Good morning. Bank of America’s latest earnings results offer insight into the sentiment of U.S. businesses on M&A in the coming year.
“The consumers are still spending, and our business clients are profitable and increasingly optimistic,” Bank of America CFO Alastair Borthwick said during a media call on Thursday preceding the Q4 earnings call. “Coupled with our fourth quarter return to operating leverage, we’re entering 2025 with good momentum.”
The Federal Reserve’s interest rate cuts in September, November, and December of last year seemingly created more of an appetite for dealmaking. In Q4 2024, Bank of America’s investment-banking fees outperformed the market, growing 44% from last year to reach $1.7 billion, Borthwick said. This was led by M&A, while the bank also saw strength across debt and equity capital markets, he said.
The year ahead for M&A is a “very challenging area to forecast or predict,” Borthwick said. However, he sees some encouraging signs. Borthwick added that discussions with Bank of America’s corporate client base combined with the pickup in M&A activity in Q4 reflect a couple of things:
“The interest rate structure is settling in here, and valuations are becoming clearer to people on both the buy side and the sell side,” he explained. “And there appears to be more CEO confidence that deals can get done in the future environment.”
“That’s what’s giving our M&A team some optimism, and that’s the reason that our pipeline continues to build,” he added.
Bank of America’s net income for Q4 2024 was $6.7 billion with earnings per share of 82 cents, compared to $3.1 billion with earnings per share of 35 cents, the same time last year. For the full year of 2024, Bank of America reported net income of $27.1 billion and earnings per share of $3.21.
“Every source of revenue increased, and we saw better than industry growth in deposits and loans,” Bank of America CEO Brian Moynihan said in a statement.
In Q4, Bank of America’s loans reached $1.1 trillion and deposits grew 3% to almost $2 trillion, beating estimates.
“We ended the year with $3.3 trillion of assets,” Borthwick said. The bank has focused on assisting clients as they grow, and strengthening its balance sheet, “while investing in the right technology, operations, and people,” he said.
At the beginning of the earnings call on Thursday, Moynihan expressed concern for the communities, clients, and teammates impacted by the California wildfires. Bank of America has activated its client assistance program, donated $1 million in disaster relief to the American Red Cross, along with contributions to the LA Food Bank and the LA Chamber of Commerce Small Business efforts, he said.
“We have teams on the ground, assisting in any way we can, and are monitoring the situation to extend support and resources,” Moynihan said.
Have a good weekend.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Some notable moves this week:
Anthony DiSilvestro, CFO of Mattel, Inc. (Nasdaq: MAT) will retire on May 15. DiSilvestro joined Mattel in August 2020. The company has initiated a search for his replacement. Following his retirement date, DiSilvestro will serve as an advisor through Aug. 15.
Darren Myers, CFO of Algonquin Power and Utilities Corp. (NYSE: AQN), is departing the company. Myers will remain as CFO through the reporting of the company’s fourth quarter 2024 results. He joined Algonquin in August 2022. The company will conduct a search for his replacement.
Mary Salter was promoted to CFO and treasurer of The Ladies Professional Golf Association (LPGA). Salter has more than 20 years of experience in accounting, finance, and nonprofit management. She joined the LPGA in 2017 as controller and has held several leadership roles, most recently serving as EVP of finance.
Ed Weber was promoted to CFO of Major League Baseball (MLB). Weber previously served as EVP and deputy CFO. He succeeds Bob Starkey, who will remain with MLB as a senior advisor to Commissioner of Baseball Robert D. Manfred, Jr. Weber began his baseball career in 2006 when he became SVP and CFO of MLB Advanced Media.
Kevin Grant was appointed CFO of a.k.a Brands (NYSE: AKA), which owns a portfolio of online fashion stores. He replaces Ciaran Long, who was named the company's chief executive after serving as interim CEO and CFO since March 2023. Grant joined the company in the role of global controller in April 2021.
Robert Langer was appointed EVP, CFO and treasurer of Sphere Entertainment (NYSE: SPHR), the eponymous owner of the Las Vegas entertainment venue, as well as New York regional sports network MSG, effective Jan. 13. Langer previously spent 25 years at The Walt Disney Company, most recently as global leader of enterprise-wide financial planning and corporate strategy.
Andy Wamser was appointed CFO of NCR Atleos Corporation (NYSE: NATL), a financial services company, effective Jan. 27. Wamser joins the company from BlueLinx where he held the position of SVP and CFO. He succeeds Paul Campbell who stepped down from his role as EVP and CFO.
Big Deal
A new survey from Grant Thornton, a provider of tax, audit, and advisory services, takes a look at the evolving priorities of CFOs in the tech industry. The finance chiefs surveyed plan to expand AI capabilities, with 58% naming it as the top technology investment for 2025, according to the report.
When it comes to cybersecurity, CFOs understand the roles employees play in managing risk. Thirty-three percent of CFOs are investing in cybersecurity training and awareness. Meanwhile, partnering with external security firms moved from 9% last year to 21% this year, surpassing security audits.
“It's about really making sure that you're staying ahead of AI and evolving your workforce's mindset,” Andrea Schulz, national managing principal of technology at Grant Thornton Advisors LLC, said in a statement. “They need to be critically thinking about the threats and how they're protecting the company."
Another finding is that 58% of CFOs named organizational culture as a top priority for talent at their firms, compared to 45% in last year’s survey.
Going deeper
Here are four Fortune weekend reads:
“Citigroup CEO Jane Fraser is still committed to her $1 billion efficiency push: ‘The best is still ahead’” by Rachel Ventresca
“Famed short seller with a track record for getting CEOs arrested, indicted, and charged with fraud is closing up shop” by Amanda Gerut
“TikTok’s CEO used to work for Mark Zuckerberg as a Facebook intern. Just one decade later, he’s become one of Meta’s fiercest competitors” by Marco Quiroz-Gutierrez
“Jamie Dimon chokes up when recalling his near-deadly heart condition: ‘I thought I heard it rip’” by Alexa Mikhail
Overheard
“It’s about starting to become relevant by showing up in the places where these customers are. Then it’s about having the right offers for these customers as well.”
—Conny Kalcher, chief customer officer at Zurich Insurance, told Fortune in an interview regarding attracting Gen Z customers. Since 2021, when Zurich launched its Instagram handle, it said it has seen a 96% growth in its follower count. And since the launch of its TikTok the following year, it’s seen a 430% growth, Fortune reported.
