Wells Fargo & Co. may soon be the most valuable bank in America based on market capitalization.
After the company's stock rose 5% over the past two weeks, Wells is within a few billion dollars of JPMorgan Chase & Co.'s $156 billion market cap.
But don't expect the company to throw itself a party should it overtake its rival in the next new few weeks — while better than its peers, its average total annual return over the last decade was only 4.4%. Wells has created sector-beating value for its shareholders, but its near-first-place capitalization is due primarily to the failings of its larger competitors and its relative distaste for capital markets.
The bank, of course, is also the nation's largest residential lender with a market share of 23%, according to figures compiled by National Mortgage News.
Among servicers, Wells ranks second, but as its home loan production remains strong, it is closing the gap between itself and Bank of America. (In servicing, Wells has a market share of 18% compared to 22% for Wells.)
To be sure, the bank's trajectory is a reminder that Wells enjoyed relative prosperity during the financial crisis. It gained a national retail banking network, a capital markets group and an asset management business from Wachovia Corp.
It has done a relatively good job at minimizing the fallout of mortgage put-backs, robo-signing notoriety and other industry missteps.
"They deserve to be praised for this," said Paul Miller, managing director of FBR Capital Markets, though he noted that the bar for large-bank outperformance is low.
