Mon, Jan. 5, 1:25 PM
- "We view Wells Fargo (WFC -2.7%) as a core bank holding, but shares have reached our price target and we believe sentiment is now overwhelmingly positive after leading returns in 2014 (+21%, #1 among the top 50 banks)," says Baird's David George, who earlier downgraded the stock from Outperform to Neutral.
- Put the money in another bank? Not so quick, says George, suggesting the Fed could tighten later and be less aggressive than most expect, disappointing those hoping for higher rates to boost profits. Other than Wells Fargo, George sees sentiment highest in PNC Financial (PNC -2.7%), SunTrust (STI -3.9%), and U.S. Bancorp (USB -2.2%).
- Asset-sensitive names like Comerica (CMA -3.7%) and Zions (ZION -3.4%) lagged in 2014, but estimates still look to high.
- Top ideas would be Fifth Third (FITB -2.7%), Capital One (COF -2.4%), and JPMorgan (JPM -3%), but George is having a tough time finding value in the sector.
- Previously: Longtime Wells Fargo bull rings the register (Jan. 5)
Dec. 17, 2014, 3:23 PM
- This time its the National Credit Union Administration Board, and it's suing Bank of America (NYSE:BAC) and U.S. Bancorp (NYSE:USB) over losses on $5.8B in MBS.
- "Even after ample evidence came to light that the trusts were riddled with defective loans, defendants shut their eyes to such problems,” according to the complaint. “As participants in many roles in the securitization process, defendants were economically intertwined with the parties they were supposed to police.”
Dec. 9, 2014, 1:49 PM
Nov. 29, 2014, 8:00 AM
- New guidelines - set to take full effect on December 1 - are the result of an agreement reached last month between banks and the GSEs meant to clarify exactly when lenders could be called to task for mortgages sold to Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) which ultimately default. Since the financial crisis, Fannie and Freddie have forced banks to repurchase billions of dollars worth of mortgages, leaving them naturally gun-shy about making new loans to all but the most pristine of credits.
- “It’s providing greater certainty for all the parties so that you can lend more confidently and make the whole judgment process much easier and more clear cut,” says Mike Heid, president of Wells Fargo (NYSE:WFC) Home Mortgage. Along with SunTrust (NYSE:STI), Wells says borrowers should begin to see initial changes - such as faster processing times, reduced credit score requirements, and greater leeway to those whose credit history suffered due to one-time events - in a few weeks.
- "We will be able to be looser and open up the net wider," says Mason-McDuffie Mortgage CEO Bill Godfrey, now expecting to make loans down to a 620 credit score from 660 previously.
- Not everyone agrees: “Unless we are convinced that the rules are going to be permanent and there is not going to be a look back or a reach back in future times…we are simply going to stay on the sidelines," U.S. Bancorp (NYSE:USB) boss Richard Davis has said, and Bank of America (NYSE:BAC) CEO Brian Moynihan made similar comments at a recent conference.
Nov. 21, 2014, 10:24 AM
- At a time when a focus on expense management is a popular meme for the banking industry, U.S. Bancorp (NYSE:USB) CEO Richard Davis says his bank will add thousands of positions next year. Many, however, will not be in areas suggesting a brisk pickup in business, but instead in the compliance and audit departments.
- The bank will end this year with 67K employees, and Dennis sees as many as 70K by year-end 2015.
Oct. 22, 2014, 7:36 AM
- Q3 net income of $1.471B or $0.78 per share vs. $1.468B and $0.76 one year ago.
- Net interest income of $2.748B up 1.3% Y/Y, with NIM of 3.16% down 27 basis points. Average earning assets up 10%. Average loans up 6.3%.
- Noninterest income of $2.242B up 3%, with small increases in credit and debit card revenue, corporate payment products revenue and merchant processing services. Trust and investment management fees of $315M up 12.5%. Mortgage banking revenue of $260M down 20.7%.
- Noninterest expense of $2.614B up 1.9%. Efficiency ratio of 52.4% flat from last year.
- ROA of 1.51% down 14 basis points. ROE of 14.5% down 130 basis points. Book value per share of $21.38 up from $19.31.
- Conference call at 8 ET
- Previously: U.S. Bancorp EPS and revenue in-line
- USB no trades premarket
Oct. 22, 2014, 7:17 AM
Oct. 21, 2014, 5:30 PM
Oct. 15, 2014, 10:49 AM
- Bank earnings models will no doubt need to be tweaked as the sure thing of higher rates becomes somewhat less sure, with the 10-year U.S. Treasury yield plunging all the way down to 2%, and 30-day Fed Funds futures - just weeks ago pricing in 100% chance of a rate hike by June 2015 - now sees no move until December 2015.
- The XLF is lower by 1.9% and the Regional Banking ETF (NYSEARCA:KRE) is down 2.1% (the S&P 500 is off a mere 1.1%). Among individual names, KeyCorp (KEY -6.4%), First Bancorp (FBP -6.4%), Regions Financial (RF -4%), U.S. Bancorp (USB -2.2%), Fifth Third (FITB -2.6%), Bank of America (BAC -4%), Citigroup (C -3.3%), JPMorgan (JPM -2.8%), Wells Fargo (WFC -1.9%).
- Financial ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, IAT, SEF, IYG, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, FINZ, KRS
- Life insurers were also waiting on higher rates and they're slipping more than the averages as well. MetLife (MET -3.7%), Prudential (PRU -2.9%), Manulife (MFC -3.5%) Sun Life (SLF -3.4%), Lincoln Financial (LNC -3.9%).
- Insurance ETFs: KIE, IAK, KBWP, KBWI
- Previously: BofA call: Assumption about higher rates not so sure anymore
Oct. 7, 2014, 7:23 AM
Sep. 25, 2014, 12:57 PM
- U.S. Bancorp (USB -1.3%) is the latest bank called on the carpet by regulators for billing practices involving identity theft protection, as it is fined $9M and required to return $48M to customers unfairly charged for identity theft and credit monitoring whose full benefits they didn’t receive.
- The action follows related orders by the Office of the Comptroller of the Currency and the Consumer Financial Protection Bureau against BofA and J.P. Morgan.
Sep. 17, 2014, 3:16 PM
- Leading markets higher as the reality of higher interest rates gets nearer is the financial sector (XLF +0.9%). Whether its banks, brokerages, or insurers, a higher benchmark rate for some time has been considered a key bullish catalyst. An especially large move is being seen in the online brokerage names who have been forced to forego money market fees for years thanks to ZIRP: E*Trade (ETFC +3%), Schwab(SCHW +3.2%), Ameritrade (AMTD +2%).
- Morgan Stanley (MS +1.8%), Bank of America (BAC +1.2%), JPMorgan (JPM +0.9%)
- U.S. Bancorp (USB +1.1%), Regions Financial (RF +2%), New York Community Bank (NYCB +0.8%), Huntington Bancshares (HBAN +1.3%), KeyCorp (KEY +1.3%)
- MetLife (MET +0.6%), Voya Financial (VOYA +0.7%).
- Chubb(CB +0.4%), AIG (AIG +1.1%), Hartford (HIG +0.8%)
- Financial sector ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, SEF, IYG, IAK, FXO, KBWB, FNCL, RKH, QABA, FINU, KRU, KBWR, RWW, KBWP, RYF, KBWI, KRS, FINZ
Sep. 16, 2014, 1:26 PM
Sep. 10, 2014, 8:03 AM
- It's my favorite slide, says Wells Fargo (NYSE:WFC) CFO John Shrewsberry, presenting at the Barclays Financial Services Conference. He's referring to page 23 of his presentation which shows Wells' performance across certain key metrics vs. its peers.
- Whether its ROA, ROE, efficiency ratio, or payout ratio, Wells Fargo ranks near the top, whether compared against the TBTFs or against regional players (though USB consistently ranks higher ... kudos).
- As for the proposed tough capital rule which made news yesterday, Shrewsberry says regulators have been talking about it for some time, he believes they're serious, the tougher ratios will come to pass, and his bank is prepared.
- Echoing his CEO John Stumpf from a couple of weeks ago, Shrewsberry says the current mortgage regime - where GSEs threaten to put back to lenders any mortgages which don't perform, no matter how many years have gone by - is not a viable business model for the bank.
Jul. 16, 2014, 8:10 AM
- Net income of $1.495B or $0.78 per share vs. $1.484B and $0.76 one year ago. The quarter included the $200M FHA mortgage settlement along with $214M pretax gain from sale of Visa shares - combined, the two had no impact to the headline number.
- Net interest income of $2.744B up 2.7% Y/Y, with NIM of 3.27% down 16 basis points.
- Noninterest income of $2.444B up 7.4% Y/Y, boosted by the previously-mentioned sale of Visa shares. Mortgage banking revenue of $278M fell 30%, but modest gains were seen across nearly all the rest of the bank's other fee categories.
- Noninterest expense of $2.753B up 7.7% Y/Y thanks to the previously-mentioned FHA settlement, along with a 2.5% rise in compensation expense.
- ROA of 1.6%, ROE of 15.1%, and efficiency ratio of 51.3% (after excluding notable items) all continue to lead the industry.
- CC at 8:30 ET
- Previously: U.S. Bancorp beats by $0.01, beats on revenue
- USB +1.6% premarket
Jul. 16, 2014, 7:17 AM
USB vs. ETF Alternatives
U.S. Bancorp is a multi-state financial holding company. It provides financial services through its subsidiaries, including lending and depository services, cash management, foreign exchange and trust and investment management services.
Other News & PR