second-largest bank reaped the benefits of CEO Brian Moynihan's
cost-cutting and as loan losses from the 2008 mortgage meltdown
continued to shrink.
Charlotte, N.C.-based Bank of America earned $4.0 billion, or 32 cents
a share, as revenue climbed 3% to $22.9 billion. Analysts had expected
the bank to earn 25 cents a share, according to data compiled by
FactSet.
The bank reported double-digit growth from last year in a wide range
of businesses. Commercial loan balances are up 20% from last year, and
investment banking revenue rose 36%. Bank of America owns Merrill
Lynch.
"We are doing more business with our customers and clients, and
gaining momentum across every customer group we serve," Moynihan said.
"We must keep improving, but with the consumer recovering and
businesses strong, we have lots of opportunity ahead."
The bank, whose shares are at their highest level since 2011 as the
economic recovery takes root, said higher interest rates did hurt the
value of its bond holdings during the quarter.
Bank of America's stock was up nearly 1% in pre-market trading, rising
12 cents to $14.04.
"There's probably not enough positives from the revenue lines to
propel the stock much higher today, given recent gains,'' Raymond
James analyst Anthony Polini said, adding that the bank improved
profit margins by cutting expenses, including thousands of workers.
``But, very solid quarterly performance.''
Revenue from mortgage production declined, even though more people
took out loans, as the average loan generated less revenue. But the
bank's number of seriously delinquent mortgage borrowers has fallen by
more than half in the last year, to 492,000.
A wide range of mortgage-related expenses dropped, from salaries for
now-departed staffers who handled loan workouts to litigation costs
and provisions for payouts to loan buyers who contend that the bank
misrepresented the quality of loans it sold. That last cost fell to
$197 million from $395 million a year ago.
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