Bank of America profit beats expectations, boosted by fees

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Bank of America exceeded Wall Street's expectations in the fourth quarter, fueled by rising fee income from its wealth management and investment banking units.

From October through December 2024, net income for America's second-largest bank reached $6.7 billion, up from $3.1 billion in the year-ago period.

Diluted earnings per share were 82 cents, surpassing analysts' average estimate of 77 cents according to S&P. Revenue reached $25.3 billion, barely above analysts' estimates of $25.1 billion.

"We finished 2024 with a strong fourth quarter," CEO Brian Moynihan said in a statement on Thursday. "Every source of revenue increased, and we saw better than industry growth in deposits and loans. … We believe this broad momentum sets up 2025 very well for Bank of America."

The megabank said this growth was largely thanks to fee income from two departments: Global Wealth and Investment Management, which saw its fees rise 23% year-on-year, and Global Banking, whose fees jumped 44%.

"The team generated strong fee income throughout 2024, and we believe we are on track to continue growing net interest income in the year ahead," Chief Financial Officer Alastair Borthwick said in a statement.

Overall, the year-on-year improvement is in some ways not surprising. In the fourth quarter of 2023, Bank of America — along with its peers — was hit with a $2.1 billion special assessment from the Federal Deposit Insurance Corp., stemming from that year's regional bank crisis. It also suffered a plunge in net interest income as the Federal Reserve hiked rates to historic highs.

As 2025 begins, the bank's leadership says economic conditions are much more favorable.

"Asset quality is healthy, and client spending continued to grow at a moderate pace, reflecting a solid economic environment," Borthwick said. "Looking towards 2025, we remain focused on delivering for our shareholders while supporting our clients' growth and driving market share."

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For Bank of America, the fourth quarter also saw the return of an old-fashioned tactic: building more brick-and-mortar branches. The bank said in September that it planned to open 165 more locations by the end of 2026, including 40 in 2024.

The plan marks a reversal from years of focusing on digital banking, a shift that began more than a decade ago and was accelerated by the COVID-19 pandemic. From 2010 to mid-2024, Bank of America reduced its total branch count by almost 40%.

But as the COVID crisis recedes into history, many of the changes it brought to banking — including remote work — are beginning to fade as well. And it's not just Bank of America; JPMorgan and Wells Fargo have also been opening new branches in areas where their footprint is small.

Bank of America has said offering both digital and physical interfaces for customers is an important part of its strategy, not only for banking but for wealth management.

"It's been a critical element of our consumer strategy to have both a real commitment to industry-leading technology and digital capabilities as well as financial centers that are driving advice and guidance for our clients," Aron Levine, president of preferred banking at Bank of America, told American Banker in September.