Analyst Note| Eric Compton, CFA |
Wide-moat Bank of America reported decent first-quarter earnings, with EPS of $0.86 easily beating FactSet consensus EPS of $0.66, equating to a return on tangible common equity of 17% for the quarter. The biggest swing factor was the firm's provisioning for credit losses. As we had expected, the bank released a sizable portion of reserves, totaling $2.7 billion. We have been more bullish than consensus on reserve releases, and we think Bank of America could release even more as the year develops (we already have nearly $1 billion more penciled in for 2021).