NEW YORK - Bank of America Corp., the second-largest U.S. lender, said third-quarter profit rebounded as the firm curbed legal expenses and more borrowers paid on time.
Net income advanced to $2.5 billion, or 20 cents a diluted share, from $340 million a year earlier when per-share results were break-even, the Charlotte, N.C.-based bank said today in a statement. The average estimate of 24 analysts surveyed by Bloomberg was 21 cents.
CEO Brian T. Moynihan, 54, has said the “lion’s share” of costs tied to disputed mortgages are behind his bank after booking more than $45 billion tied to his predecessor’s 2008 takeover of Countrywide Financial Corp. The bank will trim $8 billion in annual operating costs by the end of 2014 and $10 billion from troubled loans a year later, Moynihan has said.
“They’ve done a fairly good job of convincing the market that those cost savings are going to occur,” said Jonathan Finger, whose family-owned investment company, Finger Interests Ltd., owns 900,000 Bank of America shares. “Their results have gotten cleaner, though a lot of folks still expect some charges going forward.”
Total expenses during the quarter slid 6.6 percent from a year earlier to $16.4 billion because of lower costs in the division servicing troubled loans, staff reductions and litigation costs that fell by 31 percent to $1.1 billion.
Capital levels improved, with the bank saying it expects to exceed new U.S. regulatory minimums -- known as the supplementary leverage ratio -- for the parent company and its two primary banking units.
Revenue rose 5.4 percent to $21.5 billion. Excluding certain accounting adjustments, revenue slid to $22.2 billion from $22.5 billion.
“We saw good loan growth, improved credit quality and record deposit balances,” Moynihan said in the statement.