Updated from 9:10 a.m. EST

Bank of America ( BAC), the nation's third-largest bank, reported a 41% surge in fourth-quarter profit, kicking off a parade of bank earnings Tuesday.

The Charlotte, N.C.-based lender earned $3.85 billion, or 94 cents a share, in the quarter, compared with $2.73 billion, or 92 cents a share, a year ago. Total revenue at the bank was $13.7 billion. The latest quarter included a restructuring charge of $181 million, or 4 cents a share.

Including the charge, earnings matched the Thomson First Call estimate. Revenue was about $300 million higher than expected.

The bank reported earnings growth in all of its major business divisions. Leading the way was BofA's wealth and investment management group, which reported a 28% gain in earnings to $1.58 billion.

The bank said commercial lending "grew modestly during the year." Lackluster commercial borrowing has been a concern for many analysts. But in a hopeful sign, BofA says corporate borrowing picked up in the fourth quarter, a possible "indication of corporate confidence in the economy."

In a conference call, bank executives talked optimistically about 2005, projecting a 7% to 9% rise in revenue. As for earnings guidance, BofA didn't offer investors much to mull over. The bank says it expects full-year earnings of at least $4 a share.

Before the earnings call, analysts were expecting full-year earnings of $4.04 a share.

In late-morning trading, BofA shares were up 51 cents to $45.40.

BofA was one of many banks to report fourth-quarter numbers Tuesday. Other results were mixed, something investors may have to get used to this year after two stellar years of bank earnings.

Virtually every bank announcing earnings reported a significant year-over-year decline in its respective net interest margin, an important measure of the profitability of a bank's investments and lending operation. Margins are getting squeezed because of a so-called flattening of the bond yield curve.

The yield curve is said to flatten out when the spread between short-term and long-term rates on bonds narrows. Bank analysts caution that lenders with significant portfolios of interest rate-sensitive, mortgage-backed securities could get hit hardest if the yield curve pancakes any further.

Wells Fargo ( WFC), the nation's fourth-largest bank and a top-tier mortgage lender, reported a 10% rise in fourth-quarter profits, but earnings came in a bit shy of analyst expectations.

In the quarter, Wells earned $1.8 billion, or $1.04 a share, up from $1.6 billion, or 95 cents a share. The Thomson Financial consensus had the bank earning $1.06 cents a share. But total revenue of $8.2 billion, up 10% from a year ago, beat the consensus estimate by a wide margin.

Boston-based State Street Bank ( STT) reported an 81% slide in fourth-quarter profit. Last year's earnings at the big processing bank included the proceeds from the sale of several businesses.

In the quarter, State Street earned $184 million, or 55 cents a share, compared to $447 million, or $1.33 a share, in the year-ago period.

Midwestern regional lender Fifth Third ( FITB), as expected, reported a sharp drop in earnings, stemming from a previously announced charge to restructure its balance sheet for rising rates. The Cincinnati-based bank earned $176 million, or 31 cents a share, down from $442 million, or 77 cents a share, in the year earlier period.

Fifth Third's earnings exceeded the Thomson Financial estimate by 2 cents a share. Analysts had lowered their estimates for the bank based on the earlier warnings.

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