Recovery from lackluster 2009 continues in 2Q for Bank of America, Webster Bank

Financial giant Bank of America Corp. and regional bank Webster Financial Corp. posted profitable second-quarter results recently as both banks appeared to continue their recovery from a lackluster 2009.
Bank of America said it made $3.12 billion in the three-month period ending in June, down 3 percent from the $3.22 billion in net income Bank of America reported in the same period last year.
Meanwhile, Waterbury, Conn.-based Webster Financial – parent of Webster Bank – said it made $17.64 million, a significant improvement over the $31.56 million it lost in 2009 second quarter.
Rockland, Mass.-based Independent Bank Corp., parent of Rockland Trust Co., and Newport Bancorp Inc., holding company for NewportFed, did not report second-quarter results before deadline last week.
Sovereign Bank’s parent, the Spanish bank Banco Santander S.A., is scheduled to report its results July 29. And Royal Bank of Scotland plc, owner of Providence-based Citizens Financial Group Inc. is expected to release second-quarter numbers Aug. 6.
While Bank of America’s second-quarter profit was lower than a year ago, the earnings of 27 cents per diluted common share beat the 23-cent average estimate of analysts surveyed by Bloomberg News.
Bank of America executives noted that the largest U.S. bank’s credit quality improved in the second quarter. Total net charge-offs were $9.55 billion in the second quarter, down from $10.8 billion in first three months of 2010. Also the bank’s second-quarter provision in anticipation of bad loans was $8.11 billion, down from $9.81 billion the previous quarter and $13.38 billion a year earlier.
Webster Bank – Rhode Island’s ninth-biggest measured by deposits – also benefited from reducing its second-quarter loan-loss provision to $32 million, down from $85 million in the 2009 second quarter.
As with Bank of America, Webster’s balance sheet indicated that the quality of its $10.5 billion loan portfolio continued to improve.
The bank said nonperforming loans declined to $317.31 million as of June 30, down from $348.85 million on March 31 and $350.4 million a year ago. And charge-offs – loans the bank has deemed uncollectible – sank to $35.98 million, down from $43.08 million in the first quarter and $52.2 million in the second quarter of 2009.
Webster said the nonperforming assets were 3.21 percent of total loans and other real estate owned, down from 3.3 percent in the second quarter of 2009.
“Asset quality continued to improve in the second quarter,” said Jerry Plush, chief financial officer and chief risk officer. •