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Bank of America Corp BAC

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Morningstar’s Analysis

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Bank of America Raises Short-Term Expense Guidance, but Otherwise, First-Quarter Results Are Solid

Eric Compton, CFA Senior Equity Analyst

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).

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Company Profile

Business Description

Bank of America is one of the largest financial institutions in the United States, with more than $2.5 trillion in assets. It is organized into four major segments: consumer banking, global wealth and investment management, global banking, and global markets. Bank of America's consumer-facing lines of business include its network of branches and deposit-gathering operations, home mortgage lending, vehicle lending, credit and debit cards, and small-business services. The company's Merrill Lynch operations provide brokerage and wealth management services, as does U.S. Trust private bank. Wholesale lines of business include investment banking, corporate and commercial real estate lending, and capital markets operations. Bank of America has operations in several countries.

Contact
100 North Tryon Street, Bank of America Corporate Center
Charlotte, NC, 28255
T +1 704 386-5681
Sector Financial Services
Industry Banks - Diversified
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 213,000

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