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TheStreet Open House

Wells Fargo Lays Earnings Egg: Financial Loser (Update 1)

Updated with market close information.

NEW YORK ( TheStreet) -- Wells Fargo (WFC) was the loser among major U.S. financial names Monday, with shares falling 8% to close at $24.42.

Wells Fargo announced third-quarter earnings of $4.1 billion, or 72 cents a share, a penny below the consensus estimate among analysts polled by Thomson Reuters. Investors were disappointed with a 4% quarter-over-quarter decline in revenue. However, CEO John Stumpf said during the company's conference call that he wanted "get as much back to shareholders as fast as we can and dividends are an important part of that."

The KBW Bank Index (I:BKX) decline 4% to close at 36.53, with all 24 index components seeing early declines, except for Northern Trust (NTRS), which was up 1% to close at $37.15, and State Street , which rose two cents to close at $33.92.

Northern Trust will report its third-quarter results on Wednesday, and is expected by analysts polled by FactSet to post earnings of 69 cents a share, following second-quarter earnings of 62 cents and third-quarter 2010 earnings of 64 cents.

State Street is set to announce its third-quarter results on Tuesday, with the consensus among analysts being a third-quarter profit of 88 cents a share, compared to EPS of a dollar in the second quarter, and $1.08 in the third quarter of 2010.

Citigroup (C) gave up earlier gains, with shares declining 2% to close at $27.93.

Citi reported third-quarter earnings of $3.8 billion, or $1.23 a share, which included a an accounting gain of 39 cents from the declining value of its own debt, similar to the third-quarter debit valuation adjustment reported by JPMorgan Chase (JPM).

Excluding the accounting gain, Citi earned $84 cents a share in the third quarter, beating the consensus earnings estimate of 82 cents a share among analysts polled by Thomson Reuters, with strong growth in Citi's international consumer banking business offsetting weaker trading and investment banking revenues,.

Large banks seeing shares decline over 6% on Monday included Fifth Third Bancorp (FITB), closing at $10.62; and Regions Financial (RF), closing at $3.46.

Fifth Third reports its third-quarter results on Wednesday, with analysts expecting earnings of 33 cents a share, declining from 35 cents the previous quarter with continued pressure on net interest margins for large banks, but rising from 22 cents a year earlier on lower credit costs.

Big banking names seeing 5% declines included Comerica (CMA), closing at $24.46; First Niagara Financial Group (FNFG), at $9.33; SunTrust (STI), at $18.09; and Zions Bancorporation (ZION), which closed at $15.89.

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-- Written by Philip van Doorn in Jupiter, Fla.

To contact the writer, click here: Philip van Doorn.

To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn.

Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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