Wells Fargo is one of the country’s oldest banks, with a history spanning over 160 years. In the last few years, the bank has been rocked by several scandals, beginning with a large-scale attempt to artificially boost its number of accounts — followed by hefty fines, legal fees and a $1.95 trillion cap on its assets. But it remains one of the largest banks in the U.S. Investors can use the following information to decide whether or not this is a smart investment.
|Wells Fargo: Company Snapshot
|CEO Charles W. Scharf’s Total Compensation
|$20.3 million (2020)
|How Much Is Wells Fargo Worth?
|Share Price, 52-Week Range
|GOBankingRates’ Evaluation of Wells Fargo’s Net Worth
Wells Fargo’s Market Cap: $208.55B
Market capitalization is determined by the total dollar value of a company’s outstanding shares, which helps investors determine the relative size of a company. As of Jan. 22, Wells Fargo’s share price is $53.67, giving the company a current market capitalization of $208.55 billion.
The bank saw its market value plummet 45% in 2020 as a result of scandal and pandemic-spurred regulation, since rescinded, that restricted banks from buying back shares. However, the shares since have rebounded, and as of Jan. 21 were trading at their highest price in about 17 months.
Wells Fargo’s Net Worth: $306.04B
Market caps offer one view of what the market values a company at, but that value is susceptible to change on an almost hourly basis due to external market forces and investors fighting over the value of shares. The GOBankingRates Evaluation attempts to overcome market changes by calculating a company’s net worth based on recent annual reports of income and profit but also taking into consideration its assets and liabilities.
Based on Wells Fargo’s revenue and profits from the last three years, the bank’s net worth is over $306.04 billion.
Warren Buffett Hangs On to Wells Fargo Shares
Wells Fargo is one of the largest banks in the U.S., serving one in three American households and overseeing approximately $1.9 trillion in assets as of June 2021. An asset cap imposed by the Fed remains in effect.
The bank’s size and brand recognition might be enough to keep investors in for the long haul, riding out ups and downs of Wells Fargo share prices as the company recovers from scandal and rebuilds trust in the industry and overcomes the effects of the pandemic.
Wells Fargo admitted to charging mortgage customers unnecessary fees and requiring auto loan borrowers to purchase insurance they didn’t need, The New York Times reported. A consent order imposed by the U.S. Office of the Comptroller of the Currency imposed in 2015 because of that scandal was terminated in January. Another 2015 consent order, this one related to anti-money-laundering compliance, was also terminated.
In 2016, regulators revealed the bank had created millions of fake accounts in order to satisfy sales goals and receive financial rewards. The fallout included the firing of more than 5,000 employees, a $185 million fine, billions in legal expenses and the planned closure of hundreds of bank branches to offset legal costs.
Last fall, the bank settled a civil suit alleging it fraudulently had marked up fees charged to commercial customers that had used Wells Fargo’s foreign exchange service.
Still, analysts aren’t ready to give up on the stock yet. Wells Fargo reported fourth-quarter 2021 profits that surpassed expectations, surging 30%. Revenue was up 10% compared to the same quarter last year, Reuters reported. The stock was up on news of the positive earnings report and lifting of consent orders.
Twenty-nine analysts polled by CNN have a consensus “buy” rating on Wells Fargo, with a median price estimate forecasting a 21% increase from it’s current price.
Good To Know
Wells Fargo’s stock also has the blessing of investor Warren Buffett. Buffett holds over 650,000 shares worth about $30.6 million through Berkshire Hathaway.
Wells Fargo’s CEO and Founders
Wells Fargo CEO Charles W. Scharf replaced Timothy Sloan as executive officer in 2019 amid Wells Fargo’s regulatory problems. Scharf’s pay was reduced from $23 million in 2019 to $20 million in 2020, according to a year-end filing with the Securities and Exchange Commission. The filing cited the effects of the pandemic on the bank’s financials as a reason for the cut.
Henry Wells and William Fargo founded Wells, Fargo & Co. to serve the West during the Gold Rush era. In its early days, the bank used stagecoaches as its means of transportation and communication, traversing more than 3,000 miles of territory. It continued to lead the pack in later decades as the first big bank in the country to offer customers online banking in 1995.
Daria Uhlig contributed to the reporting for this article.
Data is accurate as of Jan. 22, 2022, unless otherwise noted, and subject to change.
Methodology: The GOBankingRates Evaluation assesses a company’s net worth based on the company’s total assets, total liabilities, and revenue and net income from the last three years. Base value is established by subtracting total liabilities from total assets from the company’s last full fiscal year. Income value is established by taking the average of the revenue from the last three full fiscal years, plus 10 times the average of the net profits from the last three full fiscal years, and then calculating the average of those two figures. The final GOBankingRates Evaluation number is the sum of the base value and the income value.
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- Wells Fargo. 2021. "Notice of Annual Meeting and Proxy Statement."
- Winston-Salem Journal. 2022. "Federal regulator ends second pre-scandal Wells Fargo consent order."
- Reuters. 2022. "Bank of America profit beats estimates on loan growth, M&A boost."
- Investing.com. "Wells Fargo & Company (WFC)."