Bank Of America Q4 Profit Climbs, Beats Estimates
CHARLOTTE (dpa-AFX) - Bank of America Corp.
(BAC) reported a profit for the fourth-quarter that increased about 46.8 percent from last year, driven by higher Fixed-income trading revenue as well as lower expenses. Earnings per share beat analysts' estimates.
"While the recent rise in interest rates came too late to impact fourth-quarter results, we expect to see a significant increase in net interest income in the first quarter of 2017. We remain focused on delivering value to our shareholders as evidenced by today's announcement to increase our planned repurchases for the first half of this year from $2.5 billion to $4.3 billion," said Paul Donofrio, Chief Financial Officer.
Net income applicable to common shareholders for the fourth-quarter rose 46.8 percent to $4.34 billion, from $2.95 billion, with earnings per share improving to $0.40 from $0.27 last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.38 per share. Analysts' estimates typically exclude special items.
Noninterest expense decreased $308 million, driven by improved operating efficiencies and lower fraud costs, partially offset by higher FDIC expense.
Provision for credit losses declined to $774 million from $810 million. Net charge-offs declined to $880 million from $1.1 billion in the prior year.
Net interest income increased 6% to $10.3 billion, reflecting benefits from higher interest rates as well as growth in loans and deposits, partially offset by $0.2 billion in market-related debt hedge ineffectiveness. Excluding adjustments for certain trust preferred securities in the fourth-quarter of 2015, Net interest income was relatively flat.
Noninterest income decreased 2% to $9.7 billion from $9.9 billion in the prior year.
Revenue, net of interest expense, increased 2% to $19.99 billion from $19.58 billion for the quarter. Wall Street expected revenues of $20.85 billion.
Fixed-income trading revenue climbed 12 percent to $1.96 billion. Equity trading rose 11 percent to $948 million.
In the Friday per-market trade, BAC currently trading at $22.78, down $0.14 or 0.61%.
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