Based on early pre-market trading, Bank of America Corporation’s (NYSE BAC) failed to impress, although the number beat Wall St. estimates. It may be that the results of JPMorgan Chase (NYSE:JPM) set the bar too high.
B of A reported first-quarter 2010 net income of $3.2 billion compared with a net loss of $194 million in the fourth quarter and net income of $4.2 billion a year earlier. After preferred dividends, the company earned $0.28 per diluted share in the first quarter, up from a loss of $0.60 per share in the fourth quarter and earnings of $0.44 per share in the first quarter of 2009.
Strong capital markets activity, including record sales and trading driven by industry-leading corporate and investment banking positions, helped drive results for Global Banking and Markets. In other words, the commercial banking, consumer and business lending sectors are still moribund and big banks do not want to take any loan risks that might damage their balance sheets.
Allowance for loan and lease losses soared to $46.8 billion from $29 billion last year. Non-performing loans moved from $25.6 billion last year to $39.5 blllion in the most recent quarter.
In other words, B of A won’t loan money and still has real estate problems. Its only salvation was investment banking
Douglas A. McIntyre
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