(By Balachander) Bank of America Corp. (NYSE:BAC) swung to a profit in the second quarter helped by a rise in mortgage banking income and continued improvement in quality of credit, and its shares jumped 1.89 percent in premarket trading on Wednesday.
The Charlotte, North Carolina-based bank earned $2.5 billion or $0.19 per share, compared with a loss of $8.8 billion or $0.90 per share in the year-ago quarter that included a total of $18.2 billion in pretax charges for certain mortgage-related items.
Total revenue jumped 65 percent to $22.20 billion as noninterest income surged to $12.42 billion from $1.99 billion boosted by a significant fall in the provision for representations and warranties.
Net interest income on a fully taxable-equivalent (FTE) dropped 15 percent due to a fall in consumer loan balances and yields and lower investment securities yields.
Analysts, on average, polled by Thomson Reuters expected the bank to earn 14 cents a share on revenue growth of 72.80 percent to $22.87 billion.
Provision for credit losses declined 45.5 percent and 28 percent, from the year-ago period and prior quarter, respectively.
In the previous quarter, the bank reported earnings of 3 cents a share on revenue of $22.48 billion.
As of June 30, 2012, BAC's Basel 3 Tier 1 common capital ratio on a fully phased-in basis was estimated at 8.10 percent, up from its prior forecast of more than 7.50 percent on a fully phased-in basis by year-end 2012.
BAC shares, which have been trading in the 52-week range between $4.92 and $10.28, ended Tuesday's regular trading at $7.92.