BAC earnings 1Q 2022

BAC earnings 1Q 2022

Financial institution of America posted first-quarter revenue that exceeded analysts’ estimates, helped by the better-than-expected credit score high quality of its debtors.

Listed here are the numbers:

  • Earnings:  80 cents a share vs 75 cents a share Refinitiv estimate.
  • Income:  $23.33 billion vs $23.2 billion estimate

The lender mentioned {that a} run of sturdy credit score continued into the primary quarter; the financial institution had $392 million in web mortgage charge-offs within the quarter, lower than half of the $848.7 million StreetAccount estimate and a 52% drop from a yr earlier.

That financial institution posted a mere $30 million provision for credit score losses, far lower than the $468 million anticipated by analysts, and launched $362 million in reserves. Financial institution of America’s launch of loan-loss reserves is in distinction to rival JPMorgan Chase, which disclosed final week that it opted to construct reserves by $902 million.

Financial institution of America, led by CEO Brian Moynihan, had loved tailwinds as rising rates of interest and a rebound in mortgage development promised to spice up revenue. However financial institution shares bought hammered this yr amid issues that greater inflation would assist spark a recession, which might result in greater defaults.

Whereas longer-term charges rose through the quarter, quick time period charges rose extra, and that flat, or in some circumstances inverted, yield curve spurred issues about an financial slowdown forward.  

Financial institution of America shares have fallen 15% this yr earlier than Monday, worse than the 11.6% decline of the KBW Financial institution Index.

Final week, JPMorgan mentioned revenue slumped because it posted losses tied to Russia sanctions and put aside cash for future mortgage losses. Goldman, Morgan Stanley and Citigroup every topped expectations with stronger-than-expected buying and selling outcomes, and Wells Fargo missed on income amid a decline in mortgage lending.

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