Most big banks have benefited from releasing reserves they had tucked away as a rainy-day fund in case loans turned bad, but government spending and liquidity support seem to have blunted the edge and the released reserves are now juicing the banks’ bottom line.

JPMorgan Chase, Citibank and Bank of America are among the banks that have benefited from the better-than-expected loan performance. In their earnings reports banks expressed an overall bullish sentiment toward recovery and indicated they were optimistic about credit-card spending and consumer debt as vaccines continue to roll out and the country moves closer to reopening. Bank Automation News rounds up the latest Q1 earnings news here with an eye toward banks’ efficiency ratios and technology initiatives.

JPMorgan Chase

JPMorgan Chase, the largest U.S. bank, posted a profit of $14.3 billion and an overhead ratio of 58% for the first quarter of 2021, up from 55% in the previous quarter. The $2.9 trillion bank’s chief executive Jamie Dimon had recently expressed bullish sentiments on the overall economy, while noting that banks are facing tough competition from emerging fintechs and big tech firms like Google and Apple.

The bank’s technology, communications, and equipment spending has remained relatively flat over the last year and stood at $2.5 billion for Q1 2020, slightly lower than the previous quarter, which registered $2.6 billion in such spending.

Bank of America

Signaling improved internal performance, Bank of America’s efficiency ratio dipped to 68% in the first quarter of 2021, slightly better than 69% in the previous quarter. An uptick in efficiency ratios generally indicates a decline in profitability and an ideal ratio is considered to be 50% or below.

The ratio was disclosed as part of the bank’s quarterly earnings, which were reported Wednesday. The $2.2 trillion Bank of America also conformed to the trend of big banks beating earning expectations, reporting its profits had nearly doubled in the first three months of the year. The growth in profitability is also partly due to the bank releasing reserves it had tucked away last year to protect against loans turning bad.

The bank also registered an uptick in customers using its digital assistant Erica as the number jumped to 19.5 million in Q1, up 59% year over year.

Wells Fargo & Co.

Wells Fargo & Co. on Wednesday posted a quarterly profit of $4.74 billion and registered an improvement in its efficiency ratio which stood at 77% for the first quarter, improving from 83% in the previous quarter. The $1.77 trillion bank said that its non-interest expense increased by 4% year-on-year, primarily driven by higher spending on technology which was partially offset by lower headcount and consulting expense related to efficiency initiatives.

Citibank

For Citibank, it has been a “much better than expected start of the year,” said Jane Fraser, chief executive at Citibank, during the bank’s earnings call today. The $1.6 trillion bank reported net income of $7.9 billion in its quarterly earnings report and disclosed an improved efficiency ratio of 57.3% in Q1 2021, down from 67.3% in Q4 2020. Citi also said it is looking to consolidate gains in its wealth management vertical as it winds down its consumer banking business in 13 counties, including China and India.

Looking to simplify and modernize its internal processes, Citi is aiming to “remove manual processes and controls,” in its risk, operations and client-service domains, and invest further in “talent and technology,” Fraser said. She added that the bank had also registered record revenues in equity underwriting and equity trading during Q1.

U.S. Bancorp

U.S. Bancorp recorded net revenues of $5.47 billion in the first quarter, down 5.2% year over year. The bank’s efficiency ratio increased to 62.1%, up from 58.8% in the last quarter of 2020. The $498 billion bank also registered a $70 million uptick in technology and communications expenditure during the last year, primarily due to increased call center volumes.

Truist Bank

Truist posted a quarterly net income of $1.3 billion for the first quarter, denoting an improvement of 35.3% on a year-on-year basis. The bank’s earnings released on Thursday noted a slight improvement in the bank’s efficiency ratio which stood at 65.8% for Q1 2021, compared to 67.8% for the 2020 last’s quarter.

The $498 billion Truist was formed when BB&T and SunTrust merged in 2019. Professional fees and outside processing expenses decreased $43 million due to, “lower spend for professional services for strategic technology projects,” according to the earnings report. Truist plans to integrate all its customers into one digital platform by the end of 2021.