Bank of America tops earnings forecast, predicts 'significant increase' in net interest income

Bank of America reported fourth quarter earnings Friday that topped expectations and said it expects a "significant increase" in net interest income for the current quarter.

The firm reported earnings per share of 40 cents on revenue $19.99 billion. Analysts polled by Reuters expected Bank of America to report a profit of 38 cents a share on revenue of $20.85 billion.

"Strong client activity and good expense discipline created solid operating leverage again this quarter. While the recent rise in interest rates came too late to impact fourth-quarter results, we expect to see a significant increase in net interest income in the first quarter of 2017. We remain focused on delivering value to our shareholders as evidenced by today's announcement to increase our planned repurchases for the first half of this year from $2.5 billion to $4.3 billion," Chief Financial Officer Paul M. Donofrio said in a release.

Shares struggled edged higher in premarket trade.

The bank said net interest income increased 6 percent to $10.3 billion in the fourth quarter, while loan balances climbed by $19 billion to $915.9 billion.

The bank reported a 12 percent rise in fixed income trading revenue. It reported a 7 percent rise in equities trading revenue, "reflecting increased market activity post U.S. election." Excluding net debit valuation, total sales and trading revenue rose 11 percent.

The bank also said it repurchased $5.1 billion in common stock and paid $2.6 billion in common stock dividends in 2016.

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