Updated from 2:49 p.m. ET with market close information.

NEW YORK ( TheStreet) -- Bank of America ( BAC) was the winner among the nation's largest financial players on Wednesday, with shares rising 3% to close at $14.31.

The broad indices ended higher after Federal Reserve chairman Ben Bernanke said during testimony before the House Financial Services Committee that "a highly accommodative monetary policy will remain appropriate for the foreseeable future."

The Federal Open Market Committee's "highly accommodative" monetary stimulus efforts include keeping the short-term federal funds rate in a range of zero to 0.25% since late 2008, and monthly purchases of $85 billion in long-term bonds by the Fed since September.

Bernanke opened his remarks by mincing no words for members of Congress: "The economic recovery has continued at a moderate pace in recent quarters despite the strong headwinds created by federal fiscal policy."

The market has anticipated a reduction of securities purchases by the central bank, sending the yield on 10-year U.S. Treasury bonds to 2.49% Wednesday afternoon, rising from just 1.70% at the end of April. The recent closing high for the 10-year was 2.73% on July 5.

When discussing the Fed's bond-buying, Bernanke said "because our asset purchases depend on economic and financial developments, they are by no means on a preset course. On the one hand, if economic conditions were to improve faster than expected, and inflation appeared to be rising decisively back toward our objective, the pace of asset purchases could be reduced somewhat more quickly. On the other hand, if the outlook for employment were to become relatively less favorable, if inflation did not appear to be moving back toward 2 percent, or if financial conditions -- which have tightened recently -- were judged to be insufficiently accommodative to allow us to attain our mandated objectives, the current pace of purchases could be maintained for longer."

The KBW Bank Index ( I:BKX) was up 1% to 64.74, with all but seven of the 24 index components showing afternoon gains.

Shares of Bank of New York Mellon ( BK) were up 2% to close at $30.92, after a strong earnings report that included a 14% year-over-year increase in fee revenue. On a sequential basis, the custody bank's fee revenue was up 13%. Bank of New York Mellon also reported a very strong second-quarter return on tangible common equity of 25.2%.

Shares of U.S. Bancorp ( USB)pulled back over 1% to close at $36.74. The Minneapolis lender met the consensus second-quarter earnings estimate among analysts polled by Thomson Reuters of 76 cents a share, mainly because of the great reduction in the amount set aside to cover losses. The negative market reaction may have reflected investors' discomfort with a $37 million sequential decline in net interest income.

Bank of America

Bank of America reported second-quarter net income of $4.012 billion, or 32 cents a share, increasing from $1.483 billion, or 10 cents a share, in the first quarter, and $2.463 billion, or 19 cents a share, during the second quarter of 2012.

The company's second-quarter net revenue came in at $22.949 billion, compared to $23.408 billion the previous quarter, and $22.202 billion a year earlier.

The consensus among analysts was for the nation's second-largest bank by assets to report second-quarter earnings of 25 cents a share on revenue of $22.759 billion.

Bank of America had originally reported a first-quarter profit of $2.623 billion, or 20 cents a share, but on April 19 restated its quarterly results to include $1.6 billion in pretax charges related to settlements with MBIA ( MBI) and other monoline insurers.

The operating earnings improvement mainly reflected a decline in total noninterest expense to $16.018 billion in the second quarter from $19.500 billion the previous quarter and $17.048 billion a year earlier. The sequential expense decline reflected the MBIA settlement. Other major areas for cost savings included personnel expenses, declining to $8.531 billion during the second quarter from $8.729 billion a year earlier, and professional fees, which declined to $694 million in the second quarter from $922 million in the second quarter of 2012.

The bank also said its legacy mortgage loan servicing expenses declined by roughly $250 million during the second quarter from the first quarter. The company also reduced its full-time staff by over 2% during the second quarter, mainly from reductions in mortgage loan servicing employees and "staff associated with consumer delivery network optimization."

Bank of America said outstanding mortgage repurchase claims against the company totaled $16.6 billion as of June 30, down from $17.1 billion the previous quarter, mainly reflecting the MBIA settlement.

The company also said its estimated Basel III Tier 1 common equity ratio was 9.60% as of June 30, putting it well above the required minimum of 8.5%, including the ordinary 7% minimum for large bank holding companies, plus an additional buffer of 1.5% as a "global systemically important financial institution," or GSIFI.

While the Federal Reserve finalized its enhanced capital rules under Basel III on July 2, the Fed, the Office of the Comptroller of the Currency and the FDIC together proposed that U.S. banks with total assets of over $700 million be required to maintain supplementary Basel III Tier 1 leverage ratios of at least 5% by January 2018, with 6% required for the nation's largest holding companies.

Bank of America CFO Bruce Thompson said during the company's earnings conference call that "our preliminary analyses indicate that at the holding company our leverage ratio for the second quarter of 2013 was in the range of 4.9% to 5%, which positions us very well relative to the 5% minimum."" Regulators plan to phase in the new Tier 1 leverage requirement beginning in 2015, with banks required to be in full compliance by January 2018.

"Key positives include better forward cost guidance on LAS legacy asset servicing costs and strong capital ratios," according to Atlantic Equities analyst Richard State. The analyst also wrote in a note to clients Wednesday that "Overall we see this as a good set of results with BAC making good progress on costs and capital ratios. We see these as the key drivers near term although longer term it will also need to demonstrate the potential to grow revenues and improve weak areas such as fixed income."

Staite rates Bank of America "overweight," with a price target of $16.50.

Please see TheStreet's earnings coverage for much more on Ban of America's second-quarter results.

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-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.