(Bloomberg) — Bank of America Corp. beat analysts’ earnings estimates as fees climbed at the company’s dealmaking unit, boosted by a record-breaking period for mergers and acquisitions.

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Investment-banking advisory fees rose 65% to a record $654 million in the third quarter as a combination of cheap financing for buyers and attractive valuations for sellers spurred a wave of takeovers. Overall investment-banking fees were up 23% to $2.2 billion, with firms leaning on the company to handle their debt and equity financing.

“The economy continued to improve and our businesses regained the organic customer growth momentum we saw before the pandemic,” Chief Executive Officer Brian Moynihan said in a statement Thursday. “Deposit growth was strong and loan balances increased for the second consecutive quarter, leading to an improvement in net interest income even as interest rates remained low.”

Government aid programs that kept consumers and businesses afloat during the pandemic had cut into loan growth at financial firms. That trend, combined with historically low interest rates meant to bolster the economy, has weighed on the profitability of banks’ core lending businesses.

But there are signs of a turnaround. Loans and leases rose 1% from the previous quarter to $927.7 billion. That’s more than analysts’ estimates of $923.9 billion. The bank is expecting more loan growth across all its products, Chief Financial Officer Paul Donofrio said on a conference call with reporters Thursday.

Net interest income, or revenue from customer loan payments minus what the company pays depositors, rose 10% to $11.1 billion. In April, the bank forecast that NII would be about $1 billion higher by the end of the year than the $10.3 billion it posted in the first quarter. By the second quarter, NII had slipped slightly to $10.2 billion.

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“We grew revenues faster than expenses, producing year-over-year operating leverage in every business segment,” Donofrio said in the statement. NII improved, “despite a challenging rate environment, and our fee-based businesses continued to benefit from robust markets.”

While it’s too early to comment on fourth-quarter investment-banking results, the M&A pipeline “remains at elevated levels” and is almost as high as the record pipeline at midyear, Donofrio said on a the media call.

Sales and trading were also a bright spot for the bank, rising about 9% from a year earlier to $3.6 billion. The total was boosted by equities-trading revenue, which rose 33% to $1.6 billion.

Bank of America shares, which gained 42% this year through Wednesday, advanced 2.9% to $44.38 at 8:09 a.m. in early New York trading.

Also in Bank of America’s results:

  • With the risk of widespread loan defaults fading further, Bank of America released $1.1 billion in reserves in the third quarter. That follows a $2.2 release in the second quarter.

  • Noninterest expenses were little changed at $14.4 billion.

  • Net income rose 58% to $7.7 billion, or 85 cents a share. Analysts estimated 71 cents, on average.

(Updates with CFO comments, trading starting in fifth paragraph.)

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