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Th e M Rep o RT | 43 O r i g i nat i O n s e r v i c i n g a na ly t i c s s e c O n da r y m a r k e t ORIGINATION the latest Bank of america more than doubles its Q2 net income; U.s. Bank & Pnc Profitable optimism abounds in the second quarter, which saw a trifecta of positive returns. B ank of America re- ported a net income of $5.3 billion for Q2, more than twice the bank's net income from the same quar- ter in 2014, according to its Q2 2015 earning statement. U.S. Bancorp and PNC also posted solid growth in Q2 with net incomes of $1.48 billion and $1 billion, respectively, in their earn- ings statements. A reduction in expenses was one of the drivers of the substan- tial increase in net income for Bank of America, which saw its income jump from $2.3 billion in Q2 2014 (and from $3.35 billion in Q1 2015) up to $5.3 billion in Q2 2015. Noninterest expense, excluding litigation, declined by 6 percent down to $13.6 billion, according to the bank's statement. The diluted share price also more than doubled year-over-year in Q2, from $0.19 up to $0.45. Also for Bank of America, con- sumer banking deposits increased year-over-year by $33 billion (6 percent) up to $547 billion, and residential mortgage and home loan equity loan originations increased over the year in Q2 by 40 percent, up to $19.2 billion. The bank's number of 60-plus days delinquent first mortgage loans serviced by Legacy Assets and Servicing fell to 132,000 in Q2, a year-over-year decline of 50 percent, while adjusted net charge-offs also declined year- over-year by 26 percent down to $929 million. "Solid core growth, higher mortgage originations, and the lowest expenses since 2008 con- tributed to our strongest earnings in several years, as we continued to build broader and deeper rela- tionships with our customers and clients," Bank of America CEO Brian Moynihan said. "We also benefited from the improvement in the U.S. economy, where we are particularly well-positioned." U.S. Bancorp's Q2 net income of $1.483 billion was virtually unchanged from the same quarter in 2014, when the bank reported a net income of $1.495 billion. The price per diluted common share climbed by 2 cents year-over-year in Q2 from $0.78 up to $0.80. Average total loans grew by 4 percent year-over-year and average total deposits rose by 8.9 percent over the same period. Slowly improving economic conditions resulted in an improvement in non-performing assets for U.S. Bancorp; though they increased quarter-over-quarter in Q2, net charge-offs dropped by $53 million year-over-year in Q2 down to $296 million, a decline of 15 percent. "U.S. Bancorp once again demonstrated the effectiveness of its business model as we delivered solid second-quarter financial results in a challenging operating environment for financial institu- tions," U.S. Bancorp Chairman, President, and CEO Richard K. Davis said. "We achieved net income of $1.48 billion, or $0.80 per diluted common share, and continue to realize industry-lead- ing performance measures, with a return on average assets (ROA) of 1.46 percent, return on average common equity (ROE) of 14.3 percent, and an efficiency ratio of 53.2 percent. As we pursue our vision for the future, we must continue to balance the invest- ments we make in our highest return initiatives with prudent financial discipline—that's the nature of navigating through this low interest rate environment. Furthermore, because of the over- all strength and consistency of our results, we returned 76 percent of our earnings to shareholders through dividends and share buy- backs in the second quarter." For PNC, Q2's net income of $1 billion held steady from the previ- ous quarter and decreased from $1.1 billion year-over-year. Even with the slight decline in net income, PNC's price per diluted common share increased year- over-year by 3 cents (from $1.85 in Q2 2014 up to $1.88 in Q2 2015). PNC's credit quality improved in Q2 compared with Q1, as nonperforming assets declined by 6 percent down to $2.6 billion and net charge-offs fell from $103 mil- lion down to $67 million. "PNC had a successful second quarter," said William S. Demchak, chairman, president and CEO of PNC. "We grew fee income on higher client activity, made positive progress on our strategic priori- ties, and managed our expenses well despite low interest rates that continue to pressure net interest income industrywide." "[We] benefited from the improvement in the U.S. economy, where we are particularly well- positioned." —Brian Moynihan, Bank of America CEO