Bank of America (NYSE:BAC) beats expectations for first-quarter financial results, delivering a 16% positive surprise in earnings per share ($0.94 vs. expected $0.80) and a 5% positive surprise in revenue ($26.39 billion vs. $25.19 billion) .
What you should know about Bank of America’s first quarter results.
- Net income increased 15% from $7.1 billion in Q1 2022 to $8.2 billion in Q1 2023.
- Revenue, net of interest expense, increased 13% to $26.3 billion from a year earlier. This was the second best quarter in Bank of America’s history, in terms of revenue.
- Earnings were largely driven by higher net interest income (NII), which increased $2.9 billion, or 25%, from Q1 2022 to Q1 2023, to $14.4 billion, due to higher interest rates and solid loan growth.
- From a year ago, average loan and lease balances increased $64 billion, or 7%, to $1 trillion. This was due to strong growth in commercial loans and higher credit card balances.
- Period-end deposit balances decreased $20 billion, or 1%, to $1.9 trillion compared to the fourth quarter of 2022.
- For the consumer banking business, average deposits decreased by $30 billion, or 3%, from $1.056 trillion in Q1 2022 to $1.026 trillion in Q1 2023.
- Compared to Q4 2022 and Q1 2022, EPS increased 10.5% and 17.5%, respectively, while sales growth was 7.5% and 13.6%, respectively.
- “All business segments performed well as we grew customer relationships and accounts organically and at a solid pace. Our results demonstrate how our company’s decade-long commitment to responsible growth helped provide stability in changing economic environments,” said Chairman and Chief Executive Officer Brian Moynihan.
- Bank of America shares were up 2% in Tuesday’s premarket trading.
Bank of America vs. rivals in the first quarter
Bank of America announced better-than-expected Q1 2023 results, with EPS of $0.94, ahead of analysts’ expectations by 16%.
On the same day, Goldman Sachs (NYSE:GS) posted EPS of $8.79, 8% better than Wall Street’s $8.14 forecast, but missed revenue expectations by 4%.
JP Morgan Chase & Co (NYSE:JPM) posted EPS of $4.10, which beat analysts’ expectations by 20%.
Citigroup, Inc (NYSE:C) announced EPS of $2.19, 33% better than analysts’ median projection.
Wells Fargo & Company (NYSE:WFC) announced EPS of $1.23, which beat expectations by 8%.
Price Movements
Since the start of earnings season for banks, Bank of America shares have outperformed rivals, rising 8.5%, while JPMorgan shares are up 8.2%.
Wells Fargo and Citigroup rose 4.85% and 4.2%, respectively. Morgan Stanley gained 3.3%, while Goldman Sachs lost 1.5%, lagging its rivals.