- The Washington Times - Tuesday, July 22, 2008

CHARLOTTE, N.C. (AP) | Bank of America Corp. became the latest in a string of big banks whose second-quarter earnings, while hurting from the impact of the credit crisis, still managed to beat Wall Street expectations.

The nation’s second-largest bank by assets said Monday its profit fell 41 percent as losses in its struggling mortgage operations were offset by business in other parts of the company. But it easily beat Wall Street estimates, and its stock rose $1.07, or 3.9 percent, to close at $28.56.

Four of the nation’s five biggest banks have now reported better-than-estimated results. JPMorgan Chase & Co. and Wells Fargo & Co. reported smaller-than-expected profit declines, while Citigroup Inc. had a milder-than-expected $2.5 billion loss.

Wachovia Corp., the nation’s fourth-largest bank, is expected to report earnings Tuesday. The Charlotte-based bank has said it may post a $2.6 billion to $2.8 billion loss for the quarter.

“Most of our businesses are performing well even with the current state of the economy and the problems with housing,” Bank of America Chief Executive Officer Ken Lewis said during a conference call with analysts.

“However, as I said, we are not in denial. Credit losses are still going up, but given what we see today, they are manageable.”

Bank of America, also based in Charlotte, reported net income of $3.41 billion, or 72 cents per share, on $20.32 billion in revenue, in the April-June period. That compared with net income of $5.76 billion, or $1.28 per share, on $19.63 billion in revenue a year earlier.

Analysts on average expected a profit of 53 cents per share on $18.37 billion in revenue.

Bank of America said credit quality continued to weaken during the quarter, particularly in markets that experienced the most significant home price declines.

The company more than tripled the amount it set aside for bad loans to $5.83 billion, up from $1.81 billion a year ago, largely for consumer and commercial portfolios directly tied to the housing market, including home equity, residential mortgages and homebuilding. The figure surged to $6.01 billion in the first quarter.

During the second quarter, troubled loans in residential mortgage rose to $3.27 billion, nearly four times the amount from a year ago. Home equity loans also continued to rise to $1.85 billion in troubled loans from $496 million a year ago.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide