plan to influence a bank; this happened in the 90s when Buffett's stake in Amex rose above 10%.
    • Now read Wells Fargo's Fundamental Valuation Might Surprise You »
    | Mon, Mar. 28, 4:13 PM | 31 Comments
  • Thu, Mar. 24, 10:50 AM
    • "We see risks to Wells Fargo's (WFC -2.4%) revenue growth and credit performance," says UBS. "Coupled with a valuation on the high end of peers and consensus estimates that have not come down much, [this] puts Wells Fargo shares at risk of under performance in our view."
    • The bank has a strong management team and franchise, acknowledges UBS, but this isn't news and is priced into the stock.
    • Though down sharply on the session, Wells isn't doing any worse than the rest of the major U.S. banks.
    | Thu, Mar. 24, 10:50 AM | 23 Comments
  • Tue, Mar. 22, 12:33 PM
    • Return on average common equity (ROACE) is what determines the valuation of large, mature banks, says RBC's Gerard Cassidy, and those banks that cannot earn their cost of equity capital - estimated at 9-10% through the cycle - ought to consider alternative strategies, including breaking up.
    • The key here is interest rates, and should they remain at these levels for a prolonged period, reaching targeted ROACE will be difficult for all banks, particularly for Bank of America (NYSE:BAC) and Citigroup (NYSE:C).
    • While a sum-of-the-parts analysis indicates value could be unlocked, the cost of doing so could be prohibitive, says Cassidy.
    • Long-term investors planning on holding through the cycle are better off with Wells Fargo (NYSE:WFC) and JPMorgan (NYSE:JPM), but active investors managing their portfolios more aggressively might consider BofA and Citi.
    | Tue, Mar. 22, 12:33 PM | 38 Comments
  • Thu, Mar. 17, 2:58 PM
    • Tom DuCharme has been named new head of Wells Fargo's (NYSE:WFC) Global Banking division, where he'll report to Richard Yorke, head of the bank's International Group.
    • Prior to this job, DuCharme was the banking co-head of JPMorgan's Asia Pacific Corporate & Investment Bank. He's also held a senior position with Deutsche Bank.
    • He succeeds Sanjiv Sanghvi, who was previously announced as head of Wells' Western Region for Commercial Banking.
    • Wells Fargo's Global Banking division employs over 300 across 13 countries.
    • Source: Press Release
    | Thu, Mar. 17, 2:58 PM | 3 Comments
  • Thu, Mar. 17, 2:16 AM
    • JPMorgan Chief Executive Jamie Dimon +35% to $27M.
    • Bank of America CEO Brian Moynihan +23% to $16M.
    • Wells Fargo boss John Stumpf unchanged at $19.3M.
    • Citigroup CEO Michael Corbat +27% to $16.5M.
    • U.S. Bancorp head Richard Davis +20% to $21.7M.
    | Thu, Mar. 17, 2:16 AM | 9 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