Wed, Jan. 14, 8:17 AM
- Q4 net income of $5.7B or $1.02 per share vs. $5.6B and $1.00 one year ago.
- Net interest income of $11.2B up $239M from Q3, with net interest margin of 3.04% down two basis points as deposits continue to roll in.
- Community Banking net income of $3.435B vs. $3.222B one year ago on revenue of $12.835B vs. $12.254B. Mortgage originations of $44B vs. $48B in Q3. 14.1M active mobile customers up 19% Y/Y.
- Wholesale Banking net income of $1.97B vs. $2.111B a year ago on revenue of $6.054B vs. $5.972B.
- Wealth, Brokerage and Retirement net income of $514M vs. $491M a year ago on revenue of $3.647B vs. $3.438B. Retail brokerage client assets of $1.4T up 4% Y/Y. Wealth management client assets of $225B up 5%.
- Conference call at 10 ET
- Previously: Wells Fargo EPS in-line, beats on revenue (Jan. 14)
- WFC -1.1% premarket
Wed, Jan. 14, 8:08 AM
Tue, Jan. 13, 5:30 PM
Tue, Jan. 13, 3:21 PM
- 2015 has opened much like 2014, with interest rates doing the exact opposite of what most expected, and falling sharply. It's a tough start for bank investors who have been counting on higher interest rates to help boost earnings for a number of years.
- In the meantime, deposits keep rolling in, and the pace of lending growth isn't quick enough to absorb all the money. In 2014, loan balances rose 4.4%, but securities holdings popped 12%, and cash assets jumped 22%.
- The good part of falling yields are unrealized gains on those security portfolios - negative a year ago, they're were in the green by about $15B on Dec. 31. More good news, says Goldman's Richard Ramsden: Valuations. The big banks are priced at about 9.9x estimated 2016 earnings, allowing for some nice upside if and when rates do decide to go higher.
- Reporting Q4 results tomorrow are JPMorgan (JPM) and Wells Fargo (WFC -0.8%), and on Thursday are Bank of America (BAC -1.4%) and Citigroup (C -0.9%).
Mon, Jan. 12, 8:43 AM
- The collapse in oil prices is set to crimp one of the few fast growth areas for banks since the financial crisis - lending to the energy industry. Right now, we're just talking about a slowdown in lending, but Charles Peabody - who saw the losses incurred by Texas banks during the 1980s energy slump - expects the current situation to lead to losses as well.
- "It’s been a hot industry, probably a little too hot,” says Cullen/Frost (NYSE:CFR) CEO Dick Evans, whose bank has a sizable energy business. “But it is not time to panic. We have been in the game a long time. I am comfortable with what we have been doing.”
- The flip side of energy issues might be stronger business for banks elsewhere as consumers find themselves with more money in their pockets after filling up.
- Among the more sizable banks, Scotiabank (NYSE:BNS) leads the way with 34.6% of its investment banking revenue coming from energy companies. Next is RBC (NYSE:RY), with 20.2%, and then Wells Fargo (NYSE:WFC) with 14.9% and Citigroup (NYSE:C) with 11.8%. Others include Barclays (NYSE:BCS) with 10.7%, Credit Suisse (NYSE:CS) with 8.1%, and Bank of America (NYSE:BAC) with 7.4%.
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)
Mon, Jan. 5, 1:03 PM
- An improving economy and easing of the regulatory burden will be keys for a big move higher in the big banks this year, says Barclays' Jason Goldberg, seeing double-digit percentage gains for the Citigroup (C -2.9%), Bank of America (BAC -3%), JPMorgan (JPM -2.8%), and Wells Fargo (WFC -2.6%).
- His top pick among the group is Citigroup, where the $65 price target suggests upside of more than 20%.
- Goldman has a different take, and sees the regulatory burden as making JPMorgan worth more broken up than together.
Mon, Jan. 5, 9:59 AM
Dec. 23, 2014, 2:22 PM
- The National Credit Union Administration Board last week filed suit against Bank of America and U.S. Bancorp over crisis-era mortgage trusts, and today it's Wells Fargo's (NYSE:WFC) turn.
- At issue are five credit unions which failed after buying about $2.5B in MBS between 2004 and 2007.
- Previously: BofA and U.S. Bancorp face another mortgage suit (Dec. 17)
Dec. 12, 2014, 2:46 PM
- Wells Fargo's (WFC -0.4%) Norwest Venture Partners is one of LendingClub's earliest investors, and it's currently sporting a return of about 70x its $18M investment.
- The bank's limited partnership with Norwest (Wells is the sole LP) is a rare one in the Dodd-Frank era, but it's been lucrative, particularly this year. In Q3, Wells booked more than $700M in profits from equity investments, after $400 in Q2 - those profits come largely from Norwest, which now has $5B in AUM.
- Previously: LendingClub blasts off following IPO (Dec. 11, 2014)
Dec. 9, 2014, 8:52 AM
- A check of the other major banks premarket amid a global selloff of some note and BofA's Brian Moynihan's warning about sluggish Q4 trading revenue finds JPMorgan (NYSE:JPM) -1.5%, Citigroup (NYSE:C) -1.5%, Wells Fargo (NYSE:WFC) -1.2%, Goldman Sachs (NYSE:GS) -1.7%, and Morgan Stanley (NYSE:MS) -1.5%.
- XLF -1.1%
- ETFs: XLF, FAS, FAZ, UYG, VFH, IYF, IAI, SEF, IYG, FXO, FNCL, FINU, KCE, RWW, RYF, KBWC, FINZ
Dec. 8, 2014, 8:54 AM| Comment!
Dec. 5, 2014, 10:06 AM
- Among those counting on higher interest rates to boost profits are banks, insurers, and online brokers, and all are outliers to the upside in today's session after a strong November jobs report has rate hike expectations on the rise. The XLF is up 1%.
- TBTFs: Bank of America (BAC +2.1%), Citigroup (C +1.8%), JPMorgan (JPM +2.2%), Wells Fargo (WFC +1.2%)
- Regionals (KRE +1.9%): Regions Financial (RF +2.6%), KeyCorp (KEY +2.3%), Huntington (HBAN +1.5%), BB&T (BBT +1.6%), Zions (ZION +4%)
- Custodials: BNY Mellon (BNY), State Street (STT +1.6%), Northern Trust (NTRS +1.8%)
- Life insurers: MetLife (MET +2.1%), Prudential (PRU +2.5%), Lincoln National (LNC +2.3%)
- Online brokers: Schwab (SCHW +3.8%), E*Trade (ETFC +3%), Ameritrade (AMTD +2.7%)
- Previously: Short end of yield curve on the move after jobs number (Dec. 5, 2014)
- Previously: Bonds and dollar higher, gold slumps after strong jobs report (Dec. 5, 2014)
- ETFs: XLF, FAS, FAZ, UYG, KRE, VFH, KBE, IYF, KIE, IAT, IAI, SEF, IYG, IAK, FXO, FNCL, KBWB, RKH, QABA, FINU, KRU, RWW, KBWR, RYF, KBWP, KBWI, PSCF, FINZ, KRS
Dec. 2, 2014, 3:42 PM
- "Our concern is that the market has become complacent on the setting of the SIFI surcharge for the mega banks, which means there may be surprise at just how onerous the surcharge could be for JPMorgan (NYSE:JPM), Citigroup (NYSE:C), Bank of America (NYSE:BAC), Wells Fargo (NYSE:WFC), Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS)," writes Guggenheim's Jaret Seiberg.
- The Fed is expected to announce the capital surcharge on December 9.
- Previously: U.S. banks to be hit with tougher capital rule
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. 18, 2014, 2:57 PM
- Wells Fargo (WFC -0.1%) has been beating or meeting earnings estimates for six quarters running, notes BMO, but "from lower-quality sources such as elevated market-sensitive revenues, an unusually low tax rate, and aggressive reserve releases, while core revenue trends have been under pressure."
- Wells Fargo deserves premium valuation to its big bank peers, says BMO, but a forward P-E ratio 10% higher than the rest - after having no premium as recently as April - is about the limit.
- BMO's downgrade follows Macquarie over the weekend reiterating its Underperform rating after also noting the bank's recent reliance on non-core earnings and its rich valuation.
- Previously: BMO no longer a bull on Wells Fargo
WFC vs. ETF Alternatives
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.
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