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Bank Of America Q1 Profit Beats Estimates; Revenue Up 2%

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Bank of America (BAC) reported that its first quarter pretax income declined 14% year-on-year to $7.9 billion reflecting a smaller reserve release than the first quarter of prior year. Net interest income was up $1.4 billion, or 13%, to $11.6 billion, driven by strong deposit growth and investment of excess liquidity, loan growth and benefits from higher long-end interest rates. Noninterest income declined $968 million, or 8%, to $11.7 billion, primarily driven by lower investment banking revenue.

First quarter net income applicable to shareholders declined to $6.60 billion from $7.56 billion, prior year. Earnings per share was $0.80 compared to $0.86. On average, 20 analysts polled by Thomson Reuters expected the company to report profit per share of $0.74, for the quarter. Analysts' estimates typically exclude special items.

First quarter revenue, net of interest expense, increased 2% to $23.2 billion. Analysts on average had estimated $23.11 billion in revenue.

Average deposits were up year-over-year $240 billion, or 13%, to $2.0 trillion. Average loan and lease balances were up $70 billion, or 8%, to $978 billion. Excluding Paycheck Protection Program, loans grew $89 billion.

"Going forward, and with the forward curve expectation of rising interest rates, we anticipate realizing more of the benefit of our deposit franchise," said CFO Alastair Borthwick.

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