BofA CEO Brian Moynihan. (Photo: AP)

Bank of America (BAC) reported quarterly earnings and revenue that beat analysts’ expectations on Monday.

The company posted second-quarter net income of $4.23 billion, or $0.36, down close to 18% from $5.13 billion, or $0.45 a share a year earlier. Revenue for the quarter fell 7% to $20.4 billion, against the comparable year-ago figure of $22 billion.

Most of the company’s divisions produced higher sales and net income in Q2’16 vs. the year-ago period, with the exception of both the wealth management operations and activities not included in the bank’s consumer banking, global banking and global markets operations.

Revenue for asset liability management and other activities (such as equity investments, international consumer cards, noncore mortgage loans and servicing activities and interest rate and foreign currency risk management work) plunged from $1.7 billion last year to -$708 million in Q2’16. The unit also had a loss of $815 million in Q2’16 vs. a profit of $781 million a year ago.

“Our responsible growth strategy led to improved customer and client activity and each of our four business segments reported higher earnings than the year-ago quarter,” Bank of America CEO Brian Moynihan said in a statement. “We also moved closer to our longer-term performance targets.”

Net interest income for the bank decline 12% in the year-ago period to $20.4 billion.

“We believe we surely can [maintain a profit if interest rates do not rise],” Moynihan explained on a call with equity analysts. “If rates rise, we would expect [net interest income] to grow.”

Wealth Management

Revenue from Merrill Lynch, U.S. Trust and the bank’s consumer-banking unit was down 2.4% year over year to $4.46 billion, while net income improved 8% to$722 million. The unit’s net interest income rose slightly to $1.43 billion from $1.35 billion last year.

The Merrill Lynch business, though, has a 4.2% drop in revenue to $3.63 billion in Q2’16.

“In the second quarter, Merrill Lynch’s profitability increased as we continue to streamline our business, manage expenses efficiently and meet more of our clients’ needs,” the company said in a statement. “At the same time, revenues declined from a strong period a year ago, as our brokerage and asset management activity was diminished by global instability and market volatility.” 

The level of advisor productivity (or average yearly fees & commissions per rep) declined to $984,000 from $1,050,000 a year ago. (BofA says the average yearly production for veteran advisors is $1.26 million.)

The wealth unit has some 16,664 financial advisors (up about 300 from a year ago and up about 50 from the prior quarter); 2,248 of these reps are with the consumer-banking unit. It also says it has a total of 18,159 wealth advisors, 2,229 of whom are with U.S. Trust.

Total client assets weakened to $2.42 trillion in Q2’16 vs. $2.52 trillion a year ago, but asset flows improved to $10.1 billion from $8.6 billion. In addition, the unit’s pretax margin was 26% in the most-recent period, up from 23% a year ago. 

The wealth unit’s average loan balances rose about 7% from last year to $141.2 billion.

“Most of our advisors have a combination of fee-based and commission-based (hybrid) relationships based on client choice and need,” BofA explained. “Today, 61% of our advisors (compared to 55% last quarter) have 50% or more of their client assets under a fee-based relationship.”

— Check out JPMorgan Beats Estimates on Higher Sales: Q2 Earnings on ThinkAdvisor.