Is It Time to Take Profits on Bank of America After Earnings?

Banking, finance, and taxes

Published: January 15, 2020 10:25 am

Last Updated: January 30, 2020 11:11 am

When Bank of America Corp. (NYSE: BAC) reported its fourth-quarter financial results before the markets opened on Wednesday, it posted $0.74 in earnings per share (EPS) and $22.30 billion in revenue. That compared with consensus estimates of $0.68 in EPS and $22.35 billion in revenue, as well as the $0.70 per share and $22.89 billion reported in the same period of last year.

During the most recent quarter, average loan and lease balances in business segments rose $54 billion, or 6%, to $936 billion. Average deposit balances rose $65 billion, or 5%, to $1.4 trillion.

Overall credit quality remained strong across both the consumer and commercial portfolios, with the provision for credit losses at $941 million, an increase of $36 million last year.

In terms of its segments, the bank reported as follows:

Consumer Banking saw its total revenues decrease by 4.5% year over year to $9.51 billion.
Global Wealth and Investment Management total revenues fell 2.5% to $4.91 billion.
Global Banking revenues shrank 0.6% to $5.14 billion.
But Global Markets revenue increased 5.5% to $3.43 billion.

Book value per share was $27.32 at the end of the quarter, while tangible book value per common share was $19.41.

Brian Moynihan, board chair and chief executive, commented:

In a steadily growing economy marked by solid client activity, our teammates produced another strong quarter and year, allowing us to increase investments in our customers, communities, and employees, while keeping a close eye on expenses. We also delivered for shareholders in 2019 by returning a record $34 billion in excess capital through dividends and share repurchases. As evidenced by a quarter in which our customer deposits surpassed $1.4 trillion and client balances in our wealth management business topped $3 trillion, we enter 2020 with momentum.

Shares of Bank of America traded down about 2% on Wednesday, at $34.65 in a 52-week range of $26.21 to $35.72. The consensus price target is $36.88.