In my most recent post, I reported that the Largest Big Nine US Financial Corps, with Pretax Income of more than $1 bil in either the 4Q 2011 or the 4Q 2010, registered a solid 4Q 2011 Total Pretax Earnings increase of 15%, but with very low quality earnings, due mainly to the substantial reduction in Provision for Credit Losses recorded in the 4Q 2011 as compared with the prior year's quarter. These Big Nine are:
Bank of America
Wells Fargo
JPMorgan Chase
Citigroup
Morgan Stanley
Goldman Sachs
GE Capital Services
US Bancorp
American Express
In this post, I am focusing on the large US National and Regional Banks that are a bit smaller than the above nine mega US banks.
I found 19 of these banks, with Pretax Earnings or Losses of at least $100 mil each in either the 4Q 2011 or in the 4Q 2010, which have already reported their 4Q 2011 earnings. There were two other ones, California HQed UnionBanCal and Oklahoma HQed BOK Financial, which probably would have made this earnings threshold, but they haven't reported their 4Q 2011 earnings yet, and thus weren't included below. Instead, they were included later at the very bottom of this post.
How did they do? Well, not so hot. These 19 Banks had a Total Pretax Earnings Decrease of 7% in the 4Q 2011. Here they are, along with their 4Q 2011 Pretax Earnings (PTI):
.............................................4Q............4Q..........Increase
...........................................2011.........2010......(Decrease)
............................................PTI.........PTI(L)....Amount......%
...........................................(in millions of dollars)......
PNC Financial(1).........PA....838...........961.........(123).....-13%
Bank NY Mellon..........NY...689...........970.........(281).....-29%
Capital One Financial..VA....571........1,032.........(461).....-45%
State Street Corp........MA....532...........252..........280......111%
BB&T..........................NC....484...........232..........252......109%
Fifth Third Bancorp....OH....418...........417..............1........0%
Key Corp....................OH....276...........508.........(232).....-46%
M&T Bank...................NY...203...........307.........(104).....-34%
Regions Financial(2)...AL....190...........111............79.......71%
NY Community Banc..NY....181...........231..........(50).....-22%
Northern Trust............IL....171...........214..........(43).....-20%
Huntington Banc.........OH....169...........158............11........7%
SunTrust Banks...........GA....143...........238..........(95).....-40%
First Republic Bank.....CA....141...........127............14.......11%
Zions Bancorp............UT....137...........(96).........233......243%
Comerica....................TX....129...........126..............3........2%
East West Bancorp......CA....103............86............17.......20%
Hudson City Banc(3)...NJ.....93...........200.........(107).....-54%
Synovus Financial......GA.....27..........(160).........187......117%
Total all 19......................5,495.........5,914.........(419)......-7%
(1) PNC Financial 2011 PTI excludes Charge from Redemption of Trust Preferred Securities. Its 2010 PTI excludes Gain on Sale of BlackRock Shares.
(2) Regions Financial 2011 PTI excludes Goodwill Impairment Charge.
(3) Hudson City Bancorp 2011 PTI excludes Loss on Debt Extinguishment.
Well it's bad enough that the Total Pretax Earnings of these 19 US Big National/Regional Banks decreased by 7%, or by $419 mil, in the most recent quarter over the prior year's quarter. But it gets much worse.
Of these 19 Banks, 13 of them had very puzzling Reduction in Loan Loss Provision Charges in the 4Q 2011 as compared to that recorded in the 4Q 2010, and some of these reductions are just huge.
These 13 Banks had a Total Reduction in Loan Loss Provision Charges to Earnings of a massive $1,825 mil in the 4Q 2011 as compared to 4Q 2010, and even with the huge resultant $1,825 mil increase in Pretax Income from this accounting action, all 19 combined had their Total Pretax Income drop by $419 mil in the 4Q 2011 vs. the 4Q 2010.
Here are the 13 Big US National/Regional Banks with Reductions in their Provision for Credit Losses in the 4Q 2011 vs. 4Q 2010:
..................................Provision for Credit Losses
................................4Q 2011...4Q 2010...Decrease
....................................(millions of dollars)
Regions Financial........295..........682.........(387)
BB&T...........................272..........643.........(371)
PNC Financial..............190..........442.........(252)
Synovus Financial.........55..........252.........(197)
SunTrust Banks...........327..........512.........(185)
Zions Bancorp...............(1).........173.........(174)
Fifth Third Bancorp.......55..........166.........(111)
Huntington Banc...........45............87..........(42)
Comerica......................19............57..........(38)
Northern Trust.............13............40..........(27)
Hudson City Banc.........25............45..........(20)
M&T Bank.....................74............85..........(11)
East West Bancorp........20............30..........(10)
Total all 13...............1,389.......3,214.......(1,825)
So the 99%ers, including US small businesses, who these 13 Big US Banks are making much of their profits from, have their financial status mostly deteriorate substantially in the past year, and these 13 Big Banks react to this by making just the opposite assessment, by reducing their Total Loan Loss Charges on their books by $1.8 bil. I call that pouring salt on the open wounds of the 99% bank customers. And then they pour additional salt on the wounds of the 99% by "dollars over decency" adamantly refusing to reduce the principal balance of underwater homeowner mortgages.
Something just doesn't seem right here. The Occupy Movement all throughout the country, and all of their 99% supporters, including many small businesses, are spot on. The deck is stacked against them, the Big Corps are continually dealing from the bottom of the deck, and the US Government, specifically the US Congressional Republicans, the "dollars over decency" advocates, facilitate this patently unfair process, which is destroying the fabric of the US Democracy.
=======================================
Late Additions Feb 1, 2012
.............................................4Q............4Q..........Increase
...........................................2011.........2010......(Decrease)
............................................PTI.........PTI(L)....Amount......%
...........................................(in millions of dollars)......
UnionBanCal..............CA....165...........221..........(56).....-25%
BOK Financial............OK....105............90............15.......17%
