Bank Of America Reports Record Q1 Earnings

Bank of America Corp BAC Tuesday morning reported record first-quarter results.

What Happened

Bank of America said it earned 70 cents per share in the quarter on revenue of $23 billion versus expectations of 68 cents per share and $23.1 billion. Net income rose 6 percent from the same quarter last year to $7.3 billion, mostly due to ongoing strong operating leverage.

Net interest yield rose nine basis points to 2.51 percent while loans within the consumer and commercial businesses rose at least 3 percent. Deposits were also higher by 5 percent in the quarter at $1.4 trillion.

Net income was higher across Consumer Banking, Global Wealth & Investment Management, and Global Banking segments. However, the Global Markets unit saw its profit drop 26 percent from last year due to poor trading results along with lower investment banking fees.

Why It's Important

Bank of America Chairman and CEO Brian Moynihan said in a press release the company realized record quarterly earnings. The executive cited the bank's business mix, commitment to responsible growth which was complemented by ongoing momentum in economic growth and consumer activity in the U.S.

The CEO also said businesses of all sizes continue borrowing capital to drive the economy.

What's Next

Bank of America said it remains positioned to generate ongoing solid growth "the right way." The company plans on adding 350 financial centers in new and existing markets by 2021 to reach more than 90 percent of the U.S. population.

Over the next two years, the company plans on raising its minimum starting pay to $20. The bank also plans on extending its Environmental Business Initiative to more than $300 billion over 10 years to "help create a low-carbon sustainable future."

Shares closed Monday at $29.84 and were down marginally Tuesday morning.

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Photo credit: Mike Mozart, Flickr