Bank of America tops forecasts

Bank of America was the fifth major bank to report results Wednesday.

NEW YORK (CNNMoney) -- Bank of America reported third-quarter results Wednesday that beat expectations, driven by mortgage lending, trading and investment banking.

Revenue from the refinancing and origination of home mortgages increased 12% from the second quarter and 18% from a year earlier.

But the mortgage lending unit still failed to turn a profit during the quarter, as the cost of managing the bank's delinquent and defaulted loans -- legacies of the financial crisis -- continues to drag down the mortgage lending unit.

"Our strategy is taking hold even as we work through a challenging economy and continue to clean up legacy issues," said CEO Brian Moynihan, in a statement.

Bank of America also cashed in on the global corporate refinancing boom. Fees in the investment banking division jumped 17% from the second quarter and 44% from the third quarter of 2011.

Overall, the bank increased both its deposits and its lending from the prior quarter. Deposits grew 2.7%, and lending increased 8%.

Still, the bank remains mired in litigation from the financial crisis. A $1.6 billion litigation expense dragged down profits this quarter.

Bank of America reported a third-quarter profit of $340 million, which translated to $0.00 per share, on revenue of $22.5 billion. Analysts expected the bank to generate a net loss of 7 cents per share, on $21.9 billion of revenue.

Related: Citigroup names new CEO as Vikram Pandit steps down

In premarket trading, the bank's stock rose more than 2%. Shares of Bank of America (BAC, Fortune 500) are up 70% this year, after dropping precipitously in 2011.

Bank of America is the fifth major bank to report earnings, following JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500), Citigroup (C, Fortune 500), and Goldman Sachs (GS, Fortune 500). All four banks also beat expectations. Morgan Stanley (MS, Fortune 500) reports Thursday.

First Published: October 17, 2012: 7:30 AM ET

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