How Did Bank of America Fare in the First Quarter?



Key takeaways

Bank of America (BAC) posted mixed first-quarter results today. The bank’s revenues continued to benefit from higher net interest income driven by sustained growth in lending and deposits. Moreover, higher interest rates supported net interest income growth. Despite higher net interest income, Bank of America missed analysts’ revenue estimate due in part to the 8% decrease in FICC revenue and a 22% decline in equity trading revenues.

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In comparison, JPMorgan Chase (JPM) impressed investors with its first-quarter revenue growth, driven by an increase in loans and deposits and higher rates. Meanwhile, higher investment banking fees further supported revenue growth. Meanwhile, Citigroup (C), Wells Fargo (WFC), and Goldman Sachs (GS) marked a YoY decline in first-quarter revenues.

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Higher net interest income, lower expenses, and share repurchases drove the double-digit growth in Bank of America’s bottom line, which handily exceeded Wall Street’s estimate.

Q1 financials

Bank of America’s first-quarter revenues, net of interest expenses, stayed flat at $23.0 billion. However, revenues missed analysts’ estimate, reflecting lower investment banking fees and a decline in trading revenues.

Average loan and lease balances rose 4% to $897 billion, driven by 3% growth in consumer loans and a 4% increase in commercial loans. Average deposits rose 5% to $1.4 trillion. Non-interest expenses decreased 4%, while the efficiency ratio improved by 252 basis points to 57%.

Bank of America posted EPS of $0.70, which increased 13% on a YoY basis and surpassed analysts’ estimate of $0.66.


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