Bank of America Corporation
CEO : Mr. Brian Thomas Moynihan
Quarterly earnings growth(YoY,%)
| Period |
Revenue |
Operating Income |
EPS |
Release Date |
| 2024 Q3 |
-0.5% YoY |
-8.4% |
-9.9% |
2024-10-15 |
Alastair Borthwick says,
Financial Performance Overview
- Return on Average Assets reached 83 basis points, and Return on Tangible Common Equity was 12.8%.
- Total assets for the quarter stood at $3.3 trillion, marking an increase of $66 billion from the previous quarter.
- Global liquidity sources amounted to $947 billion, up $38 billion compared to the second quarter.
- Shareholders’ equity rose by $2.6 billion, with common equity up by $4.6 billion.
- Tangible book value per share increased by 10% to $26.25.
Deposit and Loan Dynamics
- Total deposits grew by $20 billion on an ending basis, with average deposits increasing for the fifth consecutive quarter.
- Average loan balances for Q3 were $1.06 trillion, a 1% increase year-over-year, driven by commercial loan growth.
- Consumer Banking loan growth was observed in credit card and vehicle loans, though mortgage balances declined.
- Rate paid on deposits is expected to fall below 2% in October, reflecting recent rate cut pass-throughs.
Net Interest Income (NII) and Interest Rate Outlook
- NII on a fully tax equivalent basis was $14.1 billion, marking an increase of $252 million from Q2.
- Q4 NII is projected to be $14.3 billion or more, assuming a forward curve with two anticipated rate cuts in November and December.
- A potential 100 basis point increase in rates could benefit NII by $1.8 billion, while a decrease could reduce it by $2.7 billion.
- A $200 million benefit in Q4 is expected from the BSBY alternative rate transition.
Expense and Headcount Management
- Total expenses for the quarter were $16.5 billion, a 1% increase from Q2, largely due to revenue improvements.
- Headcount reached 213,000, with a net increase of approximately 1,000 employees due to hiring of college graduates.
- Q4 expenses are expected to align with Q3 levels, with plans to improve operating leverage in 2025.
Business Segment Highlights
- Consumer Banking net income was $2.7 billion, driven by credit card, vehicle, and small business loans.
- Wealth Management saw an 8% revenue growth to $5.8 billion, with net income rising to $1.1 billion.
- Global Banking earnings were $1.9 billion, experiencing a decline due to lower NII and higher provision expenses.
- Global Markets earnings grew 23% year-over-year to $1.6 billion, with strong performance in FICC and equities trading.
| Segment |
Q3 Revenue ($ billion) |
Year-over-Year Change (%) |
| Consumer Banking |
Various |
6% decline in reported earnings |
| Wealth Management |
5.8 |
8% growth |
| Global Banking |
Various |
6% revenue decline |
| Global Markets |
4.9 |
14% revenue improvement |
Brian Moynihan says,
Consumer Payments and Economic Indicators
- Consumer payments increased by 4% to 5% year-over-year, reflecting stable economic activity.
- This growth mirrors consumer spending patterns seen between 2016 and 2019.
- Despite consumer concerns over cost of living and interest rates, overall consumer activity remains robust.
- Unemployment remains low and wage growth is steady, which positively impacts consumer asset quality.
Financial Results and Revenue Growth
- Bank of America generated $25.5 billion in revenue and $6.9 billion in net income for Q3 2024.
- Year-to-date net income surpassed $20 billion.
- Earnings per share were $0.81 for the quarter.
- Investment banking fees grew 18% year-over-year, with sales and trading revenue up by 12%.
- Total expenses increased by 4%, mainly driven by market-related areas.
Asset Quality and Financial Stability
- Net charge-off and provision expense remained unchanged at $1.5 billion.
- Consumer credit losses decreased as anticipated, reflecting good asset quality.
- Office losses were also lower, confirming earlier predictions.
Organic Growth and Customer Expansion
- Added 360,000 net new consumer checking accounts this quarter, totaling over 880,000 for the year.
- Wealth management added 5,500 net new relationships this quarter.
- Investment balances and client relationships continue to grow across GWIM and commercial businesses.
- Managed $5.9 trillion in client balances with $62 billion in flows over the past four quarters.
Digital Transformation and Client Interaction
- Active digital users reached over 48 million, with 3.6 billion logins this quarter.
- Digital sales accounted for 54% of total consumer sales.
- Erica, the AI virtual assistant, recorded 2.4 billion client interactions since launch.
- 75% of new accounts in Merrill were opened digitally, enhancing customer coverage efficiency.
| Category |
Q3 2024 Metrics |
| Revenue |
$25.5 billion |
| Net Income |
$6.9 billion |
| Year-to-Date Net Income |
Over $20 billion |
| Earnings Per Share |
$0.81 |
| Net Charge-off/Provision Expense |
$1.5 billion |
The economic stability and consistent performance across various segments, along with the Bank’s commitment to digital innovation, position Bank of America for continued growth into 2025.
Q & A sessions,
Net Interest Income (NII) Growth and Guidance
- NII grew by $252 million from Q2, indicating a positive inflection point.
- Expectations for Q4 NII growth to reach $14.3 billion or more on a fully tax equivalent basis.
- Repricing of $20 billion in fixed rate loans and securities anticipated to benefit NII in Q4 and beyond.
- The BSBY transition is expected to provide a $200 million benefit in Q4.
- Long-term interest rate shifts predicted, a 100 basis point increase would boost NII by $1.8 billion, whereas a decrease would lower it by $2.7 billion.
Deposit and Loan Growth
- Deposits increased $20 billion on an ending basis, marking five consecutive quarters of growth.
- Average deposits up $45 billion year-over-year, with a rise in rates paid moderated to 210 basis points.
- Loans reached $1.06 trillion, improving 1% year-over-year, driven primarily by commercial loan growth.
- Consumer banking saw a downturn in mortgage balances due to pay downs exceeding originations.
Investment and Securities Strategy
- No significant changes in the securities portfolio; the hold-to-maturity segment continues its 13th consecutive quarter of run-off.
- Approximately $9 billion reinvested in higher yields, continuing to fund loan growth.
- Reduction of $15 billion in Institutional CDs this quarter.
- Balancing capital, liquidity, and earnings remains a strategic focus over rate views.
Capital Strategy and Shareholder Returns
- Capital strategy remains unchanged, built to withstand Basel III final regulations.
- 30 basis points of capital generation each quarter post-dividend.
- 8% increase in dividends this quarter, with $3.5 billion returned to shareholders, matching the prior quarter’s returns.
- Tangible book value per share rose 10% from Q3 ’23 to $26.25.
Operational Highlights and Market Position
- Return on average assets at 83 basis points and return on tangible common equity at 12.8%.
- Total assets reached $3.3 trillion, increasing by $66 billion from Q2.
- Continued organic growth in consumer checking accounts and wealth management relationships, with 360,000 net new consumer checking accounts added.
- Digital and physical presence expansion in strategic markets like Denver and Columbus, aiming for comprehensive market coverage.
| Key Metric |
Q3 2024 |
Change vs Q2 2024 |
| NII (Fully tax equivalent basis) |
$14.1 billion |
+$252 million |
| Total Assets |
$3.3 trillion |
+$66 billion |
| Average Deposits |
Increased by $45 billion |
+2% YoY |
| Commercial Loans |
Up 2% YoY |
31% of total loan growth |
No bad stock 