Bank of America on Tuesday reported first-quarter earnings that beat analysts’ estimates for better-than-expected earnings and interest income and investment banking activities.
Here’s what the company said:
- Earnings: Adjusted 83 cents per share versus expectations of 76 cents, according to LSEG.
- Revenue: $25.98 billion versus expected $25.46 billion.
The bank said earnings fell 18% to $6.67 billion, or 76 cents per share; Excluding the $700 million FDIC estimate, earnings were 83 cents per share. Revenue fell 1.6% to $25.98 billion as net interest income fell from a year earlier.
Net interest income, or the difference between what the company earns on loans and investments and what it pays customers for their deposits, was $14.19 billion, beating StreetAccount’s estimate of $13.93 billion.
The bank’s interest earnings were a “small positive surprise,” although it’s unclear whether that means the measure will improve sooner than expected, Wells Fargo analyst Mike Mayo said in a research note Tuesday.
The bank’s total deposits of $1.95 trillion rose about 1% from the fourth quarter, while loans were little changed at $1.05 trillion.
“I am not impressed by the flat level of deposits and loans,” David Wagner, portfolio manager at Aptus Capital Advisors, said in an email. “The only area where BAC has excelled is where other banks have shown strength.”
Bank of America Chief Financial Officer Alastair Borthwick told analysts on a conference call Tuesday that NII will likely fall in the second quarter to about $14 billion due to falls in asset management and markets interest income, and could rise in the second half of the year.
NPV has been declining in recent quarters as funding costs have risen along with rising interest rates.
The bank’s shares fell more than 4%.
Investment banking revenue jumped 35% to $1.57 billion, beating estimates of $1.36 billion and following similar growth among peers including Goldman Sachs And JP Morgan Chase.
It’s also significantly higher than Borthwick’s forecast, which last month told analysts that investment banking revenue would rise 10% to 15% from a year earlier.
The bank’s trading operations also exceeded expectations. Fixed income revenue fell 3.6% to $3.31 billion, slightly above the $3.24 billion estimate, while equity revenue rose 15% to $1.87 billion compared with the $1.84 billion estimate.