- Company News
- Earnings Reports and News
BAC beat on earnings and revenue
By
Nathan Reiff
Full Bio
Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016.
Learn about our editorial policies
Published October 17, 2022
Key Takeaways
- Bank of America's 3Q net interest margin came in above analyst estimates.
- Net interest margin is a measure of the difference between the interest banks earn on their assets and the interest they pay out to depositors and other creditors.
- The bank's earnings per share (EPS), profit, and revenue also topped predictions.
Bank of America Earnings Results | |||
---|---|---|---|
Metric | Beat/Miss/Match | Reported Value | Analysts' Prediction |
Earnings Per Share | Beat | $0.81 | $0.78 |
Revenue | Beat | $24.5B | $23.5B |
Net Interest Margin | Beat | 2.06% | 2.00% |
Source: Predictions based on analysts' consensus fromVisible Alpha
Bank of America (BAC) Financial Results: Analysis
Bank of America Corp. (BAC), the second-largest U.S. bank by consolidated assets, beat analyst predictions on profit, revenue, and net interest margin for Q3 FY 2022 on higher interest rates and loan growth, although the results were partly offset by a swelling provision for credit losses of $898 million and declining investment banking fees. Net interest margin also beat predictions.
Earnings per share (EPS) fell 4.7% year-over-year (YOY) to 81 cents, compared with a consensus estimate of 78 cents. Revenue also outperformed, rising by 7.5% YOY in line with rising interest rates, Noninterest income declined.
Bank of America's outperformance, announced before markets opened on Oct. 17, show how the firm, like other lenders, benefited from a series of interest rate hikes in recent months by the Federal Reserve. Climbing rates bolstered net interest income even as Bank of America's investment banking business slowed due to weaker underwriting activity.
BAC Net Interest Margin
Bank of America's net interest margin, which the firm calls "net interest yield," came in at 2.06%, above expectations for 2.0%. It's a key metric that measures the difference between income banks generate from credit products such as loans and mortgages compared with interest they pay to depositors and other creditors. It's analogous togross marginreported by non-financial companies.
BAC Outlook and Stock Performance
Bank of America didn't provide forward guidance. Chief Executive Officer Brian Moynihan has said U.S. consumer spending levels and deposit amounts remain strong, even as they showed signs of slowing.
Bank of America shares, down 27% in the past year compared with a 19.3% decline in the S&P 500 Index, jrose 5.2% as of 10:45 a.m. New York time on Oct. 17..
Bank of America's fourth quarter earnings report is expected to be released on Jan. 13, 2023.
Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.
Bank of America Corp. "Q3-22 Financial Highlights," Pages 1, 18.
Visible Alpha. "Financial Data."
Federal Reserve Statistical Release. “Insured U.S.-Chartered Commercial Banks That Have Consolidated Assets of $300 Million or More, Ranked by Consolidated Assets.”
Bank of America Corp. "Q3-22 Financial Highlights," Page 1.
TradingView. "Price Chart: BAC and S&P 500."
Yahoo! Finance. "Bank of America Corp. (BAC)."
MarketScreener. "Bank of America Corporation (BAC)."
Compare Accounts
×
The offers that appear in this table are from partnerships from which Investopedia receives compensation. This compensation may impact how and where listings appear. Investopedia does not include all offers available in the marketplace.
Provider
Name
Description
Partner Links
Related Terms
What Is the FMX Futures Exchange?
The FMX Futures Exchange is a newly approved futures exchange owned by BGC Group, specializing in interest-rate futures markets.
more
Net Interest Income: What It Is, How It's Calculated, Examples
Net interest income reflects the difference between the revenue from a bank's interest-bearing assets and expenses on its interest-bearing liabilities.
more
Earnings Per Share (EPS): What It Means and How to Calculate It
Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock, serving as a profitability indicator.
more
P/E Ratio Definition: Price-to-Earnings Ratio Formula and Examples
The price-to-earnings (P/E) ratio measures a company's current share price relative to its per-share earnings.
more
What Is Financial Leverage, and Why Is It Important?
Leverage results from using borrowed capital as a source of funding when investing to expand a firm's asset base and generate returns on risk capital.
more
Return on Equity (ROE) Calculation and What It Means
Return on equity (ROE) is a measure of financial performance calculated by dividing net income by shareholders' equity.
more
- About Us
- Terms of Service
- Dictionary
- Editorial Policy
- Advertise
- News
- Privacy Policy
- Contact Us
- Careers
- #
- A
- B
- C
- D
- E
- F
- G
- H
- I
- J
- K
- L
- M
- N
- O
- P
- Q
- R
- S
- T
- U
- V
- W
- X
- Y
- Z
Investopedia is part of the Dotdash Meredithpublishingfamily.
We Care About Your Privacy
We and our 100 partners store and/or access information on a device, such as unique IDs in cookies to process personal data. You may accept or manage your choices by clicking below, including your right to object where legitimate interest is used, or at any time in the privacy policy page. These choices will be signaled to our partners and will not affect browsing data.
We and our partners process data to provide:
Store and/or access information on a device. Use limited data to select advertising. Create profiles for personalised advertising. Use profiles to select personalised advertising. Create profiles to personalise content. Use profiles to select personalised content. Measure advertising performance. Measure content performance. Understand audiences through statistics or combinations of data from different sources. Develop and improve services. Use limited data to select content.