Bank of America (BAC) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $6.9B ($0.83 EPS), down from $7.4B ($0.88) year-over-year, as higher noninterest expense and credit loss provisions offset gains in noninterest income; revenue rose 1% to $25.4B, led by fee growth in asset management, investment banking, and trading.

• Board authorized a new $25B stock repurchase program effective August 1, 2024, and announced an 8% increase in the quarterly dividend to $0.26 per share, pending board approval.

• Total assets rose to $3.3T, with average deposits of $1.91T (+2% YoY) and average loans and leases of $1.05T (modest YoY growth).

• Digital engagement remains robust, with 47M active mobile users and 53% of consumer sales conducted digitally.

• Return on average assets was 0.85%, and return on tangible common equity was 13.6%.

Financial highlights

• Net interest income fell 3% year-over-year to $13.7B, as higher deposit costs offset asset yield gains; noninterest income rose 6% to $11.7B, led by investment and brokerage fees and investment banking.

• Provision for credit losses increased to $1.5B, mainly from credit card and commercial real estate office loans; net charge-offs were $1.5B, with a net charge-off ratio of 0.59%.

• Noninterest expense rose 2% year-over-year to $16.3B, driven by higher compensation and investments in technology.

• CET1 capital was $198B, with a CET1 ratio of 11.9%, well above regulatory minimums.

• Book value per share rose 7% year-over-year to $34.39; tangible book value per share up 9% to $25.37.

Outlook and guidance

• Net interest income is expected to rise in Q3 and Q4 2024, with Q4 NII targeted around $14.5B, assuming three 25 bp rate cuts and fixed-rate asset repricing.

• Loan and deposit growth are expected to remain in the low single digits for the remainder of 2024, with slowing deposit rotation.

• Expense levels are anticipated to remain around Q2 levels for the rest of 2024.

• Net charge-offs are expected to flatten or decline in the second half of 2024, especially in credit cards and commercial real estate.

• The new SCB and CET1 requirements will be effective from October 2024 through September 2025.