Bank of America earns $3.2 billion in first quarter
Bank of America Corp. began the year with a much larger profit than expected, as the company benefited from its purchase of Merrill Lynch during the financial crisis.
The Charlotte, N.C.-based bank said Friday that it earned $3.2 billion, or 28 cents a share, in the first three months of 2010. Analysts had estimated earnings of 18 cents a share.
The profit was down from the first quarter of last year, reflecting one-time events associated with the financial crisis. The company was in the red in the last half of 2009.
The results are another sign of the strong recovery being staged by the country’s big banks, including rival JPMorgan Chase & Co., which reported its earnings earlier in the week.
BofA’s robust performance, like JPMorgan’s, relied heavily on its investment banking and securities trading units, large parts of which were acquired when the bank bought Merrill Lynch at the end of 2008.
The results also were helped by the improving finances of consumer borrowers.
“With each day that passes, the 2010 story appears to be one of continuing credit recovery, and our results reflect a gradually improving economy,” BofA Chief Executive Brian T. Moynihan said in a statement.
The bank’s credit card division set aside $4.7 billion less than it did a year earlier to account for delinquent borrowers. There were fewer good signs in the mortgage division, where losses jumped to $2.1 billion in a sign that the nation’s housing woes are not yet over.
The strongest results came from the bank’s trading division, which recorded a $3.2-billion operating profit. Most of the profit came from the bond, commodity and currency trading desks, which brought in $5.8 billion in revenue.
Bank of America’s stock, which has surged in the last two months, sank $1.07, or 5.5%, to $18.41 as the entire financial sector slumped on news of fraud charges against Goldman Sachs Group Inc.
But BofA shares are still up 27% since Feb. 12.