An Eye on Earnings Report: Banco Bilbao Vizcaya Argentaria (NYSE: BBVA)

On Friday, Shares of Banco Bilbao Vizcaya Argentaria (NYSE: BBVA) declined -1.72% to $6.29. The stock grabbed the investor’s attention and traded 2,632,542 shares as compared to its average daily volume of 3.25M shares. The stock’s institutional ownership stands at 2.80%.

BBVA Compass Bancshares, Inc., a Sunbelt-based bank holding company (BBVA Compass), stated recently net income of $196.0M for the fourth quarter of 2018, a 276 percent increase from the $52.0M earned during the fourth quarter of 2017. Included in fourth quarter 2017 results is income tax expense of about $121.0M related to the revaluation of net deferred tax assets at the lower statutory tax rate mandated by the Tax Cuts and Jobs Act (non-cash charge). Excluding the impact of this item, the year-over-year increase in net income for the fourth quarter of 2018 contrast to adjusted net income of $173.0M for the fourth quarter of 2017 was 13 percent.

Net income for the full-year 2018 totaled $763.0M, a boost of 66 percent from the $461.0M earned during the full-year of 2017. Excluding the impact of the non-cash charge, the year-over-year increase in net income for the full-year of 2018 contrast to adjusted net income of $582.0M for the full-year of 2017 was 31 percent.

Total revenue for the quarter was a record $953.0M, a boost of 6 percent from fourth quarter 2017 levels. For the full-year 2018, total revenue was $3.70B (also a record), a boost of 9 percent from $3.40B in 2017. Fueling the growth was net interest income which totaled $682.0M, up 13 percent from the fourth quarter of 2017 and 15 percent (annualized) on a linked quarter basis. The percent net interest margin in the fourth quarter was 3.37 percent, up 15 basis points from the fourth quarter of 2017 and 10 basis points from the third quarter of 2018. On a full-year basis, the percent net interest margin was 3.30 percent in 2018, a boost of 20 basis points from the comparable period in 2017.

Noninterest income for the quarter totaled $271.0M, down 9 percent contrast to the $297.0M recorded in the fourth quarter of 2017. For the full-year of 2018, noninterest income totaled $1.10B, up 1 percent from prior year levels as several of our major fee-based businesses recorded positive performances. Particularly noteworthy were card and merchant processing fees (+37 percent), corporate and correspondent investment sales (+36 percent) and mortgage banking income (+87 percent). Conversely, weaker demand and economic conditions influenced investment banking and advisory fees (-25 percent) and money transfer income (-10 percent). Other income also recorded a decline in the quarter and for the year due in part to a decrease in syndication fees and other miscellaneous fees coupled with certain interchange fees  being reclassified to card and merchant processing fees in 2018.

Overall expense growth was well contained as noninterest expense totaled $602.0M, down 2 percent contrast to the prior year quarter, and for the full-year of 2018 was up 2 percent. Revenue growth combined with the strong focus on expense management resulted in record operating income of $351.0M in the quarter and $1.30B for the year, both represent a 23 percent increase over the respective prior year period.

Total loans at the end of the fourth quarter of 2018 were $65.30B, a boost of 6 percent from the $61.70B at the end of the fourth quarter of 2017.

“Loan production was brisk throughout our network as we funded a record $21.70B in customer loans during the year, an 18 percent increase over the prior year,” said Rodríguez Soler. “This enabled us to offset increased payoff activity as total commercial loans increased 5 percent in the aggregate, led by an 11 percent increase in commercial mortgages, while double-digit increases in credit cards, direct consumer lending and indirect auto lending resulted in an 8 percent increase in our consumer loan portfolio.”

Total deposits at the end of the fourth quarter of 2018 were $72.20B, a 4 percent increase from the $69.30B at the end of the fourth quarter of 2017. The loan to deposit ratio ended the quarter at 90 percent, up slightly from 89 percent a year ago.

Total shareholder’s equity at the end of the fourth quarter totaled $13.50B, a 4 percent increase from $13.00B at the end of the fourth quarter of 2017. The CET1 ratio stood at 12.00 percent at the end of the fourth quarter of 2018, up 20 basis points from the end of the fourth quarter of 2017.

BBVA has a market value of $42.16B while its EPS was booked as $0.84 in the last 12 months. The stock has 6.70B shares outstanding. Beta value of the company was 1.01; beta is used to measure riskiness of the security.



Jerry Simmons

Jerry Simmons

I am Jerry Simmons and I focus on breaking news stories and ensuring we (“Digital Wall”) offer timely reporting on some of the most recent stories released through market wires about “Financial” sector. I have formerly spent over 3 years as a trader in U.S. Stock Market and is now semi-stepped down. I work on a full time basis for Digital Wall specializing in quicker moving active shares with a short term view on investment opportunities and trends. Address: 4042 Braxton Street, Sterling, IL 61081, USA Phone: (+1) 815-535-4324 Email: jerry.simmons@yourdigitalwall.com