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Bank Of America Q1 Profit Increases

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Bank of America Corp. (BAC) reported a profit for the first-quarter that increased about 34 percent from the prior year. Quarterly revenue, net of interest expense, increased about 4 percent from last year. Net interest income for the quarter increased 5%, reflecting benefits from higher interest rates, as well as loan and deposit growth.

"This was a strong quarter. Revenue was up 4 percent year-over-year and expenses were down 1 percent, making this the 13th consecutive quarter of positive operating leverage. We also carefully managed credit costs. This enabled us to deliver double-digit EPS growth. We also returned $6.1 billion in capital to our shareholders through dividends and common stock repurchases," said Paul Donofrio, Chief Financial Officer.

Net income applicable to common shareholders for the first-quarter increased about 34 percent to $6.49 billion from last year's $4.84 billion, with earnings per share improving to 38 percent to $0.62 from $0.45 last year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.59 per share. Analysts' estimates typically exclude special items.

Non-interest expense declined $196 million or 1%, to $13.9 billion; efficiency ratio improved to 60%. The Tax Act resulted in an ongoing reduction to the effective tax rate of approximately 9 percentage points.

Net interest income for the quarter increased $550 million, or 5%, to $11.6 billion, reflecting benefits from higher interest rates, as well as loan and deposit growth. Non-interest income increased $327 million, or 3%, to $11.5 billion, reflecting strength in Equities and higher asset management fees. Provision for credit losses stable at $834 million.

Quarterly revenue, net of interest expense, increased about 4% to $23.13 billion from $22.25 billion in the prior year. Wall Street expected revenues of $23.06 billion for the quarter.

In the Consumer Banking, Quarterly pretax income grew 19%, to $3.6 billion, driven by solid operating leverage as revenue growth outpaced expense growth. Revenue increased $748 million, or 9%, to $9.0 billion.

In the Global Wealth and Investment segment, Quarterly pretax income increased 12% to a record $1.4 billion, as solid revenue growth more than offset increased revenue-related expenses Management. Revenue rose $264 million, or 6%, to a record $4.9 billion.

In the Global Banking, Pretax income declined 2%, reflecting lower noninterest income, partially offset by higher Net interest income. Revenue decreased $21 million, or 0.4%, to $4.9 billion.

In the Global Markets, Net income increased $161 million, or 12%, to $1.5 billion. Revenue increased $78 million, or 2%, to $4.8 billion, driven by higher sales and trading revenue.

In the Monday's pre-market trade, BAC is trading at $30.11 up $0.31 or 1.04 percent.

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