Bank of America, one of Connecticut’s biggest out-of-state banks, said Friday its first-quarter earnings rose 0.7 percent to $2.83 billion as strong trading revenue helped the bank offset continuing losses on consumer loans, The Associated Press reports.
The bank reported a $2.1 billion loss in its home mortgage business, but said its other consumer loan businesses were showing signs of healing.
Bank of America’s results after payment of preferred stock dividends are up slightly from $2.81 billion a year ago. They surpassed expectations and provided further evidence that the banking industry and the economy are recovering. JPMorgan Chase & Co. on Wednesday also reported improvements in its consumer loan business, and said continuing credit losses were offset by income from trading.
Bank of America set aside $9.8 billion to covered soured loans during the quarter, down 3 percent from $10.1 billion the previous quarter. A year earlier, it had set aside $13.4 billion. Many analysts predict loan losses should peak some time in the first half of 2010.
CEO Brian Moynihan said in a statement, “the 2010 story appears to be one of continuing credit recovery, and our results reflect a gradually improving economy.” JPMorgan Chase also reported that it saw signs of improvement in the economy.
Still, home mortgages remain a trouble spot for Bank of America, the nation’s largest mortgage servicer. Although its set aside less money for overall loan losses, it increased the amount set aside for home mortgage losses, to $3.6 billion, as its mortgage losses widened. Net revenue in the unit fell 31 percent, as the bank saw lower mortgage production volume and a drop-off in refinance activity.
Home loans were the only one of Bank of America’s six major business units to show a loss for the quarter.
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