Bank of America has released their income report for the year's third quarter. The report indicated an "originated $13.7 billion of first-mortgage loans and $3.1 billion of home equity loans."
According to nationalmortgagenews.com, this year's third quarter yielded a better result for first mortgages as it rose with 13 percent compared to last year's $11.7 billion.
Bank of America's yearly two percent increase in non- interest income is due to higher mortgage banking income. The bank has recovered from last year's losses of $232 million as the bank was able to garner a net income of $4.5 billion for this year's third quarter.
The bank non- interest expense has declined with one percent and used the saved funds for additional 300 sales personnel which are consist of financial advisors mortgage originators, and small business bankers.
Bank of America's Legacy Asset and Servicing unit or LAS has catered 114,000 first- mortgage loan giving way for its recovery for last year's mortgage servicing fee income decline of 27 percent.
According to reuters.com, Bank of America's recovery for this quarter is due to cost- cutting efforts of Chief Executive Brian Moynihan to cushion the impact of low income in three of its four businesses.
Moynihan said "We continue to make good progress in a tough revenue environment due to low interest rates and a sluggish economic recovery."
The bank has been cutting billions of dollars from its investment banking, wealth management businesses and commercial lending. This move is due to "overnight fund rates remain near zero and worries about China's economy and uncertainty over the timing of a U.S. rate hike prevent traders from making big bets."
Bank of America's LAS unit is also able to slash their costs with 83 percent while bank's consumer banking was the only business that has reported a gain in its revenue caused by growing more active accounts and approving more credit card applications.
Deutsche Bank analyst Matt O'Connor said that Bank of America might experience an income drop of 7.1 percent in 2016 if the current interest rates didn't rise.
The Bank of America has been known as the "most sensitive to interest rate changes among the big U.S. banks."
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