Morning Commentary: Preferreds stay firm; Wells Fargo, Bank of America preferreds improve

By Stephanie N. Rotondo

Phoenix, Oct. 14 – Preferred stocks were edging higher in early Wednesday trading, helped in part by a round of good bank earnings.

The Wells Fargo Hybrid and Preferred Securities index was up 4 basis points at mid-morning.

Wells Fargo & Co. and Bank of America Corp. put out third-quarter results early in the day. Both saw an increase in profits, which helped their preferreds gain momentum.

Wells’ 6% series V class A noncumulative preferreds (NYSE: WFCPV) were up 7 cents at $25.75 at mid-morning. BofA’s 6.5% series Y noncumulative preferreds (NYSE: BACPY) were 12 cents higher at $25.65.

For Wells Fargo, 7.7% in loan growth resulted in a net profit of $5.8 billion, or $1.05 per share. Revenue rose to $21.88 billion from $21.21 billion.

Analysts polled by Thomson Reuters had predicted earnings per share of $1.04 on revenue of $21.76 billion.

As for BofA, it posted a profit of $4.5 billion, which compared to a loss of $232 million the year before. Earnings per share were 37 cents, better than the 33 cents analysts had been expecting.

However, the bank did see revenues fall 2.4% to $20.9 billion.

The earnings from Wells Fargo and BofA follow JPMorgan Chase & Co.’s own quarterly release on Tuesday. For the quarter, JPMorgan posted adjusted earnings per share of $1.32 on revenue of $23.54 billion.

Revenue was off 6% year over year, and the figures missed expectations of $1.37 per share on revenue of $23.69 billion, according to analysts polled by Thomson Reuters.

On a non-adjusted basis, net profit was up over 20%.

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