Bank Stocks Earnings: Last Weeks Affects, This Weeks Announcements
After hearing from many of the more popular bank stocks, we would like to review some of the more significant bank stocks and their stories. The main trends that seem to define the future of the bank stocks was declining trading revenue, Banks stocks are exposed to heavier regulation causing higher expenses. On the bright side Bank stocks as a group have reported lower loan losses and higher loan originations.
On Tuesday, Citigroup Inc. and Wells Fargo & Co. Two of the larger bank stocks recorded their strongest loan-growth numbers since the financial crisis. The figures confirm a warming trend highlighted last week by J.P. Morgan. this trend seems to be solidifying among other bank stocks as well.
The lending gains mark a defined change from the past few years, when lackluster figures opened bank stocks to criticism from politicians and others that their tight grip on cash was staling economic growth. The recent data reported from bank stocks, signals that the deleveraging that swept the economy following the 2007-08 turmoil may be easing. This information is not a recommendation we are only trying to collect and group together some of the more popular bank stocks presenting a general view of the group’s earnings, which may give you additional insight and understanding into bank stocks.
Citigroup (C) – One of the larger bank stocks, fourth-quarter net income dropped 11 percent compared to the same period in 2011, to $0.38. Due to a decline in revenues, there was a $465 million hike in operating expenses, and a $470 million jump in tax provisions. Analysts were looking for EPS of $0.48 the consensus range was $0.30 – $0.64 a share. Revenue came in at $17.17B compared to expectations of $18.54B.
Full Year 2011 net Income of $11.3B was up 6% and Full Year 2011 revenues of $78.4B compared to $86.6B in 2010. Book value per share was up 8% to $60.78, tangible book value per share was up 12% to $49.81.
One bright spot was a drop in loan losses, which fell 40 percent to $4.1 billion, suggesting that for consumers at least, the economy was becoming more solid.
Wells Fargo (WFC) – One of the larger bank stocks, announced earnings of $0.73 and revenue of $20.06B. Analysts were looking for EPS of $0.72 on revenue of $20.08B. This compares to last year’s gain of $0.61. For the full year revenues are expected to decline to $80.61B. The company reported revenues of $80.9 and earnings per share increased to $2.83 from $2.21 in the previous year.
Goldman Sachs (GS) – One of the larger bank stocks, although earnings dropped 58 percent to $1.01 billion, or $1.84 a share, they beat the $1.28 average estimate by 56 cents. Revenues fell 30% year over year to $6.05 billion versus the $6.32 billion consensus. Revenue for 2011 dropped 26 percent to $28.8 billion, the lowest since 2008. Revenues were expected to decline to $30.15B. Book value per common share was $130.31 and tangible book value per common share was $119.72.
Bank of America (BAC) - One of the larger bank stocks, analysts were looking for EPS of $0.23 and the consensus range was $0.03-$0.48. Earnings came in at $0.15 this compares to last year’s gain of $0.04. Revenue was $25.1 billion, up 11% from $22.7 billion in the prior-year quarter. Revenues also surpassed Estimates of $24.11B.
Bank of America is one of the largest credit card issuers and they made the point that Americans seemed to be getting their financial houses in order by paying off more debt in a timely manner. Their customers who paid bills a month late declined for the 11th consecutive quarter.
Morgan Stanley (MS) One of the larger bank stocks, posted a smaller-than-expectedd loss of $250 million, or 15 cents a share, on strong trading revenue. Revenue plunged 26% to $5.71 billion. After lowering estimates deeply, analysts were looking for a loss of $0.57 on revenue of $5.57B.
“The bar is pretty low,” Ralph Cole, a senior vice president in research at Ferguson Wellman Inc., told Bloomberg News in regards to these results. “If they can show less weakness than their peers, that appears to be strength.”
Morgan Stanley, underwriting revenue of $477 million fell 54% from last year’s fourth quarter, while advisory revenue fell 16% to $406 million. Here again Morgan Stanley beat earnings estimates making it the fifth quarter in a row to beat expectations.
Next Week Northeast and Mid-Atlantic Banks Stock Earnings
This information is not a recommendation we are only trying to inform you of the street’s expectations for these companies. All the data provided here is from Yahoo Finance.
New York Community Bancorp, Inc (NYB) – Wednesday, before bell: One of the larger local bank stocks, analysts are looking for EPS of $0.27 on revenue of $295.94M this compares to last year’s gain of $0.31. The consensus range is for $0.25 – $0.31, and $ 282.72M – $307.00M for revenue. For the fiscal year 2011, revenues are expected to rise to $1.2B from $1.18B for the previous year. Earnings per share are expected to decline to $1.10 compared to $1.21 for 2010.
Hudson City Bancorp, Inc. (HCBK) – Wednesday, before bell: One of the larger local bank stocks, analysts are looking for a loss of $0.74 on revenue of $228.62M this compares to last year’s gain of $0.25. The consensus range is for a loss of $0.76 – $0.72, and $215.27M – $245.10M for revenue. For the fiscal year 2011, revenues are expected to decline to $1.01B from $1.19B for the previous year. Earnings per share are expected to decline to a loss of $1.51 compared to a profit of $1.09 for 2010.
Brookline Bancorp, Inc. (BRKL) – Wednesday, after the close: One of the local bank stocks Analysts are looking for EPS of $0.12 on revenue of $26.85M this compares to last year’s gain of $0.11. Being a smaller Bank there are few analysts covering this company. For the fiscal year 2011, revenues are expected to rise to $1.05M from $91.75 reflecting 14.5% growth from the previous year. Earnings per share are expected to rise to $0.50 compared to $0.45 for 2010.
First Niagara Financial Group (FNFG) – Thursday, before bell: One of the local bank stocks, analysts are looking for EPS of $0.24 on revenue of $304.73M this compares to last year’s gain of $0.24. The consensus range is for $0.22 – $0.26, and $295.54M – $312.40M for revenue. For the fiscal year 2011, revenues are expected to rise to $1.12B from $784.40M for the previous year. Earnings per share are expected to rise to $0.98 from $0.87 last year.
Valley National Bancorp Common (VLY) – Thursday, before bell: One of the larger local bank stocks, analysts are looking for EPS of $0.19 on revenue of $138.21M this compares to last year’s gain of $0.23. The consensus range is for $0.18 – $0.21, and $133.88M – $152.51M for revenue. For the fiscal year 2011, revenues are expected to rise to $585.7M from $554.08M for the previous year. Earnings per share are expected to rise to $0.84 from $0.77 last year.
Provident Financial Services (PFS) – Friday, before bell: One of the local bank stocks, analysts are looking for EPS of $0.27 on revenue of $54.77M this compares to last year’s gain of $0.23. The consensus range is for $0.26 – $0.28, and $54.35M – $55.50M for revenue. For the fiscal year 2011, revenues are expected to rise to $216.85M from $208.96M for the previous year. Earnings per share are expected to rise to $1.03 from $0.90 last year.
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We have chosen to review the earning of bank stocks because many of the bank stocks have been hurt by the financial crisis and now again the bank stocks as a group has been hurt from the European crisis
