2 Worries From This Big Bank: Wells Fargo & Company (WFC), JPMorgan Chase & Co. (JPM)

When it comes to deposit growth, while Wells Fargo’s growth of 7.39% in average deposits looks pretty good, their competition all performed better. For all of Bank of America’s challenges, the company’s average deposits grew by 11%. J.P. Morgan grew deposits by 10%, and BB&T showed deposits increasing 8.1%. When three of your largest competitors are able to grow deposits faster, it doesn’t argue for a premium stock price.

If we look at loan growth, ironically both Wells Fargo & Company (NYSE:WFC) and J.P. Morgan did worse than their lesser thought of competitors. Wells Fargo showed anemic loan growth of just 2.42%, and J.P. Morgan did even worse with average loans down 5%. Bank of America reports loans in multiple segments, and most performed significantly better than Wells Fargo. The bank’s first lien production increased 6%, and global wealth loans were up over 6% as well. Bank of America’s consumer real estate loans were down, but this is primarily because of the bank’s continued work to dissolve their troubled loan assets. When it comes to BB&T, the bank reported total loans up 9.3% and none of their competition did as well.

What Bank Is The Best Value?
If you look at the valuation of each of these banks and other factors, I have a hard time picking against BB&T over Wells Fargo, J.P. Morgan, or Bank of America. J.P. Morgan has the lowest expected earnings growth rate at 6.45%, and the second lowest yield at 2.54% of the four banks. While Bank of America is expected to grow earnings by better than 18%, the company’s yield is almost non-existent at 0.35%.

Wells Fargo is a popular pick in the banking sector, and with EPS growth expected at 9.33% and a yield of 2.86% the numbers look pretty good. However, BB&T showed the best deposit and loan growth of the four. The bank also had the lowest percentage of non-performing loans at 1.2%. On a valuation basis, BB&T offers the best combination of growth and income with 10.87% EPS growth expected and a yield of about 3%. Wells Fargo’s two big problems are BB&T’s two biggest strengths. The best value of the four banks seems pretty clear.

The article 2 Worries From This Big Bank originally appeared on Fool.com and is written by Chad Henage.

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