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A Mixed Bag of Profitability and Mortgage Income

Piggy Bank 2 BHFour of the country’s biggest banks posted healthy numbers and solid revenues to end 2016, though net income was down for two. PNC and Wells Fargo posted losses in net income, while Bank of America and JPMorgan Chase posted increases quarterly and year-over-year profits in their end-of-year financial statements.

PNC posted a net income of $3.9 billion for 2016, down from $4.1 billion in 2015. In Q4, the bank posted a net income of a little over $1 billion. Total revenue for the year grew by $45 million. Residential mortgage banking noninterest income decreased $18 million, “primarily due to lower loan sales revenue from lower application and origination volumes,” the bank stated. Residential mortgage banking noninterest income increased $29 million.

“PNC delivered a solid year in 2016. Although the financial results finished slightly below 2015, this was due in part to our disciplined risk management efforts throughout the year to position PNC well in the current credit and interest rate cycle,” said William S. Demchak, Chairman, President, and CEO. “At the same time in 2016, we grew net interest and fee income, and kept expenses essentially flat. We also returned capital to shareholders, grew our customer franchise and continued to invest in our strategic priorities, particularly core technology infrastructure that will be critical to our future success. As we look ahead, I'm confident the actions we took position us for further growth and long-term value.”

Bank of America posted a net income of $4.7 billion, an increase of 43 percent over last year’s net income. In Q4 the bank posted total assets of $2.18 billion, down slightly from Q3’s $2.2 billion, but above last year’s $2.14 billion. Total mortgage production grew $4.9 billion (29 percent) to $21.9 billion. BOA’s mortgage-backed securities were ranked among top three by volume in 2016.

“We had strong results in 2016 because our strategy is working,” Bank of America CEO Brian Moynihan said. “We are lending more and seeing historically low charge-offs, which is what responsible growth is all about. Revenue was up modestly, but EPS grew by 15 percent as we continued to manage our expenses and create operating leverage. With strong leadership positions in our businesses against a backdrop of rising interest rates, we are well-positioned to continue to grow and deliver for our shareholders in 2017."

Wells Fargo posted $21.9 billion in net income for 2016, down from 2015’s $22.9, with $5.3 billion in net income in Q4. In Q4 of 2015, Wells posted $5.8 billion in net income. Revenue for 2016 was $88.3 billion, up 3 percent from last year. Mortgage banking noninterest income was $1.4 billion in Q4, compared with $1.7 billion in Q3 2016. Residential mortgage loan originations were $72 billion in the fourth quarter, up from $70 billion in the third.

"We continued to make progress in the fourth quarter in rebuilding the trust of our customers, team members and other key stakeholders,” Wells Fargo CEO Tim Sloan said. “I am pleased with the progress we have made in customer remediation, the ongoing review of sales practices across the company and fulfilling our regulatory requirements for sales practices matters. As planned, we launched our new Retail Bank compensation program this month, which is based on building lifelong relationships with our customers. While we have more work to do, I am proud of the effort of our entire team to make things right for our customers and team members and to continue building a better Wells Fargo for the future.”

JPMorgan Chase posted a 2016 net income of $24.7 billion and a Q4 net income of $6.7 billion. That’s up from $6.3 billion in Q3 and from $5.4 billion in Q4 of 2015. Mortgages brought the bank just shy of $1.7 billion in Q4, up slightly over Q4 of 2015, but down from $1.8 billion in mortgage income in Q3.

“Our results this quarter were a strong end to another record year, reflecting our intense client focus and solid performance across our businesses,” said Jaime Dimon, Chairman and CEO of JPMorgan Chase.

Click the bank’s name to view the full earnings report for that bank:

Bank of America, JPMorgan Chase, PNC, Wells Fargo.

About Author: Scott Morgan

Scott Morgan is a multi-award-winning journalist and editor based out of Texas. During his 11 years as a newspaper journalist, he wrote more than 4,000 published pieces. He's been recognized for his work since 2001, and his creative writing continues to win acclaim from readers and fellow writers alike. He is also a creative writing teacher and the author of several books, from short fiction to written works about writing.
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