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Business, Finance, Occupation & Industry

Fifth Third Announces First Quarter 2013 Net Income to Common Shareholders of $413 Million or $0.46

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By Business Wirevia The Motley Fool

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Fifth Third Announces First Quarter 2013 Net Income to Common Shareholders of $413 Million or $0.46 Per Share

  • 1Q13 net income available to common shareholders of $413 million, or $0.46 per diluted common share, vs. $390 million or $0.43 per share in 4Q12, up 7% and $421 million or $0.45 per share in 1Q12, up 2%
  • 1Q13 results included a benefit of $34 million pre-tax (~$22 million after-tax, or ~$0.02 per share) on the valuation of the warrant Fifth Third holds in Vantiv
    • Significant items in 4Q12 included a positive net pre-tax impact related to Vantiv shares and warrants of $138 million (~$90 million after tax, or ~$0.10 per share) and pre-tax expense for FHLB debt extinguishment of $134 million (~$87 million after-tax, or ~$0.09 per share); significant 1Q12 items included a positive net pre-tax impact related to Vantiv shares and warrants of $127 million (~$83 million after-tax, or ~$0.09 per share)
    • Excluding these items, earnings per diluted common share of $0.44^ increased $0.08, or 22%, from 1Q12
  • 1Q13 return on assets (ROA) of 1.41%; return on average common equity of 12.5%; return on average tangible common equity** of 15.4%
  • Pre-provision net revenue (PPNR)** of $653 million in 1Q13
    • Net interest income (FTE) of $893 million, down 1% sequentially due primarily to lower day count; net interest margin 3.42%; average portfolio loans up 2% sequentially driven by 6% sequential growth in C&I loans
    • Noninterest income of $743 million included $34 million gain on Vantiv warrant and $17 million in investment securities gains; compared with $880 million in prior quarter which included net gains of $138 million related to Vantiv shares and warrant
    • Noninterest expense of $978 million, down 16% from 4Q12 which included FHLB debt termination charge
  • 1Q13 effective tax rate of 30.4% compared with 26.8% in 4Q12 and 28.6% in 1Q12; 1Q13 income taxes included seasonal increase of $12 million related to expiration of stock options; 4Q12 income taxes included $10 million benefit from the termination of certain leases
  • Credit trends remain favorable
    • 1Q13 net charge-offs of $133 million (0.63% of loans and leases) vs. 4Q12 NCOs of $147 million and 1Q12 NCOs of $220 million; lowest NCO level since 2Q07; 1Q13 provision expense of $62 million compared with 4Q12 provision of $76 million and 1Q12 provision of $91 million
    • Loan loss allowance decreased $71 million sequentially reflecting continued improvement in credit trends; allowance to loan ratio of 2.08%, 147% of nonperforming assets, 187% of nonperforming loans and leases, and

      From: http://www.dailyfinance.com/2013/04/18/fifth-third-announces-first-quarter-2013-net-incom/

Business, Finance, Occupation & Industry

Wells Fargo Reports Record Quarterly Net Income

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By Business Wirevia The Motley Fool

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Wells Fargo Reports Record Quarterly Net Income

Q1 Net Income of $5.2 Billion; EPS of $0.92, Up 23 Percent from Prior Year

SAN FRANCISCO–(BUSINESS WIRE)– Wells Fargo & Company (NYS: WFC) :

  • Continued strong financial results:
    • Record Wells Fargo net income of $5.2 billion, up 22 percent from first quarter 2012
    • Record diluted earnings per share of $0.92, up 23 percent
    • Revenue of $21.3 billion, compared with $21.6 billion
    • Noninterest expense of $12.4 billion, down $593 million
      • 58.3 percent efficiency ratio, improved from 60.1 percent
    • Pre-tax pre-provision profit (PTPP)1 of $8.9 billion, up 2 percent
    • Return on average assets (ROA) of 1.49 percent, up 18 basis points
    • Return on equity (ROE) of 13.59 percent, up 145 basis points
  • Continued loan and deposit growth:
    • Total average loans of $798.1 billion, up $29.5 billion from first quarter 2012
      • Quarter-end loans of $800.0 billion, up $33.4 billion
      • Quarter-end core loans2 of $709.1 billion, up $50.8 billion
    • Total average core deposits of $925.9 billion, up $55.4 billion from first quarter 2012
      • Quarter-end core deposits of $939.9 billion, up $51.2 billion
  • Continued improvement in credit quality:

    • Net charge-offs of $1.4 billion, a decline of $976 million from first quarter 2012

      • Net charge-off rate of 0.72 percent (annualized), lowest since second quarter 20063

    • Non-performing assets of $22.9 billion, down $3.8 billion from first quarter 2012

    • $200 million (pre-tax) reserve release4 due to continued strong credit performance
  • Strengthened capital levels; increased dividends and continued share repurchases:
    • Tier 1 common equity5 under Basel I increased $14.1 billion from first quarter 2012 to $113.6 billion, with Tier 1 common equity ratio of 10.38 percent under Basel I at March 31, 2013
    • Estimated Tier 1 common equity ratio of 8.39 percent under current Basel III capital proposals6
    • Increased quarterly common stock dividend to $0.25 per share in first quarter 2013 and purchased approximately 17 million shares of common stock
    • Received a non-objection to 2013 Capital Plan under the Comprehensive Capital Analysis and Review (CCAR), which included a dividend rate of $0.30 per share for second quarter 2013, subject to Board approval. The 2013 plan also included an increase in common stock repurchase activity compared with actual repurchases in 2012.

From: http://www.dailyfinance.com/2013/04/12/wells-fargo-reports-record-quarterly-net-income/

Business, Finance, Occupation & Industry

7 Things You Need to Know About U.S. Bancorp

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By John Grgurich, The Motley Fool

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Heard about U.S. Bancorp lately? Probably not, and that’s a good thing. U.S. Bancorp is the big bank with small drama: quietly — but profitably — going about its business year in and year out, and rewarding the patient, insightful investor who’s looking for something a bit off the beaten path.

As a quick way of introduction to U.S. Bancorp, here are seven of my favorite things about this often overlooked bank.

1. U.S. Bancorp is a bigger bank than you think
Again, it’s not bank that’s in the news everyday, but for its size, it easily could be. With more than $353 billion in total assets, it’s the seventh largest bank in the country, just ahead of Bank of New York Mellon , another low-drama bank that rewards the patient, long-term investor.

In and of itself, being big means nothing. But a big bank that’s well-managed and conservatively run — like U.S. Bancorp — means it has enough resources and reach to generate profit, but likely won’t get itself, or its investors, into trouble.

2. Great 2012 share-price performance
We all know that investor darling Bank of America returned better than 100% for investors in 2012, but less well-known is the fact that shares in U.S. Bancorp gained a big 15.81% in the same time period.

3. Great return on assets
ROA measures how well a company performs relative to its total assets and is broadly a measure of management effectiveness.

U.S. Bancorp’s ROA is a big 1.58% trailing 12 months. JPMorgan Chase‘s ROA is only 0.92% TTM — this from a bank widely recognized to be very well run.

4. Great return on equity
ROE is another measurement of management effectiveness, and looks at the amount of net income a company makes with its shareholder’s money.

U.S. Bancorp’s ROE is a big 14.59% TTM, significantly better than JPMorgan’s 10.98%, and slightly better even than the normally indomitable Wells Fargo , which has an ROE of 12.89%.

5. Solid fourth-quarter earnings
In the fourth quarter of 2012, U.S. Bancorp grew its revenue by 5.1% year over year, and its net income by 5.2% year over year. Not staggering, but solid, and easily beating B of A’s -20.7% and -63.2% for the same respective categories.

6. U.S. Bancorp pays a solid dividend
2.3% isn’t the biggest dividend in the world, but it’s healthy. Wells Fargo only pays 2.7%, BNY Mellon only pays 1.9%, and investor-favorite B of A only pays 0.3%.

7. Great stress-test performance
U.S. Bancorp had a Tier 1 common ratio of 9% for 2013 and a stressed minimum of 8.3%, arguably better than JPMorgan’s 10.4% and 6.3% (respective) performance. As a result, U.S. Bancorp will be raising its dividend by 18% and will be buying back $2.25 billion in shares.  

Foolish bottom line
In banking, it pays to be healthy and strong. U.S. Bancorp is practically the poster child for this. It’s a low-drama,

Source: FULL ARTICLE at DailyFinance