New York Mortgage brings new issue; Bank of America firms post-earnings; Goldman numbers ahead

By Stephanie N. Rotondo

Phoenix, April 15 – Tax Day was strong for the preferred stock market, as the Wells Fargo Hybrid and Preferred Securities index jumped 20 basis points.

The index was up 8 bps early Wednesday morning.

The new issue pipeline saw a deal from New York Mortgage Trust Inc. get priced. The real estate investment trust sold $90 million of 7.875% series C cumulative redeemable perpetual preferreds.

A trader said initial price talk was 7.875% to 8% and at least $50 million shares were expected to be sold.

“There’s not much going on in it,” the trader noted. “I think they will pretty much hand out stock to anyone who wants it.

“I have a feeling it trades soft for awhile,” he added.

The trader pegged the issue at $24.60 bid in the early gray market.

As for the company’s 7.75% series B cumulative redeemable preferreds (Nasdaq: NYMTP), those were initially trading off 2 cents at $24.85. However, by the end of the day, the paper had improved a penny to $24.88.

Meanwhile, JPMorgan Chase & Co.’s new $2 billion issue of 5.3% $1,000-par series Z fixed-to-floating rate noncumulative preferreds were quoted at 100.75 bid, 100.875 offered early in the session.

After the bell, another market source saw the issue at 100.75 bid, 101 offered.

That deal priced late Tuesday following the company’s earnings release.

And speaking of bank earnings, Bank of America Corp. announced its first-quarter results ahead of the market’s open on Wednesday. Profit beat expectations as legal expenses shrank.

However, unlike JPMorgan and Wells Fargo & Co., which both saw revenue gains for the latest quarter, BofA’s revenue was down slightly.

Still, the bank’s preferreds were moving up.

Looking ahead, a trader said the market was “waiting to see as we get through bank earnings who is going to bring deals.”

“It’s not a bad time for these guys to bring something perpetual and fixed with the bond market being relatively stable,” the trader said.

Goldman Sachs Group Inc. and Citigroup Inc. are the next big banks scheduled to bring earnings. Ahead of the reports, Goldman’s 6.375% series K fixed-to-floating rate noncumulative preferreds (NYSE: GSPK) were up a nickel at $27.10.

BofA revenue dips

Bank of America’s first-quarter results beat expectations as legal costs declined.

However, the company did see a decline in revenue.

Altogether, the results were still taken positively and investors pushed the bank’s preferred stock into higher territory.

The 6.5% series Y noncumulative preferreds (NYSE: BACPY) closed up 6 cents at $25.94.

In the first quarter, legal expenses fell to $370 million, indicating that the company’s legal woes might be lessening.

Among other expenses, non-interest expense fell 29.4% to $15.7 billion.

Net income was $2.98 billion, or 27 cents per share. That compared to a loss of $514 million, or 5 cents per share, the year before.

On an adjusted basis, earnings per share came to 30 cents, beating expectations of 29 cents.

Revenue from fixed income, currencies and commodities trading dipped 6.8% to $2.75 billion. But mortgage banking revenue improved 68.4% to $694 million. Investment and brokerage service revenues were also better, rising 3.3% to $3.38 billion.

Still, total revenue declined 5.9% to $21.42 billion.

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