Bank of America stock rises as profit, revenue beat estimates

Yahoo Finance Live anchors Brad Smith and Rachelle Akuffo break down the rise in stock for Bank of America following quarterly earnings.

Video transcript

BRAD SMITH: Another bank that we heard from this morning was Bank of America. The company beat on profit and revenue, and its trading revenue, that countered some slowing loans here.

And there were really three things that I took away from this. I'll try and hustle to my finish here, Rachelle, but I got kind of excited about this, so much so that I dialed into the earnings call, and I'll have a little bit more on that later on. But three things real quick.

First and foremost, the elevated credit- and debit-card spending. This is something that we've heard about from the household debt and credit developments from the New York Fed. They continue to give us some updates there. This was up 6%.

And one read on this could be into how much consumers need to rely on credit spending in the face of or instead of relying on some of their cash spending. And particularly going to be interesting to see in further reports from the New York Fed as well where delinquency rates have increased because they've already increased for nearly all debt types, and that was as of the end of Q4 2022. So once we get that Q3 update-- that's set to come perhaps in the coming weeks. That's going to be interesting to see. So I kind of correlated it with that from the New York Fed.

Also was taking a look at another key takeaway here, the return on tech investments. We were just talking about this relationship between tech and the investments that big banks have made. Well, for Bank of America, digital usage, that continued to grow for them. They had a record 73% of all overall households actively using their digital platforms. Record 45 million active digital banking users. That was up by about 6%. And then 1.8 million, thereabouts, digital sales. That was up by about 4%.

And so all of that considered, also think about the relationship with Zelle here. Zelle, of course, a common household term now. 19.6 million active Zelle users sending and receiving 275 million transfers worth about $84 billion here. So it would be interesting to see how much of that gets reported. Of course, I mean, as we're reporting taxes, some of those digital payments are going to be new for the reporting of your taxes this year, and so we'll be watching that.

And then just lastly here, I'll shout out the total deposits here, and this was going to be interesting with relation to, of course, the banking turmoil that we've seen. We've got this chart to see how that moved lower. It was kind of minimis. It was a single-digit-percentage move lower but still worth noting here for Bank of America, Rachelle.

RACHELLE AKUFFO: Indeed, and we mentioned this fixed-income rush that we did see that they weren't-- Goldman Sachs wasn't able to capitalize on. A very different story for Bank of America. Fixed income revenue rising 30%. And once you do have that big name and you have more sort of retail consumers, obviously now Bank of America was better positioned to take advantage of that than Goldman Sachs. But an interesting tale, a tale of two banks as we continue to look at it, Brad.