Bank of America said its profits grew 19% in its most recent quarter, the latest of the big banks to see its bottom line boosted by higher interest rates.

The nation's second-largest bank by assets said Tuesday that it posted a profit of $7.4 billion in the three months ended June 30, up from $6.2 billion in the same period a year earlier. On a per-share basis, BofA earned 88 cents, compared with 73 cents one year ago. Analysts were expecting profit of 84 cents per share, according to a poll by FactSet.

Revenue of $25.2 billion came in just ahead of targets.

Like its major competitors, BofA has benefitted from wealthy clients, businesses and other customers moving deposits to the bank in search of safety after this spring's bank failures. The nation's biggest banks are seen as having an implicit government backstop, due to their "too big to fail" status among the country's financial institutions.

The Federal Reserve has raised its benchmark interest rate to a range of 5% to 5.25% from near zero starting in March 2022. Those higher interest rates have allowed banks to charge more for customers to borrow. Bank of America's net interest income rose 14% to $14.2 billion in the second quarter.

BofA executives told investors on a conference call that the bank expects net interest income for the full year to be slightly more than $57 billion, an increase of more than 8% over 2022.

The rise in interest rates also means banks are competing for depositors for the first time in years, as customers seek higher payouts. BofA CEO Brian Moynihan said that while some customers have moved money into higher paying certificates of deposit, the average deposit balance at BofA still remains well above pre-pandemic levels.

Regional banks are more exposed to the competition for deposits. PNC Financial, based in Pittsburgh, said Tuesday that interest-bearing deposits made up 73% of all deposits in the second quarter, up from 67% a year ago, and the average rate paid on those deposits increased to 1.96% from 0.12%. The bank also lowered expectations for growth in net interest income for the year to 5% to 6%, saying it expects to pay out more for deposits while seeing "modestly lower loan growth."

When the banking crisis hit in the spring, regional banks such as PNC borrowed from the federal government to shore up their balance sheets. PNC said those additional funding costs helped lower net interest income in the second quarter compared to the first quarter.

Bank of America's trading revenue rose in the second quarter, in contrast to double-digit declines in trading revenue at Morgan Stanley, JPMorgan and Citigroup. Morgan Stanley said Tuesday that profit fell 13% in the second quarter as the company paid out more than $300 million in severance costs. The company cut about 3,000 employees during the quarter.

Morgan Stanley's results still topped Wall Street expectations and its shares jumped more than 5%.

Charlotte, North Carolina-based BofA set aside roughly $602 million to cover potentially bad loans in the quarter. Many banks have been increasing their so-called loan loss reserves the last few quarters as customers start borrowing again after not doing so during the pandemic, and inflation starts stretching household budgets.

The bank's total expense for the quarter was $16 billion, including about $276 million in litigation costs. Earlier this month, two government agencies said they ordered BofA to reimburse customers more than $100 million and pay $150 million in fines for "double-dipping" on overdraft fees, withholding reward bonuses on credit cards and opening accounts without customer consent.

BofA's unrealized losses rose by $7 billion to $106 billion in the period. Those losses, which reflect bonds it intends to hold for maturity, were driven by a more than half-point increase in mortgage rates, bank executives told investors.

Shares of Bank of America Corp. rose 4.7% to $30.78 per share in morning trading Tuesday. Shares of PNC rose 2.7%.