Wells Fargo Steps Firmly

San Francisco-based Wells Fargo (WFC), currently the largest retail home mortgage lender in the U.S., has surprised many this morning by stepping up to buy Wachovia Bank (WB) after everyone assumed Citigroup (C) would be getting the company's banking operations.  Wachovia shares, for those brave souls still holding them, are up 76% in the early market.

According to an AP report this morning, "The combined company will have total deposits of $787 billion and assets of $1.42 trillion, more than doubling Wells Fargo's totals on both counts. The bank will operate more than 10,000 locations. The two banks currently employ a combined 280,000 people."

Amazing that for a mortgage-heavy U.S. bank, Wells Fargo has maintained relatively healthy, allowing itself big opportunities like buying out Wachovia.  Also, this deal requires no government assitance, which the Citi deal would have.  Certainly this will have found favor on the floor of Congress this week.

Zacks senior financial industry analyst Neena Mishra covers Wells Fargo stock, most recently as a Hold recommendation.  "The company is known for its sales-focused culture," she notes, "which continues to drive significant growth in loans and deposits."

Also helping explain WFC escaping the big rumble with just a little scrape, she said this: "The company has a limited sub-prime exposure and does not have risky loans such as negative amortizing mortgages, options ARMs or stated income mortgages in its portfolio. Further, though the company's profitability ratios have moderated during the recent quarters, they still remain well above its peers."

Read the full analyst report on WFC

Read the full analyst report on WB

Read the full analyst report on C