Bank of America 4Q earnings jump nearly five-fold

Published on NewsOK Modified: January 15, 2014 at 9:10 am •  Published: January 15, 2014
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NEW YORK (AP) — Bank of America Corp. said Wednesday that its fourth-quarter profit jumped from a year earlier, as the loans on the bank's balance sheet continued to improve.

The nation's second-largest bank earned $3.44 billion in the October to December period, up from $732 million a year earlier. On a per-share basis, the bank earned 29 cents, beating the 26 cents expected by financial analysts. Fourth-quarter revenue rose to $22.32 billion from $19.6 billion, exceeding analysts' forecasts of $21.2 billion.

FEWER BAD LOANS: The bank's profits got a big boost because Bank of America was able to significantly reduce the amount of money it holds on its balance sheet to protect itself from bad loans. The bank's provision for credit losses fell to $336 million from $2.2 billion in the same period a year earlier. Even BofA's mortgage division, which took huge losses after the housing bubble popped, improved. The number of mortgages that were delinquent 60 days or more fell 58 percent from a year ago. "We enter this year with one of the strongest balance sheets in our company's history," Bank of America Chief Financial Officer Bruce Thompson said in a prepared statement.

MORTGAGE DEMAND SLOWS: Like JPMorgan Chase and Wells Fargo, Bank of America saw a slowing in its mortgage origination business last year. Mortgage-originations fell by 46 percent in the fourth quarter from a year ago. Over the summer, mortgage rates started to rise, which stopped consumers from refinancing their home loans. Mortgage giant Freddie Mac said last week that the average 30-year fixed rate mortgage had an interest rate of 4.51 percent, compared to 3.35 percent in May of 2013.

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