Bank of America Shares fell 1.1% on Friday after the company reported a decline in fourth-quarter earnings amid heavy one-time charges.
Here's what the company reported compared to Wall Street expectations, according to LSEG, formerly known as Refinitiv:
- Earnings per share: 70 cents, adjusted against the expected 68 cents.
- Revenue: $22.1 billion versus the expected $23.74 billion.
Bank of America said its net income fell to $3.1 billion, or 35 cents a share, in the fourth quarter, down more than 50% from $7.1 billion, or 85 cents a share, a year ago.
The bank, based in Charlotte, North Carolina, said it was hit by a $1.6 billion pretax charge in the quarter related to the transition from the London interbank offered rate. The results also included a $2.1 billion special fee charged by the Federal Deposit Insurance Corporation. The commission is tied to the bankruptcies of Silicon Valley Bank and Signature Bank. Excluding items, the company said it earned 70 cents per share, which beat analysts' expectations.
However, revenue of $22.1 billion missed Wall Street estimates for the first time in two years and was down 10% from the same period a year earlier.
“We reported strong results in the fourth quarter and full year as all of our businesses achieved strong organic growth, with record customer activity and digital engagement,” CEO Brian Moynihan said in a statement. “Our spending discipline allowed us to continue investing in growth initiatives. Strong capital and liquidity levels position us well to continue generating responsible growth in 2024.”
The country's second-largest bank recorded a provision of $1.1 billion for credit losses, $12 million more than the same quarter last year.
Bank of America said its net interest income decreased 5% to $13.9 billion due to higher deposit costs and lower deposit balances, which more than offset higher asset returns.
The bank was supposed to be one of the biggest beneficiaries of higher interest rates last year, but has underperformed its peers because the lender had accumulated long-dated, low-yielding securities during the Covid-19 pandemic. 19. Those securities lost value as interest rates rose.
Consumer banking revenue fell 4% to $10.3 billion, while sales and operating income rose 3% to $3.6 billion.
Bank of America shares are down 2.6% this year after a gain of just 1.7% in 2023. The S&P 500 financial sector gained 10% last year.
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