Banking, finance, and taxes
Wells Fargo Earnings Report Proves 'Safest Bank in America' Status
Published:
Last Updated:
Wells Fargo & Co. (NYSE: WFC) has managed to beat earnings but it is obviously going to be in second place after J.P. Morgan Chase & Co. (NYSE: JPM). The bank still shows why it is now the top of the 7 Safest Banks in America as it posted record earnings per share up 38% to of $0.82 EPS. Revenue was $21.3 billion versus $21.6 billion in the prior quarter. Thomson Reuters had estimates of $0.81 EPS and $21.35 billion in revenue.
Wells Fargo showed a return on average assets of 1.41%, up 10 basis points from the prior quarter. Its return on equity rose 72 basis points to 12.86%. Tier 1 common equity under Basel I increased $2.2 billion to $101.7 billion. Its Tier 1 common equity ratio was 10.08% under Basel I; the estimated Tier 1 common equity ratio was 7.78% under the latest Basel III capital proposals.
Share buybacks continue here as the bank repurchased 53 million shares of common stock in the second quarter and an additional estimated 11 million shares through a forward repurchase transaction expected to settle in the third quarter 2012.
Book value per share at the end of the quarter was up to $26.06 per share, up from $25.45 at the end of the first quarter and up from $23.84 a year ago.
If you wonder why this is still the safest bank in America, all you have to do is line up the earnings reports of Wells Fargo and J.P. Morgan and compare the tone. If you forget about how the J.P. Morgan news was not as bad as many investors were braced for, the fact is that Wells Fargo just has far less exposure to losses and derivatives when compared to J.P. Morgan. We would expect the safest bank status to only be even more magnified against the troubled money-center banks of Citigroup, Inc. (NYSE: C) and Bank of America Corporation (NYSE: BAC) when they report earnings next week.
The highly volatile Direxion Daily Financial Bull 3X Shares (NYSEMKT: FAS) is currently up 0.8% at $85.10 in the pre-market trading session. Wells Fargo shares are down marginally on the news by 0.24% at $32.77.
JON C. OGG
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.