“Net interest income increased by $1.4 billion versus the year-ago quarter supported by strong loan and deposit growth,” said CFO Alastair Borthwick.
Updated at 7:44 am EST
Bank of America (BAC) – Get Bank of America Corp Report posted better-than-expected first quarter earnings Monday thanks in part to solid gains in net interest income amid improving loan demand and a $240 billion gain for the bank’s deposit base.
Bank of America said profit for the three months ended in March were tabbed at 80 cents per share, down 7% from the same period last year and but 5 cents ahead of the Street consensus forecast of 75 cents per share.
Group revenues, the bank said, rose 2% from last year to $23.2 billion, falling largely in-line with analysts’ estimates, as net interest income rose 13% to $11.6 billion, offsetting a 35% slump in investment banking fees.
“We achieved solid first-quarter results earning $7.1 billion, continuing the momentum from record net income in 2021. Across our businesses, ongoing organic growth combined with good expense management drove operating leverage for the third consecutive quarter,” said CEO Brian Moynihan.
“Year over year we grew loans $70 billion and deposits by $240 billion. Our teammates supported our clients while managing through the impacts of the pandemic, war in Ukraine, and an evolving rate environment,” he added. “Our strong first quarter client activity drove results that allow us to deliver for shareholders while continuing to invest in our people, businesses, and communities.”
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Bank of America shares were marked 1.25% higher in pre-market trading immediately following the earnings release to indicate an opening bell price of $38.05 each.
Wall Street banks have posted a mixed collection of first quarter earnings so far this reporting season, with JPMorgan (JPM) – Get JPMorgan Chase & Co. Report CEO Jamie Dimon cautioning that “Inflation and Ukraine are powerful forces that threaten the economy” following its softer-than-expected update and Goldman Sachs (GS) – Get Goldman Sachs Group, Inc. Report using its powerful wealth management division, alongside its trading arm, to print better-than-expected first quarter profits that offset a slump in deal-making fees amid sharp decline in merger activity.
Global merger activity fell more than 20% from last year’s SPAC-fueled first quarter frenzy, data from Refinitiv indicated earlier this month, with the total value of transactions pegged at around $1 trillion, highlighted by Microsoft’s MSFT $69 acquisition of video game maker Activision Blizzard ATVI.
