Bank of America profit beats target

updated 9:08 a.m. ET April 18, 2005

Bank of America Corp., the nation's third-largest bank, said Monday that first-quarter earnings rose sharply from a year ago, due to the acquisition of FleetBoston, strong results throughout the company's businesses, lower credit costs and gains from the sales of securities.

Net income rose to $4.70 billion, or $1.14 per share, for the three months ended March 31 from $2.68 billion, or 91 cents per share, a year ago. Under purchase accounting rules, results for the first quarter of 2004 do not include the impact of FleetBoston Financial Corp., which was acquired on April 1, 2004.

The latest quarter includes merger and restructuring costs of 2 cents per share. Revenue on a fully taxable-equivalent basis grew to $14.22 billion from $9.70 billion the previous year.

Analysts surveyed by Thomson Financial were looking for profit of 97 cents per share on revenue of $13.82 billion in the latest quarter.

Kenneth D. Lewis, chairman and chief executive officer, said, "The continuing successful integration of the Fleet franchise has bolstered our ability to achieve future growth and value creation for our shareholders. In particular, we saw the strongest commercial loan growth in many quarters across our company and deposit growth continues to be robust."

Bank of America said the integration of Fleet remained on schedule as several systems conversions were completed during the quarter and additional conversions were started. Direct cost savings achieved in the quarter totaled $437 million.

Net interest income grew to $8.07 billion from $5.97 billion a year earlier, driven by Fleet, consumer and middle-market business loan growth, higher domestic deposit levels and asset-liability management portfolio activity. These increases were partially offset by a lower trading-related contribution and lower levels of foreign loans.

Noninterest income surged to $6.15 billion from $3.73 billion a year ago. In addition to the impact of Fleet, these results were driven by higher investment and brokerage services, equity investment gains, trading account profits and card income.

During the quarter, the company realized $659 million in securities gains, up from $495 million in securities gains in the first quarter of 2004. Provision for credit losses was $580 million, down from $706 million in the fourth quarter of 2004 and $624 million last year.

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