Bank of America's first quarter profits at $2.8 billion

Bank of America Corp. this morning said it made a profit of $2.8 billion in the first quarter, after paying $1.4 billion in preferred dividends, a significant turnaround from a $2.4 billion loss in the fourth quarter of last year.

The results were another glimmer of hope for the banking industry, but they also showed the financial sector still faces tough times. Bank of America's problems loans continued to rise as borrowers struggle in the recession. The bank's profit was also helped by a one-time gain from selling shares in China Construction Bank, a write-up on Merrill Lynch debt, and recent changes in accounting standards.

The report for the first time includes numbers from Merrill Lynch & Co., which Bank of America bought Jan. 1. That deal has brought the Charlotte bank shareholder lawsuits and regulatory probes into bonuses, but in the first quarter it contributed $3.7 billion in net income, not including merger costs, on strong capital markets revenue.

Bank of America made $1 billion after preferred dividends in the first quarter of 2008. Those results did not include Merrill Lynch or mortgage lender Countrywide Financial Corp., which the bank acquired July 1.

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