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Tuesday, January 17, 2012

Well They Did It Again, But Leave Us With Empty Promises in the Citi (WFC) (MTB) (C)

NEW YORK - Together, Wells Fargo shareholders breached $30 in premarket trading a level not seen in months as the San Francisco based bank reported record results today and overall clean results. This was the first quarter since the close of the Wachovia acquisition that Wells Fargo saw linked quarter revenue growth. Revenue growth has been an issue for the company as purchased impaired loans provide a revenue boost but not an earnings boost. As a loan is purchase impaired it has a higher yield. These loans have gone down over time.

Wells reported net income of $4.1 billion or 73 cents a share. After preferred dividends the company made $3.9 billion. Interest income increased $300 million to $12.4 billion. Funding costs continued to fall. The tier 1 common ratio grew to a ridiculous 9.5%. WFC also returned over 16.5% on average tangible equity.

Citigroup also reported today. The company disappointed investors on every conceivable metric and are now bringing down king pin, Bank of America's stock who will report on Thursday. Citi showed a $400 million revenue drop linked quarter to $17.8 billion. The company made $1.2 billion in profit or 38 cents a share. Which is down sharply from the $1.23 a share in their last quarter. The difference was a near $600 million in trading losses compared to $2 billion in gains in their last quarter. Citi has been plagued by problems since the financial crisis as it tries to downsize its operations.

M&T Bank also reported. The bank whose CEO is fresh off his "Banker of the Year" award. American Banker, the company awarding it may want their award back. Net income in the recent quarter dropped to $148 million or $1.04 a share. M&T says that one time charges decreased earnings by $48 million or 38 cents a share. Provisions also dropped quarter over quarter.

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