Summary
Bank of America Corporation (BAC) reported a significant improvement in net income for the third quarter of 2015 compared to the same period in 2014, with net income of $4.5 billion, or $0.37 per diluted share, a substantial turnaround from a net loss of $232 million, or $0.04 per share, in the prior year. This positive performance was primarily driven by a considerable reduction in litigation expenses, which decreased by $5.7 billion year-over-year. While revenue saw a slight decrease primarily due to lower net interest income on a fully taxable-equivalent basis and negative market-related adjustments on debt securities, the substantial drop in noninterest expenses, particularly those related to litigation, boosted profitability. Financially, BAC maintained a strong capital position, with a Common Equity Tier 1 (CET1) capital ratio of 11.6% under the Basel 3 Standardized – Transition framework. The company also saw an increase in total assets to $2.2 trillion, driven by deposit inflows. Management is actively addressing a conditional non-objection from the Federal Reserve on its capital plan by resubmitting it with necessary revisions.
Financial Highlights
35 data points| Revenue | $20.99B |
| Interest Expense | $2.50B |
| Net Income | $4.62B |
| EPS (Basic) | $0.40 |
| EPS (Diluted) | $0.38 |
| Shares Outstanding (Basic) | 10.44B |
| Shares Outstanding (Diluted) | 11.20B |
Key Highlights
- 1Net income significantly improved year-over-year, turning from a loss to a substantial profit, largely due to lower litigation expenses.
- 2Total revenue saw a slight decline, impacted by lower net interest income and negative market-related adjustments on debt securities.
- 3Noninterest expense decreased substantially, mainly due to reduced litigation charges.
- 4Common Equity Tier 1 (CET1) capital ratio remained strong at 11.6% under Basel 3 Standardized – Transition, though slightly down from the prior year-end.
- 5Total assets increased to $2.2 trillion, primarily driven by deposit inflows.
- 6Bank of America is actively working with the Federal Reserve to address weaknesses identified in its capital planning process as part of the CCAR submission.
- 7The company is preparing to transition to the Basel 3 Advanced approaches capital framework in the fourth quarter of 2015.