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New Mortgages, Earnings See Growth at BofA

For the fifth straight quarter, mortgage production at Bank of America Corp. has breezed past prior periods. As well, the institution realized a healthy earnings increase despite shrinkage in other mortgage business metrics.

For the three months ended June 30, BofA closed $19.171 billion in residential home loans, according to the corporation’s second-quarter earnings data.

The Charlotte, North Carolina-based company’s lending business surged past its first-quarter home lending totaling $16.930 billion, bringing the first-half total to $36.101 billion.

Since it’s sluggish start in last year’s first-quarter, BofA has steadily gained steam in new home lending activity each quarter. So, unsurprisingly, recent originations beat the second quarter 2014 funding volume of $13.703 billion.

Second-quarter 2015 originations included $15.962 billion in first mortgages and $3.209 billion in home equity loans.

The financial giant’s mortgage servicing portfolio, which included residential mortgages, home-equity loans and home-equity lines of credit, dropped to $610 billion from $669 billion as of March 31 and $760 billion as of June 30 in the previous year.

The mortgages serviced-for-investors portion of the servicing portfolio came to $409 billion, shrinking from $459 billion as of March 31 and $505 billion as of June 30, 2014.

As of the end-date in June, the company’s balance sheet included $279.831 billion in residential assets. The mortgage investment portfolio declined from the March 31-ended balance of $291.496 billion and last year’s second-quarter end-balance of $326.635 billion.

The most-recent mortgage asset total reflected $198.825 billion in mortgages and $81.006 billion in HELs.

First mortgages 60 days or more delinquent declined 14 percent to 132,000 loans as of June 30. This metric has improved substantially from the second-quarter 2014, when there were 263,000 loans in this category.

The lender’s latest balance sheet also included $52.344 billion in commercial real estate loans, an increase over the $49.446 billion reported as of March 31 and the $46.815 billion documented at the same point last year.

Second-quarter, new repurchase claims fell to $0.224 billion from $3.416 billion one quarter prior. BofA was left with $18.957 billion in unresolved or outstanding repurchase claims, of which private-label mortgage-backed securities comprised the bulk.

Within the consumer banking division, earnings before income taxes climbed to $2.717 billion from $2.345 billion in the first quarter and $2.594 billion in the second-quarter 2014.

Across the company, second-quarter income before taxes came to $7.5 billion, a big jump from $4.7 billion earned in the prior three months. The lender also pulled in $4.7 billion more than last year from April 1 through June 30.

“Solid core loan growth, higher mortgage originations and the lowest expenses since 2008 contributed to our strongest earnings in several years,” said Brian Moynihan, chief executive officer for the financial institution, in the report.

Current legacy assets and servicing division staff members thinned to 13,700 people from 15,500 inventoried at the end of March. As of June 30 a year ago, this workforce division claimed 22,300 employees.

Company-wide, BofA headcount of 216,679 full-time equivalent employees dropped by 2,979 workforce members from March 31 and by 16,522 versus June 30, 2014.

With 4,789 U.S. financial centers accounted for at the end of last month, BofA’s footprint was 46 locations smaller than reported by the final day in March.

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