Bank of America Corp ( BAC )  reported a third-quarter fiscal 2024 net income of $6.9 billion and EPS of $0.81, beating the analyst consensus estimate of $0.77. Net income fell 12% year-on-year due to higher provisions for loan losses and rising expenses.

Revenue, net of interest expense, increased 1.0% year over year to $25.49 billion, beating the analyst consensus estimate of $25.29 billion.

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The gains in trading revenue, asset management, and investment banking fees offset the decline in net interest income. The stock gained after the quarterly print.

Segment Net income: Consumer Banking $2.69 billion vs. $2.86 billion Y/Y, Global Wealth and Investment Management $1.06 billion vs. $1.03 billion Y/Y, Global Banking $1.9 billion vs. $2.6 billion Y/Y, and Global Markets $1.55 billion vs. $1.26 billion Y/Y.

Investment banking fees grew by 18% to $1.40 billion. The Net interest income was $14.1 billion (-3.0% Y/Y), as higher asset yields and loan growth were more than offset by higher deposit costs. Noninterest income was $11.4 billion (+5.5% Y/Y). Provision for credit losses was flat Y/Y at $1.5 billion.

The efficiency ratio for the quarter was 64.64% vs. 62.55% Y/Y. The bank reported a CET1 ratio of 11.8%, up 112 bps from a year ago. The book value per share of $35.37 improved by 8%.

The average loan and lease balance was $1.06 trillion (+1.0% Y/Y). Average deposits are up 2% Y/Y to $1.92 trillion. Bank of America ( BAC ) added ~1.0 million credit card accounts during the quarter.

Outlook: In the second quarter, Bank of America ( BAC ) said it expects net interest income of ~$14.50 billion in the fourth quarter, assuming a 25 bps interest rate cut.

Bank of America ( BAC ) stock gained over 55% in the last 12 months.

In September, the U.S. Fed cut the lending rate by 50 bps, lowering the central bank's benchmark rate to 4.75%-5% to spur demand. This could pose a tailwind for banks through cheaper borrowing rates and promoting lending activities.

Price Action: BAC stock is up 2.10% at $42.79 premarket at the last check Tuesday.

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