Bank of America Earnings: What Happened with BAC

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BAC bushed connected net and connected revenue

Published October 14, 2021

Key Takeaways

  • Bank of America's nett involvement borderline bushed expert estimates.
  • Net involvement borderline reflects the quality betwixt the involvement banks gain connected their assets and the involvement they wage retired to depositors and different creditors.
  • Net income was boosted by a reserve merchandise of $1.1 billion.
Bank of America Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
EPS Beat $0.85 $0.70
Revenue Beat $22.8B $21.6B
Net Interest Margin Beat 1.68% 1.63%

Source: Predictions based connected analysts' statement from Visible Alpha

Bank of America (BAC) Financial Results: Analysis

Bank of America Corporation (BAC) reported Q3 FY 2021 earnings that bushed analysts' statement estimates. Earnings per share (EPS) exceeded expert expectations, rising 66.7% twelvemonth implicit twelvemonth (YOY). The bank's quarterly gross besides came successful supra estimates, up 12.3% from the year-ago quarter. Net involvement borderline surpassed expert forecasts. The company's shares were up much than 2% successful pre-market trading. Over the past year, Bank of America's shares person provided a total return of 76.5%, good supra the S&P 500's full instrumentality of 24.3%.

BAC Net Interest Margin

Bank of America's net involvement margin roseate for the archetypal clip since the last 4th of FY 2018. Net involvement borderline is simply a cardinal metric that measures the quality betwixt the income banks make from recognition products similar loans and mortgages and the involvement they wage to depositors and different creditors. It is analogous to gross margin reported by non-financial companies, which is the quality betwixt income and outgo of goods sold. In highly low involvement complaint environments, nett involvement margins get squeezed arsenic banks little rates charged to borrowers successful bid to stay competitory but are reluctant to propulsion rates they wage to creditors beneath the little zero bound.

Bank of America said that, contempt involvement rates remaining low, its net involvement income improved owed to expanding indebtedness balances, which roseate for the 2nd consecutive quarter. Overall nett income was boosted by a loan nonaccomplishment reserve merchandise of $1.1 cardinal arsenic plus prime improved during the quarter. Last year, banks enactment speech billions of dollars arsenic provisions for recognition losses amid the COVID-19 pandemic. As the system improves and risk of defaults declines, banks person begun to merchandise those reserves.

Bank of America's adjacent net study (for Q4 FY 2021) is estimated to beryllium released connected Jan. 18, 2022.

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  1. Visible Alpha. "Financial Data." Accessed Oct. 12, 2021.

  2. Bank of America Corp. "Bank of America Reports Q3-21 Net Income of $7.7 Billion, EPS of $0.85," Pages 2 & 18. Accessed Oct. 14, 2021.

  3. TradingView. "Price Chart." Accessed Oct. 13, 2021.

  4. Bank of America Corp. "Bank of America Reports Q3-21 Net Income of $7.7 Billion, EPS of $0.85," Page 18. Accessed Oct. 14, 2021.

  5. Bank of America Corp. "Bank of America Reports Q3-21 Net Income of $7.7 Billion, EPS of $0.85," Page 1. Accessed Oct. 14, 2021.

  6. Bank of America Corp. "Bank of America Announces 2022 Financial Reporting Dates." Accessed Oct. 13, 2021.

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