The nation’s second-largest bank reported net income of $7.4 billion, or 88 cents per diluted share, beating analyst expectations of 84 cents per diluted share.
The second-quarter earnings were also 19% more than the $6.2 billion, or 73 cents per diluted share, reported a year earlier. The results were down 9.8% from net income of $8.2 billion, or 94 cents per diluted share, in the first quarter of this year.
Total revenue, net of interest expense, in the quarter increased 11% from a year earlier to $25.2 billion, though that was down 3% from the first quarter.
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Net interest income rose $1.7 billion, or 14%, year over year to $14.2 billion, driven primarily by benefits from higher interest rates and loan growth, the bank said.
Noninterest income of $11 billion increased $795 million, or 8%, year over year as higher sales and trading revenue more than offset lower service charges and investment and brokerage fees, it said.
Residential mortgage originations rebounded in the second quarter to $5.9 billion, up $2 billion, or 51%, from the first quarter. Originations were still down 59% from $14.5 billion in the second quarter of last year.
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“We delivered one of the strongest quarters and first-half net income periods in the company’s history, ” Bank of America Chairman and CEO Brian Moynihan said. “Continued organic client growth and client activity across our businesses complemented beneficial impacts of higher interest rates and produced an 11% increase in revenue.”
He continued, “We continue to see a healthy U.S. economy that is growing at a slower pace, with a resilient job market. All businesses performed well, and we saw improved market shares, particularly in our Sales and Trading and Investment Banking businesses. A strong balance sheet and ample liquidity allowed us to continue investments in our franchise to drive long-term value for stakeholders.”
“Our focus remains on growing our businesses organically by deepening existing client relationships, establishing new relationships, and driving operating leverage, ” he said. “We did that again in the second quarter, producing our eighth consecutive quarter of operating leverage.”
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Bank of America’s second-quarter results followed on reports released Friday by JPMorgan Chase and Wells Fargo, both of which also beat analyst expectations.
The earnings report also follows an agreement Bank of America reached with federal regulators last week to pay $250 million in fines and compensation to settle claims that it double-charged customers fees, withheld credit card perks, and opened accounts without customer approval.
The Hollywood, Florida-based A&D Mortgage announced the arrival of two new account executives this week. Greg Ciprut and Catrina Hegarty were welcomed to the team in a strategic move by the Non-QM lender to expand its suite of conforming products, including convention...
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First-time homebuyers may easily forget there are home expenses outside of principal and interest payments on their mortgage that can go up and down with inflation, including maintenance, improvements, utilities, property taxes, and insurance. In other words, the true cost o...
Of more than 500 counties analyzed by ATTOM, 97.8% are less affordable in the first quarter of 2024 than their historic averages.Federal Reserve Chair Jerome Powell told Congress earlier this month he favors upping rates in order to help rein in runaway inflation. In preparation of the first hike, which is expected today, financial markets are already pricing in higher mortgage rates. As of Friday, the average 30-year fixed mortgage rate sits at 3.85%—up from 3.11% in December.
Spiking mortgage rates should help to cool the red-hot housing market, right? Not so fast, predicts a report due out this week by Bank of America.
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While higher mortgage rates would price out some buyers, Bank of America says it won’t be enough to stop the housing market from posting strong home price growth this year. Indeed, Bank of America predicts that U.S. home prices will finish 2022 up 10%. That’s nearly double the average annual home price growth (4.6%) posted since 1989. However, it would be a bit of a deceleration: Between December 2020 and December 2021, the Case-Shiller U.S. National Home Price Index—the leading measurement of U.S. home prices—jumped 18.8%.
Why the bullish 2022 outlook? While climbing mortgage rates could pour some cold water on the housing market over the long term, Bank of America says it could increase buyers’ urgency—as they rush to lock in rates—in the short term. Rising household incomes, favorable demographics, and “shifting preferences due to remote work” should also put upward pressure on price growth, writes Bank of America. That demand is something the supply side of the market—which is still hovering around four-decade lows for housing inventory—simply can’t handle.
“We currently expect 10% appreciation in Case-Shiller home prices this year, largely due to the historical supply/demand imbalance, though risks may be for high single digits, ” writes Bank of America.
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The good news for home shoppers? Next year could bring some relief. Bank of America predicts that U.S. home prices will rise just 5% in 2023. That would put home price growth back into a normalized rate of appreciation and would likely result in fewer bidding wars.
But home sellers and buyers alike should take Bank of America’s forecast with a grain of salt. Over the past two years, real estate firms have struggled to pinpoint where the housing market was headed. At the onset of the pandemic in 2020, Zillow and CoreLogic both predicted that home prices would fall by spring 2021. Not only did prices not fall during the pandemic, they’ve gone on the hottest run in tabulated history.
Never miss a story: Follow your favorite topics and authors to get a personalized email with the journalism that matters most to you.The annual cost of a loan to a borrower. Like an interest rate, an APR is expressed as a percentage. Unlike an interest rate, however, it includes other charges or fees (such as mortgage insurance, most closing costs, points and loan origination fees) to reflect the total cost of the loan.
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An amount paid to the lender, typically at closing, in order to lower the interest rate. Also known as mortgage points or discount points. One point equals one percent of the loan amount (for example, 2 points on a $100, 000 mortgage would equal $2, 000).
The estimated monthly payment includes principal, interest and any required mortgage insurance (for borrowers with less than a 20% down payment). The payment displayed does not include amounts for hazard insurance or property taxes which will result in a higher actual monthly payment. If you have an adjustable-rate loan, your monthly payment may change once every six months (after the initial period) based on any increase or decrease in the Secured Overnight Financing Rate (SOFR) index, published daily by the New York Fed. Note: Bank of America is not affiliated with the New York Fed. The New York Fed does not sanction, endorse, or recommend any products or services offered by Bank of America.
Also called a variable-rate mortgage, an adjustable-rate mortgage has an interest rate that may change periodically during the life of the loan in accordance with changes in an index such as the U.S. Treasury-Index (T-Bill) or the Secured Overnight Financing Rate (SOFR) published daily by the New York Fed. Bank of America ARMs generally use SOFR as the basis for ARM interest rate adjustments. Note: Bank of America is not affiliated with the New York Fed. The New York Fed does not sanction, endorse, or recommend any products or services offered by Bank of America.
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Your monthly payment may fluctuate as the result of any interest rate changes, and a lender may charge a lower interest rate for an initial portion of the loan term. Most ARMs have a rate cap that limits the amount of interest rate change allowed during both the adjustment period (the time between interest rate recalculations) and the life of the loan.
In order to provide you with the best possible rate estimate, we need some additional information. Please contact us in order to discuss the specifics of your mortgage needs with one of our home loan specialists.
We offer a wide range of loan options beyond the scope of this calculator, which is designed to provide results for the most popular loan scenarios. If you have flexible options, try lowering your purchase price, changing your down payment amount or entering a different ZIP code.
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Chart data is for illustrative purposes only and is subject to change without notice. Advertised rate, points and APR are based on a set of loan assumptions (refer Loan assumptions and disclosures above for important information). Your actual rate and APR may differ from chart data. Chart accuracy is not guaranteed and products may not be available for your situation. Monthly payments shown include principal and interest only, and (if applicable), any required mortgage insurance. Any other fees such as property tax and homeowners insurance are not included and will result in a higher actual monthly payment. Advertised loans assume escrow accounts (monthly collection of subject property taxes and any applicable homeowners insurance with your monthly principal and interest payment) unless you request otherwise and the loan program and applicable law allows. Should you choose to waive escrows, your rate,
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