Bank Ratings: U.S. Bancorp Tops, Morgan Stanley Last

Bank Ratings Through December 31, 2012

The 10 Largest USA Banks have reported fourth quarter 2012 financial results, i.e., financial performance for the quarter ending 12-31-12 and financial position at 12-31-12. There were several changes in the quarterly ratings: 4 upgrades and 2 downgrades. The median score is "D" and the average score for the quarter ending December 2012 is "C+", an increase from the average score of "C" for the prior quarter ending September 2012.

Largest USA Banks Rankings The 10 Largest USA Banks ratings are presented below in a percentage format. The ratings range from A+ (100%) to G- (0%).



Rating, Bank, Change
A     U.S. Bancorp
A-    Wells Fargo
A-    Capital One
A-    PNC Financial Services, upgrade from B+
B+   BNY Mellon, upgrade from B
B-    Citigroup, upgrade from E+
C+   Bank of America, downgrade from B-
D     JPMorgan Chase
D     Goldman Sachs, upgrade from F-
G     Morgan Stanley, downgrade from E-
B+   Average

Above Average U.S. Bancorp is the sole leader at "A", followed by Wells Fargo, Capital One, and PNC Financial Services at "A-". These 4 banks have moved positively beyond the 2008 financial crisis. BNY Mellon and Citigroup are next at "B+" and "B-", respectively.

Average Bank of America is at the average of "C+".

Below Average JPMorgan Chase and Goldman Sachs are next at "D", which is the median rating. Trailing the field is Morgan Stanley at a dismal "G".

Based on fundamental analysis of both financial position and performance on a short-term and long-term basis, the largest 10 USA banks rankings have been updated with a composite score. There is no subjectivity involved from quarter to quarter, just objective data. The ratings are the result of the output from a model, with the latest quarterly financial statement data input.

The score can range from a high of A+ to a low of G-, a total of 21 tiers. The median score is D in this rating system. The average score can vary each quarter.

Financial position is weighted more than financial performance. Therefore, the rating is primarily a gauge of financial position, balance sheet strength, which indicates the ability of the bank to withstand a downturn in financial performance from internal and/or external events. The rating is secondarily a gauge of financial performance, both short-term and long-term. A measure of financial safety and soundness, not future financial performance, is the predominant intent of the ratings.

$XLF $USB $PNC $WFC $BK $BAC $JPM $C $MS $GS $COF

Max Keiser: Fake-It-Til-You-Make-It Economy

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Max Keiser

Keiser Report: Fake-It-Til-You-Make-It Economy

In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the global yellow cake baking, talcum powder shaking, perpetual war making, balloon boy chasing, fake it til you make it economy in which spoof trading and a shadow banking system collateralized by a combination of liar loans and temporary workers consuming genetically modified food-like products produces such heroes for our times as Robb U, the guy who was handed $6 million in loans based on having a YouTube music video with a million plus views.

In the second half of the show, Max Keiser talks to former Scotland Yard fraud squad detective, Rowan Bosworth-Davies of Rowans-Blog.blogspot.co.uk about justice departments and regulators going after the 'little guy' because he is 'easier' to get than the too-big-to-fail.

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JPMorgan Earnings Review: Strong Profits Continue

JPMorgan reported QE December 2012 financial results on January 16

Strong profits continue for CEO Jamie Dimon and accomplices with an impressive earnings per share of $1.39, near a post-financial crisis high. Financial performance continues strong and financial position improved. Capital is adequate.

Risk management is the uncertainty at the largest of the Wall Street Banksters ($2.36 trillion total assets). A consent cease and desist order regarding same was issued by the Federal Reserve and Comptroller of the Currency this week.





At QE 12-31-12, I have rated JPMorgan a "D" on a scale of A+ to G-. This is no change in the rating from the prior QE 9-30-12. The median rating is "D" and the average rating at QE 9-30-12 was "C". Financial position is weighted more than financial performance. The QE 9-30-12 bank ratings review is here.







Jamie Dimon, Chairman and Chief Executive Officer, commented on the financial results: “For the third consecutive year, the Firm reported both record net income and a return on tangible common equity of 15%. The Firm’s results reflected strong underlying performance across virtually all our businesses for the fourth quarter and the full year, with strong lending and deposit growth. We also maintained our leadership positions and continued to gain market share in key areas of our franchise. As we highlight upfront in this release, there were several significant items that affected our results this quarter, but they largely offset each other.”

Dimon added: “We continued to see favorable credit conditions across our wholesale loan portfolios and strong credit performance in our credit card portfolio, where charge-off rates remain at historic lows. The real estate portfolios, while at elevated levels of losses, continued to show improvement as the housing market and economy continued to recover. As a result, we reduced the related allowance for credit losses by $700 million in the fourth quarter and we are likely to continue to see reductions in the allowance as the environment improves.”

$JPM $XLF

Federal Reserve Issues 2 Cease & Desist Orders Against JPMorgan

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Federal Reserve Board Issues Two Consent Cease and Desist Orders Against JPMorgan Chase & Co.

(Board of Governors of the Federal Reserve System and Office of the Comptroller of the Currency; January 14, 2013)

WASHINGTON -- The Federal Reserve Board on Monday issued two consent Cease and Desist Orders against JPMorgan Chase & Co., New York, New York (JPMC), a registered bank holding company. The first order requires JPMC to take corrective action to continue ongoing enhancements to its risk-management program and its finance and internal audit functions, particularly in regard to JPMC's Chief Investment Office (CIO). The Board's order follows the disclosure of significant losses in a large synthetic credit portfolio that was managed by the CIO. The second order requires JPMC to take corrective action to enhance its program for compliance with the Bank Secrecy Act and other anti-money laundering requirements at JPMC's various subsidiaries.

The Office of the Comptroller of the Currency on Monday issued two similar Consent Orders against JPMorgan Chase Bank, N.A., Columbus, Ohio.

Consent Cease and Desist Order #1

1. Source of Strength: The board of directors shall take appropriate steps to ensure that the Bank complies with the Consent Order issued by the OCC.

2. Board Oversight: Within 60 days of this Order, the board of directors shall submit to the Reserve Bank an acceptable written plan to continue ongoing enhancements to the board’s oversight of JPMC’s risk management, internal audit, and finance functions.

3. Risk Management: Within 60 days of this Order, JPMC shall submit to the Reserve Bank an acceptable written plan to continue ongoing enhancements to its risk management program, particularly with respect to the matters set forth below.

4. Finance: Within 90 days of this Order, JPMC shall submit to the Reserve Bank an acceptable written plan to continue ongoing enhancements to the finance function, particularly with respect to the CIO finance function.

5. Internal Audit: Within 90 days of this Order, JPMC shall submit to the Reserve Bank an acceptable written plan to continue ongoing enhancements to firmwide internal audit, particularly with respect to the matters set forth below.

6. & 7. Approval, Implementation, and Progress Reports to Federal Reserve

Consent Cease and Desist Order #2

1. Source of Strength: The board of directors shall take appropriate steps to ensure that the Bank complies with the Consent Order issued by the OCC.

2. Board Oversight: Within 60 days of this Order, JPMC’s board of directors shall submit to the Federal Reserve Bank of New York (the “Reserve Bank”) an acceptable written plan to continue ongoing enhancements to the board’s oversight of JPMC’s firmwide compliance risk management program with regard to compliance with BSA/AML Requirements.

3. Compliance Risk Management Program: Within 60 days of this Order, JPMC shall submit an acceptable written plan to the Reserve Bank to improve the firmwide compliance risk management program with regard to BSA/AML Requirements and the regulations issued by the Office of Foreign Assets Control of the United States Department of the Treasury

4. and 5. BSA/AML Compliance Program: Within 90 days of this Order, JPMC shall complete a review of the effectiveness of JPMC’s firmwide BSA/AML compliance program (the “BSA/AML Review”) and prepare a written report of findings and recommendations (the “BSA/AML Report”).

6. Progress Reports to Federal Reserve

7. Approval and Implementation of Plans to Federal Reserve

Consent Cease and Desist Order #1 (.pdf file)

Consent Cease and Desist Order #2 (.pdf file)

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Federal Reserve Announces $8.5 Billion Mortgage Settlement

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Independent Foreclosure Review to Provide $3.3 Billion in Payments, $5.2 Billion in Mortgage Assistance

(Board of Governors of the Federal Reserve System and Office of the Comptroller of the Currency; January 7, 2013)

WASHINGTON -- Ten mortgage servicing companies subject to enforcement actions for deficient practices in mortgage loan servicing and foreclosure processing have reached an agreement in principle with the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Board to pay more than $8.5 billion in cash payments and other assistance to help borrowers.

The sum includes $3.3 billion in direct payments to eligible borrowers and $5.2 billion in other assistance, such as loan modifications and forgiveness of deficiency judgments. The payments involve mortgage servicers operating under enforcement actions issued in April 2011 by the OCC, the Federal Reserve, and the Office of Thrift Supervision. The agreement ensures that more than 3.8 million borrowers whose homes were in foreclosure in 2009 and 2010 with the participating servicers will receive cash compensation in a timely manner.

Eligible borrowers are expected to receive compensation ranging from hundreds of dollars up to $125,000, depending on the type of possible servicer error.

This agreement includes Aurora, Bank of America, Citibank, JPMorgan Chase, MetLife Bank, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo. For these participating servicers, fulfillment of the agreement would meet the requirements of the enforcement actions that mandated that the servicers retain independent consultants to conduct an Independent Foreclosure Review.

Independent Foreclosure Review to Provide $3.3 Billion in Payments, $5.2 Billion in Mortgage Assistance

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NCUA Sues J.P. Morgan, WaMu Capital, Others for $2+ Billion in Faulty Securities

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NCUA Sues J.P. Morgan, WaMu Capital and Others over $2.2 Billion in Faulty Securities

Legal Action is the Agency’s 10th against Wall Street Investment Firms

NCUA has similar actions pending against Barclays Capital, Credit Suisse, Goldman Sachs, J.P. Morgan Securities, RBS Securities, UBS Securities, Wachovia, and Bear, Stearns.

NCUA was the first federal regulatory agency for depository institutions to recover losses from investments in faulty securities on behalf of failed financial institutions. To date, the agency has settled claims worth more than $170 million with Citigroup, Deutsche Bank Securities and HSBC.

ALEXANDRIA, Va. (Jan. 4, 2013) – The National Credit Union Administration (NCUA) has filed suit in Federal District Court in Kansas against J.P. Morgan Securities as successor-in-interest to Washington Mutual Bank, alleging violations of federal and state securities laws in the sale of $2.2 billion in mortgage-backed securities to three corporate credit unions.

Other defendants include WaMu Capital Corp., Long Beach Securities Corp., and WaMu Asset Acceptance Corp.

“The damage caused by the actions of firms like Washington Mutual has been extremely expensive to contain and repair, and that job isn’t finished, yet,” said NCUA Board Chairman Debbie Matz. “All the credit unions we supervise and insure have had to share this burden, so it’s only right that the people who caused the damage be required to pick up that burden, as well.”

NCUA’s suit alleges the firms made misrepresentations in connection with the underwriting and subsequent sale of mortgage-backed securities to U.S. Central, Western Corporate and Southwest Corporate federal credit unions. All three corporate credit unions became insolvent and were subsequently placed into NCUA conservatorship and liquidated as a result of losses from these faulty securities. These failures caused significant losses to the credit union system.

J.P. Morgan Securities acquired Washington Mutual in 2008.

The complaint alleges the firms made numerous misrepresentations and omissions of material facts in the Offering Documents of the securities sold to the failed corporate credit unions. The complaint states underwriting guidelines in the Offering Documents were “systematically abandoned,” and the misrepresentations caused the credit unions to believe the risk of loss was minimal. In fact, these securities were “significantly riskier than represented in the Offering Documents” and that the faulty securities “were destined from inception to perform poorly.”

NCUA Sues J.P. Morgan, WaMu Capital and Others over $2.2 Billion in Faulty Securities

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NCUA Sues J.P. Morgan and Bear, Stearns Over Faulty Securities

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NCUA Sues J.P. Morgan and Bear, Stearns Over $3.6 Billion in Faulty Securities

Legal Action is the Agency’s Largest to Date against Wall Street Investment Firms

NCUA has eight similar actions pending against Barclays Capital, Credit Suisse, Goldman Sachs, J.P. Morgan Securities, RBS Securities, UBS Securities, and Wachovia.

NCUA was the first federal regulatory agency for depository institutions to recover losses from investments in faulty securities on behalf of failed financial institutions. To date, the agency has settled claims worth more than $170 million with Citigroup, Deutsche Bank Securities and HSBC.

ALEXANDRIA, Va. (Dec. 17, 2012) – The National Credit Union Administration (NCUA) has filed suit in Federal District Court in Kansas against J.P. Morgan Securities and Bear, Stearns & Co., alleging violations of federal and state securities laws in the sale of $3.6 billion in mortgage-backed securities to four corporate credit unions.

NCUA’s suit — the largest the agency has filed to date—alleges Bear, Stearns & Co. made misrepresentations in connection with the underwriting and subsequent sale of mortgage-backed securities to U.S. Central, Western Corporate, Southwest Corporate and Members United Corporate federal credit unions.

All four corporate credit unions became insolvent and were subsequently placed into NCUA conservatorship and liquidated as a result of losses from these faulty securities. These failures caused significant losses to the credit union system. J.P. Morgan Securities purchased Bear, Stearns & Co. in 2008, after the demise of Bear, Stearns & Co.

“Bear, Stearns was one of several Wall Street firms that sold faulty securities to corporate credit unions, leading to their collapse and enormous losses across the industry,” said NCUA Board Chairman Debbie Matz. “Firms like Bear, Stearns acted unfairly by ignoring the rules for underwriting. They packaged these securities and then told buyers the paper was sound. When the securities plunged in value, we learned the truth. NCUA is now working to hold these underwriters accountable and secure recoveries on behalf of federally insured credit unions.”

The complaint alleges Bear, Stearns & Co. made numerous misrepresentations and omissions of material facts in the offering documents of the securities sold to the failed corporate credit unions. The complaint states underwriting guidelines in the offering documents were “abandoned” and the misrepresentations caused the credit unions to believe the risk of loss was minimal. In fact, these securities were “significantly riskier than represented” and “routinely overvalued.” The faulty securities, the complaint states, “were destined from inception to perform poorly.”

As liquidating agent for the four corporate credit unions, NCUA has a statutory duty to seek recoveries from responsible parties in order to minimize the cost of any failure to its insurance funds and the credit union industry.

Corporate credit unions are wholesale credit unions that provide various services to retail credit unions, which in turn serve consumers, or “natural persons.” Retail credit unions rely on corporate credit unions to provide them such services as check clearing, electronic payments, and investments.

NCUA Sues J.P. Morgan and Bear, Stearns Over $3.6 Billion in Faulty Securities

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Largest USA Banks Ratings: U.S. Bancorp, Wells Fargo, Capital One Tops, Goldman Sachs Last

Big Banks Ratings Through September 30, 2012

The Largest USA Banks have reported third quarter 2012 financial results, the financial performance for the QE 9-30-12 and financial position at 9-30-12. There were several changes in the quarterly ratings: 4 downgrades and no upgrades. The median score is "D" and the average score for QE September 2012 is "C".

Above Average U.S. Bancorp is the sole leader at "A", followed by Wells Fargo and Capital One at "A-". These 3 banks have moved positively beyond the 2008 financial crisis. PNC Financial Services is next at "B+", followed by Bank of New York Mellon at "B" and Bank of America at "B-".

Below Average JPMorgan Chase is next at "D", which is the median rating. Citigroup follows with an "E+", below the median rating of "D". Farther below is Morgan Stanley at "E-". Trailing the field is Goldman Sachs, continuing at a dismal F-.

Rating, Bank, Change
A     U.S. Bancorp
A-    Wells Fargo
A-    Capital One
B+   PNC Financial Services
B     BNY Mellon
B-    Bank of America => (downgrade from B)
D     JPMorgan Chase
E+   Citigroup => (downgrade from D-)
E-    Morgan Stanley => (downgrade from E+)
F-    Goldman Sachs => (downgrade from G+)
C     Average

Largest USA Banks Rankings The 10 Largest USA banks ratings are presented below in a percentage format. The ratings range from A+ (100%) to G- (0%).



Based on fundamental analysis of both financial position and performance on a short-term and long-term basis, the largest 10 USA banks rankings have been updated with a composite score. There is no subjectivity involved from quarter to quarter, just objective data. The ratings are the result of the output from a model, with the latest quarterly financial statement data input.

The score can range from a high of A+ to a low of G-, a total of 21 tiers. The median score is D in this rating system. The average score can vary each quarter.

Financial position is weighted more than financial performance. Therefore, the rating is primarily a gauge of financial position, balance sheet strength, which indicates the ability of the bank to withstand a downturn in financial performance from either internal or external events. The rating is secondarily a gauge of financial performance, both short-term and long-term. A measure of financial safety and soundness, not future financial performance, is the predominant intent of the ratings.

$XLF $USB $PNC $WFC $BK $BAC $JPM $C $MS $GS $COF

JPMorgan Earnings Review: Solid Quarter!

JPMorgan reported QE September 2012 financial results on October 12

CEO Jamie Dimon and accomplices reported a solid quarter with an impressive earnings per share of $1.40, a post-financial crisis high. Both financial performance and position improved. Capital is adequate. Risk management is always the great uncertainty at the largest of the Wall Street Banksters.

At QE 9-30-12, I have rated JPMorgan a "D" on a scale of A+ to G-. This is no change in the rating from the prior QE 6-30-12. The median rating is "D" and the average rating at QE 6-30-12 was "C". Financial position is weighted more than financial performance. The QE 6-30-12 bank ratings review is here.







Jamie Dimon, Chairman and Chief Executive Officer, commented on financial results: "The Firm reported strong performance across all our businesses in the third quarter of 2012. Revenue for the quarter was $25.9 billion, up 6% compared with the prior year, or 16% before the impact of DVA. These results reflected continued momentum in all our businesses."

Dimon continued: "The Investment Bank reported favorable Fixed Income Markets results and maintained its #1 ranking for Global Investment Banking fees. Consumer & Business Banking average deposits were up 9% and Business Banking loan balances grew for the eighth consecutive quarter to a record $19 billion, up 8% compared with the prior year. Mortgage Banking originations were $47 billion, up 29% compared with the prior year. Credit Card sales volume1 was up 11% compared with the prior year. Commercial Banking reported record revenue and grew loan balances for the ninth consecutive quarter to a record $124 billion, up 15% compared with the prior year. Treasury & Securities Services assets under custody rose to a record $18.2 trillion, up 12% compared with the prior year. Asset Management reported positive net long-term product flows for the fourteenth consecutive quarter and record loan balances of $75 billion."

Dimon commented: "Importantly, we believe the housing market has turned the corner. In our Mortgage Banking business, we were encouraged that credit trends continued to modestly improve, and, as a result, the Firm reduced the related loan loss reserves by $900 million. Despite this improvement, the absolute level of charge-offs remains elevated. We also expect to see high default-related expense for a while longer. We are acting responsibly to help homeowners and prevent foreclosures, offering nearly 1.4 million mortgage modifications and completing 578,000 since 2009. Credit trends in our credit card portfolio continued to improve, and the wholesale credit environment remained stable."

$JPM $XLF

NCUA Sues Barclay’s Capital for Misrepresentations

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NCUA Sues Barclay’s Capital

Legal Action Is the Agency’s Seventh Against Wall Street Investment Firms

NCUA has previously filed similar actions against J.P. Morgan Securities, LLC, RBS Securities, Goldman Sachs, Wachovia and UBS Securities. NCUA has already settled claims worth more than $170 million with Citigroup, Deutsche Bank Securities and HSBC, making it the first federal regulatory agency for depository institutions to recover losses from investments in faulty securities on behalf of failed financial institutions.

(NCUA; September 25, 2012)

ALEXANDRIA, Va. (Sept. 25, 2012) – The National Credit Union Administration (NCUA) today filed suit in Federal District Court in Kansas against Barclay’s Capital, Inc.

NCUA’s suit alleges Barclay’s, the U.S. subsidiary of the British financial services firm, violated federal and state securities laws through misrepresentations in the sale of mortgage-backed securities to U.S. Central Federal Credit Union (US Central) and Western Corporate Federal Credit Union (WesCorp). The price paid for the securities by US Central and WesCorp exceeded $555 million. Both corporate credit unions subsequently failed.

“Trust and accountability are two cornerstones of our financial system,” said NCUA Board Chairman Debbie Matz. “As clearly outlined in our complaint, Barclay’s violated that trust by issuing faulty disclosures on securities underwritten by the firm. As a result, two corporate credit unions collapsed, and the entire credit union industry experienced a crisis. Since then, NCUA has successfully worked to restore stability to the credit union system. Now we are working to hold Barclay’s, and other responsible parties, accountable for their actions.”

NCUA’s complaint alleges Barclay’s made numerous misrepresentations and omissions of material facts in the offering documents of the securities sold to the failed corporate credit unions. The complaint also alleges systemic disregard of the underwriting guidelines stated in the offering documents. These misrepresentations caused US Central and WesCorp to believe the risk of loss was minimal, when in fact the risk was substantial.

As liquidating agent for US Central and WesCorp, NCUA has a statutory duty to seek recoveries from responsible parties in order to minimize the cost of any failure to its insurance funds and the credit union industry. Recoveries from these seven additional legal actions would further reduce the total losses resulting from the failure of the five corporate credit unions. Losses from those failures must be paid from the Temporary Corporate Credit Union Stabilization Fund. Expenditures from this fund must be repaid through assessments against all federally insured credit unions. Thus, any recoveries would help to reduce the amount of future assessments on credit unions.

Corporate credit unions are wholesale credit unions that provide various services to retail credit unions, which in turn serve consumers, or “natural persons.” Retail credit unions rely on corporate credit unions to provide them such services as check clearing, electronic payments, and investments.

NCUA Sues Barclay’s Capital

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Wall Street Banksters: Ongoing Bailouts & No Criminal Prosecutions!

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Neil Barofsky on the Ongoing Bailout of Wall Street and the Lack of Criminal Prosecutions

Welcome to Capital Account. The legacy of the financial crisis and the response from the government is still making headlines. It has turned into a legacy with taxpayers footing the bill and Wall Street paying less for its crimes. Today the SEC charged Wells Fargo's brokerage firm, as well as a former Vice President, for selling investments tied to Mortgage-Backed Securities without fully understanding their complexity or disclosing the risk to investors. Wells Fargo agreed to settle the charges. However, a fine of $6.5 million, no admission of guilt, and a 6-month suspension of the Vice President sounds like a handslap playing on a broken record. We talk to Neil Barofsky, the man who helped prosecute the CEO and President of Refco, and the watchdog for TARP -- the government-sposered bailout of Wall Street.

Neil Barofsky discuses the costs associated with the taxpayer funded bailouts of wall street doled out through tarp and the false promises made under the pretense of bailing out main street. He provides an in-depth account of his experience behind the scenes, as he tried to negotiate what he initially believed, was a program designed to save main street, but that he later discovered was really created with the full intention of bailing out wall street. That man is Neil Barofsky, the former Special Inspector General for TARP and author of "Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street."

Also, Bloomberg reports that Russell Wasendorf Sr., the CEO of the bankrupt Peregrine Financial Group, was indicted on 31 counts for making false statements to regulators. We ask Neil Barofsky if, even without blatant confessions of guilt, there are legitimate criminal cases that could be built around executives at major firms. He cites the LIBOR scandal as the most current, and most obvious example of an opportunity for criminal charges and prosecutions to be filed by authorities.

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Max Keiser: World in Financial Holocaust!

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Wall Street Bankster, Con Artist, and Financial Terrorist: JPMorgan CEO Jamie Dimon

Max Keiser: We're in A Financial Holocaust!

On the Sunday, August 12 edition of Infowars Live, Alex hosts Max Keiser discussing the ravaged state of the U.S. economy and fragility of markets as published in a recent Fox News article The Coming Economic Collapse.

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Big Banks Long-Term Growth Stalls: U.S. Bancorp and Wells Fargo Shine

Long-Term Year on Year Earnings Performance

Only 2 of the 10 Largest USA Banks reported gains in net income from the prior year Q2 2012. The other 8 reported year over year decreases. Shining were U.S. Bancorp (+18%) and Wells Fargo (+17%). Reporting the smallest YoY decreases were JPMorgan (-9%), Goldman Sachs (-12%), and Citigroup (-12%). Those dropping more significantly were BNY Mellon (-35%), PNC Financial (-40%), and Morgan Stanley (-50%). Even worse at next-to-last and last-place were Capital One (-90%) and Bank of America (-128%).



Short-Term Quarter on Quarter Earnings Performance

Sequential quarterly net income results, the change from the prior quarter Q1 2012, were better. 6 of the 10 Largest USA Banks reported increases with Morgan Stanley and Bank of America at the top with +729% and +277%, respectively. Next were Wells Fargo (+9%), U.S. Bancorp (+6%), JPMorgan (+1%), and Citigroup (+1%). Reporting decreases QoQ were BNY Mellon (-21%), PNC Financial (-33%), Goldman Sachs (-54%), and Capital One (-94%).



Largest USA Banks Ratings: U.S. Bancorp & Wells Fargo Tops, Goldman Sachs Last

Big Banks Assets Shrink, Capital Strengthens

Big Banks Earnings Increase: JPMorgan, Wells Fargo, Citigroup Most Profitable

$XLF $USB $PNC $WFC $BK $BAC $JPM $C $MS $GS $COF

Big Banks Earnings Increase: JPMorgan, Wells Fargo, Citigroup Most Profitable

Quarterly Net Income

All 10 of the Largest USA Banks reported net income for the QE 6-30-12, reaching an aggregate quarterly net income of $19.1 billion. This is a small increase of +$142 million and +0.75% from the prior QE 3-31-12, but a strong increase of +$9.1 billion and +48% from the prior year QE 6-30-11.

Bank of America (+$1.81 billion) and Morgan Stanley (+$685 million) reported the largest sequential QoQ increases. Capital One (-$1.31 billion) and Goldman Sachs (-$1.15 billion) reported the largest sequential QoQ decreases.

The Billion Dollar Club: JPMorgan Chase led the way at #1 with $4.96 billion in quarterly net income. Wells Fargo was #2 at $4.62 billion. Citigroup ($2.95 billion), Bank of America ($2.46 billion), and U.S. Bancorp ($1.42 billion) were next. Below $1 billion in quarterly net income were Goldman Sachs ($962 million), Morgan Stanley ($591 million), PNC Financial Services ($546 million), and BNY Mellon ($496 million). Capital One was last and #10 with quarterly net income of a near break-even $93 million.



Return on Assets

The 10 Largest USA Banks reported an average return on assets of +0.83% for the QE 6-30-12, which was a small decrease -0.03% from the prior QE 3-31-12 of +0.86%.

The 1%+ Club: U.S. Bancorp and Wells Fargo were the clear leaders with an ROA of +1.60% and +1.30%, respectively. Capital One was #3 at 1.13%. Just below the 1% ROA benchmark was PNC Financial Services at +0.96%. Next were JPMorgan Chase (+0.78%) and BNY Mellon (+0.72%). Further down were Citigroup (+0.55%) and Bank of America (+0.52%). Trailing at #9 and #10 were Goldman Sachs (+0.39%) and Morgan Stanley (+0.31%).



Largest USA Banks Ratings: U.S. Bancorp & Wells Fargo Tops, Goldman Sachs Last

Big Banks Assets Shrink, Capital Strengthens

$XLF $USB $PNC $WFC $BK $BAC $JPM $C $MS $GS $COF

Big Banks Assets Shrink, Capital Strengthens

Total Assets

The 10 Largest USA Banks reported aggregate total assets of $10.69 trillion for the QE 6-30-12. This is a small decrease of -$57 billion and -0.53% from the prior QE 3-31-12, but a strong increase of +$105 billion and +1.00% from the prior year QE 6-30-11.

The 3 largest banks in the USA, JPMorgan, Bank of America, and Citigroup, all reported decreases in total assets as did 5 of the 6 biggest. The remaining 4 reported increases. JPMorgan reported the largest decrease (-$30 billion) followed by Citigroup and Morgan Stanley (both -$28 billion). BNY Mellon reported the largest increase (+$30 billion) followed by U.S. Bancorp (+$12 billion).

Largest USA Banks by Total Assets The Trillion Dollar Club: JPMorgan Chase continues #1 with total assets of $2.29 trillion, Bank of America is #2 with $2.16 trillion, Citigroup is #3 with $1.92 trillion, and Wells Fargo continues #4 with $1.34 trillion. Next are Goldman Sachs at $949 billion and Morgan Stanley at $754 billion. U.S. Bancorp $353 billion, Bank of New York Mellon $330 billion, PNC Financial Services $300 billion, and Capital One at $297 billion round out the top 10.



Capital Ratio

The 10 Largest USA Banks reported an average capital to assets ratio of 10.39% for the QE 6-30-12, an increase from the prior QE 3-31-12 (10.27%). The increase was broad with 8 of the 10 reporting higher ratios. BNY Mellon reported the only notable decrease (from 11.60% to 10.71%) and the Capital One decrease (from 12.55% to 12.54%) was negligible.

Largest USA Banks by Capital Ratio The 10%+ Club: PNC Financial Services, Capital One, Wells Fargo, U.S. Bancorp, Bank of America, and BNY Mellon all have capital ratios greater than 10%, which is very good. Citigroup, JPMorgan, Morgan Stanley, and Goldman Sachs are below 10%.



Largest USA Banks Ratings: U.S. Bancorp & Wells Fargo Tops, Goldman Sachs Last

$XLF $USB $PNC $WFC $BK $BAC $JPM $C $MS $GS $COF

Largest USA Banks Ratings: U.S. Bancorp & Wells Fargo Tops, Goldman Sachs Last

The Largest USA Banks have reported second quarter 2012 financial results. There were several changes in the quarterly ratings: 3 upgrades and 2 downgrades. The median score is "D" and the average score for the QE June 2012 is "C".

Above Average U.S. Bancorp is the sole leader at "A", followed by Wells Fargo and Capital One at "A-". These 3 banks have moved positively beyond the 2008 financial crisis. PNC Financial Services is next at "B+", followed by Bank of New York Mellon and Bank of America at "B".

Below Average JPMorgan Chase follows at "D". Citigroup is next with a "D-", below the median rating of "D". Farther below is Morgan Stanley at "E+". Trailing the field is Goldman Sachs, continuing at a dismal G+.

Rating, Bank, Change
A      U.S. Bancorp
A-     Wells Fargo
A-     Capital One => (downgrade from A)
B+    PNC Financial Services => (downgrade from A-)
B      BNY Mellon => (downgrade from B+)
B      Bank of America => (upgrade from C+)
D     JPMorgan Chase
D-    Citigroup
E+    Morgan Stanley => (upgrade from F-)
G+   Goldman Sachs
C      Average

Largest USA Banks Rankings The 10 Largest USA banks ratings are presented below in a percentage format. The ratings range from A+ (100%) to G- (0%).



Based on fundamental analysis of both financial position and performance on a short-term and long-term basis, the largest 10 USA banks rankings have been updated with a composite score. There is no subjectivity involved from quarter to quarter, just objective data. The ratings are the result of the output from a model, with June 30, 2012 financial statement data input.

The score can range from a high of A+ to a low of G-, a total of 21 tiers. The median score is D in this rating system. The average score varies each quarter.

Financial position strength, notably the capital ratio, is weighted more than financial performance. Therefore, the rating is primarily a gauge of financial position, balance sheet strength, which indicates the ability of the bank to withstand a downturn in financial performance from either internal or external events. The rating is secondarily a gauge of financial performance, both short-term and long-term. A measure of financial safety and soundness, not future financial performance, is the predominate intent of the ratings.

$XLF $USB $PNC $WFC $BK $BAC $JPM $C $MS $GS $COF

JPMorgan Earnings Review: Not Too Bad!

JPMorgan reported QE June 2012 financial results on Friday, July 13

CEO Jamie Dimon and accomplices dodged the bullet and Q2 financial results keep them in the ballgame. Q1 financial results were revised resulting in a decrease in net income of -$459 million and a decrease in earnings per share of -$0.12. This is reflected in the data below.

Metric, QoQ Change, YoY Change
Total Assets: $2.29 trillion, -1%, +2%
Net Revenues: $22.18 billion, -15%, -17%
Net Income: $4.96 billion, +1%, -9%
Earnings per Share: $1.21, +2%, -5%

At QE 6-30-12, I have rated JPMorgan a "D" 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 is weighted more than financial performance. The QE 3-31-12 bank ratings review is here.















Jamie Dimon, Chairman and Chief Executive Officer, commented on financial results: "Importantly, all of our client-driven businesses had solid performance. However, there were several significant items that affected the quarter's results - some positively; some negatively. These included $4.4 billion of losses on CIO's synthetic credit portfolio, $1.0 billion of securities gains in CIO and a $545 million gain on a Bear Stearns-related first-loss note, for which the Firm now expects full recovery. The Firm's results also included $755 million of DVA gains, reflecting adjustments for the widening of the Firm's credit spreads which, as we have consistently said, do not reflect the underlying operations of the Firm. The Firm also reduced loan loss reserves by $2.1 billion, mostly for the mortgage and credit card portfolios. These reductions in reserves are based on the same methodologies we have used in the past - the good news is that these reductions reflected meaningful improvements in delinquencies and estimated losses in these portfolios. We continue to maintain strong reserves."

$JPM $XLF

Infiltrating the JPMorgan Mafia Hearings in Congress!

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Wall Street Bankster and Con Artist: JPMorgan CEO Jamie Dimon

Lauren Lyster and Heidi Moore Infiltrate JP Morgan's Mafia Hearings in Washington DC!

Welcome to Capital Account. We come to you live from our bunker deep within the newsroom's "fortress balance sheet," because Jamie Dimon was on Capitol Hill testifying about JP Morgan's multi-billion dollar trading loss. We headed to the hill with the protection of a full body suit that repels cronyism and dirty deals...we tried to enter through a revolving door so as not to raise any eyebrows, but there was not one to be found! Perhaps this is only for the seasoned politicians. In any case, Lauren did manage to infiltrate the Capitol one way or another, and she brings you the real story from inside the lion's den!

Now, we were hoping we would see a repeat of the Valachi mafia hearings of the 1960s, where the country really got some insight into the workings of organized crime: the mafia. Because, as our guest Wall Street correspondent for Marketplace Heidi N. Moore put it, "the mafia has better disclosure than the banking industry." Sadly, this type of scrutiny was not applied to Jamie Dimon today. Instead, what we saw was lawmakers who have JP Morgan to thank as a major contributor, asking Jamie Dimon how they should better regulate JP Morgan! We interview Marketplace's Heidi Moore on Capitol Hill, fresh from the hearings, to assess everything of value that came out of the Don's deposition!

Plus we're wondering if Banker Bonus Arbitrage is upon us, when "toxic" assets unloaded on bankers turn out to be the gift that keeps on giving. Or perhaps are we seeing a breed of genetically mutated bank executives, who are the only ones that can digest toxic assets? Either way, we had to ask after a Reuters report raised a few eyebrows around the Capital Account studio. Demetri and Lauren give you their take on our segment of Loose Change.

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Bankers Gone Bad: MF Global, Bank of America

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Wall Street Bankster, Politician, and Con Artist: Former MF Global CEO John Corzine

Nomi Prins on Banker's Gone Bad - MF'ers, BoA, and Spanish Bond Bashing

Welcome to Capital Account. MF Global's creditors could have more than three billion dollars in claims against the failed firm. That's according to the creditors' bankruptcy trustee -- former FBI director Louis Freeh. Guess who is NOT in the front of the line for the money according to Freeh's report? Customers. This is after a report came out yesterday from the trustee for the creditors, James Giddens. Lot's to unpack, and we have just the guest to help us do it, author and former Goldman Sachs managing director Nomi Prins.

G7 finance chiefs reportedly held a Eurozone crisis conference call today as Spain's treasury minister has up a flare: Help Us! The country is shut out of the bond market. The treasury minister and reportedly some of Spain's bankers want the EU to help recapitalize struggling banks. This is easy for them to say. A bank rescue for them comes on the backs of taxpayers. It comes on the backs of citizens. We'll ask if anything could turn this dynamic around.

And, on a lighter night, no pun intended, it seems that cash strapped cities have discovered a new and creative way to fill the budget shortfall: putting advertisements on fire trucks. We are not kidding. Demetri and Lauren will explain on our episode of Loose Change.

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Big Banks Earnings Increase: JPMorgan, Wells Fargo, Citigroup Most Profitable

9 of the 10 Largest USA Banks reported net income for the QE 3-31-12, with only Morgan Stanley reported a net loss. Aggregate quarterly net income for the Big Banks was $19.4 billion, which was +$5.1 billion and +36% from the prior QE 12-31-11 ($14.3 billion). Citigroup (+$1.98 billion), JPMorgan (+$1.66 billion), and Goldman Sachs (+$1.10 billion) reported the largest sequential QoQ increases. Bank of America (-$1.34 billion) reported the largest sequential QoQ decrease.

Regardless of the recent minimum $2 billion in trading losses incurred by JPMorgan Chase & Co., that is less than half of their most recent quarterly net income ($5.38 billion). No doubt this misstep materially impacts JPMorgan's financial performance for the current quarter, but to-date the losses do not appear life-threatening. See my recent post Too Big To Fail: JPMorgan Rolls the Dice, Loses $2 Billion.

The Billion Dollar Club: JPMorgan Chase led the way at #1 with $5.38 billion in quarterly net income. Wells Fargo was #2 at $4.25 billion. Citigroup ($2.93 billion) and Goldman Sachs ($2.11 billion) were next. Capital One ($1.40 billion) and U.S. Bancorp ($1.34 billion) followed. Below $1 billion in quarterly net income were #7 PNC Financial Services ($811 million), #8 Bank of America ($653 million), and #9 BNY Mellon ($631 million). Morgan Stanley was last and #10 with a net loss of -$94 million.



The 10 Largest USA Banks reported an average return on assets of +0.78% for the QE 3-31-12, which was a small decrease -0.03% from the prior QE 12-31-11 of +0.81%. The 1%+ Club: Capital One and U.S. Bancorp were the clear leaders with an ROA of +1.61% and +1.57%, respectively. Wells Fargo at 1.27% and PNC Financial Services at 1.12% were #3 and #4. BNY Mellon and JPMorgan Chase were next at +0.83%. Trailing were Citigroup +0.57%, Goldman Sachs +0.41%, and Morgan Stanley +0.38%. Finally Bank of America continues last at #10 at 0.00%, a decrease from the QE 12-31-11 of +0.06%.



Too Big To Stop Growing: Largest USA Banks Get Bigger

Largest USA Banks Ratings: U.S. Bancorp Tops, Goldman Sachs Last

Big Banks Profits Slow: Capital One, US Bancorp, Wells Fargo Shine

$XLF $USB $PNC $WFC $BK $BAC $JPM $C $MS $GS $COF