What happened
Shares of Bank of America (BAC -0.16%) traded roughly 1.4% lower as of 10:49 a.m. ET today after the bank reported earnings results for the first quarter of 2023.
So what
Bank of America reported diluted earnings per share of $0.94 on revenue of roughly $26.3 billion, both numbers that soundly beat earnings.
Notably, the bank, which had more unrealized bond losses than its peers coming into the quarter, sold a portion of its securities and increased its cash position meaningfully by $146 billion. Total deposits, which are being watched closely by investors right now, fell about $20 billion in the first quarter.
Net interest income (NII), the money that banks make on loans and securities after funding those assets, came in at $14.6 billion, down about $200 million from the prior quarter. However, the bank saw a nice lift from its trading business, which generated revenue of nearly $5.1 billion, up about 9% year over year and roughly 46% from the prior quarter.
Asset quality at the bank, which investors have also been watching closely, still looks quite healthy. The bank barely added to its reserves for loan losses and expected loan losses are similar to what they were last quarter.
Now what
While it wasn't a bad quarter given everything that's happened in the banking sector, I found Bank of America's results to be a little bit underwhelming, especially when you think about NII compared to the likes of JPMorgan Chase.
Still, it was good to see the bank start to reposition the balance sheet and that asset quality continues to be quite healthy. I still view Bank of America to be a good long-term buy, especially at the current valuation.
