Bank Of America Corp Surges After Earnings Beat

Bank of America released its second quarter earnings report before opening bell this morning, posting earnings of 45 cents per share on $22.35 billion in revenue. Analysts had been looking for earnings of 36 cents per share and $21.4 billion in revenue. In the same quarter last year, the bank posted earnings of 19 cents per share and $21.96 billion in revenue.

Bank Of America Corp Surges After Earnings Beat
Source: Wikimedia Commons

Key metrics from Bank of America’s earnings report

Bank of America reported a 6% increase in consumer banking deposits to $547 billion and a 40% increase in residential mortgage and home equity loan originations, which brought them to $19.2 billion. The firm issued 1.3 million new credit cards during the quarter, which is the most since the third quarter of 2008.

Assets in the Merrill Edge Brokerage division increased 15% year over year to $122 billion. Fees from wealth management and asset management climbed 9% to $122 billion. Global banking loan balances rose 7% to $397 billion Bank of America generated $1.5 billion in investment banking fees and $3/3 billion in sales and trading revenues, excluding net DVA.

Excluding litigation, noninterest expense fell 6% year over year. Expenses on legacy assets and servicing noninterest expenses fell 37%. Net charge-offs were $1.07 billion, which was in line with the consensus estimate. Adjusted net charge-offs fell 26% to $929 million. Provisions for credit losses were $780 million, compared to the consensus estimate of $836.9 million.

Bank of America sees new records in capital, liquidity

Bank of America achieved a Common Equity Tier 1 Capital level of $148.3 billion, a new record. The firm also set a new record for global excess liquidity sources, which was $484 billion. Tangible book value per share rose 5% year over year to $15.02, while book value per share climbed 4% to $21.91 per share.

The return on average assets was 0.99%, while the return on average tangible common equity was 12.8%. The bank returned $1.3 billion to shareholders through a combination of dividends and share repurchases during the second quarter.

As of this writing, shares of Bank of America were up 3.59% to $17.73 per share.