Wells Fargo: The Customers Strike Back

Understandably, the cloudy outlook made it hard for investors to get too excited for the shares even though the bank joined rivals JPMorgan Chase and Citigroup in posting revenue and earnings per share that beat analysts' estimates [Though Wells beat by the lowest -- 1.9%, versus about 9% and 15% for Citigroup and JPM, respectively]. After perking up in early trading, Wells Fargo's stock was poised for a fourth consecutive daily decline.

The $185 million settlement the bank reached with regulators last month is obviously just the beginning of its costs. The bill will undoubtedly rise as the bank shells out for fines and more settlements, reparations for customers and former employees and an increase in compliance costs.It's still too early to gauge how much all of these costs -- plus the reputational damage and the shift away from an aggressive sales culture -- will diminish the bank's bottom line. 

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But how much worse it gets may depend largely on how Sloan handles the difficult task of addressing the toxic elements of the bank's culture that fostered the scandal and showing that Wells Fargo has purged itself of them.