- Wells Fargo (WFC - Get Report) saw its pre-provision net revenue -- backing out gains on equity investments and gains on debt securities available for sale -- grow 13% year-over-year, to $9.1 billion in the third quarter, according to Thomson Reuters Bank insight. While third-quarter tax-adjusted net interest income declined to $10.10.820 million from $10.714 million a year earlier, noninterest income rose to $10.384 billion from $8.442 billion, and noninterest expense declined by over $1 billion to $12.112 billion. Mortgage banking revenue was up 53% year-over-year to $2.807 billion in the third quarter, while the company reported net gains from trading activities of $529 million, compared to losses of $442 million, a year earlier. Overall earnings performance remained strong, with a third-quarter ROA of 1.45% and a return on equity of 13.38%.
- For JPMorgan Chase (JPM - Get Report), pre-provision net income increased 14% year-over-year to $10.317 billion. The company's tax-adjusted net interest income declined to $11.176 billion in the third quarter from $11.950 billion a year earlier, as the company's net yield narrowed by 23 basis points year-over-year, to 2.43%. But the company's third-quarter noninterest income -- backing our securities gains -- increased to $13.712 billion from $11.339 billion in the third quarter of 2011. JPMorgan's Corporate/Private Equity business line saw profit increasing to $221 million in the third quarter, from a loss of $645 million a year earlier. Meanwhile, Retail Financial Services profit grew 21% year-over-year, to $1.408 billion, amid the wave of mortgage loan refinancing.
- Citigroup (C - Get Report) saw a 22% year-over-year decline in pre-provision net revenue, to $5.887 billion in the third quarter. Third-quarter tax-adjusted net interest income declined to $12.054 billion from $12.252 billion a year earlier, reflecting a decline in earning assets, as part of the company's long-term strategy to right-size its balance sheet. Citi's net interest margin actually expanded, to 2.86% in the third quarter, from 2.83% a year earlier. Noninterest income declined to $6.237 billion in the third quarter from $8.098 million a year earlier. The third-quarter bottom-line results included a pre-tax loss of $4.7 billion from the sale of a 14% interest in the Morgan Stanley Smith Barney joint venture and the write-down on Citi's remaining 35% interest in the joint venture, which will eventually be sold to Morgan Stanley (MS). A major positive for Citigroup an estimated Basel III Tier 1 common equity ratio was strong 8.6% as of Sept. 30, giving investors hope that the company could receive Federal Reserve approval for a significant return of capital during 2013.
- For Bank of America (BAC - Get Report), one-time items brought the company's third-quarter pre-provision net revenue down by 55% year-over-year, to $4.380 billion in the third quarter. Third-quarter results included pretax litigation expenses totaling $1.6 billion, including the settlement of a 2009 class action lawsuit, related to the company's acquisition of Merrill Lynch. Bank of America's net interest income declined to a tax-adjusted $10.167 billion in the third quarter, from $10.739 billion a year earlier. Noninterest income was down 36% year-over-year, to $10.157 billion in the third quarter, in part because the third-quarter 2011 results included a $3.6 billion gain on sales of shares in China Construction Bank, which was partially offset by a loss of $2.2 billion on private equity and other investments, including the CCB stake.
Shares of Wintrust Financial ( WTFCO) of Lake Forest, Ill., closed at $37.07 Friday, returning 33% year-to-date, following a 15% decline during 2011. Wintrust's shares trade for 1.3 times their reported Sept. 30 tangible book value of $28.93, and for 15 times the consensus 2013 earnings estimate of $2.47 a share, among analysts polled by Thomson Reuters. During the third quarter, Wintrust purchased the failed First United Bank of Crete, Ill., and Second Federal Savings and Loan Association from the Federal Deposit Insurance Corp. The company in September agreed to acquire HPK Financial Corp. of Hyde Park, Ill, which has about $390 million in total assets, in a deal that is expected to be completed in the fourth quarter. Wintrust had $17 billion in total assets as of Sept. 30. The company's third-quarter pre-provision net revenue -- aside from bargain purchase gains on acquisitions and gains on available-for-sale securities -- grew by 23% from a year earlier to $63.9 million, reflecting a 12% increase in net interest income to $132.6 million, from strong loan growth, while the net interest margin bucked the industry trend and expanded to 3.55% from 3.38% in the third quarter of 2011. Excluding bargain purchase gains booked after failed-bank acquisitions in both periods and gains on securities available for sale, Wintrust's noninterest income grew 41% year-over-year, to $55.9 million in the third quarter. The bulk of this improvement was mortgage banking income, which totaled $31.1 million in the third quarter, increasing from $14.5 million a year earlier. Noninterest expense was up 17% year-over-year, to $124.6 million. Third-quarter earnings were $32.3 million, or 66 cents a share, increasing from $30.2 million, or 65 cents a share, in the third quarter of 2011. The company's second-quarter ROA was 0.77% and its return on average common equity was 7.57%. Jefferies analyst Emlen Harmon reiterated his "Hold" rating for Wintrust on Oct. 18, after the company reported its third-quarter results, saying "concerns about the longer-term earnings run-rate surfaced as a portion of outsized expense growth will be run-rated. We remain cautious on the shares, as the roll-off of mortgage revenue and modest margin compression weigh on the company's ability to generate significant earnings growth post-4Q. Harmon has a $35 price target for Wintrust's shares, and estimates the company will earn $2.50 a share in 2013. WTFC data by YCharts
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Shares of M&T Bank ( MTB - Get Report) of Buffalo, N.Y., closed at $103.44 Friday, returning 39% year-to-date, following an 8% decline last year. M&T's shares trade for 2.4 times tangible book value, according to Thomson Reuters Bank Insight, and for 13 times the consensus 2013 EPS estimate of $8.14. Based on a quarterly payout of 70 cents, the shares have a dividend yield of 2.71%. M&T had $81.1 billion in total assets as of Sept. 20. The company August agreed to acquire Hudson City Bancorp ( HCBK) of Paramus, N.J., for $3.7 billion in stock and cash. Hudson City had $41.9 billion in total assets as of Sept. 30, and its board of directors had been some pressure to sell, after a long-term leverage strategy of increasing wholesale borrowings and investing in long-term mortgage-backed securities backfired in the prolonged low-rate environment, leading to two costly balance sheet restructurings. The merger is expected to be completed during the second quarter of 2013. For the third quarter, M&T's pre-provision net revenue grew 38% year-over-year, to $504.3 million, with mortgage banking revenue of $106.8 million, increasing from $38.1 million in the third quarter of 2012. Meanwhile, third-quarter noninterest expenses totaled $616.0 million, declining from $ $662.0 a year earlier, with the cost savings "predominantly due to the integration of the operations obtained in the May 2011 acquisition of Wilmington Trust Corporation." M&T's tax-adjusted net interest income grew 7% year-over-year to $669.3 million in the third quarter, and the net interest margin widened to 3.75% from 3.67% a year earlier. M&T reported third-quarter net income available to common shareholders of $273.9 million, or $2.18 a share, increasing from $1.32 during the third quarter of 2011. The company's third-quarter ROA was 1.45% and its return on average common equity was 12.40%. Jefferies analyst Ken Usdin rates M&T a "Hold," with a price target of $106, saying on Oct. 24 that because Hudson City's third-quarter results showed "incremental loan yield compression and lower interest income," he was lowering his 2013 earnings estimate for M&T by a nickel to $8.40. Usdin added that "there are a ton of moving parts and as much as three full quarters left before closing, so a lot could change otherwise." MTB data by YCharts
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Shares of Capital One Financial ( COF - Get Report) of McLean, Va., closed at $60.00 Friday, returning 42% year-to-date, following a flat return during 2011. The shares trade for 1.5 times their reported Sept. 30 tangible book value of $40.17, and for 8.5 times the consensus 2013 EPS estimate of $7.05. Following "messy" first and second quarters, from one-time items related to the acquisitions of ING Direct (USA) in the first quarter and HSBC's U.S. credit card portfolio in the second quarter, Capital One reported third-quarter earnings available to common shareholders of $1.2 billion, or $2.01 a share (excluding income from discontinued operations), increasing from $813 million, or $1.77 a share, during the third quarter of 2011. The company's third-quarter ROA was 1.60% and its return on average equity was 12.33%. The return on average tangible equity was 21.48%. Capital One's second-quarter pre-provision net revenue grew 45% year-over-year, to $2.8 billion. Net interest income was up 42% to $4.6 billion, while the net interest margin narrowed to 6.97% from 7.39%. Noninterest income increased 30% year-over-year, to $1.1 billion, while noninterest expense grew 33% to $3.0 billion. Oppenheimer analyst Chris Kotowski on Oct. 19 said that Capital One "crushed it," beating his third-quarter EPS estimate of $1.63, although there were "complicated purchase accounting impacts and moving parts that keep us from simply multiplying the $2.01 by four to estimate 2013." Kotowski rates Capital One a "Buy," and said that "investors are yearning for two comparable quarters from COF, and this wasn't it. However, while we are once again left with an unease about all the moving parts, a $7+ number in 2013 seems very reasonable to us, and our target for the stock is now $71." Kotowski's price target for Capital One is $68.00, and he estimates that Capital One will earn $7.02 a share in 2013. COF data by YCharts
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Shares of City National Corp. ( CYN) of Los Angeles close at $50.56 Friday, returning 16% year-to-date, following a 27% declined last year. The shares trade for 1.6 times tangible book value, and for 13 times the consensus 2013 EPS estimate of $3.96. Based on a quarterly payout of 25 cents, the shares have a dividend yield of 1.98%. City National in July purchased Rochdale Investment management. The company had $26.3 billion in total assets as of Sept. 30. Third-quarter pre-provision net revenue grew 52% year-over-year, to $108.5 million. Noninterest income -- excluding investment gains -- was up 61% year-over-year to $106.4 million, as City National booked $1.7 million in revenue from FDIC loss-sharing agreements, when the company had reported $14.2 million in expenses from the agreements a year earlier. Trust and investment fees rose to $43.5 million in the third quarter from $35.4 million in the third quarter of 2011, while brokerage and mutual fund fees increased to $9.1 million from $5.1 million, reflecting the Rochdale acquisition. City National's third-quarter net interest income was up 5% from a year earlier, to $209.9 million, but the net interest margin narrowed to 3.52% from 3.74%. The company reported third-quarter net income of $59.8 million, or $1.10 a share, increasing from $41.4 million, or 78 cents a share, a year earlier. City National's third-quarter ROA was 0.93% and its return on average equity was 10.35%. Jefferies analyst Casey Haire rates City National a "Hold," with a $52 price target, and said on Oct. 19 that "we leave our 2013 EPS
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Shares of Brookline Bancorp ( BRKL - Get Report) of Brookline, Mass., closed at $8.48 Friday, returning 3% year-to-date, following 19% decline during 2011. The shares trade for 1.3 times tangible book value, and for 13 times the consensus 2013 EPS estimate of 67 cents. With a quarterly payout of 8.5 cents, the shares have a dividend yield of 4.01%. Brookline Bancorp had $5.1 billion in total assets as of Sept. 30. The company's pre-provision net revenue grew by 58% year-over-year to $19.8 million in the third quarter, as its net interest income increase by 68% to $46.4 million, mainly because of the acquisition of Bancorp of Rhode Island in January. The net interest margin widened to 4.00% in the third quarter, from 3.68% a year earlier. The company's noninterest income increased to $3.8 million in the third quarter from $928 million a year earlier. Noninterest expense nearly doubled, to $30.4 million. Brookline reported third-quarter earnings of $11.4 million, or 16 cents a share, increasing from $6.3 million, or 11 cents a share, a year earlier. The third-quarter ROA was 0.90% and the return on average equity was 7.53%. KBW analyst Damon DelMonte rates Brookline Bancorp "Market Perform," with a $9.00 price target, and said on Oct. 24 after the earnings announcement that "BRKL posted a solid quarter as the bank's bottom line benefited mainly from liquidity deployment into loans and securities and a lower tax rate from federal tax credits, both of which were somewhat offset by higher expenses across the board." DelMonte added that the company's core net interest margin "expansion was closer to 5bps as the reported NIM benefited from 14bps, or $1.4mm, of yield adjustments on the bank's acquired loan portfolio" from the Bancorp of Rhode Island acquisition. DelMonte estimates that Brookline Bancorp will earn 65 cents a share during 2013. BRKL data by YCharts
Interested in more on Brookline Bancorp? See TheStreet Ratings' report card for this stock. -- Written by Philip van Doorn in Jupiter, Fla. >Contact by Email. Follow @PhilipvanDoorn