Bank of America Corporation reported fourth quarter earnings per share of $0.28, beating the street estimates of $0.26 on January 19th. They reported revenue of $19.53B, which is a 4.3% increase Y/Y. However, the revenue missed estimates by $250M. The stock initially had a positive reaction, but since then the market sell off has affected the price. Although some analyst say BACs expenses remain too high, they are headed in the right direction, finally being able to move past most of their legal problems from the recession. The company is becoming more efficient, improving their efficiency ratio from 88% in 2014 to 68% in 2015. As they lower their expenses it will improve further.
The bank makes most of its money from net interest income and non-interest income. We saw net interest income grow in Q4 2015 to $10.5B from $10.3B in Q3 2015, and $10.4B Q4 2014. Non-interest income was also up to $9.7B, a 7% increase Y/Y. As for consumer benefits, CEO Brian Moynihan says spending on credit and debit cards rose 4% Y/Y, but without the oil decline, it would have risen 5.7%. Putting a dollar number on it, that's $20M per day in savings to the bank's credit and debit card customers.
With interest rates rising, that can only help the NII, and the largest banks will see some gains. BAC saw their best year for earnings since the Great Recession.