Bank of America swings to a profit

Bank of America reported a profit that topped forecasts and strength in its consumer banking division.

NEW YORK (CNNMoney)

Shares of Bank of America (BAC, Fortune 500) were up in premarket trading.

Despite the unfolding debt ceiling crisis in Washington, CEO Brian Moynihan sounded upbeat "The economy and business climate will improve even more quickly as conditions normalize, and we are well positioned to benefit from that," Moynihan said in a release.

Related: Citigroup's weak earnings disappoint

Bank of America managed to beat analysts' profit expectations for the third quarter, but it failed to meet revenue forecasts.

The slowdown in mortgage lending weighed on Bank of America's revenues. However, cost cutting and $800 million from the sale of its stake in China Construction Bank (CICHY) helped Bank of America generate a profit.

Unlike most of the big banks that have reported earnings so far, Bank of America reported increased revenues in its consumer banking franchise. Small business lending rose more than 31% from last year.

Revenues dipped slightly in the bank's global markets business, which includes trading. Profits fell in that unit too. Bank of America's stock trading revenues increased but not by enough to offset the dip in bond trading that has hit all the major banks.

Related: JPMorgan posts loss on big legal costs, but ...

The key numbers: Bank of America reported earnings of 20 cents per share on revenues of $21.7 billion. Analysts had expected the bank to report a profit of 18 cents per share on revenues of $22 billion.

Bank of America's stock is up 23% this year. Financial firms have been among the biggest winners in the market rally this year despite concerns about rising interest rates and the debt ceiling drama.

But third quarter results from rivals JPMorgan Chase (JPM, Fortune 500), Wells Fargo (WFC, Fortune 500) and Citigroup (C, Fortune 500) have been mixed.

Investment banks Goldman Sachs (GVP) and Morgan Stanley (AACXX) will report earnings later this week.

First Published: October 16, 2013: 7:34 AM ET

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