Credit quality continued to improve, with first-quarter net loan charge-offs of $2.517 billion, declining from $3.104 billion the previous quarter and $4.056 billion in the first quarter of 2012. The first-quarter annualized ratio of net charge-offs -- excluding impaired purchased loans, which had previously been written down -- to average loans was a decent 1.14%, improving from 1.40% the previous quarter and 1.80% a year earlier.
KBW analyst Christopher Mutascio rates Bank of America a "buy," with a price target of $13.50, and said in a note to clients that "total expenses increased to $18.15 billion versus our expectations for a decline to $17.10 billion. Driving the increase in expenses were seasonally higher personnel expenses of $9.9 billion versus $8.3 billion last quarter, partially offsetting this was a decline in other expenses to $3.98 billion from $5.37 billion last quarter."
"We expect that the noise in expenses this quarter will lead shares weaker on the day as investors look to see meaningful expense reductions in-line with prior company guidance," Mutascio wrote. He added, "The company is still on track to deliver our 4Q13 run-rate of below $16 billion in expenses."