Profits at Bank of America ( BAC) rose 10% in the third quarter as the nation's No. 2 bank pocketed more fees and investment gains. In the quarter, the Charlotte, N.C.-based bank earned $4.13 billion, or $1.02 a share, up from $3.76 billion, or 91 cents a share in the year-earlier period. Revenues at the bank rose 16% to $14.81 billion. Excluding a restructuring charge of 2 cents a share, the bank earned $1.04 a share on an operating basis. Using that measurement, earnings at BofA exceeded the Thomson Financial consensus analyst estimate by 2 cents. Revenue came in slightly ahead of the $14 billion forecast. The surge in revenue came mainly from gains in fees from credit cards and other banking services, mortgage banking income, proprietary trading and equity investment gains. Fee-related income jumped 39% to $6.83 billion. Trading revenue rose 37% to $800 million. Meanwhile, the bank recorded a $564 million gain on investments, compared with a $182 million gain in the year ago period. Credit card income rose more than 21% to $1.4 billion, largely due to more customer use. But it wasn't all good news for the bank. Like many lenders, BofA struggled with the impact of a flattening yield curve, the narrowing spread between low-and short-term interest rates. The phenomenon has made it difficult for many lenders to generate big profits from their lending operations. The bank said net interest income rose a scant 2% to $7.97 billion. "The increase in net interest income was driven by growth in consumer and middle-market business loans, higher domestic deposit levels, and a larger asset-liability management portfolio," the bank said. "These increases were partially offset by margin compression resulting from a flattening yield curve and a lower trading-related net interest income contribution." The bank said credit quality of its loans was generally good in the quarter. But in a possible sign that some companies are experiencing economic difficulty, the bank noted that "the rate of improvement in commercial credit quality slowed."