Bank of America Profit Doubles After It Releases Reserves for Bad Loans

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 [e-mail]

(END) Dow Jones Newswires

April 15, 2021 06:58 ET (10:58 GMT)

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