Overall, revenue for the Charlotte,N.C.-based bank increased 3% on yearly basis from $22.2 billion in 2012 to $22.9 billion in 2Q13.
Additionally, earnings per diluted share grew year-over-year from $0.19 to $0.32.
According to Bank of America, the income improvements were driven by net interest income, investment and brokerage income, investment banking fees, sales and trading revenue, equity investment income and credit quality. There were also expense reductions.
However, reduced income was generated from a smaller servicing portfolio and there was less favorable MSR hedged performance, partially offset by a higher sales volume of loans that had returned to performing status, led to a mortgage revenue decline of $200 million from the previous quarter.
During the second quarter, Bank of America funded $26.8 billion in residential home loans, up 7% from the prior quarter and a 41% increase from a year ago. Approximately 83% of funded first mortgages were refinances and 17% were for home purchases.
Furthermore, the number of first mortgage loans serviced by legacy assets and servicing that are 60 or more days delinquent declined 26% quarter-over-quarter to 492,000 loans from 667,000. These figures are down substantially from the 1.4 million delinquency peak in the last quarter of 2010 and the financial institution projects delinquencies to fall below 375,000 by the end of this year.
Also, Bank of America’s sales group of financial solutions advisors, mortgage loan officers and small business bankers increased to more than 6,800 specialists in 2Q13, which is a 21% increase from last year. Bank of America said in a webcast when announcing its earnings that bringing in more staff “reflects the company’s continued commitment to deepen customer relationships.”
“At the beginning of the year, we said would focus on three things—revenue stability, strengthening the balance sheet and managing costs,” said Bruce Thompson, chief financial officer at Bank of America. “This quarter, we delivered on all three. Revenue increased 3%, we continued to build capital ratios, despite the negative impact of higher interest rates on our bond portfolio, and we reduced expenses related to servicing delinquent mortgage loans at a faster rate than we originally expected.”