Bank of America (BAC) Tops Q2 EPS by 26c

Bank of America (NYSE: BAC) reported Q2 EPS of $1.03, $0.26 better than the analyst estimate of $0.77. Revenue for the quarter came in at $21.5 billion versus the consensus estimate of $21.83 billion.

• Net income of $9.2 billion, or $1.03 per diluted share, including: – $1.6 billion provision for credit losses benefit(C) – $2.0 billion positive tax adjustment related to revaluation of UK deferred tax assets

• Revenue, net of interest expense, decreased 4% to $21.5 billion – Net interest income (NII)(D) declined 6% to $10.2 billion, driven primarily by lower interest rates – Noninterest income down 2% to $11.2 billion, driven by lower sales and trading revenue and the absence of a $704 million gain in the yearago quarter, partially offset by higher Consumer and Wealth Management revenues

• Provision for credit losses decreased $6.7 billion to a benefit of $1.6 billion, reflecting a reserve release of $2.2 billion amid an improved macroeconomic outlook(C)

• Noninterest expense rose $1.6 billion, or 12%, to $15.0 billion, including higher compensation and benefits costs, a $500 million contribution to the Bank of America Foundation to support ESG initiatives, and $300 million associated with processing transactional card claims related to state unemployment benefits

• Average loan and lease balances in business segments declined 11% YoY to $889 billion but increased $1.8 billion QoQ; excluding Paycheck Protection Program, loan balances grew $5.1 billion QoQ • Deposits rose $231 billion, or 14%, to $1.9 trillion

• Average Global Liquidity Sources rose $267 billion, or 34%, to a record $1.1 trillion, reflecting strong deposit balance growth(E) • Common equity tier 1 (CET1) ratio strong at 11.5% (Standardized)(A)

• Returned $5.8 billion to shareholders through common dividends and share repurchases

From Chairman and CEO Brian Moynihan "We delivered solid earnings and returned more capital to shareholders during the quarter as we moved to a more open economy. Our team continued to do a great job serving clients, as shown by the increased levels of client activity across all of our businesses. "More than 85% of our buildings and offices are open, and we're welcoming our teammates back. This means more face-to-face meetings; helping to increase sales of Consumer products and drive strong household growth in Wealth Management, and increased prospect calling in Commercial Banking. "Consumer spending has significantly surpassed prepandemic levels, deposit growth is strong, and loan levels have begun to grow."

For earnings history and earnings-related data on Bank of America (BAC) click here.

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