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Factoids Large-Cap Banks Mid-Cap Banks Excite Daily #s Large-Cap Banks Mid-Cap Banks Banking News Bankstocks.com Prior Updates Mar 2006 Feb 2006 Jan 2006 Dec 2005 Nov 2005 Oct 2005 Sept 2005 August 2005 July 2005 June 2005 May 2005 April 2005 March 2005 Feb 2005 Jan 2005 Dec 2004 Nov 2004 Oct 2004 Sept 2004 August 2004 July 2004 June 2004 May 2004 Feb 2004 Jan 2004 Dec 2003 Nov 2003 Oct 2003 |
Fed Lifts Yearlong Ban On Citigroup Acquisitions Clint Riley, WSJ 4-05 The Federal Reserve cleared Citigroup to pursue future acquisitions, lifting a yearlong restriction that was imposed following a string of scandals and regulatory missteps at the financial-services company. In a letter sent late Monday to Charles Prince, the company's chief executive, William L. Rutledge, executive vice president of the Federal Reserve Bank of New York, said that Citigroup had made "significant progress" by implementing new internal compliance and risk-management programs, and therefore "the understanding that you would refrain from significant expansion is no longer in operation." Lehman sees Accelerating Bank M&A Greg Morcroft, MarketWatch 4-05 As regulatory and integration issues wind down and factors like valuations converge with foreign interest in the U.S. market, Lehman Brothers said Wednesday it expects mergers and acquisitions activity in the banking sector to accelerate. "While the number of banks has halved over the past 20 years, we expect it to halve again over the next 20 years. We continue to view consolidation in the banking industry as a secular trend that has cyclical ups and downs," the analysts wrote Wednesday. "Still, our view has been and continues to be that consolidation should accelerate in 2006." Competition is increasing in the banking industry, raising costs as banks rush to open new branches and increase deposits. At the same time, stubbornly low interest rates have made it more difficult to attract traditional deposits. "The number of commercial banks in the U.S. fell by 103 to 7,527 in 2005. However, the number of branches increased by 2,767 to 71,716, the largest one-year increase on record, thus there are a lot more mouths to feed," the report concluded. Just this week, Federal regulators lifted a year-old ban on big mergers for Citigroup, freeing Chief Executive Chuck Prince to put his stamp on the financial giant, which was famous for its acquisitions under former CEO Sandy Weill. But Prince also said Tuesday that the bank would prefer to grow organically rather than by large, transformative acquisitions. "Our primary focus has to be on organic growth, and that's supplanted by transactions," Prince said in an interview Tuesday. Citigroup, the world's biggest bank, would prefer international deals to U.S. acquisitions, Prince said. He is especially interested in countries "with stable economies and rapidly emerging middle classes." Bank of America's 2003 acquisition of FleetBoston also raised the stakes for competitors because the move created a new giant with a big footprint across markets in the affluent Northeast. That deal both ignited, and highlighted, the fact that the biggest banks are increasing their focus on retail banking. The advent of traditionally non-bank firms into retail banking has also turned up the heat in the industry, leading the Lehman analysts to forecast mergers may be the cheapest and most effective way to stay competitive. Credit card firm Capital One has recently moved into banking in a big way with its buyouts of Hibernia and North Fork, and Dutch insurer ING has been successful gathering retail deposits with its INGDirect online banking business. Online financial services firms Charles Schwab, Ameritrade and ETrade have also made strides recently in the banking business. In figuring out just which banks may be set to do deals, the analysts suggested geography and the age of CEOs are likely to be determining factors. "More CEOs are expected to reach the critical age of 59 without established succession plans. Of the 13 $1 billion-plus transactions completed since the third quarter of 2004, 10 sellers had chairman 59 or older and 11 sellers had a presence in California, Texas, Florida, or New York,' the report noted. The report particularly cited Compass Bancshares, First Horizon, SunTrust and Colonial Bancgroup. "We also believe the Midwest may consolidate, given the competitive and growth characteristics of that market. However, given the market dynamics, we believe Midwest banks need to merge with each other as we do not expect new entrants," the report said. It also noted that the Chicago area is particularly fragmented and National City, Fifth Third and TCF Financial all have a significant presence in Chicago and also have a chairman age 60 or older. Bank of America Reports EPS of $1.07/Share PRNewswire 4-20 Bank of America Corporation today reported that net income in the first quarter of 2006 rose 14 percent to $4.99 billion from $4.39 billion a year earlier. Per-share earnings (diluted) were unchanged from a year earlier at $1.07. Return on average common equity for Q1 was 15.44%. Under purchase accounting rules, results for the first quarter of 2005 do not include MBNA, which was acquired on January 1, 2006. The current quarter's results included $320 million, or 5 cents per share, in expense from the impact of SFAS 123R, which accelerates the recognition of equity-based compensation expenses. The company terminated certain derivatives used as hedges in asset liability management that did not qualify for SFAS 133 hedge accounting at a cost of $175 million, or 2 cents per share. Revenue on a fully taxable-equivalent basis grew 31% to $17.94 billion from $13.74 billion in Q1-05. Last year's results did not include MBNA. Net interest income on a fully taxable-equivalent basis was $9.04 billion, compared to $7.71 billion the previous year. In addition to MBNA, the increase was driven by the impact of consumer, middle market, commercial and large corporate loan growth and increases in asset liability management activity primarily due to changes in interest rates. The impact of these increases was partially offset by a lower trading-related contribution. The net interest yield increased two basis points to 2.98%. Noninterest income was $8.90 billion compared to $6.03 billion. In addition to MBNA, these results were driven by continued strength in service fee income, increases in trading account profits, equity investment gains, investment banking income and card income. Gains on sales of debt securities were $14 million in the quarter compared to $659 million in Q1-05. The efficiency ratio for Q1-06 was 49.74%. Noninterest expense increased to $8.92 billion compared to $7.06 billion a year ago. In addition to MBNA and the increase in personnel costs due to changes in equity-based compensation accounting, expenses were higher due to increased marketing spending related to consumer banking initiatives. Also included in Q1-06 expenses were $98 million in pre-tax merger and restructuring charges related to the MBNA acquisition. Credit quality was stable. As anticipated, net charge-offs decreased substantially from Q4-05 due to the impact of bankruptcy reform. Net charge-offs were down compared to Q1-05 due to lower bankruptcies, partially offset by growth and seasoning of the card portfolio and new advances on accounts previously securitized. Provision for credit losses was $1.27 billion, down from $1.4 billion in Q4-05, and up from $580 million a year earlier. Net charge-offs were $822 million, or 0.54% of average loans and leases. Reported net charge-offs excluded $210 million, or 0.14%, as a result of impaired loan accounting for MBNA. Net charge-offs were $1.65 billion, or 1.16%, in Q4-05 and $889 million, or 0.69%, in Q1-05. Nonperforming assets were $1.68 billion, or 0.27% of total loans, leases and foreclosed properties, as of March 31, 2006. This compared to $1.60 billion, or 0.28%, at December 31, 2005 and $2.34 billion, or 0.44% on March 31, 2005. Total shareholders' equity was $129.43 billion at March 31, 2006. Period- end assets grew to $1.38 trillion. The Tier 1 Capital Ratio was 8.45 percent, up from 8.25 percent on December 31, 2005 and 8.26 percent a year earlier. During the quarter, Bank of America paid a cash dividend of $0.50 per share. In conjunction with the MBNA acquisition, the company issued 631 million common shares. The company also issued 38.9 million shares primarily related to employee stock options and ownership plans, and repurchased 88.5 million common shares. Period-ending common shares issued and outstanding were 4.58 billion for the first quarter of 2006, compared to 4.00 billion for the fourth quarter of 2005 and 4.04 billion for the first quarter of 2005. Bank of New York Reports 12% Increase in Q1 EPS BusinessWire 4-20 The Bank of New York reported Q1-06 net income of $422 million compared with $379 million in Q1-05 and diluted earnings per share of 55 cents, up 12% over the 49 cents earned in Q1-05. In Q4-05, earnings were $405 million and 53 cents. Return on Average Common Shareholders' Equity was 17.31% in Q1-05 vs. 16.57% in Q4-05 and 16.52% in Q1-05. Return on Average Assets was 1.61% in Q1-06 vs. 1.53% in Q4-05 and 1.55% in Q1-05. The Efficiency Ratio was 65.1% in Q1-06 vs. 65.5% in Q4-05 and 66.2% in Q1-05. Securities servicing fees up 11% versus the year-ago quarter. The growth was led by strong performance in issuer services, broker-dealer services, and execution and clearing services. Net interest income was up 7% over last year. Foreign exchange and other trading revenues were up 20% from Q1-05. Private banking and asset management revenues were up 16% from Q1-05 reflecting both organic growth and the acquisition of Alcentra Group Limited and Urdang Capital Management. The increase in noninterest income versus Q1-05 reflects positive revenue trends in securities servicing, foreign exchange and other trading, private banking and asset management, and other income. Service charges and fees were down from Q1-05 and Q4-05. The year-over-year decline reflects lower underwriting fees. BB&T Reports Net Income of $0.79 vs. $0.71 in Q1-05 PRNewswire 4-20 BB&T reported net income for Q1-06 totaling $431.5 million, or $.79 per diluted share, compared with $395.4 million, or $.71 per diluted share, earned during Q1-05. These results reflect increases of 9.1% and 11.3%, respectively, compared to the first quarter last year. BB&T's first quarter net income produced annualized returns on average assets and average shareholders' equity of 1.60% and 15.72%, respectively, compared to prior year returns of 1.60% and 14.70%, respectively. Operating earnings for the first quarter of 2006 totaled $427.7 million, or $.79 per diluted share, excluding an $18.3 million after-tax gain from the sale of duplicate facilities, $1.8 million in net after-tax merger-related credits and $16.4 million in after-tax equity-based compensation resulting from the adoption of SFAS 123® during the current quarter. Operating earnings for the first quarter of 2005 totaled $393.8 million, excluding $1.6 million in net after-tax merger-related credits. These results reflect increases of 8.6% and 11.3%, respectively, compared to the same period last year. Return on average assets was 1.59% in Q1-06 vs. 1.59% in Q1-05. Return on average equity was 15.58% in Q1-06 vs. 14.64% in Q1-05. Net yield on earning assets was 3.82% in Q1-06 vs. 3.95% in Q1-05. The efficiency ratio was 53.8% in Q1-06 vs. 52.9% in Q1-05. BBT had taxable equivalent interest income of $1,578,012,000 in Q1-06 vs. $1,263,654 in Q1-05, an increase of 24.9 %. BB&T's noninterest income was $608.2 million for Q1-06, an increase of 17.7% compared with Q1-05. This increase includes improved revenues from insurance operations, trust services, investment banking and brokerage fees and commissions, services charges on deposit accounts, other nondeposit fees and commissions and mortgage banking income. Nonperforming assets, as a percentage of total assets, were .27% at both March 31 and Dec. 31, 2005, compared to .33% at March 31, 2005. Annualized net charge-offs were .26% of average loans and leases for Q1-06, down from .28% in Q1-05. Citigroup EPS $1.21 BusinessWire 4-17 Citigroup reported net income for Q1-06 of $5.64 billion, or $1.12 per share. Return on common equity was 20.3%. Results include $846 million of compensation expense ($520 million after-tax) related to stock grants to retirement-eligible employees required under SFAS 123R, and a $657 million tax benefit related to the resolution of a federal tax audit for the years 1999 through 2002. FITB Reports EPS of $0.65 vs. $0.72 in Q1-05 PRNewswire 4-18 Fifth Third Bancorp's 2006 first quarter earnings per diluted share were $.65 compared to $.60 in the fourth quarter of 2005 and $.72 per diluted share for the same period in 2005. First quarter net income totaled $363 million compared to $332 million last quarter and $405 million in the same quarter last year. Return on average assets and return on average equity were 1.41% and 15.3%, respectively, compared to 1.62% and 18.0% in Q1-05. Net interest income on a fully taxable equivalent basis decreased 5%, despite 4% growth in average earning assets, due to a 30 bp decline in the net interest margin compared to Q1-05. Net interest income was $718 million in Q1-06 vs. $735 in Q4-06 and $759 million in Q1-05. Net interest margin was 3.08% in Q1-05 vs. 3.11% in Q4-05 and 3.38% in Q1-05. Noninterest income, excluding operating lease revenues and securities gains and losses, increased by six percent over the same quarter last year. Compared to last quarter, total noninterest income decreased by $19 million due primarily to seasonal factors. Noninterest income $617 million in Q1-06 vs. $636 million in Q4-06 and $607 in Q1-05. The Efficiency Ratio was 54.7% in Q1-06 vs. 55.6% in Q4-05 and 51.6% in Q1-05. Net charge-offs as a percentage of average loans and leases were 42 bp in the first quarter, compared to 67 bp last quarter and 40 bp in Q1-05. Nonperforming assets were 51 bp of total loans and leases and other real estate owned at March 31, 2006, compared to 52 bp last quarter and 53 bp in the year ago first quarter. Key Reports Net Income of $0.70 vs. $0.64 in Q1-05 PRNewswire 4-18 KeyCorp announced first quarter net income of $289 million, or $0.70 per diluted common share, compared with $264 million, or $0.64 per share, for Q1-05. For Q4-05, net income was $296 million, or $0.72 per diluted common share. Return on average equity was 15.48% for Q1-06, compared with 15.09% for the same period last year and 15.59% for Q4-05. Key expects earnings to be in the range of $0.69 to $0.73 per share for the second quarter of 2006 and $2.80 to $2.90 per share for the full year. Taxable-equivalent net interest income increased to $756 million for Q1-06 from $714 million for the same period last year. Average earning assets rose by 3% as a result of commercial loan growth, and the net interest margin increased by 11 basis points to 3.77%. Compared with Q4-05, taxable-equivalent net interest income rose by $8 million. This growth was attributable to an increase in average earning assets and a 6 basis point improvement in the net interest margin. Key's noninterest income was $481 million for Q1-06, compared with $500 million for the year-ago quarter. Last year's first quarter results benefited from income related to the sale of the indirect automobile loan portfolio, including a $19 million gain recorded in net gains from loan securitizations and sales, and $11 million of derivative income recorded in investment banking and capital markets revenue. In addition, Key recorded net losses of $3 million from principal investing in the current year, compared with net gains of $12 million one year ago. Net loan charge-offs for the quarter totaled $39 million, or 0.23% of average loans, compared with $54 million, or 0.34%, for the same period last year and $164 million, or 0.98%, for the previous quarter. Included in net charge-offs for Q4-05 were $127 million of commercial passenger airline leases. At March 31, 2006, Key's nonperforming loans stood at $295 million and represented 0.44% of period-end loans, compared with 0.47% at March 31, 2005, and 0.42% at December 31, 2005. Marshall & Ilsley Reports Net Income of $0.78 vs. $0.71 in Q1-05 PRNewswire 4-17 Marshall & Ilsley today reported 2006 first quarter net income of $0.78 per diluted share, or $186.8 million, as compared to $0.71 per diluted share, or $165.3 million, in the first quarter of 2005. First quarter net income per share increased 9.9 percent over the same period in 2005. Return on average assets based on net income for the first quarter was 1.62%, as compared to 1.63% for the same period in 2005. Return on average equity based on net income was 15.67% this quarter as compared to 16.59% for Q1-05. Net Interest Margin / Avg. Earning Assets in Q1-06 was 3.26% vs. 3.44% in Q1-05. Net Interest Income was $332.5 in Q1-06 vs. $307.0 8.3% in Q1-05. Total Non-Interest Revenues was 472.8 in Q1-06 vs. 402.5% in Q1-05, an increase of 17.5%. Data Processing Services income was 343.0 in Q1-06 vs. 283.0 in Q1-05, an increase of 21.2%. MI announced 4-25 an increased in the quarterly cash dividend on its common stock of 12.5% to $0.27 per share from $0.24 per share. The cash dividend is payable on June 9th. Mellon's Top Line Net Income Falls, Pro Forma Rises PRNewsWire 4-17 Mellon Financial reported income from continuing operations of $202 million, or 49 cents per share, in Q1-06. This compares to income from continuing operations of $305 million, or 72 cents per share, in Q1-05, and $208 million, or 50 cents per share, in Q4-05. Income from continuing operations in the first quarter of 2006 included pre-tax expenses of $19 million, or 3 cents per share, recorded in connection with payments, awards and benefits payable to our former chairman and chief executive officer, pursuant to his employment agreement, while income from continuing operations in the first quarter of 2005 included a pre-tax gain of $197 million from the sale of our remaining interest in Shinsei Bank together with other expenses of $15 million which netted to 28 cents per share. Excluding these amounts, earnings per share from continuing operations in Q1-06 increased 18% compared to Q1-05. Return on equity was 19.7% in Q1-06 vs. 20.1% in Q4-05 and 29.6% in Q1-05. Net interest margin was 1.95% in Q1-06 vs. 1.85% in Q4-05 and 1.92% in Q1-05. Total fee and other revenue excluding the Shinsei gain noted above, increased $185 million, or 19%, and represented 90% of total revenue. Mellon increased its quarterly common stock dividend by 10% or 2 cents per share to 22 cents per share. Regions Financial Report Net Income of 64 Cents/Share BusinessWire 4-18 Regions Financial reported Q1-06 net income of $295 million, or 64 cents per diluted share compared to Q4-05's 55 cents per diluted share, including 7 cents of merger and other costs, and Q1-05's 51 cents per diluted share, including 6 cents of merger and other charges. Excluding merger and other charges in first quarter 2005, per share earnings increased 12% year-over-year. The increase was primarily a result of strong net interest income, record Morgan Keegan results and the impact of merger-related cost saves. Morgan Keegan's earnings climbed to $41 million, including a $9 million after tax gain on the swap of NYSE seats for stock. Profits were over 50% higher than Q4-05's $27 million and Q1-05's $26 million. Return on average tangible equity was 22.32% in Q1-06 vs. 18.00% in Q1-05. Return on average stockholders' equity was 11.18% in Q1-06 vs. 9.15% in Q1-05. Return on average total assets was 1.40% in Q1-06 vs. 1.16% in Q1-05. Taxable equivalent net interest income rose 10% linked-quarter, annualized, and 9 percent compared to first quarter 2005, helped by further net interest margin expansion. Continued disciplined balance sheet management, including a positive shift in funding mix and modest deposit price increases, lifted first quarter's net interest margin to 4.18%. Regions' margin improved 17 basis points compared to the fourth quarter and 34 basis points year-over-year, as deposits grew with very disciplined pricing controls. Net loan charge-offs declined to $29 million, or an annualized 0.20% of average loans, from fourth quarter 2005's $40 million (annualized 0.28% of average loans). Notably, Q1 charge-offs included $3 million related to borrowers located in areas hard-hit by Hurricane Katrina versus $972,000 in the preceding quarter. Q1-05 net loan charge-offs totaled $25 million, or an annualized 0.17% of average loans. At March 31, 2006, non-performing assets totaled $409 million (0.70 percent of loans and other real estate) compared to $407 million at year-end 2005. Total non-performing assets were 16% below the March 31, 2005 level. Regions continued to return excess capital to shareholders through an active share repurchase program. During the first quarter, 3.7 million common shares were repurchased at an average cost of $34.36 per share. Tangible stockholders' equity to tangible assets was 6.77% at March 31, 2006 compared to 6.64% at year-end 2005. SunTrust's Net Income $1.46, Up 7% PRNewsWire 4-17 SunTrust Banks today reported record net income for the first quarter of 2006 of $531.5 million, up 8% from $492.3 million inQ1-05. Net income per diluted share was also a record $1.46, up 7% from $1.36 in Q1-05. Revenue growth was 9%, and excluding the net gain on sale of factoring assets in the first quarter of 2005 and securities gains and losses, revenue growth was 10% over Q1-05. Loan growth was 13% over this same time frame. Return on average total assets was 1.21% in Q1-06 vs. 1.17% in Q4-05 and 1.24% in Q1-05. Return on average total equity was 12.64% in Q1-06 vs. 12.19% in Q4-05 and 12.39% in Q1-05. The efficiency ratio was 59.80% in Q1-06 vs. 60.20% in Q4-05 and 60.22% in Q1-05. Fully taxable-equivalent net interest income was $1,199.4 million in Q1-06, up 6% from Q1-05. The primary factor driving the fully taxable-equivalent net interest income growth year-over-year was strong loan growth. Loans grew 13% on average from Q1-05. The net interest margin of 3.10% for Q1-06 was unchanged from Q4-05 but down from 3.25% in Q1-05. Total noninterest income was $851.5 million for Q1-06, up a strong 13% from Q1-05. Excluding securities gains and losses and the net gain on sale of factoring assets recorded in Q1-05, total noninterest income grew 15%. A significant portion of the increase resulted from growth in mortgage related income. Net charge-offs in Q1-06 were 0.08% of average loans, down from 0.17% of average loans in Q4-05 and 0.14% of average loans in Q1-05. Net charge-offs were $22.3 million in Q1-06 compared to $49.9 million in Q4-05 and $36.8 million Q1-05. Nonperforming assets were relatively stable in Q1-06 compared to Q4-05, and were down $58.0 million, or 15%, from Q1-05. Nonperforming assets were $334.3 million, or 0.28% of loans, other real estate owned and other repossessed assets as of March 31, 2006 compared to $334.2 million, or 0.29% of loans, other real estate owned and other repossessed assets as of December 31, 2005. UBS Net Income Up 10% BusinessWire 4-18 U.S. Bancorp reported net income of $1,153 million for Q1-06, compared with $1,071 million for Q1-05. Net income of $.63 per diluted share in Q1-06 was higher than the same period of 2005 by 10.5%, or $.06 per diluted share. Return on average assets and return on average common equity were 2.23% and 23.3%, respectively, for Q1-06, compared with returns of 2.21% and 21.9%, respectively, for Q1-05. Total net revenue on a taxable-equivalent basis for the first quarter of 2006 was $206 million (6.6 percent) higher than the first quarter of 2005, primarily reflecting a 16.8 percent increase in noninterest income partially offset by a 1.5 percent decline in net interest income. Noninterest income growth was due to 12.0 percent growth in fee-based revenue across the majority of fee categories driven by organic growth, the expansion in trust and payment processing businesses and the recognition of the derivatives gain, partially offset by the impact of adopting SFAS 156. In addition, there was a favorable change due to $59 million in securities losses in the first quarter of 2005. Net interest margin was 3.80% in Q1-06 vs. 3.88% in Q4-05 and 4.08% in Q1-06. USB's results for Q1-06 improved over Q1-05, as net income increased by $82 million (7.7 percent), primarily due to growth in a majority of fee-based products and lower provision for credit losses due to strong credit quality and the near-term favorable impact of bankruptcy legislation enacted in Q4-05. In addition, results for Q1 were impacted by SFAS 156 (mortgage servicing rights). Secondly, UBS identified certain interest rate swaps that did not qualify for hedge accounting. As a result, the value of these derivatives was recorded as a $44 million trading gain in other noninterest income. Finally, implemented SFAS 123R (stock-based compensation standard). Provision for credit losses for Q1-06 was $115 million, a decrease of $57 million from Q1-05. The decrease in the provision for credit losses year-over-year primarily reflected strong credit quality and the near-term favorable impact of changes in bankruptcy law in Q4-05. Net charge-offs in Q1-06 were $115 million, compared with the Q4-05 net charge-offs of $213 million and Q1-05 net charge-offs of $172 million. Wachovia Reports Net Income of $1.09 vs. $1.01 in Q1-05 PRNewswire 4-18 Wachovia reported net income of $1.73 billion, or $1.09 per share, in Q1-06 compared with $1.62 billion, or $1.01 per share, in Q1-05. Excluding after-tax net merger-related expenses of 3 cents per share in the first quarter of 2006 and 2 cents per share in Q1-05, earnings were $1.77 billion, or $1.12 per share, in Q1-06 compared with $1.65 billion, or $1.03 per share, in Q1-05. Return on average common stockholders' equity was 14.62% in Q1-06 vs. 14.60% in Q4-05 and 13.92% in Q1-05. WB grew revenue 9%, increased net interest income 2% and generated a 17% increase in fee and other income. Net interest margin was 3.21% in Q1-06 vs. 3.25% in Q4-05 and 3.31% in Q1-05. Wells Fargo's EPS Up 10% BusinessWire 4-18 Wells Fargo reported record diluted earnings per common share of $1.19 for Q1-06, compared with $1.08 in Q1-05, up 10 percent. Net income was a record $2.02 billion, up 9% from $1.86 billion in Q1-05. First quarter results for the first time were reduced by $52 million, or $.02 per share, for expensing stock options required under FAS 123R. Net income to average total assets (ROA) was 1.72% in Q1-06 vs. 1.63% in Q4-05 and 1.75% in Q1-05. Net income applicable to common stock to average common stockholders' equity (ROE) was 19.89% in Q1-05 vs. 19.22% in Q4-05 and 19.72% in Q1-05. Revenue of $8.6 billion for Q1-06 grew $466 million, or 6%, from a year ago. Home Mortgage revenue declined $665 million from $1.5 billion in first quarter 2005 to $853 million in Q1-06. Combined revenue of businesses other than Home Mortgage grew 17 percent from Q1-05 to $7.7 billion in Q1-06. Average loans of $311.1 billion in Q1-06 increased 8 percent from Q1-05 and 7 percent (annualized) on a linked-quarter basis. Average commercial and commercial real estate loans increased $11.4 billion, or 11 percent, from Q1-05 and increased $2.6 billion, or 10 percent (annualized), from Q4-05. Average consumer loans increased $10.8 billion, or 6 percent, from Q1-05 (up 21 percent excluding real estate 1-4 family first mortgages), and grew $2.1 billion, or 5 percent (annualized), on a linked-quarter basis (up 14 percent excluding 1-4 family first mortgages). Net interest income for Q1-06 increased 9% from a year ago, due to 9% growth in average earning assets and a relatively stable net interest margin. Net interest income increased 3% (annualized) on a linked-quarter basis due to 7% growth (annualized) in average earning assets and a 1 basis point increase in net interest margin to 4.85%, partially offset by fewer days. Noninterest income increased $49 million, or 1%, from Q1-05. Excluding mortgage banking, noninterest income increased 16% from Q1-05, reflecting strong year-over-year growth in deposit service charges, up 8%; trust and investment fees, up 10%; other fees, largely loan-related, up 8%; insurance, up 8%; equity investments, up $119 million; and the $127 million gain related to the sale of Island Finance's operations in Puerto Rico. Net charge-offs for Q1-06 were $433 million (.56% of average loans outstanding, annualized), compared with $703 million (.91%) during Q4-05, which included $171 million (.22%) for incremental bankruptcies above normalized levels, and $585 million (.83%) during Q1-05, which included $163 million (.23 percent) related to changes in loss recognition rules at Wells Fargo Financial to conform to Federal Financial Institutions Examination Council bank standards for recognizing credit losses. From Henry Sanderson; Dow Jones Newswires 4-18: Wells Fargo Chief Financial Officer Howard Atkins said the company did not need to do acquisitions to maintain growth at the company. "We believe we will continue to grow the organization as we have for the last five years, which is getting double-digit growth organically," Atkins said in a CNBC interview Tuesday. Atkins said the ability to cross-sell across the company's 80 different type of businesses, and the company had good consumer and commercial growth. However, he said the company would not rule out acquisitions if they were more affordable in the marketplace. April Ratings Changes On 4-18 Friedman Billings Downgraded RF from Outperform to Market Perform. On 4-06 Keefe Bruyette Initiated coverage of USB at Market Perform. ASBC Reports EPS of 60 Cents - up from 59 Cents in Q1-05 PRNewswire 4-20 Associated Banc-Corp earned $.60 per diluted share in Q1-06, compared to $.59 per diluted share in Q1-05. Net income for Q1-06 was $81.7 million, up 5.5% compared to Q1-05 net income of $77.5 million. Analysts polled by Thomson First Call were expecting earnings of 61 cents a share. Book value per share rose to $16.98 as of March 31, 2006, up 8.7% compared to a year earlier. For Q1-06, return on average assets was 1.52% and return on average equity was 14.16%, compared to ROA of 1.54% and ROE of 15.52% for Q1-05. Associated's net interest income for Q1-06 was $166.9 million, compared to $165.9 million and $175.6 million for Q1-05 and Q4-05, respectively. The Q1-06 net interest margin was 3.48%, compared to 3.68% for Q1-05, and 3.59% for Q4-05. Net interest income and the net interest margin were pressured by the interest rate environment, resulting in a rising cost of funds that exceeded the increased yield on earning assets. The late-March 2006 investment sale activity had minimal impact on the margin for Q1. Of the 11 basis point decline in the margin from Q4, approximately 6 basis points was attributable to the seasonal outflow of net free funds (notably non-interest bearing demand deposits), with the remainder from the combination of rate, volume and mix changes. Core noninterest revenues grew between the first quarter periods with increases in trust service fees (7%), service charges on deposits (12%), card-based and other nondeposit fees (9%), and retail commissions (5%). Compared to Q4-05, seasonal trends impacted retail commissions (up $1.9 million) and service charges (down $2.1 million). Trust fees, as well as card-based and other nondeposit fees, were relatively flat between Q1-06 and Q4-05. At March 31, 2006, the allowance for loan losses represented 1.31% of total loans and covered 185% of nonperforming loans. Nonperforming loans rose to $110 million, representing 0.71% of total loans, compared to $99 million or 0.65% of loans at year-end 2005. The provision for loan losses was $4.5 million, $2.3 million, and $3.7 million, respectively, for Q1-06, Q1-05, and Q4-05, approximating net charge-off levels for each period. Q1-06 net charge-offs were 0.12% of average loans, compared to 0.09% for the full year 2005. Associated repurchased 4 million shares of its common stock in Q1-06 at an average price of $33.89 per share. During Q1, ASBC paid a dividend of 27 cents per share, up 8% from the year-earlier dividend. Associated's Board approved a dividend of 29 cents per share for the second quarter, representing a 7% increase over the previous quarterly dividend. AmSouth Reports Q1-06 EPS of 52 Cents vs. 50 Cents in Q1-05 Businesswire 4-18 AmSouth Bancorporation reported earnings for Q1-06 of $.52 per diluted share, compared to $.50 per diluted share reported for Q1-05. Net income for Q1-06 was $181.0 million versus $178.6 million for Q1-05. AmSouth's first quarter performance resulted in a return on average equity of 20.5%, a return on average assets of 1.39%, and an efficiency ratio of 52.5%. Net interest income in Q1-06 grew to $397.7 million, or an annual rate of 5.7% compared with the prior quarter, and the net interest margin expanded 5 basis points during the quarter to 3.42%. Strong loan growth continued, particularly in Commercial Real Estate, which grew 25.8%, and Residential Mortgage lending, which grew 15.4%, compared with Q1-05. Low-cost deposits grew $1.3 billion or 5.6% during the same period. Non-interest revenue, which includes earnings from service charges, trust, investment services, interchange, and other sources of fee income, was $219.7 million for the quarter. Noninterest expenses in Q1 were $330.0 million, reflecting increases in personnel costs and marketing expenses, partially offset by lower professional fees. Underlying credit quality remained strong despite charge-offs of two airline leases, which had been significantly reserved for previously. Net charge-offs were 0.47% of average net loans in Q1, increasing 24 basis points compared with Q1-05. Without the effect of the airline leases, net charge-offs would have been 0.17%, a 6 basis point decline. The ratio of loan loss allowance to total loans was 0.96% at March 31, 2006, a level commensurate with our improving credit risk profile. Excluding the airline leases, the loan loss provision exceeded net charge-offs, representing amounts attributable to loan growth and other factors. Total nonperforming assets at March 31, 2006, were $100.3 million, or 0.27% of loans net of unearned income, foreclosed properties and repossessions, compared to $122.9 million, or 0.34%, in the previous quarter. BXS Reports Net Income of 47 Cents - up from 40 Cents in Q1-05 PRNewswire 4-19 BancorpSouth's net income increased 18.9% for Q1-06 to $37.7 million from $31.7 million for Q1-05. Net income per diluted share for Q1-06 increased 17.5% to $0.47 from $0.40 for Q1-05. Return on average assets was 1.30% in Q1-06 vs. 1.18% in Q1-05. Return on common equity was 15.72% in Q1-06 vs. 14.02% in Q1-05. Interest revenue for Q1-06 increased 21.0%, or $27.8 million, to $159.9 million from $132.1 million for Q1-05 and 6.6% from $150.0 million for Q4-05. Interest expense increased 42.2%, or $19.0 million, to $64.0 million for Q1-06 from $45.0 million for Q1-05 and 10.8% from $57.7 million for Q4-05. The average taxable equivalent yield on earning assets increased to 6.16% for Q1-06 from 5.48% for Q1-05 and 5.86% for Q4-05. The average rate paid on interest bearing liabilities was 2.91% for Q1-06, compared with 2.17% for Q1-05 and 2.69% for Q4-05. Net interest revenue increased 10.1% to $95.9 million for Q1-06 from $87.1 million for Q1-05 and 4.0% from $92.3 million for Q4-05. Net interest margin was 3.73% for Q1-06 compared with 3.64% for both Q1-05 and Q4-05. Noninterest revenue was $52.8 million for Q1-06, down 2.1% from $53.9 million for Q1-05. As previously noted, these results include the impact of a $1.9 million net decrease in mortgage revenue related to changes in the value of BancorpSouth's mortgage servicing asset for Q1-06 compared with Q1-05. In addition, consistent with the past, BXS sold its accumulated inventory of government-guaranteed student loans, producing a $2.4 million gain for Q1-06 compared with a $2.5 million gain for Q1-05. Results for Q1-05 also benefited from a $1.7 million gain on the sale of BXS's membership in an electronic banking network. Non-performing loans and leases declined 18.7% to $26.0 million, or 0.35% of loans and leases, at March 31, 2006, from $32.0 million, or 0.46% of loans and leases, at March 31, 2005, and improved 9.7% from $28.8 million, or 0.39% of loans and leases, at December 31, 2005. The allowance for credit losses was 1.30% of loans and leases at March 31, 2006, compared with 1.34% of loans and leases at March 31, 2005 and 1.38% of loans and leases at December 31, 2005. Compass EPS Up 15% BuesinesWire 4-17 Compass Bancshares reported record earnings of $107.9 million for Q1-06, a 16% increase over the $93 million earned during Q1-05. For the same time period, earnings per share increased 15% to $0.85 from $0.74 in the prior year. Return on average assets and return on average shareholders' equity for Q1-06 were 1.42% and 19.03%, respectively. D. Paul Jones, Jr., Compass chairman and CEO, stated, "Compass delivered another quarter of outstanding profitable growth highlighted by balanced, double-digit revenue growth. Jones added, "Compass' record financial performance was fueled by a 12% increase in revenue as both net interest income and noninterest income posted double-digit gains. Net interest income increased 12% from year ago levels driven by solid loan growth and continued low-cost deposit generation. Most of our major fee-based businesses generated solid results as noninterest income increased 10% from prior year levels. At the same time, noninterest expense growth was well contained at 10% including the impact of newly opened banking offices and our acquisition of TexasBank. Our ability to continue to grow top-line revenue, coupled with good expense management, enabled us to record positive operating leverage as our efficiency ratio improved 203 basis points from year ago levels." "While our percent net interest margin increased to 3.70% from 3.59% a year ago, we recognize the challenges given a flat yield curve and expectations that interest rates will continue to rise. Our focus, however, remains on generating high-quality loans and continued growth of low-cost deposits. Accordingly, during Q1 we registered a $28.7 million increase in net interest income compared to a year ago. Additionally, during the quarter we modestly repositioned our balance sheet by terminating $400 million of favorable debt financing at a gain of $14.9 million and selling $470 million of investment securities available for sale at a loss of $14.8 million. While the net cost of this transaction on the quarter was neutral, it better positions our balance sheet for the current interest rate environment." "Importantly, loan growth did not come at the expense of maintaining sound credit quality standards. Net charge-offs as a percentage of average loans showed marked improvement, decreasing to 0.32% compared to 0.42% in Q1-05. Nonperforming assets as a percentage of loans and other real estate decreased to 0.30% compared to 0.36$ at the end of Q1-05," Jones said. CBCF Reports Net Income of 48 Cents - up from 46 Cents in Q1-05 PRNewswire 4-20 Citizens Banking Corporation announced net income of $20.8 million Q1-06. This represents an increase of $1.9 million or 9.9% over Q4-05 net income of $18.9 million and an increase of $0.7 million or 3.4% over Q1-05 net income of $20.1 million. Diluted net income per share was $0.48, compared with $0.44 for the fourth quarter of 2005 and $0.46 for Q1-05. Annualized returns on average assets and average equity during Q1-06 were 1.10% and 12.86%, respectively, compared with 0.97% and 11.46% for Q4-05 and 1.05% and 12.54% for Q1-05. Net interest income was $67.5 million in Q1-06 compared with $69.1 million in Q4-05 and $68.2 million in Q1-05. The decreases in net interest income compared with Q4-05 and Q1-05 were driven by declines in average earning assets of $106.8 million and $75.3 million, respectively, partially offset by a higher net interest margin. Net interest margin was 3.97% for Q1-06 compared with 3.95% for Q4-05 and 3.96% for Q1-05. The increase in net interest margin compared with Q4-05 and Q1-05 resulted from the restructuring of the investment portfolio in Q4-05, largely offset by shifts within the deposit portfolio from lower cost savings and transaction products to higher cost savings products and time deposits as well as continued pricing pressure on all loans. Noninterest income for Q1-06 was $25.6 million, an increase of $14.6 million from Q4-05 and an increase of $3.1 million or 13.8% from Q1-05. Service charges on deposit accounts for Q1-06 were essentially unchanged from Q4-05 at $8.9 million and increased $0.6 million or 7.1% from Q1-05. The increase from Q1-05 was largely due to higher overdraft fee income. Brokerage and investment fees for Q1-06 were $2.0 million, a decrease of $0.4 million or 22.2% from Q4-05 and decreased $0.1 million or 5.2% from Q1-05. All other noninterest income categories, which include ATM network user fees, bankcard fees, fair value change in CD swap derivatives, other income, and investment securities gains (losses), increased $15.2 million over Q4-05 to $8.1 million and increased $2.3 million or 40.1% over Q1-05. The increase over Q4-05 was primarily the result of a $3.6 million charge on the fair value change in CD swap derivatives and the $9.0 million net loss on the sales of securities during Q4-05 as well as a $2.9 million gain on the sale of the former downtown Royal Oak office. Nonperforming assets totaled $36.5 million at March 31, 2006, a decrease of $3.4 million or 8.5% compared with December 31, 2005 and a decrease of $7.3 million or 16.7% compared with March 31, 2005. The decrease from Q1-05 is primarily the result of the third quarter 2005 sale of nonperforming commercial loans with a balance of $6.7 million. Nonperforming assets at March 31, 2006 represented 0.65% of total loans plus other repossessed assets acquired compared with 0.71% at December 31, 2005 and 0.80% at March 31, 2005. Net charge-offs increased to $4.0 million or 0.29% of average portfolio loans in Q1-06 compared with a net recovery of $5.1 million or (0.36)% of average portfolio loans in Q4-05 and $4.2 million or 0.32% of average portfolio loans in Q1-05. The increase over Q4-05 was primarily due to a $9.1 million insurance settlement received in that quarter, which was accounted for as a loan loss recovery on previous losses that were charged to the allowance for loan losses. Excluding the insurance settlement, which reduced net charge-offs as a percent of average portfolio loans by 0.65%, the Q4-05 net charge-offs as a percent of average portfolio loans would have been 0.29%. CNB Reports Earnings Per Share of $0.42, up 24% Businesswire 4-19 The Colonial BancGroup Chairman, CEO and President, Robert Lowder, announced that CNB had record net income of $65 million for Q1-06, a 35% increase over the $48 million recorded in Q1-05. Diluted earnings per share were $0.42, a 24% increase over the $0.34 reported in Q1-05. Diluted earnings per share increased $0.02 over Q4-05. "We ended the first quarter with particularly strong results. Colonial continued its growth story by increasing revenues 14% and increasing average loans and average deposits by 19% and 26%, respectively, over Q1-05. Revenue growth and expense savings resulted in improved operating leverage in the first quarter. The efficiency ratio improved 275 basis points to 54.73%," said Mr. Lowder. Net interest income [$118 million] increased 3% annualized over Q4-05. This increase was due primarily to an 8%, annualized, growth in average earning assets, primarily from loans, and a one basis point increase in net interest margin to 3.86%. This quarter represents the tenth consecutive quarter that CNB has expanded net interest margin. Noninterest income [$41 million] increased 53%, whereas core noninterest income increased 6% over Q1-05. Service charges on deposit accounts, electronic banking, mortgage banking and mortgage warehouse fees showed growth over Q1-05. Several nonrecurring items are included in noninterest income in the quarter. Colonial completed the sale of $481 million of securities resulting in a gain of $1.7 million and terminated certain interest rate swaps for a $2.5 million gain. The Company also sold its $9 million investment in Goldleaf Technologies and recognized a gain of $2.8 million in the first quarter. Colonial's nonperforming assets ratio was 0.24% at March 31, 2006 compared to 0.29% at March 31, 2005 and 0.21% at December 31, 2005. Net charge-offs were an annualized 0.26% of average loans for the first quarter compared to 0.21% for Q1-05. CYN Reports Q1-06 Net Income of $1.12 vs. $1.09 in Q1-05 Businesswire 4-19 City National Corporation, the parent company of wholly-owned City National Bank, today reported an increase in net income to $57.2 million, or $1.12 per share, compared with $55.5 million, or $1.09 per share, for the first quarter of 2005. First-quarter revenue (net interest income plus noninterest income) increased 5 percent to $207.3 million. Return on average assets was 1.57% in Q1-06 vs. 1.62% in Q1-05. Return on average shareholders' equity was 15.68% in Q1-06 vs. 16.63% in Q1-05. Fully taxable-equivalent net interest income reached $155.5 million in Q1-06, up 4% from $149.9 million for Q1-05. Fully taxable-equivalent net interest income in Q4-05 was $163 million. First-quarter loans grew significantly. Average balances reached $9.6 billion, up 12% from one year ago and 5% from Q4-05. Commercial loans increased 24% from Q1-05 and 8% from Q4-05. Residential mortgage lending rose 13% from one year ago and 2% from Q4-05. Commercial mortgage lending was up 1% from Q1-05 and 2% from Q4-05. Real estate construction loans declined 9% from one year ago, but grew 2% from Q4-05. Higher asset yields also contributed to Q1 net interest income growth. City National's yield on earning assets reached 5.98%, up from 5.43% in Q1-05. At March 31, 2006, the bank's prime rate was 7.75%, 200 basis points higher than it was at the same time last year. CYN's Q1 net interest margin was 4.62%, compared with 4.75% during the same period last year and 4.85% in Q4-05. First-quarter 2006 noninterest income was $54.9 million, 9% higher than Q1-05, due primarily to the continuing growth of City National's wealth management and international businesses. Asset quality remains strong. At March 31, 2006, nonaccrual loans were $14.6 million, compared with $29.9 million at the same time last year and $14.4 million in Q4-05. Recoveries exceeded charge-offs by $2.7 million, and for the 11th consecutive quarter, City National made no provision for credit losses. City National's management has revised its previously announced expectation of 9% to 12% earnings per share growth for 2006, and now expects earnings per share to grow between 8% and 10% for the year. During Q1-06, City National repurchased 41,200 of outstanding shares at an average cost of $73.64. CNY is currently authorized to repurchase as many as 337,800 additional shares. There were 826,230 treasury shares at March 31, 2006. For the 11th consecutive year, City National also increased its annual dividend. On January 19, 2005, the company raised its common stock cash dividend 14% to $1.64 per share. FNB Reports Net Income of 27 Cents - up from 28 Cents in Q1-05 PRNewswire 4-19 FNB reported Q1-06 net income of $15.8 million, or $.27 per diluted share. These results compare to $14.9 million, or $.28 per diluted share, for Q1-05 and net income of $4.7 million, or $.08 per diluted share, for Q4-05. In Q4-05, FNB recorded after tax charges of $11.0 million or $.19 per diluted share as a result of a balance sheet restructuring, efficiency initiatives and merger costs. FNB's return on equity for Q1-06 was 13.3%, its return on tangible equity was 25.5% and its return on assets was 1.14%. Fully tax equivalent net interest income for Q1-06 was up approximately 1% over the same period last year. The net interest margin in Q1-06 was 3.82%, lower than the 3.97% in same period last year but 4 basis points ahead of the 3.78% in the fourth quarter of last year. The improved performance on a sequential quarter basis is principally attributable to the balance sheet restructuring completed at the end of last year as well as strong growth of higher-yielding commercial loans. Non-interest income for Q1-06 was $20.1 million compared to $18.7 million in the same period last year, representing a 7.3% increase. This improvement was primarily due to the acquisitions completed in 2005, as well as an 8.8% year-over-year increase in insurance revenues primarily driven by a 48.7% increase in contingent fees. Annualized net charge-offs for Q1-06 improved to 37 basis points of average loans, compared to 43 basis points for Q1-05 and 48 basis points in Q4-05. Non-performing loans to total loans were 81 basis points for Q1-06, representing improvements from 88 basis points in both the first quarter last year and on a sequential quarter basis. As a result of these improving asset quality trends, the provision for loan losses was reduced to $3.0 million for Q1-06, compared to $3.7 million in the fourth quarter last year and $2.3 million in Q1-05. Shareholders' equity at March 31, 2006 was $481.3 million. FNB's equity to assets ratio was 8.6%, regulatory leverage capital ratio was 7.1% and the tangible capital ratio was 4.9% at the end of Q1-06. The equity to assets and tangible capital ratio continue to show strong improvement, having increased from the first quarter 2005 ratios of 8.1% and 4.4%, respectively. First Horizon National Corp EPS Doubles on Asset Sales Primezone 4-19 First Horizon National Corporation announced first quarter 2006 earnings of $215.0 million or $1.67 per diluted share. In 2005, first quarter earnings were $105.8 million or $.83 per diluted share. FHN's performance in first quarter 2006 was impacted by transactions through which the incremental capital provided by the merchant divestiture was utilized, various other transactions and accounting issues. The results for first quarter 2006 included earnings from discontinued operations of $210.3 million or $1.63 per diluted share related to the sale of the merchant processing business. Mortgage banking experienced foreclosure losses and other expenses of $13.2 million compared to historical levels of approximately $2 million to $3 million related to nonprime mortgage loans. Going forward, profitability of the nonprime origination business is expected to return to normal levels. HBAN Announces New 15 Million Share Repurchase Authorization PRNewswire 4-20 Huntington Bancshares also announced that the board of directors today authorized a new share repurchase program for up to 15 million shares. This represents 6% of the 233 million shares outstanding as of March 31, 2006, and $356 million worth of stock based on the closing price of $23.74 on April 19, 2006. TCB Reports EPS of 45 Cents vs. 47 Cents in Q1-05 Businesswire 4-19 TCF Financial [TCB]reported diluted earnings per share of 45 cents for Q1-06, compared with 47 cents for Q1-05. Net income for Q1-06 was $58.2 million, compared with $63.5 million for Q1-05. Q1-05 included $10.9 million in gains on asset sales and a $3.3 million commercial business loan recovery for a combined after-tax impact of seven cents per diluted share. Q1-06 includes $4.5 million in net gains on sales of assets, including a $1.6 million net gain on the sale of mortgage servicing rights for a combined after-tax impact of two cents per diluted share. For Q1-06, return on average assets was 1.71% and return on average common equity was 23.82%, compared with 2.03% and 27.18%, respectively, for Q1-05. TCF's net interest income in Q1-06 was $131.2 million, up $2.1 million, or 1.6%, from Q1-05 and up $1.9 million, or 1.5%, from Q4-05. Net interest margin in Q1-06 was 4.25%, compared with 4.56% for Q1-05 and 4.31% for Q4-05. Total non-interest income was $117.5 million for Q1-06, up $5.4 million, or 4.9%, from Q1-05. Banking fees and service charges increased 6.2% from Q1-05. Card revenues totaled $21.3 million for Q1-06, up 20.5% over Q1-05. The increase in card revenues was primarily attributable to an increase in active accounts and customer transaction volumes. Leasing and equipment finance revenues were $11.9 million for Q1-06, up $1.2 million, or 11.4%, from Q1-05, primarily due to higher operating lease revenues. Other revenue increased $3.2 million to $11.2 million from Q1-05. At March 31, 2006, TCF's allowance for loan and lease losses totaled $59.4 million, or .56 percent of loans and leases, compared with $60.4 million, or .59 percent, at December 31, 2005. The provision for credit losses for 2006 was $1.5 million, up $4.9 million from Q1-05, primarily due to a $3.3 million commercial business loan recovery recorded in Q1-05. Net loan and lease charge-offs in Q1-06 were $2.5 million, or .10% (annualized) of average loans and leases, compared with net loan and lease recoveries of $441 thousand, or .02% (annualized) for Q1-05. SKYF Reports EPS of 46 Cents - up from 29 Cents in Q1-05 PRNewswire 4-19 Sky Financial Group reported 2006 first quarter net income of $50.6 million, or $.46 per diluted share, compared to $30.7 million, or $.29 per diluted share, for Q1-05. Annualized return on average equity was 13.07% in Q1-06 vs. 8.51% in Q1-05. Return on average assets was 1.31% in Q1 vs. 0.83% in Q1-05. Q1-05 was negatively affected by a higher provision for credit losses compared to Q1-06. Net interest income for the first quarter was $132.8 million, up 7.1% from $124.0 million in Q1-05. The efficiency ratio was 55.81% in Q1-06 vs. 56.41% in Q1-05. Net interest margin was 3.78% in Q1-06 vs. 3.69% in Q1-05. Non-interest revenues were $56.7 million for Q1-06, up 10.1% from $51.5 million in Q1-05, which includes a $0.9 million decrease in net gains on securities transactions. Non-interest revenues, excluding securities transactions, were up 12.0%, including the benefit from acquisitions, compared to the same quarter in 2005. The provision for credit losses for the first quarter was $7.2 million, decreasing from $30.8 million in Q1-05. The Q1-05 provision for credit losses was higher due to higher net charge-offs in the quarter, primarily from two large commercial credits and the sale of a group of non-performing consumer loans. In addition, the 2006 provision for credit losses reflects an improving credit risk profile achieved over the last year. Net credit losses for the quarter were $8.0 million, or .29% annualized to average total loans, compared to $31.7 million, or 1.21%, for Q1-05. At March 31, 2006, non-performing loans to total loans was 1.16% versus 1.07% at the end of 2005 and 1.18% at March 31, 2005. Total non- performing loans at March 31, 2006, were $128.9 million, an increase of $9.4 million from $119.5 million at December 31, 2005 and an increase of $2.9 million from $126.0 million at March 31, 2005. Commenting on 2006, Kevin Thompson, chief financial officer, stated, "We are pleased with our progress in the first quarter of 2006 and are poised for a solid performance throughout the remainder of 2006. We are maintaining our projection of 2006 diluted earnings per share on a net income, or GAAP basis, of $1.90 to $1.95 per diluted share." UnionBanCal Reports Q1-06 Earnings Per Share of $1.24 Businesswire 4-20 UnionBanCal Creported Q1-06 net income of $172.9 million, or $1.18 per diluted common share, and income from continuing operations of $181.5 million, or $1.24 per diluted common share. Excluding a positive tax adjustment of $0.07 per diluted common share last year, Q1-06 income from continuing operations per diluted common share increased 9.7%. For Q1-06, total revenue (taxable-equivalent net interest income plus noninterest income) was $684 million, an increase of $42 million, or 6.5% compared with Q1-05. Net interest income increased 6.8%, and noninterest income increased 6.0%. Return on average stockholders' equity from continuing operations was 17.32% in Q1-06 vs. 14.33% in Q4-05 and 16.21% in Q1-05. Return on average assets from continuing operations was 1.57% in Q1-06 vs. 1.33% in Q4-05 and 1.53% in Q1-05. Net interest income was $466 million in Q1-06, up $30 million, or 6.8%, from Q1-05, primarily due to strong growth in loans. Average earning assets increased $1.4 billion, or 3.4%, primarily due to a $4.3 billion, or 14.6%, increase in average loans, while average securities declined $2.9 billion, or 25.8%. Compared to Q1-05, average noninterest bearing deposits decreased $649 million, or 3.6%. The average yield on earning assets of $43.1 billion was 5.77%, up 83 basis points over first quarter last year, with the average loan yield increasing 58 basis points. The average rate on interest bearing liabilities of $24.5 billion was 2.49%, up 118 basis points, reflecting both higher short-term interest rates and heightened competition for deposits, compared with Q1-05. Average interest bearing deposits were $21.3 billion and the weighted average rate was 2.19%. The net interest margin in Q1-06 was 4.36%, compared with 4.22% in Q1-05, an increase of 14 basis points. In Q1-06, noninterest income was $218 million, up $12 million, or 6.0%, from Q1-05. Service charges on deposit accounts increased 3.0%, primarily due to changes in the overdraft and NSF fee structure, partially offset by lower account analysis fees stemming from an increase in the earnings credit rate on deposit balances. Compared with Q4-05, Q1-06 noninterest income increased $34 million, or 18.8%. Nonperforming assets at 3-31-06, were $42 million, or 0.09% of total assets. This compares with $62 million, or 0.12% of total assets, at 12-31-05, and $101 million, or 0.20% of total assets, at 3-31-05. Nonperforming assets declined 58% between Q1-05 and Q1-06. In Q1-06, the total provision for credit losses was negative $10.0 million. The total provision for credit losses was negative $5.0 million in Q4-05 and negative $9.1 million in Q1-05. UB currently estimates that Q2-06 EPS from continuing operations will be in the range of $1.26 to $1.31, including estimated stock option expense of $0.02/share and a total provision for credit losses of approximately zero. UB expects to record a net loss from discontinued operations of approximately $0.05/share. Therefore, net income per share is expected to be in the range of $1.21 to $1.26. For full year 2006, UB currently estimates that EPS from continuing operations will be in the range of $5.30 to $5.50, including estimated stock option expense of $0.10/share and an estimated total provision for credit losses of $10 million. UB expects to record a net loss from discontinued operations of approximately $0.11/share. Therefore, net income per diluted common share is expected to be in the range of $5.19 to $5.39. Wilmington Trust Reports EPS of 64 Cents - up 12% from Q1-05 Businesswire 4-21 Wilmington Trust Corporation reported that net income for Q1-06 was $44.1 million. This was 13% higher than for the year-ago first quarter. Earnings per share (on a diluted basis) for Q1-06 were $0.64. This was 12% higher than for the year-ago first quarter. The Board of Directors raised the quarterly cash dividend 5%, from $0.30 per share to $0.315 per share. On an annualized basis, this increased the dividend from $1.20 per share to $1.26 per share. On an annualized basis, first quarter 2006 results produced a return on average assets of 1.76% and a return on average equity of 17.42%. The corresponding returns for Q1-05 were 1.68% and 17.32%, respectively. Net interest income was 13% higher than Q1-05. On a linked-quarter basis, net interest income fell slightly because there were two fewer days in Q1-06 than in Q4-05. Net interest margin was 3.77% in Q1-06, 3.74% in Q4-05 and 3.64% in Q1-05. Factors in the improvement of net interest margin included the short-term interest rate environment, the company's slight asset sensitivity, modest deposit pricing pressure, and the closely matched repricing characteristics of floating rate loans and purchased funding. Approximately 77% of total loans were floating rate loans, most of which reprice within 30 to 45 days of a rate increase. In this environment, the company's loan yields rose at a faster pace than its deposit rates. The net charge-off ratio was 2 basis points. In comparison, the net charge-off ratio for the 2005 fourth quarter was 5 basis points. For the year-ago first quarter, it was 4 basis points. Net charge-offs were $1.8 million. In comparison, net charge-offs were $4.0 million for Q4-05 and $2.4 million for the year-ago first quarter. Banks Have No Exposure to Mortgages? Caroline Baum, Bloomberg 4-17 Every time the subject of banks making risky home loans to bad credit risks - no money down, no questions asked - the usual retort is that banks sell the mortgages. They aren't at risk. It doesn't matter if the loan stops performing because they don't own it. That's not exactly true. According to the Federal Reserve's Flow of Funds report for the fourth quarter of 2005, mortgages accounted for 32% of commercial banks' financial assets. Throw in agency- and mortgage-backed securities, and the exposure to outright and securitized mortgage loans is 44%. What happens to housing matters to the economy - and not just because of the effect that reduced equity extraction would have on consumer spending if home prices were to stabilize or decline. It matters because mortgages are the big kahuna on banks' balance sheets. If enough of these loans go bad, as they did in the late 1980s and early 1990s, it could impair the banking system's ability to extend credit, with all that implies for the economy. If history is any guide, when the banking system is broken, the economy doesn't work. The Great Depression, the savings-and-loan crisis in the U.S. in the early 1990s, and the lost decade-plus (1990s and early 2000s) in Japan all saw an extended period of bank balance-sheet contraction, which hampered economic growth. In the early 1990s, which saw the biggest number of U.S. bank failures since the 1930s, it took an extended period of low interest rates for the economy to regain its footing. In the 1980s housing boom, the villain was speculative building. After the bust, regulators clipped builders' wings. This time around, it's been speculative buyers who have provided the tailwind to the housing boom. ``We've outsourced the speculation,'' says economist Michael Carliner of the National Association of Home Builders in Washington. ``The non-owner-occupied share of mortgages has been rising since the mid 1990s.'' According to LoanPerformance, a unit of First American Corp. that maintains the two largest databases of mortgage information in the country, 17.1% of purchase loans were investor or second-home loans. As recently as 2000, that share was 7.7%. Of course, there's an incentive to lie about the nature of a home purchase, claiming primary residence rather than second or investment home to avoid the higher interest rate. While the premium for a mortgage on a non-owner-occupied home has come down over time, encouraging buyers to be more truthful, the statistics probably understate the number of homes bought for investment. Turning to the type of loans used to finance home purchases, interest-only and negative amortization ARMs were almost 42% of the market last year, up from 32.6% in 2004, according to LoanPerformance's asset- and mortgage-backed database, which does not include Fannie Mae and Freddie Mac securities. As recently at 2001, only 1.9% of purchases were financed with exotic mortgages. The good news is that to date, the delinquency rates for loans on owner-occupied homes and second/investment homes are almost the same, according to LoanPerformance. That doesn't mean there's nothing to worry about, according to Andy Laperriere, a political economist with International Strategy & Investment. In an article in the April 10 issue of the Weekly Standard, Laperriere outlined some potential `Housing Bubble Trouble.' [1] 43% of first-time home buyers made no down payment last year, according to a study by First American Corp. [2] 22% of the borrowers with initial interest payments of 2.5% or less have negative equity in their homes; 40% have less than 40% equity. [3] About one-quarter of the jobs created since the 2001 recession have been in construction, real estate and mortgage finance. The press has been filled with stories of folks buying houses for the sole purpose of flipping them in a year for a 25% profit. Even if the idea of buying a home for the steady rental income had crossed their minds, they would have been disappointed to see how divorced prices were from rents, Laperriere writes. When prices stop appreciating, the speculative tailwind behind the housing market will abate. At that point, the true measure of outright speculation versus good old-fashioned home ownership should become apparent. The froth in the housing market finally caught the attention of the regulators last December. The Office of the Comptroller of the Currency, the Fed and the other financial regulatory agencies issued `guidance' on `non-traditional mortgage products,' highlighting the potential risks and recommending banks perform due diligence on borrowers' ability to repay their loans. It would certainly be a first if regulators got into the act before any fallout occurred. April Ratings Changes On 4-04 Ryan, Beck & Co Initiated coverage of CMA at Market Perform. On 4-19 Friedman Billings Upgraded ASO from Market Perform to Outperform. On 4-20 Friedman Billings Downgraded CYN from Outperform to Market Perform, Sandler O'Neill Downgraded CYN from Buy to Hold, Sanders Morris Harris Downgraded CYN from Buy to Hold, Ryan, Beck Upgraded CYN from Market Perform to Outperform and Lehman Brothers Upgraded CYN from Equal-weight to Overweight. On 4-21 Ryan, Beck Downgraded ASBC from Outperform to Market Perform, Friedman Billings Downgraded ASBC from Outperform to Market Perform, and KeyBanc Capital Mkts / McDonald Downgraded ASBC from Aggressive Buy to Buy. Home Page Factoids Previous Update |