5 Things You Probably Didn't Know About Wells Fargo

With its $924 billion in deposits, Wells Fargo (NYSE: WFC  ) trails only Bank of America (NYSE: BAC  ) when it comes to institutions holding the money of the American public. Wells Fargo is a household name with an incredible brand and market presence -- but there are five things you probably didn't know about this bank.


Wells Fargo tower, Richmond. Va. Source: Flickr/Taber Andrew Bain.

1. Wells Fargo is headquartered in ...
South Dakota. Wait. What?

Yes, that's correct. Wells Fargo Bank, National Association, with its $907 billion in deposits, calls Sioux Falls, S.D., home. The FDIC-insured bank holding company has all those deposits in the land of "great faces, great places."


If you look carefully, you'll see your money. Source: Wikimedia Commons.

Now, technically, that is the bank holding company, and not the company itself, that's headquartered there, as Wells Fargo & Co. is headquartered in San Francisco. But why South Dakota? Curt Everson, president of the South Dakota Bankers Association, guesses one reason is that "South Dakota has a well-established track record in terms of consistent support for the banking industry."

Notably, South Dakota doesn't have usury laws prohibiting banks from charging excess interest above 18% on credit cards, so that's surely part of the reason both Wells Fargo and Citigroup (NYSE: C  ) have their banks headquartered there.

In fact, in an interview with the Sioux Falls Business Journal, Dave Zimbeck, associate general counsel for Citibank, said: "South Dakota treats the banking industry very well. We bring a lot of jobs, we put a lot of money in the state treasury in franchise tax, and overall the industry from the smallest banks to largest are very good corporate citizens, and the state leaders appreciate that."

2. Wells Fargo is more than just Wells Fargo
So we've established that there is Wells Fargo, National Association, a bank headquartered in South Dakota, and there is Wells Fargo & Company, headquartered in San Francisco. A bank, and a holding company.

But did you know that according to the latest SEC filing, Wells Fargo also has roughly 1,400 subsidiaries located in more than 80 different places from which it also does business?

It's important to know that Wells Fargo does this largely for legal and regulatory purposes across states and countries, not to subvert paying taxes, skirt laws, or anything of that sort. A company with $1.5 trillion in assets that does business in a multitude of countries simply has to do business through a number of legal entities.

3. Warren Buffett owns it -- a lot of it
Although the quirks with its corporate structure may cause some amount of pause, perhaps this point will provide a good bit of reassurance. As of the most recent quarter, Warren Buffett's Berkshire Hathaway owned 463 million shares of Wells Fargo's common stock, which is worth about $19.8 billion at today's prices. Provided Berkshire Hathaway didn't buy or sell any shares in the most recent quarter, that would mean Berkshire Hathaway owns roughly 11.5% of the bank. Any time you have a backing from the one of the world's wealthiest individuals and most successful investors, that's undoubtedly a good thing.

4. It dominates the lending landscape
Wells Fargo has more than 70 million customers, 9,051 stores, and almost 12,500 ATMs scattered across the United States. As a result of its massive presence, it also turns out that when it comes to consumers, Wells Fargo is the bank of choice when it comes to getting pretty much any type of loan.

In the most recent quarter, of the $11.1 trillion in total consumer debt outstanding, 87% of it came in the form of mortgage, student, or auto loans:


Source: St. Louis Federal Reserve Bank.

In a recent presentation, Wells Fargo disclosed that it was the top lender of choice in two of those three categories, and it came in second in the third category:


Source: Company investor relations.

When most people think of Wells Fargo, they think of it as a consumer lender. And the data says that it isn't simply a consumer lender -- it is the consumer lender.

5. Its executives are primarily from a bank you don't remember or have never heard of
Of the 12 executive officers, four hail from Norwest Bank, which merged with Wells Fargo in June 1998. Corporate Information Officer Kevin Rhein, general counsel James Strother, President and CEO John Stumpf, and head of community banking Carrie Tolstedt all hail from the formerly Minneapolis-based Norwest. Stumpf succeeded Richard Kovacevich, who also came over to Wells Fargo in the Norwest acquisition. Of that entire group, the one with the shortest tenure at the company is Kevin Rhein, who joined Norwest in 1993.

As a matter of fact, when Wells Fargo and Norwest merged, Norwest had more assets than Wells Fargo ($96 billion compared with $94 billion), though Wells Fargo did have a greater market capitalization ($32 billion, versus $30 billion at Norwest. The acquisition largely erased the Norwest name from the public's consciousness, but it has left a lasting imprint on Wells Fargo and its executive team.

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Those are five surprising things about Wells Fargo -- and there are a lot more surprises that await in the impending bank renaissance. If you want to learn how to take advantage of this shift, click below to discover the one company leading the way. You see, this fast-growing company is poised to disrupt big banking's centuries-old practices and stands to make early investors like you a fortune -- if you act now. Our brand-new investor alert "Big Banking's Little $20.8 Trillion Secret" lays bare every banker's darkest secret for the world to see. Simply click here for instant access!


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