Profits at Bank of America jumped 10 percent in the third quarter of 2005, the company said today.
Third-quarter net income rose to $4.13 billion, or $1.02 a share, from $3.76 billion, or 91 cents, a year earlier, Charlotte, N.C.-based Bank of America said today.
The company, which is the fifth largest U.S. mortgage lender by total volume, earned $1.04 a share excluding merger costs. A group of analysts surveyed by Thomson Financial had predicted a report of $1.02 share.
Revenue growth was driven primarily by increases in noninterest income, including a rebound in mortgage banking income, continued strength in card results, service fees, improved trading account profits and higher equity investment gains, the company said.
First mortgage loans originated in the third quarter rose to $27.5 billion, $10.9 billion higher than the third quarter of 2004, as borrowers took advantage of a favorable rate environment during the quarter, the company said.
Bank of America’s average loans and leases increased 7 percent as consumers took more equity out of their homes and businesses borrowed to fuel expansion, the company said.
Revenue for the company rose 16 percent to $14.6 billion, while non-interest expenses increased 3.4 percent to $7.29 billion, the company said.
“The real contributor to the quarter was loan growth, which was robust,” Mark Batty, an analyst at PNC Advisors in Philadelphia, which holds Bank of America shares, told Bloomberg. “You have to give them credit for the fact, too, that expense growth was significantly less than revenue growth during the quarter.”
Chief Executive Kenneth Lewis is focusing on selling more of the bank’s products to each customer, a strategy he’s looking to extend to MBNA Corp., the credit-card issuer he agreed to buy in June, the company said.
The company’s stock had risen 51 cents, to $42.08, at 2:45 p.m. today, in the wake of the announcement.
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