Bank of America tops estimates as CEO Brian Moynihan says consumer banking is 'healthy'

Bank of America, the nation’s second-largest lender, beat on the top and bottom lines during the first quarter, bolstered by equities sales and trading.

Here’s what the firm reported:

• Earnings per share: $1.11 per share vs. $1.01 LSEG estimate
• Revenue: $30.43 billion vs. $29.93 billion estimate

The bank said Wednesday that net income rose 17% to $8.6 billion, or $1.11 per share, Bank of America’s highest EPS in almost two decades.

Revenue rose 7.2% to $30.43 billion on rising net interest income, higher trading revenue, and fees from investment banking and asset management.

Equities trading contributed to the beat, as the geopolitical environment roiled stock markets. Revenue in that business jumped 30% to $2.83 billion, topping the StreetAccount estimate by roughly $350 million and helping drive the bank’s trading operations to its best quarter in 15 years.

Investment banking also beat and was up 21% to $1.8 billion.

Net interest income, the profitability metric for loan-making, increased by 9% to $15.9 billion and beat as well. That was due to higher loan and deposit balances, fixed-rate asset repricing and markets activity.

In a sign that the bank’s borrowers weren’t deteriorating, the firm posted a $1.3 billion provision for credit losses in the quarter, lower than the $1.5 billion provision in the year earlier period and about $190 million below the estimate.

“We remain watchful of evolving risks. However, we saw healthy client activity, including solid consumer spending and stable asset quality, indicating a resilient American economy,” Bank of America CEO Brian Moynihan said in the release.

Still, like rival Goldman Sachs, the bank’s fixed income revenue came in below expectations. That business generated about $3.5 billion in revenue, missing the StreetAccount estimate by about $330 million.

The net-charge-off ratio, showing what proportion of total loans were deemed unable to be collected, improved 6 basis points during the quarter to 0.48%. The firm’s consumer banking and global wealth divisions each gained more than 20% in revenue.

Return on tangible common equity, a measure of profitability, was 16%, a more than 200 basis point improvement.

Correction: Bank of America previously guided to net interest income growth of between 5% and 7% this year. A previous version of this article misstated the range.