Bank of America posted second-quarter results that, like its brethren such as J.P. Morgan Chase, showed positive effects from releasing reserves into earnings, as caution over anticipated souring loans in the midst of the pandemic did not materialize.
The firm said that in the quarter it earned $1.03 a share, above the 77 cents that had been expected by the Street. The earnings got a lift from releasing $2.2 billion of reserves taken in past periods. Total revenues in the quarter came in at $11.2 billion, down 2 percent year on year.
Drilling down into metrics discussed in earnings presentation materials, debit card purchase volumes were $121 billion in the most recent period, up from $89.6 billion a year ago. Credit and debit spend, the company said in an earnings release presentation, saw a 28 percent surge in retail segments compared to last year. Spending on food in the similar period was up 28 percent, while travel spending was up more than 220 percent from a year ago.
Credit And Debit Spending Surge Double-Digit Percentages
Bank of America said that credit spending was up 46 percent, a pace that quickened past debit’s 36 percent. In commentary on the earnings call, management noted that spending on travel and entertainment represents about 10 percent of debit card spend. As of mid-June, domestic airline purchases were up 8 percent over 2019, while international airline trip purchases are down about 40 percent.
The company also said that credit card delinquencies were below pre-pandemic levels, as deferrals expired and balances declined. The average card loans outstanding in the period stood at $73.4 billion, down from $86.2 billion in the period. The company said that 30-day and 90-day past-due delinquencies of a respective 1.3 percent and 71 basis points are below the pre-pandemic lows of 2.09 percent and 1.07 percent seen at the end of 2019.
Consumer net charge-offs, as measured in the most recent period, were about 50 basis points in the cards segment, down from 65 basis points a year ago.
Active mobile banking customers in the most recent quarter stood at 31.8 million, up from 31.5 million in the first quarter of this year and up from 30.3 million a year ago. The total number of digital users in the second quarter was 40.5 million, up from 39 million a year ago. Management said on the conference call that about 85 percent of mortgages were done digitally, as were 77 percent of direct vehicle loans.
Zelle payments in the period showed sales volume of 189 million transactions and $57 billion, up from a respective 117 million and $32 billion last year.
As many as 79 percent of households are using digital across the enterprise, said Bank of America, up from 77 percent in the second quarter of 2020.
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