NEW YORK (TheStreet) -- Bank of America (BAC) - Get Bank of America Corp Report stock is up by 0.58% to $15.62 in mid-day trading on Wednesday, after a report showed the baking sector had the highest quarterly earnings ever recorded for the 2015 second quarter.
The Federal Deposit Insurance Corporation reported $43 billion in earnings, a 7.3% year-over-year increase, from 6,348 commercial banks and savings institutions insured by the federal agency.
During the second quarter, 58.7% of the financial institutions reported year-over-year earnings growth.
Unprofitable banks fell to 5.6% of insured institutions, from 6.8% last year.
Loan and lease balances rose 2.2% during the quarter and net loan losses fell for the 20th consecutive quarter.
"However, the low interest-rate environment remains a challenge," FDIC Chairman Martin Gruenberg said in a statement. "Many institutions have responded by acquiring higher-yielding, longer-term assets, but this has left banks more vulnerable to rising interest rates and that is a matter of ongoing supervisory attention."
In July, Bank of America reported earnings of $5.32 billion, or 45 cents per diluted share, on revenue of $22.35 billion for the second quarter of this year.
Separately, TheStreet Ratings team rates BANK OF AMERICA CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate BANK OF AMERICA CORP (BAC) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income, impressive record of earnings per share growth, expanding profit margins and solid stock price performance. We feel its strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- BAC's revenue growth has slightly outpaced the industry average of 1.7%. Since the same quarter one year prior, revenues slightly increased by 0.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Commercial Banks industry. The net income increased by 132.2% when compared to the same quarter one year prior, rising from $2,291.00 million to $5,320.00 million.
- BANK OF AMERICA CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, BANK OF AMERICA CORP reported lower earnings of $0.35 versus $0.91 in the prior year. This year, the market expects an improvement in earnings ($1.45 versus $0.35).
- The gross profit margin for BANK OF AMERICA CORP is currently very high, coming in at 86.17%. Regardless of BAC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, BAC's net profit margin of 21.48% compares favorably to the industry average.
- After a year of stock price fluctuations, the net result is that BAC's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: BAC Ratings Report