Bank of America Corp.'s second-quarter income fell 5.5% on higher merger charges and continued credit woes, but results topped analysts' expectations.

The banking giant is considered particularly vulnerable to unemployment, and the condition of its mammoth portfolio of credit-card loans could be a bellwether for the rest of the industry. Credit losses were flat during the quarter at $13.38 billion.

Bank of America and others have enjoyed a lift from the mini-boom in mortgage financing, and several other banks that have reported this week have also reported strong results in investment banking.

The company said Friday results were also driven by strong revenue in the wholesale capital markets business and in home loans.

Investors are also still hungry for clues about the state of Bank of America's merger with Merrill Lynch, which it said Friday was on track.

Shares were recently down 2 cents at $13.15 in premarket trading. The stock is still off by half in the last year.

The company posted income of $3.22 billion, or 33 cents a share, down from $3.41 billion, or 72 cents a share, a year earlier. The company had 64% more shares outstanding in the most recent period amid its capital-raising efforts. The periods included $829 million and $212 million, respectively, in merger and restructuring charges.

In part on those acquisitions, revenue jumped 61% to $32.77 billion.

Analysts polled by Thomson Reuters expected earnings of 28 cents and revenue of $33.1 billion.

The company didn't break out an earnings number for Merrill Lynch on its own, but said it would likely achieve about 40% of its goal of $7 billion in cost savings from the merger this year, compared with its original goal of 25%.

Credit-loss provisions more than doubled from a year earlier, while the net charge-off rate surged to 3.64% from 1.67% a year earlier and 2.85% in the first quarter. Credit-card managed losses increased to 11.7% from 5.96% a year ago, and total nonperforming assets rose to 3.31% from 1.13% in the prior year and 2.64% last quarter.

The company said it extended more than $211 billion in new credit during the period, with $78 billion to commercial non-real-estate intents and another $111 billion for mortgages. Bank of America has said it is beefing up its mortgage operations to meet demand in recent months as rates fell to historic lows. But most mortgage activity industrywide has been for refinancings, not for home purchases.

Bank of America's tangible common equity ratio, which measures how much of a bank's hard assets its common shareholders actually own, rose to 4.7% from 3.2%. Its tier one capital ratio, a key measure of financial strength, jumped to 12% from 8.3%.

The bank was ordered to raise common-equity ratios by $33.9 billion by the U.S. Treasury Department following its stress test of the 19 largest financial institutions by assets. The company has been exchanging preferred stock for common shares and has sold some assets, and has said in recent months it will easily be able to raise the mandated amount. It said Friday it had increased Tier one capital by nearly $40 billion.

Meanwhile, since late April, seven of the company's board members have resigned amid calls for improved corporate governance.

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