There's a new No. 1 bank in the US

Wells Fargo becomes the most profitable financial giant with the biggest market value. JPMorgan Chase still has the most assets, but it has run into legal trouble.

By The Fiscal Times Jan 17, 2014 1:15PM

File photo of Wells Fargo & Co. signage at a bank branch in New York (© Scott Eells/Bloomberg via Getty Images)By Yuval Rosenberg, The Fiscal Times


The biggest U.S. banks underwent a big shift in 2013.


For the first time since 2009, JPMorgan Chase (JPM) was not the most profitable of the nation's financial giants, as massive legal and regulatory settlements cut into its earnings.


Instead, that title went to Wells Fargo (WFC), the country's largest mortgage lender, based on data released by the banks this week.


JPMorgan Chase reported full-year profit of $17.9 billion, down 16 percent from a record $21.3 billion in 2012. Despite a slowdown in mortgage refinancing caused by rising interest rates late in the year, Wells Fargo earned $21.9 billion in 2013, up from $18.9 billion in 2012.


Wells Fargo's stock has outperformed that of JPMorgan over the past year, and it now has a market value of $244 billion, roughly $20 billion larger than JPMorgan's.


Bank Earnings Since 2009

On the other hand, JPMorgan is still the largest U.S. bank by assets, and it generated $23.15 billion in revenue last year, compared with $20.67 billion for Wells Fargo. It also would have retained its profit title if not for more than $11 billion in legal expenses.


JPMorgan came through the financial crisis in the best shape of any large U.S. bank. Its profits surged past those of Goldman Sachs (GS) and Wells Fargo in 2010 and then climbed higher still over the following two years. But its sterling reputation has lost much of its luster more recently as lawsuits and government investigations mounted. The bank agreed to roughly $22 billion in fines and penalties over the past year, and about $29 billion over the past two years.

Earlier this month it agreed to pay $2.6 billion to the U.S. government to settle criminal and civil allegations that it failed to raise red flags about Bernie Madoff's Ponzi scheme. That settlement reduced fourth-quarter profits by about $850 million. It followed a record $13 billion agreement reached in November to settle investigations into its mortgage-bond sales.


"It was in the best interests of our company and shareholders for us to accept responsibility, resolve these issues and move forward," JPMorgan CEO Jamie Dimon said in a statement accompanying the earnings release.


Dimon shrugged off losing the annual profits crown. "The company is doing really well," he told reporters on Tuesday. "And that's what's important, being the best, not the biggest. The biggest, that doesn't worry me that much."


Still, JPMorgan could regain that title fairly quickly if its legal costs ebb and falling demand for mortgages hurts Wells Fargo's bottom line.


More from The Fiscal Times

22Comments
Jan 17, 2014 1:55PM
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I wouldn't bank at Wells Fargo if they paid me and gave mea free deposit box. This bank is full of con artists!
Jan 17, 2014 2:36PM
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I reported a mortgage scam to Wells Fargo 3 months ago.  It cost the taxpayers $200,000+.  It has been ignored.  It was my 18th 'whistle blow' in (primarily 'gubmnt fraud) industries.  Nothing has ever been done.  Does anyone doubt why a Snowden happened?
Jan 17, 2014 3:18PM
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Why am I NOT SURPRISED that Wells Fargo is No. 1 Bank in the USA ?

 

                                      HERE'S HOW THEY DO IT!

 

1.  Close perfectly fine accounts so customers don't have access to their "available credit".

2.  Increase interest rates on existing A/C's citing "poor" FICO scores - or credit risk

3.  Block all established (O/D) protection accounts link to PMA or checking A/C's.    

4.  When O/D lines of credit are non-accessible to linked checking A/C's -  charge a $35 fee. 

5.  Deny Modifications for underemployed US Tax Payers, until homes become unaffordable.   

6.  Foreclose homes of our US Citizens so the rich investors have a "second serving"    

7.  Greet you when you enter bank locations and screw you with their products..

8.  Demand bank employees sell more products, and teach them to say  "sorry it's not a bank error" 

9.  Repeat Items 1 thru 8, and NEVER listen to their customer concerns.

 

Wells Fargo owns more than Two/Thirds of all US Home Mortgages - wait till the market picks up again in one/two years, Bank will quadruple income recovered from underwater home equities!    

     

 

Jan 17, 2014 3:08PM
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Jesus threw the " money changers " out of the temple. There is no such thing as a " good " bank.
Jan 17, 2014 2:12PM
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They are only #1 because they pay yhe least in taxes ....at least according to what MSN reported earlier
Jan 17, 2014 3:54PM
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Wells Fargo is the worst and they show profitability because they screw their customers over and charge fees that they invent.  Even when it's their problem, the customer has to pay the fees, then write a letter to have it reviewed by the bank to see if a refund is warranted and it never is.

 

Wells Fargo is as big of a rip off and scam as the others.  I don't trust any of them and don't want to do business withany of them.  And they can stick their credit cards too

 

So glad to work my **** off to get out of debt and now these guys can Kiss My A-- for business.

 

Young people don't get drawn in by Wells Fargo, you will, eventually regret it.

Jan 17, 2014 3:17PM
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Chase is by far the worst!  It took years, but at least they got them for a small slice of their questionable activities like Madoff and playing stupid with all those people who applied for mortgage modifications so they could throw them out of their homes.  And, lets not forget how they were foreclosing on homes and evicting families of active armed forces personnel against the law until they were caught and it was publicized.  The list goes on and on.      
Jan 17, 2014 10:35PM
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Heck, Dave Ramsey said Perkstreet Bank was the best bank until they went under. 
Jan 17, 2014 5:11PM
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After trying to deal with Wells Fargo, I am now hunting for my next bank....WF did nothing but delay and nitpick...and delay again...and then require more and more information....Maybe they fit some people, but for me they failed to make enough effort to do business with me or to keep me as a customer. As a customer, I am supposed to receive some service....they have a whole dif attitude about that....
Jan 17, 2014 3:41PM
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Pray you never have a Insurance claim with Wells as your Mortgagor. Good grief, to get them to sign off on an Insurance claim check to give to contractors who completed work was like pulling teeth. 
Jan 17, 2014 2:09PM
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The Bank of Obamaville is bigger - gotta have a place to store all of those Obama Dollars that were printed with red ink -
Jan 17, 2014 2:23PM
Jan 17, 2014 8:43PM
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Maybe if more people spend time paying their bills in person, in cash, and away from the smartphone, they would not worry about the banks and be less stressed.
Jan 17, 2014 9:02PM
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A future Republican in the making.

http://www.youtube.c​​​​​​om/watch?v=AukE​2​5​i​s​p​VY

They are simply adorable and loving little things aren't they?
Jan 18, 2014 1:36PM
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USBANK is the country's strongest and most well run financial institution.
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