Morgan Stanley Earnings Review: Losing Streak Snapped!

Morgan Stanley reported QE June 2012 financial results on Thursday, July 19

Any earnings per share reported by the volatile Morgan Stanley is an improvement, and trend reversal, regardless of whether it is a beat or miss. The current Q2 2012 earnings per share of $0.29 serves that purpose. Morgan Stanley has reported losses per share in 2 of the past 3 quarters, in 3 of the past 5 quarters, and in 4 of the past 8 quarters.

Morgan Stanley does this to themselves and apparently to their clients. CEO James Gorman noted 2 quarters ago that MS continues "addressing a number of outstanding strategic and legacy issues." I guess that's one way to say it. Another way to say it is: we lie, cheat, and steal. The general public is not as familiar with Morgan Stanley as they are Goldman Sachs in the Wall Street Banksters syndicate. They are just as criminally inclined.

Metric, QoQ Change, YoY Change
Total Assets: $753.76 billion, -3%, -9%
Net Revenues: $6.95 billion, 0%, -25%
Net Income: $591 million, +729%, -50%
Earnings per Share: $0.29, +583%, -176%

At QE 6-30-12 I have upgraded Morgan Stanley to an "E+" from an "F-" at the prior QE 3-31-12. Previously at QE 12-31-11, the rating had been "D-". This is on a scale of A+ to G-. The median rating is "D" and the average rating was "C" at QE 3-31-12. Financial position strength is weighted more than financial performance. The QE 3-31-12 bank ratings review is here.













James P. Gorman, Chairman and Chief Executive Officer, said, “Although global economic uncertainty remains a headwind, we are proactively positioning the Firm for success. Our businesses showed resilience in key areas during the quarter, and we made progress against strategic goals. Despite muted volumes, Investment Banking maintained its industry-leading rankings. In Global Wealth Management, we increased our pre-tax margin to 12 percent in an environment marked by investor caution, and we integrated substantially all of our technology systems, which should bring additional value to our clients. We continue to be focused on taking the necessary steps to deliver strong returns for our shareholders.”

$MS $XLF

Capital One Earnings Review: Quarter Wiped Out!

Capital One reported QE June 2012 financial results on Thursday, July 19

At first I thought I had made an error on my spreadsheet when there was not much left on the bottom line. Nope, performance was really that bad and trashed all the financial ratios. Good grief, Capital One crashed and burned in Q2. Financial position continues very strong, the brunt of the losses appear recognized, but some lesser, additional charges could occur.

A QoQ drop in net income and earnings per share was expected, after the Q1 incredible earnings per share of $2.72. A bargain purchase gain of $1.16 per share on the acquisition of ING Direct was included. Excluding this one-time gain resulted in a lower EPS of $1.56 in the prior quarter. That was the benchmark.

But this quarter's drop was deeper, damaging and caused by:
* $1.2 billion provision for credit losses for non-impaired loans (HSBC U.S. Card acquisition)
* $180 million representation and warranty expense to settle deceptive marketing litigation
* $98 million for net litigation reserves to cover interchange and other settlements
* $85 million of PCCR amortization (HSBC U.S. Card acquisition)
* $60 million in regulatory fines related to cross-sell activities in the Domestic Card business

Metric, QoQ Change, YoY Change
Total Assets: $296.57 billion, +1%, +48%
Net Revenues: $5.06 billion, +2%, +27%
Net Income: $93 million, -93%, -90%
Earnings per Share: $0.16, -94%, -92%

At QE 6-30-12 I have downgraded Capital One to an "A-" from an "A" at the prior QE 3-31-12. This is on a scale of A+ to G-. The median rating is "D" and the average rating was "C" at QE 3-31-12. Financial position strength is weighted more than financial performance. The QE 3-31-12 bank ratings review is here.















"While second quarter results reflect significant purchase accounting impacts and other items, the strong underlying performance of our businesses continues to demonstrate that we're well positioned to deliver sustained shareholder value," said Richard Fairbank, Chairman and Chief Executive Officer. "We're focused on delivering that value, including distributing capital to shareholders through a meaningful dividend and opportunistic share buybacks, consistent with our long-standing commitment to maintaining a strong and resilient capital base."

$COF $XLF

Bank of America Earnings Review: Could Be Worse, Cost Cutting Announced

Bank of America reported QE June 2012 financial results on Wednesday, July 18

This was a darn good quarter for Bank of America, the World's Most Unstable Bank. Lower expectations enough and you can meet them. I even have the vague feeling BAC has moved on from the very worst of their troubles. However, doom is most likely alive and well in the background and may be in the form of junk mortgage repurchases. For now, a sigh of relief is in order and we'll wait and see what hell the next quarter might bring.

CEO Brian Moynihan continues cleaning up the carnage from the biggest debacle in banking history. He is now implementing Project New BAC: a multi-year, multi-billion dollar cost cutting plan which will include a workforce reduction of tens of thousands. I see no problem with a leaner, more efficient Bank of America. Downsize this beast! The past, and even recent, business model is broken.

The foremost problem is contingent liabilities, ongoing legacy losses, that surface and the lawsuits and government regulatory actions that result. After reserving billions of dollars, the worst of the incredible and extraordinary losses appear accounted for. Only time and fate will tell.

Metric, QoQ Change, YoY Change
Total Assets: $2.16 trillion, -1%, -4%
Net Revenues: $21.97 billion, -1%, +66%
Net Income: $2.46 billion, +277%, -128%
Earnings per Share: $0.19, +533%, -121%

At QE 6-30-12 I have upgraded Bank of America to a "B" from a "C+" at the prior QE 3-31-12. This is on a scale of A+ to G-. The median rating is "D" and the average rating was "C" at QE 3-31-12. Financial position strength is weighted more than financial performance. The QE 3-31-12 bank ratings review is here.















$BAC $XLF

US Bancorp Earnings Review: Record Performance!

US Bancorp reported QE June 2012 financial results on Wednesday, July 18

CEO Richard Davis was able to push earnings per share, operating income, net income, operating margin, net margin, capital ratio, and return on assets to record levels. This stellar performance solidifies US Bancorp as one of the very best large USA banks.

Metric, QoQ Change, YoY Change
Total Assets: $353.14 billion, +4%, +10%
Net Revenues: $5.01 billion, +3%, +8%
Net Income: $1.42 billion, +6%, +18%
Earnings per Share: $0.71, +6%, +18%

At QE 6-30-12 I have rated US Bancorp an "A" on a scale of A+ to G-. This is no change in the rating from the prior QE 3-31-12. The median rating is "D" and the average rating at QE 3-31-12 was "C". Financial position strength is weighted more than financial performance. The QE 3-31-12 bank ratings review is here.















U.S. Bancorp Chairman, President and Chief Executive Officer Richard K. Davis said, “I am exceptionally proud of our Company’s second quarter 2012 results, as we reported record diluted earnings per common share of $.71, an 18.3 percent increase over the prior year’s quarter and a 6.0 percent increase over the first quarter of 2012. Further, our performance metrics remained industry-leading and within the range of our long-term objectives, with a return on average assets of 1.67 percent, a return on average common equity of 16.5 percent and an efficiency ratio of 51.1 percent.

$USB $XLF

PNC Financial Services Earnings Review: Legacy Losses Derail Quarter

PNC Financial Services reported QE June 2012 financial results on Wednesday, July 18

The quarter was ruined for CEO James Rohr due to taking a significant hit of $403 million ($0.76 per share) for residential mortgage repurchase obligations, trust preferred securities redemptions, and integration costs of the acquisition of RBC Bank (USA).

The mortgage repurchase obligations date back to the acquisition of City National Corp., and their mortgage portfolio, in 2008. Some GSE's, FNMA and FHLMC, required PNC to take back questionably underwritten and poorly performing mortgages. The issue now is whether additional losses will be incurred in the future, increasing investor uncertainty.

Metric, QoQ Change, YoY Change
Total Assets: $299.58 billion, +1%, +14%
Net Revenues: $3.62 billion, -3%, +1%
Net Income: $546 million, -33%, -40%
Earnings per Share: $0.98, -32%, -41%

At QE 6-30-12 I have downgraded PNC Financial Services to a "B+" from an "A-" at the prior QE 3-31-12. This is on a scale of A+ to G-. The median rating is "D" and the average rating at QE 3-31-12 was "C". Financial position strength is weighted more than financial performance. The QE 3-31-12 bank ratings review is here.















“PNC’s results for the second quarter reflected strong operating performance in a challenging environment,” said James E. Rohr, chairman and chief executive officer. “While we experienced a few items that reduced our earnings in the short term, we were very pleased with our success in continuing to grow customer relationships and loans resulting in strong revenue. We are excited about the opportunities we see in our newly acquired southeastern markets and across our entire franchise to drive long-term value.”

$PNC $XLF

BNY Mellon Earnings Review: Litigation Charge Wrecks Performance

BNY Mellon reported QE June 2012 financial results on Wednesday, July 18

Earnings per share were a disappointing $0.39, which included a previously announced (7-6-12) litigation charge of $212 million after-tax or an $0.18 loss per share. There has been a slow, long-term decline in profitability. CEO Gerald Hassell will need some time to recoup this litigation loss and hopefully turn around the overall performance deterioration. The 11-quarter average EPS is $0.50.

Metric, QoQ Change, YoY Change
Total Assets: $330.28 billion, +10%, +8%
Net Revenues: $3.62 billion, -1%, -6%
Net Income: $496 million, -21%, -34%
Earnings per Share: $0.39, -25%, -34%

At QE 6-30-12 I have downgraded BNY Mellon to a "B" from a "B+" at the prior QE 3-31-12. This is on a scale of A+ to G-. The median rating is "D" and the average rating at QE 3-31-12 was "C". Financial position strength is weighted more than financial performance. The QE 3-31-12 bank ratings review is here.















NEW YORK, July 18, 2012 -- The Bank of New York Mellon Corporation (“BNY Mellon”) (NYSE:BK) today reported second quarter net income applicable to common shareholders of $466 million, or $0.39 per common share including the previously announced litigation charge of $212 million (after-tax) or $0.18 per common share, compared with $735 million, or $0.59 per common share, in the second quarter of 2011 and $619 million, or $0.52 per common share, in the first quarter of 2012.

“We continue to grow investment management and investment services fees reflecting the strength of our business model. We are delivering on our operational excellence initiatives, investing for future growth and positioning our businesses to deliver the full breadth of our global capabilities. Our strengthened capital positions us as a preferred counterparty, and provides us greater flexibility for ongoing investment while continuing to return capital to shareholders,” said Gerald L. Hassell, chairman, president and chief executive officer of BNY Mellon. “Also in the second quarter, we were able to put significant litigation behind us with no material impact on our capital,” added Mr. Hassell.

$BK $XLF

Goldman Sachs Earnings Review: Downtrend Continues

Goldman Sachs reported QE June 2012 financial results on Tuesday, July 17

Goldman Sachs comes now before us, The World's Most Hated Bankers led by CEO Lloyd Blankfein who is not only the World's Most Corrupt Banker but possibly now the most inept. By inept, I mean year over year decreases in earnings per share 3 of the past 4 quarters and 8 of the past 11 quarters.

Apparently Blankfein is very smart even though inept in his current CEO position: to lead an investment banking house that is criminally insane, helped themselves to American taxpayers' money, ripped off the entire world with fraudulent securitizations, traded against positions recommended to clients, and doesn't make much money - but yet he keeps his job! Bravo for him but not for the shareholders, clients, and future unsuspecting victims...

Financial position is marginal and questionable without the $166.99 billion in unsecured long-term borrowings being counted as capital. The earnings reports are veiled. Goldman Sachs dispenses only the information they feel the mighty GS should allow commoners, shareholders, and clients, known internally as "muppets", to see.

Metric, QoQ Change, YoY Change:
Net Revenues: $6.63 billion, -33%, -9%
Net Income: $962 million, -54%, -12%
Earnings per Share: $1.78, -55%, -4%

I have not rated Goldman Sachs at the current QE 6-30-12 due to insufficient data and will rate at a later date. At QE 3-31-12, I have rated Goldman Sachs a "G+" on a scale of A+ to G-. The median rating is "D" and the average rating was "C". Financial position strength is weighted more than financial performance. The bank ratings review is here.











News Flash! Latest Goldman Sachs' Propaganda: “During the second quarter, market conditions deteriorated and activity levels for both corporate and investing clients were lower given continued instability in Europe and concerns about global growth,” said Lloyd C. Blankfein, Chairman and Chief Executive Officer. “Still, we remain focused on meeting our clients’ needs, while prudently managing our capital, liquidity and risk.”

$GS $XLF