Bank of America posts Q3 results; Tops estimates

Bank of America reported its Q3 results on Thursday before the market opened. They exceeded analysts’ expectations by posting better-than-expected loan losses and record advisory and management fees.

  • Revenue: $22.87 billion vs the $21.8 billion estimate
  • Earnings: 85 cents a share vs the 71 cents a share estimate
Key Highlights:
  • Net income rose 58% to $7.7 billion, or $0.85 per diluted share
  • Revenue, net of interest expense, increased 12% to $22.8 billion
  • Net interest income (NII)(B) up $1 billion, or 10%, to $11.1 billion, driven by strong deposit growth and related investment of liquidity, and Paycheck Protection Program (PPP) activities
  • Non-interest income up 14% to $11.7 billion, driven by record asset management fees, strong investment banking revenue and higher sales and trading revenues
  • Provision for credit losses improved by $2.0 billion to a benefit of $624 million, reflecting a reserve release of $1.1 billion driven primarily by asset quality improvements during the quarter(C)
  • Non-interest expense was relatively flat at $14.4 billion as higher revenue-related expenses were largely offset by lower litigation expense and lower COVID-related costs
  • Average loan and lease balances in business segments increased $14 billion QoQ to $903 billion; excluding PPP, loan balances grew $21 billion QoQ(D)
  • Average deposits up $247 billion, or 15%, to $1.9 trillion • Average Global Liquidity Sources rose $261 billion, or 30%, to record $1.1 trillion

“We reported strong results as the economy continued to improve and our businesses regained the organic customer growth momentum we saw before the pandemic. Deposit growth was strong and loan balances increased for the second consecutive quarter, leading to an improvement in net interest income even as interest rates remained low.”

“Each day clients entrust us with more of their business, whether it’s new checking and credit card accounts in Consumer; broader and deeper relationships in Wealth Management; increased commercial loan balances; or near record investment banking activities. Our institutional clients also relied on us to help them manage risk through our market-leading sales and trading capabilities, where we had strong revenues this quarter.”

“For our shareholders, we returned nearly $12 billion in capital this quarter, while continuing to support clients and communities. The team has done a remarkable job, and I couldn’t be prouder of how they stepped up to support our clients and deliver another quarter of outstanding results.”

Chairman and CEO Brian Moynihan

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