Bank of America releases Q2 2017 results

July 17, 2017
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Bank of America releases Q2 2017 results

• Net income increased 10% to $5.3 billion, and EPS increased 12% to $0.46, compared to $4.8
billion and $0.41, respectively

– Sale of the non-U.S. consumer credit card business resulted in a $103 million after-tax gain

• Revenue, net of interest expense, increased 7% to $22.8 billion from $21.3 billion

– Net interest income (NII) increased 9% to $11.0 billion, reflecting benefits from higher interest rates, as well as loan growth
– Noninterest income increased 6% to $11.8 billion, driven primarily by the sale of the non-U.S. consumer credit card business and higher investment banking fees, partially offset by lower gains from the sale of debt securities and lower equity investment income

• Provision for credit losses improved 26% to $726 million from $976 million. Net charge-offs declined 8% to $908 million from $985 million; the net charge-off ratio declined to 0.40% from 0.44%

• Noninterest expense rose 2% to $13.7 billion

– Q2-17 included $0.4B of expense for the combined impact of impairment charges related to certain data centers in process of being sold and increased severance in the quarter
– Efficiency ratio improved to 60%

• Average loan balances in business segments rose $39 billion, or 5%, to $827 billion. Total average
deposit balances increased $44 billion, or 4%, to $1.26 trillion

• Return on average assets of 0.93%; return on average common equity of 8.0%; return on average tangible common equity of 11.2%

• Book value per share rose 5% to $24.88; tangible book value per share rose 6% to $17.78

• More than doubled YTD capital returns from prior-year period through net share repurchases and common dividends

CEO Commentary

"Against modest economic growth of 2 percent, we had one of the strongest quarters in our history. All of our businesses delivered strong results, with several setting new records. The investments we made to transform how we serve clients produced 500 basis points of operating leverage in the quarter.

We achieved our 60 percent efficiency ratio target, and we continued to manage credit risk carefully in line with responsible growth. This supports our plan to return $17 billion in capital during the next four quarters, including a 60 percent increase in the quarterly common dividend."

— Brian Moynihan, Chief Executive Officer

CFO Commentary

“Client activity remained strong across the franchise with increased loans and deposits. Our Consumer Banking business reported its best quarter in a decade with strong operating leverage and good asset quality. Our balance sheet remains strong. We strengthened capital even as we repurchased a net $2 billion in stock and paid $0.8 billion in common stock dividends in the quarter."

— Paul M. Donofrio, Chief Financial Officer

Re-disseminated by The Asian Banker