=Bank of America (BAC) reported earnings on Thur 14 Apr 2016 (b/o)

Bank of America reports EPS in-line, misses on revs  :

• Reports Q1 (Mar) earnings of $0.21 per share, in-line with the Capital IQ Consensus of $0.21; revenues fell 8.0% year/year to $19.7 bln vs the $20.32 bln Capital IQ Consensus.
  • Total Loans $901 bln compared to $897 mln in Q4.
  • Tangible Common Equity Ratio 7.9%
  • Tangible BVPS $16.17; BVPS $23.12
  • Return on average assets 0.50%; return on average common equity 3.8%; return on average tangible common equity 5.4%
• Credit Costs
  • Provision for credit losses of $997 million, compared to $765 million; net charge-offs declined to $1.1 billion from $1.2 billion. Provision for credit losses increased to $997 million, due to increased reserves in the commercial portfolio due to energy sector exposure Net reserve release was $71 million, compared to $429 million, as reserve releases in consumer were mostly offset by increased commercial reserves.
• Global Markets
  • Revenue down $240 million to $4.0 billion; excluding net DVA, revenue decreased $795 million to $3.8 billion, driven by lower sales and trading results and lower investment banking fees; Sales and trading revenue down $48 million to $3.4 billion.
  • FICC decreased 17%, reflecting a weak trading environment for credit-related products and lower revenues in currencies compared with a strong year-ago quarter, partially offset by an improved performance in rates and client financing
  • Equities down 11%, reflecting a weaker trading performance in a challenging market environment.
  • The net charge-off ratio decreased to 0.48% from 0.56%; excluding the items noted above, the net charge-off ratio was 0.46% in Q1-16, down from 0.47%
• Energy Exposure
  • Utilized energy exposure of $21.8 billion decreased $0.3 billion from Q1-15
  • Higher risk subsectors of Exploration & Production (E&P) and Oil Field Services (OFS) decreased $0.6 billion from Q4-15 and $0.3 billion from Q1-15 to $7.7 billion, representing less than 1% of total corporation loans
  • Energy reserves increased $525 million from Q4-15 to $1.0 billion, primarily driven by increased allowance coverage for the higher risk subsectors (E&P and OFS)