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The Street
The Street
Business
Martin Baccardax

Bank of America Stock Gains as Loan Growth Helps Drive Q1 Earnings Beat

Bank of America (BAC) posted better-than-expected first quarter earnings Monday thanks in part to solid gains in net interest income amid improving loan demand and a $240 billion gain for the bank's deposit base.  

Bank of America said profit for the three months ended in March were tabbed at 80 cents per share, down 7% from the same period last year and but 5 cents ahead of the Street consensus forecast of 75 cents per share.

Group revenues, the bank said, rose 2% from last year to $23.2 billion, falling largely in-line with analysts' estimates, as net interest income rose 13% to $11.6 billion, offsetting a 35% slump in investment banking fees.

“We achieved solid first-quarter results earning $7.1 billion, continuing the momentum from record net income in 2021. Across our businesses, ongoing organic growth combined with good expense management drove operating leverage for the third consecutive quarter," said CEO Brian Moynihan. 

"Year over year we grew loans $70 billion and deposits by $240 billion. Our teammates supported our clients while managing through the impacts of the pandemic, war in Ukraine, and an evolving rate environment," he added. "Our strong first quarter client activity drove results that allow us to deliver for shareholders while continuing to invest in our people, businesses, and communities.”

Bank of America shares were marked 2.1% higher in early Monday trading following the earnings release to change hands at $38.35 each.

Wall Street banks have posted a mixed collection of first quarter earnings so far this reporting season, with JPMorgan (JPM) CEO Jamie Dimon cautioning that "Inflation and Ukraine are powerful forces that threaten the economy" following its softer-than-expected update and Goldman Sachs (GS) using its powerful wealth management division, alongside its trading arm, to print better-than-expected first quarter profits that offset a slump in deal-making fees amid sharp decline in merger activity.

Global merger activity fell more than 20% from last year's SPAC-fueled first quarter frenzy, data from Refinitiv indicated earlier this month, with the total value of transactions pegged at around $1 trillion, highlighted by Microsoft's MSFT $69 acquisition of video game maker Activision Blizzard ATVI.

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