Free Trial

Bank of America 4Q profits fall with lower interest rates

NEW YORK (AP) — Consumer banking giant Bank of America said Wednesday that its fourth-quarter profits fell 4% from a year ago, as the bank was impacted by the rapid decline of interest rates in late 2019.

The Charlotte, North Carolina-based bank said Wednesday that it earned a profit of $6.99 billion, or 74 cents a share, down from a profit of $7.29 billion, or 70 cents per share a year ago. BofA bought back roughly 900 million shares between 2018 and 2019, which is why the per-share earnings rose while the bank's overall profit fell.

Still the bank's profits beat expectations. Analysts were looking for BofA to earn 68 cents per share.

Bank of America, the nation's second-largest bank by assets, is particularly impacted by movements in interest rates since it sells a range of consumer banking products, and its balance sheet is more aligned with short-term bonds and other securities. That made the bank more sensitive to the Federal Reserve's decision last year to cut short-term interest rates three times to shore up the U.S. economy.

The bank's quarterly interest income fell more than $900 million year over year, from $17.84 billion to $16.93 billion. Reflecting the impact of declining interest rates, BofA's net interest margin fell to 2.35%.

BofA wasn't the only bank this quarter to be negatively impacted by interest rates. JPMorgan Chase, Citigroup and Wells Fargo, which all reported their results on Tuesday, all reported declines in interest income. Wells Fargo, which has a similar business model to BofA, took a bigger blow than JPMorgan or Citi.

Should You Invest $1,000 in Wells Fargo & Company Right Now?

Before you consider Wells Fargo & Company, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Wells Fargo & Company wasn't on the list.

While Wells Fargo & Company currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

Options Trading Made Easy - Download Now Cover

Learn the basics of options trading and how to use them to boost returns and manage risk with this free report from MarketBeat. Click the link below to get your free copy.

Get This Free Report
Like this article? Share it with a colleague.

Companies Mentioned in This Article

CompanyMarketRankâ„¢Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
JPMorgan Chase & Co. (JPM)
4.8644 of 5 stars
$286.78-0.5%1.95%14.08Moderate Buy$284.42
Bank of America (BAC)
4.8689 of 5 stars
$46.71-0.6%2.23%13.90Moderate Buy$48.89
Citigroup (C)
4.9443 of 5 stars
$86.73-0.4%2.58%13.70Moderate Buy$87.89
Wells Fargo & Company (WFC)
4.7544 of 5 stars
$82.550.2%1.94%14.82Moderate Buy$80.13
Compare These Stocks  Add These Stocks to My Watchlist 

Featured Articles and Offers

Related Videos

3 Made in America Stocks Under $20 You Need to See!
These 3 Penny Stocks Could Surprise Everyone This Summer!
Congress Is Pouring Millions Into These 6 Surprising Stocks

Stock Lists

All Stock Lists

Investing Tools

Calendars and Tools

Search Headlines