Bank of America earnings decline 31 percent

Net income totaled $3.7 billion, down 32 percent from $5.42 billion in third-quarter 2006. Diluted earnings per share fell 31 percent to 82 cents from $1.18.

The drop in net income was the result of a $1.33 billion decline in earnings in the company’s global corporate and investment banking division, due to significant disruption in the financial markets, according to a company news release. Provision expenses increased by $865 million due to consumer and small-business credit costs rising from post-bankruptcy reform lows, as well as stress in several portfolios driven by the weakened U.S. housing market.

Revenue net of interest expense also declined; revenue dropped 12 percent to $16.3 billion from $18.49 billion in third-quarter 2006.

“While the significant dislocations in the capital markets have hurt most participants, we are still very disappointed in our third-quarter performance,” said Kenneth D. Lewis, chairman and CEO, in a news release. He went on to say that the company is confident that its diverse business offerings will allow for success in the long-term.

Also during the third quarter, retail deposits increased $16.52 billion, or 4 percent, and debit card purchase volume increased 11 percent, while an increase in retail accounts drove service charge income up by 8 percent.

Bank of America shares of stock (NYSE: BAC) closed Wednesday at $50.03, compared to a 52-week range of $46.52 to $55.08. Shares were down to $48.48 as of 9:15 a.m. Central time.