Bank of America Corp. said its quarterly profit fell as the second largest U.S. lender by assets was hurt by the continued drag of low interest rates, though the bank's results beat expectations.
Shares edged up 0.4% premarket.
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The Charlotte, N.C.-based lender reported a profit of $4.23 billion, or 36 cents a share. That compares with $5.13 billion, or 45 cents a share, in the same period of 2015. The latest results included 6 cents a share in market-related charges. Analysts polled by Thomson Reuters had expected the bank to earn 33 cents a share.
Revenue fell to $20.4 billion from $21.96 billion a year ago. Adjusted revenue was $20.6 billion, above the $20.41 billion expected by analysts.
Trading revenue, excluding an accounting adjustment, rose 12% to $3.7 billion from $3.32 billion in the second quarter of last year. J.P. Morgan Chase & Co. last week reported a 23% increase in trading revenue, and Citigroup Inc. reported a 15% increase.
Net interest income fell 12% to $9.21 billion from $10.46 billion a year ago.
Expenses declined 3.3% to $13.49 billion from $13.96 billion a year ago. The bank continued to cut jobs and sell or shutter branches.
Things have been relatively calm for the bank and Chairman and CEO Brian Moynihan. Last month, it passed the Federal Reserve's stress test without incident for the first time since 2013. The crisis-era legal fees that dogged earnings have been receding for a couple years.
But now Mr. Moynihan, who has led the bank for six and a half years, is working to pivot to improving earnings, shareholder returns and the bank's stock price. That task has been made more difficult of late by long-term bond yields falling, something that hurts the bank's lending profitability and investments in mortgage securities.
Bank of America's shares have fallen 19% since the start of the year, worse than any peer bank and a steeper fall than the 8% drop in the KBW Nasdaq index of bank stocks.
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