Core Insights - The Bank of New York Mellon Corporation reported quarterly earnings of $1.72 per share, exceeding the Zacks Consensus Estimate of $1.56 per share, and showing an increase from $1.28 per share a year ago, resulting in an earnings surprise of 10.26% [1] - The company achieved revenues of $4.85 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.92% and up from $4.31 billion year-over-year [2] - The stock has underperformed the market with a decline of about 1.2% since the beginning of the year, compared to the S&P 500's decline of 0.7% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.44 on revenues of $4.65 billion, and for the current fiscal year, it is $6.61 on revenues of $19.1 billion [7] - The estimate revisions trend for the company is mixed, leading to a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Banks - Major Regional industry is currently ranked in the top 26% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% of industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Viewpoint - The Bank of New York Mellon Corporation (BNY) has reported its financial results for the fourth quarter of 2024, with additional resources available for investors and analysts [1]. Financial Results - BNY oversees $52.1 trillion in assets under custody and/or administration and $2.0 trillion in assets under management as of December 31, 2024 [4]. Company Overview - BNY is a global financial services company that has been operational for 240 years, assisting clients in managing, moving, and safeguarding their money [4]. - The company serves over 90% of Fortune 100 companies and nearly all of the top 100 banks globally, as well as supporting governments and pension plans [4]. - BNY employs over 50,000 people worldwide and has received recognition as one of Fortune's World's Most Admired Companies and Fast Company's Best Workplaces for Innovators [5].

Financial Performance - Fee and other revenue for Q4 2024 was $3,653 million, a 1% increase from Q3 2024 and a 12% increase from Q4 2023[4] - Net interest income for Q4 2024 was $1,194 million, reflecting a 14% increase from Q3 2024[4] - Total revenue for Q4 2024 reached $4,847 million, up 4% from Q3 2024 and 11% from Q4 2023[4] - Net income for Q4 2024 was $1,157 million, a decrease of 3% from Q3 2024 but a significant increase of 462% from Q4 2023[4] - Diluted earnings per common share for Q4 2024 was $1.54, a 3% increase from Q3 2024 and a 633% increase from Q4 2023[4] - Total revenue for Q4 2024 was $4,847 million, an increase of 4% compared to Q3 2024 and 11% compared to Q4 2023[7] - Net income for Q4 2024 reached $1,157 million, reflecting a 38% increase year-over-year from $206 million in Q4 2023[7] - Earnings per common share (diluted) for Q4 2024 was $1.54, a 3% increase from $1.50 in Q3 2024 and a 633% increase from $0.21 in Q4 2023[7] - Total revenue for Q4 2024 was $2,324 million, representing a 5% increase from Q3 2024 and a 7% increase from Q4 2023[15] - Total revenue for Q4 2024 was $873 million, reflecting a 3% increase from Q3 2024 and a 29% increase from Q4 2023[23] Assets and Liabilities - Assets under management (AUM) decreased to $2.03 trillion in Q4 2024, down 5% from Q3 2024[4] - Total assets decreased to $416,064 million as of December 31, 2024, down from $427,461 million at the end of Q3 2024[8] - Deposits decreased to $289,524 million in Q4 2024, down from $296,438 million in Q3 2024[8] - Average loans for Q4 2024 are $11,553 million, a 4% increase compared to Q3 2024[17] - Average loans for FY24 were $41,533 million, an 11% increase compared to FY23[21] - Average loans for FY24 were $13,610 million, showing a 1% decrease compared to FY23[23] - Total assets under management (AUM) decreased by 5% from Q3 2024 to $2,029 billion, but increased by 3% year-over-year[27] - Wealth Management client assets decreased by 2% quarter-over-quarter to $327 billion, but increased by 5% year-over-year[27] Expenses and Profitability - Total noninterest expense increased to $3,355 million in Q4 2024, an 8% increase from Q3 2024[7] - Noninterest expense for Q4 2024 is $1,666 million, a 7% increase from Q3 2024[15] - Noninterest expense for Q4 2024 was $700 million, a 4% increase from Q3 2024[23] - The pre-tax operating margin for Q4 2024 is 28%, unchanged from Q3 2024[15] - The pre-tax operating margin for Q4 2024 was 20%, down from 21% in Q3 2024[23] Capital and Ratios - The common equity tier 1 (CET1) ratio was 11.2% at the end of Q4 2024, down from 11.9% in Q3 2024[4] - CET1 capital as of December 31, 2024, is $18,754 million, down from $19,687 million in the previous quarter[14] - The total capital ratio under the Standardized Approach is 14.8% as of December 31, 2024, compared to 15.6% in the previous quarter[14] - The average liquidity coverage ratio is 115% for Q4 2024, slightly down from 116% in Q3 2024[14] Market Performance - The market capitalization increased to $55,139 million at the end of Q4 2024, compared to $52,248 million at the end of Q3 2024[4] - The market value of securities on loan at period end is $488 billion, an increase of 8% from Q4 2023[17] Revenue Sources - Investment services fees increased by 4% quarter-over-quarter and 9% year-over-year, totaling $2,438 million in Q4 2024[7] - Total investment management and performance fees for Q4 2024 were $808 million, up 2% from Q3 2024 and 9% from Q4 2023[9] - Foreign exchange revenue in Q4 2024 was $177 million, a 1% increase from Q3 2024 and a 24% increase from Q4 2023[9] - Total investment services fees for Q4 2024 are $1,337 million, a 6% increase year-over-year[15] - Investment management fees increased by 1% quarter-over-quarter and 9% year-over-year, totaling $789 million in Q4 2024[23] Shareholder Information - The company reported a common dividend payout ratio of 31% for Q4 2024, slightly down from 32% in Q3 2024[4] - BNY shareholders' equity at period end decreased to $41,318 million in Q4 2024 from $41,992 million in Q3 2024, a decline of 1.6%[43] - Tangible common shareholders' equity at period end was $19,412 million in Q4 2024, down from $20,363 million in Q3 2024, representing a decrease of 4.7%[43] Credit Losses - The provision for credit losses was $20 million in Q4 2024, a significant decrease from $84 million in Q4 2023[7] - The allowance for credit losses at the end of the period was $392 million, down from $401 million in the previous quarter, with loan losses as a percentage of total loans at 0.41%[35] - The total allowance for credit losses at the beginning of the period was $401 million, with a provision for credit losses of $20 million in Q4 2024[35] - The net charge-offs for Q4 2024 were $(29) million, compared to $(18) million in Q3 2024[35]

The upcoming report from The Bank of New York Mellon Corporation (BK) is expected to reveal quarterly earnings of $1.56 per share, indicating an increase of 21.9% compared to the year-ago period. Analysts forecast revenues of $4.65 billion, representing an increase of 7.9% year over year.The consensus EPS estimate for the quarter has undergone an upward revision of 1% in the past 30 days, bringing it to its present level. This represents how the covering analysts, as a whole, have reassessed their initial e ...

The Bank of New York Mellon Corporation (BK) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price.The earnings report, which is expected to be released on January 15, 2025, might help the stock move higher if these ...

The Bank of New York Mellon Corporation BK will release earnings results for its fourth quarter, before the opening bell on Wednesday, Jan. 15, 2025.Analysts expect the New York-based company to report quarterly earnings at $1.54 per share, up from $1.28 per share in the year-ago period. Bank of New York Mellon projects to report revenue of $4.65 billion for the recent quarter, compared to $4.31 billion a year earlier, according to data from Benzinga Pro.On Oct. 11, the finance behemoth reported third-quart ...

The Zacks Major Regional Banks will benefit from the Federal Reserve’s interest rate cuts as the deposit/funding costs come down and the industry-wide lending backdrop improves. Further, a decent economic expansion will support the industry players’ net interest income (NII) and margins.Business restructuring/expansion initiatives and digitization will offer support. Though weakening asset quality is likely to exert pressure on the financials to some extent, major banks like U.S. Bancorp (USB) , Truist Fina ...

S&P 500 Performance - The S&P 500 Index rallied 26 2% year to date in 2024 driven by optimism regarding the Federal Reserve's interest rate cut trajectory robust economic growth and a solid rebound in the capital market business [1] Banking Sector Overview - The S&P 500 Banks Industry Group Index rose 18 7% in 2024 with several banks outperforming the broader index including Goldman Sachs Bank of New York Mellon Wells Fargo JPMorgan Chase and M&T Bank [10] - The Federal Reserve cut interest rates by 100 basis points in 2024 with the latest cut on Dec 18 2024 bringing the Fed fund rates to 4 25-4 5% [12] - Global M&A deal value increased 15% in 2024 to $3 45 trillion recovering from a decade-low in 2023 [13] - Donald Trump's re-election and expected expansionary economic policies including reduced capital requirements deregulation and relaxed fiscal policies are expected to support the banking sector [15] - The Federal Reserve expects to lower interest rates twice in 2025 and two additional times in 2026 bringing the rate to 3 4% by the end of 2026 [16][17] Goldman Sachs (GS) - Goldman Sachs' net interest income (NII) reached $6 47 billion in the first nine months of 2024 reflecting a 29% increase from the same period in 2023 [3] - The Zacks Consensus Estimate for the company's earnings per share for 2024 and 2025 is pegged at $37 05 and $43 04 respectively implying increases of 62% and 16 17% [4] - Investment Banking revenues increased 24% in the first nine months of 2024 as global M&A bounced back [20] - The company's cash and cash equivalents were $155 billion as of Sept 30 2024 with total unsecured debt of $325 billion [22] - Goldman Sachs increased its common stock dividend by 9 1% to $3 per share in July 2024 and repurchased approximately $6 billion worth of its common shares in the first nine months of 2024 [22] Bank of New York Mellon (BK) - Non-U S revenues constituted 35% of total revenues in the first nine months of 2024 [5] - The company hiked its quarterly cash dividend by 12% to 47 cents per share in June 2024 and announced a share repurchase program worth $6 billion in April 2024 [6] - The Zacks Consensus Estimate for the company's earnings per share for 2024 and 2025 is pegged at $5 84 and $6 61 respectively implying year-over-year increases of 15 64% and 13 15% [27] - The company's total debt was $52 7 billion as of Sept 30 2024 significantly lower than its cash and due from banks and interest-bearing deposits of $108 5 billion [25][26] Wells Fargo (WFC) - Wells Fargo's CEO expressed confidence in the bank's progress to fix compliance problems following its years-long fake account scandal [7] - The company announced a dividend hike of 14% to 40 cents per share in July 2024 and had the authority to repurchase up to $11 3 billion of common stock as of Sept 30 2024 [8] - Wells Fargo's NII increased 10% in the first nine months of 2024 contributing to the continued expansion of overall revenues [30] - The company's liquidity coverage ratio was 127% as of Sept 30 2024 with liquid assets totaling $185 5 billion [31] - The Zacks Consensus Estimate for the company's earnings per share for 2024 and 2025 is pegged at $5 28 and $5 49 respectively [32] JPMorgan Chase (JPM) - JPMorgan's Investment Banking fees increased 33% in the first nine months of 2024 driven by a strong capital market performance [33] - The company's NII rose 3% in the first nine months of 2024 from the same period in 2023 [36] - JPMorgan announced plans to open more than 500 branches by 2027 and renovate 1 700 existing locations by 2027-end [37] - The company's total debt was $850 1 billion as of Sept 30 2024 with cash and due from banks and deposits with banks totaling $434 3 billion [38] - The Zacks Consensus Estimate for the company's earnings per share for 2024 and 2025 is pegged at $18 82 and $16 77 respectively [39] M&T Bank (MTB) - M&T Bank's revenues saw a CAGR of 10 2% over the past five years (2018-2023) [34] - The company's total debt was $14 2 billion as of Sept 30 2024 significantly lower than the cash and due from banks and interest-bearing deposits at banks of $26 6 billion [41] - The company hiked its quarterly dividends by 4% to $1 35 per share in May 2024 and repurchased 3 8 million shares of its common stock in the first nine months of 2024 [42] - The Zacks Consensus Estimate for the company's earnings per share for 2024 and 2025 is pegged at $14 62 and $16 41 respectively [43]

Economic and Market Overview - The US economy started strong in 2024 due to optimism about potential Federal Reserve interest rate cuts, a robust labor market, rising consumer spending, and technological advancements [1] - However, optimism about rate cuts faded as inflation remained persistent, leading to uncertainty about the pace of future cuts [1] - The Fed has reduced interest rates by 100 basis points since September 2023 but hinted at fewer cuts in 2025 [1] Banking Sector Outlook - Deal-making activities are expected to surge in 2025, leading to increased revenues and expanded net interest margins (NIM) for banks [2] - Mortgage banking income is unlikely to improve in 2025 due to elevated mortgage rates [3] - Weakness in asset quality is expected to persist in credit cards, auto loans, and commercial real estate loans [3] - Despite challenges, 2025 is anticipated to be a favorable year for banks [3] Selected Banking Stocks - The Bank of New York Mellon Corp (BK), Northern Trust Corporation (NTRS), and Stock Yards Bancorp Inc (SYBT) are well-positioned for growth in 2025 [2] - These stocks have a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and have rallied more than 20% in 2024 with market caps of $2 billion or higher [4] The Bank of New York Mellon Corp (BK) - BK's net interest revenues grew at a CAGR of 3.8% over the past five years (2018-2023), with NIM improving to 1.25% in 2023 from 0.97% in 2022 [5] - BK is expanding globally through new services and acquisitions, such as the launch of Alts Bridge and the acquisition of Archer [6] - Non-US revenues accounted for 35% of total revenues as of September 30, 2023 [6] - BK's market cap is $57 billion, and its stock has risen 50.5% in 2024 [7] - Earnings are expected to grow by 15.6% in 2024 and 13.2% in 2025 [7] Northern Trust Corporation (NTRS) - NTRS's revenues grew at a CAGR of 3.5% over the three years ended 2023, driven by higher non-interest income and net interest income (NII) [8] - Loans and lease balances grew at a CAGR of 7.7% over the same period, despite a temporary decline in loans in 2024 [8] - NTRS is focusing on the Asset Servicing and Wealth Management segments to drive organic growth [8] - Earnings are expected to grow by 19.8% in 2024 and 5.6% in 2025 [9] - NTRS has a market cap of $20.7 billion and a Zacks Rank of 1, with shares rising 24% year-to-date [9] Stock Yards Bancorp Inc (SYBT) - SYBT's total revenues grew at a CAGR of 16.3% over the past five years (2018-2023), driven by higher rates and efforts to boost non-interest income [10] - NII and non-interest income grew at CAGRs of 16.7% and 15.3%, respectively, over the same period [10] - SYBT has a market cap of $2.2 billion and has risen 42% year-to-date [22] - Earnings are expected to grow by 3.8% in 2024 and 5.7% in 2025 [22] - SYBT has a Zacks Rank of 2 and has consistently paid dividends, with a dividend payout ratio of 34% [11] Industry Trends and Strategies - Banks are focusing on AI and technology to enhance client experience and expand online presence to capture the growing mobile banking population [13] - Strategic acquisitions and collaborations are being used to deepen global presence and diversify revenue streams, which will bolster fee income in 2025 [13] - The Federal Reserve's rate cuts are expected to drive consumer and commercial loan demand, stabilize funding costs, and boost NII and NIM [12] - The US presidential election has fueled optimism around banks due to anticipated tax cuts, favorable regulations, and expansionary fiscal measures [12] Capital Distributions and Share Repurchases - BK has increased dividends four times in the past five years with an annualized growth of 8.9% and announced a $6 billion share repurchase program in April 2024 [17] - SYBT extended its share repurchase program in May 2023, authorizing the repurchase of up to 1 million shares, with 0.7 million shares remaining as of September 30, 2024 [11] - SYBT announced a 25-million share repurchase program in October 2021, with 13.3 million shares remaining as of September 30, 2024 [23]

The Zacks Finance sector comprises a diversified set of players, ranging from banks, investment companies and insurance companies to real estate firms, which offer a varied set of financial services to their clients. With a few days left for 2024 to end, factors such as a favorable pricing environment, tight labor market, improved consumer spending and technology advancements have played a pivotal role in shaping the performance of the sector so far this year. Since the beginning of 2024, the spotlight rema ...