On January 12, 2024, Bank of America Corp (BAC, Financial) released its 8-K filing, detailing the financial performance for the fourth quarter of 2023. The report shows a net income of $3.1 billion, or $0.35 per diluted share, a significant decrease from $7.1 billion, or $0.85 per diluted share, in the same quarter of the previous year. Adjusted net income stood at $5.9 billion, or $0.70 per diluted share, after considering special assessments and charges.
Bank of America, one of the largest financial institutions in the United States, faced several challenges in Q4, including higher deposit costs, lower deposit balances, and increased noninterest expenses. The bank's revenue, net of interest expense, fell by 10% to $22.0 billion, impacted by a 5% decrease in net interest income and a $1.8 billion drop in noninterest income. The provision for credit losses saw a marginal increase to $1.1 billion.
Financial Achievements and Challenges
The bank's financial achievements include a 9% rise in book value per common share to $33.34 and a 12% increase in tangible book value per common share to $24.46. Despite a challenging environment, Bank of America maintained a CET1 ratio of 11.8%, 181 basis points above the regulatory minimum effective January 1, 2024. The bank also returned $2.7 billion to shareholders through dividends and share repurchases.
However, the bank's performance was affected by the FDIC special assessment of $2.1 billion and a BSBY cessation charge of $1.6 billion. These factors, along with market volatility and economic headwinds, contributed to the decrease in net income and posed challenges for the bank.
Segment Performance
Bank of America's Consumer Banking segment reported a net income of $2.8 billion, with revenue down 4% due to lower deposit balances. The Global Markets segment saw a 3% increase in sales and trading revenue to $3.6 billion, including net debit valuation adjustment (DVA) losses of $132 million.
From Chair and CEO Brian Moynihan:
We reported solid fourth quarter and full-year results as all our businesses achieved strong organic growth, with record client activity and digital engagement. This activity led to good loan demand and growth in deposits in the quarter and full-year net income of $26.5 billion. 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."
Bank of America's earnings report reflects the resilience of its diversified business model in the face of economic challenges. The bank's ability to maintain a strong capital position and return capital to shareholders, while navigating market headwinds, demonstrates its commitment to long-term value creation.
For more detailed financial information and the full earnings report, please refer to the 8-K filing.
Explore the complete 8-K earnings release (here) from Bank of America Corp for further details.
