Things are looking up for Bank of America, which reported better than expected earnings this morning. Last quarter, the Charlotte-based bank was hit with major losses due to mortgage "issues," as their CEO called them. This quarter, they are up $2.3 billion in net income.
Analysts predicted Bank of America would post $0.29 per share. Last year, earnings were $0.32 per share. Bank of America exceeded this with $0.41 in the second quarter, however, it was adjusted for ongoing litigation costs. Last quarter, Bank of America was dealing with $6 billion in litigation fees. This quarter, Bank of America noted that results included a litigation expense of $4 billion (before tax,) which is about $0.22 per share (after tax.) This make their diluted share price $0.19 this quarter.
Revenue for this quarter was $22 billion, also exceeding expectations, which ranged from $20.89 billion to $22.97 billion. Year-over-year, they were down four percent.
The economy continues to strengthen, and our customers and clients are doing more business with us. Among other positive indicators, consumers are spending more, brokerage assets are up by double digits and our corporate clients are increasingly turning to us to help finance business expansion and
merger activity. We are well positioned for further progress."
Chief Financial Officer Bruce Thompson added:
During the quarter, our Basel 3 capital ratios improved and credit losses remained near historical lows. In addition, we did a good
job managing expenses. Although litigation expenses were higher than the year-ago quarter, total noninterest expense, excluding litigation, declined 6 percent from the second quarter of 2013."
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