Bank of America Corp. swung to a third-quarter profit over a prior-year period hammered by a sizable write-down as the bank also posted an increase in revenue.
The nation's largest bank by assets has faced a mountain of troubles related to its acquisition of mortgage lender Countrywide Financial in 2008. The Countrywide deal turned the lender into one of the nation's largest mortgage players yet also saddled it with hundreds of thousands of delinquent loans and an array of lawsuits.
Now the bank is working to strip itself of noncore assets to narrow its focus and boost its capital cushion. Recent transactions include the sale of half its stake in China Construction Bank Corp. for $8.3 billion, as well as an agreement to sell its $8.6 billion Canadian consumer credit-card portfolio.
Bank of America reported a profit of $6.23 billion, compared with a year-earlier loss of $7.3 billion. On a per-share basis, which includes the payment of preferred dividends, the bank reported earnings of 56 cents compared with a loss of 77 cents a year earlier.
The most-recent quarter included, among other things, $4.5 billion in positive fair value adjustments on structured liabilities and a pretax gain of $3.6 billion from the sale of shares of China Construction Bank. The bank also booked a $1.7 billion gain tied to a change in the valuation of its own debt. Recently reported JPMorgan Chase & Co. and Citigroup Inc. have also reported earnings boosts from such adjustments.
Prior-year results included a goodwill impairment charge of $10.4 billion. Excluding the writedown, the bank reported a profit of $3.1 billion, or 27 cents a share, a year earlier.
Revenue in the latest period improved 6.6% to $28.45 billion.
Credit-loss provisions were $3.41 billion, down from $5.4 billion a year earlier but above $3.26 billion in the prior quarter. The net charge-off rate was 2.17%, from 3.07% and 2.44%, respectively.
Shares were down 2.7% to $5.87 in recent premarket trading. The stock is down 55% since the start of the year.
