Wells Fargo expected to have strong loan growth

Buoyed by "surging" commercial and industrial loans, overall loan growth is growing at large banks -- and Wells Fargo is likely one of the leaders, according to a research note from Stifel Nicolaus analysts.

According to data from the Federal Reserve, C&I loan balances grew more than 5 percent in the fourth quarter, a stronger pace than the quarter before. Credit card balances were up 2.6 percent. While commercial real estate balances are still down, they were by a smaller percentage.

Stifel analysts said banks with "healthy balance sheets," excess liquidity, and low funding costs will lead loan growth, and cited Wells Fargo as one of two banks (US Bancorp being the other), likely leading the pack.

KBW analysts predict Bank of America will lose money in Q4

Despite analysts' consensus that Bank of America will report earnings of 18 cents per share in the fourth quarter, the team at investment firm Keefe, Bruyette & Woods predict the Charlotte bank will lose money.

In a research note Tuesday, KBW put its estimate at a loss of 3 cents per share, citing a likely increase in rep and warranty expenses.

The firm was bearish on large banks in general. Analysts lowered their outlook for JPMorgan Chase, Citigroup, Goldman Sachs and Morgan Stanley on expected declines in investment banking and trading.

Morning roundup: Bank of America cutting off some small business lines of credit

Happy New Year! Here's a look at what's news in banking and finance this morning:

• Bank of America is cutting off lines of credit to some small business customers, the Los Angeles Times reports, straining their finances.
• Last year, fully 30 percent of private loan modifications included a principal write-down as banks -- including Bank of America -- navigate the mortgage melt-down, NPR says.
• Fewer banks failed in 2011 than in the previous two years, but the Wall Street Journal says the "era of troubled banks" is not over. Data indicate that banks are only failing more slowly.
• A Reuters columnist explores why some banks make dumb decisions. His hypothesis: it's their size.

Morning roundup: What's in store for BofA stock?

Here's a look at this morning's banking and finance news:

• Bank of America is on track to be this year's worst performer in the Dow Jones Industrial Average, Bloomberg reports. Shares have fallen nearly 60 percent this year, erasing almost $80 billion of shareholder value, as concerns about mortgage-related troubles and overall economic unrest have rattled investors.


• But readers of TheStreet said in a recent poll the Charlotte-based bank's shares will top $10 by the end of next year.


• The investment-banking role in Facebook Inc.'s IPO is up for grabs, and big banks are facing off, the Wall Street Journal reports. Goldman Sachs and Morgan Stanley are reportedly front-runners.


• Global markets were closing 2011 on a positive note, but most still saw big declines for the year, the AP reports.


• The markets remain risky. But for savers confident that better times are ahead, it's a great time to buy, Reuters explains.

Analyst: Consumers feeling better about the recovery

The economic recovery is taking longer than many hoped, but one measure - consumers' financial anxiety - seems to be improving, analyst Dan Geller reports.

His Money Anxiety Index, which measures how economic indicators are affecting consumer behavior, began to decline in July after rising steadily through the recession and recovery. The index hit 95.1 in December, down from 99.5 earlier this year, said Geller, executive vice president of Market Rates Insight, a California research firm that analyzes bank pricing.

The improvement is due in part to the falling national unemployment rate and has translated to higher retail sales in recent months, he said. Still, despite the declining anxiety, the index remains at the same level as during the recession of the early 1980s, Geller said.

"The current level of consumer financial anxiety is still very high," he said.

The Money Anxiety Index measures consumers' financial worries based on economic indicators, rather than how they say they feel about the economy. It has fluctuated from a high of 136 in the 1980s to a low of 40.3 in the mid-1960s.

Bank CEOs out-earned shareholders and employees in 2011

In a research note filled with data, banking industry analyst Dick Bove of Rochdale Securities laid out Thursday how bank CEO salaries compared with shareholder value and compensation given to the bank's employees in 2011.

The results?

Despite earnings per share increasing more than 13 percent at the two dozen banks the securities firm studies, stock prices fell more than 30 percent. CEOs, however, brought in about 65 more times than the average employee salary.

"What is clear, assuming I have the numbers right, is that CEOs of banks are doing considerably better than bank employees and bank shareholders," Bove writes.

At Bank of America, the numbers break down thusly:

Stock price

Dec. 31, 2010: $13.34

Dec. 24, 2011: $5.29

Percent change: (60.3 percent)

Earnings per share

2010: ($0.37)

2011 (estimated): $0.04

Pay

CEO Brian Moynihan's take-home pay: $2,259,521

Moynihan's "expensed compensation": $1,940,069

Average employee compensation: $127,907

Moynihan take-home/employee average: 17.7

The CEO with the largest salary was JPMorgan Chase and Co.'s Jamie Dimon, who took home $41,990,521 after exercising nearly $23 million worth of stock options. That put his pay at 365.6 times the average employee salary.

Edit: The "average employee compensation" at Bank of America is derived from taking total compensation expense and dividing by the total number of employees.

Richmond Fed says Carolinas' business activity improved in December

The Federal Reserve Bank of Richmond said Thursday that business activity increased steadily in North and South Carolina this month, jumping for the second month in a row.

But labor demand remained weak, and expectations for six months out remain steady, the Richmond Fed said in its monthly Carolinas Survey of Business Activity.

"Despite an apparent upturn in general business activity, firms remained reluctant to hire," the report said.

The survey is sent out monthly to 160 businesses who collectively match the profile of the two states. Typically about half respond.