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Bank of America Posts Solid Q1 Gains

Bank of America overall reported $4.9 billion in net income in Q1, a 40 percent increase in net revenue driven by expanded consumer loans and gains in both net interest and noninterest income. Earnings per share also increased by 46 percent, to $.041.

Net interest income increased 5 percent to $11.1 billion, “reflecting benefits from higher interest rates, as well as growth in loans and deposits,” the report stated. Noninterest income increased nine percent to $11.2 billion, driven by higher sales and trading results and record Q1 investment banking fees

Consumer banking was a major boost to the bank’s Q1 earnings. Loans were up $18 billion while deposits were up $64 billion. Brokerage assets increased 21 percent and total credit/debit card spending was up 5 percent. Q1 included $1.4 billion in annual retirement-eligible incentive costs and seasonally elevated payroll tax compared to $1.2 billion in Q1 of 2016.

Average loan balances in business segments rose $44 billion (6 percent) to $819 billion. Total average deposit balances increased by five percent to $1.26 trillion. Nonperforming loans decreased $433 billion from Q4, driven primarily by consumer NPL sales.

One of the few decreases in Q1, compared to a year ago, was in total mortgage production. The bank saw total mortgage production of $15.5 billion in Q1, down about $900 million compared to last year. Average loans and leases were down 20 percent overall. Residential mortgages comprised $69 billion in Q1, down from $87 billion a year ago.

The bank reported record revenue of $5 billion in global banking in the quarter. Global banking loans increased $11 billion. In global wealth management, total client balances increased $119 billion to nearly $2.6 trillion and loans were up $9 billion.

All in all, this helped Bank of America end the first quarter with a seven percent revenue rise to $22.2 billion. At the same time, despite “higher revenue-related compensation expenses,” total expense was flat at $14.8 billion, the report stated. Q1 included $1.4 billion in annual retirement-eligible incentive costs and seasonally elevated payroll tax, compared to $1.2 billion a year ago.

Provision for credit losses declined 16 percent to $835 million.

About Author: Scott Morgan

Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He's been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing.
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