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) YoY, as higher noninterest expense and credit loss provisions offset gains in noninterest income; revenue rose 1% to $25.4B, led by asset management, investment banking, and trading fees.

• CET1 ratio rose to 11.9%, book value per share increased 7% YoY to $34.39, and $5.4B was returned to shareholders via dividends and buybacks.

• Strong organic growth: 278,000 net new checking accounts, 6,100 new wealth relationships, and $5.7T in client balances managed; digital engagement robust with 47M active mobile users and 53% of consumer sales via digital channels.

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

• Continued strategic investments in technology, AI, and talent, with $4B tech spend expected in 2024.

Financial highlights

• Net income: $6.9B; diluted EPS: $0.83; revenue $25.4B (+1% YoY); noninterest income $11.7B (+6%); NII $13.7B (-3%).

• Return on average assets: 0.85%; ROE: 10.0%; ROTCE: 13.6%; efficiency ratio: 64%.

• Book value per share $34.39 (+7% YoY), tangible book value per share $25.37 (+9% YoY).

• Average deposits $1.91T (+2% YoY), average loans and leases $1.05T (modest YoY growth).

• CET1 capital $198B, CET1 ratio 11.9%, well above new regulatory minimum.

Outlook and guidance

• Q2 2024 marked the trough for NII in this rate cycle; NII expected to rise in Q3 and Q4, with Q4 NII guided to ~$14.5B (4-5% above Q2), assuming three 25 bp rate cuts in late 2024.

• Loan and deposit growth expected to be low single digits in the back half of 2024; deposit rotation and pricing changes remain key variables.

• Net charge-offs expected to flatten or decline in H2 2024, especially in credit cards and commercial real estate.

• NIM expected to gradually rise from current 1.93% toward a normalized 2.3% over time.

• New SCB and CET1 requirements effective October 2024 through September 2025.