5 Quotes from Wells Fargo's Conference Call
Most European castles are situated in strategically significant locations: on cliffs overlooking the sea, square in the middle of valleys, at the entrance to mountain passes, and at carefully selected crossing points along rivers. This isn't a coincidence, as the power of their inhabitants derived largely from the ability to control the channels of commerce.
A similar concept explains why Wells Fargo , the nation's fourth largest bank by assets, has had so much success over the past few years. That is, it alone is responsible for upwards of a third of the domestic mortgage market. It controls, if you will, the narrows of the multitrillion-dollar home lending industry.
We saw the tangible results on Friday, when the mortgage giant reported yet another record quarterly profit, earning a staggering $5.5 billion during the three months ended June 30. But beyond the sheer magnitude of that profit, and because of its strategic significance, the most notable thing about Wells Fargo's results was what they implied about the broader economy.
With that in mind, here are five things CEO John Stumpf had to say about it, and other topics, on the mortgage giant's conference call.
1. On the economy
We continue to be optimistic about the improvements we are seeing throughout the economy. While commercial loan demand is still modest, jobs are being created, consumer confidence is increasing, and the housing market continues to demonstrate strong momentum. In fact, in the second quarter, the housing market movement was stronger and more broad-based than it has been since before 2008.
2. On home prices
The thing I hear most about when I'm out in the marketplace is lack of inventory. And so we are expecting that prices will continue to improve, maybe not at levels they have in the past, but housing sure has strength to it.
3. On mortgage rates
If you were in the mortgage market before 2000, you know that these are [still] unbelievably good rates. My first mortgage was at 8.5%. My second one was 11.5%. I thought those were great rates at those times. So affordability still is there.
4. On bank branches
We're a retailer. So most retailers that I respect are always looking at their distribution footprint and model. But the long and the short of it is that we believe in the store concept.
5. On checking accounts
When I wake up in the morning and get here, the first thing I look at is checking account data from the day before. I love checking accounts. I dream about them ... because it's a formational account for a consumer. And the second probably most important is a mortgage.
The Foolish bottom line
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The article 5 Quotes from Wells Fargo's Conference Call originally appeared on Fool.com.
John Maxfield has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Wells Fargo. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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