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Bank of America tops target
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October 15, 2001: 10:16 a.m. ET
No. 3 U.S. bank sees earnings slip, but still tops Wall St. forecasts for 3Q.
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NEW YORK (CNNmoney) - Bank of America saw third-quarter earnings slip but still managed to beat Wall Street expectations for the period Monday.
The nation's No. 3 bank holding company earned $2.1 billion, or $1.28 a diluted share, down from $2.2 billion, or $1.31 a share it earned a year earlier. Analysts surveyed by the research firm First Call were looking for the bank to earn $1.25 a share in the period.
The company, which is based in Charlotte, N.C., said revenue grew 5 percent to $8.7 billion in the period, but that missed First Call forecasts of $8.9 billion. The company said it was helped by a 14 percent increase in net interest income, which overcome a nearly 7 percent decline in non-interest income in the period.
The bank said it is being hurt by a decline in credit quality in the face of the slowing U.S. economy.
Results included $635 million in charge-offs due to its exit from the so-called subprime business - lending to consumers with less than top credit ratings - as well as $135 million in charge-offs from the sale of problem commercial and consumer loans. The company said its allowance for credit losses reached $6.7 billion, or 1.97 percent of loans and leases, up from 1.67 percent a year earlier.
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Separately, Fannie Mae, the No. 1 U.S. home loan financing company, said earnings rose 23 percent in the third quarter as lower interest rates spurred a wave of mortgage purchases and refinancings.
And Northern Trust Corp., which manages money for companies and wealthy individuals, reported third-quarter earnings of $126.6 million, or 55 cents a share, compared with $123.3 million, or 53 cents a share, a year ago. Wall Street expected Northern Trust to earn 57 cents a share, according to First Call.
Northern Trust's assets under management slipped to $327.5 billion in the quarter from $338.3 billion a year ago, while its revenue rose to $551.4 million from $549 million.
Bank of America (BAC: up $2.07 to $55.08, Research, Estimates) and Fannie Mae (FNM: up $1.32 to $78.75, Research, Estimates) shares moved higher in midday trading, while Northern Trust (NTRS: down $0.79 to $49.71, Research, Estimates) shares fell. 
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