Earnings Reports

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Bank of America $BAC,  America's second-biggest bank by assets reported better than expected third quarter earnings before the bell on Friday ahead of Wells Fargo $WFC and PNC Financial $PNC. $BAC follows other money center major banks  Citigroup $C and JPMorgan $JPM who  better than expected numbers Thursday morning. Results overcame seeing revenue for fixed income, currencies and commodities fell 22%. $BAC shares were up pre market open.

Bank of America

Earnings: EPS was 48 cents with revenue of $22.070 billion beatung expected EPS of 46 cents on expected revenue of $21.981 billion.

Reaction: Bank of America NYSE $BAC $25.72 +0.29 (+1.14 %) Pre-Market: 7:56AM EDT

Preview of Bite ImageRevenue:

  • Revenue for fixed income, currencies and commodities fell 22%,
  • Revenue for equities rose 2% 

Loan Losses

Overall BofA's loan loss reserves fell by 2% but rose $200 million for credit cards due to rising charge-offs. $BAC said its loans in 3Q17 totaled $927.1MM, while deposits came in at $1.284 trillion. Meanwhile, driven by higher commercial losses, $BAC's net charge-offs rose by $12Bil YoY to $900MM.

Bank stocks jumped recently after the GOP's tax-reform plan was announced. We expect more of the same with trading mellow, interest rates low and business cautious. The banking sector received a boost earlier in the year after the largest U.S. banks passed Fed stress tests and were allowed to raise dividends and share buybacks. The Fed as it raise rates is helping banks' finances.

Since Donald Trump won on Election Day has been a huge run higher on BAC and the other bank stocks. Caution hangs over the sector if congress can pass regulatory rollbacks after the GOP's unsuccessful attempt to replace the Affordable Care Act. Auto and student loans also overhang the banking and finance sectors. 

Daily Chart of Bank of America shows the influence of market expectations.

BAC 10 19 17


Previous Quarter Earnings
Bank of America $BAC Earnings Beat Estimates With Strong Trading Result
Bank of America $BAC Earnings Beats on Trading Income Rise

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 has also buoyed optimism for the mortgage business and banks profits thereto.


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