Bank of America shares fall after company reports lower fourth-quarter profit, hit by regulatory charge

Bank of America shares fell about 2% in premarketing trading on Friday after the firm reported declining fourth-quarter earnings amid hefty one-time charges.

Here’s what the company reported compared with Wall Street expectations:

• Earnings per share: 70 cents adjusted vs. 68 cents per share expected, according to LSEG, formerly known as Refinitiv
• Revenue: $22 billion, adjusted, unclear if the figure is comparable to analyst estimates

Bank of America said its net income fell to $3.1 billion, or 35 cents per share, in the fourth quarter, down more than 50% from $7.1 billion, or 85 cents per share, a year ago.

The bank, based in Charlotte, North Carolina, said it was hit by a pretax charge of $1.6 billion in the quarter related to the transition away from the London Interbank Offered Rate. The results also included a special $2.1 billion fee charged by Federal Deposit Insurance Corp. The fee is tied to the failures of Silicon Valley Bank and Signature Bank. Excluding items, the company said it earned 70 cents per share.

“We reported solid fourth quarter and full-year results as all our businesses achieved strong organic growth, with record client activity and digital engagement,” CEO Brian Moynihan said in a statement. “Our expense discipline allowed us to continue investing in growth initiatives. Strong capital and liquidity levels position us well to continue to deliver responsible growth in 2024.”

The nation’s second-largest bank posted a $1.1 billion provision for credit losses, up by $12 million from the same quarter last year.

Bank of America said its net interest income decreased 5% to $13.9 billion due to higher deposit costs and lower deposit balances, which more than offset higher asset yields.

The bank was supposed to be one of the biggest beneficiaries of higher interest rates last year, but it has underperformed its peers because the lender had piled into low-yielding, long-dated securities during the Covid pandemic. Those securities lost value as interest rates climbed.

Revenue from consumer banking dipped 4% to $10.3 billion, while sales and trading revenue went up by 3% to $3.6 billion.

Bank of America stock is down more than 1% this year after a mere 1.7% gain in 2023. The S&P 500 financial sector gained 10% last year.