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Bank of America's Deposits Shrink, Bucking Big Bank Growth Trend

As the nation's largest mortgage lender, Wells Fargo has a particular focus on holding down costs, as the refinancing boom subsides.

The company will announce its third-quarter results next Friday, with analysts, on average, expecting the company to post EPS of 97 cents a share, declining from 98 cents the previous quarter, but increasing from 88 cents a year earlier.

Wells Fargo's shares closed at $41 Thursday and traded for 10.3 times the consensus 2014 EPS estimate of $4.00.

JPMorgan Chase

JPMorgan Chase is the nation's largest bank by total assets, but it was in third-place for deposits, with a U.S. market share of 10.09% as of June 30, increasing from 9.67% in June 2012 and 9.70% in June 2008 (including Washington Mutual). The company's total deposits were 952.249 billion as of June 30, growing 10% from a year earlier, and 39% over the previous five years (including Washington Mutual).

Meanwhile, JPMorgan has been the only one of the big four to continue adding branches. Total branches grew to 5,697 as of June 30 from 5,608 in June 2012, and a combined total of 5,434 in June 2008.

JPMorgan Chase also will announce its third-quarter results on Friday, with analysts expecting EPS of $1.28, down from $1.60 in the second quarter and $1.40 in the third quarter of 2012.

There has been a flood of media reports predicting a global settlement between JPMorgan Chase, the Justice Department, regulators and state attorneys general covering a number of criminal and civil investigations of mortgage activities, but it would appear that a broad settlement will not be included in the third-quarter numbers.

The company on Sep. 19 entered into a $920 million settlement with four regulators over the 2012 "London Whale" hedge trading debacle, and also settled for $369 million a joint investigation by the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency of "illegal credit card practices."

JPMorgan Chief Financial Officer Marianne Lake on Sept. 10 said the company's mortgage origination business was likely to post net losses for the second half of 2013.

The regulator overhang, as well as the mortgage decline, have made for a low market valuation for JPMorgan's shares, which traded for just 8.6 times the consensus 2014 EPS estimate of $6.02, when they closed Thursday at $51.94.


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