10-QPeriod: Q3 FY2018

BANK OF AMERICA CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2018

Filed October 29, 2018For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

Bank of America Corporation (BAC) reported strong financial results for the third quarter of 2018, demonstrating robust growth and improved profitability. Net income increased significantly year-over-year, driven by higher net interest income, lower provision for credit losses, and reduced noninterest expense, benefiting from the Tax Cuts and Jobs Act. Total assets grew to $2.3 trillion, supported by deposit growth and liquidity management actions. The company actively returned capital to shareholders through $5.0 billion in common stock repurchases and a $0.15 per share common stock dividend. The diversified business segments, including Consumer Banking, Global Wealth & Investment Management, Global Banking, and Global Markets, all contributed positively to the overall financial performance. The company's capital position remains strong, with Common Equity Tier 1 ratios well above regulatory minimums, indicating a solid foundation for future growth and resilience.

Financial Highlights

35 data points
Beta

Revenue

$22.72B

Net Income

$7.17B

31.5% Net Margin

EPS (Diluted)

$0.66

Total Assets

$2.34T

Cash & Equivalents

$184.86B

Free Cash Flow

$19.61B

Financial Statements
Beta
Revenue$22.72B
Interest Expense$4.90B
Net Income$7.17B
EPS (Basic)$0.67
EPS (Diluted)$0.66
Shares Outstanding (Basic)10.03B
Shares Outstanding (Diluted)10.17B

Key Highlights

  • 1Net income for the three months ended September 30, 2018, was $7.2 billion, an increase from $5.4 billion in the prior year's quarter.
  • 2Diluted earnings per share were $0.66, up from $0.46 in the prior year's quarter.
  • 3Net interest income increased by $709 million to $11.9 billion for the three months ended September 30, 2018.
  • 4Noninterest expense decreased by $327 million to $13.1 billion for the three months ended September 30, 2018.
  • 5The provision for credit losses decreased by $118 million to $716 million for the three months ended September 30, 2018.
  • 6Common stock repurchases totaled $5.0 billion during the third quarter of 2018.
  • 7Return on average tangible common shareholders' equity improved to 15.48% from 10.98% in the prior year's quarter.

Frequently Asked Questions

The increase in net income was primarily driven by a lower income tax expense due to the Tax Cuts and Jobs Act, an increase in net interest income, improved noninterest income in the three-month period, a lower provision for credit losses, and a decline in noninterest expense.

Bank of America repurchased $5.0 billion of common stock during the third quarter of 2018, consistent with its capital plan and shareholder return strategy. The company also declared a quarterly common stock dividend of $0.15 per share.

Net interest income increased due to higher interest rates and loan and deposit growth. The company expects this trend to continue, supported by its strong deposit base and asset-liability management strategies.

The company reported an improvement in asset quality, particularly in the commercial portfolio and energy exposures. The provision for credit losses decreased, reflecting improved credit conditions and proactive risk management, though some areas like the U.S. credit card portfolio saw seasoning and loan growth impacting provisions.