01—Abstract
Summary
Summary of the 10-Q filed April 30, 2024. Cited figures are marked; the original filing is the authoritative source.
Bank of America Corporation (BAC) reported its first-quarter 2024 results, showing a net income of $6.7 billiona, or $0.76 per diluted share, a decrease from $8.2 billion, or $0.94 per diluted share, in the first quarter of 2023.
This decline was attributed to higher noninterest expense, lower revenue, and an increased provision for credit losses. Total assets grew to $3.3 trillionb, driven by trading account assets and securities, while total deposits also saw an increase to $1.95 trillion, supported by time deposit growth and seasonal inflows. Key factors impacting profitability included a $700 million charge for the FDIC special assessment related to bank failures in the previous year, which contributed significantly to the rise in noninterest expense.
Net interest income experienced a slight decrease year-over-year, impacted by higher deposit and funding costs, though this was partially offset by higher asset yields and Global Markets activity. Fee and commission income saw growth, primarily from investment and brokerage services and investment banking, but this was largely offset by a decrease in market-making activities. From a capital management perspective, Bank of America maintained strong regulatory capital ratios, with its Common Equity Tier 1 (CET1) ratio at 11.9%c under the Standardized approach, exceeding regulatory requirements.
The company also declared a quarterly common stock dividend of $0.24d per share, signaling continued commitment to returning capital to shareholders. Despite the year-over-year decrease in net income, the bank demonstrated resilience through its diversified business segments and robust capital position.
02—Key points
Key Highlights
- Net income decreased to $6.7 billion ($0.76/share) in Q1 2024 from $8.2 billion ($0.94/share) in Q1 2023, primarily due to higher expenses and provisions.
- Total assets increased to $3.3 trillion, while total deposits reached $1.95 trillion, indicating growth in balance sheet size and funding.
- Noninterest expense increased by $1.0 billion, largely due to a $700 million FDIC special assessment charge.
- Net interest income declined slightly to $14.0 billion due to higher funding costs, partially offset by increased asset yields.
- Noninterest income remained relatively stable at $11.8 billion, with growth in investment and brokerage services and investment banking fees offset by lower market-making activities.
- Provision for credit losses rose to $1.3 billion, driven by credit card and commercial real estate exposures, despite an improved macroeconomic outlook.
- Regulatory capital ratios remained strong, with CET1 at 11.9%, exceeding requirements.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2024filed April 30, 2024Financial Statements
Q1 FY2024 against Q1 FY2023
| Line item | Q1 FY2024Q1 FY2023 | Change |
|---|---|---|
| Revenue | $25.82B$26.26B | −1.7% |
| Interest Expense | $22.25B$14.21B | +56.6% |
| Net Income | $6.67B$8.16B | −18.2% |
| EPS (Basic) | $0.77$0.95 | −18.9% |
| EPS (Diluted) | $0.76$0.94 | −19.1% |
| Shares Outstanding (Basic) | 7.97B8.07B | −1.2% |
| Shares Outstanding (Diluted) | 8.03B8.18B | −1.8% |
05—Questions
Frequently Asked Questions
What was the main reason for the decrease in net income compared to the previous year?
The decrease in net income was primarily driven by higher noninterest expense, which included a $700 million charge for the FDIC special assessment, lower total revenue, and an increased provision for credit losses.
How did net interest income perform, and what were the key drivers?
Net interest income decreased slightly to $14.0 billion from $14.4 billion in the prior year's quarter. This was mainly due to higher deposit and funding costs, partially offset by higher asset yields and Global Markets activity.
What is the outlook for credit quality, given the increased provision for credit losses?
The provision for credit losses increased primarily due to credit card loans and the commercial real estate office portfolio. While the overall macroeconomic outlook improved, management is monitoring these areas closely. Net charge-offs also increased, primarily in credit card loans and the commercial real estate office portfolio.
How strong is Bank of America's capital position?
Bank of America maintained strong regulatory capital ratios. The Common Equity Tier 1 (CET1) capital ratio was 11.9% under the Standardized approach at March 31, 2024, exceeding the regulatory minimum requirements, which reflects a solid capital buffer.
What significant events or charges impacted the company's expenses this quarter?
The company recorded a pretax charge of $700 million in noninterest expense for the FDIC special assessment, which was levied to recover losses from the failures of Silicon Valley Bank and Signature Bank.
06—Continue