Bank of America shares fell 1.1% Friday after the firm reported declining fourth-quarter earnings amid hefty one-time charges.
Here’s what the corporate reported in comparison with Wall Street expectations, in accordance with LSEG, formerly generally known as Refinitiv:
- Earnings per share: 70 cents, adjusted vs. 68 cents expected.
- Revenue: $22.1 billion vs. $23.74 billion expected.
Bank of America said its net income fell to $3.1 billion, or 35 cents per share, within the fourth quarter, down greater than 50% from $7.1 billion, or 85 cents per share, a yr ago.
The bank, based in Charlotte, North Carolina, said it was hit by a pretax charge of $1.6 billion within the quarter related to the transition away from the London Interbank Offered Rate. The outcomes also included a special $2.1 billion fee charged by the Federal Deposit Insurance Corporation. The fee is tied to the failures of Silicon Valley Bank and Signature Bank. Excluding items, the corporate said it earned 70 cents per share, which outpaced analysts’ expectations.
Nonetheless, revenue of $22.1 billion fell wanting Wall Street’s estimates for the primary time in two years and was down 10% from the year-ago period.
“We reported solid fourth quarter and full-year results as all our businesses achieved strong organic growth, with record client activity and digital engagement,” CEO Brian Moynihan said in an announcement. “Our expense discipline allowed us to proceed investing in growth initiatives. Strong capital and liquidity levels position us well to proceed to deliver responsible growth in 2024.”
The nation’s second-largest bank posted a $1.1 billion provision for credit losses, up $12 million from the identical quarter last yr.
Bank of America said its net interest income decreased 5% to $13.9 billion because of higher deposit costs and lower deposit balances, which greater than offset higher asset yields.
The bank was supposed to be one in every of the most important beneficiaries of upper rates of interest last yr, however it has underperformed its peers since the lender had piled into low-yielding, long-dated securities during the Covid-19 pandemic. Those securities lost value as rates of interest climbed.
Revenue from consumer banking dipped 4% to $10.3 billion, while sales and trading revenue went up 3% to $3.6 billion.
Bank of America stock is down 2.6% this yr after a mere 1.7% gain in 2023. The S&P 500 financial sector gained 10% last yr.
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