Bank of America shares fall after company reports lower fourth-quarter revenue, hit by regulatory charge
Bank of America shares fall after company reports lower fourth-quarter revenue, hit by regulatory charge

Bank of America shares fell about 2% in premarketing buying and selling on Friday after the agency reported declining fourth-quarter earnings amid hefty one-time prices.

Here’s what the company reported in contrast with Wall Street expectations:

  • Earnings per share: 70 cents adjusted vs. 68 cents per share anticipated, in line with LSEG, previously generally known as Refinitiv
  • Revenue: $22 billion, adjusted, unclear if the determine is akin to analyst estimates

Bank of America said its net income fell to $3.1 billion, or 35 cents per share, within the fourth quarter, down greater than 50% from $7.1 billion, or 85 cents per share, a yr in the past.

The financial institution, primarily based in Charlotte, North Carolina, stated it was hit by a pretax charge of $1.6 billion within the quarter associated to the transition away from the London Interbank Offered Rate. The outcomes additionally included a particular $2.1 billion payment charged by Federal Deposit Insurance Corp. The payment is tied to the failures of Silicon Valley Bank and Signature Bank. Excluding objects, the company stated it earned 70 cents per share.

“We reported stable fourth quarter and full-year outcomes as all our companies achieved sturdy natural progress, with file shopper exercise and digital engagement,” CEO Brian Moynihan stated in an announcement. “Our expense self-discipline allowed us to proceed investing in progress initiatives. Strong capital and liquidity ranges place us effectively to proceed to ship accountable progress in 2024.”

The nation’s second-largest financial institution posted a $1.1 billion provision for credit score losses, up by $12 million from the identical quarter final yr.

Bank of America stated its internet curiosity earnings decreased 5% to $13.9 billion because of greater deposit prices and lower deposit balances, which greater than offset greater asset yields.

The financial institution was supposed to be one of the most important beneficiaries of greater rates of interest final yr, but it surely has underperformed its friends as a result of the lender had piled into low-yielding, long-dated securities throughout the Covid pandemic. Those securities misplaced worth as rates of interest climbed.

Revenue from shopper banking dipped 4% to $10.3 billion, whereas gross sales and buying and selling income went up by 3% to $3.6 billion.

Bank of America inventory is down greater than 1% this yr after a mere 1.7% acquire in 2023. The S&P 500 monetary sector gained 10% final yr.

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