Bank of America's Quarterly Profit Soars as Revenues Sink

bank of america earnings
Richard Drew/AP
Bank of America reported a lower-than-expected first-quarter profit and its revenue fell, sending the No. 2 U.S. bank's shares down 3 percent before the bell on Wednesday.

Net income quadrupled to $2.62 billion, or 20 cents a share, from $653 million, or 3 cents a share a year earlier as expenses dropped and the bank set aside less money to cover bad loans. But total adjusted revenue fell 8.4 percent to $23.85 billion.

Analysts on average had expected Bank of America to earn 22 cents a share, according to Thomson Reuters I/B/E/S.

Bank of America Corp. (BAC) shares dropped 3.3 percent before the bell to $11.88.

Earnings in the year-earlier period were affected by a host of one-time items including a $4.8 billion charge related to the value of its debt.

Chief Executive Brian Moynihan has made progress in building capital and settling mortgage-related lawsuits since taking over in January 2010. But he is under pressure to show that the bank can produce higher earnings at a time of low interest rates, stricter regulations and volatile economic conditions.


Bank of America, the last of the big four U.S. banks to report results, has pledged to cut $8 billion in expenses by mid-2015 and has said it could reduce expenses in its division that handles delinquent mortgages by $1 billion by the end of 2013.

The bank showed signs of progress in these efforts in the quarter, with total expenses falling 5.2 percent to $18.15 billion.

As with other big banks this quarter, Bank of America results were also boosted by reduced credit losses as borrowers did a better job of making their payments. The bank's provision for loan losses fell 29.2 percent to $1.71 billion.

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Bruce

This is bizarre. It isn't THAT many years ago that banks were actually liable for "usury" for charging ANY interest AT ALL on loaned funds. It was a central tenet of the Catholic Church that charging interest was "immoral" and "a sin" as recently as the 14 - 15th centuries. NOW, banks are "criticized" by "investors" when banks don't book RIDICULOUS profit levels. The feudal system is alive and well in the Federal Reserve!

April 18 2013 at 3:19 AM Report abuse rate up rate down Reply
maestro62

Wow banks are taking our money! What a surprise. Better gig then owning a casino

April 17 2013 at 10:53 PM Report abuse +1 rate up rate down Reply
capecr0530

BOA just proved that crime does pay dividends.......

April 17 2013 at 8:31 PM Report abuse +2 rate up rate down Reply
Galen

Naturally it is probably creative accounting. Probably reflects the amount earned before paying back any government loans.... oh wait, the government let them off the hook for that. Now they have more money to contribute to their favorite and corrupt government officials.

April 17 2013 at 8:10 PM Report abuse +2 rate up rate down Reply
touchsoothesthesoul

I am one of millions BOA robbed of their homes. On Monday, I received a check for $600 and a not so nice letter attached saying basically they were not admitting to any wrong doing, but here's some money. ARE YOU KIDDING ME?! My mortgage was current and my credit score immaculate until I noticed an error in billing me for insurance. My mortgage went up an additional $500. They acknowledged the error and said they would correct it and for me to HOLD the PAYMENT until the error could be corrected. Instead of correcting it, for three months the gave me the run around then sent the account to foreclosure. I hired an attorney who wasn't much help because of the too big to fail mentality. I lost more than $200K INCLUDING MY JOB. Those sunsofbytches have ruined lives and cost us everything! There wasn't even the standard "sorry for any inconvenience we may have cause" line and NO WAY IN HELL FAIR COMPENSATION FOR THE DAMAGES THEY ARE RESPONSIBLE FOR! I am torn with what to do with their check. It won't cover retaining legal counsel to seek further damages, or even a months rent. I have to reconsider filing bankruptcy while the A'holes complain about not meeting revenue%. I hope they all rot in hell!

April 17 2013 at 4:54 PM Report abuse +1 rate up rate down Reply
TIMOTHY JACOBS

BOA is one of the worst. I will soon have my credit card paid off and will never deal with this bank again. Sad thing is Credit Unions are becoming more like banks every day.

April 17 2013 at 4:53 PM Report abuse rate up rate down Reply
supermolar

of course "profits" soar-the gov't gives the banks free money. I listened to Elliuot Spitzer a few weeks ago- I believe he said nearly all of the bank's profit came from gov't money

April 17 2013 at 4:44 PM Report abuse +2 rate up rate down Reply
Linda

As a BOA customer I see how some can try to get away with so much.. give a assistant a bad review of services she can go in and play with your account.. then suddenly getting a 19.00 fee for having the account. It's a small branch with one idiot who needs a recheck. .. It also said my savings account could NOT be linked... yet in their policies it says it can. So called the main office and in seconds once she verified who I was, linked my accounts and refunded the 19.00. II asked what happens if this branch does it again? She said report her... they would deal with the problem.. I've not been back to the bank sense but wonder when I go to make a deposit what games will be played? You think your working with first class only to learn 1/2 are 4th class :(

April 17 2013 at 4:41 PM Report abuse rate up rate down Reply
mrnaturallyphree

I would not bank with proven crooks or vote for the ones who made there thefts legal...
And I'm afraid that covers most institutions and politicians.

April 17 2013 at 3:21 PM Report abuse +2 rate up rate down Reply
cyrosie

Am I wrong if I read "increased profits" as more fees from current clients as less revenues?

April 17 2013 at 2:22 PM Report abuse +1 rate up rate down Reply