Justin Sullivan
Bank of America (NYSE:BAC) posted stronger-than-expected adjusted Q4 earnings on Friday, but saw net interest income match consensus and noninterest income fall short of Wall Street expectations.
Q4 adjusted EPS of $0.70, vs. the average analyst estimate of $0.64, fell from $0.90 in Q3 and $ in Q4 2022. The adjusted figure excludes a pretax $2.1B charge for the FDIC’s special assessment on large banks and a $1.6B pretax BSBY cessation charge.
Net interest income (FTE basis) of $14.1B, matching the Visible Alpha consensus, fell from $14.5B in the prior quarter and $14.8B a year ago, as higher deposit costs and lower deposit balances more than offset higher asset yields.
Noninterest income of $8.01B, trailing the $9.57B Visible Alpha estimate, compared with $10.8B in Q3 and $9.85B in Q4 2022.
Bank of America (BAC) stock fell 1.24% in Friday premarket trading.
Provision for credit losses fell to $1.10B from $1.23B in the prior quarter and increased from $1.09 a year ago. Those include net reserve release of $88M in the current quarter and net reserve builds of $303M in Q3 and $403M in Q4 2022.
Q4 adjusted noninterest expense of $15.6B vs. $15.8B in the previous quarter and $B a year ago.
Adjusted return on average tangible common shareholders’ equity was 11.7% vs. ROTCE of 15.47% in Q3 and % in Q4 2022.
Consumer Banking revenue of $10.3B compared with $10.5B in Q3 and $10.8B in Q4 2022; net income of $2.77B slipped from $2.86B in the prior quarter and $3.58B a year ago. Average deposits of $959B decreased 8% Y/Y, and combined credit/debt card spending of $229B rose 3% from a year ago.
Global Wealth and Investment Management revenue of $5.23B fell from $5.32B in the prior quarter and $5.41B in the year-ago period; net income of $1.02B compared with $1.03B in Q3 and $1.20B in Q4 2022. Client balances of $3.8T increased 12% Y/Y, driven by higher market valuations and positive net client flows.
Global Banking revenue of $5.93B dropped from $6.20B in the previous quarter and $6.44B a year ago; net income of $2.47B declined from $2.57B in Q3 and $2.54B in Q4 2022. Average deposits of $528B increased 5% Y/Y and average loans and leases of $375B fell by 1% Y/Y, reflecting lower client demand.
Global Markets revenue: net income (ex-DVA) of $4.22B slid from $4.96B in the prior quarter and $4.05B a year ago; net income (ex-DVA) sank to $736B from $1.26B in Q3 and increased from $650M in Q4 2022. Sales and trading revenue of $3.6B rose 3% Y/Y, excluding net DVA +1%, with revenue from fixed income, currency and commodity trading falling 4% and equities trading rising 13%.
Conference call at 11:00 AM ET.
