Bank of America beats predictions
Retail banks reported earnings at or above analysts’ expectations on Wednesday, with profits driven by gains in mortgages, credit card portfolios and other areas. Bank of America reported fourth-quarter profits of $2.61 billion, or $1.69 a share, up 27 percent from $2.05 billion, or $1.28 a share a year earlier. Analysts surveyed by Thomson First Call had expected the bank to earn $1.63 per share.
The bank, which is based in Charlotte, N.C., said earnings were fueled by growth in consumer banking revenue and tight expense controls.
Fourth-quarter earnings also were boosted by after-tax income of $488 million from a previously announced tax settlement.
Bank of America said gains in mortgages, debit and credit cards, and deposits, were offset somewhat by continued losses in revenue from the weak stock market.
Vice chairman and chief financial officer Jim Hance told analysts on a conference call Wednesday the bank’s earnings outlook for 2003 depends on the health of the economy and global events, including the possibility of war.
For the year, Bank of America reported net income of $9.25 billion, or $5.91 a share. The company reported net income of $6.79 billion, or $4.18 a share, in 2001.
Expenses were down 9 percent from a year earlier to $4.83 billion, primarily due to tightened expense control, lower legal expenses and other measures, the bank said.
Fifth Third Bancorp of Cincinnati reported earnings of $423.6 million, or 72 cents a share, for the fourth quarter, up from $385.7 million, or 65 cents a share, a year earlier. Profits were driven by the banking company’s expansion into new markets.
The earnings were in line with projections from analysts surveyed by Thomson First Call.
In afternoon trading, Fifth Third’s shares were down $2.39, or nearly 4 percent, at $59.42 on the Nasdaq stock market.
In recent years, Fifth Third has bought banks in Fort Myers, Fla., as well as in the Chicago, Indianapolis and Detroit markets.
Earnings for all of 2002 totaled $1.63 billion, or $2.76 per share, up from $1.3 billion, or $2.37, in 2001. The 2001 figures exclude merger charges and an accounting change.
Fifth Third has $81 billion in assets and banking operations in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee and West Virginia.
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