Bank of America Corp., the second largest U.S. bank by assets, on Monday said earnings for the fourth quarter fell slightly, as profit was weighed down by an increase in bankruptcy filings at the beginning of the period and weaker trading results.
Profit fell to $3.77 billion, or 93 cents per share, for the October-December period from $3.85 billion, or 94 cents per share, a year earlier.
Before merger and restructuring charges totaling $59 million before taxes related to its acquisition of credit card giant MBNA Corp., the U.S. banking giant posted profit of 94 cents per share during the period.
Results still fell below Wall Street projections for $1.02 per share, according to analysts polled by Thomson Financial.
Bank of America Chairman and Chief Executive Kenneth D. Lewis pinned the shortfall on a number of challenges. He cited increased amounts set aside for bad loans and lower trading results — factors that influenced earnings industrywide during the quarter.
"The impact of the change in bankruptcy laws and changes in our practices for overdraft charge-offs and over limit credit card fees reduced pretax results by about $320 million," he said in a statement. "In addition, we had a weak trading quarter that was well under our performance in recent quarters. The bankruptcy issue will not recur and should actually benefit us going forward as we expect a reduced level of bankruptcy filings under the new law."
Bank of America reported its provision for credit losses was $1.4 billion during the quarter, up from $706 million in the year-ago period.
Revenue during the fourth quarter grew to $14.12 billion from $13.71 billion last year. This also fell below Wall Street projections for revenue of $14.52 billion.
Consumer and middle-market business loan growth and higher deposits helped net interest income jump to $8.1 billion from $7.95 billion. Noninterest rose 5 percent to $6.26 billion from $5.97 billion, helped by higher mortgage banking income and equity investment gains.