This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Wells Fargo's Rate Strategy Pays Off

By contrast, Bank of America's MSR results were ho-hum. Its overall MSR portfolio grew $1.9 billion over the final quarter to become $19.5 billion at year-end. The bank lost $213 million in fair-value adjustments while fees were essentially flat. Though derivatives changes aren't broken out, former CFO Joe Price told conference-call listeners that positive hedging activity offset slightly lower production levels.

JPMorgan Chase didn't fare quite as well. Its MSR portfolio grew 14% over the quarter to $15.5 billion, but the bank lost $657 million in fair-value adjustments. Derivatives alone declined by $1.65 billion, compared with a $1.5 billion gain the previous quarter. Overall servicing revenue was essentially flat at $1.2 billion.

CFO Michael Cavanaugh acknowledged the lackluster results, but said while MSR risk management "had been a big positive in some of the prior quarters," it "normally is more like what it is this quarter."

Citigroup didn't provide much commentary or detail for its mortgage-servicing results. The bank simply said its MSR balance grew 5% over the quarter to $6.5 billion.

If fourth-quarter results and interest-rate expectations are any indication, it appears competitors may need to start mimicking Wells Fargo's tactics more closely. The Fed's golden era of free money and purchasing assistance has existed for over a year, and may be around for another quarter or two, but it won't last forever. The market reaction is always one step ahead -- as are the most adept risk managers.

Atkins indicated that Wells Fargo management has its sights set ahead on where the next earnings boom will be. He said that at times "less conducive to strong mortgage earnings" -- as the economy begins to expand, and interest rates rise -- Wells will rely on other businesses to drive results.

3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
BAC $15.81 -1.43%
C $52.42 0.02%
JPM $61.28 -0.49%
WFC $54.79 -0.65%
AAPL $128.46 -1.50%


DOW 18,132.70 -81.72 -0.45%
S&P 500 2,104.50 -6.24 -0.30%
NASDAQ 4,963.5270 -24.3630 -0.49%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs