Bank of America's profits more than doubled in the second quarter thanks to lower legal costs and progress in resolving problems stemming from the financial crisis.
The consumer banking giant earned $4.99 billion, the bank said Wednesday, up from $2.04 billion a year earlier. The bank earned 45 cents per share, compared with 19 cents per share a year earlier.
BofA's consumer banking division, its largest business by revenue and profit, earned $1.7 billion, up modestly from $1.63 billion a year earlier. The bank said an increase in deposits, lower expenses and an improving balance sheet helped offset a decline in revenue.
Financial analysts surveyed by FactSet expected the bank to earn 36 cents per share, a figure which typically excludes one-time items. Revenue rose to $22.1 billion from $21.75 billion.
The biggest drop in BofA's expenses came in its legal costs, which plummeted from $4 billion to $175 million and were a big reason why the bank's profits jumped from last year. The bank reached a $13 billion legal settlement last year with state and federal regulators regarding its role in the leadup to the 2008 financial crisis, which weighed heavily on its 2014 results.
The Charlotte, N.C.-based bank also saw its businesses expand in many places. In consumer banking, the bank originated $16 billion in residential mortgages, up from $11.1 billion a year ago. The bank also originated more home equity loans. Credit card issuance was the highest since 2008.
Where the bank made the most progress was continuing to clean up delinquent loans and other trouble spots left over from the housing bubble.
The bank's unit that holds troubled assets made a modest profit in the quarter of $45 million, compared with a $2.74 billion loss a year earlier. It was the first time that unit has made a profit since BofA created it in 2010.
Mortgages delinquent by 60 days or more dropped by half to 132,000 loans, the bank said.
"I think we are moving into a more normalized environment … and are getting away from the legacy issues," said Bruce Thompson, BofA's chief financial officer.