Summary
Bank of America Corporation (BAC) reported a net income of $2.5 billion, or $0.19 per diluted share, for the second quarter of 2012. This represents a significant improvement from the net loss of $8.8 billion, or ($0.90) per diluted share, recorded in the same period last year. The turnaround was largely driven by a substantial decrease in the provision for credit losses and lower noninterest expense, the latter benefiting from the absence of a goodwill impairment charge recorded in Q2 2011. Total revenue, net of interest expense, increased to $22.2 billion on a fully taxable-equivalent basis, primarily due to a significant reduction in the representations and warranties provision. Despite the improved profitability, the company faced headwinds from a challenging economic environment marked by slowing U.S. economic momentum and ongoing European financial strains. Net interest income continued to decline due to lower consumer loan balances and yields, as well as lower investment securities yields, exacerbated by the low-interest-rate environment. Furthermore, noninterest income was negatively impacted by lower card income due to the Durbin Amendment and reduced investment banking fees. The company is actively managing its balance sheet, reducing long-term debt, and focusing on cost savings initiatives as part of 'Project New BAC' to improve efficiency and profitability.
Financial Highlights
35 data points| Revenue | $21.97B |
| Interest Expense | $4.44B |
| Net Income | $2.46B |
| EPS (Basic) | $0.19 |
| EPS (Diluted) | $0.19 |
| Shares Outstanding (Basic) | 10.78B |
| Shares Outstanding (Diluted) | 11.56B |
Key Highlights
- 1Net income of $2.5 billion in Q2 2012, a significant improvement from a net loss of $8.8 billion in Q2 2011.
- 2Diluted EPS of $0.19 in Q2 2012, compared to ($0.90) in Q2 2011.
- 3Total revenue, net of interest expense (FTE basis), increased to $22.2 billion, driven by lower representations and warranties provision.
- 4Net interest income (FTE basis) decreased to $9.8 billion due to lower loan and securities yields and compressed deposit spreads.
- 5Noninterest expense decreased to $17.0 billion, aided by lower litigation expenses and the absence of a goodwill impairment charge from the prior year.
- 6Allowance for loan and lease losses decreased to $30.3 billion from $33.8 billion at the end of 2011, reflecting improved portfolio trends.
- 7Tier 1 common capital ratio improved to 11.24% from 9.86% at year-end 2011, indicating stronger capital levels.