The bank was upbeat about improving credit markets
Bank of America (BoA) has returned to profit, reporting a net income of $3.2bn (£2.1bn) in the first three months of 2010.
This compares with a $194m loss in the previous quarter, but is 24% lower than profits of the same period a year ago.
The giant US bank said record sales and trading activity at its capital markets arm - including acquisition Merrill Lynch - had driven the latest results.
BoA said it was having to put aside less money for losses on bad loans.
Markets took the news well, and European banks with major capital markets businesses rallied, with Barclays jumping 1.35% and Credit Suisse up 1.3%.
BoA's strong results follow impressive first quarter numbers from JP Morgan, released on Wednesday.
Like JP Morgan, BoA earned the bulk of its income - some $3.2bn - from its business on the global capital markets, which includes former investment bank Merrill Lynch that BoA bought in a rescue acquisition at the height of the crisis.
This has offset losses the US firm made on its more traditional banking businesses of deposit taking and lending.
Record home repossessions
Home foreclosures in the US hit a record in March
Traditional lending in the US mortgage market has proven to be a growing thorn in the side of all the American banks, including BoA.
Losses at the bank's home loan division increased to $2.1bn, up from only $0.4bn a year earlier, as Americans continued to struggle to repay their mortgages.
Hopes that the US housing market might be on the mend were dealt a blow as home repossessions jumped to the highest monthly rate on record in March, according to online property broker RealtyTrac.
With many banks now seeking to dump a large backlog of repossessed houses on the market, the outlook for house prices remains highly uncertain.
However, BoA believes their lending business has turned the corner.
"With each day that passes, the 2010 story appears to be one of continuing credit recovery, and our results reflect a gradually improving economy," said Chief Executive Brian Moynihan.
The bank's credit card business has swung back into profit, making early $1bn, compared with a loss of $1.8bn a year ago.
And although losses in its home loan division continue to rise, the bank decided to reduce the amount of cash it sets aside against future loan losses across the entire bank by some $3.6bn.