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Bank of America reported betetr than expected third quarter earnings before the bell Monday. Last week JPMorgan Chase $JPM. Wells Fargo $WFC, PNC Financial $PNC and Citigroup $C$C reported.  In Q2 $BAC saw a 43% drop in income taxes to $1.7 billion from $3 billion.

Bank of America Mortgage

Bank of America Corporation NYSE: BAC Earnings Beat Before Open Monday

$0.66 Beat Forecast $0.62 EPS AND $22.78 Billion Beat  $22.67 Billion Forecast in Revenue 

Earnings 

Bank of America Corp. (NYSE: BAC) reported its third-quarter results on Monday at 66 cents a share, up 37.5%, with revenue at $22.78 billion. Lending and deposits rose modestly while net charge-offs decreased. with analysts forecasting $0.62 in earnings per share (EPS) on  $22.67 billion in revenue.

The stock has a 52-week trading range of $25.12 to $33.05. 

Bank of America Corporation NYSE: BAC

Market Reaction Pre-Open $28.56 +0.10 (+0.35%)

Highlights

  • Provision for credit losses decreased by $118 million to $716 million, below the $964.2 million estimate.
  • BAC's net interest margin rose 4 basis points to 2.42 percentage points, beating the analyst estimate by 1 basis point.
  • Profit in consumer banking, the lender's biggest division, jumped 49 percent to $3.1 billion on improving credit, expenses and lower taxes.
  • Loans in the business sector rose 6 percent to $285 billion and deposits rose 4 percent to $688 billion.
  • Global markets division posted profit that rose 21 percent to $912 million.
  • Fixed income trading revenue came in at $2.06 billion
  • Equities trading generated $1.01 billion, roughly matching analysts expectations for the quarter.

BAC Earnings Q3 18

 

Bank of America Corporation NYSE: BAC Q2 Earnings Recap

Earnings:

EPS soared 43% to 63 cents a share on adjusted revenue rising nearly 3% to $22.6 billion beating expectations of earnings per share of 59 cents, on revenue of $22.3 billion. Net income rose 33% to $6.8 billion.

  • Reaction: Bank of America NYSE $BAC
  • Pre- Market - $28.88 +0.34 (+.19 %)

Revenue Breakdown

      • Consumer banking, the bank's largest segment rose 8% to $9.2 billion, as deposits rose 5% to $688 billion.
      • Sales and trading revenue of $3.4 billion, including net debit valuation adjustment (DVA) of $(179) million
      • Excluding net DVA, sales and trading revenue up 7% to $3.6 billion(C)
      • Equities up 17% to $1.3 billion(C)
      • FICC up 2% to $2.3 billion(C)
      • Wealth management revenue increased slightly to $4.7 billion
      • Average loans and leases in business segments grew 5% – Consumer up 6% and commercial up 5%
      • Average deposits increased 3%
      • Merrill Edge brokerage assets increased 20%
      • Client balances within Global Wealth & Investment Management increased to nearly $2.8T

Credit Losses Improve

$BAC allocated $800 million for credit losses in the quarter, less than the $973.5 million expected by analysts. Non-performing loans fell half a billion dollars from the first quarter of 2018 on improvements in consumer and commercial debt.

While the bank grew loans and leases to $935.8 billion, that was below the $942 billion estimate.

"Responsible growth continued to deliver as a driver for every area of the company," CEO Moynihan said in a statement. "We grew consumer and commercial loans; we grew deposits; we grew assets within our Merrill Edge business; we generated more net new households in Merrill Lynch; and we supported more institutional client activity."

 

The bank rally had been fueled by expectations for easier regulations including a possible repeal of DoddFrank and infrastructure spending. The Federal Reserve decision to raise rates has also helped banks.  The new surge in home prices had  also buoyed optimism for the mortgage business and banks profits thereto.

Source: BAC, AlphaStreet

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