Title: Bank of America Shares Gain After Earnings, Results Seen as 'Good Enough'

Apr 18, 2022 08:45AM ET

By: AnalysisWatch

Bank of America's shares rose 1.5% in pre-market trading Monday after the company reported better-than-expected earnings for the first quarter excluding DVA.

The bank reported first-quarter earnings per share of 80 cents per share, beating the consensus estimate of 75 cents per share. Revenue came in at $23.23 billion, just above analysts' expectations of $23.18 billion.

Revenue from trading excluding DVA was US $4.72 billion for the period, beating analysts' consensus estimate of US $4.25 billion. FICC trading revenue excluding DVA was reported at USD 2.71 billion, beating the consensus estimate of USD 2.66 billion.

Equity trading revenue, excluding DVA, was $2.01 billion, above the $1.58 billion expected. BofA reported net interest income of $11.68 billion, missing the consensus estimate of $11.72 billion.

Investment banking revenue was $1.46 billion, below the consensus estimate of $1.67 billion.

Total wealth and investment management revenues for the period were $5.48 billion, which exceeded the $5.43 billion estimate. The bank reported an average return on equity of 11%, above the 10.1% expected.

The return on average assets was 0.89%, above expectations of 0.82%, while the return on tangible common equity was 15.5%, also above estimates of 14.2%. The bank reported a compensation expense of $9.48 billion, which beat estimates of $9.43 billion.

BofA said the strong first quarter results were driven by strong client activity despite volatility and market challenges. BAC also pointed to very low direct exposure to Russian companies.

Richard Ramsden, an analyst at Goldman Sachs, said BAC had delivered "reasonably strong" results, which were the result of "much lower capital exposure than other companies".