District Banker

Wells Fargo: Please Dilute Shareholders and Repay TARP Now!

oh - you're one of those EPS bank stock investors that has gotten mowed over in the last 2+ years.

don't worry about the balance sheet - those toxic assets won't come back to bite you!

Wells Fargo: Please Dilute Shareholders and Repay TARP Now!

What dilution are you talking about?! WFC is trading well above TBV, and thus any issuance would be ACCRETIVE to book value. Yes, today's shareholders would own a smaller percentage of Wells, but it would be a smaller piece of a larger pie.

Do you know what would be dilutive? REPURCHASING SHARES (contrary to your suggestion). This is basic finance, and you shouldn't be posting if you don't understand it.

Chart of the Day: The Big Banks Get Bigger

The FDIC is going to insure all those deposits under the specified limit whether they are scattered across 1,000 community banks, or all held at JPM.... so what's your point?

Wells Fargo, JPMorgan and Bank of America: Stock Prices Can Double

We will have to agree to disagree on this issue. But how can you have a serious discussion of bank stock valuations without a TBV figure?

What’s My Payment?

The name of the song is just "Beverly Hills." Get your Rivers Cuomo straight

Five Midget Banks I'm Watching

I realize that you post a caveat saying, "I have not done enough work on these 5 names..." - but how could you post this article without a single piece of fundamental analysis??

The closest piece of relevant info you posted is P/Book - which no bank investors look at (we all look at P/Tangible Book). If you have to ask the difference, you shouldn't be investing in any financials, and certainly not banks.

On what basis would you say that FITB was the riskiest buy?

Wells' 'Under the Radar' Subprime Loans

What WFC really needs to worry about is the commercial real estate shoe that will ultimately drop right on them. Those of us that follow banks (and only banks, as the sector is more than a full time job in and of itself), know that WB was a notoriously loose underwriter in the CRE space. Yes, WFC charged off a good deal of WB's loans in the purchase accounting transaction, but those were resedential credits - not CRE credits.

I do believe that when all the dust settles, WFC will fare better than most large banks (with the exception of USB) - but that does not mean the fundamentals aren't working against them (like all banks). If you are forced to own a large cap US bank, I suppose WFC poses some possibility of RELATIVE performance, but that is likely to still be negative on an absolute basis. If you are not forced to own such an institution, I do not see why you would jump into the US bank/thrift sector at this juncture.

Disclosure: I am neither long, nor short WFC

Hudson City and Wells Fargo - Two Attractive Picks

Ugh - the total lack of fundamentals in this analysis is disturbing. Read HCBK's 10-Q: a great deal of their mortgage portfolio is purchased, and 1/3 of it is NOT from NY/NJ/CT. I do credit you for pointing out that the NY/NJ/CT portion of the book is heavily leveraged to the financial services sector, given they are jumbo mortgages.

On WFC, I think it is a better bank than, say - BAC. But it also trades like it! It is an expensive stock, and they will have plenty of problems on the commercial side of their loan book (ask almost any bank analyst how WB's underwriting was...).

If you like paying a high P/TBV multiple for a suspect balance sheet (just because they have a name you recognize) - that's your prerogative. I suggest finding smaller gems that have been thrown out with the sector.