Wells Fargo & Co., the San Francisco-based lender that doubled its size by buying Wachovia Corp. during the credit crisis, passed JPMorgan Chase & Co. to become the largest U.S. bank by stock-market value.
Wells Fargo’s market capitalization rose to $157.6 billion at the close of New York trading yesterday, surpassing JPMorgan’s $156.4 billion. Wells Fargo is ranked fourth by assets and deposits, while JPMorgan is second behind Bank of America Corp. and New York-based Citigroup Inc. is third.
Chief Executive Officer John Stumpf, 57, has used acquisitions to fuel growth at Wells Fargo. The lender completed more than 55 purchases in the past five years, led by its $12.7 billion takeover of Wachovia in October 2008, according to data compiled by Bloomberg. Wells Fargo had $622.4 billion in assets in the quarter before it purchased Wachovia. It held $1.2 trillion in assets at the end of September.
Wells Fargo rose 0.8 percent yesterday to $30.02 at 4 p.m. in New York Stock Exchange composite trading. The shares have advanced 11 percent this year, compared with a loss of 4 percent at JPMorgan. The biggest shareholder in Wells Fargo is Warren Buffett’s Berkshire Hathaway Inc. with a 6.4 percent stake.
Wells Fargo, the largest U.S. mortgage lender, had outperformed peers through Oct. 21 in part because it faces fewer mortgage-repurchase demands from Fannie Mae, Freddie Mac and private investors, FBR Capital Markets Corp. analysts led by Paul Miller wrote in a report that day.
A month later, in a Nov. 29 report, Miller said repurchase demands combined could cost financial institutions $54 billion to $106 billion. Any total losses suffered by Wells Fargo will be outpaced by those at JPMorgan and Bank of America, Miller estimated.
Yesterday wasn’t the first time Wells Fargo has been the top bank by market value. On May 12, Wells Fargo passed Bank of America as the most valuable U.S. bank before the Charlotte, North Carolina-based company passed it on May 18, according to data compiled by Bloomberg.
New York-based JPMorgan has held the lead for most of the last two years, except for the five-month period between February and July of this year when it repeatedly traded places with Bank of America.Download the 1977 - 2009 Warren Buffett Letter's to Berkshire Hathaway Shareholders
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