Bank of America Corp , the largest U.S. bank by assets, reported higher-than-expected second-quarter profit as credit costs declined.
The Charlotte, N.C.-based bank posted net income of $3.1 billion, or 27 cents per share, down from $3.2 billion, or 33 cents per share, a year earlier. Analysts had expected 22 cents per share, according to Thomson Reuters I/B/E/S.
Our quarterly results show that we are making progress on our strategy to align around our three core customer groups -- consumers, businesses and institutional investors, Chief Executive Brian Moynihan said in the company's earnings announcement.
Rival Citigroup Inc is due to report quarterly earnings later Friday morning.
Bank of America's profit beat came despite an 11 percent drop in revenue. Revenue net of interest expenses decreased to $29.4 billion from $33.1 billion.
The bank's shares were down 4.4 percent to $14.71 in premarket trade.
Noninterest income fell 23 percent to $16.2 billion due to lower equity investment and mortgage banking income, and a decline in trading account profits.
But the bank's credit costs declined for the fourth straight quarter. Its provision for credit losses was $8.1 billion, down $1.7 billion from the first quarter and down $5.3 billion from a year earlier.
During the quarter, the bank recognized $1.1 billion in pretax gains from sales of noncore assets, including its main investment stakes in two Latin American banks -- Itau Unibanco and Santander Mexico.
The bank must raise $3 billion through asset sales by year's end as a condition of repayment of its government bailout.
The bank's shares fell 20 percent during the second quarter, outpacing a KBW Bank Index decline of 11 percent, amid an industry sell-off as the U.S. Congress debated financial reform.
(Reporting by Joe Rauch; editing by John Wallace)