Bank of America's Q2 Earnings: Revenue And EPS Beat, $1.5B Credit Loss Provision, Sees Q4 NII Growth

Bank of America Corp BAC reported a second-quarter fiscal 2024 net income of $6.9 billion and EPS of $0.83, beating the analyst consensus estimate of $0.80.

Revenue, net of interest expense, increased 0.8% year-over-year to $25.54 billion, beating the analyst consensus estimate of $25.22 billion.

Segment Net income: Consumer Banking $2.595 billion vs. $2.853 billion Y/Y, Global Wealth and Investment Management $1.03 billion vs. $978 million Y/Y, Global Banking $2.12 billion vs. $2.65 billion Y/Y, and Global Markets $1.41 billion vs. $1.18 billion Y/Y.

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The Net interest income was $13.7 billion (-3.0% Y/Y), as higher deposit costs more than offset higher asset yields and modest loan growth. Noninterest income was $11.7 billion (+6.0% Y/Y). Provision for credit losses was $1.5 billion, compared to $1.1 billion a year ago.

The efficiency ratio for the quarter was 64%, flat Y/Y. The bank reported a CET1 ratio of 11.9%, up 30 bps from a year ago. The book value per share of $34.39 improved by 7%.

The average loan and lease balance was $1.05 trillion (+0.5% Y/Y). Average deposits are up 2% Y/Y to $1.91 trillion.

Bank of America added ~1.0 million credit card accounts during the quarter.

Dividend: From CFO Alastair Borthwick: "We announced plans for an eight percent increase in our quarterly common stock dividend, to 26 cents per share, pending Board approval."

Outlook: Bank of America anticipates net interest income of ~$14.50 billion in the fourth quarter. It assumes a 25 bps interest rate cut.

Price Action: BAC shares are trading higher by 2.41% at $42.90 premarket at the last check Tuesday.

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