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Bank of America's stock extends selloff after downbeat net interest income outlook

Tomi Kilgore

Shares of Bank of America Corp. slumped 1.7% in premarket trade Tuesday, extending losses after the start of the post-earnings conference call, after bank's outlook for full-year growth in net interest income (NII) was below expectations. Just prior to the start of the conference call, the stock was down about 0.5% after the bank reported first-quarter earnings that beat expectations but revenue that fell short. Chief Financial Officer Paul Donofrio said in the conference call that 2019 NII was expected to grow at "roughly half the pace of 2018," according to a transcript provided by FactSet. The FactSet consensus for 2019 NII of $50.12 billion implies 4.3% growth, compared with 2018 growth of 5.3%. Donofrio said the economy is expected to grow more moderately in 2019, resulting in lower longer-term interest rates. The NII warning comes after Well Fargo & Co. warned of a NII decline in its post-earnings conference call earlier this week. BofA's stock has run up 21% year to date through Monday while the S&P 500 has gained 16%.