Bank of America (BAC) reported a slight earnings and revenue beat for the second quarter, with earnings per share (EPS) of $0.83, surpassing the analyst estimate of $0.80.
The company's revenue for the quarter also exceeded expectations, coming in at $25.4 billion against the consensus estimate of $25.24 billion.
Despite the positive results, net income fell to $6.9 billion from $7.4 billion in the same quarter last year, a decrease attributed to higher deposit costs and increased provisions for credit losses.
The bank's revenue, net of interest expense, rose by 1% year-over-year (YoY), driven by higher asset management and investment banking fees, as well as sales and trading revenue.
However, net interest income (NII) saw a 3% decline to $13.7 billion as higher deposit costs offset gains from higher asset yields and modest loan growth. Noninterest expense also saw an uptick, increasing by 2% due to investments in personnel and revenue-related compensation.
Chair and CEO Brian Moynihan highlighted the consistent performance of the bank's Global Markets business, which marked its ninth consecutive quarter of YoY revenue growth in sales and trading. "Our Global Markets business delivered its ninth consecutive quarter of year-over-year revenue growth in sales and trading, earning double-digit returns," he stated. "Our investments in this business are delivering for our shareholders.”
CFO Alastair Borthwick noted the return of $5.4 billion to shareholders through dividends and share repurchases and announced plans for an eight percent increase in the quarterly common stock dividend, subject to Board approval.
Following the earnings release, Bank of America's shares saw an increase of 0.95%.
The bank's provision for credit losses rose to $1.5 billion, up from $1.3 billion in the first quarter of 2024 and $1.1 billion in the second quarter of 2023, with net charge-offs remaining relatively flat compared to the first quarter of 2024 but increasing from $869 million in the second quarter of the previous year.
BAC's average deposit balances grew by 2% to $1.91 trillion, and average loans and leases showed a modest increase compared to the second quarter of the previous year. Bank of America also reported a robust capital position, with a Common equity tier 1 (CET1) ratio of 11.9%, above the new regulatory minimum set to take effect in October 2024.