BAC Q1 2016
Bank of America reported first quarter earnings of $0.21 on April 14, which beat analyst estimates of $0.20. However, they reported revenue of $19.7B (-8.0% Y/Y), missing estimates by $600M. Although they missed on revenue the stock closed up 2.5% on the day.
BAC saw an increase in Net Interest Income, but saw a decrease in non interest income because capital markets and other related activities. Banking sources of non interest income were performing well. Loans are growing across the bank. Cost went down 3%, and the costs are expected to continue to go down. Credit quality is strong in the quarter, besides those for the energy sector. Although provisions for credit losses related to the energy loans, BAC made adjustments to lower energy exposure because of the low energy prices, and the volatility. The efficiency ratio improved to 73% compared to the 77% in Q1 2015. The possibility of increased interest rates sometime toward the end of the year will only increase NII for BAC. They are not performing at a spectacular level, it is nothing people should be worried about, which is why I believe we saw an increase in price today. BAC is still very cheap.