Bank of America earnings: Good and bad, half-empty half-full

Bank of America (NYSE: BAC) is indicated slightly higher in pre-market trading after beating earnings estimates. The largest U.S. bank posted $1.28 EPS and revenues came in at $19.96 billion. That is higher from First Call estimates of $1.20 EPS and $18.6 billion revenues, and up from $1.19 EPS and $18.5 billion revenues in Q2 2006.

Consumer and small business banking, corporate and investment banking and wealth and investment management were listed as the reasons for the boost in earnings. Perhaps the company should focus more on its brokerage operations now that it is as close to the U.S. deposit limit of 10%. Investment banking revenue rose 26% from a year ago period, retail product sales added 8% and non-interest income rose 17% to $11.18 billion.

The banking giant didn't claim to be immune to credit losses at all, as it boosted provisions for loan losses. It has set aside $1.81 billion overall for credit losses, up from $1.24 billion in the first quarter and $1.01 billion in the second quarter of 2006, and its net charge-offs rose to $1.5 billion. Those are some pretty large increases if you do the math on total earnings and revenues.

Bank of America has fallen behind in the market cap race with Citigroup (NYSE:C): B of A has a $219 billion market cap and Citigroup has a $255 billion market cap.

Jon Ogg is a partner at 24/7 Wall St.; he does not own securities in the companies he covers.