Bank of America (BoA) has achieved solid first-quarter results earning $7.1bn or $0.80 per diluted share, continuing the momentum from record net income in 2021.
BoA’s highlights for the first quarter ended March 31, 2022 include Net interest income (NII) up $1.4bn, or 13%, to $11.6bn; Noninterest expense decreased 1% to $15.3bn; Average Global Liquidity Sources rose $106bn, or 11%, to $1.1trn; Common equity tier 1 (CET1) ratio 10.4% (Standardized); returned $4.4bn to shareholders through common stock dividends and share repurchases.
Chair and CEO Brian Moynihan said that across businesses, ongoing organic growth combined with good expense management drove operating leverage for the third consecutive quarter.
In the quarter that saw geopolitical conflict, rising interest rates, pandemic and rising inflation concerns, BoA grew revenue through just costs, Moynihan said on the Earnings Conference Call.
“We made trading profits every day during the quarter, we grew pre tax pre provision income by 8%,” he stressed.
In the banking business, there was strong loan and deposit growth.
“Year over year we grew loans $70bn and deposits by $240 billion,” he said.
“Our teammates supported our clients while managing through the impacts of the pandemic, war in Ukraine, and an evolving rate environment,” he said.
The Bank grew and expanded customer relationships across every business, according to Moynihan.
This quarter alone, BoA opened new financial centers and renovated many others.
“We added more digital capabilities across 50% of digital and our wealth management businesses,” said Moynihan.
“Adding the digital capacity clearly increases our total production capability, he added.
Nevertheless, sales and trading revenue down 7% to $4.7bn, including net debit valuation adjustment (DVA) gains of $69m; Fixed Income Currencies and Commodities (FICC) revenue of $2.7bn and Equities revenue of $2bn.
“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,” said Moynihan:
According to Chief Financial Officer Alastair Borthwick, first quarter results were strong despite challenging markets and volatility, which reflect the value of the Bank’s Responsible Growth strategy.
Net interest income increased by $1.4bn versus the year-ago quarter supported by strong loan and deposit growth.
“Going forward, and with the forward curve expectation of rising interest rates, we anticipate realizing more of the benefit of our deposit franchise,” he said.
Borthwick said that asset quality continued to remain strong with net charge-offs about half of the year-ago quarter amount.”
Our balance sheet remained strong with $170bn of regulatory capital and a CET1 ratio nearly 90 bps above our current minimum requirements.” “Capital strength allowed us to grow loans, weather the worst bond market in 40 years, support communities, and return more than $4 billion back to shareholders,” he said.
“With very minor direct exposure to Russia-based companies, our teams were able to assist clients and navigate through the complexities of the sanctions,” he added.
