Bank of America, the nation’s second-largest bank by assets, continued the string of strong first-quarter results among the top U.S. banks, reporting a 15% increase in profit and soundly beating analysts expectations.
The bank on Tuesday reported its results for the first quarter of 2023, posting net income of $8.2 billion, or 94 cents per diluted share, compared to $7.1 billion, or 85 cents per diluted share, in the fourth quarter of last year. The profit was also a 15% improvement from a year earlier.
The results beat analyst expectations of 79 cents per diluted share, according to Zacks Investment Research.
Watch The Interest
Total revenue net of interest expense in the first quarter was $26.3 billion, up 7.4% from $24.5 billion in the fourth quarter of last year, and up 13.4% from the first quarter last year.
“The value of responsible growth is evidenced again in our first-quarter financial performance with 15% net income growth compared to Q1 '22,” said BofA Chief Financial Officer Alastair Borthwick. “Results were strong despite a challenging economic environment with market and banking-sector volatility.”
For its business segments, the bank said its consumer banking unit posted net income of $3.1 billion, a 4% increase, driven by strong revenue growth and continued investments in the business. Revenue of $10.7 billion improved 21%, the bank said, due to increased non-interest income (NII) “driven by higher interest rates and loan balances, partially offset by the impact of reduced customer non-sufficient funds and overdraft fees.”
The provision for credit losses totaled $1.1 billion, compared to a benefit of $52 million a year earlier.
The bank said its average deposits remained above $1 trillion, but decreased $30 billion, or 3%, from a year earlier.
In the Global Wealth and Investment Management segment, net income was $917 million, down 19% year over year. Revenue of $5.3 billion decreased 3% year over year, “driven by the impact of lower equity and fixed income market valuations on asset management fees, partially offset by higher NII.”
The bank said average loans and leases totaled $221 billion, up $11 billion, or 5%, year over year, “driven by residential mortgage lending and custom lending. New residential mortgage originations decreased 25% from the previous quarter to $3.9 billion from $5.2 billion. New home equity originations, however, remained unchanged at $2.6 billion.
“Every business segment performed well as we grew client relationships and accounts organically and at a strong pace,” said BofA Chairman and CEO Brian Moynihan. “Led by 13% year-over-year revenue growth, we delivered our seventh-straight quarter of operating leverage. We further strengthened our balance sheet and maintained strong liquidity. … Our results demonstrate how our company’s decade-long commitment to responsible growth helped to provide stability in changing economic environments.”
Like Bank of America, both JPMorgan Chase & Co., the nation’s largest bank by assets, and Wells Fargo, the fourth-largest U.S. bank, reported strong results for the first quarter of 2023.
