It seems like Merrill Lynch may have saved the day, when you consider that earnings in the same quarter a year ago were $653 million or $0.03 per share. The first thing mentioned as a driver was increased brokerage income and then higher investment banking fees. Another driving force was improved credit quality across all major portfolios, but that was partially offset by lower mortgage banking income and lower net gains on the sales of debt securities. Bank of America’s net interest margin was 2.43% in the most recent quarter, versus 2.35% in the fourth quarter (sequential) and 2.51% in the first quarter of 2012.
Book value per share is a common measurement now, and that was $20.30 per share. Tangible book value was $13.46 per share. Bank of America’s Basel III Tier 1 common capital ratio was 9.42%. The bank said that it would begin $5 billion in share buybacks and would begin $5.5 billion in preferred stock redemptions.
As a reminder, Meredith Whitney recently went with her $15 price near-term and even higher next year; Dick Bove gave a longer term valuation of $30 for Bank of America. That being said, today’s news looks good on the surface, but the reality is that Wall St. was demanding even better results after this was the best-performing DJIA stock in 2012.
Bank of America shares closed at $12.28 on Tuesday, against a 52-week range of $6.72 to $12.94. Shares are indicated down close to 3% around $11.90 in early Wednesday premarket trading.
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