Bank of America Corporation (NYSE: BAC, Stock Forum) reported Monday that its first quarter revenue more than doubled to a record $36.1 billion from a year ago.
The company’s net income in the first quarter of 2009 hit $4.2 billion, compared with $1.2 billion in the same period last year. Net income applicable to common shareholders rose to $2.8 billion, or 44 cents per share, from $1.02 billion or 23 cents per share in the same quarter last year.
The company notes that corporate banking revenue of $1.4 billion increased 30% as a result of higher loan and deposit balances, increased loan spreads and fee income, while commercial banking revenue rose 3% to $2.8 billion driven by a 20% increase in deposit balances and a more modest increase in both loan balances and spreads.
Results for the quarter include Merrill Lynch & Co., which Bank of America purchased on January 1, and Countrywide Financial, which was acquired in July 2008. Merrill Lynch contributed $3.7 billion to net income.
However, shares of the company fell 18.5% to $8.63 as MarketWatch notes that investors “realized that much of the profit came from special gains, and that traditional banking business continued to suffer from tight credit and a weakening economy.”
The provision for credit losses of $13.4 billion rose from $8.5 billion in the fourth quarter and included a $6.4 billion net addition to the allowance for loan and lease losses. Nonperforming assets were $25.7 billion compared with $7.8 billion at March 31, 2008, reflecting the continued deterioration in portfolios tied to housing.
"The fact that we were able to post strong, positive net income for the quarter is extremely welcome news in this environment," said Kenneth D. Lewis, chairman and chief executive officer. "It shows the power of our diversified business model as well as the ability of our associates to execute. We are especially gratified that our new teammates at Countrywide and Merrill Lynch had outstanding performance that contributed significantly to our success," he added.
“However, we understand that we continue to face extremely difficult challenges primarily from deteriorating credit quality driven by weakness in the economy and growing unemployment," Lewis noted.
Bank of America says the Merrill Lynch integration is on track and expected to meet targeted cost savings.
On the company’s Bullboard Monday, Jameso noted: “So much for 13+. It appears the fear of rising uncollectable loans have overshadowed the better than expected expectations. Oh well, it has had some good gains of recent anyways. Overall you can't complain if you bought in a few weeks ago[sic].”
