American bank On Tuesday, it reported first-quarter earnings that beat analysts' estimates for earnings and revenue thanks to better-than-expected interest income and investment banking.
Here is what the company said:
Earnings: 83 cents per share, adjusted, vs. 76 cents expected, according to LSEG Revenue: $25.98 billion, vs. $25.46 billion expected
The bank said profits fell 18% to $6.67 billion, or 76 cents per share. Excluding an FDIC valuation of $700 million, profit was 83 cents per share. Revenue fell 1.6% to $25.98 billion with net interest income lower than the previous year.
Net interest income, or the difference between what the company earns on loans and investments and what it pays customers for their deposits, was $14.19 billion, beating StreetAccount estimates of $13.93 billion.
The bank's interest income was a “slight positive surprise,” Wells Fargo analyst Mike Mayo said Tuesday in a research note, although it's unclear whether that means the measure will improve earlier than expected.
The bank's total deposits of $1.95 trillion rose nearly 1% from the fourth quarter, while loans of the same size rose to $1.05 trillion.
“I was unimpressed with the stability of deposits and loans,” David Wagner, portfolio manager at Aptus Capital Advisors, said in an email. “The only areas where Bank of America has performed well are areas where other banks have shown strength.”
The bank's shares fell 4%.
Analysts are likely to ask Bank of America management for more guidance on National Insurance, which has declined in recent quarters as funding costs rise as interest rates rise.
Investment banking revenue jumped 35% to $1.57 billion, beating estimates of $1.36 billion, and following a similar rise at competitors including Goldman Sachs And C. B. Morgan Chase.
It's also well above guidance provided by Bank of America Chief Financial Officer Alastair Borthwick, who told analysts last month that they expect investment banking revenue to rise 10% to 15% from a year earlier.
The bank's trading operations also exceeded expectations. Fixed income revenues fell 3.6% to $3.31 billion, slightly beating estimates of $3.24 billion, and equity revenues rose 15% to $1.87 billion, compared to estimates of $1.84 billion.
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