Wells Fargo Bank

Wells Fargo Bank is a Californian bank having over 100 years of existence. The institution is one of the leading companies as far as the financial sector goes. Come September 19, 2008 stocks were at $39.80 which at the time were relatively high with a promise to continue to rise. However, after partaking in the sub prime mortgage game it lost a great deal of reputation after having to deal with countless lawsuits. The New York Times stated that "Wells Fargo Bank “rode the stagecoach from hell” for a decade, systematically singling out blacks in Baltimore and suburban Maryland for high-interest sub prime mortgages." Further evidence is the fact that 71% of foreclosures under Wells Fargo were in predominantly black neighborhoods.The aftermath of their arrogance was felt particularly by March 6, 2009 as stocks hit $8.6, an all time low. Needless to say that the company received $25 billion dollars from TARP as a bailout.

Profit Margins before the crash seemed to be around 83% mid 2008 at one of its peaks. Post the recession it reach a high of about 91% and has flat lined ever since. It seems as if Wells Fargo is on the rebound. It has been lowering its accounts parables which in turn means an increments in assets, specifically liquid asset in the form of cash. It’s also the number one lender to small business increasing its owners equity which has been evident in the $0.67 dividend increase this last quarter. Those dividends then translate to about $3.8 billion net income furthering both the stock holder value and its liquid assets. Wells Fargo merge with Wachovia has also proven to be beneficial to the company as more of Wachovia’s banks are converting throughout places like Connecticut, Delaware, New Jersey, and New York.

It seems as if Wells Fargo has learned its lesson as it plans to shut down its sub prime mortgage sector. It's main focus is guided towards small business in an effort to push forward the economy. Tough times still lie ahead, but hope is still in the air as its charging on through correcting its errors of the past. Nevertheless, closer supervision is required to create a firm guided hand pointing towards the road progress and ingenuity.