Surry Business

For and about business in Surry County, N.C., including Dobson, Elkin, Lowgap, Pilot Mountain and Mount Airy

Surry Business random header image

Bank of America’s income plunges in third quarter

October 19th, 2007 · No Comments

Bank of America Corp. (NYSE: BAC) reported Thursday that third-quarter net income declined 32 percent to $3.70 billion from $5.42 billion a year earlier. Diluted earnings per share fell 31 percent to $0.82 from $1.18.

The lower net income resulted from a $1.33-billion decline in earnings in global corporate and investment banking “given the significant disruption in the financial markets during the quarter” including rising costs for consumer and small business credit and stress in several portfolios driven by the weakened U.S. housing market.

“While the significant dislocations in the capital markets have hurt most participants, we are still very disappointed in our third quarter performance,” said Kenneth D. Lewis, chairman and chief executive officer. “However, the majority of our businesses experienced solid revenue growth as sales momentum continued, demonstrating the value of our diverse business mix. We continued to invest in our businesses for the long term and to introduce innovative products and services to differentiate Bank of America in the marketplace.

“While we cannot predict the near term, I am confident that such innovation and execution combined with the advantages of scale and reach are the formula for future success.”

The news was not all bad. Total sales of retail products rose 12 percent, generated by strong growth in sales of first mortgages, checking and savings accounts and online banking activations. Net new retail checking accounts grew to a record 757,000. Retail deposits increased $16.52 billion, or 4 percent. Debit card purchase volume increased 11 percent and an increase in retail accounts drove service charge income higher by 8 percent. First mortgage originations rose 27 percent. Average loans and leases in business lending increased 9 percent to nearly $240 billion. Total unit sales to small businesses with less than $2.5 million in annual sales rose 24 percent, while average deposits grew 9 percent.

Total shareholders’ equity was $138.51 billion at Sept. 30. Period-end assets were $1.6 trillion.

During the quarter, Bank of America paid a cash dividend of $0.64 per share. The company also issued 9.5 million common shares related to employee stock options and ownership plans and repurchased 9.6 million common shares.

Bank of America is one of the world’s largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company has more than 5,700 retail banking offices including one in Surry County at 704 Independence Boulevard, Mount Airy.

Tags: Finance

0 responses so far ↓

  • There are no comments yet...Kick things off by filling out the form below.

Leave a Comment