Editor's note: A previous version of this story incorrectly stated that Wells Fargo acquired Golden West Financial. In actuality, Wachovia has acquired Golden West Financial. We regret the error.
Wells Fargo just reported another solid year. Our recent Fool by Numbers will walk you through the financial details, but in a nutshell, the company once again posted solid numbers across the board. Core consumer banking net income grew only 1% for the year, but accelerated in the fourth quarter. Wholesale banking and the financial segment posted 17% and 111% growth for the year, with the latter growing from an admittedly small base.
Management summed it up well in the earnings press release, noting that total company earnings growth has averaged 14% over the past 20 years, while revenue has expanded at a 12% annual clip over the same time frame. The pace has slowed somewhat over the past five years, as total revenue has grown only 9.5%, but earnings have slowed only slightly to 13.8% since 2000.
So how does a firm with a $122 billion market cap and $35.7 billion in annual revenue keep growing in the double digits? That's a good question, one that also plagues Wells Fargo's three larger peers: Citigroup
JPMorgan has been playing catch-up, since it was a bit slow in integrating a giant merger of JPMorgan and Chase. Wachovia
of net income and market cap, has also relied on buying market share and is in the process of digesting a large acquisition of Golden West Financial. Only Wells Fargo has a reputation for generating among the most visible and consistent organic growth in the industry, especially considering its size.
The company also is posting industry-leading and impressive return on equity and net interest margins, demonstrating an ability to profitably manage growth rather than have new business initiatives drag down bottom-line metrics, as occurs at Commerce Bancorp
For related Foolishness:
- Wells Fargo Deposits Q4 Results: Fool by Numbers
- 5 Dynamic Dividend Stocks
- A Closer Look at Bank Stocks
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Fool contributor Ryan Fuhrmann has no financial interest in any company mentioned. Feel free to email him with feedback or to discuss any companies mentioned further. The Fool has an ironclad disclosure policy.