Bank Earnings: Morgan Stanley, Wells Fargo, Northern Trust, KeyCorp, US Bancorp

The most recent market surge was initially set off when many financial stocks started to get hit hard. That caused investors to shift towards higher quality stocks.

Today, we got more earnings report from major banks. Here’s a rundown of some prominent names.

Morgan Stanley Returns to a Profit

Morgan Stanley announced on Wednesday that it had returned to profitability in the third quarter after three successive quarterly losses.

The bank said it earned $498 million or 38 cents a share, compared with $7.7 billion, or $7.38 a share, in the quarter a year ago when results were helped by a one-time gain.

Earnings from continuing operations were $757 million in the third quarter, after a loss of $159 million in the second quarter. The results beat expectations. Analysts had expected earnings 29 cents a share on revenues of about $6.99 billion.

Wells Fargo Says Profit Doubled in Quarter

Wells Fargo & Company said Wednesday that its third-quarter profit nearly doubled from a year ago although it joined other big American banks in reporting higher loan losses.

Wells, the nation’s fourth-largest bank, said it earned $3.2 billion, or 56 cents per share, in the period ended Sept. 30. Analysts, on average, were expecting earnings of 37 cents per share.

The San Francisco-based bank said losses from bad loans climbed to $5.1 billion. Bank of America, JPMorgan Chase and Citigroup have all reported higher credit losses as consumers struggle to pay off their bills.

Wells Fargo, which acquired the Wachovia Corporation last fall, says it expects credit losses to peak in 2010.

Northern Trust reports profit but misses estimate

Northern Trust Corp swung to a profit in the third quarter as it earned more for investing clients’ money and offering other services, but results fell short of analysts’ expectations.

The company, which offers private banking, investment management and global custody services, said net income was $187.9 million, or 77 cents a share, compared with a loss of $148.3 million, or 66 cents per share, a year earlier.

Analysts had expected earnings of 84 cents per share.

KeyCorp posts wider 3Q loss

KeyCorp lost $438 million, or 52 cents per share, compared with a loss of $48 million, or 10 cents per share, during the same quarter a year ago.

Analysts in a Thomson Reuters survey had expected on average a loss of 41 cents per share. Such estimates generally exclude one-time charges or gains.

Key took a third-quarter provision of $733 million for loan losses. As of Sept. 30, its allowance for loan losses was $2.5 billion, or 4 percent of loans, up from $1.4 billion, or 1.90 percent, for the same time last year.

US Bancorp 3Q profit rises along with revenue

Its third-quarter profit rose to $583 million from $557 million a year ago as interest income and fee revenue rose. The profit worked out to 30 cents per share, well ahead of the 27 cents per share expected by analysts surveyed by Thomson Reuters.

Its shares climbed $1.21, or 5.1 percent, to $25.01 in morning trading.

Revenue rose 2.2 percent to $4.25 billion.

There were several bright spots. The company saw mortgage banking revenue rise by $215 million as homeowners refinanced during a stretch when interest rates were low. Revenue from commercial products rose 18.9 percent.

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