In This Article:
Bank of America (NYSE: BAC) posted better-than-expected numbers for the first quarter, signaling that the uncertainty gripping Wall Street has not yet made its way to Main Street.
Investors applauded the results, sending Bank of America shares up as much as 6% on Tuesday and up 4% as of 11 a.m. ET.
Strong momentum in consumer banking and trading
Bank of America earned $0.90 per share in the quarter on revenue of $27.4 billion, surpassing Wall Street expectations for $0.82 per share in earnings on sales of $26.9 billion. This was the 12th consecutive quarter of year-over-year revenue growth.
Consumer banking revenue grew by 3%, though average deposits was down slightly. Bank of America added 250,000 net new checking accounts in the quarter, and said combined credit and debt card spending was up 4%.
Investment banking fees were down, reflecting a lack of deal activity, but trading revenue was up 11% year over year.
"Our business clients have been performing well, and consumers have shown resilience, continuing to spend and maintaining healthy credit quality," CEO Brian Moynihan said in a statement. "Though we potentially face a changing economy in the future, we believe the disciplined investments we have made for high-quality growth, our diverse set of businesses, and the team's relentless focus on responsible growth will remain a source of strength."
Is Bank of America a buy?
While the first quarter was great for Bank of America, a flurry of tariff announcements in the days since the quarter ended means all eyes are on what lies up ahead. Bank of America said its provision for credit loss was up by about $200 million from a year ago, but flat compared to the fourth quarter of 2024, an indication that the bank is not in panic mode.
Executives on the post-earnings call, though not dismissive of the recession threat, were upbeat about the bank's positioning, saying that the loan portfolio is more balanced than it has been in the past and calling the deposit base "stable." If so, Bank of America might prove to be a good safe-harbor candidate for investors worried about turbulence up ahead.
Should you invest $1,000 in Bank of America right now?
Before you buy stock in Bank of America, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bank of America wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $502,231!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $678,552!*
Now, it’s worth noting Stock Advisor’s total average return is 800% — a market-crushing outperformance compared to 156% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.