=Bank of America (BAC) reported 4Q earnings on Tue 19 Jan 2016 (before open)

** charts before earnings **



** charts after earnings **



Bank of America declined 1.5% despite beating earnings estimates on in-line revenue.

 Bank of America beats by $0.01, reports revs in-line :

• Reports Q4 (Dec) earnings of $0.28 per share, $0.01 better than the Capital IQ Consensus of $0.27; revenues rose 105669.2% year/year to $19.8 bln vs the $19.89 bln Capital IQ Consensus. 
• Net interest income up 2% to $10.0B;
• Provision for credit losses $0.8B, compared to $0.8B in Q3-15 and $0.2B in Q4-14;
• Return on average assets 0.61%;
• return on average common equity 5.1%;
• return on average tangible common equity 7.3%;
• Tangible book value per share increased 8% to $15.62; book value per share increased 6% to $22.54;
• Noninterest expense down 16% to $1.1B; noninterest expense, excluding litigation, down 28% to $795MM.

Investment Bank

• Sales and trading revenue up $0.7B to $2.4B; Excluding net DVA, sales and trading revenue up 11% to $2.6B;
• FICC increased 20%, reflecting improvement across most products, notably in rates and credit-related products
• Equities down 3%, due to lower levels of client activity.

Credit

• Credit quality remained strong, improving across all consumer portfolios, while the energy sector of the commercial portfolio experienced elevated charge-offs and criticized levels;
• Net charge-offs were $1.1B, compared to $0.9B;
• Excluding losses associated with the August 2014 DoJ settlement, collateral valuation adjustments, and nonperforming loan sale and other recoveries, net charge-offs were $1B in both Q4-15 and the year-ago quarter
• The net charge-off ratio increased to 0.51% from 0.40%.
• Excluding the items noted above, the net charge-off ratio was 0.45% in Q4-15, compared to 0.47%
• Provision for credit losses of $810MM was relatively stable compared to the third quarter of 2015 and up from the year-ago quarter due to lower consumer recoveries, a slower pace of improvement in the consumer portfolio, and higher reserve builds in the commercial portfolio, due to loan growth and energy sector exposure
• Net reserve release was $334MM, compared to $660MM; after adjusting for certain items reserved for in prior quarters, the net reserve release was $195MM, compared to $509MM