Bank of America (BAC) Tops Q3 EPS by 4c

Bank of America (NYSE: BAC) reported Q3 EPS of $0.66, $0.04 better than the analyst estimate of $0.62. Revenue for the quarter came in at $22.8 billion versus the consensus estimate of $22.7 billion.

• Net income up 32% to $7.2 billion, driven by continuing strong operating leverage and asset quality, as well as the benefit of tax reform
• Diluted earnings per share up 43% to $0.66
• Pretax income up 18% to $9.0 billion • Revenue, net of interest expense, increased 4% to $22.8 billion – Net interest income (NII) increased $709 million, or 6%, to $11.9 billion, reflecting benefits from higher interest rates, as well as loan and deposit growth; net interest yield of 2.42%, up 6 bps(A) – Noninterest income increased $229 million, or 2%, to $10.9 billion
• Provision for credit losses decreased $118 million to $716 million – Net charge-off ratio remained low at 0.40%
• Noninterest expense declined $327 million, or 2%, to $13.1 billion; efficiency ratio improved to 57%
• Average loan and lease balances in business segments rose $29 billion, or 3%, to $871 billion – Consumer up 5% and commercial up 2% • Average deposit balances rose $45 billion, or 4%, to $1.3 trillion
• Repurchased $14.9 billion in common stock and paid $4.0 billion in common dividends YTD

“Responsible growth, backed by a solid U.S. economy and a healthy U.S. consumer, combined to deliver the highest quarterly pre-tax earnings in our company’s history. This marks the 15th consecutive quarter of positive operating leverage, driven by continued growth in deposits, client balances in wealth management, solid loan growth and disciplined expense management. Our strong balance sheet has allowed us to return $19 billion to shareholders so far this year in dividends and share buybacks. Our high-tech, high-touch approach continues to drive both client satisfaction and efficiencies. More than 3 million users have accessed Erica, the industry’s only AI virtual assistant, since its April rollout, and nearly a quarter of deposit transactions this quarter were performed via mobile device. We also have opened 53 financial centers and renovated more than 400 others in the last 12 months. We continue to expand into new markets, recently opening our first financial center in Pittsburgh, and we plan to open in Salt Lake City in the coming months, with additional markets to follow. In Global Banking, deposit growth reflects GTS investments, and Global Markets profitability improved. Bank of America is helping our clients address the straightforward question of what they would like the power to do, and delivering capabilities and solutions to help them reach their goals,” said Brian Moynihan, Chairman and Chief Executive Officer.

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

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