NEW YORK (TheStreet) -- Warren Buffett once described derivatives as financial weapons of mass destruction. I have wondered over his disdain for these classes of "fiscal engineering." However, if arguably the world's greatest investor holds these complicated financial instruments in contempt, everyday common investors should be wary.For most people, the term "financial engineering" means simply earning a check from a 40-hour week and investing part of it in successful stocks. But sometimes, through even basic investments, people become victims of fallout from these "weapons" indirectly, when they invest in companies exposed to high risk attributable to derivatives.
The bank's slogan is "together we'll go far" and, again unlike several of its peers, it seems that it is committed to living up to this motto, with an intrinsic customer focus that has resulted in not only lower costs on deposits but also loan yields in excess of the industry average. The bank's aggressiveness in capturing more of the potential business from its depositor base continues to set it apart from regional rivals such as SunTrust ( STI) and PNC Financial ( PNC). That difference was even more apparent when it reported first-quarter earnings -- a report that included an increase in products per household to 5.98. Wells reported a 13% increase in net income to $4.02 billion -- topping last year's number of $3.57 billion. Earnings per share grew 12% from last year's number of $0.67 to $0.75 -- also topping analysts' estimates of $0.73 per share. For the quarter, its pre-tax pre-provision profit grew by 14% on an annual basis to $8.64 billion -- this is also considered the total revenue less noninterest expense. Total quarterly revenue grew 6% to $21.64 billion, topping not only last year's number of $20.33 billion but also beating analysts' estimates of $20.46 billion. Remarkably this growth comes despite the fact that it is still working to integrate and fully realize merger synergies from its acquisition of Wachovia.