Bank of America (BAC) released its Q3 2016 earnings report on Monday. The company’s stock is trading up 0.81% in pre-market trading on Tuesday as a result. The report has revealed a lot about the company going into the final quarter of the year.
1. Revenue Surpassed Expectations
Wall Street pegged the company’s revenue at $20.96 billion with an EPS of $0.34. Bank of America surpassed expectations with revenue of $21.64 billion and an EPS of $0.41. Revenue year-on-year increased by 3%, with an increase of noninterest and net interest income.
2. Net Income is Up 6.6%
Net income on the quarter rose 6.6% as expenses fell 3%. The company posted a net profit of $4.45 billion on the quarter. There was a 14% uptick in sales and trading revenue on the quarter. Fixed income trading revenue rose by 32%.
Equities trading revenue fell 17% on the quarter.
3. Return on Common Equity Disappoints
Bank of America’s return on common equity disappointed investors. The 10% mark is the industry standard, but the company posted average common equity of just 7.3% on the quarter, which is a concern.
The company remains focused on long-term value for its shareholders.
Value per share rose by 11% on the quarter, with $2.2 billion in capital returning to common shareholders on the quarter.
4. Loans and Leases Rose 3% YoY
The company posted that total loan and lease averages rose 3% year-over-year. Average deposits rose 6%, according to the company. Net income on interest hit $10.2 billion, up $0.3 billion compared to the third quarter a year prior.
Bank of America beat Wall Street expectations on the quarter, but the beat has done little to rally the bank’s stock.
JPMorgan (JPM) also beat expectations, posting earnings per share of $1.59. Revenue at the bank also rose 8%, up to $25.5 billion on the quarter.
