Bank of America Corp. on Thursday said third-quarter results were better-than-expected as the third-largest U.S. bank saw profit boosted from its acquisition of FleetBoston Financial Corp. and strength in brokerage income and service charges, however, quarterly revenue was light.
Quarterly net income was $3.76 billion, or 91 cents per share, compared with $2.92 billion, or 96 cents per share, a year ago. Under purchase accounting rules, year-ago results do not include the impact of FleetBoston Financial Corp., which was acquired on April 1. Latest third-quarter earnings included merger and restructuring charges of 4 cents per share. Also, the company had more shares outstanding in the latest quarter, due to stock issued in the Fleet transaction and a 2-for-1 stock split.
Analysts polled by Thomson First Call expected Bank of America to earn 90 cents per share on revenue of $13.3 billion.
Revenue during the period rose to $12.73 billion from $9.92 billion last year. Retail deposits grew 11 percent to $399.6 billion. Net interest income was $7.84 billion, compared with $5.48 billion a year earlier.
Noninterest income was $4.90 billion compared with $4.45 billion a year ago. In addition to the impact of Fleet, these results were driven by record card income, higher service charges, investment and brokerage income and equity investment gains, offset by a loss of $250 million in mortgage banking income, which resulted from lower origination volume and a writedown of mortgage servicing rights.
Provision for credit losses was $650 million, down from $789 million in the second quarter of 2004 and $651 million a year earlier.
The bank said earlier in October that it would cut another 4,500 jobs as part of its acquisition of FleetBoston, in addition to 12,500 previously reported layoffs. Bank of America said the new job cuts would result in an additional $150 million in severance costs spread out between the third quarter of this year and the first quarter of 2005.