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.