BofA’s Merrill Unit Doubles Profits

Bank of America Merrill Lynch’s global wealth and investment management unit posted a first-quarter profit of $547 million, more than doubling the $259 million it earned in the fourth quarter, and the second-highest quarterly profit since the Merrill acquisition in 2008.

Company officials credited higher revenue, up 4.6% sequentially to $4.36 billion, lower credit costs and lower expenses for the impressive improvement compared to the fourth quarter.

However, the unit’s total revenue actually declined from the $4.5 billion it recorded in the year-ago quarter and net income was only up $5 million from the $542 million it earned in the first quarter of 2011.

Client balances increased $102 billion, or $4.8%, a direct reflection of the stock market’s strong performance in the first quarter. Long-term assets under management net flows rose to $7.8 billion, also the second-highest level since the merger, and pre-tax margins checked in at 19.8%.

The wealth management group’s performance largely mirrored the overall performance for Bank of America in the first quarter.

Excluding a flurry of one-time accounting charges, Bank of America reported net income of $653 million, or $0.03 a share, down from $2 billion, or $0.17 a share, in the year-ago quarter.

Still, the bank’s operating income came in at $3.6 billion, or $0.31 a share, ahead of the consensus analyst forecast of $0.12, while the $27.3 billion in total revenue garnered in the first quarter matched most analysts’ estimates.

Bank of America officials said its total number of client-facing professionals increased for the 11th consecutive quarter and it now employs 17,487 financial advisors.

Bank of America (NYSE: BAC) shares were up $0.12 a share to $9.04 in early-afternoon trading. The stock has been on a tear so far this year, up more than 60%, and was the best-performing Dow component stock in the first quarter.

Larry Barrett writes for Financial Planning.