A day later, mystery still surrounds Howard Atkins&#39; exit at Wells Fargo

As expected, investors in Wells Fargo & Co. were not happy about the unexpected -- that is, the largely unexplained departure of Howard Atkins as chief financial officer.

Wells Fargo shares fell 97 cents, or nearly 3%, to $33.13 on Wednesday, a day after the bank abruptly disclosed that Atkins, generally well-regarded on Wall Street, was retiring.

The big San Francisco bank waited until after stock markets closed Tuesday to announce that Atkins had taken an unpaid leave. Wells Fargo explained only that it was for personal reasons, not because of problems with the bank's finances or financial reporting.

Wells said Atkins, 59, would quit altogether in August, his 10th anniversary with the bank, when his retirement benefits vest fully. It said the company's chief administrative officer, Timothy Sloan, had been named CFO effective immediately.

The mysterious event generated waves of speculation and warnings from analysts that the stock would likely be under pressure at least until Sloan signs off on the bank's official annual financial report in a few weeks.

Sample headlines: "CFO's Departure at Wells Fargo Bewilders Wall Street" (Wall Street Journal); "Wells Fargo Investors Want Answers" (thestreet.com); "Markets don't like Wells Fargo CFO Howard Atkins' retirement (bizjournals.com).

"The timing is very bad since the bank is in the middle of the year-end disclosure and audit cycle," wrote Christopher Whalen of Institutional Risk Analytics, adding, "this event suggests instability in the internal systems and controls."

The fact that Wells immediately named Sloan as Atkins' successor "somewhat mitigates these concerns," Whalen said.

RBC Capital Markets analyst Joe Morford said in an interview that his phone had been ringing off the hook. By the end of the day, he said, there were no clear answers to why Atkins had departed, only a slew of questions.

But Morford, who said Sloan seemed a solid replacement, opined that in the end it might not matter anyway because Wells Fargo's top executive and financial teams had worked together closely for so long.

"There's a lot of very good people at Wells," he said.

-- E. Scott Reckard

Photos, from top: Wells Fargo mystery retiree Howard Atkins and his replacement, Timothy Sloan. Credit: Wells Fargo & Co.