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Wells Fargo & Co. (WFC)

  • Tue, Apr. 21, 9:37 PM
    • "This whole discussion today about when interest rates move is torture for us,” said U.S. Bancorp (NYSE:USB) CEO Richard Davis on last week's earnings call. “I remain very optimistic for the economy … a little less optimistic for the bankers until interest rates start to move up.”
    • Earlier today, Regions Financial (NYSE:RF) and Fifth Third (NASDAQ:FITB) became the latest in a line of lenders reporting slimming net interest margins. For Regions, the average yield on its loan portfolio fell to 3.45% from 4.03% a year ago. "You’re trying to book the prudent loans that you have the opportunity to, but with the level of competition in the market, it’s hard to move those rates up absent some kind of interest-rate increase," said Regions chief Grayson Hall on the earnings call.
    • On average, U.S. banks with more than $10B in assets showed a NIM of 2.97% in Q4, the lowest level in 25 years according to the FDIC ... And it got worse in Q1. Six of the nine big commercial banks reporting so far - including Wells Fargo (NYSE:WFC) and PNC Financial - had Q1 margins lower than Q4.
    • Bank of America (NYSE:BAC) and Regions - two banks seen as particularly sensitive to interest rates - are unsurprisingly the worst performers in the KBW bank index (NYSEARCA:KBE) this year, off 13.9% and 9.3% respectively.
    • What to do? Regions, for one, is trying to emulate the Wall Street big boys by bulking up its wealth management and capital markets operations. And maybe there's some more fat to trim. “We’re going to turn up the heat on expenses…and we’ll see where we get to,” said PNC boss William Demchak on last week's conference call.
    • Source; WSJ's Peter Rudegeair
    | Tue, Apr. 21, 9:37 PM | 9 Comments
  • Mon, Apr. 20, 12:36 PM
    • Moving quickly on its promise to get out of the banking business, General Electric (GE -0.2%) is in talks with Wells Fargo (WFC +0.7%) and others to sell its $74B commercial lending division - an operation which makes loans to midsize U.S. companies.
    • Should a deal be reached, it would mean GE would have already sold about half of the $200B in assets the company hopes to move off the books in the next two years.
    • Source: WSJ
    • Previously: WSJ: GE in talks to sell commercial lending business (April 20)
    | Mon, Apr. 20, 12:36 PM | 14 Comments
  • Mon, Apr. 20, 12:16 PM
    | Mon, Apr. 20, 12:16 PM | 34 Comments
  • Tue, Apr. 14, 3:45 PM
    | Tue, Apr. 14, 3:45 PM | Comment!
  • Tue, Apr. 14, 10:51 AM
    • It starts with the customer, says Wells Fargo (WFC -1.7%) management on the earnings call, and customers tell us they want branches. Responding to a question about whether investments in technology are going to be a negative if they're not offset with branch closings, management says all channels are important, and both branches and mobile help link them. "We're as much an information provider as we are financial services."
    • Webcast and earnings supplement
    • Credit cards are one of the bank's biggest opportunities, says CEO John Stumpf, noting 729K new accounts in Q1, 19% more than a year ago. Outstanding balances are up 15%, in part thanks to the Dillard's purchase.
    • The country's largest auto lender, Wells backed away a bit in Q1, making $7.1B in auto loans in Q1, down 10% Y/Y. The loan-loss rate slipped to 0.73% from 0.81% a year ago.
    • Live blog on WSJ
    • Previously: Wells Fargo beats by $0.06, beats on revenue (April 14)
    • Previously: Wells Fargo slips early despite topping views (April 14)
    | Tue, Apr. 14, 10:51 AM | 2 Comments
  • Tue, Apr. 14, 8:13 AM
    • Q1 net income of $5.8B or $1.04 per share vs. $5.9B and $1.05 one year ago. ROE of 13.17% vs. 14.35%.
    • Net interest income of $10.986B up 3% Y/Y, with net interest margin slipping to 2.95% from 3.20%. Efficiency ratio of 58.8% vs. 57.9%.
    • Community Banking net income of $3.665B vs. $3.844B one year ago. Provisions of $617M vs. $419M. Noninterest expense of $7.064B vs. $6.774B.
    • Wholesale Banking net income of $1.797B vs. $1.742B a year ago on revenue of $5.912B vs. $5.580B.
    • Wealth, Brokerage and Retirement net income of $561M vs. $475M. Retail brokerage client assets of $1.4T up 4% Y/Y. Wealth Management client assets of $226B up 4%. Retirement IRA assets of $365B up 6%.
    • CET 1 ratio of 10.53%. Common share float down 7.4M since Q4.
    • Conference call at 10 ET.
    • WFC -0.7% premarket.
    • Previously: Wells Fargo beats by $0.06, beats on revenue (April 14)
    | Tue, Apr. 14, 8:13 AM | Comment!
  • Tue, Apr. 14, 8:02 AM
    • Wells Fargo (NYSE:WFC): Q1 EPS of $1.04 beats by $0.06.
    • Revenue of $21.3B (+3.3% Y/Y) beats by $60M.
    • Press Release
    | Tue, Apr. 14, 8:02 AM | Comment!
  • Mon, Apr. 13, 5:30 PM
  • Mon, Apr. 13, 12:21 PM
    • Swimming against the regulatory currents, Wells Fargo (WFC +0.6%) is expanding its investment-banking unit, bolstering trading assets, and building up overseas offices, writes Emily Glazer.
    • The bank in 2014 earned $1.71B in fees from investment banking, up 77% from 2010, and should get another boost from its purchase (along with Blackstone and others) of $26.5B in real estate assets from GE (Wells is also an adviser on the deal).
    • So far, Wells remains a favorite of regulators despite the investment-banking push, mostly because it's still a small player (the bank ranks ninth in U.S. investment-banking fees). But this year, Wells Fargo has collected 5.2% of all U.S. IB revenue - more than Credit Suisse and Deutsche Bank - and the bank's market share is up to 7th from 9th, according to Dealogic.
    • Jefferies Ken Usdin cautions Wells has to be careful investment-banking doesn't grow so big as to jeopardize the bank's reputation for steady earnings growth. Investment banking profits, after all, tend to be somewhat volatile.
    • And what of Wells moving out of its comfort zones in order to book a fee? “We drive faster and safer with a seat belt and air bags,” says Chairman John Stumpf.
    | Mon, Apr. 13, 12:21 PM | 1 Comment
  • Fri, Apr. 10, 6:46 AM
    • GE decides the time is right to get out the banking business and plans to sell nearly all GE Capital assets over the next 24 months, excepting the financing verticals relating to the company's industrial businesses - GE Capital Aviation Services, Energy Financial Services, and Healthcare Equipment Finance.
    • As part of the plan and as leaked yesterday, GE agrees to the sale of nearly all of the assets of GE Capital Real Estate to Blackstone (NYSE:BX) and Wells Fargo (NYSE:WFC). GE also has LOIs from other buyers for another $4B in property. The total amount of the sales comes to about $26.5B.
    • Under the restructuring, GE expects more than 90% of its earnings will be generated by industrial businesses by 2018 - that's up from 58% last year.
    • For 2015, the company's industrial businesses remain on track to generate operating EPS of $1.10-$1.20.
    • GE has identified the potential to return $90B to shareholders in dividends, buybacks, and the Synchrony Financial (NYSE:SYF) separation through 2018, and has authorized a new buyback program of up to $50B. The company expects to reduce share count to 8B-8.5B by 2018 (it's currently 10B).
    • Shares +1.8% premarket.
    • Source: Press release
    | Fri, Apr. 10, 6:46 AM | 71 Comments
  • Wed, Apr. 8, 11:47 AM
    • Picking winners in banking names is tough right now, says Nomura, as correlation between names has risen to 90% this year from 60% in 2014. When the headwind from ZIRP turns into a tailwind from rising rates is anybody's guess, but Nomura figures the market will still reward those who deliver strong performance in areas they can control, like fee income and efficiency.
    • In credit cards, the team sees relative value in Discover (DFS +0.7%), noting it trades at a lower premium to Capital One (COF +1.2%) than has been typical in the past. "Discover’s excess capital (9% of its market cap) and the optionality associated with having its own network lead us to believe that it is likely to regain its premium."
    • For banks, Nomura is cautious as recent data suggests loan growth has not been enough to offset margin compression. If you've got to own them, PNC Financial (PNC), U.S. Bancorp (USB +0.3%), and Wells Fargo (WFC +0.1%) are favorites.
    | Wed, Apr. 8, 11:47 AM | Comment!
  • Wed, Apr. 1, 4:33 PM
    • Looking for some kind of growth wherever they can find it, banks are about to get their wish as Fair Isaac is set to launch a new credit scoring metric which should expand by tens of millions the field of those eligible to get credit.
    • The new score will pull payment histories for things like utilities to calculate credit scores for consumers who might otherwise not have one. Other things - like how often someone changes address - will be used to help calculate a score.
    • FICO and 10 unnamed credit card issuers have been testing the new score since November, and Fair Isaac intends to roll things out nationwide by year-end. Right now, about 15M of the 53M previously unscorable Americans can be scored using the new system.
    • Source: WSJ
    • Among those of interest: WFC, C, BAC, JPM, COF, DFS, AXP
    | Wed, Apr. 1, 4:33 PM | 16 Comments
  • Tue, Mar. 31, 2:58 PM
    • Joining a number of its big bank brethren, Wells Fargo (WFC -0.3%) receives approval from the Fed and the OCC to use its own tailored risk models for figuring its capital requirements.
    | Tue, Mar. 31, 2:58 PM | 1 Comment
  • Wed, Mar. 25, 2:49 PM
    • Mike Johnson has been with Wells Fargo (WFC -1%) for 32 years and will step down as corporate-banking chief at the end of Q2. No successor has yet been named.
    • In other news, the bank is cutting 1K jobs at its mortgage servicing office in Milwaukee as sharp reductions in delinquencies/problem mortgages means less servicing work. The bank has about 265K employees.
    | Wed, Mar. 25, 2:49 PM | Comment!
  • Mon, Mar. 23, 3:24 PM
    • The Barron's 400 has regularly beaten the S&P 500 (NYSEARCA:SPY) since its 2007 launch, writes Chris Dieterich, and also powers the Barron's 400 ETF (NYSEARCA:BFOR), which has topped the S&P 500 by nearly 500 basis points since starting in June 2013. BFOR is up 6% YTD, more than double that of the S&P 500.
    • Among those added to the index during last week's twice-yearly rebalancing were Celgene (NASDAQ:CELG), American Airlines (NASDAQ:AAL), Starbucks (NASDAQ:SBUX), and Ameriprise Financial (NYSE:AMP).
    • Among those dropped were McDonald's (NYSE:MCD), Wells Fargo (NYSE:WFC), Verizon (NYSE:VZ), and IBM.
    • A "ruthless" quantitative security-selection method screens for growth, value, and cash flow, and filters further with other factors such as diversification.
    | Mon, Mar. 23, 3:24 PM | 22 Comments
  • Wed, Mar. 11, 4:47 PM
    | Wed, Mar. 11, 4:47 PM | 6 Comments
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