The Numbers

Financial institution of America reported a revenue of $7.4 billion final quarter, up practically 20 p.c from the yr earlier than.

Income grew greater than 10 p.c, to $25.2 billion within the second quarter.

Financial institution of America holds practically $2 trillion in buyer deposits, however like most banks, it’s seeing declines as clients transfer their cash to accounts with larger returns: The financial institution’s common deposits within the second quarter dropped round 7 p.c from a yr earlier.

The financial institution additionally continued to make progress on a objective it laid out this yr: shrinking its head depend by means of attrition. The financial institution, which had 288,000 staff in 2010, is all the way down to about 213,000 (excluding summer time interns), roughly 4,000 fewer than 1 / 4 in the past.

“That units us up for an excellent trajectory on expense going ahead,” mentioned Alastair Borthwick, the financial institution’s chief monetary officer.

Takeaways

Brian Moynihan, the financial institution’s chief govt, referred to as the quarter one of many strongest within the financial institution’s historical past.

“We proceed to see a wholesome U.S. financial system that’s rising at a slower tempo, with a resilient job market,” he mentioned. That echoed feedback from his counterparts at different huge banks, as economists debate the chance of a so-called mushy touchdown, through which inflation subsides with out massive job losses or a big slowdown in financial development. Buyer spending on credit score and debit playing cards rose 3 p.c, to $226 billion, the financial institution mentioned.

Notably, the lender’s investment-banking enterprise rebounded within the second quarter, after a pointy drop in deal-making had solid a chill over the business. The funding banking unit’s charges rose 7 p.c, to $1.2 billion, and its buying and selling income rose 3 p.c, to $4.3 billion.

“That’s in all probability a very powerful spotlight of the quarter, I feel, within the world banking enterprise,” Mr. Borthwick mentioned. “We’ve bought just a little little bit of pickup in fairness capital markets, and that’s been a welcome signal for us.”

Context

America’s 4 largest banks — Financial institution of America, Citigroup, JPMorgan Chase and Wells Fargo — have now reported practically $30 billion in revenue for the second quarter, up greater than 30 p.c from a yr earlier. That stands in distinction to their smaller rivals, which have struggled just lately. PNC Monetary, which launched earnings on Tuesday, reported roughly flat revenue and gross sales.

However massive penalties for misdeeds stay a routine expense on the largest banks. Final week, Financial institution of America was fined $150 million by two federal regulators for charging its clients improper charges and denying them promised sign-up bonuses. The financial institution reported $276 million in litigation prices final quarter, up from $89 million the earlier quarter, “pushed by agreements reached on client regulatory issues.”

What’s Subsequent

Analysts can be intently watching outcomes on Wednesday from Goldman Sachs, which has struggled to recuperate from an ill-fated foray into client banking. They’ll additionally scrutinize smaller banks like Western Alliance as these lenders’ leaders attempt to shake off the consequences of the three financial institution failures this yr — First Republic, Signature Financial institution and Silicon Valley Financial institution — that threw the regional banking sector into turmoil.

Banks are bracing for a invoice associated to these failures. Financial institution of America mentioned its bills within the second half of this yr may embody a $1.9 billion accrual if the Federal Deposit Insurance coverage Company completes an evaluation on banks to cowl the prices of defending failed banks’ uninsured deposits.