Big banks have been beating low earnings expectations regularly the past couple years. Now that the bar isn’t set so low, modest earnings growth is no longer good enough.

Bank of America (NYSE: BAC) felt the brunt of higher expectations this morning. Bank of America earnings are up 20 cents per share, well ahead of last year’s 3-cents-a-share profit. However, those earnings fell short of the 22 cents per share analysts were projecting.

The earnings miss has sent BAC shares tumbling 4.5% in early trading.

The $2.62 billion in first-quarter profits is more than half the $4.2 billion Bank of America made all of last year. It’s also more than the company earned in 2010 and 2011 combined.

But the bar has been raised for banks – at least on Wall Street.

There were other reasons BAC’s earnings disappointed. Revenue was down 8.4%, net interest income declined 1.6%, and consumer loans fell 7.5% compared to a year ago.

Also, the bank’s mortgage business declined 21%, with its consumer real-estate division reporting a $1.31 billion loss.

With today’s drop-off, Bank of America shares are now in the red for the year. It’s the only one of the six major U.S. financial institutions whose stock has fallen in 2013.

Published by Wyatt Investment Research at