10-QPeriod: Q3 FY2016

BANK OF AMERICA CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2016

Filed November 1, 2016For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

Bank of America Corporation (BAC) reported a solid third quarter of 2016, with net income of $5.0 billion, or $0.41 per diluted share, a 6.5% increase in net income compared to the prior year's $4.6 billion, or $0.38 per diluted share. This improvement was driven by higher total revenue, which rose to $21.6 billion from $21.0 billion in the third quarter of 2015, and a decrease in noninterest expense. The bank demonstrated continued capital strength, repurchasing $1.4 billion of common stock and increasing its quarterly dividend to $0.075 per share, reflecting confidence in its financial position and commitment to returning capital to shareholders. Asset quality metrics showed improvement, with a decrease in nonperforming loans and leases as a percentage of total loans and leases, and a decrease in net charge-offs. Management highlighted positive trends in key business segments, including Consumer Banking and Global Banking, which both saw increases in net income. Global Markets also showed robust performance with a significant increase in net income, driven by strong trading revenue. While Global Wealth & Investment Management revenue saw a slight decrease, net income improved due to lower expenses, indicating effective cost management across the organization.

Financial Highlights

34 data points
Beta

Revenue

$21.64B

Net Income

$4.96B

22.9% Net Margin

EPS (Diluted)

$0.41

Total Assets

$2.20T

Cash & Equivalents

$143.43B

Free Cash Flow

$526.00M

Financial Statements
Beta
Revenue$21.64B
Interest Expense$2.41B
Net Income$4.96B
EPS (Basic)$0.43
EPS (Diluted)$0.41
Shares Outstanding (Basic)10.25B
Shares Outstanding (Diluted)11.00B

Key Highlights

  • 1Net income increased to $5.0 billion ($0.41 per diluted share) from $4.6 billion ($0.38 per diluted share) in the prior year's quarter, driven by higher revenue and lower noninterest expense.
  • 2Total revenue increased to $21.6 billion from $21.0 billion in the prior year's quarter.
  • 3Noninterest expense decreased to $13.5 billion from $13.9 billion in the prior year's quarter.
  • 4The corporation repurchased $1.4 billion of common stock during the quarter and increased the quarterly dividend to $0.075 per share.
  • 5Consumer Banking segment net income increased 7% year-over-year, benefiting from lower noninterest expense and higher net interest income.
  • 6Global Banking segment net income increased 22% year-over-year due to higher revenue and lower provision for credit losses.
  • 7Global Markets segment net income increased 34% year-over-year, driven by strong trading revenue and lower noninterest expense.

Frequently Asked Questions

Bank of America reported a net income of $4.955 billion, or $0.41 per diluted share, for the third quarter of 2016. This represents an increase compared to $4.619 billion, or $0.38 per diluted share, in the same period of 2015.

Bank of America repurchased $1.4 billion of common stock during the third quarter of 2016 and increased its quarterly common stock dividend from $0.05 per share to $0.075 per share, as part of its approved 2016 CCAR capital plan.

The Consumer Banking and Global Banking segments showed strong performance with increases in net income. The Global Markets segment also demonstrated robust results, with a significant year-over-year increase in net income driven by strong trading revenue.

Effective July 1, 2016, Bank of America changed its accounting method for the amortization of premiums and accretion of discounts on certain debt securities from the prepayment method to the contractual method. This change was applied retrospectively to prior periods presented, and management stated it would not restate previously-filed capital metrics and ratios as the cumulative impact was insignificant.