Reply To: Big Banks Kick Off First Quarter Earnings Season with Citigroup, JPMorgan, PNC and Wells Fargo


Financial-related stocks received mixed reactions to earnings reports this morning.

M&T Bank (MTB 117.65, +1.06, +0.9%) beats by $0.05

The bank beat expectations for both its earnings and revenue. “These results reflect loan growth, steady credit quality, a strong liquidity position and, as in past years, seasonally higher salaries and employee benefits expense,” the company’s CFO said.

Charles Schwab (SCHW 48.91, -1.86, -3.7%) reported better than expected earnings

Q1 adjusted EPS of $0.93, topping the average analyst estimate of $0.90, fell from $1.07 in Q4 2022 and climbed from $0.77 in the year-ago quarter.
Net revenue of $5.12B, falling short of the $5.13B consensus, dipped from $5.50B in Q4 and rose from $4.67B in Q1 of last year.
Net interest revenue came in at $2.77B for the three months ended March 31, down from $3.03B in the prior quarter and up from $2.18B in Q1 2022.
Asset management and administration fees were $1.12B compared with $1.05B in Q4 and $1.07B a year before.
Trading revenue of $892M vs. $895M in Q4 and $963M in Q1 2022.
Bank deposit account balances of $106.5B dropped 16% from Q4 and 31% from the year-earlier period. Meantime, money market funds of $357.8B surged 28% from Q4 and 150% from a year ago.
Total expenses, excluding interest, advanced to $3.01B from $2.90B in Q4 and from $2.83B in Q1 2022.

State Street (STT 70.75, -9.28, -11.6%) reported below-consensus earnings.

Q1 adjusted EPS of $1.52, trailing the average analyst estimate of $ 1.64, fell from $1.91 in Q4 2022 and from $1.57 in the year-earlier quarter. Revenue of $3.10B, vs. $3.13B consensus, slipped from $3.16B in Q4 and rose slightly from $3.08B in Q1 2022.
Fee income was $2.34B compared with $2.36B in Q4 and $2.57B in Q1 of last year, mostly reflecting the impact of lower average market levels on servicing and management fees, lower FX trading services and lower Front office software and data revenue, partially offset by higher Securities finance revenue and Other fee revenue.
Assets under custody or administration came in at $37.6T, up 2% from the prior quarter and down 10% from a year ago.
Offsetting fee revenue headwinds, net interest income of $766M slipped 3% from Q4 and surged 50% from Q1 2022, thanks to the rising interest rate environment.
Provision for credit losses rose to $44M from $10M in Q4, amid an increasingly uncertain economic outlook.
Total expenses of $2.37B vs. $2.26B in the previous quarter and $2.33B in Q1 2022.

Going forward, “we are optimistic about client onboardings and we expect revenue growth in the coming quarter,” said CEO Ron O’Hanley.