Preferreds stay firm; Wells Fargo, Bank of America improve post-earnings; Targa softens

By Stephanie N. Rotondo

Phoenix, Oct. 14 – Preferred stocks were modestly higher for most of Wednesday trading but came in a touch in the final minutes of the day.

The earlier gains were due in part to a round of good bank earnings.

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 Fargo’s 6% series V class A noncumulative preferreds (NYSE: WFCPV) closed up 5 cents at $25.73, as the 5.85% series Q fixed-to-floating rate noncumulative perpetual preferreds (NYSE: WFCPQ) rose 2 cents to $25.62. BofA’s 6.5% series Y noncumulative preferreds (NYSE: BACPY) were 15 cents higher at $25.68.

For Wells Fargo, a 7.7% increase 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.

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.

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

Meanwhile, the greenshoe on Targa Resources Partners LP’s offering of 9% fixed-to-floating rate cumulative redeemable preferred units was partially exercised on Wednesday, a market source reported.

An additional $15 million of the units was sold.

The securities ended at $24.91, off 2 cents on the day.

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