[ by Howard Haykin ] Beware, Though.  BofA's "New BAC" Restructuring Program still a Work-In-Progress. Okay, so Bank of America swung to a quarterly profit, largely because of reduced expenses and lower credit losses - which compares quite favorably to the company's huge Q2 loss one year earlier.  The bank, still 2nd-largest in the U.S. (after JPMorgan Chase), $2.5 billion, or 19¢ a share. Second quarter revenues, however, were $22.2 billion, slightly less than expected and below the $22.9 billion generated one year ago.  The weakness in revenue is a sign of the pressures big banks face in expanding their business amid a weak economy and tighter regulations.  But BofA was able to offset those challenges with savings elsewhere.

All told, the bank beat analyst expectations for profits (19¢ vs. 14¢) but fell short for revenues ($22.2 billion vs. $22.9 billion).

FYI, last year's financial difficulties were due largely to hug mortgage-related charges and related credit losses.  The bank has apparently tightened its controls around those areas. BofA's "New BAC" Restructuring Initiative. The bank raised its projected cost-cutting targets under its "New BAC" restructuring initiative, predicting an additional $3 billion in savings by mid-2015.  This would include plans to cut more than 30,000 workers in coming years. As of 6/30/12, the bank's head count stood at 275,000 - for the quarter, a drop of over 3,000;  for the year, a drop of 12,600 employees.

[C-I Note: The results are a concern, because it portends, we believe, to indicate larger drops.  An imagined thought going around the Executive Offices:  "Wow.  Look at "New BAC's" magic.  Given that the first round of cuts were this effective, imagine what the next phases can achieve - particularly because we've got a year's experience under our belts. Who needs high levels of employees, when we can report quarterly profits and provide returns to our shareholders.

Mind you, C-I holds no grudges against shareholders - they deserve to make some money on their investments.  But we're looking at the picture from the employees' side and it's looking more like were can expect some sizable job cuts, and perhaps bonus potential. foreboding.]

The bank also managed to strengthen its balance sheet, which had been a worry of investors last year, when its stock briefly fell below $5 a share.  This helped push up BAC shares 1%, to $8 a share, in Wednesday's pre-market trading.   [Dealbook, 7/18/12]