Bank of America Q1 profits fall 12%, much less than rivals

Apr 18, 2022, 5:23 AM | Updated: Apr 19, 2022, 1:25 am
A woman walks past a Bank of America branch, Friday, Jan. 14, 2022, in Woodmere Village, Ohio. Bank...

A woman walks past a Bank of America branch, Friday, Jan. 14, 2022, in Woodmere Village, Ohio. Bank of America posted a 12% decline in first-quarter profits from a year earlier, a decline that was much less than the ones its rivals had reported the previous week. The nation's second-largest bank was helped by higher net interest income and no noticeable exposure to Russian assets. (AP Photo/Tony Dejak)

(AP Photo/Tony Dejak)

NEW YORK (AP) — Bank of America posted a 12% decline in first-quarter profits from a year earlier, a decline that was much less than the ones its rivals had reported the previous week. The nation’s second-largest bank was helped by higher net interest income and very modest exposure to Russian assets.

The Charlotte, North Carolina-based bank said it earned a profit of $7.1 billion, or 80 cents a share, compared with a profit of $8.05 billion, or 86 cents a share, in the same period a year earlier. The results were better than what analysts had forecasted, according to FactSet.

While BofA’s profits fell like the other big five Wall Street bank s this quarter, their results were helped by a few factors that helped the bank do better than its rivals.

The bank saw net interest income increase 13% in the quarter, roughly $1.4 billion. BofA’s balance sheet is more skewed to bonds with shorter maturities, so short-term moves in interest rates tend to quickly impact the bank’s bottom line.

BofA’s consumer banking division, the bank’s largest business by revenue and profits, also helped boost results. Net income in the division was up 11% from a year earlier, helped by higher revenue from loans and interest rates. Deposits also grew quite noticeably, up 14%, to $1.06 trillion.

“This is not a bad result for Bank of America, particularly the continued solid loan growth,” said David Wagner, portfolio manager at Aptus Capital Advisors, who owns BofA shares, in an email.

The bank did not have to set aside much funds this quarter to cover potential losses as well, in contrast to JPMorgan Chase and Citigroup, who had to set aside money to cover the risk of a recession as well as for their exposures to Russia. BofA said it had roughly $700 million in total in exposure to Russia, compared with the $1.9 billion Citigroup had to set aside to cover just potential losses.

Wagner thinks it’s possible BofA may have to raise its credit reserves later this year. JPMorgan was aggressive in reserving for loan losses in the pandemic, and seems to be doing so again now with inflation making it likely the Federal Reserve has to aggressively raise rates.

Banks only (reserve for losses) when they think that default rates, which are currently low, will start to rise. And JPMorgan admitted to such during the call, saying it was a ‘preemptive move’ if the economy slowed.”

Like other banks, BofA saw a drop in investment banking revenues and fees in the quarter as businesses refrained from deal-making due to market volatility. Trading revenues were down in the quarter, also due to market volatility.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

AP

FILE - Packaging for an electronic cigarette and menthol pods from Juul Labs is displayed on Feb. 2...
Associated Press

Juul, FDA suspend court case while e-cigarette ban on hold

WASHINGTON (AP) — The Food and Drug Administration and Juul agreed Wednesday to put their court fight on hold while the government conducts more review of the company’s electronic cigarettes. The agreement comes one day after the FDA placed a hold on its initial order banning Juul’s products from the market, saying that Juul’s application […]
16 hours ago
Associated Press

Knock-knock. Are any ivory-billed woodpeckers out there?

NEW ORLEANS (AP) — The U.S. Fish and Wildlife Service put off a decision about whether ivory-billed woodpeckers are extinct, announcing Wednesday that it’s adding six months to review information, including a month of public comment. “We are aware that there have been surveys or evidence collected recently,” Amy Trahan, the agency’s expert on the […]
16 hours ago
Cassidy Hutchinson, former aide to Trump White House chief of staff Mark Meadows, testifies about h...
Associated Press

Hutchinson’s Jan. 6 committee testimony a television hit

SYRACUSE, N.Y. (AP) — Former White House aide Cassidy Hutchinson’s testimony before the Jan. 6 committee was a big hit with television viewers, easily reaching a larger live audience than any of the four other daytime hearings. Hutchinson’s riveting testimony about former President Donald Trump’s temper as plans to overturn the 2020 election fell apart […]
16 hours ago
Associated Press

Group aims to harness anger over crime to oust LA prosecutor

LOS ANGELES (AP) — Los Angeles County’s progressive prosecutor could be tossed from office like his counterpart in San Francisco after opponents on Wednesday said they would submit more than enough signatures to qualify for an election to recall District Attorney George Gascón, who they say is soft on crime. The campaign spent about $8 […]
16 hours ago
Associated Press

Group aims to harness anger over crime to oust LA prosecutor

LOS ANGELES (AP) — Los Angeles County’s progressive prosecutor could be tossed from office like his counterpart in San Francisco after opponents on Wednesday said they would submit more than enough signatures to qualify for an election to recall District Attorney George Gascón, who they say is soft on crime. The campaign spent about $8 […]
16 hours ago
Associated Press

School system enters settlement in desegregation case

MADISON, Ala. (AP) — A federal judge has approved an agreement to settle a long-running desegregation case with a north Alabama school system, prosecutors said Wednesday. The school system agreed to take steps to ensure equal educational opportunities for Black students, including participation in gifted programs and college prep classes, officials said in a U.S. […]
16 hours ago

Sponsored Articles

...
Day & Night Air

Tips to lower your energy bill in the Arizona heat

Does your summer electric bill make you groan? Are you looking for effective ways to reduce your bill?
...
Arizona Division of Problem Gambling

Arizona Division of Problem Gambling provides exclusion solution for young sports bettors

Sports betting in Arizona opened a new world to young adults, one where putting down money on games was as easy as sending a text message.
...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

ADHS mobile program brings COVID-19 vaccines and boosters to Arizonans

The Arizona Department of Health Services and partner agencies are providing even more widespread availability by making COVID-19 vaccines available in neighborhoods through trusted community partners.
Bank of America Q1 profits fall 12%, much less than rivals