Bank of America (BAC) Q2 Results 'Mixed,' Outlook Positive - Evercore
The analyst noted the $.32 headline EPS number included several specials that net added $0.06/share. This brings "core" EPS closer to $0.26 which compares to their estimates and the consensus of $0.25. The beat was driven by lower credit costs while core rev a bit light on fees while core spread in line and core expenses in line.
Marquardt said overall the results were "mixed." He noted "good core expense control and core spread/NIM stable, while fees more mixed on FICC trading results down YoY (vs up meaningfully for C/JPM/GS) but equities better up meaningfully YoY, IB results better than expected, similar to peers. Balance sheet a bit lower than expected, but core loans were flattish with strong comm'l growth offset by declining consumer. Capital improved with T1C B3 9.6% (vs 9.52% last qtr) but TBV lower to $13.32 (vs $13.36) likely due to AOCI."
The analyst also said Outlook commentary appears net positive at accelerated expense target around LAS to now expect run rate costs of $2b by end '13 (vs prior guidance of $2.1b), NII should build over time from core $10.4b, NCOs under $2b vs $2.1b this qtr, and mortgage activity to slow (not unexpected).
He said the stock reaction is likely to be modestly positive.
The firm maintained an Overweight rating and price target of $15.
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Shares of Bank of America closed at $13.92 yesterday, with a 52 week range of $6.90-$14.02.