Charles Schwab, regional banks post meager Q4 results

Charles Schwab (SCHW) reported fourth-quarter earnings results alongside regional banks US Bancorp (USB) and Citizens Financial Group (CFG) Wednesday morning. Notably, Charles Schwab saw profits decline by at least 47%.

Yahoo Finance Reporter Madison Mills breaks down the earnings results and bank sector sentiments, live from the New York Stock Exchange.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Luke Carberry Mogan.

Transcripción del video

SEANA SMITH: Let's get to three stocks that are on the move here this morning in Premarket Trading. We're hearing from the regional banks Charles Schwab, US Bancorp. And Citizens Financial, all out with their quarterly results. And you can see downward pressure on all three of these names.

Charles Schwab now off nearly 6% ahead of the open. Madison Mills standing by on the floor of the New York Stock Exchange with the latest on this. And, Maddie, once again, we're seeing some weakness in some of these regional plays.

MADISON MILLS That's exactly right, Seana. And it's all about that net interest income. And also, it's all about the revenue picture. And when you look at Schwab this morning that is what the Street is focused on, and that's why we're seeing some negativity in that name.

I want to run through just a couple of the numbers here. Fourth quarter net-interest income declining by nearly half at about 48%. That is a huge dip in that area from the previous quarter and what the consensus was for this name. Earnings topping consensus despite that net income number. Deposits as well, and this has been a key thing to watch across all of these banks, down by 21%.

And that story continues into my other stock to watch this morning. US Bank Corp the consensus on the Yahoo Finance platform was at the lowest that it's been in the past 5/4 for this name. And we did see some disappointment for USB as well, particularly, when it comes to those deposits down by 10%. But interestingly, revenue was still up by 6% for the US Bank Corp.

And then, finally, I want to end on Morgan Stanley struggling in a very similar way to these other banks here. Again, it's about that forward guidance and that's where we're seeing a lot of negativity towards Morgan Stanley coming out of yesterday and into today's trade as well.

I want to take a quick look at the KBW Bank index because we'll be able to get a clearer look at how this entire basket of names is performing. That index is down a little over 1% on my end this morning, premarket. And what's interesting to note is that higher interest rates that used to be a good thing for these banks because it meant that they could charge more interest.

But in today's environment that means that folks are pulling their money out. They're going into money market funds. They're investing in bonds. And that's why we're seeing that downward pressure on deposits killing these banks and earnings.

BRAD SMITH: All right, Maddie, thanks so much for teeing that up. We're going to be watching all those names going into the opening cross and throughout the trading session. Yahoo Finance's own, Maddie Mills, we'll check back in with you at the NYSE in just a little bit.