Bank of America (BAC) posted a better-than-expected first-quarter profit, helped by robust results from trading operations and a $3.6 billion decline in credit-loss provisions.
The nation's biggest bank by assets said net income for the three months ended March 31 fell to $3.2 billion, or 28 cents a share after dividends, from $4.2 billion, or 44 cents, in the year-ago period. Analysts, on average, expected Bank of America to post earnings of 9 cents a share.
The company said results were driven by strong capital markets activity, including record sales and trading, and an improvement in credit quality that cut credit loss provisions dramatically. "With each day that passes, the 2010 story appears to be one of continuing credit recovery, and our results reflect a gradually improving economy," Chief Executive Officer Brian Moynihan said in a press release.
Earlier in the week, JPMorgan Chase (JPM), the nation's second-biggest bank after Bank of America, likewise posted strong quarterly results on investment banking activity and improved losses on loans.
Bank of America said credit quality continued to improve during the first quarter, with net losses declining in most consumer portfolios. Credit costs, however, "remain high amid relatively weak global economic conditions," the firm said. Credit quality across most commercial portfolios also showed signs of improvement with criticized and non-performing loans dropping from the prior quarter.
The company completed 77,000 mortgage loan modifications during the quarter with total unpaid principal balances of $17.8 billion, including 33,000 customers who converted from trial-period to permanent modifications under the government's Making Home Affordable program, Bank of America said.
"We will continue to support our customers through these and other initiatives aimed at helping restore their financial health," said Moynihan.