Bank of America
reported a 14% gain in first-quarter profits, as the nation's second-largest lender topped Wall Street expectations.
In the quarter, BofA earned $4.99 billion, or $1.07 a share, up from $4.39 billion, or $1.07 a share, a year ago. Total revenue rose 30% to $17.7 billion.
On an operating basis, which excluded a $98 million merger-related charge, the bank would have earned $1.08 a share. BofA's earnings per share were largely unchanged from a year ago because the bank had more shares outstanding this quarter compared to a year ago.
Analysts, as surveyed by Thomson Financial, were looking for BofA to earn $1 a share on revenue of $16.79 billion.
The results at BofA were boosted by its acquisition of credit-card giant MBNA, which the bank bought for $34 billion in January. BofA said if MBNA had been added to the bank's results for the year-ago quarter, the revenue gain only would have been 10%.
BofA is the latest in a string of leading U.S. lenders to post better-than-expected earnings for the first quarter, despite a tricky interest rate environment that has put a chill on the once-red-hot home-lending market.
The bank posted a strong profit gain, despite a doubling in its quarterly provision for loan losses and a big drop in gains on the sale of securities.
In the quarter, net interest income rose 17% to $8.77 billion. Net interest income is revenue a bank generates from its lending and deposit operation.
Non-interest income, which includes all other revenue at the bank, rose 48% to $8.9 billion.
On the flip side, the MBNA acquisition caused the bank's provision for loan losses to double to $1.27 billion, while gains from the sale of securities fell to $14 million, down from $659 million, in the year-ago quarter.
"We have strong momentum in all our businesses as the benefits from continued execution in our consumer businesses were accompanied this quarter by a rebound in trading and good performance in investment banking and wealth management,'' said BofA Chairman and CEO Kenneth Lewis, in a press release.