Bank of America 1Q Profit Drops 13%

Bank of America Corp BAC reported net income of $2.7 billion or 21 cents a share for the first quarter representing 13% YOY drop. According to the company, the results included $1.2 billion or seven cents a share of unfavorable market-related NII adjustments and $0.9 billion or five cents a share in annual retirement-eligible incentive compensation costs. Last year, the company earned 25 cents a share in the first quarter. Following the results, the stock traded down by 1.2% in the pre-market trading. Bank of America said that revenue, on a FTE basis, fell 3.24% to $20.9 billion from $21.6 billion in the previous year quarter. Street analysts estimated the company to deliver earnings of 21 cents a share and revenue of $20.3 billion. The company's CEO, Brian Moynihan, said that "This quarter, we benefited from good consumer and commercial banking activity. Our business segments earned $4.5 billion, up 16 percent from the year-ago quarter. This was partially offset by valuation adjustments from lower long-term interest rates and annual compensation expenses. Despite volatile markets, our Global Markets business produced solid earnings." Moynihan continued to say that "As always, we are focused on loan and deposit growth and managing expenses. By doing that, we continue to improve on what we do best: helping consumers live their financial lives and helping businesses grow and employ more people." Bank of America's CFO, Paul Donofrio, commented that "In a challenging and volatile environment, we stayed true to our strategy this quarter. We grew loans and deposits, increased core net interest income and improved an already strong and highly liquid balance sheet, increasing tangible book value per share by 9 percent. We also reduced noninterest expense by $1 billion, or 6 percent, as we continued to focus on improving operating leverage."