Chillin' out till it needs to be funded
BofA printed another scratchy topline down to the wire repeating Q2 2010 all over again when Non Interest expenses of $17.5 B and a Tax expense of $1B almost completely covered its Topline of $20.6 B after a small $1.8 B addition to Credit provisions the $300M profits counting to a $0.00 EPS for the Quarter. Admittedly $1.9 B charges came from the valuation of its book for Fair Value and DVA/CVA adjustments
In terms of provisions, the bill is not the hefty $12 B of that year ago quarter but is a minimal $1.6 B for a class action settlement for Merrill Lynch
Investment Banking fees grew a bit under 20% sequentially on Q2 2012 while mortgages by an internal measure grew more than 10% in Production ( New Accounts) and 14% in profitability, weakly mirroring the comeback trend in other bank results last week at JP Morgan and Wells Fargo and as Employee coutn plummeted by 3K, costs also came down to lend a hand to pay for the litigation if not profits for shareholders
Debt Fees added a fat $867M to the Investment Banking Topline of $1.36B and international contribution was down to a miniscule $236 MM at the bank this quarter as it gets set to restart that business.
RWA are still a stable $1.19T and Total assets growing to $2.17T on growth in Deposits by $28 B at a cost of deposits lower by 2 bp
Tier I Common is up another $2.3 B sequentially to $136B and Tangible Book Value outpacing any comebacks in the industry to $13.48 as the share flails around $9.20, starting Pre market at near its high of $9.75 and currently trading around $9.42 after the surprising results printed by the bank
Tangible Common Equity ratio has improved more than 10% over last year to come in at 6.95%. The bank also managed to get rid of billions in Trust Preferred Capital ($6.2B) and $5.1B savings in liability management to $287B in Long term debt, down $15 B sequentially
The bank has a stable NII of $10.5 B in the quarter, improving from a $10.3 B in June (Q2 2012) and Retail Banking (CBB) revenues are up to $7.07B of which $2.42 B is Non interest Income (CBB EOP Loans: $133.9 B , Deposits : ~$487B)
Of the above Card Services maintained $109B in loans only on the US portfolio and Net charge offs are under 5% with 90+ down to 1.6%. SME banking loans outstanding seem to have come down by nearly 20% even as $6.2 B as added in new lending
Mortgage Production has returned a $260 MM profit but the bank is still losing $1.1 B on the servicing prtfolio of ~ $1.1T
Wealth management Income is stable at $4.28B ith $2.8B in Fee and other Non interest charges, Client Balances finally showing an improvement of nearly $70 b as the bank will likely be hailed in the markets for putting 2011 behind it despite the new litigation reserves.