After getting pummeled by market forces for the better part of last year, the lights are starting to flicker back on at Bank of America. The nation's second largest lender's earnings beat analyst estimates and profit rose "excluding certain line items," Bloomberg reports, thanks to "a rebound in trading and better credit quality." The bank's shares jumped in early morning trading but remained basically flat after the bell. So is it good news or bad news for the company? That depends on how you read the charts.
A BoA rebound is not how The New York Times' Nelson D. Schwartz reads the charts just before the bell. Under the headline "Profit at Bank of America Falls to $653 Million in First Quarter," Schwartz focused on those line items that were not so good. That $653 million number actually refers to BoA's net income, which is down, though the bank is actually losing less money than it used to -- hence, the bullish outlook on Wall Street. Globally, the bank did okay: "The company’s global markets unit swung to a profit of $798 million, compared with a loss of $768 million in the fourth quarter. Revenue at the division, which includes Bank of America Merrill Lynch, more than doubled from the fourth quarter but was down from the first quarter a year ago." So Bank of America isn't as bad as it used to be, which is exactly what CEO Brian Moynihan would want you to think.
Funnily enough, the rebound in expectations comes the day after the website, Your Bank of America, a bogus consumer outreach campaign, was written up in Forbes. "Today, it’s time to acknowledge that our Bank isn’t working anymore -- not just for the market, but for people, our real customers," Halah Touryalai quotes from the a fake note from Moynihan. It goes on to talk about Bank of America paying fines to the government, facing lawsuits from the people and "a petition with the Federal Reserve to break up our bank, adding yet more uncertainty to our position." There's even a mention of BoA's investments in coal. We're not sure who created the spoof, but themes on the Your Bank of America site look an awful lot like what Occupy's been yelling about for the past seven months.
Regardless of who pulled it off, it's a loaded joke. If you're not a fan of Bank of America's behavior leading up to and after the economic crisis, you might appreciate the critique. What's happening, apparently, is Moynihan's plan to slim down the global financial giant and focus on the business that actually make money appears to be working. Banks, like people, still have bills to pay, and indeed there was a $4.8 billion accounting bill meant that not every line item in BoA's first quarter earnings report looked great.
This doesn't mean that Moynihan isn't willing to take even more drastic measures to save his company. As recently as two months ago, the bank was considering liquidating its real estate, but Moynihan's real statement about the situation sounds confident: "Our strategy is paying off," he said. "With the economy steadily improving and because of the work we have done to strengthen and simplify our company, we saw improved profitability in all of our businesses this quarter compared to the fourth quarter of last year." Sure, those improvements may not be to your Bank of America, but it's doing a little better nonetheless.
This article is from the archive of our partner The Wire.
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