WFC - Wells Fargo

[Guest eatliftinvestgolf]

How does WFC grow 4% without increasing assets? By necessity, it means ROA must increase (and operating expenses must remain flat or ROA must increase fast enough to accommodate increasing operating expenses as well). We know wages are increasing and NIM is decreasing. The longer the asset cap remains the harder it's going to be to grow post-cap removal since relationships are slowly lost to competition.

 

I think coc meant going forward not during the asset cap? During the asset cap, distributable earnings are higher, buybacks are higher, revenue may shrink, and  non interest operating expenses are currently elevated and will start to be ripped out.  In the future, post-asset cap, the 4% growth as a valuation assumption seems reasonable relative to the long term deposit trends in the industry and the ROIC of retaining capital as a scale community banking player. You have to believe that the remaining customers are good customers for the franchise (stickiness and credit quality)to be comfortable that the asset cap won’t be too damaging to per share intrinsic value as the company is not growing right now and per share ownership goes up.

[coc]

How does WFC grow 4% without increasing assets? By necessity, it means ROA must increase (and operating expenses must remain flat or ROA must increase fast enough to accommodate increasing operating expenses as well). We know wages are increasing and NIM is decreasing. The longer the asset cap remains the harder it's going to be to grow post-cap removal since relationships are slowly lost to competition.

 

Yes, I am talking post asset cap. I do not believe they are losing out to competition in any great sense - though they are letting some business go on purpose. WFC would be able to grow at 4% probably without adding a great deal of new relationships, net, anyways. If your customers stay around, there is natural growth in the relationship over time as the economy grows.

 

While the cap is in, they are, I’m sure, paring down what they feel are the least attractive relationships. But it would be too simple to say they won’t be able to grow over time if they so choose. There are lines of business they’re not heavily in, they do nothing internationally, and so on. They can be simultaneously pursuing new relationships and letting go of old.

[Guest Schwab711]

What is everyone assuming on asset cap timing out of curiosity?

 

The Fed has said over and over the cap will be lifted after WFC comes up with a plan, enacts those plans, and proves they are working. That sounds like years. I think folks underestimate the damage that can be done to a banking entity in that time. The pressure to make bad decisions will increase.

 

There's rate risk, leverage loan risk, inflation risk, ect during that period. Zero asset growth is generally a mid-single digit ROE destiny for a bank.

 

I get everyone has multi-decade horizons but realistically I'd rather buy post-asset cap (and 10% spike). WFC may not be the old WFC on the other side.

 

The idea that WFC can expand internationally post-asset cap is really odd. That's new territory for them, thus high risk.

[Guest eatliftinvestgolf]

I think Dec 2020 after the election, but I don’t share your level of concern.  Why do they need asset growth to earn a 1% ROA?  Mid single digits seems off unless they are not allowed to return capital... which seems unlikely.

[HalfMeasure]

What is everyone assuming on asset cap timing out of curiosity?

 

The Fed has said over and over the cap will be lifted after WFC comes up with a plan, enacts those plans, and proves they are working. That sounds like years. I think folks underestimate the damage that can be done to a banking entity in that time. The pressure to make bad decisions will increase.

 

There's rate risk, leverage loan risk, inflation risk, ect during that period. Zero asset growth is generally a mid-single digit ROE destiny for a bank.

 

I get everyone has multi-decade horizons but realistically I'd rather buy post-asset cap (and 10% spike). WFC may not be the old WFC on the other side.

 

The idea that WFC can expand internationally post-asset cap is really odd. That's new territory for them, thus high risk.

 

I would say there are also potential positives to having a cap, especially if the economy is in the late innings. WFC is structurally unable to reach in an attempt to grow their book, and in fact might actually take the opportunity to prune their book and focus on quality of assets vs. quantity. How does capping assets necessarily lower ROE prospects? In my opinion, that only happens if excess capital builds on the balance sheet, but if excess capital can be returned then the ROE should be fine.

[Guest Schwab711]

Without asset growth, commercial relationships are in decline. Normal relationships grow at ~GDP growth. With the cap, WFC will need to cull at roughly that rate. Commercial relationships represent non-interest bearing assets. So you have an additional squeeze on NIM.

 

Everything bad looks far off at this point in the cycle. There will be bad years at some point. A full cycle, single digit return for a hypothetical, asset-capped bank with excellent scale is quite reasonable. Maybe the word mid was misleading.

 

Asset growth is the life blood of the bank. Without it, bank returns are akin to bond coupons instead of providing the fuel to a compounding machine! I'm not saying WFC is uninvestable or anything similar. I just haven't seen a single WFC investment pitch that incorporates the ST and LT effects of the asset cap. Nearly every pitch assumes asset cap disappears (sometimes assumed to be instantly) and everything returns to normal. Everything may go back to normal, but it seems less likely by the day.

[Guest Schwab711]

What is everyone assuming on asset cap timing out of curiosity?

 

The Fed has said over and over the cap will be lifted after WFC comes up with a plan, enacts those plans, and proves they are working. That sounds like years. I think folks underestimate the damage that can be done to a banking entity in that time. The pressure to make bad decisions will increase.

 

There's rate risk, leverage loan risk, inflation risk, ect during that period. Zero asset growth is generally a mid-single digit ROE destiny for a bank.

 

I get everyone has multi-decade horizons but realistically I'd rather buy post-asset cap (and 10% spike). WFC may not be the old WFC on the other side.

 

The idea that WFC can expand internationally post-asset cap is really odd. That's new territory for them, thus high risk.

 

I would say there are also potential positives to having a cap, especially if the economy is in the late innings. WFC is structurally unable to reach in an attempt to grow their book, and in fact might actually take the opportunity to prune their book and focus on quality of assets vs. quantity. How does capping assets necessarily lower ROE prospects? In my opinion, that only happens if excess capital builds on the balance sheet, but if excess capital can be returned then the ROE should be fine.

 

If you look back to posts around when the cap was announced, that was my original position too. The issue is, WFC hasn't doing those things. That's what led me to change course in thinking.

 

All else equal: ROA declines with an asset cap because expenses increase and interest income remains flat (assuming no change in yields to compensate). If leverage is stable, ROE decline due to ROA decline.

[HalfMeasure]

What is everyone assuming on asset cap timing out of curiosity?

 

The Fed has said over and over the cap will be lifted after WFC comes up with a plan, enacts those plans, and proves they are working. That sounds like years. I think folks underestimate the damage that can be done to a banking entity in that time. The pressure to make bad decisions will increase.

 

There's rate risk, leverage loan risk, inflation risk, ect during that period. Zero asset growth is generally a mid-single digit ROE destiny for a bank.

 

I get everyone has multi-decade horizons but realistically I'd rather buy post-asset cap (and 10% spike). WFC may not be the old WFC on the other side.

 

The idea that WFC can expand internationally post-asset cap is really odd. That's new territory for them, thus high risk.

 

I would say there are also potential positives to having a cap, especially if the economy is in the late innings. WFC is structurally unable to reach in an attempt to grow their book, and in fact might actually take the opportunity to prune their book and focus on quality of assets vs. quantity. How does capping assets necessarily lower ROE prospects? In my opinion, that only happens if excess capital builds on the balance sheet, but if excess capital can be returned then the ROE should be fine.

 

If you look back to posts around when the cap was announced, that was my original position too. The issue is, WFC hasn't doing those things. That's what led me to change course in thinking.

 

All else equal: ROA declines with an asset cap because expenses increase and interest income remains flat (assuming no change in yields to compensate). If leverage is stable, ROE decline due to ROA decline.

 

Fair. What signs suggest to you that WFC isn't doing these things? I'm curious for this year's CCAR on the excess capital side of things.

[Rasputin]

Focus on personnel count.  I think by 2030 it's likely to be well below 200k.  BAC went from 282k fte dec 31 2010 to 205k dec 31 2018.

 

We can't see WFC's true earnings power today, and probably not until 2023 or beyond, just like we couldn't see it with BAC's circa 2011 through 2016.  All these issues not only add bazillion costs, they disrupt day to day business.  The fact that the numbers WFC produced so far, tell me their clients are sticky.

 

I for one like the fact that they can buy back more shares at lower prices.

 

 

[coc]

If you truly believe WFC has an impaired franchise long term, you are definitely right to avoid the stock. But I don’t agree that this is the case. Think of the extreme culling B of A went through - and their franchise is growing again. That was a much worse problem, and it was addressed. It took a while, but so what? WFC is reducing its expense base carefully while buying back stock at a 10%+ yield - if it takes another few years, that’s not the end of the world. You happen to think they will come out of it poorly on the other side — you’re entitled to that, and if you’re right, it’ll be a mediocre investment. A lot can happen in banking. Another rough period would again shake out some aggressive competitors and allow WFC to pick up new customers again when they are able.

[Guest eatliftinvestgolf]

What is everyone assuming on asset cap timing out of curiosity?

 

The Fed has said over and over the cap will be lifted after WFC comes up with a plan, enacts those plans, and proves they are working. That sounds like years. I think folks underestimate the damage that can be done to a banking entity in that time. The pressure to make bad decisions will increase.

 

There's rate risk, leverage loan risk, inflation risk, ect during that period. Zero asset growth is generally a mid-single digit ROE destiny for a bank.

 

I get everyone has multi-decade horizons but realistically I'd rather buy post-asset cap (and 10% spike). WFC may not be the old WFC on the other side.

 

The idea that WFC can expand internationally post-asset cap is really odd. That's new territory for them, thus high risk.

 

I would say there are also potential positives to having a cap, especially if the economy is in the late innings. WFC is structurally unable to reach in an attempt to grow their book, and in fact might actually take the opportunity to prune their book and focus on quality of assets vs. quantity. How does capping assets necessarily lower ROE prospects? In my opinion, that only happens if excess capital builds on the balance sheet, but if excess capital can be returned then the ROE should be fine.

 

If you look back to posts around when the cap was announced, that was my original position too. The issue is, WFC hasn't doing those things. That's what led me to change course in thinking.

 

All else equal: ROA declines with an asset cap because expenses increase and interest income remains flat (assuming no change in yields to compensate). If leverage is stable, ROE decline due to ROA decline.

 

Fair. What signs suggest to you that WFC isn't doing these things? I'm curious for this year's CCAR on the excess capital side of things.

 

There are a number of small signs they are doing these things.  Junior mortgage (pick-a-pay) loan book sales, for instance. They also did a good job avoiding some of the excesses in auto lending recently.

[sleepydragon]

What is everyone assuming on asset cap timing out of curiosity?

 

The Fed has said over and over the cap will be lifted after WFC comes up with a plan, enacts those plans, and proves they are working. That sounds like years. I think folks underestimate the damage that can be done to a banking entity in that time. The pressure to make bad decisions will increase.

 

There's rate risk, leverage loan risk, inflation risk, ect during that period. Zero asset growth is generally a mid-single digit ROE destiny for a bank.

 

I get everyone has multi-decade horizons but realistically I'd rather buy post-asset cap (and 10% spike). WFC may not be the old WFC on the other side.

 

The idea that WFC can expand internationally post-asset cap is really odd. That's new territory for them, thus high risk.

 

I would say there are also potential positives to having a cap, especially if the economy is in the late innings. WFC is structurally unable to reach in an attempt to grow their book, and in fact might actually take the opportunity to prune their book and focus on quality of assets vs. quantity. How does capping assets necessarily lower ROE prospects? In my opinion, that only happens if excess capital builds on the balance sheet, but if excess capital can be returned then the ROE should be fine.

 

If you look back to posts around when the cap was announced, that was my original position too. The issue is, WFC hasn't doing those things. That's what led me to change course in thinking.

 

All else equal: ROA declines with an asset cap because expenses increase and interest income remains flat (assuming no change in yields to compensate). If leverage is stable, ROE decline due to ROA decline.

 

Fair. What signs suggest to you that WFC isn't doing these things? I'm curious for this year's CCAR on the excess capital side of things.

 

There are a number of small signs they are doing these things.  Junior mortgage (pick-a-pay) loan book sales, for instance. They also did a good job avoiding some of the excesses in auto lending recently.

 

On my way between work and home, I saw them recently closed a branch. That branch is at a awkward locations and not much traffics.

[Spekulatius]

If you truly believe WFC has an impaired franchise long term, you are definitely right to avoid the stock. But I don’t agree that this is the case. Think of the extreme culling B of A went through - and their franchise is growing again. That was a much worse problem, and it was addressed. It took a while, but so what? WFC is reducing its expense base carefully while buying back stock at a 10%+ yield - if it takes another few years, that’s not the end of the world. You happen to think they will come out of it poorly on the other side — you’re entitled to that, and if you’re right, it’ll be a mediocre investment. A lot can happen in banking. Another rough period would again shake out some aggressive competitors and allow WFC to pick up new customers again when they are able.

 

Agree with above. If they can’t grow, so be it. With the share as cheap as it is, if they can pay an almost 4% dividend and buy back 5-6% of their shares year after year- so be it. I prefer this low risk of value creation over pushing too much on growth st this point in the cycle. They still show underwriting discipline, which imo is the most important thing for a bank.

[RuleNumberOne]

- Imagine the balance sheet, earnings, dividend, and market cap stay frozen for the next 7 years.

- WFC retires 7% of its market cap every year (~$14 billion in buybacks, ~$8 billion in dividends).

- After 7 years, WFC has retired 60% of its original share count (0.93^7 = 0.6).

- Dividend yield would be 3.9%/0.4 = 9.75% of original share price

 

If WFC continues to do the same in years 7 - 14, the dividend yield would be 24.375% of original share price (9.75% / 0.4).

 

Assume 2% inflation over 14 years. 1.02 ^ 14 = 1.32.

 

24.375%/1.32 = 18.5%.

 

Wouldn't I get an inflation-adjusted 18.5% yield for retirement if the market cap stays the same?

[RuleNumberOne]

I believe WFC's customer relationships are not affected. I recently got a mortgage with WFC on a new home with a 33% loan-to-value. Loan officers at BAC and PNC took me for a ride, making false promises about their mortgage rates, just so that I move my brokerage accounts there. Immediately after I transferred some brokerage accounts to BAC, their loan officer revealed they couldn't make even a 25% loan-to-value mortgage (the reason: I owned 2 homes with no debt and BAC calls that a risk.). The mortgage on my old home had been with BAC.

 

There is a lot of bait-and-switch that happens at other banks. WFC's loan officer was always 100% truthful, perhaps because WFC has everyone on a tight leash. The ride I took due to the false promises from BAC and PNC cost me at least 0.25% in interest rates. By the time I completed the round-trip, mortgage rates had gone up. This doesn't get reported by Elizabeth Warren.

 

There is plenty of room on the balance sheet for WFC to remain #1 in home mortgages with an 80% loan-to-value. A year ago, "excellent banker" Tim Sloan had flagged commercial RE as frothy. A few weeks ago, FT said that interest-only commercial RE mortgages have climbed to 2008-2009 levels. WFC can always retreat from such frothy areas.

 

WFC's NIM was 2.91% in the latest quarter. That is less than the NIM WFC makes on residential mortgages. WFC can retain home mortgage market share while retreating from lower NIM/frothy businesses.

[John Hjorth]

... - After 7 years, WFC has retired 60% of its original share count (0.93^7 = 0.6). ...

 

Welcome to CoBF, RuleNumberOne!,

 

I agree with you on the math [in casu, that (0.93^7) = 0.6], but your conclusion on the calculus is not right. You're calculating shares not bought back at year end year 7, so retired [bought back] shares over 7 years is 40%, not 60%, based on your assumptions [, which matters for your further calculations].

[sleepydragon]

- Imagine the balance sheet, earnings, dividend, and market cap stay frozen for the next 7 years.

- WFC retires 7% of its market cap every year (~$14 billion in buybacks, ~$8 billion in dividends).

- After 7 years, WFC has retired 60% of its original share count (0.93^7 = 0.6).

- Dividend yield would be 3.9%/0.4 = 9.75% of original share price

 

If WFC continues to do the same in years 7 - 14, the dividend yield would be 24.375% of original share price (9.75% / 0.4).

 

Assume 2% inflation over 14 years. 1.02 ^ 14 = 1.32.

 

24.375%/1.32 = 18.5%.

 

Wouldn't I get an inflation-adjusted 18.5% yield for retirement if the market cap stays the same?

 

Mktcap will be smaller. You meant the earning remained the same.

I agree, I don’t see how much earning will change. WFC is not losing deposits and they will still be making loans.

 

I am getting a lot ads from them in Facebook about 2.40% 11 month CD. That’s pretty good rate.

[sleepydragon]

I believe WFC's customer relationships are not affected. I recently got a mortgage with WFC on a new home with a 33% loan-to-value. Loan officers at BAC and PNC took me for a ride, making false promises about their mortgage rates, just so that I move my brokerage accounts there. Immediately after I transferred some brokerage accounts to BAC, their loan officer revealed they couldn't make even a 25% loan-to-value mortgage (the reason: I owned 2 homes with no debt and BAC calls that a risk.). The mortgage on my old home had been with BAC.

 

There is a lot of bait-and-switch that happens at other banks. WFC's loan officer was always 100% truthful, perhaps because WFC has everyone on a tight leash. The ride I took due to the false promises from BAC and PNC cost me at least 0.25% in interest rates. By the time I completed the round-trip, mortgage rates had gone up. This doesn't get reported by Elizabeth Warren.

 

There is plenty of room on the balance sheet for WFC to remain #1 in home mortgages with an 80% loan-to-value. A year ago, "excellent banker" Tim Sloan had flagged commercial RE as frothy. A few weeks ago, FT said that interest-only commercial RE mortgages have climbed to 2008-2009 levels. WFC can always retreat from such frothy areas.

 

WFC's NIM was 2.91% in the latest quarter. That is less than the NIM WFC makes on residential mortgages . WFC can retain home mortgage market share while retreating from lower NIM/frothy businesses.

 

I too got my home mortgage from WFC and got competing quotes from BAC. BAC’s quote only gave me 30 day locking of the rate. I didn’t feel that’s enough. The WFC agent told me he had clients who was with BAC but BAC couldn’t finish the process within 30 days and asked clients to pay more to keep the old rate.

WFC gave me a lock of 3 months, rate was 3.25%

Nobody else could beat it, except BAC agreed to 3.20% but only 30 day lock (their initial quote is 3.50)

This was in 2016

[Spekulatius]

I had a similar  positive experience with WFC, when I bought a house and sold one at the same time. so for a short period of time (2month) I had two houses with a mortgage, due to duration of the sales process. I got my new mortgage with WFC and it wasn’t a problem. It might have helped that I have substantial assets with WF Investments.

 

I think they might look harder at marginal loans/relationships with the asset cap, and I like this at this point in the cycle.

[sleepydragon]

I believe WFC's customer relationships are not affected. I recently got a mortgage with WFC on a new home with a 33% loan-to-value. Loan officers at BAC and PNC took me for a ride, making false promises about their mortgage rates, just so that I move my brokerage accounts there. Immediately after I transferred some brokerage accounts to BAC, their loan officer revealed they couldn't make even a 25% loan-to-value mortgage (the reason: I owned 2 homes with no debt and BAC calls that a risk.). The mortgage on my old home had been with BAC.

 

There is a lot of bait-and-switch that happens at other banks. WFC's loan officer was always 100% truthful, perhaps because WFC has everyone on a tight leash. The ride I took due to the false promises from BAC and PNC cost me at least 0.25% in interest rates. By the time I completed the round-trip, mortgage rates had gone up. This doesn't get reported by Elizabeth Warren.

 

There is plenty of room on the balance sheet for WFC to remain #1 in home mortgages with an 80% loan-to-value. A year ago, "excellent banker" Tim Sloan had flagged commercial RE as frothy. A few weeks ago, FT said that interest-only commercial RE mortgages have climbed to 2008-2009 levels. WFC can always retreat from such frothy areas.

 

WFC's NIM was 2.91% in the latest quarter. That is less than the NIM WFC makes on residential mortgages . WFC can retain home mortgage market share while retreating from lower NIM/frothy businesses.

 

I too got my home mortgage from WFC and got competing quotes from BAC. BAC’s quote only gave me 30 day locking of the rate. I didn’t feel that’s enough. The WFC agent told me he had clients who was with BAC but BAC couldn’t finish the process within 30 days and asked clients to pay more to keep the old rate.

WFC gave me a lock of 3 months, rate was 3.25%

Nobody else could beat it, except BAC agreed to 3.20% but only 30 day lock (their initial quote is 3.50)

This was in 2016

 

I will just add when I applied for the mortgage, I didn’t have any other accounts at WFC. But I had all the accounts at BAC and I am the “platinum preferred” customers.

WFC’s loan officer did give me a lot of scrutiny when looking at my income and bank statements. I had to write a letter explaining why my income was lower in 2016 compared to 2015. They were very thorough.

[RuleNumberOne]

John, good catch. Updated calculations, but this time I included dividend reinvestment.

 

3.9% / (0.93^14) = 10.77%

 

Assume a tax rate of 37%, after-tax dividend yield is 3.9% * 0.63 = 2.46%. Dividend reinvestment will increase my shares by 1.0246 ^ 14.

 

10.77% x (1.0246 ^ 14) = 15.12%.

 

Would beat the S&P 500. S&P yield is 1.9% right now.

[Viking]

Just finished listening to CFO Shrewsbery at Barclays presentation. Good update.

- https://newsroom.wf.com/press-release/corporate-and-financial/wells-fargo-present-2019-barclays-americas-select-franchise?_ga=2.202039705.980588676.1558143175-1146450343.1558143175

 

One question near the end had to do with expenses at WFC vs peers. He said due to the nature of WFC business they should have the lowest expenses among peers. That is not the case today. He said compliance costs to come out down the road are in the ‘billions’.

 

Earlier in the call he discussed NII. He said it will be down year over year. One (of many) reasons is because they are still selling off some higher risk / higher margin consumer loans (taken on way back in 2009/10). This should help them in the next down turn (selling lower quality loans now).

 

I am starting to think that the worst may be behind this bank. Lots of parallels with BAC back in 2015 (in terms of negative investor sentiment). 2019 will be noisy for WFC; however, the catalysts are starting to line up:

1.) new CEO announcement

2.) CCAR capital return annoucement in June (something similar to current $32 billion?)

3.) asset cap removal

4.) US economy continues to chug along at 2-2.5% growth

 

Looking out another year WFC could really start to drive some serious operating leverage (similar to BAC the past couple of years). Top line growth similar to GDP growth and a significant drop in expenses that continues over many years.

[RuleNumberOne]

Page 8 of WFC's latest 10-Q lists the assets and liabilities by yield.

 

Between Q12018 and Q12019, their "interest earning deposits with banks" fell by $31 billion. Their total earning assets fell by $30 billion over the same period.

The average current yield for their "deposits with banks" is 2.33%. Other than Treasuries, these are the lowest-yielding assets.

 

Meanwhile, in the liabilities area, the highest yields are:

  -  "Other time deposits" costing 2.67% increased by $21 billion

  -  "Long-term debt" costing 3.32% increased from $226 billion to $223 billion.

 

If WFC needs to shrink its balance sheet, it has plenty of room to take down "deposits with banks" from its current $141 billion. Over the last year, total loans have stayed flat - $950-$951 billion.

 

For comparison, BAC's total loans went up $12 billion between Q1 2018 and Q1 2019: from $932 billion to $944 billion.

 

It seems poor Tim Sloan is the only victim of this brouhaha. Elizabeth Warren enacted theater for the cameras, with WFC as a prop. Neither WFC's earnings, nor its customers, care. WFC reported an increase in consumer checking customers.

 

WFC should be able to operate fine for years under this asset cap by trimming "deposits with banks" if needed.

[StubbleJumper]

Just finished listening to CFO Shrewsbery at Barclays presentation. Good update.

- https://newsroom.wf.com/press-release/corporate-and-financial/wells-fargo-present-2019-barclays-americas-select-franchise?_ga=2.202039705.980588676.1558143175-1146450343.1558143175

 

 

Earlier in the call he discussed NII. He said it will be down year over year. One (of many) reasons is because they are still selling off some higher risk / higher margin consumer loans (taken on way back in 2009/10). This should help them in the next down turn (selling lower quality loans now).

 

 

 

Does that pass the sniff test?  Seriously, a consumer loan written in 2009/10 that has not yet been written off by 2019 is either mostly already repaid or it's no longer high risk by the solitary virtue of having not already been written off at some point in the past 9 or 10 years.

 

Am I missing something obvious?

 

 

SJ

[Viking]

Stubble, it does make sense to me. I think BAC has been doing something similar for years. I think BAC still has about $40 billion of old pre 2008 loans that are trying to essentially run off. It is one of the reasons that BAC has been posting such low top line growth.

 

WFC said when they make the sale it results in a one time gain. And when they reinvest the proceeds the NII is lower. However, the quality of the new loan is also better. This was only one of about 6 different reasons why WFC said NII would be falling year over year.

 

Don’t get me wrong. It will take WFC another year or two to emerge from their current cloud. I still expect more negative surprises. Their business mix also looks quite different than JPM or BAC (and C is even more different). WFC looks much more sensitive to long bond yields than peers. Bottom line, at $45.50 per share i am starting to like the risk/reward potential of WFC a little more. I have a small position today and will continue reading and listening and learning...