Bank of America (NYSE:BAC) reported a roughly $5.5 billion profit in the fourth quarter of 2020, or $0.59 in diluted earnings per common share, beating analysts' estimates on total profits, but revenue fell short of predictions.

In the full year of 2020, Bank of America reported a profit of $17.9 billion, or $1.87 diluted earnings per common share, down about 35% from full-year earnings in 2019.

The bank booked $881 million of net charge-offs (debt unlikely to be collected) in the fourth quarter. However, after releasing reserves of $828 million back into earnings, the provision for credit losses in the quarter only ended up being $53 million.

Bank of America

Image source: Bank of America.

"In the fourth quarter, we continued to see signs of a recovery, led by increased consumer spending, stabilizing loan demand by our commercial customers, and strong markets and investing activity," CEO Brian Moynihan said in a statement.

Low interest rates continued to put some pressure on the bank's net interest margin (NIM), the difference between what the bank makes on interest-earning assets such as loans and pays out on interest-bearing liabilities such as deposits. The NIM fell 1 basis point (.01%) and ended the quarter at 2.71%.

Loan demand also fell off a little bit from the third quarter, but Bank of America managed to grow net interest income from the third quarter of 2020 by deploying excess cash into its securities portfolio.

Its consumer bank, global wealth and asset management, and global banking divisions all increased their profits from the third quarter of 2020, but profits were still down compared to the fourth quarter of 2019.

The investment bank division experienced the opposite, seeing its profits fall from the third quarter of 2020 by nearly 12%, but growing profits significantly compared to the fourth quarter of 2019. Credit quality at the bank remained stable.

Shares of Bank of America were basically unchanged at 2 p.m. EST Tuesday

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