Bank of America (NYSE:BAC) revealed its Q4 earnings on Friday, surpassing analyst estimates for adjusted earnings per share. However, the banking behemoth faced stagnation in net interest income, matching consensus, while noninterest income fell short of Wall Street expectations.

Strong Q4 Earnings Performance

Q4 adjusted EPS of $0.70 exceeded the average analyst estimate of $0.64. Notably, this figure represented a decrease from $0.90 in the previous quarter and $ in Q4 2022. The adjusted result excludes a pretax $2.1B charge for the FDIC’s special assessment on large banks and a $1.6B pretax BSBY cessation charge.

Challenges in Key Income Areas

Net interest income (FTE basis) stood at $14.1B, matching the Visible Alpha consensus, down from $14.5B in the prior quarter and $14.8B a year ago. This decline was attributed to higher deposit costs and lower deposit balances offsetting higher asset yields. Noninterest income of $8.01B fell short of the $9.57B Visible Alpha estimate, compared with $10.8B in Q3 and $9.85B in Q4 2022.

Market Reaction and Credit Provisions

Bank of America (BAC) stock experienced a 1.24% drop in Friday’s premarket trading. The provision for credit losses decreased to $1.10B from $1.23B in the previous quarter but increased from $1.09B a year ago. These figures include a net reserve release of $88M in the current quarter, contrasting with net reserve builds of $303M in Q3 and $403M in Q4 2022.

Expense Management and Returns

Q4 adjusted noninterest expense amounted to $15.6B, compared to $15.8B in the previous quarter. Meanwhile, adjusted returns on average tangible common shareholders’ equity came in at 11.7%, lower than the 15.47% return on tangible common equity in Q3 and % in Q4 2022.

Performance Across Banking Segments

Consumer Banking revenue of $10.3B decreased from $10.5B in Q3 and $10.8B in Q4 2022. Global Wealth and Investment Management revenue fell to $5.23B from $5.32B in the previous quarter and $5.41B in the year-ago period. Global Banking revenue dropped from $6.20B in the previous quarter to $5.93B, and Global Markets revenue decreased from $4.96B to $4.22B in the prior quarter.

Insights on Investor Engagement

The challenges in Q4 are likely to prompt questions from shareholders, and Bank of America has scheduled a conference call at 11:00 AM ET to provide additional insights.