Continuing the recent string of earnings from big banks – a string that kicks off earnings season per tradition – Bank of America said loan growth and a boost in digital initiatives boosted results in the second quarter. The company is also committing a significant amount of incremental capital over the next several quarters to technology initiatives.
Amid the general numbers reported, adjusted earnings per share came in at 64 cents, seven cents better than the Street expected. Revenues were down slightly, accounting for a gain on sale recorded last tear on non-commercial cards, to $22.7 billion, better than the $22.3 billion that had been expected by the Street. Consumer loans were up 7 percent to $281 billion.
In evidence of the bank’s continued shift toward activity rendered over bits and bytes, branch count fell to 4,411 from more than 5,400 last year.
As a result of those efforts, non-interest expense was off 5 percent from a year ago.
Drilling down into the numbers, the company said its consumer banking revenue was $9.2 billion, up from $8.5 billion last year. In the quarter, the average credit card outstanding balances stood at $93.5 billion, compared to $94.4 billion in the first quarter of this year. And measured from the previous year, total credit and debit spend was $147.5 billion, a boost over the $137.4 billion in the previous period. Credit card purchase volume gained 8.4 percent year over year, while debit card spending, as measured by volume, was up a bit more than 7 percent.
Total number of cards out in the field grew by 1.2 million, roughly on par with the first quarter of this year.
As for net charge-offs, the number was $996 million, up from $908 million as the portfolio seasoned, the loan book grew and there were storm-related losses.
The company also stated that last year’s well-publicized tax reform has given Bank of America about $500 million to deploy through the next few quarters, earmarked for technology.
Looking at the digital side of the business, mobile banking users were up 11 percent year on year to 25.3 million. The total digital user count was 35.7 million.
Along with that boost in digital users, the company said that 24 percent of sales were tied to digital channels. Zelle growth was, measured on a transaction basis, up 142 percent, and volume roughly doubled $10 billion. The total number of Zelle users was four million at the end of the quarter as compared to two million at the June 2017 launch.