Bank of America Reports Q3-23 Net Income of $7.8 Billion, Showing 11% YoY Growth
Bank of America has announced its financial results for the third quarter of 2023. The bank reported a net income of $7.8 billion, representing an 11% increase compared to the same period last year. Earnings per share (EPS) stood at $0.90, up from $0.81 in Q3-22.
The revenue for the quarter showed improvement, reaching $25.2 billion, a 3% increase compared to the previous year. This growth was mainly driven by net interest income, which rose by 4% to $14.4 billion ($14.5 billion FTE). The bank benefited from higher interest rates and loan growth, contributing to the increase in net interest income.
Noninterest income also saw a positive trend, reaching $10.8 billion, an increase of $51 million. Higher sales and trading revenue, as well as asset management fees, offset lower other income.
Bank of America set aside $1.2 billion for credit losses, marking an increase of $336 million compared to the previous year. The net reserve build for the quarter was $303 million, lower than the $378 million in Q3-22. Net charge-offs amounted to $931 million, higher than the prior year but remained below pre-pandemic levels in Q4-19.
Operating expenses totaled $15.8 billion, a 3% increase. The bank invested in its franchise through people and technology, contributing to the higher expenses. Additionally, higher FDIC expenses resulting from increased assessments on banks announced in 2022 impacted the overall expenses. The bank achieved an efficiency ratio of 63%.
Average deposit balances grew by approximately $1 billion from Q2-23 to $1.9 trillion but declined by $87 billion, or 4%, compared to Q3-22. Average loan and lease balances increased by $12 billion, or 1%, reaching $1.0 trillion, driven by higher credit card balances.
Bank of America maintained a strong liquidity position, with average Global Liquidity Sources amounting to $859 billion.
The Common Equity Tier 1 (CET1) ratio stood at 11.9% (Standardized), representing an increase of 29 basis points from Q2-23. The ratio remained 240 basis points above the regulatory minimum, effective as of October 1, 2023. The bank returned $2.9 billion to shareholders through common stock dividends and share repurchases.
Book value per common share increased by 9% to $32.65, while tangible book value per common share rose by 12% to $23.797.
The return on average common shareholders' equity ratio was 11.2%, and the return on average tangible common shareholders' equity ratio was 15.5%.
