Summary
Bank of America Corporation (BAC) reported its Q2 2020 results, highlighting a significant increase in its provision for credit losses, driven by the economic outlook related to the COVID-19 pandemic. This resulted in a substantial year-over-year decline in net income. Despite these challenges, the company maintained strong capital ratios and a stable liquidity position. The bank continued to support customers and communities through various relief measures and participated in government programs like the Paycheck Protection Program. Key financial metrics reflect the challenging economic environment. Net interest income decreased due to lower interest rates, while noninterest income saw a boost from stronger investment banking fees and market-making activities, which partially offset declines in card income and service charges. The company's balance sheet remained robust, with total assets and deposits increasing from the previous year-end. Management emphasized its commitment to capital preservation and customer support during the pandemic.
Financial Highlights
35 data points| Revenue | $22.33B |
| Interest Expense | $1.69B |
| Net Income | $3.53B |
| EPS (Basic) | $0.38 |
| EPS (Diluted) | $0.37 |
| Shares Outstanding (Basic) | 8.74B |
| Shares Outstanding (Diluted) | 8.77B |
Key Highlights
- 1Provision for credit losses surged to $5.1 billion for the quarter, an increase of over 500% compared to the prior year's $857 million, primarily due to the economic impact of COVID-19.
- 2Net income applicable to common shareholders decreased by 54% year-over-year to $3.3 billion, or $0.37 per diluted share, from $7.1 billion, or $0.74 per diluted share, in Q2 2019.
- 3Total revenue, net of interest expense, decreased slightly to $22.3 billion from $23.1 billion in the prior year quarter.
- 4Net interest income declined by 11% year-over-year to $10.8 billion, reflecting lower interest rates and a lower net interest yield.
- 5Noninterest income increased by 5% year-over-year to $11.5 billion, driven by higher investment banking fees and market-making activities.
- 6The Common Equity Tier 1 (CET1) capital ratio remained strong at 11.6% (Standardized Approach) and 11.4% (Advanced Approaches), well above regulatory minimums.
- 7The company participated in the Paycheck Protection Program (PPP), funding approximately 334,000 loans totaling $25.1 billion by the end of Q2 2020.
- 8The Federal Reserve directed large banks to suspend share repurchases in Q3 2020, a measure Bank of America voluntarily implemented earlier in the year, while maintaining its quarterly common stock dividend at $0.18 per share.