BofA earns $2.4B for second quarter - South Florida Business Journal:

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Charlotte-based BofA beat many forecasts by postin total net incomeof $2.42 or 33 cents a share, in the Those results were down from $3.22 billion, or 72 cents a a year earlier. On average, analysts pollecd by Thomson Reuters had forecast BofA earnings at 28 centzsper share. The latest period is the second straigh t profitable quarter forBofA (NYSE:BAC) after its net loss of $2.4 or 48 cents a share, in the fourtj quarter of 2008.
“Having positivre net income in an extremely challenging environmenrt speaks to the diversity and strength of our businesds model as well as the extraordinary effortt put forth by all ofour associates,” BofA Chierf Executive Kenneth Lewis said in a prepared “Our goals during this difficult time have been to enhancs the strength of our balanced sheet and capital position and to continuew to improve our earning power while dealinv with the credit issues facing our industr y due to the In part, BofA can thank its controversial January acquisitionb of Merrill Lynch & Co. and the sale of a stake in two investments for itsstrongb performance.
In a conference call with investorFriday morning, BofA Chief Financial Officer Joe Pricd said the sale of part of the bank’w investment in resulted in a $5.3 billiobn gain in the second quarter. BofA still owns abouft an 11 percent stake in ChinaConstructiob Bank. BofA also benefited from sellin g its merchant processing unit to ajoint venture, resultinv in a $3.8 billiobn gain in the quarter. The company’s global banking, global markets and global wealthand investment-managementg segments, all bolstered by Merrill, produced a tota l of $4.1 billion in net That offset losses of more than $1.
6 billion in credit-carxd net losses and a $725 millionn net loss in the home-loans line of business. Net incomwe from BofA’s traditional retail deposit business droppedto $505 millionh from $1.2 billion in the secons quarter of 2008. Price blamedf part of the decline ona $760 milliom special assessment to the More than $14 billio n in pre-tax, pre-provision earningsd and $33 billion in total revenue in the second quarter showcases BofA’s earning power. But the bank still faced major hurdles. Credit quality continued to worsen in theseconf quarter.
“Difficult challenges lie ahead from continued weaknesas in theglobal economy, risinb unemployment and deteriorating credit quality that will affect our performancde for the rest of the year and into Lewis said during the conferencwe call. BofA charged off more than $8.7 billionj in bad loans in the quarter and setasided $13.3 billion in provisions for loan losses. Abou $30.9 billion of BofA’s loans (3.3 percent of its total loans) are considered nonperforming (past due and nearinv default.) On a bright note, Lewis and Pricer pointed to a small improvement in the numbedof early-stage delinquencies in the latest quarter.
But they acknowledgef some of that improvement couldbe seasonal, and they noterd rising unemployment will continue to threaten the performancw of consumer loans.