Bank of America began the year with unexpectedly strong profits, in another sign of the strong recovery being staged by the country's big banks.
The Charlotte, N.C.-based bank, the nation's largest, said on Friday morning that it booked a profit of $3.2 billion in the first three months of 2010, or 28 cents a share. That was more than the 18 cents a share that analysts surveyed by Bloomberg had expected.
The profit was down from the first quarter of 2009, but those results were muddied by one-time events associated with the financial crisis. Last quarter, the bank lost $194 million, while in the quarter before that, losses amounted to $1 billion.
Like JPMorgan Chase & Co., which reported its earnings earlier in the week, Bank of America's strong results came primarily from the strength of its investment-bank and trading desks, large parts of which were acquired when Bank of America purchased Merrill Lynch in the midst of the financial crisis. But the results were also helped by the improving credit trends of retail borrowers.
"With each day that passes, the 2010 story appears to be one of continuing credit recovery, and our results reflect a gradually improving economy," the bank's chief executive, Brian T. Moynihan, said in a statement.
The bank's credit card division set aside $4.7 billion less than it did a year ago to account for delinquent borrowers. There were fewer good signs in the mortgage division, where losses jumped to $2.1 billion in a sign that the nation's housing woes are not yet over.
The strongest results came from the bank's trading division, where the profit was the same as those for the bank as a whole: $3.2 billion. Most of the profit came from the bond, commodity and currency trading desks, which brought in $5.8 billion in revenue. The bank's stock had been bid up in recent months. In early trading on Friday, the stock fell 32 cents, or 1.6%, to $19.16.