Bank of America (BAC) and Wells Fargo (WFC) released their third quarter earnings reports before opening bell this morning. Bank of America posted earnings of 37 cents per share, beating the analyst estimate of 33 cents per share. The firm posted revenue of $20.91 billion, compared to last year's $21.43 billion and the estimate of $20.77 billion.
Wells Fargo posted a 3% increase in earnings to $1.05 per share on revenue of $21.9 billion. Analysts had been expecting earnings of $1.04 per share and $21.76 billion in revenue for the third quarter.
Bank of America swings to profit
In last year's third quarter, Bank of America posted a loss of 4 cents per share on the back of a $5.6 billion charge in connection with a settlement in the U.S. mortgage probe case. The bank's non-interest expenses fell 31% year over year to $13.81 billion. Non-interest income increased 1.6% to $11.17 billion. The bank's legal costs fell for the third consecutive quarter, declining to $231 million compared to last year's $6 billion.
Bank of America reported net interest income of $9.74 billion, compared to last year's $10.44 billion and the FactSet consensus estimate of $10 billion. Net charge-offs declined 11% to $932 million, beating the estimate of $1.05 billion FICC trading revenue fell 11% year over year, while equity sales and trading revenue increased 12% from last year.
Shares of Bank of America increased as much as 2.25% to $15.88 per share in premarket trades this morning.
Wells Fargo's earnings rise
In the same quarter last year, Wells Fargo posted earnings of $1.02 per share and revenue of $21.2 billion. The bank reported a 7% increase in total average loans to $95.1 billion. Wells Fargo had $903.2 billion in loans at the end of the quarter, an 8% increase from last year. Total average deposits increased 6% to $1.2 trillion.
The bank saw net charge-offs increase to $703 million compared to $35 million last year. However, the net charge-off rate edged downward from 0.32% last year to 0.31% this year. Wells Fargo had a Common Equity Tier 1 Basel III ratio of 10.7%.
