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Banking, finance, and taxes

Buffett’s Favorite Bank Gets It Done (WFC, BRK-A, C, BAC, JPM)

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By Jon C. Ogg Updated Published

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Wells Fargo & Co. (NYSE: WFC) managed to beat earnings this morning.  Warren Buffett’s favorite bank posted a gain of 19% in net income of $3.15 billion, translating to $0.60 EPS on revenues of $20.9 billion.  Thomson Reuters had estimates of $0.55 EPS and revenues of $20.95 billion. As a reminder, Warren Buffett’s Berkshire Hathaway Inc. (NYSE: BRK-A) owns roughly 325 million shares of Wells Fargo.  The bank is joining Bank of America Corporation (NYSE: BAC), Citigroup, Inc. (NYSE: C) and J.P. Morgan Chase & Co. (NYSE: JPM) in beating earnings estimates.  The question is whether Wells Fargo can shake the trend.

The following figures were provided:

  • Checking and savings deposits up 9% from year ago and up 9% annualized on a sequential basis;
  • Net loan charge-offs of $4.1 billion, down $394 million, or 9% from prior quarter, down $1.3 billion, or 24%, from fourth quarter 2009 peak;
  • tier 1 capital 10.9% vs 10.5% sequentially and vs. 10.6% year ago;
  • total capital 14.9% vs. 14.5% sequentially and vs. 14.7% year ago;
  • Tier 1 leverage 9.0% vs. 8.7% sequentially and vs. 9.0% year ago;
  • Tier 1 common equity 8.0% vs 7.6% sequentially and vs. 5.2% year ago.

Total loans were $753.7 billion at September 30, 2010 compared with $766.3 billion at June 30, 2010 and $800.0 billion at September 30, 2009.

Book value per common share was listed as $22.04 and shares closed on Tuesday at $24.55. Shares are indicated up 1.4% at $24.90 in pre-market trading.

JON C. OGG

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About the Author Jon C. Ogg →

Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.

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