Bank of America First Quarter Earnings News: Bank of America First Quarter Results: Profits Down 18% Due to Higher Costs and Amortization
The Charlotte, North Carolina-based bank posted profit of $6.67 billion, or 76 cents per share, compared with $8.2 billion, or 94 cents per share, in the same period a year ago. BofA was required to make a one-time payment of $700 million to the Federal Deposit Insurance Corp. to help replenish its deposit insurance fund.
Excluding one-time costs, the bank earned 83 cents per share.
Bank of America has been dealing with the impact of higher interest rates on its loan and investment portfolio over the past year. Banks purchased significant numbers of bonds during the pandemic when interest rates were low, and as interest rates rose, the value of those bonds fell.
Banks are also paying more for deposits, which has slightly reduced their profits. The net interest yield, which measures the amount a bank earns on loans compared to the interest owed to depositors, fell from 2.20% in 2023 to 1.99% in 2024.
Sales at BofA’s consumer banking division, its largest by revenue and profit, fell 5% to $10.2 billion. Banks saw consumers opening more accounts and spending more on credit and debit cards, but banks also had to raise more funds to cover potential loans and charge credit cards. Investment banking was one of the bank’s strengths this quarter, with global investment banking fees up 35% in the quarter. Stock and bond trading was little changed, with bond trading revenue decreasing while stock trading revenue increased.
