Bank of America shares rallied premarket Thursday following a strong earnings report.
Earnings at Bank of America (ticker: BAC) more than doubled from a year ago, coming in at $8.1 billion, up from $4 billion in last year’s first quarter. The bank posted earnings of 86 cents a share on sales of $22.8 billion—topping analyst expectations for earnings of 66 cents a share on $21.9 billion in revenue.
Shares advanced 1.2% in premarket trading.
Like JPMorgan Chase (JPM) and Wells Fargo (WFC), which reported earlier in the week, Bank of America’s results were helped by an improving economic backdrop and the release of reserves built up last year to cover potential loan losses. The bank released $2.7 billion from its reserves, compared with adding $3.6 billion at this time last year.
Net interest income was $10.2 billion, down from $12.1 billion in the year-ago quarter as the bank—like peers—continues to be impacted by low interest rates, which narrows the spread between what banks earn on lending and pay out in deposits.
“While low interest rates continued to challenge revenue, credit costs improved and we believe that progress in the health crisis and the economy point to an accelerating recovery,” Brian Moynihan, chief executive of Bank of America, said in a statement.
Weaker net interest income was offset by a 19% jump in non interest income, which rose to $12.6 billion, thanks to strong capital markets and investment banking activity. Bank of America noted record investment banking fees of $2.2 billion and record equity underwriting fees of $900 million, which climbed 218%. Meanwhile fixed income trading climbed 22% to $3.3 billion while equity trading climbed 10% to $1.8 billion.
Citigroup (C) is also set to report results Thursday while Morgan Stanley (MS) reports on Friday. JPMorgan Chase (JPM), Goldman Sachs (GS), and Wells Fargo (WFC) kicked off bank earnings on Wednesday.
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