A person uses an automated teller machine at a Bank of America bank branch in San Francisco.
David Paul Morris/Bloomberg
Wall Street found a lot to like in Bank of America
‘s earnings release Thursday as third-quarter results helped push its stock higher.
The bank’s results easily topped analysts’ estimates with profits totaling $7.7 billion, or 85 cents a share. Analysts surveyed by FactSet had been expecting net income to hit $6.1 billion, or 71 cents. Revenue also came in ahead of expectations at $22.8 billion, ahead of the $21.7 billion expected by Wall Street.
“We reported strong results as the economy continued to improve and our businesses regained the organic customer growth momentum we saw before the pandemic,” Brian Moynihan, chairman and chief executive, said in a statement.
Bank of America (ticker: BAC) is the second of the big banks to report results. JPMorgan Chase (JPM) posted results Wednesday and beat profit expectations but fell just short on revenue forecasts.
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Bank of America’s shares, which often lag during earnings season, were helped by the beat on top- and bottom-line estimates. Shares were up more than 2.6% in premarket trading.
Profits were helped by a $1.1 billion release of reserves set aside last year in anticipation that there would be a wave of defaults due to the pandemic.
Net interest income increased by $1 billion from the year-ago quarter to $11.1 billion due to strong deposit growth and investing the bank’s excess liquidity.
The bank also saw some improvement in lending with loan balances climbing to $928 billion from $908 billion in the previous quarter.
But the brightest spots in Bank of America’s results were its advisory and global wealth and investment management business, which posted results at or near record levels. Global banking saw a 57% jump in profits helped by continued elevated levels of investment banking activity. Bank of America’s global wealth business posted record profits of $1.2 billion.
Wells Fargo (WFC), Citigroup (C) and Morgan Stanley (MS) also report results Thursday. Goldman Sachs (GS) reports on Friday.
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