Bank of America’s profits doubled in the first quarter, the bank said Thursday, as the improving economy allowed it to release billions from its loan-loss reserves that it originally set aside in the early days of the pandemic.
Bank of America is the latest of the big banks to say it has released billions from its reserves, following JPMorgan Chase and Wells Fargo, which announced results Wednesday. The release of reserves helped both of those banks’ profits soar compared to the year-ago first quarter.
The Charlotte-based banking giant earned $8.1 billion in the quarter, equal to 86 cents per share, compared to a profit of $4.01 billion, or 40 cents a share, in the same period a year earlier. Analysts were looking for BofA to earn 66 cents a share.
The bank had a net one-time gain of $1.86 billion for releasing loans from its loan-loss reserves.
Like JPMorgan Chase and Goldman Sachs, which also reported its results on Wednesday, BofA had a strong quarter in its investment banking division. Total profits in the division rose to $2.05 billion from $1.71 billion in the same period a year earlier. The bank saw revenue gains on its trading desks, a reflection of the healthy volatility the markets had last quarter.