Bank of America overall reported $4.9 billion in net income in Q1 [1], 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 [2] 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.