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NOTE: Please confirm through your own research any numbers on which you are to make a buy, sell or hold decision. The Price-to-Book calculations treats Preferred Stock as a debt and not an equity - thus those calculations will vary from most other published numbers. Monthly Sector Summary During the month of January, the year-to-date sector price gains rose to 1.52% and 04 EPS estimates rose .57%. Yields ended the month at 2.89%. Bank of America Q4 Earnings Jonathan Stempel Reuters 1-15 Bank of America said Q4 profit rose 4%, as consumer and investment banking grew and bad loans dropped. Net income rose to $2.73 billion, or $1.83 per share, from $2.61 billion, or $1.69 per share, a year earlier. Analysts polled by Reuters Research on average forecast $1.77 per share. Revenue rose 9% to $9.79 billion. Bank of America said consumer and commercial banking profit rose 11 percent to $1.91 billion, corporate and investment banking profit nearly tripled to $576 million, asset management profit more than doubled to $262 million, the loss on equity investments declined to $67 million. The bank set aside $583 million for bad loans, down 50 percent. Net charge-offs, or loans on which the bank does not expect to be paid back, fell 38 percent to $725 million, and nonperforming assets fell 43 percent to $3.02 billion. Bank of America CEO says can meet '04 profit view Reuters 1-27 In a presentation to analysts, Chief Executive Kenneth Lewis said, "We are confident that we can achieve last week's Wall Street consensus of $7.12 (per share) in 2004, which has increased a few pennies since that date." Analysts polled by Thomson First Call now expect per-share profit of $7.15 in 2004. Bank of America reported profit of $10.8 billion, or $7.13 per share, in 2003. Lewis said the combined Bank of America and Fleet should in 2004 post 6% core revenue growth, 3% deposit growth and 3% to 4% expense growth. The merged company expects to achieve $1.1 billion of after-tax cost savings, including $650 million for overlapping businesses, $100 million for corporate staff, $100 million in marketing, $175 million in vendor leverage, and $75 million in occupancy costs. BankOne Earnings Bloomberg 1-21 Bank One, which has agreed to be acquired by J. P. Morgan Chase, said fourth-quarter net income rose 16 percent, to $978 million, or 87 cents a share, compared with $842 million, or 72 cents, a year earlier. Retail banking climbed 12 percent, to $398 million; commercial banking jumped 150 percent, to $370 million; credit card income rose 8 percent, to $347 million; and investment management rose 75 percent, to $105 million. Bank One's fourth-quarter provision for credit losses rose to $672 million, from $628 million in the comparable period a year ago. BK Q4 Earnings BK Press release 1-21 The Bank of New York reports Q4 diluted earnings per share of 40 cents and operating earnings of 44 cents per share, compared with operating earnings of 42 cents per share in Q3. Q4 2003 reported results include merger and integration costs associated with the acquisition of Pershing of 4 cents per share. Net income for the fourth quarter was $307 million, compared with $100 million or 14 cents per share in the fourth quarter of 2002, when results included significant charge-offs primarily related to the Company's airline exposure. For the full year, net income in 2003 was $1,157 million, or $1.52 per share, compared to $902 million, or $1.24 per share in 2002. The Company's operating income for 2003 was $1.67 per share, as it recorded non-operating charges of 8 cents per share for Pershing related merger and integration costs and 7 cents per share for settlement costs with GMAC related to the Company's sale of its factoring business in 1999. The fourth quarter results showed continued growth in the Company's servicing and fiduciary businesses. Securities servicing fees reached a record $684 million in the fourth quarter, an increase of $27 million, or 4%, over the third quarter. Securities servicing fee growth was led by global custody, fund servicing, depositary receipts, and Pershing. Private client services and asset management grew by $6 million, or 6%, over the third quarter, due to higher equity price levels and continued strength in Ivy Asset Management, a fund of funds hedge fund manager. Partially offsetting these increases, foreign exchange and other trading were down by $11 million, or 12%, versus the third quarter, global payments services was down $4 million, or 5%, versus the third quarter, and compensation and volume-related expenses were higher. BK Expects Smaller '04 EPS Tara Bernard, Dow Jones Newswires 1-26 Bank of New York said its profits for 2004 will fall short of Wall Street's expectations given a slower-than-expected recovery in trading volumes and the cost of expensing stock options. The bank expects 2004 operating profits of $1.84 to $1.89 a share, or $1.86 to $1.91 excluding the impact of expensing options, which lags behind analysts' mean estimate of $1.95 a share, as computed by Thomson First Call. A higher tax rate and higher share count in 2004 may also account for part of the shortfall, a spokesman said. "We see in 2004 a continuation of the trends evident in the latter half of 2003," said Thomas Renyi, the bank's chairman and CEO, during its annual presentation to analysts. He doesn't anticipate a more consistent recovery until 2005 or 2006, he added. Renyi expects long-term earnings-per-share growth of 12% assuming a gradual recovery in the economy and capital markets. The company, which collects most of its income from fee-generation operations such as securities processing and trust and custody services, is expected to log net interest income growth of 3% to 4%, with fee income increasing 15% to 16%, for combined total revenue growth of 11% to 13% in 2004, he said. He expects a slight decrease in its return on equity at 18% to 20% given the Pershing LLC acquisition. Citigroup Reports Earnings Riva Atlas, NY Times 1-21 Q4-03 profit at Citigroup nearly doubled on the strength of its credit card business and lower litigation costs. Citigroup reported net income of $4.76 billion for the quarter, or 91 cents a share, up 96 percent from $2.43 billion, or 47 cents a share, in the same period a year earlier. The figures reflect a $1.3 billion after-tax charge the company took in 2002, largely to cover regulatory settlements and lawsuits tied to analyst conflicts. Excluding that charge, earnings rose 27%. Revenue for the quarter rose 13 percent, to $20.2 billion, the bank said. Citigroup also announced a 14 percent dividend increase, to 40 cents a share. Citigroup earned nearly $18 billion last year, more money than any other United States company has reported or is expected to earn, according to Thomson First Call. Expenses at the bank rose 4.4 percent from the third quarter, outpacing the rise in revenue. The increase was noteworthy, analysts said, because Mr. Weill was known for being obsessive about cutting costs. Citigroup benefited from acquisitions it made last year in its credit card business, where profits rose 23 percent, to $1.14 billion. The company completed its acquisition of the Sears card portfolio in November, on the heels of its purchase of the Home Depot credit card portfolio in July. Consumer finance profits fell 17 percent from a year earlier, as Citigroup continued to suffer from losses in Japan. Profits in consumer banking increased 24 percent, helped by its acquisition of Golden State Bancorp, completed in 2002, and continued strength in mortgages. Still, profits could slow in mortgages this year, with pending financings down 40 percent from the third quarter, Mr. Thomson told analysts. Profits at Citigroup's corporate lending and investment banking division were $1.28 billion for the quarter, in contrast to a loss of $326 million a year ago, reflecting the charge taken by the company to cover the analyst investigation. Revenue from stock offerings was up 42% from the prior quarter, but demand for advice on mergers and other transactions remained weak, down 9%. USB Q4 Earnings Jonathan Stempel Reuters 1-20 U.S. Bancorp said Q4 profit rose 19%, helped by higher consumer borrowing and fewer bad loans. USB said net income rose to $977 million, or 50 cents per share, from $819.7 million, or 43 cents per share, a year earlier. Options expensing cut Q4 profit by 1 cent per share. Revenue fell 1% to $3.1 billion. Analysts on average forecast profit of 51 cents per share. Chairman and Chief Executive Jerry Grundhofer said the bank expects to achieve 10 percent per-share profit growth in 2004. The bank reported 2003 profit of $3.73 billion, or $1.93 per share. Analysts on average expect $2.18 per share in 2004. U.S. Bancorp said it set aside $286 million for bad loans in the quarter, down 18 percent from a year earlier, while net charge-offs, or loans on which the bank does not expect to be paid back, fell 25 percent to $285.1 million. Nonperforming assets fell 16 percent to $1.15 billion. U.S. Bancorp said net interest, or lending, income rose 3% from a year earlier to $1.82 million. Noninterest income fell 6% to $1.3 billion and noninterest expense fell 10 % to $1.34 billion. Loans rose 2% to $118.2 billion and deposits rose 3% to $119.1 billion. Assets rose 5%. Net interest margin, the difference between what U.S. Bancorp earns on loans and pays on deposits, fell to 4.42% from 4.65% a year earlier. Wells Fargo Q4 Eanings Bloomberg 1-21 At Wells Fargo, net income increased 10%, to $1.62 billion, or 95 cents a share, from $1.47 billion, or 86 cents, a year earlier. That met the First Call average forecast. Revenue from mortgage banking increased 23%, to $636 million, as the value of the bank's mortgage servicing unit increased. Rising interest rates increased the unit's value because a decline in refinancing makes it likely that the bank will bring in fees from handling mortgage paperwork for a longer period. Revenue from fees like mortgages, investment management and insurance rose 18 percent, to $3.4 billion. Revenue from taking in deposits and making loans grew 7 percent, to $3.58 billion. Wells Fargo set aside 1.54% of $253 billion in loans outstanding as of Dec. 31, a decline from 1.98% of $192 billion outstanding at the end of 2002. Monthly Sector Summary During the month of January, the year-to-date sector price gains rose to 6.56% and 04 EPS estimates rose 3.28%. Merrill Lynch Q4 Earnings Jonathan Stempel, Reuters 1-21 Merrill increased Q4 profit to $1.23 per share from 56 cents per share a year earlier. Analysts expected $1.01. Full-year profit totaled $4 billion. Revenue rose 17 percent to $4.92 billion, but missed analysts' forecast of $5.13 billion. Fewer trading gains helped push revenue down 3 percent from the third quarter.Chief Executive Stan O'Neal, known for cutting costs, added 300 jobs in the quarter, bringing Merrill's total to 48,100. Merrill said brokerage revenue rose 9% from a year earlier, while global markets and investment banking revenue rose 24%. Merrill last year ranked No. 3, behind Citigroup and Morgan Stanley in underwriting stock and bond sales worldwide, research firm Thomson Financial said. Schwab's Q4 Earnings Dow Jones Newswires 1-22 Charles Schwab posted net income of $148 million, or 11 cents a share. For Q4-02, the company recorded a loss of $79 million, or six cents a share. Both periods included gains or losses from discontinued operations and restructuring and acquisition charges. Excluding these and other items - considered part of ordinary operations under generally accepted accounting principles - Schwab would have earned $150 million, or 11 cents a share, up 67% from $90 million, or seven cents a share, a year earlier. Q4 revenue rose to $1.12 billion from $986 million. Schwab ended 2003 with $976 billion in client assets, up 26% on the year. Schwab reported a 42% increase in the daily rate of new account openings between August and December, with new account openings for the year totaling 592,000. The company said it is entering 2004 with "gathering momentum." Schwab's daily average revenue trades grew to 168,000 in December, the highest level since September 2001. These trading levels have continued into 2004, Schwab said, with daily revenue trades averaging 221,000 for the first 12 days of January. For the full year, Schwab said its earnings excluding certain items rose to $490 million, or 36 cents a share, from $409 million, or 30 cents a share, in 2002. T Rowe Price's Q4 Earnings Washington Post 1-31 T. Rowe Price said Q4 profit rose 43%, to $68.6 million (53 cents a share) from $46.2 million (37 cents) as the stock market improved last year. Sales rose to $281 million from $220 million. For the year, profit rose to $227 million ($1.77) from $194 million ($1.52). Sales were $996 million, up from $924 million.
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