BAC

Bank Of America Q2 Profit Beats Estimates; Revenue Down 3%

(RTTNews) - Bank of America (BAC) reported second quarter earnings per share of $0.37 compared to $0.74, prior year. On average, 21 analysts polled by Thomson Reuters expected the company to report profit per share of $0.27, for the quarter. Analysts' estimates typically exclude special items. Pretax income declined 58% year-on-year to $3.8 billion. Net income of $3.5 billion included the impact of a $4.0 billion reserve build primarily associated with a weaker economic outlook related to COVID-19. Provision for credit losses increased to $5.1 billion, driven by $4.0 billion reserve build. Pretax, pre-provision income, was down 9% to $8.9 billion.

Second quarter revenue, net of interest expense, decreased 3% year-on-year to $22.3 billion. Analysts expected revenue of $22.01 billion for the quarter. Net interest income declined 11% to $10.8 billion, driven by lower interest rates, partially offset by loan and deposit growth. Noninterest income rose 5% to $11.5 billion, led by strong capital markets results.

CFO Paul Donofrio said: "We strengthened an already strong balance sheet by increasing capital and liquidity and growing deposits. While net charge-offs remained relatively low by historical standards, we added another $4 billion to credit reserves to reflect the current economic outlook. We ended the quarter with record deposits of $1.7 trillion, $242 billion in common equity, and $21 billion in credit reserves."

Shares of Bank of America were down nearly 2% in pre-market trade on Thursday.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tags

More Related Articles

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.