Monday, July 15, 2013

Morning Report: Wells Fargo stock up after earnings

WELLS STOCK PRICE UP AFTER EARNINGS: By now you've heard the top line figure of $5.3 billion in net income, which beat Wall Street's guess and marked the 9th straight quarter of record earnings. Friday's report sent the stock price up almost 2 percent. With a little time to reflect, analysts generally had good things to say:

Guggenheim Securities: "We believe WFC should be able to continue to report sequential record quarterly earnings per share levels over the foreseeable future, as modest revenue growth coupled with improving efficiency and lower asset quality costs should provide underlying momentum."

Barclays: "Top and bottom-line results exceed expectations.... We believe forward-looking forward indicators were better than feared."

BOFA SAYS BONUS-FOR-FORECLOSURE CLAIMS 'IMPOSSIBLE': Allegations arose several weeks back from Bank of America loan servicers, including one in Charlotte, that the bank gave cash bonuses for pushing people into foreclosure. New court filings from the bank Friday say those claims are "impossible" and "wild misrepresentations," Bloomberg reports. Six of the seven workers were fired for inappropriate behavior, the filings said.

SUNTRUST RELOCATING UNIT TO CHARLOTTE: The Atlanta bank's mid-Atlantic corporate banking division will now have its home in SouthPark. From division head Jason Cagle: "North and South Carolina is the one spot in our footprint where we historically have had not a very focused calling effort on corporate clients. This clearly is our biggest opportunity for market share."

PRIVATE EQUITY BUYING CHARLOTTE HOMES: You've seen it in Arizona, California and Florida, and now they're here. Large private equity firms have made up as much as 10 percent of the home sales in Charlotte so far this year, led by Wall Street giant Blackstone and IPO-preparing American Homes 4 Rent.

This is The Charlotte Observer's Bank Watch Morning Report, bringing you banking news from the region, the top financial headlines, and the news driving activity in the Charlotte market. Click here to read more headlines from the Queen City and Wall Street.

Financial headlines

JPM IN CAPITAL HOLE?: Just a few days after regulators came out with a rule that would double the required leverage rule at the largest U.S. banks, JP Morgan Chase executives dodged several questions about where they stand on the matter, the NYT reports. They hinted, however, that their capital ratio could leave them as much as $50 billion in the hole if the rules were to go into effect today. Expect a lot of questions for Bank of America on this Wednesday.

PUSHBACK EXPECTED ON LEVERAGE RULE: Speaking of the leverage ratio rule, Gretchen Morganson of the NYT says to expect the financial industry to rally against the proposal.

CITIGROUP EARNINGS TODAY: Estimates are generally bullish, which could lift bank stocks today if C comes through.

OVERSEAS TRADING: New rules will give federal regulators new latitude to monitor U.S. banks trading overseas, the NYT reports. In effect, it will put the Dodd-Frank law for big banks' international operations.

MORE HEADLINES: UBS may have overtaken Bank of America in private banking, but it's backing off investment banking .... Buzz remains around February's "The Bankers New Clothes," which features "bank regulation as beach reading," the NYT says ....

Read more here:

Around Bank Town

ON TODAY'S OBSERVER FRONT PAGE: 300 rally in uptown Charlotte against the Trayvon Martin verdict.... Weeks of wet weather turns moods gloomy... $50,000 for a tent? Sure, if it's from a historic religious revival.... Boy finds his father on Facebook, and turns his life around.

TODAY'S COMMUTE: Slowdowns at I-77 S in south Charlotte .... Lane closures on Johnston Road coming north from S.C. ... Road work on Independence Boulevard.... Click here for full report

FROM THE WEEKEND: More from Boone -- In the years before three tragic deaths from carbon monoxide poisoning in the same hotel room, the hotel operator's business was unraveling. Meanwhile, public official emails show the missed opportunities that could have prevented the most recent death.

AHEAD THIS WEEK: Bank of America reports earnings on Wednesday. Analyst consensus is 25 cents per share. Here are more things to watch. ...... Nucor reports earnings on Thursday...

ECONOMIC DATA:  Retail sales Monday morning .... Consumer Price Index released Tuesday ... Housing starts and Fed Beige Book on Wednesday .... Initial unemployment claims in Thursday.