Thursday, April 16, 2015

Bank of America Q1 Earnings

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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