Bank of America profit rebounds to $3.36B as costs drop

BANK OF AMERICA Corp., the second-biggest U.S. lender by assets, posted profit of $3.36 billion in the first quarter as expenses declined.
BANK OF AMERICA Corp., the second-biggest U.S. lender by assets, posted profit of $3.36 billion in the first quarter as expenses declined.

NEW YORK – Bank of America Corp., the second-biggest U.S. lender by assets, posted profit of $3.36 billion in the first quarter as expenses declined.

Net income was 27 cents a share, compared with a loss of $276 million, or 5 cents, a year earlier, according to a statement Wednesday from the Charlotte, N.C.-based firm. Adjusted earnings were 36 cents a share, beating the 29- cent average estimate of 31 analysts surveyed by Bloomberg.

CEO Brian T. Moynihan, 55, is trying to boost revenue after spending the first five years of his tenure settling legal disputes, mostly tied to the 2008 acquisition of Countrywide Financial Corp. The firm’s shares have dropped 12 percent this year, the worst performance in the 24-company KBW Bank Index.

This year “marks the year we’re beyond the idea of fixing this company, and we’re into one of making it work better,” Nancy Bush, a bank analyst who founded NAB Research LLC in New Jersey, said in an interview before results were released. “Legal expenses should be down dramatically.”

- Advertisement -

In the first quarter of last year, Bank of America booked $6 billion of legal costs tied to mortgage disputes, triggering the fourth quarterly loss under Moynihan’s tenure. His predecessor’s purchase of Countrywide left Bank of America responsible for thousands of bad home loans, contributing to more than $50 billion of expenses.

Stock buybacks

Bank of America, which scrapped plans to buy back shares last year after an accounting error, won conditional Federal Reserve approval last month to repurchase $4 billion in stock. The lender must resubmit revenue and loss models and improve internal controls by Sept. 30, the Fed said in releasing the results of its annual stress tests.

The firm said it’s keeping its quarterly dividend unchanged, disappointing analysts who had expected an increase to 8 cents a share from 5 cents, according to data compiled by Bloomberg.

JPMorgan Chase & Co. said yesterday that first-quarter profit rose 12 percent to $5.91 billion on a rebound in fixed- income and equity trading. Wells Fargo & Co., the biggest home lender, said net income dropped 1.5 percent to $5.8 billion.

No posts to display