Bank of America is reaping the benefits of AI investment to enhance its lending and deposits business.

The bank today today reported $2 trillion in deposits in the first quarter, a 2.3% increase from Q1 2024 and its seventh consecutive quarter of deposits growth. Loan balances at the end of Q1 were $1.1 trillion, a 5.9% year-over-year jump, according to the bank’s earnings release.

THE BIG PICTURE: AI investments have been a key factor in Bank of America’s steady loan and deposits growth, Chief Executive Brian Moynihan said during today’s earnings call.

“The real reason that we’re driving our capabilities is more capacity and also making that capacity more efficient using some artificial intelligence and machine learning,” Moynihan said.

The $2.5 trillion bank’s retail consumer business is also seeing increased AI-driven engagement, he said.

Bank of America’s AI-driven digital assistant Erica has surpassed 2.7 billion interactions since it was launched in 2018, he said.

Erica saw 175.5 million consumer interactions during the first quarter, a 2.3% increase from the previous quarter and a 2.8% YoY increase, according to the bank’s earnings presentation.

The number of Erica users increased 1% from Q4 and 4.7% from Q1 2024 to 19.9 million, according to the earnings presentation.

Additionally, nearly 90% of Bank of America employees use Erica to help consumers with account troubleshooting, the bank revealed in an April 8 release. The bank also said that more than 90% of its 212,732 employees are using AI in their jobs.

Bank of America in Q1 reported noninterest expense of $17.8 billion, up 6% from Q4 and up 3% from Q1 2024. The bank attributed the increase to investments in technology as well as people and operations.

Other FIs including Citi and JPMorgan are also continuing their investments in AI to boost productivity and drive sales.

“The investment that we do in banks — in branches, technology, AI — can continue regardless of the environment,” Chief Executive Jamie Dimon said, during the bank’s Q1 earnings call on April 11.

BY THE NUMBERS: Bank of America in Q1 also reported:

• Revenue of $27.4 billion, up 8.3% QoQ and up 6% YoY;

  

• 49 million active digital users, up 2.1% QoQ and up 4% YoY;
• 40.5 million active mobile users, up 1.3% QoQ and up 5.2% YoY;
• Consumer sales through digital channels of 65% compared with 61% in Q4 2024 and 50% in Q1 2024; and
• Zelle peer-to-peer transaction volume of $130 billion, up 2.4% sequentially and up 22.6% YoY; and
• An efficiency ratio of 65 compared with 67 in Q1 2024.

OF NOTE: Bank of America, which holds more than 1,200 AI-related patents, is set to invest $13 billion in technology this year, including $4 billion for emerging innovations. The bank aims to sustain its digital growth by continuing to develop new capabilities, Moynihan said during the earnings call.

MARKET REACTION: Shares of Bank of America (NYSE: BAC) were up 3.7% from market open to $38.02 as of 3:42 p.m. ET today. Bank of America has a market capitalization of $289.1 billion.