THE BASIS POINT

Bank Earnings Roundup

Lee Farkas, the former chairman of Taylor, Bean and Whitaker Mortgage Corp., was found guilty on all 14 charges stemming from a seven-year, multibillion-dollar fraud scheme that led to the collapse of his firm and Colonial Bank. Even the photo can make you cringe.

At this point Mr. Farkas is probably not interested that Cantor Fitzgerald sold $635 million of bonds backed by commercial mortgages in its first sale of the securities. Congrats to Cantor, who started its real-estate finance business in September. The company is “catching the wave” since banks have arranged about $8.6 billion of commercial-mortgage backed securities this year, compared with $11.5 billion for all of last year, per Bloomberg. Issuance hit $234 billion in 2007 and $3.4 billion in 2009. And, per the article, top-rated securities tied to commercial property loans are yielding 1.93 percentage points more than Treasuries, compared with 2.28 percentage points on Dec. 31, according to a Barclays Plc. index.

At this point Mr. Farkas is probably not interested in the bank earnings that are coming out. US Bank’s profit jumped 56% to $1.05B coming in above estimates due to improved asset quality and lower provisions. Loan growth was 2.4%. Zions posted an unexpected profit of $53mm (vs. a loss last 1Q) due to a 65% drop in provision expense. Comerica posted a higher than expected profit of $102mm (vs. a loss last 1Q) due to improved credit quality and a 72% drop in provisions. Keycorp earned $184mm (vs. a loss last 1Q) due to improved credit quality and lower provisions. Wells Fargo came in this morning, with net charge-offs decreasing dramatically. 1st quarter revenue dropped slightly due to a decline in mortgage banking fee income.