Bank
of America reported earnings on 4/15/15 and reported $0.27 EPS and 21.4 billion
in revenue. The consensus on Bank of America for this quarter was $0.29 EPS and
21.5 billion in revenue. In addition last year Q1 revenues were 22.8 billion.
As a result, Bank of America dropped 1.14% today to $15.64. In Q1 Bank of
America has been the worst performing large bank stock in the sector. Bank of
America missed EPS because of a 6 billion dollar litigation expense. This was a
onetime expense and going forward Bank of America will not have this liability.
Net interest income was $484 million and net charge offs were 1.2 billion. Bank
of America has decreased their loan book slightly this quarter as they sold
their nonperforming loans. Bank of America also increased their assets slightly
to 2.14 trillion, this is because of the deposit growth. Bank of America also
has a lot of cash on hand as well that is ready to be loaned out or used in
stock buybacks or dividends, which Bank of America is planning on a $4 billion
stock buyback and dividends of $0.05 per share. Overall, this is another quarter of weak
earnings from Bank of America, they appear to be setting themselves up for a
higher interest rate environment, by cutting expenses now and managing their
lone book. The highlight of Q1 earnings is that expenses are down 6% as BAC
reduces employees and is looking to cut more expenses in the legacy asset
services division.
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