Select Page

Sing along: One of these banks is not like the others. One of these banks doesn’t belong.

This morning big money center banks JPMorgan Chase (JPM) and Citigroup (C) delivered disappointing reports on fourth quarter revenue and earnings. Shares of JPMorgan Chase finished the day down 6.15%. Citigroup shares closed lower by 1.25%.

But Wells Fargo (WFC) crushed earnings estimates for its fourth quarter. The stock gained 3.68% by the close.

JPMorgan Chase managed to beat Wall Street earnings projections of $3.01 a share thanks to another boost from a $1.8 billion release from loan loss reserves. Earnings for the quarter came in at $3.33 a share–which was down 12.1% from earnings in the fourth quarter of 2020.Revenue missed analysts estimates. Wall Street had projected a slight rise in revenue but the company reported a 0.3% drop from the fourth quarter of 2020. But the big crusher for shares of JPMorgan Chase came from a big increase in projected expenses for 2022. The bank’s estimate of $77 billion in expenses was about $6 billion above 2021 expenses.

On the other hand, Wells Fargo (WFC) reported earnings per share of $1.38, beating Wall Street estimates of $1.13 a share and fourth quarter 2020 earnings of 66 cents a share. For 2022 Wells Fargo said it expects 8% growth in net interest income to $38.66 billion. The latest analyst estimate was for growth to $37 billion. Wells Fargo, like Chase, benefited from the release of loan loss reserves and an 18 cent a share gain from the sale of the company’s corporate trust services unit and Wells Fargo Asset Management. Revenue climbed by 12.8% year over year to $20.86 billion, easily beating Wall Street projections by $2.25 billion. As per its reputation as a deposit gathering machine, the bank reported an increase in deposits to $1.47 trillion from $1.45 trillion at the end of the third quarter. Loans grew to $875 billion from $854 billion at the end of the third quarter.

I added shares of Wells Fargo to my Jubak Picks Portfolio on Wednesday, January 12.