The Charlotte, N.C.-based Bank of America earned $2.81 billion after paying preferred dividends, or 44 cents per share, in the first quarter of this year. This compares with a profit of $1.02 billion or 23 cents per share, in the Q1 2008. Analysts surveyed by Thomson Reuters had expected a profit of 4 cents per share.
Despite Bank of America's results, both its own stock and the overall stock market tumbled. BAC is down about 15% at the time of this writing, while the Dow Jones Industrial Average (DJIA) is down over 200 points.
Bank of America’s better-than-expected profit is the latest in a series of relatively good recent bank earning statements, including JP Morgan Chase and Citigroup.
In a statement, Kenneth D. Lewis, the bank’s chairman and chief executive said:
“The fact that we were able to post strong, positive net income for the quarter is extremely welcome news in this environment. It shows the power of our diversified business model as well as the ability of our associates to execute.”
One problem with that statement: B of A recorded a $13.4 billion loan-loss provision in the first quarter. The company also set aside $6.4 billion in additional reserve to cover future losses.
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