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Record BofA Pre-Tax Earnings as Home Lending Drops

Quarterly record pre-tax earnings were reported by Bank of America Corp. In the mortgage business, loan production tumbled on a linked-quarter and year-over-year basis.

BofA’s third-quarter income before income taxes climbed to $9.0 billion from $7.6 billion during the same three months in 2017, according to earnings data released Monday.

Results at the Charlotte, North Carolina-based bank-holding company also improved compared to the preceding three-month period, when income came to $8.5 billion.

Bank of America Chairman and Chief Executive Officer Brian Moynihan explained in the report, “Responsible growth, backed by a solid U.S. economy and a healthy U.S. consumer, combined to deliver the highest quarterly pre-tax earnings in our company’s history.”

Residential loans originations came to $14.081 billion in the three months ended Sept. 30, 2018, less than the $15.753 billion closed in the second quarter. An even larger decrease was recorded versus the third quarter of last year, when volume was $17.316 billion.

One component of residential business was $10.682 billion in first mortgages. Consumer banking was responsible for $7.208 billion of the first mortgage volume, while Global Wealth and Investment Management generated $3.474 billion.

The other component was $3.399 billion in home-equity originations. Consumer banking originated $3.053 billion of this, and GWIM closed $0.346 billion.

Residential production during all three quarters that have elapsed this year amounted to $43.007 billion.

Although BofA didn’t report mortgage servicing data in the earnings report, it did report its third-party servicing portfolio at $249.5 billion as of June 30 in its second-quarter 2018 10-Q filing with the Securities and Exchange Commission.

BofA’s residential assets were reduced to $259.421 billion from $261.151 billion at the end of the first half. The balance was about the same, though, as $259.198 billion as of Sept. 30, 2017. Last month’s holdings consisted of $208.186 billion in mortgages and $51.235 billion in home-equity assets.

U.S. commercial real estate assets fell to $56.9 billion from $57.1 billion but have increased from a year earlier, when the balance was $55.5 billion.

The third quarter concluded with 204,681 people on BofA’s payroll. Headcount was cut from 207,992 three months previous and 209,839 a year previous.

The 4,385 U.S. financial centers most recently in operation were 48 fewer than as of mid-year.

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