Is Wells Fargo & Co (WFC) Still the Best Bank in the Business?

Wells Fargo is arguably better prepared to handle changing conditions in the industry, which has also helped push its stock higher. For instance, it’s better positioned against the rising tide of regulatory requirements than some of its banking peers, as evidenced by the recent move by the FDIC to raise capital-to-assets ratios from 3% to 5%. Wells comes in at an estimated 7.3% currently, with Bank of America Corp (NYSE:BAC) next among the biggest banks at 5.1%. JPMorgan Chase & Co. (NYSE:JPM) and Citigroup Inc. (NYSE:C) both weigh in at 4.5%, missing the new standard and necessitating further capital-raising moves. Moreover, while B of A, JPMorgan, and Citigroup have all suffered big losses in investment securities and other types of income, Wells Fargo has limited the damage by having a much smaller debt portfolio that wasn’t as susceptible to rising interest rates.

When Wells Fargo & Co (NYSE:WFC) reports earnings, take a close look at how the bank’s management team addresses the big surge in mortgage rates recently. With revenue already slated to decline again this quarter, the loss of highly profitable mortgage activity could pose a long-term threat to earnings growth, one that the bank needs to address before it gets out of hand.

The article Is Wells Fargo Still the Best Bank in the Business? originally appeared on Fool.com and is written by Dan Caplinger.

Fool contributor Dan Caplinger owns warrants on Wells Fargo, JPMorgan Chase, and Bank of America. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends Bank of America and Wells Fargo. The Motley Fool owns shares of Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo.

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