Summary
Bank of America Corporation reported solid financial results for the second quarter of 2018, demonstrating growth and improved profitability. Net income surged by 33% year-over-year to $6.8 billion, or $0.63 per diluted share, driven by a lower effective tax rate resulting from the Tax Cuts and Jobs Act, increased net interest income, and reduced noninterest expenses. Total revenue, net of interest expense, was $22.6 billion, a slight decrease from the prior year's comparable quarter, mainly due to lower noninterest income, which was impacted by a charge related to the redemption of trust preferred securities. The company's capital management efforts were highlighted by the Federal Reserve's non-objection to its 2018 capital plan, enabling a planned return of approximately $26 billion to shareholders through dividend increases and share repurchases. The bank's balance sheet remained robust with total assets at $2.3 trillion. Deposit growth continued, supporting higher net interest income, while efficiency ratios improved, signaling effective cost management. Overall, the results reflect a strong operational performance and a favorable economic environment for the banking sector.
Financial Highlights
34 data points| Revenue | $22.55B |
| Interest Expense | $4.54B |
| Net Income | $6.78B |
| EPS (Basic) | $0.64 |
| EPS (Diluted) | $0.63 |
| Shares Outstanding (Basic) | 10.18B |
| Shares Outstanding (Diluted) | 10.31B |
Key Highlights
- 1Net income increased by 33% to $6.8 billion, or $0.63 per diluted share, compared to the prior year's second quarter.
- 2Net interest income rose by 6% to $11.7 billion, driven by higher interest rates and increased commercial loan balances, partially offset by sale of non-U.S. credit card business.
- 3Noninterest expense decreased by 5% to $13.3 billion, primarily due to lower other general operating expenses and reduced litigation expenses.
- 4The company's effective tax rate decreased significantly to 20.2% from 37.1% in the prior year's quarter, benefiting from the Tax Cuts and Jobs Act.
- 5Total assets grew to $2.3 trillion, mainly due to higher cash and cash equivalents and an increase in securities borrowed or purchased under agreements to resell.
- 6The company announced plans to return approximately $26 billion to common shareholders over the next four quarters via dividends and share repurchases, following the Federal Reserve's approval of its capital plan.
- 7The efficiency ratio improved to 58.76% from 61.25% in the prior year's quarter, indicating better operational efficiency.