Bank of America (BAC) earnings Q3 2021

Bank of America posted third-quarter outcomes on Thursday that exceeded analysts’ expectations because it benefited from better-than-expected mortgage losses and file advisory and asset administration charges.

Listed below are the numbers:

  • Earnings: 85 cents a share vs the 71 cents a share estimate of analysts surveyed by Refinitiv
  • Income: $22.87 billion vs the $21.8 billion estimate

The corporate’s revenue surged 58% to $7.7 billion, or 85 cents a share, as income climbed 12% to $22.87 billion. Outcomes have been helped by a $1.1 billion reserve launch that led to a $624 million enhance after charge-offs.

Shares of the financial institution climbed 2.5%.

“We reported robust outcomes because the economic system continued to enhance and our companies regained the natural buyer progress momentum we noticed earlier than the pandemic,” CEO Brian Moynihan stated within the release. “Deposit progress was robust and mortgage balances elevated for the second consecutive quarter, resulting in an enchancment in web curiosity earnings whilst rates of interest remained low.”

Web curiosity earnings, a intently watched determine for banks, jumped 10% to $11.1 billion, exceeding the $10.6 billion StreetAccount estimate.

Buyers had needed to see mortgage progress enhance from a weak first half of the 12 months as a result of that helps banks produce extra curiosity earnings. Certainly, mortgage balances elevated 9% on an annualized foundation from the second quarter, pushed by energy in business loans, the financial institution stated.

Extra mortgage progress is predicted from right here, Moynihan informed analysts Thursday on a convention name.

Like larger rival JPMorgan Chase, Financial institution of America posted robust leads to funding banking, wealth administration and equities buying and selling companies.

Funding banking charges rose 23% to $2.2 billion, helped by a 65% surge in advisory charges to a file $654 million. Analysts had anticipated $2 billion in funding banking income.

The financial institution’s buying and selling operations exceeded expectations for the quarter. Bond buying and selling income dipped 5% to $2 billion, edging out the $1.93 billion estimate. Equities buying and selling surged 33% to $1.6 billion, roughly $150 million greater than anticipated.  

The financial institution’s wealth administration division posted a 17% improve in income to $5.3 billion, pushed by file asset administration charges of $3.2 billion.

Like different lenders, Financial institution of America put aside billions of {dollars} for credit score losses final 12 months, when the trade anticipated a wave of defaults tied to the coronavirus pandemic. Banks have been releasing a few of these funds when the losses did not arrive, and analysts might be curious how a lot of a lift that dynamic could have within the second half of the 12 months.

They may also probably ask Moynihan about succession planning after his most senior deputy, Chief Working Officer Tom Montag, announced his departure. Final month, Moynihan introduced a sweeping administration overhaul, together with a brand new finance chief, expertise head, common counsel and chief administrative officer.

Shares of Financial institution of America have climbed 42% this 12 months earlier than Thursday, exceeding the 36% acquire of the KBW Financial institution Index.

On Wednesday, JPMorgan posted outcomes that beat expectations, pushed by a $1.5 billion enhance from better-than-expected mortgage losses. On Thursday, Morgan Stanley topped expectations because the agency posted file leads to funding banking and asset administration.

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