Shares of Bank of America Corp BAC gained more than 5 percent Wednesday morning after the bank reported a top-and-bottom-line beat in its fourth-quarter results and recorded its best quarterly profit in history.
Bank of America said it earned 70 cents per share in the fourth quarter on revenue of $22.7 billion versus expectations of 63 cents per share on revenue of $22.4 billion. Net income improved from $2.4 billion in the same quarter last year to a record quarterly high of $7.3 billion due to continued strong operating leverage, asset quality and the benefit of tax reform.
By segment, net income for the Consumer Banking business rose 52 percent from the same quarter last year to $3.3 billion, Global Wealth and Investment Management net income rose 43 percent to $1.1 billion, Global Banking net income rose 25 percent to $2.1 billion, Global Markets net income rose 20 percent to $493 million, and "Other" net income improved from a loss of $2.7 billion to positive $0.3 billion.
Bank of America paid investors $5.4 billion in cash through dividends.
Why It's Important
Bank of America's record quarter comes at a time when the company continues to focus on managing expenses while simultaneously investing in its business, CEO Brian Moynihan said in the press release. He cited the bank's strong performance due to its solid asset quality along with loan and deposit growth.
Bank of America also "shared success in many ways," including returning nearly $26 billion in cash to shareholders and giving 95 percent of its employees a second bonus due to tax reform.
Moynihan said the trillions of dollars worth of transactions the bank facilities coupled with the "steady confidence and activity" of its small businesses and commercial clients, the "solid" economy can be sustained looking forward.
"Each of our businesses faces opportunities to grow even more," the CEO said. "We are well positioned to serve clients, teammates, and communities by listening to their answer when we ask them: ‘What would you like the power to do?'"
Shares traded around $27.73 at time of publication, up 4.44 percent.
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