Monday, February 18, 2019

New York Financial Companies Total Pretax Earnings Drop Precipitously in the December 2018 Quarter

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All 52 New York Financial Cos With Stock Market Caps Above $1 Bil and Releasing Their December 2018 Quarter Earnings By February 15, 2019 Saw Their Total Pretax Earnings INCREASE Robustly in each of the First Three Quarters of 2018:  Up By 20% in Their September 2018 Quarter, Up By 15% in Their June 2018 Quarter and Up By 20% in Their March 2018 Quarter
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Then in Their December 2018 Quarter, These Same 52 New York Financial Cos Experienced a Total Pretax Earnings DECLINE of 30%
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More Telling is the Breakdown Between the Banks and the Non-Bank Financials
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The 10 New York Banks Saw Their Total Pretax Earnings Increase By 9% in the December 2018 Quarter and Increase By 8% in the September 2018 Quarter
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However, the 42 New York Non-Bank Financial Cos Saw Their Total Pretax Earnings Drop Off-the-Cliff, Going From an Increase of 36% in the September 2018 Quarter to a Decrease of 57% in the December 2018 Quarter.  I Haven't Seen Such a Negative Earnings Swing in One Quarter Since 2008 During the US Financial Meltdown.    
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From a review of company SEC filings and of MSN Money individual company common stock information, I found 63 New York Financial Companies with stock market caps sometime in 2018 of more than $1 Bil and with December 2018 Quarter Ends.

Of these 63 New York Financial Companies, 52 of them have released their December 2018 Quarterly Earnings by February 15, 2019.

My Focus is on Pretax Income rather than on After-Tax Net Income because Corporate Income Taxes are simply a transfer of financial wealth between US Corporations and the US Federal, US State and Foreign Governments.  It has nothing whatsoever to do with Company Operating Performance.

The chart below shows the Gold-Standard US GAAP Pretax Income (Loss) From Continuing Operations for each quarter of 2018 as compared with that of the prior year quarter of 2017 for each of these 52 New York Financial Companies.

US US US US US US US US
GAAP GAAP GAAP GAAP GAAP GAAP GAAP GAAP
Pretax Pretax Pretax Pretax Pretax Pretax Pretax Pretax
Income Income Income Income Income Income Income Income
(Loss) (Loss) (Loss) (Loss) (Loss) (Loss) (Loss) (Loss)
New York Financial Cos Dec Dec Better Sept Sept Better June June Better March March Better
December 2018 Qtr Earnings 2018 2017 (Worse) 2018 2017 (Worse) 2018 2017 (Worse) 2018 2017 (Worse)
Released By February 15, 2019 Quarter Quarter % Quarter Quarter % Quarter Quarter % Quarter Quarter %
Market Caps Above $1 Bil End End  Change End End  Change End End  Change End End  Change
mils $ mils $ mils $ mils $ mils $ mils $ mils $ mils $
Banks
JPMorgan Chase       8,841       8,254 7%     10,689       9,556 12%     10,572       9,749 8%     10,662       8,341 28%
Citigroup       5,306       5,099 4%       6,104       6,003 2%       5,945       5,678 5%       6,090       5,981 2%
Bank of New York Mellon       1,020          728 40%       1,334       1,368 -2%       1,394       1,308 7%       1,444       1,206 20%
M&T Bank Corp          699          629 11%          696          581 20%          655          596 10%          458          518 -12%
Signature Bank          215          177 21%          205          197 4%          206            13 1485%            47          189 -75%
Sterling Bancorp          145            (5) NM          147            66 123%          146            63 132%          128            57 125%
New York Community Bancorp          133          145 -8%          137          178 -23%          144          181 -20%          144          164 -12%
Community Bank System            51            48 6%            55            51 8%            55            25 120%            52            36 44%
NBT Bancorp            29            33 -12%            38            34 12%            36            32 13%            33            28 18%
Tompkins Financial            24            21 14%            26            26 0%            28            25 12%            26            23 13%
Total all 10 Banks     16,463     15,129 9%     19,431     18,060 8%     19,181     17,670 9%     19,084     16,543 15%
Non-Bank Financial Cos
….. Investment-Related Cos 
Goldman Sachs       2,708       3,108 -13%       3,078       2,976 3%       3,276       2,509 31%       3,419       2,539 35%
Morgan Stanley       1,857       2,471 -25%       2,851       2,482 15%       3,109       2,642 18%       3,420       2,808 22%
BlackRock       1,174       1,486 -21%       1,429       1,399 2%       1,416       1,238 14%       1,359       1,136 20%
Evercore          253          187 35%            77            89 -13%          107            48 123%          115          113 2%
Alliance Bernstein Holding LP          199          283 -30%          214          162 32%          189          163 16%          223          166 34%
Lazard Ltd          156          359 -57%          139          144 -3%          200          173 16%          186          150 24%
Ares Capital Corp          153          232 -34%          209          139 50%          254          178 43%          242          118 105%
Moelis & Co            68          187 -64%            55            58 -5%            59            59 0%            57            46 24%
MarketAxess Holdings            56            49 14%            48            47 2%            53            50 6%            61            55 11%
Cohen & Steers            31            44 -30%            40            43 -7%            35            37 -5%            37            36 3%
Golub Capital BDC            18            21 -14%            16            22 -27%            22            20 10%            23            21 10%
PJT Partners            17            26 -35%            12          (16) NM            10            (2) NM              3              2 50%
Apollo Investment Corp            (1)              6 -117%            28            32 -13%            13            29 -55%            21              8 163%
Wisdom Tree Investments          (13)              6 -317%            28            15 87%            22            22 0%            14            15 -7%
BGC Partners          (24)          (71) NM          219          142 54%            66            94 -30%          133            58 129%
Blackstone Group LP          (49)       1,400 -104%          894          976 -8%       1,690          765 121%          897       1,059 -15%
Prospect Capital          (67)          122 -155%            84            12 600%          114            51 124%            52            19 174%
Apollo Global Mgt LLC        (338)          732 -146%          382          451 -15%          163          192 -15%        (101)          394 -126%
KKR & Co LP     (1,214)          662 -283%       1,223          397 208%       1,627          887 83%          621          838 -26%
Total19Investments-RelatedCos       4,984     11,310 -56%     11,026       9,570 15%     12,425       9,155 36%     10,782       9,581 13%
….. Insurance Cos
MetLife       2,471          961 157%       1,079          485 122%       1,101       1,018 8%       1,656       1,072 54%
Voya Financial          162          220 -26%          186            40 365%          241          155 55%            21          113 -81%
Arch Capital Group Ltd            91          259 -65%          282          (37) NM          280          233 20%          188          302 -38%
Assurant            43          158 -73%            76        (108) NM            78          179 -56%          137          215 -36%
Loews Corp        (232)          461 -150%          354          264 34%          307          347 -12%          405          510 -21%
American International Group        (695)          875 -179%     (1,527)     (2,803) NM       1,252       1,667 -25%       1,227       1,727 -29%
AmTrust Financial Services  N/A   N/A   N/A           (92)        (221) NM        (101)              9 NM          661            72 818%
Total 7 Insurance Cos       1,840       2,934 -37%          358     (2,380) 115%       3,158       3,608 -12%       4,295       4,011 7%
….. Financial REITs
Blackstone Mortgage Trust            74            58 28%            78            58 34%            73            51 43%            61            51 20%
Apollo Commercial RE Finance            53            41 29%            62            68 -9%            55            36 53%            49            47 4%
New Residential Investment          (59)          347 -117%          199          272 -27%          183          420 -56%          607          143 324%
Chimera Investment Corp        (103)          108 -195%          157          139 13%          118          115 3%          239          163 47%
Two Harbors Investment Corp        (548)          173 -417%            73            88 -17%          133              3 4333%          339            34 897%
Annaly Capital Management     (2,254)          752 -400%          378          369 2%          599            14 4179%       1,328          441 201%
Total 6 Financial REITs     (2,837)       1,479 -292%          947          994 -5%       1,161          639 82%       2,623          879 198%
….. FinTechs
Mastercard       1,215       1,484 -18%       2,264       1,932 17%       1,922       1,628 18%       1,803       1,478 22%
E Trade Group          365          299 22%          374          223 68%          345          317 9%          334          225 48%
First Data Corp          219          339 -35%          502          234 115%          365          271 35%          161            91 77%
Virtu Financial          149          131 14%            29          (46) NM            49              5 880%          469            24 1854%
Broadridge Financial            64          104 -38%            89            74 20%          258          285 -9%          125          106 18%
Total 5 FinTech Cos       2,012       2,357 -15%       3,258       2,417 35%       2,939       2,506 17%       2,892       1,924 50%
….. Other Financial Cos
American Express       1,831       1,798 2%       2,118       1,831 16%       2,091       1,957 7%       2,082       1,839 13%
S&P Global          670          589 14%          672          621 8%          657          640 3%          681          611 11%
Nasdaq Inc          328          211 55%          209          234 -11%          288          211 36%          239          215 11%
Moody's Corp          322          408 -21%          413          466 -11%          496          462 7%          441          451 -2%
Marsh & McLennan          224          642 -65%          385          537 -28%          719          711 1%          916          753 22%
Total 5 Other Financial Cos       3,375       3,648 -7%       3,797       3,689 3%       4,251       3,981 7%       4,359       3,869 13%
Total 42 Non-Bank Financials       9,374     21,728 -57%     19,386     14,290 36%     23,934     19,889 20%     24,951     20,264 23%
Total all 52 NY Financial Cos     25,837     36,857 -30%     38,817     32,350 20%     43,115     37,559 15%     44,035     36,807 20%




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