Bank of America Exceeds Profit Expectations Despite Yearly NII Decline, Shares Up 2%

Bank of America (NYSE:BAC) shares rose more than 2% intra-day today after the company reported third-quarter earnings that exceeded Street expectations, buoyed by a rise in investment banking fees that helped counter a small dip in net interest income (NII) compared to last year. Net income for the period reached $6.9 billion, or $0.81 per share, above Wall Street’s forecast of $0.76 per share, although down from $7.8 billion, or $0.90 per share, in Q3 2023.

Investment banking activity rebounded, with total fees climbing by 18% to $1.4 billion as the bank benefited from an upswing in dealmaking. Revenue, net of interest expense, increased slightly by 1% to $25.3 billion, also beating estimates of $25.25 billion.

NII saw a year-over-year decline of 3% to $14.0 billion due to higher asset yields and loan growth being offset by elevated deposit costs, reflecting heightened customer demand for returns. However, sequentially, NII was up 2%, aided by fixed-rate asset repricing. The bank’s provisions for credit losses remained steady at $1.5 billion, following a recent quarter where provisions had been raised to address potential loan delinquencies.