Bank of America posts first-quarter results that top expectations on higher rates

Earnings

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Brian Moynihan, CEO of Bank of America, speaking on Squawk Box at the WEF in Davos, Switzerland on Jan. 17th, 2023. 
Adam Galica | CNBC

Bank of America on Tuesday reported first-quarter earnings and revenue that topped expectations on the back of higher interest rates.

Here’s what the bank did compared to Wall Street estimates according to Refinitiv:

  • Earnings: 94 cents per share versus 82 cents per share expected
  • Revenue: $26.39 billion versus $25.13 billion expected

The bank stock rose more than 2% in premarket trading following the results.

Bank of America said its net interest income, what it makes lending money minus what it pays out to customers, jumped 25% to $14.4 billion during the quarter thanks to rising rates.

“Every business segment performed well as we grew client relationships and accounts organically and at a strong pace,” CEO Brian Moynihan said in a statement. “Our results demonstrate how our company’s decade-long commitment to responsible growth helped to provide stability in changing economic environments.”

Its noninterest income increased by just 1% to $11.8 billion as higher sales and trading revenue offset lower service charges and declines in asset management and investment banking fees, the bank said.

“We delivered our seventh straight quarter of operating leverage. We further strengthened our balance sheet and maintained strong liquidity,” Moynihan said.

Bank of America set aside $931 million for credit losses in the first quarter. The bank said net charge-offs remained below pre-pandemic levels.

Sales and trading revenue gained 7% to $5.1 billion in the quarter. Revenue from fixed income, currency and commodity trading increased by 27% to $3.4 billion, while equities trading revenue fell 19% to $1.6 billion.