Originally created 04/15/04

Bank of America's first-quarter earnings up 11 percent

CHARLOTTE, N.C. -- Bank of America Corp. said Wednesday that its first-quarter earnings grew nearly 11 percent, fueled by strong gains in consumer loans, fees, investment and brokerage services, and credit cards.

The bank, which is based in Charlotte, N.C., said net income rose to $2.68 billion, or $1.83 per share, in the quarter. That's up from $2.42 billion, or $1.59 per share, a year earlier.

Analysts surveyed by Thomson First Call had forecast profit of $1.80 per share.

In morning trading, Bank of America shares were down 12 cents at $80.38 on the New York Stock Exchange.

Revenue rose 7 percent to $9.69 billion.

The figures did not include results from Bank of America's merger with FleetBoston Financial Corp., which was completed on April 1.

The bank said it would begin reporting combined earnings with Fleet starting next quarter.

For the first quarter, FleetBoston had earnings of $773 million, or 71 cents a share, compared with earnings of 54 cents a share a year ago, Bank of America said. FleetBoston's revenue climbed to $3.2 billion, which was 15 percent more than the year-ago period.

"Bank of America started the year with good momentum in its businesses," said Ken Lewis, chief executive officer of Bank of America. "We are encouraged by the economic growth we see in the U.S."

Lewis said he looks for good things with the newly merged bank.

"As we look forward to a combined future with Fleet, we are encouraged by the momentum they exhibited in the first quarter," he said. "The integration is ahead of schedule and we remain optimistic about the business."

Last week, Bank of America said it will cut 12,500 jobs - or nearly 7 percent of its 180,000-employee work force - over the next two years.

The cuts were a direct result of the merger, which will create a bank with nearly $1 trillion in assets and operations stretching from North Carolina to New England to California.

The combined bank, which will retain the Bank of America name, will be the third largest in the nation after the J.P. Morgan Chase & Co. merger with Bank One is completed. The combined J.P. Morgan-Bank One will be second is size to Citigroup, the nation's largest financial institution.

Bank of America's first-quarter results included a $285 million pretax charge, or 16 cents per share, for Bank of America's agreement to pay $375 million to settle accusations that it allowed favored clients to improperly trade mutual funds.

The bank also wrote off $106 million in loans and wrote down about $29 million of derivative exposure related to Parmalat, the Italian dairy conglomerate that is enmeshed in a fraud scandal.

On a conference call with analysts, vice chairman James Hance said the bank ended March with approximately $120 million of remaining exposure to Parmalat. The exposure was from loans and derivatives, he said. About $105 million of the total was insured.

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