Bank of America Profit Doubles After It Releases Reserves for Bad Loans
April 15 2021 - 7:13AM
Dow Jones News
By Ben Eisen
Bank of America Corp. said Thursday that its profit doubled in
the first three months of the year.
The Charlotte, N.C.-based lender posted earnings of $8.05
billion in the first quarter. That compared with $4.01 billion a
year earlier, when banks took big hits to their earnings to begin
stockpiling rainy-day reserves at the beginning of the
pandemic.
The bank made 86 cents a share, beating the 66 cents forecast in
a FactSet poll of analysts.
Earnings from the largest banks have reflected heightened
optimism about an economic rebound. JPMorgan Chase & Co. and
Wells Fargo & Co. said Wednesday they both released money they
had socked away last year to cover widespread loan defaults.
Bank of America said it released $2.7 billion of its reserves,
boosting its bottom line. Chief Executive Brian Moynihan has
expressed optimism about the economy, saying consumer spending is
picking back up.
But America's second largest bank is still managing through the
crisis, which ushered in record low rates. That has eroded the
spread between what banks pay to borrow and what they earn from
lending. Net interest income totaled $10.2 billion in the first
quarter, down 16% from $12.13 billion a year earlier.
The bank's revenue totaled was flat at $22.82 billion, from
$22.77 billion a year ago. Still, that beat the $21.9 billion
analysts had forecast.
Bank of America shares rose in premarket trading Thursday. Bank
stocks have been hot this year, rising more than the broader market
after falling sharply when the coronavirus hit the U.S. last
year.
Write to Ben Eisen at ben.eisen@wsj.com
(END) Dow Jones Newswires
April 15, 2021 06:58 ET (10:58 GMT)
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