Sovereign Bancorp (SOV)
reported operating EPS of $0.40, three cents below consensus estimate of $0.43. This was down 11.1% from operating EPS of $0.45 in 4th quarter 2005 and 7.0% from $0.43 in the year ago period. Operating EPS excludes the impact of: 1) $14.3 mln ($9.3 mln after-tax) in proxy and professional fees related to its recent row with Relational Investors; and 2) a $2.8 mln ($1.8 mln after-tax) recapture of prior merger and integration charges. The company also restated its historical net interest margin upward as a result of a reclassification of loan prepayment penalties and late fees to interest income from fee income.
Bank of America Corp. (BAC) income rose 14% to $4.99 billion from $4.39 billion a year earlier.
FBR lifted the rating on Allstate Corp. (ALL) to outperform. Allstate managed to generate strong profit from its auto insurance business despite heightened competition and sliding prices in that market. Losses from claims seem to be declining faster than the rates Allstate charges on its policies, adding to the favorable boost the company gets from share buybacks.