A sharpincrease in debt underwriting revenue helped perk up results at the five largestU.S. investment banks.

Totalsecond-quarter debt underwriting revenue was up 47.2% quarter over quarter and justabout flat year over year for Bank ofAmerica Corp., CitigroupInc., Goldman Sachs GroupInc., JPMorgan Chase &Co. and Morgan Stanley.Sandler O'Neill & Partners LP analyst Jeffery Harte said he was expecting someimprovement in debt underwriting for the second quarter after market volatilitydepressed first-quarter results.

"Itwound up being meaningfully better than we were expecting," he said.

Hartesaid securitization activity was part of the reason for the upside surprise. Thedebt underwriting revenue helped drive total investment banking revenue 22.9% higherquarter over quarter for the five companies. However, total investment banking revenuedropped 12.1% year over year for the group.

Equityunderwriting pulled down the year-over-year total as each of the investment bankssaw revenue from that business drop at least 37%. But equity underwriting revenuedid improve from the first quarter, with total revenue from the business increasing43.6% quarter over quarter.

AtlanticEquities LLP analyst Christopher Wheeler said it's possible that the i-banks couldsee some year-over-year growth in equity underwriting during the second half of2016 because the business was slow during the end of 2015. "Last year was adreadful third quarter, and it was an equally dreadful fourth quarter," Wheelersaid.

But companyexecutives were not overly optimistic about the near-term outlook for M&A. Inthe second quarter, advisory revenue from the five companies increased 3.8% yearover year, but the total was down 7.6% sequentially. Morgan Stanley CFO Jon Pruzannoted that announced volumes are running 20% to 25% below 2015 levels, and he expectsthat to persist.

"Dialogueand interest in strategic transactions remained strong, but below the 2015 pace,"Pruzan said during MorganStanley's July 20 earnings conference call.

DuringJPMorgan's July 14 earnings conference call, CFO Marianne Lake many M&A drivers remain in place,such as cheap financing, low organic growth, good multiples and a solid economyin the U.S. and globally. Still, Lake said the decline in M&A volumes will likelylead to lower revenue in the second half of 2016 compared with the first half ofthe year for JPMorgan.

Lakeadded that it's too early to tell how the United Kingdom's vote to leave the EuropeanUnion will impact M&A. But Goldman Sachs CFO Harvey Schwartz he believes Brexit will have a negativeimpact only on a few specific M&A transactions that are driven by geography.

"Whenwe talk to our bankers, if we continue in this low growth environment, they don'tfeel … that Brexit is going to be a headwind, but obviously it's going to be a dynamicsituation," Schwartz said during Goldman Sachs' July 19 earnings conferencecall.

However,he said the vote negatively impacted dealmaking in the second quarter. As the voteneared, concerns grew about the economic implications of the exit, and that hurtclient sentiment, risk appetite and activity levels, Schwartz said.

But theBrexit vote may have played a role in the increase in debt underwriting activity,said Atlantic Equities' Wheeler. He noted that high-yield issuance increased beforethe referendum and slowed afterward.

"Peoplecould have been taking advantage of the markets trying to get ahead of the Brexitvote," Wheeler said.