5 Key Factors To Watch In Bank Of America's Quarterly Report

Previewing Bank of America Corp's BAC Q3 results, Barclays listed five key factors to watch for:

• 1. Net interest income – The firm expects less volatility in the net interest income, as FAS91 dropped. FAS 91 is accounting for non-refundable fees and costs associated with originating or acquiring loans and initial direct costs of leases.
• 2. Expenses Efficiency – Barclays is keen to find out how the company plans to reach $53 billion target
• 3. Near term Outlook for Markets Revenues
• 4. Credit Costs
• 5. Profitability – The firm looks to get a hang on the company's ability to hit the 1 percent return on assets and 12 percent return on total capital employed target.

Expecting Earnings Beat

Analyst Jason Goldberg expects the company to report Q3 earnings per share of $0.34, ahead of the $0.33 consensus estimate. The analyst expects less concerns surrounding its net interest margin and net interest income, given that the company recently changed its premium amortization recording practice to be in line with peers.

Nevertheless, the analyst expects net interest income growth to be subdued. Trading and investment banking results are expected to be sequentially lower, although up year-over-year. The analyst is of the view that expenses and loan loss provisions may be controlled and share repurchases would pick up.

Likely Growth Drivers

Barclays expects 1 percent sequential growth in net interest income, driven by balance sheet growth and an additional day in the quarter. However, the firm estimates net interest margin to be down 3 basis points. Fee income is likely to be modestly lower and expenses are likely to be 1 percent higher, according to the firm.

Barclays has an Equal-Weight rating and a $19 price target on shares.