Bank of America Earns $4.2 Billion in First Quarter
CHARLOTTE, N.C., Apr. 20 /PRNewswire-AsiaNet/ --
Earnings Exceed All of 2008
Record Revenue of $36 Billion and Pretax, Pre-Provision Income
of $19 Billion
Merrill Lynch Contributes More Than $3 Billion to Net Income
Tangible Common Equity Ratio Improves to 3.13 Percent
Extends $183 Billion in Credit in the First Quarter
Adds $6.4 Billion to Loan Loss Reserve
Bank of America Corporation today reported first-quarter 2009 net income
of $4.2 billion. After preferred dividends, including $402 million paid to
the U.S. government, diluted earnings per share were $0.44.
Those results compared with net income of $1.2 billion, or diluted
earnings per share of $0.23 after preferred dividends, during the same period
last year.
Results for the quarter include Merrill Lynch & Co., which Bank of
America purchased on January 1, 2009, and Countrywide Financial, which was
acquired on July 1, 2008. Merrill Lynch contributed $3.7 billion to net
income, excluding certain merger costs, on strong capital markets revenue.
Countrywide also added to net income as mortgage lending and refinancing
volume increased. The year-ago period does not include Merrill Lynch and
Countrywide results.
The company also took several actions in the quarter to enhance its
capital and liquidity position, including strengthening its loan loss
reserves and building its cash position.
"The fact that we were able to post strong, positive net income for the
quarter is extremely welcome news in this environment," said Kenneth D.
Lewis, chairman and chief executive officer. "It shows the power of our
diversified business model as well as the ability of our associates to
execute. We are especially gratified that our new teammates at Countrywide
and Merrill Lynch had outstanding performance that contributed significantly
to our success."
However, we understand that we continue to face extremely difficult
challenges primarily from deteriorating credit quality driven by weakness in
the economy and growing unemployment," Lewis said. "Our company continues to
be a solid contributor to the effort to revitalize the U.S. economy through
our industry-leading efforts to reform mortgage lending, restructure home
loans where appropriate and mitigate foreclosures wherever possible. We look
forward to continuing that role."
First Quarter 2009 Business Highlights
- Bank of America Merrill Lynch was No. 2 in global and U.S. investment
banking fees during the quarter and based on volume was No. 1 in U.S.
equity capital markets, No. 1 in U.S. high yield debt, leveraged and
syndicated loans, and was a top-five advisor on mergers and acquisitions
globally and in the U.S., according to first-quarter league tables.
- Bank of America funded $85 billion in first mortgages, helping more
than 382,000 people either purchase a home or refinance their existing
mortgage. Approximately 25 percent were for purchases.
- Credit extended during the quarter, including commercial renewals of
$44.3 billion, was $183.1 billion compared with $180.8 billion in the
fourth quarter. New credit included $85.2 billion in mortgages, $70.9
billion in commercial non-real estate, $11.2 billion in commercial real
estate, $5.5 billion in domestic and small business card, $4.0 billion
in home equity products and $6.3 billion in other consumer credit.
Excluding commercial renewals, new credit extended during the period
was $138.8 billion compared with more than $115 billion in the fourth
quarter.
- During the first quarter, Small Business Banking extended more than
$720 million in new credit comprised of credit cards, loans and lines of
credit to more than 45,000 new customers.
- The company originated $16 billion in mortgages made to 102,000 low-
and moderate-income borrowers.
- To meet rising refinancing and first mortgage application volume, the
company is in the process of adding approximately 5,000 positions in
fulfillment. In addition, the company has more than 6,400 associates in
place to address increasing needs from consumers for assistance with
loan modifications.
- To help homeowners avoid foreclosure, Bank of America modified nearly
119,000 home loans during the quarter. Last year, the company embarked
on a loan modification program projected to modify over $100 billion in
loans to help keep up to 630,000 borrowers in their homes. The
centerpiece of the program is a proactive loan modification process to
provide relief to eligible borrowers who are seriously delinquent or
are likely to become seriously delinquent as a result of loan features,
such as rate resets or payment recasts. In some instances, innovative
new approaches will be employed to include automatic streamlined loan
modifications across certain classes of borrowers. Also during the
first quarter, the company began a new program that utilizes
affordability measures to qualify borrowers for loan modifications.
- Average retail deposits in the quarter increased $140.0
billion, or 27 percent, from a year earlier, including $107.3 billion in
balances from Countrywide and Merrill Lynch. Excluding Countrywide and
Merrill Lynch, Bank of America grew retail deposits $32.7 billion, or 6
percent, from the year-ago quarter.
Transition Update
The Merrill Lynch integration is on track and expected to meet targeted
cost savings. Senior- and middle-management appointments have been made
across all lines of business, including the complete integration of global
research, and the combination of a large number of client-facing teams in
corporate and investment banking and Global Markets is in place.
Merrill Lynch financial advisors and Bank of America are engaged in
client referrals. Merrill Lynch financial advisors are in the process of
integrating Bank of America's broad product set to offer clients. The
business has had early success with a sales program for certificates of
deposit, which booked more than $135 million in CDs in Florida alone. The
program soon will be rolled out nationally.
Bank of America and Merrill Lynch investment banking teams worked
jointly, providing advice and financing on numerous transactions in the
quarter.
The Countrywide transition is on track. Cost savings from the acquisition
are ahead of schedule.
Later this month, the company will introduce the Bank of America Home
Loans and Insurance brand to consumers.
First Quarter 2009 Financial Summary
Revenue and Expense
Revenue net of interest expense on a fully taxable-equivalent basis more
than doubled to a record $36.1 billion from a year ago.
Net interest income on a fully taxable-equivalent basis rose 25 percent
to $12.8 billion from $10.3 billion in the first quarter of 2008 due to an
improved rate environment, the addition of Countrywide and Merrill Lynch and
an increase in market-based net interest income. These improvements were
impacted by the sale of securities and higher funding costs related to an
increase in long-term debt. The net interest yield declined three basis
points to 2.70 percent due to lower-yielding assets associated with the
acquisitions during the past year.
Noninterest income rose more than threefold to $23.3 billion compared
with a year earlier. Increases in trading account profits, investment and
brokerage services, gains on sales of debt securities and other income
reflected the addition of Merrill Lynch while growth in mortgage banking
income reflected the Countrywide acquisition and higher mortgage activity due
to lower interest rates. Equity investment income includes a $1.9 billion
pretax gain on the sale of China Construction Bank (CCB) shares. Bank of
America continues to own approximately 17 percent of the common shares of
CCB. These increases were partially offset by lower card income due to higher
credit costs on securitized credit card loans and lower revenues.
Noninterest income included $2.2 billion in gains related to
mark-to-market adjustments on certain Merrill Lynch structured notes as a
result of credit spreads widening.
Noninterest expense increased to $17.0 billion from $9.3 billion a year
earlier. Higher personnel and general operating expenses, driven in part by
the Merrill Lynch and Countrywide acquisitions, contributed $6.4 billion of
the increase. Pretax merger and restructuring charges related to acquisitions
rose to $765 million from $170 million a year earlier.
The efficiency ratio on a fully taxable-equivalent basis was 47.12
percent compared with 53.32 percent a year earlier. Pretax, pre-provision
income on fully taxable-equivalent basis was a record $19.1 billion.
Credit Quality
Credit quality deteriorated further across all lines of business as
housing prices continued to fall and the economic environment weakened.
Consumers are under significant stress from rising unemployment and
underemployment levels. These conditions led to higher losses in almost all
consumer portfolios.
Declining home values, reduced spending by consumers and businesses and
continued turmoil in the financial markets negatively impacted the commercial
portfolio. Commercial losses increased from the prior quarter driven by
higher broad-based losses in the non-homebuilder portion of the real estate
portfolio within Global Banking and the small business portfolio within
Global Card Services.
The provision for credit losses of $13.4 billion rose from $8.5 billion
in the fourth quarter and included a $6.4 billion net addition to the
allowance for loan and lease losses. Reserves were added across most consumer
portfolios reflecting increasing economic stress on consumers. Reserves were
also increased on commercial portfolios. Nonperforming assets were $25.7
billion compared with $18.2 billion at December 31, 2008 and $7.8 billion at
March 31, 2008, reflecting the continued deterioration in portfolios tied to
housing. The 2009 coverage ratios and amounts shown in the following table
include Merrill Lynch.
Credit Quality Statistics
(Dollars in millions) Q1 2009 Q4 2008 Q1 2008
Provision for credit losses $13,380 $8,535 $6,010
Net Charge-offs 6,942 5,541 2,715
Net Charge-off ratios(1) 2.85% 2.36% 1.25%
Total managed net losses $9,124 $7,398 $4,131
Total managed net loss
ratio(1) 3.40% 2.84% 1.70%
At 3/31/09 At 12/31/08 At 3/31/08
Nonperforming assets $25,743 $18,232 $7,827
Nonperforming assets
ratio(2) 2.65% 1.96% 0.90%
Allowance for loan and lease
losses $29,048 $23,071 $14,891
Allowance for loan and lease
losses ratio(3) 3.00% 2.49% 1.71%
(1) Net charge-off/loss ratios are calculated as annualized held net
charge-offs or managed net losses divided by average outstanding
held or managed loans and leases during the period.
(2) Nonperforming assets ratios are calculated as nonperforming assets
divided by outstanding loans, leases and foreclosed properties at
the end of the period.
(3) Allowance for loan and lease losses ratios are calculated as
allowance for loan and lease losses divided by loans and leases
outstanding at the end of the period.
Note: Ratios do not include loans measured at fair value in accordance
with SFAS 159.
Capital Management
Total shareholders' equity was $239.5 billion at March 31. Period end
assets were $2.3 trillion. The Tier 1 Capital ratio was 10.09 percent, up
from 9.15 percent at December 31, 2008 and higher than the 7.51 percent a
year ago. The Tangible Common Equity ratio was 3.13 percent, up from 2.93
percent at December 31, 2008 and lower than 3.21 percent a year earlier.
In January, $20.5 billion of common shares were issued in connection with
the Merrill Lynch acquisition. The company also issued $8.6 billion of
preferred shares in exchange for outstanding Merrill Lynch preferred stock.
Additionally, the company issued $30.0 billion in preferred stock related to
the Troubled Asset Relief Program to the U.S. Department of the Treasury.
Bank of America paid a cash dividend of $0.01 per common share. During the
quarter, preferred dividends decreased earnings available to common
shareholders by $1.4 billion. Period end common shares issued and outstanding
were 6.40 billion for the first quarter of 2009, 5.02 billion for the fourth
quarter of 2008 and 4.45 billion for the year-ago quarter.
First Quarter 2009 Business Segment Results
Effective January 1, Bank of America reports results from six main
business segments. The former Global Consumer and Small Business Banking now
is reflected in three separate business segments: Deposits, Global Card
Services and Home Loans and Insurance. The former Global Corporate and
Investment Banking is now divided into Global Banking and Global Markets.
These results along with Global Wealth Management are presented below.
Certain prior period amounts have been reclassified to conform to current
period presentation.
Deposits
(Dollars in millions) Q1 2009 Q1 2008
Total revenue, net of
interest expense(1) $3,464 $4,150
Provision for credit losses 311 246
Noninterest expense 2,363 2,216
Net income 493 1,060
Efficiency ratio(1) 68.20% 53.37%
Return on average equity 8.41 16.99
Deposits(2) $377,575 $339,464
At 3/31/09 At 3/31/08
Period ending deposits $391,604 $345,990
(1) Fully taxable-equivalent basis
(2) Balances averaged for period
Deposits net income fell 53 percent from a year ago due to lower net
revenue. The decrease in revenue was primarily a result of a lower residual
net interest allocation and spread compression on money market deposits and
certificates of deposit. Noninterest income declined 5 percent as service
charge income decreased due to changes in consumer spending behavior
attributed to current economic conditions.
Average consumer deposits rose 11 percent, or $38 billion, from a year
earlier due mainly to the Countrywide acquisition and organic growth in
checking and savings products.
Global Card Services
(Dollars in millions) Q1 2009 Q1 2008
Total managed revenue, net
of interest expense(1)(2) $7,457 $7,868
Provision for credit
losses(3) 8,221 4,312
Noninterest expense 2,075 2,199
Net income (loss) (1,769) 867
Efficiency ratio(2) 27.83% 27.95%
Return on average equity n/m 9.18
Managed loans(4) $224,406 $229,147
At 3/31/09 At 3/31/08
Period ending loans $218,031 $229,974
(1) Managed basis. Managed basis assumes that credit card loans that
have been securitized were not sold and presents earnings on these
loans in a manner similar to the way loans that have not been sold
(i.e., held loans) are presented. For more information and detailed
reconciliation, please refer to the data pages supplied with this
Press Release.
(2) Fully taxable-equivalent basis
(3) Represents provision for credit losses on held loans combined with
realized credit losses associated with the securitized credit card
loan portfolio
(4) Balances averaged for period
n/m = not meaningful
Global Card Services, which now includes Debit Card to better coordinate
the company's payments businesses, swung to a net loss of $1.8 billion as the
weak economic environment drove credit costs higher. Managed net revenue
declined 5 percent to $7.5 billion due mainly to lower fee income and the
absence of the positive impact from the Visa Inc. initial public offering a
year earlier. The decline was partially offset by higher net interest income
due to lower funding costs.
Provision expense nearly doubled to $8.2 billion from a year earlier as
economic conditions led to deterioration in the consumer card, consumer
lending and small business portfolios, including a higher level of
bankruptcies. Also contributing were reserve additions related to maturing
securitizations.
Noninterest expense decreased 6 percent due to lower levels of
marketing-related expenses.
Home Loans and Insurance
(Dollars in millions) Q1 2009 Q1 2008
Total revenue, net of
interest expense(1) $5,224 $1,372
Provision for credit losses 3,372 1,812
Noninterest expense 2,650 722
Net income (loss) (498) (732)
Efficiency ratio(1) 50.73% 52.66%
Return on average equity n/m n/m
Loans(2) $126,696 $87,238
At 3/31/09 At 3/31/08
Period ending loans $131,343 $88,321
(1) Fully taxable-equivalent basis
(2) Balances averaged for period
n/m = not meaningful
The net loss in Home Loans and Insurance narrowed to $498 million as
revenue rose, mostly offset by higher credit costs and noninterest expense.
Net revenue nearly quadrupled to $5.2 billion primarily due to the
acquisition of Countrywide and from higher mortgage banking income as lower
interest rates drove an increase in mortgage activity.
The provision for credit losses increased to $3.4 billion driven by
economic and housing market weakness particularly in regions experiencing
higher unemployment and falling home prices.
Noninterest expense increased to $2.7 billion primarily due to the
acquisition of Countrywide.
Global Banking
(Dollars in millions) Q1 2009 Q1 2008
Total revenue, net of
interest expense(1) $4,641 $3,856
Provision for credit losses 1,848 526
Noninterest expense 2,511 1,740
Net income 175 1,000
Efficiency ratio(1) 54.11% 45.13%
Return on average equity 1.25 8.73
Loans and leases(2) $330,972 $305,924
Deposits(2) 196,061 160,726
(1) Fully taxable-equivalent basis
(2) Balances averaged for period
Global Banking net income fell to $175 million as credit costs increased
and noninterest expense rose.
Net revenue increased 20 percent mainly from the addition of Merrill
Lynch, strong advisory and capital markets income and improvement in net
interest income driven by loan spreads and increased deposit balances.
The provision for credit losses increased to $1.8 billion as net
charge-offs and reserves continued to rise, primarily in the real estate and
retail dealer-related portfolios.
- Corporate Banking revenue of $1.4 billion increased 30 percent as a
result of higher loan and deposit balances, increased loan spreads and
fee income as clients returned to more traditional providers of
financing. These positive impacts were partially offset by lower revenue
attributed to the impact of lower interest rates on deposit balances.
- Commercial Banking revenue rose 3 percent to $2.8 billion driven by a 20
percent increase in deposit balances and a more modest increase in both
loan balances and spreads. The year-ago quarter included the positive
impact from the Visa Inc. initial public offering.
- Investment Banking revenue of $433 million includes fees from
mergers and acquisitions, market share gains in debt and equity capital
markets fees and reflects the impact of the Merrill Lynch integration.
Investment banking income more than doubled, driven by debt capital
raising and advisory fees.
- Note: Total investment banking income in the quarter of $1.1 billion is
shared between Global Banking and Global Markets based on an internal
fee-sharing arrangement between the two segments. Advisory fee income
more than quadrupled from the year-ago quarter, while fees from debt
capital raising almost doubled, reflecting the increased size and
breadth from the acquisition of Merrill Lynch.
Global Markets
(Dollars in millions) Q1 2009 Q1 2008
Total revenue, net of
interest expense(1) $6,791 $(848)
Provision for credit losses 51 (1)
Noninterest expense 3,059 726
Net income 2,365 (991)
Efficiency ratio(1) 45.04% n/m
Return on average equity 33.81 n/m
Loans and leases(2) $18,610 $20,927
Trading-related
assets(2) 536,977 357,488
Deposits(2) 8,516 13,486
(1) Fully taxable-equivalent basis
(2) Balances averaged for period
n/m = not meaningful
Global Markets swung to net income of $2.4 billion due to the Merrill
Lynch acquisition and lower losses on positions that resulted from market
disruptions including collateralized debt obligations (CDOs), leveraged
lending and commercial mortgages.
Net revenue was $6.8 billion, which included $1.7 billion of losses
primarily on positions that resulted from market disruptions. The increase in
net revenue was driven by the addition of Merrill Lynch, strong trading
results in interest and currency rate products, equities and commodities.
- Rates and Currencies revenue of $3.6 billion was driven by
the enhanced global breadth of product and distribution capabilities
from the acquisition of Merrill Lynch, increased volatility in interest
and currency rates.
- Mortgage and Credit revenues of $1.2 billion and $890
million, respectively, were driven by the complementary nature of the
legacy institution platforms relating to origination and distribution,
as well as lower market liquidity driven losses.
- Equities revenue of $1.4 billion increased due mainly to the
acquisition of Merrill Lynch, despite the weak origination market and
lower financing revenue opportunities as a result of deleveraging by
clients.
- Commodities revenue of $536 million was driven by the power
and natural gas markets.
Global Wealth Management
(Dollars in millions) Q1 2009 Q1 2008
Total revenue, net of
interest expense (1) $4,361 $1,942
Provision for credit losses 254 243
Noninterest expense 3,288 1,314
Net income 510 242
Efficiency ratio(1) 75.41% 67.71%
Return on average equity 11.21 8.40
Loans(2) $110,533 $85,644
Deposits(2) 249,350 148,503
(in billions) At 3/31/09 At 3/31/08
Assets under management $697.3 $607.5
(1) Fully taxable-equivalent basis
(2) Balances averaged for period
Net income more than doubled to $510 million due to the acquisition of
Merrill Lynch partially offset by lower net interest income from legacy Bank
of America.
Net revenue increased to $4.4 billion as investment and brokerage service
income rose to $2.4 billion and net interest income increased 62 percent
mainly from the acquisition of Merrill Lynch.
- U.S. Trust, Bank of America Private Wealth Management net income fell 28
percent to $95 million as net revenue declined and credit costs rose. Net
revenue decreased 4 percent to $692 million on lower investment and
brokerage services income.
- The net loss in Columbia Management narrowed to $50 million from $82
million in the same period last year due primarily to the $103 million
reduction in support provided to certain cash funds, partially offset by
the impact of declining equity markets on investment and brokerage fees.
- Global Wealth Advisors, which includes the wealth management
organization of Merrill Lynch, had net income of $565 million, compared
with $176 million a year earlier driven by the positive impact on
earnings from the acquisition. Net revenue increased to $3.3 billion
compared with $983 million as asset management fees and brokerage income
rose due to the acquisition of Merrill Lynch partially offset by the
effect of lower equity markets and spread compression.
All Other(1,2)
(Dollars in millions) Q1 2009 Q1 2008
Total revenue, net of
interest expense(3) $4,142 $(969)
Provision for credit losses (677) (1,128)
Noninterest expense 1,056 346
Net income 2,971 (236)
Loans and leases(4) $168,450 $133,883
(1) All Other consists primarily of equity investments, the residential
mortgage portfolio associated with asset and liability management
(ALM) activities, the residual impact of the cost allocation process,
merger and restructuring charges, intersegment eliminations, fair
value related to certain Merrill Lynch structured notes and the
results of certain consumer finance, investment management and
commercial lending businesses that are being liquidated. All Other
also includes the offsetting securitization impact to present Global
Card Services on a managed basis. For more information and detailed
reconciliation, please refer to the data pages supplied with this
Press Release.
(2) Effective January 1, 2009, All Other includes the results of First
Republic Bank, which was acquired as part of the Merrill Lynch
acquisition.
(3) Fully taxable-equivalent basis
(4) Balances averaged for period
All Other swung to net income of $3.0 billion from a net loss of $236
million a year earlier. Fair value adjustments related to certain Merrill
Lynch structured notes, increased gains on sales of debt securities and
higher equity investment income related to the gain on the sale of CCB shares
drove the increase. The provision for credit losses rose due to deterioration
in the residential mortgage portfolio. Noninterest expense increased mostly
on merger and restructuring charges related to the Merrill Lynch acquisition.
Note: Chairman and Chief Executive Officer Kenneth D. Lewis and Chief
Financial Officer Joe L. Price will discuss first quarter 2009 results in a
conference call at 9:30 a.m. EDT today. The presentation and supporting
materials can be accessed on the Bank of America Investor Relations Web site
conference call, dial 1.877.200.4456 (U.S.) or 1.785.424.1732 (international)
and the conference ID: 79795.
Bank of America
Bank of America is one of the world's largest financial institutions,
serving individual consumers, small- and middle-market businesses and large
corporations with a full range of banking, investing, asset management and
other financial and risk management products and services. The company
provides unmatched convenience in the United States, serving approximately 55
million consumer and small business relationships with more than 6,100 retail
banking offices, more than 18,500 ATMs and award-winning online banking with
nearly 30 million active users. Bank of America is among the world's leading
wealth management companies and is a global leader in corporate and
investment banking and trading across a broad range of asset classes serving
corporations, governments, institutions and individuals around the world.
Bank of America offers industry-leading support to more than 4 million small
business owners through a suite of innovative, easy-to-use online products
and services. The company serves clients in more than 150 countries. Bank of
America Corporation stock (NYSE: BAC) is a component of the Dow Jones
Industrial Average and is listed on the New York Stock Exchange.
Bank of America and its management may make certain statements that
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation reform Act of 1995. These statements are not historical
facts, but instead represent Bank of America's current expectations, plans or
forecasts of its future earnings, integration of acquisitions and related
cost savings, loan modifications, investment bank rankings, loan and deposit
growth, mortgage originations and market share, credit losses, credit
reserves and charge-offs, consumer credit card net loss ratios, tax rates,
payments on mortgage-backed securities, global markets originations and
trading and other similar matters. These statements are not guarantees of
future results or performance and involve certain risks, uncertainties and
assumptions that are difficult to predict and are often beyond Bank of
America's control. Actual outcomes and results may differ materially from
those expressed in, or implied by, any of these forward-looking statements.
You should not place undue reliance on any forward-looking statement and
should consider all of the following uncertainties and risks, as well as
those more fully discussed under Item 1A. "Risk Factors" of Bank of America's
2008 Annual Report on Form 10-K and in any of Bank of America's subsequent
SEC filings: negative economic conditions that adversely affect the general
economy, housing prices, the job market, consumer confidence and spending
habits; the level and volatility of the capital markets, interest rates,
currency values and other market indices; changes in consumer, investor and
counterparty confidence in, and the related impact on, financial markets and
institutions; Bank of America's credit ratings and the credit ratings of its
securitizations; estimates of fair value of certain Bank of America assets
and liabilities; legislative and regulatory actions in the United States and
internationally; the impact of litigation and regulatory investigations,
including costs, expenses, settlements and judgments; various monetary and
fiscal policies and regulations of the U.S. and non-U.S. governments; changes
in accounting standards, rules and interpretations and the impact on Bank of
America's financial statements; increased globalization of the financial
services industry and competition with other U.S. and international financial
institutions; Bank of America's ability to attract new employees and retain
and motivate existing employees; mergers and acquisitions and their
integration into Bank of America; Bank of America's reputation; and decisions
to downsize, sell or close units or otherwise change the business mix of Bank
of America. Forward-looking statements speak only as of the date they are
made, and Bank of America undertakes no obligation to update any
forward-looking statement to reflect the impact of circumstances or events
that arise after the date the forward-looking statement was made.
Columbia Management: Columbia Management Group, LLC ("Columbia
Management") is the primary investment management division of Bank of America
Corporation. Columbia Management entities furnish investment management
services and products for institutional and individual investors. Columbia
Funds and Excelsior Funds are distributed by Columbia Management
Distributors, Inc., member FINRA and SIPC. Columbia Management Distributors,
Inc. is part of Columbia Management and an affiliate of Bank of America
Corporation.
Investors should carefully consider the investment objectives, risks,
charges and expenses of any Columbia Fund or Excelsior Fund before investing.
Contact your Columbia Management representative for a prospectus, which
contains this and other important information about the fund. Read it
carefully before investing.
Bank of America Corporation and Subsidiaries
Selected Financial Data
(Dollars in millions, except per share data; shares in thousands)
Three Months Ended
Summary Income Statement March 31
------------------------ ------------------
2009 2008
---- ----
Net interest income $12,497 $9,991
Total noninterest income 23,261 7,080
------ -----
Total revenue, net of interest expense 35,758 17,071
Provision for credit losses 13,380 6,010
Noninterest expense, before merger and
restructuring charges 16,237 9,093
Merger and restructuring charges 765 170
--- ---
Income before income taxes 5,376 1,798
Income tax expense 1,129 588
----- ---
Net income $4,247 $1,210
====== ======
Preferred stock dividends 1,433 190
----- ---
Net income applicable to common
shareholders $2,814 $1,020
====== ======
Earnings per common share $0.44 $0.23
Diluted earnings per common share 0.44 0.23
Three Months Ended
Summary Average Balance Sheet March 31
----------------------------- ------------------
2009 2008
---- ----
Total loans and leases $994,121 $875,661
Debt securities 286,249 219,377
Total earning assets 1,912,483 1,510,295
Total assets 2,519,134 1,764,927
Total deposits 964,081 787,623
Shareholders' equity 228,766 154,728
Common shareholders' equity 160,739 141,456
Three Months Ended
Performance Ratios March 31
------------------- ------------------
2009 2008
---- ----
Return on average assets 0.68% 0.28%
Return on average common shareholders' equity 7.10 2.90
Three Months Ended
Credit Quality March 31
-------------- ------------------
2009 2008
---- ----
Total net charge-offs $6,942 $2,715
Annualized net charge-offs as a % of
average loans and leases outstanding (1) 2.85% 1.25%
Provision for credit losses $13,380 $6,010
Total consumer credit card managed net losses 3,794 2,372
Total consumer credit card managed net
losses as a % of average managed
credit card receivables 8.62% 5.19%
March 31
------------------
2009 2008
---- ----
Total nonperforming assets $25,743 $7,827
Nonperforming assets as a % of total loans,
leases and foreclosed properties (1) 2.65% 0.90%
Allowance for loan and lease losses $29,048 $14,891
Allowance for loan and lease losses as a %
of total loans and leases (1) 3.00% 1.71%
Capital Management March 31
------------------ ------------------
2009 2008
---- ----
Risk-based capital ratios:
Tier 1 10.09% 7.51%
Total 14.03 11.71
Tangible equity ratio (2) 6.42 4.26
Tangible common equity ratio (3) 3.13 3.21
Period-end common shares issued
and outstanding 6,400,950 4,452,810
Three Months Ended
March 31
------------------
2009 2008
---- ----
Shares issued (4) 1,383,514 14,925
Average common shares issued and outstanding 6,370,815 4,427,823
Average diluted common shares issued
and outstanding 6,431,027 4,461,201
Dividends paid per common share $0.01 $0.64
Summary End of Period Balance Sheet March 31
----------------------------------- ------------------
2009 2008
---- ----
Total loans and leases $977,008 $873,870
Total debt securities 262,638 223,000
Total earning assets 1,714,460 1,458,017
Total assets 2,321,963 1,736,502
Total deposits 953,508 797,069
Total shareholders' equity 239,549 156,309
Common shareholders' equity 166,272 139,003
Book value per share of common stock $25.98 $31.22
---------------------------------------------
(1) Ratios do not include loans measured at fair value in accordance
with SFAS 159 at and for the three months ended March 31, 2009 and
2008.
(2) Tangible equity ratio equals shareholders' equity less goodwill
and intangible assets (excluding mortgage servicing rights), net
of related deferred tax liabilities divided by total assets less
goodwill and intangible assets (excluding mortgage servicing
rights), net of related deferred tax liabilities.
(3) Tangible common equity ratio equals common shareholders' equity
less goodwill and intangible assets (excluding mortgage servicing
rights), net of related deferred tax liabilities divided by total
assets less goodwill and intangible assets (excluding mortgage
servicing rights), net of related deferred tax liabilities.
(4) Includes approximately 1.375 billion shares issued in the Merrill
Lynch acquisition.
Certain prior period amounts have been reclassified to conform to current
period presentation.
Information for periods beginning July 1, 2008 include the Countrywide
acquisition. Information for the period beginning January 1, 2009
includes the Merrill Lynch acquisition. Prior periods have not been
restated.
This information is preliminary and based on company data available at
the time of the presentation.
Bank of America Corporation and Subsidiaries
Business Segment Results
------------------------
(Dollars in millions)
For the three months
ended March 31
Global Card Home Loans &
Deposits Services (1,2) Insurance
-------------- -------------- -------------
2009 2008 2009 2008 2009 2008
---- ---- ---- ---- ---- ----
Total revenue,
net of interest
expense (3) $3,464 $4,150 $7,457 $7,868 $5,224 $1,372
Provision for
credit losses 311 246 8,221 4,312 3,372 1,812
Noninterest
expense 2,363 2,216 2,075 2,199 2,650 722
Net income
(loss) 493 1,060 (1,769) 867 (498) (732)
Efficiency
ratio (3) 68.20% 53.37% 27.83% 27.95% 50.73% 52.66%
Return on
average equity 8.41 16.99 n/m 9.18 n/m n/m
Average -
total loans and
leases n/a n/a $224,406 $229,147 $126,696 $87,238
Average -
total deposits $377,575 $339,464 n/a n/a n/a n/a
Global Wealth
Global Banking Global Markets Management
-------------- -------------- -------------
2009 2008 2009 2008 2009 2008
---- ---- ---- ---- ---- ----
Total revenue,
net of interest
expense (3) $4,641 $3,856 $6,791 $(848) $4,361 $1,942
Provision for
credit losses 1,848 526 51 (1) 254 243
Noninterest
expense 2,511 1,740 3,059 726 3,288 1,314
Net income 175 1,000 2,365 (991) 510 242
Efficiency
ratio (3) 54.11% 45.13% 45.04% n/m 75.41% 67.71%
Return on
average equity 1.25 8.73 33.81 n/m 11.21 8.40
Average -
total loans
and leases $330,972 $305,924 $18,610 $20,927 $110,533 $85,644
Average -
total deposits 196,061 160,726 8,516 13,486 249,350 148,503
All Other (1,4)
----------------
2009 2008
---- ----
Total revenue,
net of interest
expense (3) $4,142 $(969)
Provision for
credit losses (677) (1,128)
Noninterest
expense 1,056 346
Net income 2,971 (236)
Average -
total loans
and leases $168,450 $133,883
Average -
total deposits 109,890 113,219
---------------
(1) Global Card Services is presented on a managed basis with a
corresponding offset recorded in All Other.
(2) Provision for credit losses represents provision for credit losses
on held loans combined with realized credit losses associated with
the securitized loan portfolio.
(3) Fully taxable-equivalent (FTE) basis. FTE basis is a performance
measure used by management in operating the business that management
believes provides investors with a more accurate picture of the
interest margin for comparative purposes.
(4) Provision for credit losses represents provision for credit losses
in All Other combined with the Global Card Services securitization
offset.
n/m = not meaningful
n/a = not applicable
Certain prior period amounts have been reclassified to conform to current
period presentation.
Information for periods beginning July 1, 2008 include the Countrywide
acquisition. Information for the period beginning January 1, 2009
includes the Merrill Lynch acquisition. Prior periods have not been
restated.
This information is preliminary and based on company data available at
the time of the presentation.
Bank of America Corporation and Subsidiaries
Supplemental Financial Data
---------------------------
(Dollars in millions)
Three Months
Fully taxable-equivalent basis data Ended March 31
----------------------------------- --------------
2009 2008
---- ----
Net interest income $12,819 $10,291
Total revenue, net of interest expense 36,080 17,371
Net interest yield 2.70% 2.73%
Efficiency ratio 47.12 53.32
Other Data March 31
---------- --------------
2009 2008
---- ----
Full-time equivalent employees 284,802 209,096
Number of banking centers - domestic 6,145 6,148
Number of branded ATMs - domestic 18,532 18,491
Certain prior period amounts have been reclassified to conform to
current period presentation.
Information for periods beginning July 1, 2008 include the Countrywide
acquisition. Information for the period beginning January 1, 2009
includes the Merrill Lynch acquisition. Prior periods have not been
restated.
This information is preliminary and based on company data available at
the time of the presentation.
Bank of America Corporation and Subsidiaries
Reconciliation - Managed to GAAP
---------------------------------
(Dollars in millions)
The Corporation reports Global Card Services on a managed basis.
Reporting on a managed basis is consistent with the way that management
evaluates the results of Global Card Services.
Managed basis assumes that securitized loans were not sold and presents
earnings on these loans in a manner similar to the way loans that have
not been sold (i.e., held loans) are presented.
Loan securitization is an alternative funding process that is used by the
Corporation to diversify funding sources. Loan securitization removes
loans from the Consolidated Balance Sheet through the sale of loans to an
off-balance sheet qualified special purpose entity which is excluded from
the Corporation's Consolidated Financial Statements in accordance with
accounting principles generally accepted in the United States (GAAP).
The performance of the managed portfolio is important in understanding
Global Card Services' results as it demonstrates the results of the
entire portfolio serviced by the business. Securitized loans continue to be
serviced by the business and are subject to the same underwriting
standards and ongoing monitoring as held loans. In addition, retained
excess servicing income is exposed to similar credit risk and repricing
of interest rates as held loans. Global Card Services' managed income
statement line items differ from a held basis reported as follows:
- Managed net interest income includes Global Card Services' net interest
income on held loans and interest income on the securitized loans less
the internal funds transfer pricing allocation related to securitized
loans.
- Managed noninterest income includes Global Card Services' noninterest
income on a held basis less the reclassification of certain components
of card income (e.g., excess servicing income) to record managed net
interest income and provision for credit losses. Noninterest income,
both on a held and managed basis, also includes the impact of
adjustments to the interest-only strip that are recorded in card
income as management continues to manage this impact within Global
Card Services.
- Provision for credit losses represents the provision for credit
losses on held loans combined with realized credit losses associated
with the securitized loan portfolio.
Global Card Services
Three Months Ended March 31, 2009
-------------------------------------
Securiti-
Managed zation Held
Basis (1) Impact (2) Basis
--------- ---------- -----
Net interest income (3) $5,207 $(2,391) $2,816
Noninterest income:
Card income 2,115 244 2,359
All other income 135 (35) 100
--- --- ---
Total noninterest
income 2,250 209 2,459
----- --- -----
Total revenue, net of
interest expense 7,457 (2,182) 5,275
Provision for credit losses 8,221 (2,182) 6,039
Noninterest expense 2,075 - 2,075
----- --- -----
Income (loss) before
income taxes (2,839) - (2,839)
Income tax expense
(benefit) (3) (1,070) - (1,070)
------ --- ------
Net income (loss) $(1,769) $- $(1,769)
======= === =======
Average - total loans and
leases $224,406 $(102,672) $121,734
Three Months Ended March 31, 2008
-------------------------------------
Securiti-
Managed zation Held
Basis (1) Impact (2) Basis
--------- ---------- -----
Net interest income (3) $4,527 $(2,055) $2,472
Noninterest income:
Card income 2,720 704 3,424
All other income 621 (65) 556
--- --- ---
Total noninterest
income 3,341 639 3,980
----- --- -----
Total revenue, net of
interest expense 7,868 (1,416) 6,452
Provision for credit losses 4,312 (1,416) 2,896
Noninterest expense 2,199 - 2,199
----- --- -----
Income (loss) before
income taxes 1,357 - 1,357
Income tax expense
(benefit) (3) 490 - 490
--- --- ---
Net income (loss) $867 $- $867
==== === ====
Average - total loans and
leases $229,147 $(105,176) $123,971
All Other
Three Months Ended March 31, 2009
-------------------------------------
Securiti-
Reported zation As
Basis (4) Offset (2) Adjusted
---------- ---------- --------
Net interest income (3) $(1,780) $2,391 $611
Noninterest income:
Card income (loss) 534 (244) 290
Equity investment income 1,326 - 1,326
Gains on sales of debt
securities 1,471 - 1,471
All other income (loss) 2,591 35 2,626
----- --- -----
Total noninterest
income 5,922 (209) 5,713
----- ---- -----
Total revenue, net of
interest expense 4,142 2,182 6,324
Provision for credit losses (677) 2,182 1,505
Merger and restructuring
charges 765 - 765
All other noninterest expense 291 - 291
--- --- ---
Income (loss) before
income taxes 3,763 - 3,763
Income tax expense (3) 792 - 792
--- --- ---
Net income (loss) $2,971 $- $2,971
====== === ======
Average - total loans and
leases $168,450 $102,672 $271,122
Three Months Ended March 31, 2008
---------------------------------
Securiti-
Reported zation As
Basis (4) Offset (2) Adjusted
---------- ---------- --------
Net interest income (3) $(1,856) $2,055 $199
Noninterest income:
Card income (loss) 663 (704) (41)
Equity investment income 268 - 268
Gains on sales of debt
securities 220 - 220
All other income (loss) (264) 65 (199)
---- --- ----
Total noninterest
income 887 (639) 248
--- ---- ---
Total revenue, net of
interest expense (969) 1,416 447
Provision for credit losses (1,128) 1,416 288
Merger and restructuring
charges 170 - 170
All other noninterest expense 176 - 176
--- --- ---
Income (loss) before
income taxes (187) - (187)
Income tax expense (3) 49 - 49
-- --- --
Net income (loss) $(236) $- $(236)
===== === =====
Average - total loans and
leases $133,883 $105,176 $239,059
-----------------------------
(1) Provision for credit losses represents provision for credit losses
on held loans combined with realized credit losses associated with
the securitized loan portfolio.
(2) The securitization impact/offset on net interest income is on a
funds transfer pricing methodology consistent with the way funding
costs are allocated to the businesses.
(3) FTE basis
(4) Provision for credit losses represents provision for credit losses
in All Other combined with the Global Card Services securitization
offset.
Certain prior period amounts have been reclassified among the segments
to conform to the current period presentation.
Information for periods beginning July 1, 2008 include the Countrywide
acquisition. Information for the period beginning January 1, 2009
includes the Merrill Lynch acquisition. Prior periods have not been
restated.
This information is preliminary and based on company data available at
the time of the presentation.
SOURCE Bank of America
CONTACT: Investors: Kevin Stitt, +1-704-386-5667, Lee McEntire,
+1-704-388-6780, or Grace Yoon, +1-212-449-7323; or Reporters: Scott
Silvestri, +1-980-388-9921, scott.silvestri@bankofamerica.com, all of Bank of
America
(BAC)
NEWS 
