Today - Tuesday, April 28, 2015
- Q1 recurring net income of 1.633B reais is the strongest first quarter since 2012, when the bank earned 1.774B reais. Net interest income of 7.14 reais rose 2.2% for the quarter. Loan-loss provisions slipped 1%, and the default ratio fell 3%, helped by the sale of 1B reais of bad debt.
- "Santander Brasil (BSBR +4.4%) faces a major structural challenge in Brazil, namely becoming the bank of choice of individuals and companies - the franchise issue," says a skeptical Eduardo Rosman of Grupo BTG Pactual. "With expectations of a deteriorating economy in the near future, Santander Brasil tends to be more affected than its peers."
- With today's gain, BSBR is up 30% since (maybe) bottoming out for the year six weeks ago.
- Source: Reuters
- In addition to the fine from the CFPB, Regions (RF +0.5%) has already refunded customers $49M in fees and will fully refund any remaining customers as necessary. In addition, the bank will have to hire an independent consultant to identify any other customers who may have been illegally charged fees and correct any errors showing up on credit reports.
- At issue is the bank's charging of overdraft fees to clients who had not opted into the service.
- "We believe the vast majority of the refunds have been completed and we have made changes to our internal systems," says the bank.
- This morning's weak Q1 results - EPS of $0.59 trailed Street estimates by $0.12 - shows just how much CIT Group (CIT -5.2%) has riding on obtaining regulatory approval for the OneWest purchase, says BTIG, reiterating its Buy rating and $55 price target.
- The team notes CEO John Thain on the earnings call as saying he expects the closing to occur mid-year. The company expects the purchase to be accretive by 20% to EPS in 2016, as reduced funding costs and operational efficiencies allow an IRR of 15%.
- BTIG notes the stock now trades at a discount to tangible book value of $46.89 per share. The $55 price target is based on 1.2x estimated 2016 TBV, discounted at 8%.
- Previously: CIT Group launches next buyback plan (April 28)
- Q1 adjusted earnings of $43M or $0.92 per share vs. $17M and $0.38 one year ago. The company notes the strong result came even with a $0.07 per share negative impact from foreign exchange.
- Real Estate Services revenue of $1.118B up 15% (in dollar terms) Y/Y, with leasing revenue of $306.1M up 14%, property management revenue of $259.8M up 5%. Capital markets and hotels revenue of $17.4M up 51%.
- LaSalle Investment Management revenue of $85.7M up 34% Y/Y, with advisory fees of $60.7M up 9%. $2B of equity commitments raised during Q1.
- The quarterly dividend is hiked by $0.02 to $0.27 per share.
- Previously: Jones Lang Lasalle beats by $0.47, beats on revenue (April 27)
- JLL +3.25%
- After opening nearly 4% lower on the heels of a sizable secondary offering announced last night, Springleaf Financial (LEAF +0.1%) has turned positive on the session. The secondary had to have been expected as the company needs cash to help pay for its OneMain Financial purchase.
- Macquarie picks today to head to the cashier's cage on its Outperform call on the stock, citing a lack of near-term catalysts as focus moves from the excitement of the OneMain acquisition to the nuts and bolts of executing.
- Previously: Springleaf down 2% on secondary offering (April 27)
- In his 25 years in the business, American Capital Agency (AGNC -2.4%) CIO Gary Kain - opening up the earnings call - can't remember a quarter with such "two-way" volatility as was seen in Q1.
- Presentation slides
- Expecting the volatility to continue, management has turned conservative - reducing interest rate exposure and cutting leverage. This conservatism has a cost, says Kain, thus the monthly dividend cut to $0.20 per share from $0.22.
- The good news: Despite the volatility, AGNC book value has remained fairly stable over the last six months, and the company has earned a positive economic return - defined as the change in book value plus the dividend - of 5.13% (10.26% annualized).
- Opening up the Q&A, Wells Fargo's Joel Houck questions the conservative stance, noting this sort of volatility in the past has been when Kain and team have earned their stripes by delivering alpha. Kain: It's a good question, but we're hunkering down for now and will pick our spots.
- Previously: American Capital Agency declares $0.20 dividend (April 27)
- Previously: American Capital Agency income and book value slip in Q1 (April 27)
- Previously: American Capital Agency misses by $0.04 (April 27)
- USA Technologies (NASDAQ:USAT) has struck a multi-year deal with Chase Commerce (JPMorgan's payment-processing/merchant acquisition arm) to offer its cashless payment and M2M/IoT services to Chase clients.
- USAT states the deal "represents the first step with Chase Commerce Solutions toward expanding our footprint through leveraging inherent economies of scale," and that it will help the company "expand its product lines into new domestic and global verticals and markets."
- Shares have made new 52-week highs. They're up 86% YTD, aided by enthusiasm for USAT's Apple Pay efforts.
- "The most important takeaway from the quarter was the company's progress in diversifying its loan and lease originations," says BTIG, reiterating its Buy rating and $32 price target on Ally Financial (ALLY +3.2%).
- Non-GM, non-Chrysler originations jumped 54% year-over-year to $2.7B, and about 900 non-GM, non-Chrysler dealers were added, brining the total to roughly 10.4K.
- The BTIG team also notes Ally as hitting its ROTCE target range of 9-11%, reporting the Q1 figure at 9.1%, up from 7.1% in Q4. "We believe this metric is particularly important insofar as it typically correlates with equity appreciation."
- Previously: Ally Financial moves on from GM leases (April 28)
- Previously: Ally Financial beats by $0.10 (April 28)
- Strategic Hotels (BEE -0.3%) is an owner of 53.5% of the property, and together with its JV partner inks a sale deal for $118M. At closing, the JV will retire $89.2M of debt secured by the hotel and consolidated on BEE's balance sheet.
- The sale is consistent with BEE's strategy of exiting non-core assets and deleveraging the balance sheet.
- Source: Press Release
- Q1 profit of €1.717B up 18% from Q4, up 31.8% from a year ago. EPS of €0.121 up 7.3% Q/Q, up 6.4% Y/Y.
- Net interest income of €8.038B up 4.2% from Q4, up 15% from a year ago.
- CET1 ratio of 9.7% flat from the start of the year.
- Company notes the positive impact of exchange rates, a fall in real operating expenses, and improved cost of credit (1.38%, down 27 bps from a year ago) as helping to boost results. The efficiency ratio of 47% improved 90 bps from Q1 of 2014.
- SAN +2.3%
- Previously: Banco Santander reports Q1 results (April 28)
- Based in Tampa, JHS has a team of 150 financial advisors which generated revenue of $38M in 2014, and had retail assets of $4.1B at year-end.
- Like Ameriprise (NYSE:AMP), JHS operates both employee and independent advisor channels, and JHS advisors are expected to join one of the existing channels at Ameriprise.
- Terms of the deal were not disclosed. It's expected to close in Q3.
- Source: Press Release
9:27 AM| Comment!
- Home Loan Servicing (NASDAQ:HLSS) is trading at $0.69 per share, down 96% from last night's close, as today the company sends checks out to owners for $16.613 per share.
- That amount - totaling about $1.2B - is what the company received from New Residential, less a cash reserve of $50M. The $50M - or $0.704059 per share - will be paid out upon consummation of the merger with NRZ.
- HLSS will be delisted from the Nasdaq prior to the open on April 29.
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