Bank of America mortgage production falls despite digital sales gains
Bank of America's residential mortgage origination volume fell short of last year's in its second-quarter earnings despite gains from digital sales and seasonal home buying, and broader consumer lending strength.
The bank generated almost $11.7 billion in total first mortgage production, down from more than $13.2 billion during the second quarter of 2017, but up from more than $9.4 billion in the first quarter of this year.
The company's weekly mortgage volume from digital sales more than quadrupled from the start of a new technology initiative launched in April to quarter-end, rising to $22.2 million from $4.8 million.
The company's total home equity volume during the second quarter was nearly $4.1 billion, down from almost $4.8 billion during the same period last year but up from more than $3.7 billion in first quarter 2018.
Most depository mortgage lenders are producing lower loan volume than a year ago despite seasonal consecutive-quarter gains.
But Bank of America's total consumer lending has been stronger than its peers, and continued to contribute to an overall year-to-year gain in net income at the company.
"We grew consumer and commercial loans, we grew deposits, we grew assets within our Merrill Edge business, we generated more net new households in Merrill Lynch, and we supported more institutional client activity — all of this while we continued to invest in our businesses and began an additional $500 million technology investment, which we intend to spend over the next several quarters, due to the benefits we received from tax reform. Even while making investments in people, technology, new markets and real estate, we managed to lower expenses again this period," CEO Brian Moynihan said in the company's earnings release.
Bank of America's net income rose to $6.8 billion from $5.1 billion a year ago, but was down slightly from $6.9 billion in the first quarter.