Bank of America (BAC) – Get Report posted stronger-than-expected fourth quarter earnings Tuesday as it joined Wall Street banking rivals in releasing millions in provisions previously set-aside to cover bad loans while maximizing its near-term share buyback plans.
Bank of America said earnings for the three months ending in December were pegged at 59 cents per share, down 21.3% from the same period last year but 4 cents ahead of the Street consensus forecast. Group revenues, Bank of America said, fell 10.6% from last year to $20.1 billion, coming in just shy of analysts’ estimates of a $20.7 billion tally.
Bank of America said it would release around $828 million in reserves, while booking just $53 million in additional credit charges, allowing it to pay an 18 cents per share dividend for the fourth quarter, and unveiled a $2.9 billion share buyback plan for the first three months of the yea, the maximum allowed under regulations set out last year by the Federal Reserve.
“During 2020, we witnessed the dramatic effects of the health crisis on the economy and our company’s operations. In the fourth quarter, we continued to see signs of a recovery, led by increased consumer spending, stabilizing loan demand by our commercial customers, and strong markets and investing activity,” said CEO Brian Moynihan.
“The latest stimulus package, continued progress on vaccines, and our talented teammates – who performed well helping their customers through this crisis – position us well as the recovery continues.”
Bank of America shares were marked 1.4% lower in pre-market trading immediately following the earnings release to indicate an opening bell price of $32.55 each.
Revenues from the bank’s fixed income and commodities unit fell 5% to $1.7 billion, but equities revenues were up 20% to a stronger-than-expected $1.3 billion, Bank of America said.
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