Bank of America posts higher second-quarter earnings

Wednesday, July 14th 2004, 12:16 pm
By: News On 6

CHARLOTTE, N.C. (AP) _ Bank of America Corp. on Wednesday posted a 41 percent increase in its second-quarter profit, beating Wall Street expectations with help from results from recently acquired FleetBoston Financial Corp.

The banking giant earned $3.85 billion, or $1.86 a share, for the three months ended in June, up from $2.74 billion, or $1.80 a share, for the same quarter last year.

Analysts surveyed by research firm Thomson First Call had expecting earnings of $1.74 per share.

The current results also included pretax expenses of $125 million related to Bank of America's $47 billion acquisition of FleetBoston, which the Charlotte-based bank bought in April. That reduced earnings per share by 4 cents.

Shares of Bank of America were down 29 cents at $84.84 in morning trading on the New York Stock Exchange.

Revenue grew to $13.19 billion in the quarter, up from $9.79 billion the previous year.

During the quarter, the bank realized $795 million in securities gains as it repositioned its balance sheet for expected movements in interest rates, Bank of America said.

Cost savings from the merger were estimated at $206 million in the second quarter, Bank of America said. Along with those savings, the results were driven by strong performances in consumer banking and the commercial banking sector.

The second-quarter earnings were the combined results from the merger with FleetBoston, which the banks completed on April 1. The year-ago results did not include Fleet's numbers, Bank of America said.

If Fleet's year-ago results were included, Bank of America's profits would have increased by 14 percent.

For the first six months of 2004, Bank of America earned $6.53 billion, or $3.70 per share, compared to $5.16 billion, or $3.39 per share, a year earlier. The year-ago results did not reflect Fleet's numbers.

``I am particularly pleased that even as we successfully execute on the merger with FleetBoston Financial, our associates continue to grow customer relationships and gain market share in key products throughout our franchise, including in the Northeast, said Ken Lewis, president and chief executive officer.

He said the merger was proceeding ahead of schedule.

``Our new Fleet teammates are contributing significantly to the company's progress, which is shown by the net increase in consumer customer accounts at Fleet during the quarter,'' Lewis said.

In a conference call with analysts, chief financial officer Marc Oken said the bank has eliminated about 3,800 jobs as a result of the merger. The bank expects cost savings from the merger to total as much as $750 million by the end of 2004, he said.