Financial institution of America (BAC) earnings for the fourth quarter of 2020

Brian Moynihan, Bank of America, speaks at the WEF in Davos on January 21, 2020


Bank of America reported a fourth quarter profit on Tuesday that exceeded analysts’ expectations as the company released some of the money it had set aside for credit losses.

The company announced that earnings were down 28% to $ 5.47 billion, or 59 cents per share, compared to the 55 cents estimate by analysts surveyed by Refinitiv. Revenue was down 10% to $ 20.2 billion and missed estimate by about $ 500 million.

The bank announced it had released reserves of $ 828 million, resulting in a loan loss provision of $ 53 million in the final quarter of 2020. The company had posted provisions of $ 11.3 billion in the previous three quarters.

“We continued to see signs of recovery in the fourth quarter, led by increased consumer spending, stabilization in credit demand from our commercial customers, and strong markets and investment activity,” said CEO Brian Moynihan in the press release. “The latest stimulus package, continued advances in vaccines, and our talented teammates who have done a good job for their clients during this crisis position us well as the recovery continues.”

Last week, rivals JPMorgan Chase and Citigroup each posted profits that exceeded analysts’ expectations as the companies combined released $ 4.4 billion in credit risk reserves.

Part of the decline in sales was due to the lack of expectations in the commercial division of Bank of America. The company posted fixed income revenues of $ 1.74 billion, compared to the estimate of $ 2.11 billion among analysts surveyed by FactSet. Stock sales of $ 1.32 billion exceeded the estimate of $ 1.22 billion.

Early Tuesday, Bank of America announced that it was planning to repurchase shares valued at $ 2.9 billion and approximately $ 300 million worth of shares in the first quarter in exchange for the shares made available to employees balance. It also said it would keep its quarterly dividend of 18 cents.

Bank of America stocks fell 15% in 2020, compared with the KBW Bank Index’s 4.3% decline.

Here are the numbers:

Result: 59 cents per share compared to 55 cents estimate by the analysts surveyed by Refinitiv.

Revenue: $ 20.2 billion versus an estimate of $ 20.7 billion.

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