Bank of America (BAC), the second-biggest U.S. lender, said profit rose 63%, beating analysts' estimates as the company kept expenses in check.

Second-quarter net income climbed to $4.01 billion, or 32 cents a share, from $2.46 billion, or 19 cents a share, a year earlier, the Charlotte, North Carolina-based firm said today in a statement. The average estimate of 28 analysts surveyed by Bloomberg was 26 cents.

Chief Executive Officer Brian T. Moynihan has said he'll eliminate $8 billion in annual costs by the end of 2014 and $10 billion tied to troubled mortgages a year later. The biggest banks are focused on curbing expenses amid new regulations, higher capital requirements and sluggish lending.

"If they can lower their costs and maintain them, it will really help them down the road when revenues improve and the economy gets better," said Pri de Silva, senior banking analyst at CreditSights Inc. He has a "market perform" rating on the lender's debt.

Moynihan, 53, got Federal Reserve approval in March to repurchase as much as $5 billion in stock, a milestone in his three-year effort to clean up the firm's balance sheet. The bank, which needed a $45 billion bailout during the 2008 financial crisis, has sold $60 billion in assets and spent more than $45 billion to settle claims from faulty mortgages and foreclosures.

The firm had posted only four quarterly profit increases since Moynihan took over in 2010 through March 31, and he told investors in May the bank must produce consistent earnings before raising the quarterly dividend, which has languished at 1 cent since early 2009.

More pressure to build capital may be ahead as U.S. regulators push for bigger cushions against losses. Under the newest proposal, leverage ratios would be pegged at 5% for holding companies, 2 percentage points more than the international minimum, while some subsidiaries would have to hold 6%. The figure represents capital as percentage of total assets.

Bank of America, which became the biggest U.S. mortgage lender after its 2008 takeover of Countrywide Financial Corp., fell to No. 4 last year after Moynihan scaled back the business, missing a surge in refinancings and home purchases.

Now the company is seeking to regain its "fair share" of the mortgage market, Chief Financial Officer Bruce Thompson said last month. Wells Fargo & Co., the biggest U.S. home lender, and JPMorgan Chase & Co., the largest by assets, are predicting home loans will slump for the rest of this year, and the drop in JPMorgan's profit from the business could be "dramatic," according to CEO Jamie Dimon.

After leading the Dow Jones Industrial Average in 2012, Bank of America trails its peers this year. The firm's 20% advance through yesterday to $13.92 a share compares with 25% for the 24-company KBW Bank Index.

Bank of America is the last of the four biggest U.S. lenders to report results. New York-based JPMorgan said earnings rose 31% on trading revenue and San Francisco-based Wells Fargo posted a 19% gain by clamping down on costs, with both firms setting quarterly records. New York-based Citigroup's profit jumped 42% as trading improved and losses on unwanted assets waned.

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