Bank of America Corp (BAC)’s Earnings Demystified

Thanks to the deterioration in the value of its securities portfolio tied to the recent increase in interest rates, this figure increased by $4.2 billion — that is, more than offsetting its $4 billion in net income. You can see the impact of this on Bank of America Corp (NYSE:BAC)’s book value, which fell on a sequential basis from $20.19 per share in the first quarter to $20.18 at the end of last quarter despite its otherwise impressive earnings.

All things considered, I’d say last quarter was a resounding, though not entirely unexpected, success for Bank of America. “At the beginning of the year, we said we would focus on three things — revenue stability, strengthening the balance sheet and managing costs,” said chief financial officer Bruce Thompson. “This quarter, we delivered on all three.” I would agree.

The article Bank of America’s Earnings Demystified originally appeared on Fool.com is written by John Maxfield.

John Maxfield owns shares of Bank of America. The Motley Fool recommends Bank of America and Goldman Sachs. The Motley Fool owns shares of Bank of America and JPMorgan Chase.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.