A gaggle of banks, led by
, reported first-quarter earnings on Tuesday, with many fairing better than projected.
Boston-based State Street, one of the nation's largest processing and administrative services banks, reported a 4% gain in profits fueled by a rise in fee-related revenue. In the quarter, the bank earned $226 million, or 67 cents a share, up from $217 million, or 63 cents a share. Revenue was $1.31 billion.
Both lines exceeded analyst expectations. Analysts, according to Thomson Financial, predicted the bank would earn 62 cents in the quarter and take in $1.28 billion in revenue.
Wells Fargo, the San Francisco-based regional lender, reported a 5% rise in profits, with revenue rising 13%, compared with a year ago. In the quarter, the bank earned $1.86 billion, or $1.08 a share, compared to $1.77 billion, or $1.03 a share. Revenue was $8.1 billion.
The Thomson consensus estimate had Wells earning $1.09 a share on revenues of $7.9 billion.
In the quarter, Wells took a pretax charge of $410 million, stemming from a series of steps the bank undertook to strengthen its balance sheet. The moves included recognition of $163 million in credit losses in its home equity and consumer finance business and a decision to take a $130 million write-down on "losses related to the sale of $18 billion of its lowest-yielding adjustable rate mortgages and auto loans."
It couldn't be determined if analysts had factored the balance sheet charged into their estimates.
So far, most major banks are reporting mid- to high-single digit profit gains for the first quarter. Those are solid numbers, to be sure, but a far cry from the outsized gains reported during the mortgage boom fueled by low interest rates. The environment for banks has turned tougher since the
began hiking rates last year.
In other bank news,
reported a 6% gain in earnings as the Minneapolis-based bank matched analyst expectations. In the quarter, the bank earned $1.07 billion, or 57 cents a share, compared to $1.01 billion, or 52 cents, a share.
First quarter profits at
fell 32% from a year ago, but earnings still came in higher than what analysts had been expecting.I
In the quarter, the Cleveland-based lender earned $484 million, or 74 cents a share, compared to $710 million, or $1.16 a share. Analysts had expected the bank to earn 69 cents in the quarter. A year ago, National City's earnings were juiced by big gains in it mortgage business, a byproduct of what had been a red-hot market for mortgage refinancings.