Bank of America Q3 earnings top consensus on higher interest, strong consumer

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Bank of America (NYSE:BAC) stock has risen 2.7% in Monday premarket trading as the company's Q3 earnings exceeded Wall Street estimates, helped by rising interest rates, strong consumer and global banking units and fairly stable global markets revenue. The bank increased its provision for bad debt as it built reserves in preparation for a weaker economy.

In the company's Global Markets division, growth in fixed income, currencies and commodities sales and trading revenue helped to offset a decline in equities sales and trading revenue.

Q2 EPS of $0.81, topped the $0.78 consensus, rising from $0.73 in Q2 and dropping from $0.85 in Q3 2021.

Average loan and lease balances of $1.03T vs. $1.02T in Q2; average deposits of $1.96T vs. $2.01T in the prior quarter.

Q3 net interest income of $13.8B, surpassing the Visible Alpha consensus of $13.5B, rose from $12.4B in Q2 and from $11.1B in the year-ago quarter. Net interest margin of 2.06% widened from 1.86% in the previous quarter and from 1.68% a year ago.

Q3 noninterest income of $10.7B, beating the Visible Alpha consensus of $10.1B, increased from $10.2B in Q2 and $11.7B in Q3 2021.

Provision for credit losses was $898M, including a net reserve build of $378M, compared with $523M, including net reserve release of $48M, in the prior quarter.

Q3 noninterest expense, at $15.3B, was flat with the prior quarter and increased from $14.4B in the year-ago quarter.

Consumer Banking revenue of $9.90B rose from $9.14B in Q2 and $8.84B in Q3 2021; net income of $3.07B vs. $2.89B in the prior quarter and $3.05B in the year-ago quarter.

Global Wealth and Investment Management total revenue of $5.43B vs. $5.43B in Q2 and $5.31B in Q3 2021; net income of $1.19B vs. $1.15B in Q2 and $1.23B in Q3 2021.

Global Banking total revenue increased to $5.59B in Q3 2022 from $5.01B in Q2 and from $5.25B in Q3 2021. Net income increased to $2.04B from $1.51B in the prior quarter and fell from $2.55B in the year-ago quarter.

Global Markets total revenue of $4.48B vs. $4.50B in Q2 and $4.52B in the year-ago quarter. FICC sales and trading revenue, excluding net debit valuation adjustments, increased to $2.57B from $2.34B in Q2 and from $2.03B in Q3 2021. For equities, sales and trading revenue (ex-DVA) fell to $1.54B from $1.66B in the prior quarter and from $1.61B in the year-ago quarter. Global Markets net income, excluding net debit valuation adjustments, was $1.08B vs. $898M in the prior quarter and $941M in the year-ago quarter.

Conference call at 8:30 AM.

Earlier, Bank of America (BAC) GAAP EPS of $0.81 beats by $0.03, revenue of $24.5B beats by $1.04B

(Editor's note: A previous version had an incorrect number of $989M for the current quarter's provision for credit losses.)