Bank of America Corp. reported a second-quarter profit on Wednesday as the second-largest U.S. bank cut costs and reduced reserves for loan losses.

Net income was $2.5 billion, or 19 cents a share, compared with a loss of
$8.8 billion a year earlier, when the bank took $20.7 billion in
mortgage-related and other charges.

The Charlotte, N.C.-based bank has lagged its peers in recovering from the
financial crisis, largely due to losses tied to its 2008 purchase of subprime
lender Countrywide Financial.

Total revenue declined to $21.97 billion, from $22.28 billion in the first
quarter but up from $13.24 billion a year ago. Banks are struggling to boost
revenue amid weak demand, low interest rates and new regulations crimping fees.

To boost profits, Bank of America last year launched a cost-cutting program
called Project New BAC. On Wednesday, the bank said the second phase of the
initiative, which covers capital markets, commercial banking and wealth
management areas, aims to reap $3 billion in annual savings by mid-2015.

The bank last year said the first phase, which focuses on consumer
businesses and information technology, was expected to save $5 billion per year
and eliminate 30,000 jobs.

The cost-cutting drive showed results in the second quarter as expenses fell
to $17 billion, from $22.9 billion a year ago and $19.1 billion in the first
quarter.

"In a challenging global economy, we still see opportunities to do more
with our customers and clients. Lending to commercial businesses increased for
the sixth straight quarter — with small business lending and commitments up 23
percent in a year — and consumer credit is in the best shape in years,"
Chief Executive Officer Brian Moynihan said.

The bank’s provision for loan losses fell to $1.77 billion, its lowest level
since the first quarter of 2007, compared with $3.26 billion a year ago.