The Office of the Comptroller of the Currency (OCC) has finalized settlements with two former Wells Fargo (WFC, Financial) executives, marking a continuation of its crackdown on the bank's previous sales practices misconduct. David Julian, who once held the position of Chief Auditor, has been penalized with a $100,000 civil money fine. Similarly, Paul McLinko, erstwhile Executive Audit Director, faces a $50,000 penalty. The OCC has also issued personal cease and desist orders to both individuals.
These actions bring closure to enforcement proceedings initiated by the OCC against Julian and McLinko in January 2020. This move is tied to the bank's pervasive sales practices issues, a matter that has led the former executives to contest Final Decisions made by the OCC earlier, on January 14, 2025, before the U.S. Court of Appeals for the District of Columbia Circuit.
The OCC has previously reached similar settlements with eight other former senior executives from Wells Fargo, with actions announced in stages from January 2020 to March 2023. Altogether, these efforts by the OCC have extracted more than $43 million in penalties from former Wells Fargo executives, with all proceeds directed to the U.S. Treasury.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 21 analysts, the average target price for Wells Fargo & Co (WFC, Financial) is $77.54 with a high estimate of $90.00 and a low estimate of $58.92. The average target implies an upside of 10.58% from the current price of $70.13. More detailed estimate data can be found on the Wells Fargo & Co (WFC) Forecast page.
Based on the consensus recommendation from 24 brokerage firms, Wells Fargo & Co's (WFC, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Wells Fargo & Co (WFC, Financial) in one year is $58.87, suggesting a downside of 16.05% from the current price of $70.125. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Wells Fargo & Co (WFC) Summary page.
WFC Key Business Developments
Release Date: April 11, 2025
- Diluted Earnings Per Share: Up 16% from a year ago.
- Net Income: $4.9 billion or $1.39 per diluted common share.
- Revenue: Declined from a year ago due to lower net interest income.
- Fee-Based Revenue: Growth across many businesses.
- Expenses: Declined 3% from a year ago.
- Capital Returned to Shareholders: $4.8 billion through dividends and share repurchases.
- Net Loan Charge-Off Ratio: Down to 45 basis points of average loans.
- Allowance for Credit Losses: Down $84 million from the fourth quarter.
- Average Deposits: Increased from a year ago.
- Commercial Loan Balances: Modest growth from the fourth quarter.
- Net Interest Income: Down $341 million or 3% from the fourth quarter.
- Non-Interest Income: Stable compared to a year ago.
- Credit Card Revenue: Grew 2% from a year ago.
- Auto Revenue: Decreased 21% from a year ago.
- Commercial Real Estate Revenue: Grew 18% from a year ago.
- Wealth and Investment Management Revenue: Increased 4% compared with a year ago.
- 2025 Net Interest Income Outlook: Expected to be approximately 1% to 3% higher than in 2024.
- 2025 Non-Interest Expense Outlook: Expected to be approximately $54.2 billion.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Wells Fargo & Co (WFC, Financial) reported a 16% increase in diluted earnings per share from a year ago, indicating strong financial performance.
- The company successfully grew its fee-based revenue across various businesses, reducing reliance on net interest income.
- Wells Fargo & Co (WFC) returned $4.8 billion of capital to shareholders through dividends and share repurchases, reflecting strong capital management.
- The company achieved significant progress in closing five consent orders in the first quarter, demonstrating improvements in risk and control processes.
- Credit performance improved with lower net charge-offs, particularly in the commercial portfolio, indicating strong credit discipline.
Negative Points
- Net interest income declined by 3% from the fourth quarter, driven by lower rates and fewer days in the quarter.
- Revenue declined in several segments, including Consumer Banking and Lending, due to higher deposit costs and lower net interest income.
- Non-performing assets increased by 4% in the fourth quarter, driven by an increase in commercial and industrial non-accrual loans.
- The company faces ongoing economic uncertainty and potential volatility, which could impact future financial performance.
- Wells Fargo & Co (WFC) continues to operate under an asset cap, limiting its ability to grow certain business segments.
