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Bank of America: Residential Activity Driving Growth

Bank of America reported $22.3 billion in revenue in Q4 2019 along with increased loan activity. Residential mortgages drove Bank of America’s $21B billion year-over-year increase in loan activity, up to $311 billion in Q4 2019.

“In a steadily growing economy marked by solid client activity, our teammates produced another strong quarter and year, allowing us to increase investments in our customers, communities, and employees, while keeping a close eye on expenses,” said Bank of America Chairman and CEO Brian Moynihan in a statement. “We also delivered for shareholders in 2019 by returning a record $34 billion in excess capital through dividends and share repurchases. As evidenced by a quarter in which our customer deposits surpassed $1.4 trillion and client balances in our wealth management business topped $3 trillion, we enter 2020 with momentum.”

Bank of America’s total volume of nonperforming loans, leases and foreclosed properties decreased year over year. As of December 31, 2019, the bank holds $3.837 billion in nonperforming loans, leases and foreclosed properties, down from 2018’s $5.2 billion.

In Q4 2018, nonperforming loans, leases and foreclosed properties made up 0.56% of Bank of America’s total loans, leases, and foreclosed properties. That percentage dropped to 0.39% as of Q4 2019.

“The company managed well through a period of transition from rising rates to lower rates over a short period of time,” said Bank of America CFO Paul Donofrio. “Solid client activity in growing loans and gathering deposits helped us offset spread compression. We also are aided by diverse lines of business and operations, with noninterest income comprising nearly half of our revenue.”

Bank of America was recently granted a no-action letter (NAL) by the Consumer Financial Protection Bureau regarding the bank’s funding arrangements with housing counseling agencies (HCAs) certified by the U.S. Department of Housing and Urban Development.

About Author: Seth Welborn

Seth Welborn is a Harding University graduate with a degree in English and a minor in writing. He is a contributing writer for MReport. An East Texas Native, he has studied abroad in Athens, Greece and works part-time as a photographer.
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