Bank of America profit up as consumer credit improves
New mortgages and home equity loans rose 40% for the quarter, and deposits were up 6%.
Bank of America posted net income of $4.9 billion for the second quarter, a 145% increase, as consumer deposits and mortgage originations jumped.
Bolstered by improving credit among U.S. consumers, Bank of America's total revenue rose 2% to $22.12 billion, outpacing analyst expectations of $21.39 billion.
The company also beat expectations of 36 earnings per share, posting 45 cents per share for the quarter.
"Solid core loan growth, higher mortgage originations and the lowest expenses since 2008 contributed to our strongest earnings in several years, as we continued to build broader and deeper relationships with our customers and clients," Bank of America CEO Brian Moynihan said in a statement. "We also benefited from the improvement in the U.S. economy, where we are particularly well positioned.
New mortgages and home equity loans rose 40% for the quarter, and consumer banking deposits edged up 6% as customers' finances improved.
Although bankers expect defaults to increase when the Federal Reserve raises interest rates -- which may yet happen later this year -- the number of homeowners who are behind on their loans is dropping.
The number of first-mortgage loan holders that were at least 60 days delinquent on Bank of America loans fell by 50% in the second quarter, compared to the same period a year ago, to 132,000. That was also down 14% from the first quarter of 2015.
Follow Paste BN reporter Nathan Bomey on Twitter @NathanBomey.