BofA Revenue Surges, Beats Profit Expectation

Bank of America shares rose in premarket trading Wednesday after it swung to a profit and posted two-thirds more revenue net of interest expenses than it did in the year-ago quarter. The bank reported a profit of $2.46 billion, or 19 cents a a share ex items. It had lost $8.83 billion, or 90 cents, in the same quarter a year ago after recording a one-time hit on bad mortgages. Results beat analyst earnings expectations of 14 cents a share. Provisions for credit losses fell to $1.77 billion, down from $3.26 billion a year earlier, and to their owest level since the first quarter of 2007. Like Wells Fargo and other banks reporting in recent days, BofA saw more mortgage loan originations. They rose 18 percent, to $18 billion. Lending to commercial businesses rose for a sixth-straight quarter, and small business lending rose 23 percent from a year ago. The company reported total exposure to Greece Ireland, Portugal and Spain of $9.6 billion, down from $16.7 billion a year earlier. The bank continued to improve its balance sheet. Its Tier 1 capital ratio, a key metric of balance sheet quality, was 11.24 percent under Basel 1 requirements, up from 10.78 percent in the first quarter. Its estimated ratio under stricter Basel 3 requirements rose to 8.1 percent, ahead of the company's goal of getting to 7.5 percent by the end of 2012. “The fact that we exceeded our previous guidance for Basel 3 six months ahead of schedule points to the significant progress we have made this year to build capital, reduce risk-weighted assets and position the company for long-term growth,” said CEO Brian Moynihan. The company says it continues to add to is network of financial advisers, boosting its ranks for the 12th straight quarter.