Bank of America (NYSE: BAC) had a so-so quarter, which was slightly disappointing compared to the outperformance of big banking competitors Citigroup
For the quarter, earnings per share excluding merger charges increased 8% over last year to $1.17. On the bright side, noninterest income rose 10%, helped by strong showings in debit cards, investment and brokerage services, investment banking, and wealth management. On the other hand, net interest income fell 6%, partially because of a shift to higher cost deposits thanks to the competitive deposit environment.
For the most part, credit quality was stable, with no major red flags in the main ratios. Net charge-offs in the residential mortgage portfolio were for the most part negligible. Although management had previously remarked that its proprietary trading desks would take a hard look at subprime loans if the price was right, the company so far hasn't made any sizable inroads into this area.
As we saw at American Express
Related Foolishness:
- The Best Financial Stock for 2007 Is ...
- This Is When You Sell
- Foolish Forecast: Bank of America Goes Organic
Bank of America and JPMorgan Chase are
Motley Fool Income Investor
recommendations. Try any one of our investing services free for 30 days.
Fool contributor Emil Lee is an analyst and a disciple of value investing. He doesn't own shares in any of the companies mentioned above. Emil appreciates your comments, concerns, and complaints. The Motley Fool has a disclosure policy.