Friday, May 24, 2024

Bank of America profit falls 18% in first quarter

Bank of America’s stock dropped nearly 4% in Tuesday afternoon trading after its first-quarter earnings report showed an 18% decline in year-over-year net income. 

A 6% increase in non-interest expense contributed to Bank of America’s profit slide.

The Charlotte-based bank also attributed the profit decline to a 3% decrease in net interest income “as higher deposit costs more than offset higher asset yields and modest loan growth,” it said in the earnings report. 

Total average deposit balances fell by 7%, further contributing to Bank of America’s profit decline. 

The Charlotte-based company reported a profit of $6.67 billion, or 76 cents a share.  Excluding a $700 million FDIC assessment, the profit was 83 cents a share, which beat analyst expectations. Revenue slipped 1.6% to $25.98 billion as net interest income declined. Analysts were expecting revenue of $25.46 billion.

“We delivered good improvement in our fee-based business, driven both by continued organic growth and good market conditions,” said CEO Brian Moynihan during the earnings conference call. “Investment banking saw a nice rebound this quarter.”

Some investors are concerned that BofA has a large portfolio of bonds and securities it bought when rates were very low. As interest rates increased, the value of that portfolio has declined significantly. It had unrealized losses of $109 billion as of March 31, compared with $98 billion on Dec. 31.

Despite a lower profit, Bank of America officials took an optimistic tone. The bank’s year-over-year consumer investment assets grew by 29% to a record-setting $456 billion. This growth was “driven by $44 billion of net client flows from new and existing clients and higher market valuations.” 

Bank of America also generated a record-setting $5.6 billion in revenue from its global wealth and investment management segment. Active digital banking users increased to a record 47 million. 

“We reported a strong quarter as our businesses performed well, adding clients and deepening relationships,” said Moynihan in a release. “Our wealth management team generated record revenue, with record client balances, and investment banking rebounded.” 

In the earnings call, Moynihan said that the company’s head count at the end of the first quarter is down by more than 4,700 people from the same quarter a year ago. It declined 650 people since the end of 2023. Bank of America had 212,335 employees as of March 31.

The company touted No. 1 rankings from Forbes, the FDIC and Asset Securitization Report in categories including best in-state wealth advisors, small business lender and asset-backed securities underwriting.

Bank of America was trading at $34.54, down $1.41, or 3.9%, in Tuesday afternoon trading.

Cooper Metts
Cooper Metts
Cooper is a business reporting intern at Business North Carolina. He is working towards degrees in journalism and economics at the University of North Carolina at Chapel Hill. He can be reached at

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