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Bank of America’s 4Q16 Earnings Topped Expectations on Cost Cuts, Trading Gains

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Bank of America beats estimates

Bank of America (BAC) declared better-than-expected 4Q16 earnings on January 13, 2017. The company reported adjusted earnings per share (or EPS) of $0.40, higher than analysts’ estimates of $0.38 and 47% higher year-over-year.

On an adjusted basis, the bank reported EPS of $0.42. Bank of America’s disciplined cost management strategy and higher trading revenues drove the earnings.

Bank of America stock rose 0.4% after the earnings release. Since Donald Trump’s presidential win, Bank of America stock has gained ~35% on anticipation of deregulation in the sector and a steady pace of interest rate hikes.

Bank of America’s CFO, Paul M. Donofrio, said in the bank’s earnings release, “Strong client activity and good expense discipline created solid operating leverage again this quarter.”

Peers (XLF) Wells Fargo (WFC) and JPMorgan Chase (JPM) also reported better-than-expected fourth quarter earnings on Friday. Peers Citigroup (C) and Goldman Sachs (GS) are due to report this week.

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