The Stunning Way Wells Fargo & Co Beat Its 7 Biggest Peers

Wells Fargo is known for its top-tier mortgage unit relative to peers Bank of America and JPMorgan Chase, but it turns out its lead is even more commanding than you think.

May 26, 2014 at 11:02AM


Wells Fargo (NYSE:WFC) is widely known for its commanding position in the $1.7 trillion mortgage market, but the degree in which it completely crushes its peers will surprise you.

Massive size
In 2013 alone it had $8.8 billion in revenue delivered from its mortgage banking operations, which was nearly as much as the revenue of Bank of America (NYSE:BAC) and JPMorgan Chase (NYSE:JPM) combined:


Mortgage Banking Revenue

Total Net Revenue

% of Total Revenue

Wells Fargo




JPMorgan Chase




Bank of America




Source: Company SEC Filings

A recent presentation revealed just how much of a commanding grip it has on the entire mortgage industry itself.

Commanding lead
At the latest annual meeting, Wells Fargo showed that it issued more mortgages in 2013 for the purposes of buying homes than the next seven companies combined

Source: Company Investor Relations.

An important point to note is that this volume is based on purchase money mortgages, not refinances. Although Wells Fargo held a commanding lead there as well, this is a shrinking market, at least for the near term: the Mortgage Bankers Association (MBA) predicts refinancing volume will fall to $425 billion this year, a decline of more than $1 trillion from the $1.5 trillion seen in 2012.

Source: Mortgage Bankers Association 

On the other hand, MBA notes the purchase volume may take a slight dip in 2014, it still expected to rise in the coming years.

Since JPMorgan Chase and Bank of America saw significant gains from mortgage refinancing, they've seen much steeper declines in the total mortgage revenue through the first quarter of 2014:

Source: Company Investor Relations

While the revenue from mortgages has fallen by 46% at Wells Fargo, the tumble at both JPMorgan Chase and Bank of America stands above 65%.

All too often, we think the businesses at the biggest banks are all the same. Yet as Wells Fargo shows here, its commanding lead in the mortgage space will continue to be one more way it stands above its peers.

Big banking's little $20.8 trillion secret
While Wells Fargo, Bank of America, and JPMorgan Chase are the three biggest banks, they're all afraid of the brand-new company that's revolutionizing banking, and is poised to kill the hated traditional brick-and-mortar banks. That's bad for them, but great for investors. And amazingly, despite its rapid growth, this company is still flying under the radar of Wall Street. To learn about about this company, click here to access our new special free report.

Patrick Morris owns shares of Bank of America. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America, JPMorgan Chase, and Wells Fargo and has the following options: short June 2014 $50 calls on Wells Fargo and short June 2014 $48 puts on Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information