As filed with the Securities and Exchange Commission on July 19, 2011
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
July 19, 2011
BANK OF AMERICA CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 1-6523 | 56-0906609 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
100 North Tryon Street
Charlotte, North Carolina 28255
(Address of principal executive offices)
(704) 386-5681
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On July 19, 2011, Bank of America Corporation (the Registrant) announced financial results for the second quarter ended June 30, 2011, reporting a second quarter net loss of $8.8 billion, or $0.90 per diluted share. A copy of the press release announcing the Registrants results for the second quarter ended June 30, 2011 as well as certain earnings related slides for use in connection with an earnings investor conference call and webcast are attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and incorporated by reference herein.
The information provided under Item 2.02 of this report, including Exhibit 99.1 and Exhibit 99.2, shall be deemed to be filed for purposes of the Securities Exchange Act of 1934, as amended.
ITEM 7.01. REGULATION FD DISCLOSURE.
On July 19, 2011, the Registrant will hold an investor conference call and webcast to disclose financial results for the second quarter ended June 30, 2011. The Supplemental Information package for use during this conference call and webcast is furnished herewith as Exhibit 99.3 and incorporated by reference in this Item 7.01. All information in the Supplemental Information package is presented as of the particular date or dates referenced therein, and the Registrant does not undertake any obligation to, and disclaims any duty to, update any of the information provided.
The information in the preceding paragraph, as well as Exhibit 99.3 referenced therein, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
The following exhibits are filed, or furnished in the case of Exhibit 99.3, herewith:
EXHIBIT NO. |
DESCRIPTION OF EXHIBIT | |
99.1 |
Press Release dated July 19, 2011 with respect to the Registrants financial results for the second quarter ended June 30, 2011 | |
99.2 |
Select earnings related slides for use on July 19, 2011 with respect to the Registrants financial results for the second quarter ended June 30, 2011 | |
99.3 |
Supplemental Information for use on July 19, 2011 with respect to the Registrants financial results for the second quarter ended June 30, 2011 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BANK OF AMERICA CORPORATION | ||
By: |
/s/ Neil A. Cotty | |
Neil A. Cotty | ||
Chief Accounting Officer |
Dated: July 19, 2011
INDEX TO EXHIBITS
EXHIBIT NO. |
DESCRIPTION OF EXHIBIT | |
99.1 |
Press Release dated July 19, 2011 with respect to the Registrants financial results for the second quarter ended June 30, 2011 | |
99.2 |
Select earnings related slides for use on July 19, 2011 with respect to the Registrants financial results for the second quarter ended June 30, 2011 | |
99.3 |
Supplemental Information for use on July 19, 2011 with respect to the Registrants financial results for the second quarter ended June 30, 2011 |
Exhibit 99.1
July 19, 2011
Investors May Contact:
Kevin Stitt, Bank of America, 1.980.386.5667
Lee McEntire, Bank of America, 1.980.388.6780
Reporters May Contact:
Jerry Dubrowski, Bank of America, 1.980.388.2840
jerome.f.dubrowski@bankofamerica.com
Bank of America Reports Second-Quarter 2011 Financial Results
Second-Quarter Loss of $0.90 per Share, in Line With Previous Estimates
Excluding Certain Mortgage-Related Items and Other Selected Items, Net Income Was $0.33 per Share1
Consumer Real Estate Services Reports $14.5 Billion Loss; Other Businesses Earn $5.7 Billion2
Credit Costs Continue to Decrease With Net Charge-Offs Declining Across Most Portfolios
Average Deposit Balances Grew for the Third Consecutive Quarter
Global Banking and Markets Reports Record Investment Banking Fees of $1.6 Billion; Highest Since Merrill Lynch Acquisition, Excluding Self-Led Deals
Global Wealth and Investment Management Achieves Record Asset Management Fees and Strong Growth in Advisors
Capital Ratios Above Prior Guidance; Liquidity Levels Remain Strong
CHARLOTTE Bank of America Corporation today reported a net loss of $8.8 billion, or $0.90 per diluted share, for the second quarter of 2011, compared with net income of $3.1 billion, or $0.27 per diluted share, in the year-ago period. Excluding certain mortgage-related items and other selected items, net income was $3.7 billion1, or $0.33 per diluted share, in the second quarter of 2011.
1 | Excluding certain mortgage-related items and other selected items represents a non-GAAP measure. For reconciliation to GAAP net income and EPS, refer to page 15 of this press release. |
2 | Other businesses include the results from All Other. |
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Compared to the second quarter of 2010, results were driven by charges related to the recently announced agreement to resolve nearly all of the legacy Countrywide-issued first-lien non-GSE residential mortgage-backed securitization (RMBS) repurchase exposures, as well as the impact of other mortgage-related costs. These charges were partially offset by lower credit costs, gains from the sale of non-core assets and debt securities, improved sales and trading revenues and higher asset management fees and investment banking fees.
Obviously, the solid performance in our underlying businesses continues to be clouded by the costs we are absorbing from our legacy mortgage issues, said Bank of America Chief Executive Officer Brian Moynihan. But it is clear that from deposits to wealth management to investment banking our customers and clients are choosing to do more with us every day. We intend to continue our efforts to put the mortgage uncertainty behind us, build capital through the strength of the franchise, and deliver the returns for shareholders that we owe them.
Making Progress on Operating Principles
During the second quarter of 2011, the company continued to make significant progress on its operating principles, including the following developments:
Customer-driven businesses
| Bank of America extended approximately $147 billion in credit in the second quarter of 2011, according to preliminary data. This included $84 billion in commercial non-real estate loans, $40 billion in residential first mortgages, $11 billion in commercial real estate loans, $4 billion in U.S. consumer and small business card, $1 billion in home equity products and $7 billion in other consumer credit. |
| The $40 billion in residential first mortgages funded in the second quarter helped nearly 194,000 homeowners either purchase a home or refinance an existing mortgage. This included approximately 15,000 first-time homebuyer credit-qualified mortgages originated by retail channels, and more than 70,000 mortgages to low- and moderate-income borrowers. Approximately 52 percent of funded first mortgages were for home purchases and 48 percent were refinances. |
| Total average deposit balances were up $44 billion, or 4 percent, from the year-ago period and $13 billion, or 1 percent, from the first quarter of 2011 to $1.04 trillion. |
| The number of net new consumer and small business checking accounts was positive for the second consecutive quarter as the company continued to focus on quality sales and retention of customer relationships. |
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| Bank of America continued to expand its service for small business owners in the second quarter of 2011 by hiring 92 locally-based small business bankers to provide convenient access to financial advice and solutions. This brings the number of small business bankers hired this year to 285. The company previously said it plans to hire more than 1,000 small business bankers by early 2012. |
| Referral volumes remained strong during the second quarter with referrals from Global Wealth and Investment Management to Global Commercial Banking up 75 percent from the prior quarter and referrals from Global Commercial Banking to Global Wealth and Investment Management up 23 percent from the prior quarter. Referrals from Global Wealth and Investment Management to Global Banking and Markets were up 19 percent from the first quarter of 2011. |
| The number of Global Wealth and Investment Management client-facing associates increased for the eighth consecutive quarter, with the company adding 546 Financial Advisors in the quarter and 942 since the second quarter of 2010. |
| Global Banking and Markets reported record investment banking fees in the second quarter of 2011 of $1.6 billion, excluding self-led deals. This marks the highest investment banking fees since the acquisition of Merrill Lynch. |
Creating a fortress balance sheet
| The company continued to strengthen the balance sheet with risk-weighted assets declining $41 billion, and global excess liquidity increasing $16 billion from the end of the first quarter of 2011 to $402 billion at June 30, 2011. |
| Regulatory capital ratios finished above the companys prior guidance with the Tier 1 common equity ratio at 8.23 percent at June 30, 2011 and the tangible common equity ratio3 at 5.87 percent at June 30, 2011. On June 29, the company estimated that the Tier 1 common ratio at the end of the second quarter of 2011 would be above 8 percent. |
Pursuing operational excellence in efficiency and risk management
| The provision for credit losses declined 60 percent from the year-ago quarter and net charge-offs fell for the fifth consecutive quarter, reflecting improved credit quality across most consumer and commercial portfolios and underwriting changes implemented over the last several years. |
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| The allowance for loan and lease losses to annualized net charge-off coverage ratio increased in the second quarter of 2011 to 1.64 times compared to 1.18 times in the second quarter of 2010 (1.28 times compared to 1.05 times excluding purchased credit-impaired loans). |
Delivering on the shareholder return model
| The company continued to focus on streamlining the balance sheet by selling non-core assets, addressing legacy issues, reducing debt and implementing its customer-focused strategy to position the company for long-term growth. |
| Tangible book value per share3 of $12.65 in the second quarter of 2011 was down from $13.21 in the first quarter of 2011 and up from $12.14 in the second quarter of 2010. Book value per share of $20.29 in the second quarter of 2011 was down from $21.15 in the first quarter of 2011 and $21.45 in the second quarter of 2010. |
Continuing to clean up legacy issues
| The company continued to make progress on its legacy mortgage issues during the second quarter, including an agreement to resolve nearly all of the legacy Countrywide-issued first-lien non-GSE RMBS repurchase exposures, representing 530 trusts with an original principal balance of $424 billion. |
| With the agreement and other mortgage-related actions taken in the second quarter of 2011, the company believes it has recorded reserves in its financial statements for a substantial portion of its representations and warranties exposure as measured by original principal balance. |
| The company also has updated the range of possible loss for the remainder of its exposure with respect to non-GSE investor representations and warranties provision and currently estimates that such range of possible loss could be up to $5 billion over accruals at the end of the second quarter of 2011. |
| Since the start of 2008, Bank of America and legacy Countrywide have completed more than 900,000 loan modifications with customers. During the second quarter, more than 69,000 loan modifications were completed, an 8 percent increase from the modifications completed in the first quarter of 2011. |
3 | Tangible common equity ratio and tangible book value per share of common stock are non-GAAP measures. Other companies may define or calculate these measures differently. For reconciliation to GAAP measures, refer to pages 25-26 of this press release. |
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Business Segment Results
Deposits
Three Months Ended | ||||||||||||
(Dollars in millions) | June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|||||||||
Total revenue, net of interest expense, FTE basis |
$ | 3,301 | $ | 3,189 | $ | 3,695 | ||||||
Provision for credit losses |
31 | 33 | 61 | |||||||||
Noninterest expense |
2,599 | 2,592 | 2,572 | |||||||||
Net income |
$ | 430 | $ | 355 | $ | 674 | ||||||
Return on average equity |
7.30 | % | 6.09 | % | 11.16 | % | ||||||
Return on average economic capital1 |
30.41 | % | 25.43 | % | 43.52 | % | ||||||
Average deposits |
$ | 426,684 | $ | 418,298 | $ | 418,480 | ||||||
At June 30, 2011 |
At March 31, 2011 |
At June 30, 2010 |
||||||||||
Period-end deposits |
$ | 424,579 | $ | 431,022 | $ | 414,470 | ||||||
Client brokerage assets |
69,000 | 66,703 | 51,102 |
1 | Return on average economic capital is calculated as net income, excluding cost of funds and earnings credit on intangibles, divided by average economic capital. Economic capital represents allocated equity less goodwill and a percentage of intangible assets. |
Business Highlights
| Average deposit balances were up $8.2 billion from a year ago, driven by strong organic growth in liquid products, including Merrill Edge®, partially offset by the impact of transfers with other client-managed businesses. |
| The cost per dollar of deposits improved by 16 basis points to 2.44 percent from the first quarter of 2011, highlighting the companys efficiency and competitive edge in maintaining a low cost distribution channel. The cost per dollar of deposits represents annualized noninterest expense, excluding one-time expenses, as a percentage of average deposits. |
Financial Overview
Deposits reported net income of $430 million, down $244 million from the year-ago quarter due to a decline in revenue driven by lower noninterest income from the impact of overdraft policy changes that were fully implemented in the third quarter of 2010.
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Net interest income increased $137 million compared to the second quarter of 2010, reflecting a customer shift to more liquid products and continued pricing discipline. Noninterest expense remained flat from a year ago.
Global Card Services
Three Months Ended |
||||||||||||
(Dollars in millions) | June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|||||||||
Total revenue, net of interest expense, FTE basis |
$ | 5,536 | $ | 5,687 | $ | 6,948 | ||||||
Provision for credit losses |
481 | 961 | 3,796 | |||||||||
Noninterest expense |
1,882 | 1,969 | 1,852 | |||||||||
Net income |
$ | 2,035 | $ | 1,735 | $ | 826 | ||||||
Return on average equity |
32.66 | % | 26.89 | % | 8.14 | % | ||||||
Return on average economic capital1 |
66.26 | % | 52.32 | % | 19.40 | % | ||||||
Average loans |
$ | 156,788 | $ | 162,425 | $ | 177,076 | ||||||
At June 30, 2011 |
At March 31, 2011 |
At June 30, 2010 |
||||||||||
Period-end loans |
$ | 153,280 | $ | 158,444 | $ | 172,531 |
1 | Return on average economic capital is calculated as net income, excluding cost of funds and earnings credit on intangibles, divided by average economic capital. Economic capital represents allocated equity less goodwill and a percentage of intangible assets. |
Business Highlights
| Total purchase volume (debit and credit) increased by 9 percent from the first quarter, in line with seasonal trends, and 6 percent from a year ago. |
| The number of new U.S. credit card accounts continued to grow in the second quarter of 2011, increasing 11 percent from the first quarter of 2011. In addition, U.S. credit card net losses improved for the seventh consecutive quarter as delinquencies neared all-time lows. |
Financial Overview
Global Card Services reported net income of $2.0 billion, up $1.2 billion from the year-ago quarter as lower credit losses more than offset a $1.4 billion decline in revenue. The lower revenue reflected a drop in net interest income from lower average loans and
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yields, as well as lower noninterest income due to the gain on the sale of the companys MasterCard position in the second quarter of 2010.
Provision for credit losses decreased $3.3 billion from a year ago to $481 million, reflecting improving economic conditions and continued expectations of improving delinquency, collection and bankruptcy trends.
Global Wealth and Investment Management
Three Months Ended | ||||||||||||
(Dollars in millions) | June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|||||||||
Total revenue, net of interest expense, |
$ | 4,490 | $ | 4,492 | $ | 4,189 | ||||||
Provision for credit losses |
72 | 46 | 122 | |||||||||
Noninterest expense |
3,631 | 3,599 | 3,269 | |||||||||
Net income |
$ | 506 | $ | 533 | $ | 329 | ||||||
Return on average equity |
11.54 | % | 12.06 | % | 7.27 | % | ||||||
Return on average economic capital1 |
29.97 | % | 30.44 | % | 19.10 | % | ||||||
Average loans |
$ | 102,200 | $ | 100,851 | $ | 98,811 | ||||||
Average deposits |
255,219 | 258,518 | 226,276 | |||||||||
(in billions) |
At June 30, 2011 |
At March 31, 2011 |
At June 30, 2010 |
|||||||||
Assets under management |
$ | 660.9 | $ | 664.4 | $ | 591.8 | ||||||
Total client balances2 |
2,201.9 | 2,226.7 | 2,047.0 |
1 | Return on average economic capital is calculated as net income, excluding cost of funds and earnings credit on intangibles, divided by average economic capital. Economic capital represents allocated equity less goodwill and a percentage of intangible assets. |
2 | Total client balances are defined as assets under management, assets in custody, client brokerage assets, client deposits and loans. |
Business Highlights
| Asset management fees were a record $1.5 billion in the second quarter of 2011, up 14 percent from the year-ago quarter, driven by long-term assets under management flows and higher market levels. |
| Average deposit balances grew 13 percent from the second quarter of 2010 to $255.2 billion and average loan balances grew 3 percent to $102.2 billion, marking the fifth consecutive quarter of loan growth. |
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Financial Overview
Global Wealth and Investment Managements net income rose 54 percent from the year-ago quarter due to higher net interest income as a result of deposit growth, higher fee-based income, lower credit costs and the absence of a charge related to the sale of the Columbia long-term asset management business in the second quarter of 2010. These factors were partially offset by higher expenses. Revenue increased 7 percent from a year earlier to $4.5 billion, driven by the impact of deposit growth and record asset management fees, partially offset by the impact of the aforementioned sale during the year-ago quarter.
The provision for credit losses decreased $50 million from a year ago. The decrease reflected improving portfolio trends within the home equity portfolio, partially offset by the impact of declines in home prices on the residential mortgage portfolio.
Noninterest expense increased $362 million from a year ago due primarily to higher volume-driven expenses and personnel costs associated with the continued build-out of the business.
Global Commercial Banking
Three Months Ended | ||||||||||||
(Dollars in millions) | June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|||||||||
Total revenue, net of interest expense, FTE basis |
$ | 2,810 | $ | 2,651 | $ | 2,883 | ||||||
Provision for credit losses |
(417 | ) | 79 | 623 | ||||||||
Noninterest expense |
1,068 | 1,106 | 974 | |||||||||
Net income |
$ | 1,381 | $ | 923 | $ | 815 | ||||||
Return on average equity |
13.67 | % | 9.02 | % | 7.46 | % | ||||||
Return on average economic capital1 |
27.92 | % | 17.96 | % | 14.14 | % | ||||||
Average loans and leases |
$ | 189,346 | $ | 192,437 | $ | 206,603 | ||||||
Average deposits |
166,481 | 160,217 | 145,499 |
1 | Return on average economic capital is calculated as net income, excluding cost of funds and earnings credit on intangibles, divided by average economic capital. Economic capital represents allocated equity less goodwill and a percentage of intangible assets. |
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Business Highlights
| Global Commercial Banking reported the highest net income since the second quarter of 2009. The Middle Market portfolio continued to see moderate expansion, up 10 percent since the end of March 2010, to $41 billion. These balances have increased in each of the last five quarters. |
| Credit quality continues to improve, predominantly in the commercial real estate portfolio, as net charge-offs have declined for eight consecutive quarters. |
Financial Overview
Global Commercial Banking reported net income of $1.4 billion, up $566 million from a year ago due to lower credit costs from improved asset quality. Revenue decreased $73 million from a year ago, primarily due to lower loan balances, partially offset by earnings on higher deposit balances and the gain on the termination of a purchase contract.
The provision for credit losses decreased to a benefit of $417 million, an improvement of $1.0 billion compared to the second quarter of 2010. The decrease was driven by improved overall economic conditions and an accelerated rate of loan resolutions in the commercial real estate portfolio.
Average deposit balances continued to grow, increasing by $21 billion from the year-ago quarter, as clients continued to maintain higher levels of liquidity. Although average loan and lease balances decreased $17.3 billion from a year ago due to client deleveraging, average commercial and industrial loan balances have continued to show modest growth.
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Global Banking and Markets
Three Months Ended | ||||||||||||
(Dollars in millions) | June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|||||||||
Total revenue, net of interest expense, FTE basis |
$ | 6,796 | $ | 7,886 | $ | 5,904 | ||||||
Provision for credit losses |
(82 | ) | (202 | ) | (133 | ) | ||||||
Noninterest expense |
4,713 | 4,722 | 4,735 | |||||||||
Net income |
$ | 1,558 | $ | 2,134 | $ | 898 | ||||||
Return on average equity |
16.44 | % | 20.59 | % | 7.03 | % | ||||||
Return on average economic capital1 |
23.40 | % | 28.02 | % | 9.06 | % | ||||||
Total average assets |
$ | 750,908 | $ | 710,684 | $ | 779,060 | ||||||
Total average deposits |
118,133 | 112,028 | 112,565 |
1 | Return on average economic capital is calculated as net income, excluding cost of funds and earnings credit on intangibles, divided by average economic capital. Economic capital represents allocated equity less goodwill and a percentage of intangible assets. |
Business Highlights
| Bank of America Merrill Lynch (BAML) was ranked No. 2 in investment banking fees globally for the six months ended in June 2011, as reported by Dealogic. |
| Revenue generated outside of the United States and Canada accounted for more than one-third of total revenue generated in the second quarter of 2011, reflecting the companys strategy to build out its international platform. |
Financial Overview
Global Banking and Markets reported net income of $1.6 billion, up from $898 million in the year-ago quarter, reflecting higher investment banking fees and increased sales and trading revenue. Although noninterest expense was relatively flat on a reported basis, the prior year period included the impact of the U.K. bonus tax. After considering this item, expenses increased from the year-ago quarter, driven by revenue-related compensation and investments in infrastructure. Compared to a seasonally strong first quarter of 2011, revenue was down $1.1 billion. Provision benefit decreased $51 million from the second quarter of 2010 due to lower reserve releases versus the prior year period.
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Sales and trading revenue was $3.8 billion, an increase of $666 million from the second quarter of 2010. The current period includes Debit Valuation Adjustment (DVA) gains of $121 million compared to gains of $77 million in the second quarter of 2010.
Fixed Income, Currency and Commodities revenues were $2.7 billion, an increase of $467 million compared to the same quarter last year, driven by increases across all lines of business other than mortgages and proprietary trading, which the company had exited as of June 30, 2011. Equities sales and trading revenues increased to $1.1 billion from $882 million due to favorable market conditions compared to the same period last year, primarily in the equity derivatives business.
Investment banking fees of $1.6 billion, excluding self-led deals, rose 28 percent in the second quarter of 2011, compared to the same period a year ago, reflecting strong performance across all categories. Approximately 23 percent of investment banking fees, excluding self-led deals, originated outside the U.S., compared to 17 percent for the same period last year.
Average loans and leases increased 14 percent from the same period a year ago to $109.5 billion, primarily as a result of originations outside the U.S. Corporate Bank which grew its loan base by 17%, reflecting the companys continued focus on international growth. Average deposits continued to grow, increasing 5 percent from the second quarter of 2010 driven by deposits in the Corporate Bank which grew by 6 percent.
Consumer Real Estate Services
Three Months Ended |
||||||||||||
(Dollars in millions) | June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|||||||||
Total revenue, net of interest expense, FTE basis |
$ | (11,315 | ) | $ | 2,063 | $ | 2,704 | |||||
Provision for credit losses |
1,507 | 1,098 | 2,390 | |||||||||
Noninterest expense1 |
8,647 | 4,801 | 2,738 | |||||||||
Net loss |
$ | (14,520 | ) | $ | (2,415 | ) | $ | (1,542 | ) | |||
Average loans |
$ | 121,683 | $ | 120,560 | $ | 130,662 | ||||||
At June 30, 2011 |
At March 31, 2011 |
At June 30, 2010 |
||||||||||
Period-end loans |
$ | 121,553 | $ | 118,749 | $ | 129,797 |
1 | Includes a goodwill impairment charge of $2.6 billion in the second quarter of 2011. |
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Business Highlights
| The company reached an agreement to resolve nearly all of the legacy Countrywide-issued first-lien non-GSE RMBS repurchase exposure, representing 530 trusts with an original principal balance of $424 billion. This agreement is subject to final court approval and certain other conditions. |
| The company completed the sale of Balboas lender-placed insurance business in the second quarter of 2011, generating a pretax gain of $752 million, net of fees. |
Financial Overview
Consumer Real Estate Services reported a net loss of $14.5 billion, compared to a net loss of $1.5 billion for the same period in 2010. Revenue declined by $14 billion, and noninterest expense increased by $5.9 billion from the year-ago quarter. These amounts were partially offset by a decline in the provision for credit losses of $883 million from a year ago.
The year-over-year decline in revenue was primarily driven by the $12.8 billion increase in representations and warranties provision, which is included in mortgage banking income; an $885 million decrease in mortgage servicing rights results, net of hedges, as a result of higher than expected servicing costs; and a $604 million decrease in core production income. The decrease in core production income was due to a decline in new loan originations caused primarily by lower overall market demand, a drop in market share in both the retail and correspondent sales channels partially driven by pricing actions, as well as the exit from wholesale lending. These declines were offset by a $752 million pretax gain, net of fees, on the sale of Balboas lender-placed insurance business.
Representations and warranties provision was $14 billion in the second quarter of 2011, compared to $1.2 billion in the second quarter of 2010. The company recorded $8.6 billion in provision and other expenses related to the agreement to resolve nearly all of the legacy Countrywide-issued first-lien non-GSE RMBS repurchase exposures and $5.4 billion in provision related to other non-GSE, and to a lesser extent, GSE exposure.
Provision for credit losses decreased $883 million from a year ago to $1.5 billion, reflecting improved portfolio trends, including lower reserve additions related to the Countrywide purchased credit-impaired home equity portfolio.
The increase in noninterest expense from the year-ago quarter was primarily due to a $2.6 billion non-cash, non-tax deductible goodwill impairment charge, $716 million in mortgage-related assessments and waivers costs related to foreclosure delays and other items the company does not expect to recover, litigation expense of $1.9 billion, and default-related and other loss mitigation expenses. These increases were partially offset
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by lower production expenses due to lower origination volumes and lower insurance expenses.
All Other1
Three Months Ended |
||||||||||||
(Dollars in millions) | June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|||||||||
Total revenue, net of interest expense, FTE basis |
$ | 1,865 | $ | 1,127 | $ | 3,127 | ||||||
Provision for credit losses |
$ | 1,663 | $ | 1,799 | $ | 1,246 | ||||||
Noninterest expense |
316 | 1,494 | 1,113 | |||||||||
Net income (loss) |
$ | (216 | ) | $ | (1,216 | ) | $ | 1,123 | ||||
Average loans |
$ | 258,397 | $ | 258,350 | $ | 257,322 |
1 | All Other consists primarily of equity investments, the residential mortgage portfolio associated with ALM activities, the residual impact of the cost allocation process, merger and restructuring charges, intersegment eliminations, fair value adjustments related to structured liabilities and the results of certain consumer finance, investment management and commercial lending businesses that are being liquidated. |
All Other reported a net loss of $216 million, compared to net income of $1.1 billion a year ago, due to lower revenue and higher provision for credit losses. The decrease in revenue was largely due to a $1.1 billion reduction in equity investment income as the year-ago period included the gains on the sales of certain strategic investments, lower positive fair value adjustments related to structured liabilities which were down $959 million from the year-ago period, and a $500 million impairment on a strategic investment during this quarter. These were partially offset by increased gains on sales of debt securities of $817 million, a $302 million increase in the dividend from China Construction Bank, and a reduction in merger and restructuring charges of $349 million, compared to the second quarter of 2010.
Provision for credit losses increased $417 million from a year ago to $1.7 billion comprised of higher reserve additions to the Countrywide purchased credit-impaired discontinued real estate and residential mortgage portfolios due to the impact of further declines in home prices.
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Corporate Overview
Second-Quarter 2011 Revenue and Expense
Three Months Ended |
||||||||||||
(Dollars in millions) | June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|||||||||
Net interest income, FTE basis1 |
$ | 11,493 | $ | 12,397 | $ | 13,197 | ||||||
Noninterest income |
1,990 | 14,698 | 16,253 | |||||||||
Total revenue, net of interest expense, FTE basis |
13,483 | 27,095 | 29,450 | |||||||||
Noninterest expense2 |
$ | 20,253 | $ | 20,283 | $ | 17,253 | ||||||
Goodwill impairment charge |
$ | 2,603 | | | ||||||||
Net income (loss) |
$ | (8,826 | ) | $ | 2,049 | $ | 3,123 |
1 | Fully taxable-equivalent (FTE) basis is a non-GAAP measure. For reconciliation to GAAP measures, refer to pages 25-26 of this press release. Net interest income on a GAAP basis was $11.2 billion, $12.2 billion and $12.9 billion for the three months ended June 30, 2011, March 31, 2011 and June 30, 2010. Total revenue, net of interest expense on a GAAP basis was $13.2 billion, $26.9 billion and $29.2 billion for the three months ended June 30, 2011, March 31, 2011 and June 30, 2010. |
2 | Excludes a goodwill impairment charge of $2.6 billion in the second quarter of 2011. |
Revenue, net of interest expense, on a fully taxable-equivalent (FTE) basis was down 54 percent from the second quarter of 2010 and down 50 percent from the first quarter of 2011, largely due to $14.0 billion of representations and warranties provision recorded in connection with the agreement to resolve nearly all of the legacy Countrywide-issued first-lien non-GSE RMBS repurchase exposures and other mortgage-related costs. Excluding the mortgage-related items and other selected items, revenue, net of interest expense, on an FTE basis was $26.5 billion in the second quarter of 2011. 4
Net interest income on an FTE basis decreased 13 percent from a year earlier. The net interest yield fell 27 basis points from the year-ago quarter, due primarily to lower consumer loan balances and lower yields. Compared to the first quarter of 2011, the net interest yield was down 17 basis points, reflecting lower consumer loan balances and a change in yield mix, as well as lower hedge results and a reduction in trading-related net interest income.
Noninterest income declined $14.3 billion, or 88 percent from the year-ago quarter, due primarily to a $12.8 billion increase in the representations and warranties provision from the year-ago period. This impact on noninterest income was partially offset by a number of items detailed below related to asset sales and other selected items. Together, the representations and warranties provision and these other items negatively impacted noninterest income, on a net basis, by approximately $13.0 billion for the period.
4 | Excluding certain mortgage-related items and other selected items represents a non-GAAP measure. For reconciliation to GAAP measures, refer to page 15 of this press release. |
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Excluding these items noninterest income4 would have been $15 billion in the second quarter of 2011.
The following table details the results on a reported basis and on an adjusted basis excluding certain mortgage-related and other selected items. The adjusted net income of $0.33 per share is at the high end of the prior guidance on June 29, 2011 when the company said net income excluding mortgage items and other selected items would be between $0.28 and $0.33 per share.
Three Months Ended June 30, 2011 | ||||||||||||
(Dollars in billions, except EPS) | As Reported | Mortgage- related and other select adjustments |
As Adjusted | |||||||||
Net interest income (FTE) |
$ | 11.5 | $ | | $ | 11.5 | ||||||
Noninterest income |
2.0 | (13.0 | ) | 15.0 | ||||||||
Total revenue, net of interest expense (FTE) |
13.5 | (13.0 | ) | 26.5 | ||||||||
Noninterest expense (excluding goodwill impairment) |
$ | 20.2 | $ | 2.6 | $ | 17.6 | ||||||
Goodwill impairment |
2.6 | 2.6 | | |||||||||
Provision for credit losses |
3.3 | | 3.3 | |||||||||
Income (loss) before income taxes (benefit) |
(12.6 | ) | (18.2 | ) | 5.6 | |||||||
Income tax expense (benefit) (FTE) |
(3.8 | ) | (5.7 | ) | 1.9 | |||||||
Net income (loss) |
$ | (8.8 | ) | $ | (12.5 | ) | $ | 3.7 | ||||
EPS |
$ | (0.90 | ) | $ | (1.23 | ) | $ | 0.33 |
The following table details the adjustments to revenue for certain mortgage-related and other selected items.
(Dollars in billions, except EPS) | Pre-tax | Approximate EPS Impact | ||||||
Representations and warranties provision |
$ | (14.0 | ) | $ | (0.88 | ) | ||
MSR negative valuation from higher servicing costs |
(1.5 | ) | (0.09 | ) | ||||
Securities gains |
0.9 | 0.06 | ||||||
Dividend from strategic investment |
0.8 | 0.05 | ||||||
Gain on sale of Balboa |
0.8 | 0.05 | ||||||
Gain on sale of BlackRock stake |
0.4 | 0.02 | ||||||
Strategic investment impairment |
(0.5 | ) | (0.03 | ) | ||||
Other |
0.1 | 0.00 |
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Noninterest expense increased $5.6 billion, or 32 percent from the year-ago quarter, driven by the items in the table below. Pre-tax merger and restructuring charges declined $349 million from a year earlier to $159 million. The tax benefit for the second quarter of 2011 was $4.0 billion.
(Dollars in billions, except EPS) | Pre-tax | Approximate EPS Impact |
||||||
Expense Mortgage-related items |
||||||||
Litigation expense |
$ | (1.9 | ) | $ | (0.11 | ) | ||
Assessments and waivers costs |
(0.7 | ) | (0.04 | ) | ||||
Goodwill impairment |
(2.6 | ) | (0.26 | ) |
Second-Quarter 2011 Credit Quality
Three Months Ended | ||||||||||||
(Dollars in millions) | June 30, 2011 |
March 31, 2011 |
June 30, 2010 |
|||||||||
Provision for credit losses |
$ | 3,255 | $ | 3,814 | $ | 8,105 | ||||||
Net charge-offs |
5,665 | 6,028 | 9,557 | |||||||||
Net charge-off ratio1 |
2.44 | % | 2.61 | % | 3.98 | % | ||||||
At June 30, 2011 |
At March 31, 2011 |
At June 30, 2010 |
||||||||||
Nonperforming loans, leases and foreclosed properties |
$ | 30,058 | $ | 31,643 | $ | 35,598 | ||||||
Nonperforming loans, leases and foreclosed properties ratio2 |
3.22 | % | 3.40 | % | 3.73 | % | ||||||
Allowance for loan and lease losses |
$ | 37,312 | $ | 39,843 | $ | 45,255 | ||||||
Allowance for loan and lease losses ratio3 |
4.00 | % | 4.29 | % | 4.75 | % |
1 | Net charge-off/loss ratios are calculated as annualized net charge-offs divided by average outstanding loans and leases during the period. |
2 | Nonperforming loans, leases and foreclosed properties ratios are calculated as nonperforming loans, leases and foreclosed properties 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 under the fair value option.
Credit quality improved in the second quarter, with net charge-offs declining across all portfolios compared to the second quarter of 2010. Provision for credit losses decreased to less than half from the year-ago level. Additionally, 30+ day performing delinquencies, excluding Federal Housing Administration-insured loans and long-term
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credit protection agreements, declined across most portfolios, and reservable criticized balances also continued to decline, down 30 percent from the year-ago period.
Net charge-offs declined $3.9 billion from the second quarter of 2010, reflecting improvement in both the consumer and commercial portfolios. The decrease was primarily driven by fewer loans becoming delinquent, improved collection rates, and lower bankruptcy filings across the Global Card Services U.S. loan portfolio, as well as fewer and less severe charge-offs across the core commercial portfolio due to the continuing economic recoverys impact on borrower credit profiles.
The provision for credit losses declined to $3.3 billion from $8.1 billion a year ago and included net reserve reductions of $2.4 billion driven primarily by continued expectations of improving delinquency, collection and bankruptcy trends across the Global Card Services portfolios and improvement in economic conditions impacting the core commercial portfolio. These factors were partially offset by additions in the consumer real estate portfolios and life of loan reserve additions of $412 million related to consumer-purchased credit-impaired portfolios obtained in prior periods through acquisitions, reflecting a more negative outlook for home prices.
The allowance for loan and lease losses to annualized net charge-off coverage ratio increased in the second quarter to 1.64 times, compared with 1.63 times in the first quarter of 2011 and 1.18 times in the second quarter of 2010. Excluding purchased credit-impaired loans, the allowance to annualized net charge-off coverage ratio was 1.28, 1.31 and 1.05 times for the same periods, respectively.
Nonperforming loans, leases and foreclosed properties were $30.1 billion at June 30, 2011, down from $31.6 billion at March 31, 2011, and $35.6 billion at June 30, 2010.
Capital and Liquidity Management
(Dollars in millions, except per share information) | At June 30, 2011 |
At March 31, 2011 |
At June 30, 2010 |
|||||||||
Total shareholders equity |
$ | 222,176 | $ | 230,876 | $ | 233,174 | ||||||
Tier 1 common ratio |
8.23 | % | 8.64 | % | 8.01 | % | ||||||
Tier 1 capital ratio |
11.00 | % | 11.32 | % | 10.67 | % | ||||||
Total capital ratio |
15.65 | % | 15.98 | % | 14.77 | % | ||||||
Tangible common equity ratio1 |
5.87 | % | 6.10 | % | 5.35 | % | ||||||
Common equity ratio |
9.09 | % | 9.42 | % | 9.09 | % | ||||||
Tangible book value per share1 |
$ | 12.65 | $ | 13.21 | $ | 12.14 | ||||||
Book value per share |
20.29 | 21.15 | 21.45 |
1 | Tangible common equity ratio and tangible book value per share are non-GAAP measures. Other companies may define or calculate the tangible common equity ratio and tangible book value per share differently. For reconciliation to GAAP measures, refer to pages 25-26 of this press release. |
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The companys liquidity position strengthened during the second quarter of 2011. The companys total global excess liquidity increased approximately $16 billion from the end of the first quarter of 2011 to $402 billion at June 30, 2011. The companys time-to-required funding was 22 months at June 30, 2011 and 2010.
During the second quarter of 2011, a cash dividend of $0.01 per common share was paid, and the company declared $301 million in preferred dividends. Period-end common shares issued and outstanding were 10.13 billion for the first and second quarters of 2011 and 10.03 billion for the second quarter of 2010, respectively.
Note: Chief Executive Officer Brian Moynihan and Chief Financial Officer Bruce Thompson will discuss second-quarter 2011 results in a conference call at 8:30 a.m. ET today. The presentation and supporting materials can be accessed on the Bank of America Investor Relations Web site at http://investor.bankofamerica.com. For a listen-only connection to the conference call, dial 1.888.245.1801 (U.S.) or 1.785.424.1732 (international) and the conference ID: 79795.
Bank of America
Bank of America is one of the worlds 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 58 million consumer and small business relationships with approximately 5,700 retail banking offices and approximately 17,800 ATMs and award-winning online banking with 30 million active users. Bank of America is among the worlds 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 approximately 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations in more than 40 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 can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as anticipates, targets, expects, estimates, intends, plans, goals, believes and other similar expressions or future or conditional verbs such as will, should, would and could. The forward-looking statements made represent Bank of Americas current expectations, plans or forecasts of its future results and revenues, the companys belief that with the agreement to resolve nearly all of the legacy Countrywide-issued first-lien non-GSE RMBS repurchase exposures (the settlement) and other mortgage-related actions taken in the second quarter of 2011, it will have recorded reserves in its financial statements for a substantial portion of its representations and warranties exposure as measured by original unpaid principal balance; expense reductions in 2012 from the companys efficiency initiative; the nationwide launch of Customer Solutions; loan run-off portfolios; maturity of illiquid structured book and continued decline in principal investments;
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Page 19
representations and warranties liabilities, expenses and repurchase activity; net interest income; risk-weighted assets and Basel mitigation efforts; capital levels; target capital ratios and regulatory capital ratios, including Tier 1 common ratio; credit trends and conditions, including credit losses, credit reserves, net loss rates, bankruptcy filing rates, delinquency trends and nonperforming asset levels; the home price impacts as a result of declines in the Home Price Index, including on pools of loans, representations and warranties costs for the GSEs and other impacts; interest rates; tax rates; net deferred tax assets; the revenue impact from the Durbin Amendment; long-term debt levels; 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 Americas 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 Americas 2010 Annual Report on Form 10-K and in any of Bank of Americas subsequent SEC filings: the accuracy and variability of estimates and assumptions in determining the expected total cost of the recent private label securitization settlement to Bank of America; the accuracy and variability of estimates and assumptions in determining the estimated liability and/or estimated range of possible loss for representation and warranties exposures to the GSEs, monolines and private label and other investors; the accuracy and variability of estimates and assumptions in determining the portion of Bank of Americas repurchase obligations for residential mortgage obligations sold by Bank of America and its affiliates to investors that has been paid or reserved after giving effect to the settlement agreement and the charges in the quarter ended June 30, 2011; the possibility that a substantial number of objections to the approval of the settlement will be made and that these objections will delay or prevent receipt of final court approval; whether the conditions to the settlement will be satisfied, including the receipt of final court approval and private letter rulings from the IRS and other tax rulings and opinions; whether conditions in the settlement agreement that would permit Bank of America and legacy Countrywide to withdraw from the settlement will occur and whether Bank of America and legacy Countrywide will determine to withdraw from the settlement pursuant to the terms of the settlement agreement; the impact of performance and enforcement of obligations under, and provisions contained in, the settlement agreement and the institutional investor agreement, including performance of obligations under the settlement agreement by Bank of America (and certain of its affiliates) and the trustee and the performance of obligations under the institutional investor agreement by Bank of America (and certain of its affiliates) and the investor group; Bank of Americas and certain of its affiliates ability to comply with the servicing and documentation obligations under the settlement agreement; the potential assertion and impact of additional claims not addressed by the settlement agreement or any of the prior agreements entered into between Bank of America (and/or certain of its affiliates) and the GSEs, monoline insurers and other investors; the effectiveness of the company-wide efficiency initiative; the companys resolution of certain representations and warranties obligations with the GSEs and ability to resolve any remaining claims; the companys ability to resolve any representations and warranties obligations with monolines and private investors; increased repurchase claims and repurchases due to mortgage insurance cancellations, rescissions and denials; the companys failure to satisfy its obligations as servicer in the residential mortgage securitization process; the potential assertion and impact of additional claims not addressed by the GSE agreements; the foreclosure review and assessment process, the effectiveness of the companys response to such process and any governmental or private third-party claims asserted in connection with these foreclosure matters; a failure or the perceived risk of failure to raise the statutory debt limit of the U.S.; negative economic
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conditions generally including continued weakness in the U.S. housing market, high unemployment in the U.S., as well as economic challenges in many non-U.S. countries in which we operate and sovereign debt challenges; the companys mortgage modification policies, loss mitigation strategies and related results; and any measures or steps taken by federal regulators or other governmental authorities with regard to mortgage loans, servicing agreements and standards, or other matters; 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, including the company as well as its business partners; the companys credit ratings and the credit ratings of its securitizations; the accuracy and variability of estimates of the fair value of certain of the companys assets and liabilities; legislative and regulatory actions in the U.S. (including the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Financial Reform Act), the Electronic Fund Transfer Act, the Credit Card Accountability Responsibility and Disclosure Act and related regulations and interpretations) and internationally; the identification and effectiveness of any initiatives to mitigate the negative impact of the Financial Reform Act; the impact of litigation and regulatory investigations (including investigations being conducted by law enforcement officials in all 50 states and the U.S. Department of Justice and other federal agencies into alleged irregularities in the foreclosure practices of residential mortgage servicers), including costs, expenses, settlements and judgments as well as any collateral effects on our ability to do business and access the capital markets; various monetary, tax and fiscal policies and regulations of the U.S. and non-U.S. governments; changes in accounting standards, rules and interpretations (including new consolidation guidance), inaccurate estimates or assumptions in the application of accounting policies, including in determining reserves, applicable guidance regarding goodwill accounting and the impact on the Companys financial statements.
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.
BofA Global Capital Management Group, LLC (BofA Global Capital Management) is an asset management division of Bank of America Corporation. BofA Global Capital Management entities furnish investment management services and products for institutional and individual investors.
Bank of America Merrill Lynch is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives, and other commercial banking activities are performed by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, financial advisory, and other investment banking activities are performed by investment banking affiliates of Bank of America Corporation (Investment Banking Affiliates), including Merrill Lynch, Pierce, Fenner & Smith Incorporated, which are registered broker-dealers and members of FINRA and SIPC. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed. Bank of America Corporations broker-dealers are not banks and are separate legal entities from their bank affiliates. The obligations of the broker-dealers are not obligations of their bank affiliates (unless explicitly stated otherwise), and these bank affiliates are not responsible for securities sold, offered or recommended by the broker-dealers. The foregoing also applies to other non-bank affiliates.
www.bankofamerica.com
Bank of America Corporation and Subsidiaries
Selected Financial Data
(Dollars in millions, except per share data; shares in thousands)
Summary Income Statement |
Six Months Ended June 30 |
Second Quarter |
First Quarter |
Second Quarter |
||||||||||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2011 | 2010 | ||||||||||||||||||||||||||||||||||||
Net interest income |
$ | 23,425 | $ | 26,649 | $ | 11,246 | $ | 12,179 | $ | 12,900 | ||||||||||||||||||||||||||||||
Noninterest income |
16,688 | 34,473 | 1,990 | 14,698 | 16,253 | |||||||||||||||||||||||||||||||||||
Total revenue, net of interest expense |
40,113 | 61,122 | 13,236 | 26,877 | 29,153 | |||||||||||||||||||||||||||||||||||
Provision for credit losses |
7,069 | 17,910 | 3,255 | 3,814 | 8,105 | |||||||||||||||||||||||||||||||||||
Merger and restructuring charges |
361 | 1,029 | 159 | 202 | 508 | |||||||||||||||||||||||||||||||||||
Goodwill impairment |
2,603 | | 2,603 | | | |||||||||||||||||||||||||||||||||||
All other noninterest expense (1) |
40,175 | 33,999 | 20,094 | 20,081 | 16,745 | |||||||||||||||||||||||||||||||||||
Income (loss) before income taxes |
(10,095 | ) | 8,184 | (12,875 | ) | 2,780 | 3,795 | |||||||||||||||||||||||||||||||||
Income tax expense (benefit) |
(3,318 | ) | 1,879 | (4,049 | ) | 731 | 672 | |||||||||||||||||||||||||||||||||
Net income (loss) |
$ | (6,777 | ) | $ | 6,305 | $ | (8,826 | ) | $ | 2,049 | $ | 3,123 | ||||||||||||||||||||||||||||
Preferred stock dividends |
611 | 688 | 301 | 310 | 340 | |||||||||||||||||||||||||||||||||||
Net income (loss) applicable to common shareholders |
$ | (7,388 | ) | $ | 5,617 | $ | (9,127 | ) | $ | 1,739 | $ | 2,783 | ||||||||||||||||||||||||||||
Earnings (loss) per common share |
$ | (0.73 | ) | $ | 0.56 | $ | (0.90 | ) | $ | 0.17 | $ | 0.28 | ||||||||||||||||||||||||||||
Diluted (loss) earnings per common share |
(0.73 | ) | 0.55 | (0.90 | ) | 0.17 | 0.27 | |||||||||||||||||||||||||||||||||
Six Months Ended | Second Quarter 2011 |
First Quarter 2011 |
Second Quarter 2010 |
|||||||||||||||||||||||||||||||||||||
Summary Average Balance Sheet |
June 30 | |||||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 938,738 | $ | 979,267 | $ | 938,513 | $ | 938,966 | $ | 967,054 | ||||||||||||||||||||||||||||||
Debt securities |
335,556 | 312,727 | 335,269 | 335,847 | 314,299 | |||||||||||||||||||||||||||||||||||
Total earning assets (2) |
1,857,124 | 1,921,864 | 1,844,525 | 1,869,863 | 1,910,790 | |||||||||||||||||||||||||||||||||||
Total assets |
2,338,826 | 2,505,459 | 2,339,110 | 2,338,538 | 2,494,432 | |||||||||||||||||||||||||||||||||||
Total deposits |
1,029,578 | 986,344 | 1,035,944 | 1,023,140 | 991,615 | |||||||||||||||||||||||||||||||||||
Shareholders equity |
232,930 | 231,695 | 235,067 | 230,769 | 233,461 | |||||||||||||||||||||||||||||||||||
Common shareholders equity |
216,367 | 207,975 | 218,505 | 214,206 | 215,468 | |||||||||||||||||||||||||||||||||||
Six Months Ended | Second Quarter 2011 |
First Quarter 2011 |
Second Quarter 2010 |
|||||||||||||||||||||||||||||||||||||
Performance Ratios |
June 30 | |||||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||
Return on average assets |
n/m | 0.51 | % | n/m | 0.36 | % | 0.50 | % | ||||||||||||||||||||||||||||||||
Return on average tangible shareholders equity (3) |
n/m | 9.26 | n/m | 5.54 | 8.98 | |||||||||||||||||||||||||||||||||||
Six Months Ended | Second Quarter 2011 |
First Quarter 2011 |
Second Quarter 2010 |
|||||||||||||||||||||||||||||||||||||
Credit Quality |
June 30 | |||||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||
Total net charge-offs |
$ | 11,693 | $ | 20,354 | $ | 5,665 | $ | 6,028 | $ | 9,557 | ||||||||||||||||||||||||||||||
Net charge-offs as a % of average loans and leases outstanding (4) |
2.53 | % | 4.21 | % | 2.44 | % | 2.61 | % | 3.98 | % | ||||||||||||||||||||||||||||||
Provision for credit losses |
$ | 7,069 | $ | 17,910 | $ | 3,255 | $ | 3,814 | $ | 8,105 | ||||||||||||||||||||||||||||||
June 30 2011 |
March 31 2011 |
June 30 2010 |
||||||||||||||||||||||||||||||||||||||
Total nonperforming loans, leases and foreclosed properties (5) |
|
$ | 30,058 | $ | 31,643 | $ | 35,598 | |||||||||||||||||||||||||||||||||
Nonperforming loans, leases and foreclosed properties as a % of total loans, leases and foreclosed properties (4) |
|
3.22 | % | 3.40 | % | 3.73 | % | |||||||||||||||||||||||||||||||||
Allowance for loan and lease losses |
$ | 37,312 | $ | 39,843 | $ | 45,255 | ||||||||||||||||||||||||||||||||||
Allowance for loan and lease losses as a % of total loans and leases |
|
4.00 | % | 4.29 | % | 4.75 | % | |||||||||||||||||||||||||||||||||
Capital Management |
June 30 2011 |
March 31 2011 |
June 30 2010 |
|||||||||||||||||||||||||||||||||||||
Risk-based capital (6): |
||||||||||||||||||||||||||||||||||||||||
Tier 1 common equity ratio (7) |
8.23 | % | 8.64 | % | 8.01 | % | ||||||||||||||||||||||||||||||||||
Tier 1 capital ratio |
11.00 | 11.32 | 10.67 | |||||||||||||||||||||||||||||||||||||
Total capital ratio |
15.65 | 15.98 | 14.77 | |||||||||||||||||||||||||||||||||||||
Tier 1 leverage ratio |
6.86 | 7.25 | 6.68 | |||||||||||||||||||||||||||||||||||||
Tangible equity ratio (8) |
6.63 | 6.85 | 6.14 | |||||||||||||||||||||||||||||||||||||
Tangible common equity ratio (8) |
5.87 | 6.10 | 5.35 | |||||||||||||||||||||||||||||||||||||
Period-end common shares issued and outstanding |
10,133,190 | 10,131,803 | 10,033,017 | |||||||||||||||||||||||||||||||||||||
Second Quarter 2011 |
First Quarter 2011 |
Second Quarter 2010 |
||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30 |
||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||
Shares issued |
48,035 | 1,382,773 | 1,387 | 46,648 | 1,016 | |||||||||||||||||||||||||||||||||||
Average common shares issued and outstanding |
10,085,479 | 9,570,166 | 10,094,928 | 10,075,875 | 9,956,773 | |||||||||||||||||||||||||||||||||||
Average diluted common shares issued and outstanding |
10,085,479 | 10,020,926 | 10,094,928 | 10,181,351 | 10,029,776 | |||||||||||||||||||||||||||||||||||
Dividends paid per common share |
$ | 0.02 | $ | 0.02 | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||||||||||||||||||||||||||
Summary Period End Balance Sheet |
June 30 2011 |
March 31 2011 |
June 30 2010 |
|||||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 941,257 | $ | 932,425 | $ | 956,177 | ||||||||||||||||||||||||||||||||||
Total debt securities |
331,052 | 330,776 | 315,200 | |||||||||||||||||||||||||||||||||||||
Total earning assets |
1,810,847 | 1,838,871 | 1,850,517 | |||||||||||||||||||||||||||||||||||||
Total assets |
2,261,319 | 2,274,532 | 2,368,384 | |||||||||||||||||||||||||||||||||||||
Total deposits |
1,038,408 | 1,020,175 | 974,467 | |||||||||||||||||||||||||||||||||||||
Total shareholders equity |
222,176 | 230,876 | 233,174 | |||||||||||||||||||||||||||||||||||||
Common shareholders equity |
205,614 | 214,314 | 215,181 | |||||||||||||||||||||||||||||||||||||
Book value per share of common stock |
$ | 20.29 | $ | 21.15 | $ | 21.45 | ||||||||||||||||||||||||||||||||||
Tangible book value per share of common stock (3) |
12.65 | 13.21 | 12.14 |
(1) | Excludes merger and restructuring charges and goodwill impairment charges. |
(2) | For the three and six months ended June 30, 2011, $40.4 billion and $20.3 billion of non-interest earning equity securities were reclassified from trading account assets to other non-earning assets. Prior period amounts are immaterial and have not been restated. |
(3) | Return on average tangible shareholders equity and tangible book value per share of common stock are non-GAAP measures. We believe the use of these non-GAAP measures provides additional clarity in assessing the results of the Corporation. See Reconciliations to GAAP Financial Measures on pages 25-26. |
(4) | Ratios do not include loans accounted for under the fair value option during the period. Charge-off ratios are annualized for the quarterly presentation. |
(5) | Balances do not include past due consumer credit card, business card loans, consumer loans secured by real estate where repayments are insured by the Federal Housing Administration and in general, consumer loans not secured by real estate; purchased credit-impaired loans even though the customer may be contractually past due; nonperforming loans held-for-sale; nonperforming loans accounted for under the fair value option; and nonaccruing troubled debt restructured loans removed from the purchased credit-impaired portfolio prior to January 1, 2010. |
(6) | Reflects preliminary data for current period risk-based capital. |
(7) | Tier 1 common equity ratio equals Tier 1 capital excluding preferred stock, trust preferred securities, hybrid securities and minority interest divided by risk-weighted assets. |
(8) | Tangible equity ratio equals period end tangible shareholders equity divided by period end tangible assets. Tangible common equity equals period end tangible common shareholders equity divided by period end tangible assets. Tangible shareholders equity and tangible assets are non-GAAP measures. We believe the use of these non-GAAP measures provide additional clarity in assessing the results of the Corporation. See Reconciliations to GAAP Financial Measures on pages 25-26. |
n/m | = not meaningful |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 21 |
Bank of America Corporation and Subsidiaries
Quarterly Results by Business Segment
(Dollars in millions)
Second Quarter 2011 | ||||||||||||||||||||||||||||
Deposits | Global Card Services |
Consumer Real Estate Services |
Global Commercial Banking |
Global Banking & Markets |
GWIM | All Other |
||||||||||||||||||||||
Total revenue, net of interest |
$ | 3,301 | $ | 5,536 | $ | (11,315 | ) | $ | 2,810 | $ | 6,796 | $ | 4,490 | $ | 1,865 | |||||||||||||
Provision for credit losses |
31 | 481 | 1,507 | (417 | ) | (82 | ) | 72 | 1,663 | |||||||||||||||||||
Noninterest expense |
2,599 | 1,882 | 8,647 | 1,068 | 4,713 | 3,631 | 316 | |||||||||||||||||||||
Net income (loss) |
430 | 2,035 | (14,520 | ) | 1,381 | 1,558 | 506 | (216 | ) | |||||||||||||||||||
Return on average equity |
7.30 | % | 32.66 | % | n/m | 13.67 | % | 16.44 | % | 11.54 | % | n/m | ||||||||||||||||
Return on average economic capital (2) |
30.41 | 66.26 | n/m | 27.92 | 23.40 | 29.97 | n/m | |||||||||||||||||||||
Balance Sheet |
||||||||||||||||||||||||||||
Average |
||||||||||||||||||||||||||||
Total loans and leases |
n/m | $ | 156,788 | $ | 121,683 | $ | 189,346 | $ | 109,473 | $ | 102,200 | $ | 258,397 | |||||||||||||||
Total deposits |
$ | 426,684 | n/m | n/m | 166,481 | 118,133 | 255,219 | 46,684 | ||||||||||||||||||||
Allocated equity |
23,612 | 24,982 | 17,139 | 40,515 | 38,001 | 17,574 | 73,244 | |||||||||||||||||||||
Economic capital (3) |
5,662 | 12,341 | 14,437 | 19,817 | 27,078 | 6,868 | n/a | |||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||
Total loans and leases |
n/m | $ | 153,280 | $ | 121,553 | $ | 189,434 | $ | 114,165 | $ | 102,878 | $ | 259,285 | |||||||||||||||
Total deposits |
$ | 424,579 | n/m | n/m | 170,156 | 123,618 | 255,580 | 42,355 | ||||||||||||||||||||
First Quarter 2011 | ||||||||||||||||||||||||||||
Deposits | Global Card Services |
Consumer Real Estate Services |
Global Commercial Banking |
Global Banking & Markets |
GWIM | All Other |
||||||||||||||||||||||
Total revenue, net of interest |
$ | 3,189 | $ | 5,687 | $ | 2,063 | $ | 2,651 | $ | 7,886 | $ | 4,492 | $ | 1,127 | ||||||||||||||
Provision for credit losses |
33 | 961 | 1,098 | 79 | (202 | ) | 46 | 1,799 | ||||||||||||||||||||
Noninterest expense |
2,592 | 1,969 | 4,801 | 1,106 | 4,722 | 3,599 | 1,494 | |||||||||||||||||||||
Net income (loss) |
355 | 1,735 | (2,415 | ) | 923 | 2,134 | 533 | (1,216 | ) | |||||||||||||||||||
Return on average equity |
6.09 | % | 26.89 | % | n/m | 9.02 | % | 20.59 | % | 12.06 | % | n/m | ||||||||||||||||
Return on average economic capital (2) |
25.43 | 52.32 | n/m | 17.96 | 28.02 | 30.44 | n/m | |||||||||||||||||||||
Balance Sheet |
||||||||||||||||||||||||||||
Average |
||||||||||||||||||||||||||||
Total loans and leases |
n/m | $ | 162,425 | $ | 120,560 | $ | 192,437 | $ | 103,704 | $ | 100,851 | $ | 258,350 | |||||||||||||||
Total deposits |
$ | 418,298 | n/m | n/m | 160,217 | 112,028 | 258,518 | 48,608 | ||||||||||||||||||||
Allocated equity |
23,641 | 26,171 | 18,736 | 41,506 | 42,029 | 17,938 | 60,748 | |||||||||||||||||||||
Economic capital (3) |
5,683 | 13,496 | 15,994 | 20,806 | 31,197 | 7,210 | n/a | |||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||
Total loans and leases |
n/m | $ | 158,444 | $ | 118,749 | $ | 190,749 | $ | 105,651 | $ | 101,286 | $ | 256,931 | |||||||||||||||
Total deposits |
$ | 431,022 | n/m | n/m | 161,584 | 115,212 | 256,526 | 34,818 | ||||||||||||||||||||
Second Quarter 2010 | ||||||||||||||||||||||||||||
Deposits | Global Card Services |
Consumer Real Estate Services |
Global Commercial Banking |
Global Banking & Markets |
GWIM | All Other |
||||||||||||||||||||||
Total revenue, net of interest |
$ | 3,695 | $ | 6,948 | $ | 2,704 | $ | 2,883 | $ | 5,904 | $ | 4,189 | $ | 3,127 | ||||||||||||||
Provision for credit losses |
61 | 3,796 | 2,390 | 623 | (133 | ) | 122 | 1,246 | ||||||||||||||||||||
Noninterest expense |
2,572 | 1,852 | 2,738 | 974 | 4,735 | 3,269 | 1,113 | |||||||||||||||||||||
Net income (loss) |
674 | 826 | (1,542 | ) | 815 | 898 | 329 | 1,123 | ||||||||||||||||||||
Return on average equity |
11.16 | % | 8.14 | % | n/m | 7.46 | % | 7.03 | % | 7.27 | % | n/m | ||||||||||||||||
Return on average economic capital (2) |
43.52 | 19.40 | n/m | 14.14 | 9.06 | 19.10 | n/m | |||||||||||||||||||||
Balance Sheet |
||||||||||||||||||||||||||||
Average |
||||||||||||||||||||||||||||
Total loans and leases |
n/m | $ | 177,076 | $ | 130,662 | $ | 206,603 | $ | 95,839 | $ | 98,811 | $ | 257,322 | |||||||||||||||
Total deposits |
$ | 418,480 | n/m | n/m | 145,499 | 112,565 | 226,276 | 64,709 | ||||||||||||||||||||
Allocated equity |
24,226 | 40,677 | 26,174 | 43,869 | 51,245 | 18,179 | 29,091 | |||||||||||||||||||||
Economic capital (3) |
6,239 | 17,501 | 21,371 | 23,159 | 40,705 | 7,380 | n/a | |||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||
Total loans and leases |
n/m | $ | 172,531 | $ | 129,797 | $ | 203,659 | $ | 95,756 | $ | 99,157 | $ | 254,516 | |||||||||||||||
Total deposits |
$ | 414,470 | n/m | n/m | 147,414 | 105,678 | 226,572 | 57,424 |
(1) | 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. |
(2) | Return on average economic capital is calculated as net income, excluding goodwill impairment charge, cost of funds and earnings credit on intangibles, divided by average economic capital. |
(3) | Economic capital represents allocated equity less goodwill and a percentage of intangible assets (excluding mortgage servicing rights). |
n/m | = not meaningful |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 22 |
Bank of America Corporation and Subsidiaries
Year-to-Date Results by Business Segment
(Dollars in millions)
Six Months Ended June 30, 2011 | ||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | Global Card Services |
Consumer Real Estate Services |
Global Commercial Banking |
Global Banking & Markets |
GWIM | All Other |
||||||||||||||||||||||||||||||||||||||||||
Total revenue, net of interest expense (1) |
$ | 6,490 | $ | 11,223 | $ | (9,252 | ) | $ | 5,461 | $ | 14,682 | $ | 8,982 | $ | 2,992 | |||||||||||||||||||||||||||||||||
Provision for credit losses |
64 | 1,442 | 2,605 | (338 | ) | (284 | ) | 118 | 3,462 | |||||||||||||||||||||||||||||||||||||||
Noninterest expense |
5,191 | 3,851 | 13,448 | 2,174 | 9,435 | 7,230 | 1,810 | |||||||||||||||||||||||||||||||||||||||||
Net income (loss) |
785 | 3,770 | (16,935 | ) | 2,304 | 3,692 | 1,039 | (1,432 | ) | |||||||||||||||||||||||||||||||||||||||
Return on average equity |
6.70 | % | 29.73 | % | n/m | 11.33 | % | 18.61 | % | 11.80 | % | n/m | ||||||||||||||||||||||||||||||||||||
Return on average economic capital (2) |
27.93 | 59.01 | n/m | 22.85 | 25.86 | 30.21 | n/m | |||||||||||||||||||||||||||||||||||||||||
Balance Sheet | ||||||||||||||||||||||||||||||||||||||||||||||||
Average |
||||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases |
n/m | $ | 159,591 | $ | 121,125 | $ | 190,883 | $ | 106,604 | $ | 101,529 | $ | 258,374 | |||||||||||||||||||||||||||||||||||
Total deposits |
$ | 422,514 | n/m | n/m | 163,366 | 115,097 | 256,859 | 47,642 | ||||||||||||||||||||||||||||||||||||||||
Allocated equity |
23,627 | 25,573 | 17,933 | 41,008 | 40,004 | 17,755 | 67,030 | |||||||||||||||||||||||||||||||||||||||||
Economic capital (3) |
5,672 | 12,915 | 15,211 | 20,309 | 29,126 | 7,038 | n/a | |||||||||||||||||||||||||||||||||||||||||
Period end | ||||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases |
n/m | $ | 153,280 | $ | 121,553 | $ | 189,434 | $ | 114,165 | $ | 102,878 | $ | 259,285 | |||||||||||||||||||||||||||||||||||
Total deposits |
$ | 424,579 | n/m | n/m | 170,156 | 123,618 | 255,580 | 42,355 | ||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2010 | ||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | Global Card Services |
Consumer Real Estate Services |
Global Commercial Banking |
Global Banking & Markets |
GWIM | All Other |
||||||||||||||||||||||||||||||||||||||||||
Total revenue, net of interest expense (1) |
$ | 7,413 | $ | 13,838 | $ | 6,237 | $ | 5,975 | $ | 15,597 | $ | 8,230 | $ | 4,450 | ||||||||||||||||||||||||||||||||||
Provision for credit losses |
98 | 7,331 | 5,990 | 1,559 | 103 | 363 | 2,466 | |||||||||||||||||||||||||||||||||||||||||
Noninterest expense |
5,139 | 3,664 | 5,985 | 2,005 | 9,024 | 6,368 | 2,843 | |||||||||||||||||||||||||||||||||||||||||
Net income (loss) |
1,372 | 1,794 | (3,619 | ) | 1,520 | 4,137 | 768 | 333 | ||||||||||||||||||||||||||||||||||||||||
Return on average equity |
11.45 | % | 8.61 | % | n/m | 6.93 | % | 15.99 | % | 8.61 | % | n/m | ||||||||||||||||||||||||||||||||||||
Return on average economic capital (2) |
44.82 | 19.74 | n/m | 13.04 | 20.28 | 22.76 | n/m | |||||||||||||||||||||||||||||||||||||||||
Balance Sheet | ||||||||||||||||||||||||||||||||||||||||||||||||
Average |
||||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases |
n/m | $ | 182,909 | $ | 132,195 | $ | 210,450 | $ | 97,427 | $ | 98,826 | $ | 256,742 | |||||||||||||||||||||||||||||||||||
Total deposits |
$ | 417,665 | n/m | n/m | 144,572 | 108,124 | 223,956 | 67,770 | ||||||||||||||||||||||||||||||||||||||||
Allocated equity |
24,179 | 41,994 | 26,641 | 44,222 | 52,182 | 18,002 | 24,475 | |||||||||||||||||||||||||||||||||||||||||
Economic capital (3) |
6,202 | 18,767 | 21,837 | 23,558 | 41,582 | 7,209 | n/a | |||||||||||||||||||||||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases |
n/m | $ | 172,531 | $ | 129,797 | $ | 203,659 | $ | 95,756 | $ | 99,157 | $ | 254,516 | |||||||||||||||||||||||||||||||||||
Total deposits |
$ | 414,470 | n/m | n/m | 147,414 | 105,678 | 226,572 | 57,424 |
(1) | 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. |
(2) | Return on average economic capital is calculated as net income, excluding goodwill impairment charge, cost of funds and earnings credit on intangibles, divided by average economic capital. |
(3) | Economic capital represents allocated equity less goodwill and a percentage of intangible assets (excluding mortgage servicing rights). |
n/m | = not meaningful |
Certain prior period amounts have been reclassified among the segments to conform to the current period presentation.
This information is preliminary and based on company data available at the time of the presentation. |
23 |
Bank of America Corporation and Subsidiaries
Supplemental Financial Data
(Dollars in millions)
Fully taxable-equivalent basis data (1) |
Six Months Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Second Quarter 2010 |
||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||
Net interest income |
$ | 23,890 | $ | 27,267 | $ | 11,493 | $ | 12,397 | $ | 13,197 | ||||||||||||||||||||||||||||||
Total revenue, net of interest expense |
40,578 | 61,740 | 13,483 | 27,095 | 29,450 | |||||||||||||||||||||||||||||||||||
Net interest yield (2) |
2.58 | % | 2.85 | % | 2.50 | % | 2.67 | % | 2.77 | % | ||||||||||||||||||||||||||||||
Efficiency ratio |
n/m | 56.73 | n/m | 74.86 | 58.58 | |||||||||||||||||||||||||||||||||||
Other Data |
June 30 2011 |
March 31 2011 |
June 30 2010 |
|||||||||||||||||||||||||||||||||||||
Number of banking centers - U.S. |
5,742 | 5,805 | 5,900 | |||||||||||||||||||||||||||||||||||||
Number of branded ATMs - U.S. |
17,817 | 17,886 | 18,078 | |||||||||||||||||||||||||||||||||||||
Full-time equivalent employees |
287,839 | 288,062 | 284,628 |
(1) | Fully taxable-equivalent basis is a non-GAAP measure. Fully taxable-equivalent 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. See Non-GAAP Reconciliations - Reconciliations to GAAP Financial Measures on pages 25-26. |
(2) | Calculation includes fees earned on overnight deposits placed with the Federal Reserve of $112 million and $198 million for the six months ended June 30, 2011 and 2010; $49 million and $63 million for the second and first quarters of 2011, and $106 million for the second quarter of 2010, respectively. |
n/m | = not meaningful |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 24 |
Bank of America Corporation and Subsidiaries
Reconciliations to GAAP Financial Measures
(Dollars in millions)
The Corporation evaluates its business based on a fully taxable-equivalent basis, a non-GAAP measure. The Corporation believes managing the business with net interest income on a fully taxable-equivalent basis provides a more accurate picture of the interest margin for comparative purposes. Total revenue, net of interest expense, includes net interest income on a fully taxable-equivalent basis and noninterest income. The Corporation views related ratios and analyses (i.e., efficiency ratios and net interest yield) on a fully taxable-equivalent basis. To derive the fully taxable-equivalent basis, net interest income is adjusted to reflect tax exempt income on an equivalent before-tax basis with a corresponding increase in income tax expense. This measure ensures comparability of net interest income arising from taxable and tax-exempt sources. The efficiency ratio measures the costs expended to generate a dollar of revenue, and net interest yield evaluates the basis points the Corporation earns over the cost of funds.
The Corporation also evaluates its business based on the following ratios that utilize tangible equity, a non-GAAP measure. Return on average tangible common shareholders equity measures the Corporations earnings contribution as a percentage of common shareholders equity plus any Common Equivalent Securities less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities. Return on average tangible shareholders equity measures the Corporations earnings contribution as a percentage of average shareholders equity less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities. The tangible common equity ratio represents common shareholders equity plus any Common Equivalent Securities 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. The tangible equity ratio represents total 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. Tangible book value per common share represents ending common shareholders equity less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities divided by ending common shares outstanding. These measures are used to evaluate the Corporations use of equity (i.e., capital). In addition, profitability, relationship and investment models all use return on average tangible shareholders equity as key measures to support our overall growth goals.
In certain presentations, earnings and diluted earnings per common share, the efficiency ratio, return on average assets, return on common shareholders equity, return on average tangible common shareholders equity and return on average tangible shareholders equity are calculated excluding the impact of goodwill impairment charge of $2.6 billion recorded in the second quarter of 2011. Accordingly, these are non-GAAP measures.
See the tables below and on page 26 for reconciliations of these non-GAAP measures with financial measures defined by GAAP for the three months ended June 30, 2011, March 31, 2011 and June 30, 2010, and for the six months ended June 30, 2011 and 2010. The Corporation believes the use of these non-GAAP measures provides additional clarity in assessing the results of the Corporation. Other companies may define or calculate supplemental financial data differently.
Six Months Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Second Quarter 2010 |
|||||||||||||||||
2011 | 2010 | |||||||||||||||||||
Reconciliation of net interest income to net interest income on a fully taxable-equivalent basis | ||||||||||||||||||||
Net interest income |
$ | 23,425 | $ | 26,649 | $ | 11,246 | $ | 12,179 | $ | 12,900 | ||||||||||
Fully taxable-equivalent adjustment |
465 | 618 | 247 | 218 | 297 | |||||||||||||||
Net interest income on a fully taxable-equivalent basis |
$ | 23,890 | $ | 27,267 | $ | 11,493 | $ | 12,397 | $ | 13,197 | ||||||||||
Reconciliation of total revenue, net of interest expense to total revenue, net of interest expense on a fully taxable-equivalent basis | ||||||||||||||||||||
Total revenue, net of interest expense |
$ | 40,113 | $ | 61,122 | $ | 13,236 | $ | 26,877 | $ | 29,153 | ||||||||||
Fully taxable-equivalent adjustment |
465 | 618 | 247 | 218 | 297 | |||||||||||||||
Total revenue, net of interest expense on a fully taxable-equivalent basis |
$ | 40,578 | $ | 61,740 | $ | 13,483 | $ | 27,095 | $ | 29,450 | ||||||||||
Reconciliation of total noninterest expense to total noninterest expense, excluding goodwill impairment charge | ||||||||||||||||||||
Total noninterest expense |
$ | 43,139 | $ | 35,028 | $ | 22,856 | $ | 20,283 | $ | 17,253 | ||||||||||
Goodwill impairment charge |
(2,603 | ) | | (2,603 | ) | | | |||||||||||||
Total noninterest expense, excluding goodwill impairment charge |
$ | 40,536 | $ | 35,028 | $ | 20,253 | $ | 20,283 | $ | 17,253 | ||||||||||
Reconciliation of income tax expense (benefit) to income tax expense (benefit) on a fully taxable-equivalent basis | ||||||||||||||||||||
Income tax expense (benefit) |
$ | (3,318 | ) | $ | 1,879 | $ | (4,049 | ) | $ | 731 | $ | 672 | ||||||||
Fully taxable-equivalent adjustment |
465 | 618 | 247 | 218 | 297 | |||||||||||||||
Income tax expense (benefit) on a fully taxable-equivalent basis |
$ | (2,853 | ) | $ | 2,497 | $ | (3,802 | ) | $ | 949 | $ | 969 | ||||||||
Reconciliation of net income (loss) to net income (loss), excluding goodwill impairment charge | ||||||||||||||||||||
Net income (loss) |
$ | (6,777 | ) | $ | 6,305 | $ | (8,826 | ) | $ | 2,049 | $ | 3,123 | ||||||||
Goodwill impairment charge |
2,603 | | 2,603 | | | |||||||||||||||
Net income (loss), excluding goodwill impairment charge |
$ | (4,174 | ) | $ | 6,305 | $ | (6,223 | ) | $ | 2,049 | $ | 3,123 | ||||||||
Reconciliation of net income (loss) applicable to common shareholders to net income (loss) applicable to common shareholders, excluding goodwill impairment charge |
||||||||||||||||||||
Net income (loss) applicable to common shareholders |
$ | (7,388 | ) | $ | 5,617 | $ | (9,127 | ) | $ | 1,739 | $ | 2,783 | ||||||||
Goodwill impairment charge |
2,603 | | 2,603 | | | |||||||||||||||
Net income (loss) applicable to common shareholders, excluding goodwill impairment charge |
$ | (4,785 | ) | $ | 5,617 | $ | (6,524 | ) | $ | 1,739 | $ | 2,783 | ||||||||
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 25 |
Bank of America Corporation and Subsidiaries
Reconciliations to GAAP Financial Measures - continued
(Dollars in millions)
Six Months Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Second Quarter 2010 |
|||||||||||||||||
2011 | 2010 | |||||||||||||||||||
Reconciliation of average common shareholders equity to average tangible common shareholders equity | ||||||||||||||||||||
Common shareholders equity |
$ | 216,367 | $ | 207,975 | $ | 218,505 | $ | 214,206 | $ | 215,468 | ||||||||||
Common Equivalent Securities |
| 5,848 | | | | |||||||||||||||
Goodwill |
(73,834 | ) | (86,225 | ) | (73,748 | ) | (73,922 | ) | (86,099 | ) | ||||||||||
Intangible assets (excluding mortgage servicing rights) |
(9,580 | ) | (11,559 | ) | (9,394 | ) | (9,769 | ) | (11,216 | ) | ||||||||||
Related deferred tax liabilities |
2,983 | 3,446 | 2,932 | 3,035 | 3,395 | |||||||||||||||
Tangible common shareholders equity |
$ | 135,936 | $ | 119,485 | $ | 138,295 | $ | 133,550 | $ | 121,548 | ||||||||||
Reconciliation of average shareholders equity to average tangible shareholders equity | ||||||||||||||||||||
Shareholders equity |
$ | 232,930 | $ | 231,695 | $ | 235,067 | $ | 230,769 | $ | 233,461 | ||||||||||
Goodwill |
(73,834 | ) | (86,225 | ) | (73,748 | ) | (73,922 | ) | (86,099 | ) | ||||||||||
Intangible assets (excluding mortgage servicing rights) |
(9,580 | ) | (11,559 | ) | (9,394 | ) | (9,769 | ) | (11,216 | ) | ||||||||||
Related deferred tax liabilities |
2,983 | 3,446 | 2,932 | 3,035 | 3,395 | |||||||||||||||
Tangible shareholders equity |
$ | 152,499 | $ | 137,357 | $ | 154,857 | $ | 150,113 | $ | 139,541 | ||||||||||
Reconciliation of period end common shareholders equity to period end tangible common shareholders equity | ||||||||||||||||||||
Common shareholders equity |
$ | 205,614 | $ | 215,181 | $ | 205,614 | $ | 214,314 | $ | 215,181 | ||||||||||
Goodwill |
(71,074 | ) | (85,801 | ) | (71,074 | ) | (73,869 | ) | (85,801 | ) | ||||||||||
Intangible assets (excluding mortgage servicing rights) |
(9,176 | ) | (10,796 | ) | (9,176 | ) | (9,560 | ) | (10,796 | ) | ||||||||||
Related deferred tax liabilities |
2,853 | 3,215 | 2,853 | 2,933 | 3,215 | |||||||||||||||
Tangible common shareholders equity |
$ | 128,217 | $ | 121,799 | $ | 128,217 | $ | 133,818 | $ | 121,799 | ||||||||||
Reconciliation of period end shareholders equity to period end tangible shareholders equity | ||||||||||||||||||||
Shareholders equity |
$ | 222,176 | $ | 233,174 | $ | 222,176 | $ | 230,876 | $ | 233,174 | ||||||||||
Goodwill |
(71,074 | ) | (85,801 | ) | (71,074 | ) | (73,869 | ) | (85,801 | ) | ||||||||||
Intangible assets (excluding mortgage servicing rights) |
(9,176 | ) | (10,796 | ) | (9,176 | ) | (9,560 | ) | (10,796 | ) | ||||||||||
Related deferred tax liabilities |
2,853 | 3,215 | 2,853 | 2,933 | 3,215 | |||||||||||||||
Tangible shareholders equity |
$ | 144,779 | $ | 139,792 | $ | 144,779 | $ | 150,380 | $ | 139,792 | ||||||||||
Reconciliation of period end assets to period end tangible assets | ||||||||||||||||||||
Assets |
$ | 2,261,319 | $ | 2,368,384 | $ | 2,261,319 | $ | 2,274,532 | $ | 2,368,384 | ||||||||||
Goodwill |
(71,074 | ) | (85,801 | ) | (71,074 | ) | (73,869 | ) | (85,801 | ) | ||||||||||
Intangible assets (excluding mortgage servicing rights) |
(9,176 | ) | (10,796 | ) | (9,176 | ) | (9,560 | ) | (10,796 | ) | ||||||||||
Related deferred tax liabilities |
2,853 | 3,215 | 2,853 | 2,933 | 3,215 | |||||||||||||||
Tangible assets |
$ | 2,183,922 | $ | 2,275,002 | $ | 2,183,922 | $ | 2,194,036 | $ | 2,275,002 | ||||||||||
Book value per share of common stock | ||||||||||||||||||||
Common shareholders equity |
$ | 205,614 | $ | 215,181 | $ | 205,614 | $ | 214,314 | $ | 215,181 | ||||||||||
Ending common shares issued and outstanding |
10,133,190 | 10,033,017 | 10,133,190 | 10,131,803 | 10,033,017 | |||||||||||||||
Book value per share of common stock |
$ | 20.29 | $ | 21.45 | $ | 20.29 | $ | 21.15 | $ | 21.45 | ||||||||||
Tangible book value per share of common stock | ||||||||||||||||||||
Tangible common shareholders equity |
$ | 128,217 | $ | 121,799 | $ | 128,217 | $ | 133,818 | $ | 121,799 | ||||||||||
Ending common shares issued and outstanding |
10,133,190 | 10,033,017 | 10,133,190 | 10,131,803 | 10,033,017 | |||||||||||||||
Tangible book value per share of common stock |
$ | 12.65 | $ | 12.14 | $ | 12.65 | $ | 13.21 | $ | 12.14 | ||||||||||
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 26 |
Exhibit 99.2
Global Card Services
Inc/(Dec)
$ in millions 2Q11 1Q11 2Q10
Net interest income 1 $3,611 ($136) ($831)
Noninterest income 1,925 (15) (581)
Total revenue 5,536 (151) (1,412)
Provision for credit losses 481 (480) (3,315)
Noninterest expense 1,882 (87) 30
Income tax expense 1 1,138 116 664
Net income $2,035 $300 $1,209
Key Indicators ($ in billions) 2Q11 1Q11 2Q10
Average loans and leases $156.8 $162.4 $177.1
Delinquent dollars 30 days+ $6.7 $8.0 $10.5
30 days+ delinquency ratio 4.4% 5.0% 6.1%
Delinquent dollars 90 days+ $3.7 $4.4 $5.8
90 days+ delinquency ratio 2.4% 2.8% 3.3%
Net charge-offs $2.9 $3.3 $5.7
as a % of avg. loans 7.4% 8.3% 12.8%
Credit card purchase volumes $61.3 $55.3 $58.7
Debit card purchase volumes $64.0 $60.0 $59.1
Total purchase volume $125.3 $115.3 $117.8
Return on average economic capital 66.3% 52.3% 19.4%
Commentary
Net income of $2.0B increased $300MM over 1Q11 as credit improvements more than offset lower net interest income from lower average loans and yields Total purchase volume of debit and credit transactions was up seasonally 9% from 1Q11 and increased 6% from 2Q10
New U.S. credit card accounts continue to grow and are up 11% from 1Q11 U.S. credit card net losses improved for the 7th consecutive quarter Payment rate on U.S. credit card improved for the 8th straight quarter Average loans declined $5.6B from 1Q11 due to higher payments, charge-offs and continued non-core portfolio run-off Exited $2.1B receivables at the end of the quarter with minimal income statement impact Upon implementation of the Durbin amendment in 4Q11, revenues are expected to be negatively impacted by approximately $475MM in 4Q11
1 Fully taxable-equivalent basis.
Home Price Impacts
The market median shows a decline in home prices of a little more than 3% in 2011 with a 1% increase in 2012, largely in the second-half, which is consistent with our assumptions
From a near-term perspective, direct impacts from changes in HPI would primarily impact a pool of $40B of consumer real estate loans
$13B of nonperforming loans greater than 180 days past due that have been written down to net realizable value
$27B carrying value of PCI loans (currently carried at 66%)
Additionally, for each 1% change in home prices, the liability for representations and warranties on unsettled GSE originations is estimated to be impacted by $125MM based on projected collateral losses and defect rates
Basel Requirements
Basel Capital Requirements 1
10.0% 9.5%
SIFI @ 250 bps 8.25%
8.0% Capital Conservation Buffer 2.5%
7.0% 1.875%
Tier 1 Common Minimum
6.0% 5.75% 1.25% 2.5%
0.625% 1.875%
4.5% 0.625% 1.25%
4.0% 3.5% 4.0%
2.0% 4.0% 4.5% 4.5% 4.5% 4.5% 4.5%
3.5%
0.0%
2013 2014 2015 2016 2017 2018 2019
Capital Deduction
Phase-In
1/1/2013 0%
1/1/2014 20%
1/1/2015 40%
1/1/2016 60%
1/1/2017 80%
1/1/2018 100%
1/1/2019 100%
Including currently identified RWA mitigation actions, December 31, 2012 RWA is estimated at $1.8T
Additional RWA mitigation efforts have been identified and will continue after December 31, 2012
Also actively mitigating against Basel III capital numerator deductions which phase in starting in 2014
We expect our ratios to be in excess of all required minimums
Assuming no benefit for the Basel III capital deduction phase-in (i.e., fully front-loaded basis), our goal is to achieve a 6.75% - 7% Tier 1 Common Ratio by January 1, 2013
1 Based on BCBSBasel III: A global regulatory framework for more resilient banks and banking systems, issued December 2010 and revised June 2011 and the press release on global systemically important banks dated June 25, 2011.
Basel Mitigation
Completed
Reduced investments in financial institutions
Exited proprietary trading
Reduced low quality investments treated as capital deductions
Decreased Global Markets Basel III RWA
Loan run-off portfolio declined ~$40B from 6/30/10
Reduced equity and alternative investments
Specific 1st Half 2011 Activities
RWA reduced $60B+, including legacy capital markets risk exposures down 26% ($6B)
MSR asset declined 17% ($2.5B) due to interest rates, amortization and charges
Completed asset sales generating $1.3B of Tier 1 common gains and reducing RWA $5B+
Identified Actions to Meet YE12 Goals
Total Basel III RWA mitigation of $200B - $250B to achieve goal of $1.8T
Continue to aggressively reduce capital intensive assets
Continue to rebalance portfolios to improve returns under Basel III
Reduce capital deductions
Manage and reduce OCI risk
Manage equity investments
DTA / multiplier effect
Future Mitigation Goals
Loan run-off portfolio to decline at roughly 20% per year (~$70B of Basel III RWA at 12/31/12)
Credit correlation trading portfolio (~$30B of Basel III RWA at 12/31/12) largely running off by 2018
Continued asset sales
Private equity declines (~$50B of Basel III RWA remaining at 12/31/12)
MSR reductions
DTA / multiplier effect
Representations and Warranties
Liability for Representations and Warranties ($MM)
2Q10 3Q10 4Q10 1Q11 2Q11
Beginning Balance $3,325 $3,939 $4,402 $5,438 $6,220
Additions for new sales 8 6 8 7 3
Provision 1,248 872 4,140 1,013 14,037
Charge-offs (642) (415) (3,028) (238) (2,480)
Other - - (84) - -
Ending Balance $3,939 $4,402 $5,438 $6,220 $17,780
New Claim Trends ($MM)
2Q10 3Q10 4Q10 1Q11 2Q11 Mix
Pre 2005 $125 $147 $455 $130 $210 5%
2005 710 589 957 409 431 13%
2006 1,276 1,442 2,105 1,584 763 32%
2007 2,329 1,664 1,775 2,253 1,746 40%
2008 278 320 351 483 389 8%
Post 2008 47 56 105 128 158 2%
New Claims $4,765 $4,218 $5,748 $4,987 $3,697
% GSEs 77% 82% 57% 88% 90%
Rescinded
claims $1,592 $1,531 $4,106 $934 $3,772
Approved
repurchases 855 1,005 3,934 1,109 2,002
Outstanding
claims 11,166 12,948 10,687 13,564 11,580
% GSEs 50% 53% 26% 39% 44%
Outstanding Claims by Counterparty ($MM)
2Q10 3Q10 4Q10 1Q11 2Q11
GSEs $5,624 $6,819 $2,821 $5,350 $5,081
Monolines 4,114 4,304 4,799 5,251 3,533
Other 1,428 1,825 3,067 2,963 2,966
Total $11,166 $12,948 $10,687 1 $13,564 1 $11,580 1
Commentary
2Q11 representations and warranties provision of $14.0B includes
$8.6B non-GSE settlement with BNY Mellon on legacy Countrywide non-GSE private-label securitizations
$5.4B additional reserve for other non-GSE exposure as a result of the private-label settlement and to a lesser extent GSE exposure
Estimated range of possible loss related to non-GSE representations and warranties exposure could be up to $5B over existing accruals at June 30, 2011. This estimate does not include reasonably possible litigation losses. The company is not currently able to reasonably estimate the possible loss or range of possible loss with respect to GSE representations and warranties exposure over existing accruals at June 30, 2011.
Outstanding claims decreased $2.0B primarily driven by the Assured settlement early in the quarter
Increase in rescissions in 2Q11 was primarily due to the Assured settlement
Increase in approvals in 2Q11 was due to an increase in throughput in processing GSEs claims driven by significant claims received from GSEs during the quarter, the increase in approvals did not result in a proportional decrease in claims outstanding
1 Includes $1.7B in demands from private-label securitization investors who do not have the right to demand repurchase of loans directly. However, inclusion of these claims does not mean we believe that the claimant has satisfied the contractual thresholds to direct the securitization trustee to take action or that these claims are otherwise procedurally or substantively valid. A claimant has filed litigation against the company relating to certain of these claims. These claims related to loans underlying securitizations included in the settlement with Bank of New York Mellon, as trustee. If the settlement is approved by the court, these claims will be resolved by the settlement.
Exhibit 99.3
Supplemental Information
Second Quarter 2011
This information is preliminary and based on company data available at the time of the earnings presentation. It speaks only as of the particular date or dates included in the accompanying pages. Bank of America does not undertake an obligation to, and disclaims any duty to, update any of the information provided. Any forward-looking statements in this information are subject to the forward-looking language contained in Bank of Americas reports filed with the SEC pursuant to the Securities Exchange Act of 1934, which are available at the SECs website (www.sec.gov) or at Bank of Americas website (www.bankofamerica.com). Bank of Americas future financial performance is subject to risks and uncertainties as described in its SEC filings.
Bank of America Corporation and Subsidiaries | ||||
Table of Contents | Page | |||
Consolidated Financial Highlights |
2 | |||
Supplemental Financial Data |
3 | |||
Consolidated Statement of Income |
4 | |||
Consolidated Balance Sheet |
5,6 | |||
Capital Management |
7 | |||
Core Net Interest Income |
8 | |||
Quarterly Average Balances and Interest Rates |
9,10 | |||
Year-to-Date Average Balances and Interest Rates |
11,12 | |||
Debt Securities and Available-for-Sale Marketable Equity Securities |
13 | |||
Quarterly Results by Business Segment |
14 | |||
Year-to-Date Results by Business Segment |
15 | |||
Deposits |
||||
Total Segment Results |
16 | |||
Key Indicators |
17 | |||
Global Card Services |
||||
Total Segment Results |
18 | |||
Key Indicators |
19 | |||
Consumer Real Estate Services |
||||
Total Segment Results |
20 | |||
Quarterly and Year-to-Date Results |
21 | |||
Key Indicators |
22 | |||
Global Commercial Banking |
||||
Total Segment Results |
23 | |||
Key Indicators |
24 | |||
Global Banking & Markets |
||||
Total Segment Results |
25 | |||
Key Indicators |
26 | |||
Credit Default Swaps with Monoline Financial Guarantors |
27 | |||
Investment Banking Product Rankings |
28 | |||
Global Wealth & Investment Management |
||||
Total Segment Results |
29 | |||
Key Indicators |
30 | |||
All Other |
||||
Total Segment Results |
31 | |||
Equity Investments |
32 | |||
Outstanding Loans and Leases |
33 | |||
Quarterly Average Loans and Leases by Business Segment |
34 | |||
Commercial Credit Exposure by Industry |
35 | |||
Net Credit Default Protection by Maturity Profile and Credit Exposure Debt Rating |
36 | |||
Selected Emerging Markets |
37 | |||
Selected European Countries |
38 | |||
Nonperforming Loans, Leases and Foreclosed Properties |
39 | |||
Nonperforming Loans, Leases and Foreclosed Properties Activity |
40 | |||
Quarterly Net Charge-offs and Net Charge-off Ratios |
41 | |||
Year-to-Date Net Charge-offs and Net Charge-off Ratios |
42 | |||
Allocation of the Allowance for Credit Losses by Product Type |
43 | |||
Exhibit A: Non-GAAP Reconciliations |
44,45 | |||
Appendix: Selected Slides from the Second Quarter 2011 Earnings Release Presentation |
46 |
1
Bank of America Corporation and Subsidiaries
Consolidated Financial Highlights
(Dollars in millions, except per share information; shares in thousands)
Six Months Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
|||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||
Income statement |
||||||||||||||||||||||||||||||||
Net interest income |
$ | 23,425 | $ | 26,649 | $ | 11,246 | $ | 12,179 | $ | 12,439 | $ | 12,435 | $ | 12,900 | ||||||||||||||||||
Noninterest income |
16,688 | 34,473 | 1,990 | 14,698 | 9,959 | 14,265 | 16,253 | |||||||||||||||||||||||||
Total revenue, net of interest expense |
40,113 | 61,122 | 13,236 | 26,877 | 22,398 | 26,700 | 29,153 | |||||||||||||||||||||||||
Provision for credit losses |
7,069 | 17,910 | 3,255 | 3,814 | 5,129 | 5,396 | 8,105 | |||||||||||||||||||||||||
Goodwill impairment |
2,603 | | 2,603 | | 2,000 | 10,400 | | |||||||||||||||||||||||||
Merger and restructuring charges |
361 | 1,029 | 159 | 202 | 370 | 421 | 508 | |||||||||||||||||||||||||
All other noninterest expense (1) |
40,175 | 33,999 | 20,094 | 20,081 | 18,494 | 16,395 | 16,745 | |||||||||||||||||||||||||
Income tax expense (benefit) |
(3,318 | ) | 1,879 | (4,049 | ) | 731 | (2,351 | ) | 1,387 | 672 | ||||||||||||||||||||||
Net income (loss) |
(6,777 | ) | 6,305 | (8,826 | ) | 2,049 | (1,244 | ) | (7,299 | ) | 3,123 | |||||||||||||||||||||
Preferred stock dividends |
611 | 688 | 301 | 310 | 321 | 348 | 340 | |||||||||||||||||||||||||
Net income (loss) applicable to common shareholders |
(7,388 | ) | 5,617 | (9,127 | ) | 1,739 | (1,565 | ) | (7,647 | ) | 2,783 | |||||||||||||||||||||
Diluted earnings (loss) per common share (2) |
(0.73 | ) | 0.55 | (0.90 | ) | 0.17 | (0.16 | ) | (0.77 | ) | 0.27 | |||||||||||||||||||||
Average diluted common shares issued and outstanding (2) |
10,085,479 | 10,020,926 | 10,094,928 | 10,181,351 | 10,036,575 | 9,976,351 | 10,029,776 | |||||||||||||||||||||||||
Dividends paid per common share |
$ | 0.02 | $ | 0.02 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||||||||||||||
Performance ratios |
||||||||||||||||||||||||||||||||
Return on average assets |
n/m | 0.51 | % | n/m | 0.36 | % | n/m | n/m | 0.50 | % | ||||||||||||||||||||||
Return on average common shareholders equity |
n/m | 5.45 | n/m | 3.29 | n/m | n/m | 5.18 | |||||||||||||||||||||||||
Return on average tangible common shareholders equity (3) |
n/m | 9.48 | n/m | 5.28 | n/m | n/m | 9.19 | |||||||||||||||||||||||||
Return on average tangible shareholders equity (3) |
n/m | 9.26 | n/m | 5.54 | n/m | n/m | 8.98 | |||||||||||||||||||||||||
At period end |
||||||||||||||||||||||||||||||||
Book value per share of common stock |
$ | 20.29 | $ | 21.45 | $ | 20.29 | $ | 21.15 | $ | 20.99 | $ | 21.17 | $ | 21.45 | ||||||||||||||||||
Tangible book value per share of common stock (3) |
12.65 | 12.14 | 12.65 | 13.21 | 12.98 | 12.91 | 12.14 | |||||||||||||||||||||||||
Market price per share of common stock: |
||||||||||||||||||||||||||||||||
Closing price |
$ | 10.96 | $ | 14.37 | $ | 10.96 | $ | 13.33 | $ | 13.34 | $ | 13.10 | $ | 14.37 | ||||||||||||||||||
High closing price for the period |
15.25 | 19.48 | 13.72 | 15.25 | 13.56 | 15.67 | 19.48 | |||||||||||||||||||||||||
Low closing price for the period |
10.50 | 14.37 | 10.50 | 13.33 | 10.95 | 12.32 | 14.37 | |||||||||||||||||||||||||
Market capitalization |
111,060 | 144,174 | 111,060 | 135,057 | 134,536 | 131,442 | 144,174 | |||||||||||||||||||||||||
Number of banking centers - U.S. |
5,742 | 5,900 | 5,742 | 5,805 | 5,856 | 5,879 | 5,900 | |||||||||||||||||||||||||
Number of branded ATMs - U.S. |
17,817 | 18,078 | 17,817 | 17,886 | 17,926 | 17,929 | 18,078 | |||||||||||||||||||||||||
Full-time equivalent employees |
287,839 | 284,628 | 287,839 | 288,062 | 288,471 | 287,293 | 284,628 |
(1) | Excludes merger and restructuring charges and goodwill impairment charge. |
(2) | Due to a net loss applicable to common shareholders for the second quarter of 2011 and the fourth and third quarters of 2010, no dilutive potential common shares were included in the calculations of diluted earnings per share and average diluted common shares because they were antidilutive. |
(3) | Tangible equity ratios and tangible book value per share of common stock are non-GAAP measures. We believe the use of these non-GAAP measures provides additional clarity in assessing the results of the Corporation. (See Exhibit A: Non-GAAP Reconciliations - Reconciliations to GAAP Financial Measures on pages 44-45.) |
n/m | = not meaningful |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 2 |
Bank of America Corporation and Subsidiaries
Supplemental Financial Data
(Dollars in millions, except per share information)
Fully taxable-equivalent basis data (1)
Six Months
Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income |
$ | 23,890 | $ | 27,267 | $ | 11,493 | $ | 12,397 | $ | 12,709 | $ | 12,717 | $ | 13,197 | ||||||||||||||||||||||||||||||||||||||||||||||
Total revenue, net of interest expense |
40,578 | 61,740 | 13,483 | 27,095 | 22,668 | 26,982 | 29,450 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest yield (2) |
2.58 | % | 2.85 | % | 2.50 | % | 2.67 | % | 2.69 | % | 2.72 | % | 2.77 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Efficiency ratio |
n/m | 56.73 | n/m | 74.86 | 92.04 | 100.87 | 58.58 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Performance ratios, excluding goodwill impairment charges (3) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30 2011 |
Second Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per common share information |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (loss) |
$ | (0.48 | ) | $ | (0.65 | ) | $ | 0.04 | $ | 0.27 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Diluted earnings (loss) |
(0.48 | ) | (0.65 | ) | 0.04 | 0.27 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Efficiency ratio (1) |
n/m | n/m | 83.22 | % | 62.33 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Return on average assets |
n/m | n/m | 0.13 | 0.52 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Return on average common shareholders equity |
n/m | n/m | 0.79 | 5.06 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Return on average tangible common shareholders equity (3) |
n/m | n/m | 1.27 | 8.67 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Return on average tangible shareholders equity (3) |
n/m | n/m | 1.96 | 8.54 |
(1) | Fully taxable-equivalent basis is a non-GAAP measure. Fully taxable-equivalent 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. (See Exhibit A: Non-GAAP Reconciliations - Reconciliations to GAAP Financial Measures on pages 44-45). |
(2) | Calculation includes fees earned on overnight deposits placed with the Federal Reserve of $112 million and $198 million for the six months ended June 30, 2011 and 2010; $49 million and $63 million for the second and first quarters of 2011, and $63 million, $107 million and $106 million for the fourth, third and second quarters of 2010, respectively. For more information see Quarterly and Year-to-Date Average Balances and Interest Rates - Fully Taxable-equivalent Basis on pages 9-10 and 11-12. |
(3) | Total noninterest expense, excluding goodwill impairment charges, net income, excluding goodwill impairment charges and net income applicable to common shareholders, excluding goodwill impairment charges and tangible equity ratios are non-GAAP measures. We believe the use of these non-GAAP measures provides additional clarity in assessing the results of the Corporation. (See Exhibit A: Non-GAAP Reconciliations - Reconciliations to GAAP Financial Measures on pages 44-45). |
n/m | = not meaningful |
Certain | prior period amounts have been reclassified to conform to current period presentation. |
This information is preliminary and based on company data available at the time of the presentation. | 3 |
Bank of America Corporation and Subsidiaries
Consolidated Statement of Income
(Dollars in millions, except per share information; shares in thousands)
Six Months
Ended June 30 |
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
|||||||||||||||||||||||||
2011 | 2010 | 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||||||||||
Interest income |
||||||||||||||||||||||||||||||
Loans and leases |
$ | 23,249 | $ | 26,362 | $ | 11,320 | $ | 11,929 | $ | 12,149 | $ | 12,485 | $ | 12,887 | ||||||||||||||||
Debt securities |
5,557 | 6,033 | 2,675 | 2,882 | 3,029 | 2,605 | 2,917 | |||||||||||||||||||||||
Federal funds sold and securities borrowed or purchased under agreements to resell |
1,114 | 905 | 597 | 517 | 486 | 441 | 457 | |||||||||||||||||||||||
Trading account assets |
3,164 | 3,539 | 1,538 | 1,626 | 1,661 | 1,641 | 1,796 | |||||||||||||||||||||||
Other interest income |
1,886 | 2,159 | 918 | 968 | 965 | 1,037 | 1,062 | |||||||||||||||||||||||
Total interest income |
34,970 | 38,998 | 17,048 | 17,922 | 18,290 | 18,209 | 19,119 | |||||||||||||||||||||||
Interest expense |
||||||||||||||||||||||||||||||
Deposits |
1,682 | 2,153 | 843 | 839 | 894 | 950 | 1,031 | |||||||||||||||||||||||
Short-term borrowings |
2,525 | 1,709 | 1,341 | 1,184 | 1,142 | 848 | 891 | |||||||||||||||||||||||
Trading account liabilities |
1,254 | 1,375 | 627 | 627 | 561 | 635 | 715 | |||||||||||||||||||||||
Long-term debt |
6,084 | 7,112 | 2,991 | 3,093 | 3,254 | 3,341 | 3,582 | |||||||||||||||||||||||
Total interest expense |
11,545 | 12,349 | 5,802 | 5,743 | 5,851 | 5,774 | 6,219 | |||||||||||||||||||||||
Net interest income |
23,425 | 26,649 | 11,246 | 12,179 | 12,439 | 12,435 | 12,900 | |||||||||||||||||||||||
Noninterest income |
||||||||||||||||||||||||||||||
Card income |
3,795 | 3,999 | 1,967 | 1,828 | 2,127 | 1,982 | 2,023 | |||||||||||||||||||||||
Service charges |
4,044 | 5,142 | 2,012 | 2,032 | 2,036 | 2,212 | 2,576 | |||||||||||||||||||||||
Investment and brokerage services |
6,110 | 6,019 | 3,009 | 3,101 | 2,879 | 2,724 | 2,994 | |||||||||||||||||||||||
Investment banking income |
3,262 | 2,559 | 1,684 | 1,578 | 1,590 | 1,371 | 1,319 | |||||||||||||||||||||||
Equity investment income |
2,687 | 3,391 | 1,212 | 1,475 | 1,512 | 357 | 2,766 | |||||||||||||||||||||||
Trading account profits |
4,813 | 6,463 | 2,091 | 2,722 | 995 | 2,596 | 1,227 | |||||||||||||||||||||||
Mortgage banking income (loss) |
(12,566 | ) | 2,398 | (13,196 | ) | 630 | (1,419 | ) | 1,755 | 898 | ||||||||||||||||||||
Insurance income |
1,013 | 1,393 | 400 | 613 | 598 | 75 | 678 | |||||||||||||||||||||||
Gains on sales of debt securities |
1,445 | 771 | 899 | 546 | 872 | 883 | 37 | |||||||||||||||||||||||
Other income (loss) |
2,218 | 3,065 | 1,957 | 261 | (1,114 | ) | 433 | 1,861 | ||||||||||||||||||||||
Other-than-temporary impairment losses on available-for-sale debt securities: |
||||||||||||||||||||||||||||||
Total other-than-temporary impairment losses |
(157 | ) | (1,783 | ) | (63 | ) | (111 | ) | (612 | ) | (156 | ) | (462 | ) | ||||||||||||||||
Less: Portion of other-than-temporary impairment losses recognized in other comprehensive income |
24 | 1,056 | 18 | 23 | 495 | 33 | 336 | |||||||||||||||||||||||
Net impairment losses recognized in earnings on available-for-sale debt securities |
(133 | ) | (727 | ) | (45 | ) | (88 | ) | (117 | ) | (123 | ) | (126 | ) | ||||||||||||||||
Total noninterest income |
16,688 | 34,473 | 1,990 | 14,698 | 9,959 | 14,265 | 16,253 | |||||||||||||||||||||||
Total revenue, net of interest expense |
40,113 | 61,122 | 13,236 | 26,877 | 22,398 | 26,700 | 29,153 | |||||||||||||||||||||||
Provision for credit losses |
7,069 | 17,910 | 3,255 | 3,814 | 5,129 | 5,396 | 8,105 | |||||||||||||||||||||||
Noninterest expense |
||||||||||||||||||||||||||||||
Personnel |
19,339 | 17,947 | 9,171 | 10,168 | 8,800 | 8,402 | 8,789 | |||||||||||||||||||||||
Occupancy |
2,434 | 2,354 | 1,245 | 1,189 | 1,212 | 1,150 | 1,182 | |||||||||||||||||||||||
Equipment |
1,199 | 1,226 | 593 | 606 | 607 | 619 | 613 | |||||||||||||||||||||||
Marketing |
1,124 | 982 | 560 | 564 | 484 | 497 | 495 | |||||||||||||||||||||||
Professional fees |
1,412 | 1,161 | 766 | 646 | 883 | 651 | 644 | |||||||||||||||||||||||
Amortization of intangibles |
767 | 885 | 382 | 385 | 420 | 426 | 439 | |||||||||||||||||||||||
Data processing |
1,338 | 1,280 | 643 | 695 | 662 | 602 | 632 | |||||||||||||||||||||||
Telecommunications |
762 | 689 | 391 | 371 | 366 | 361 | 359 | |||||||||||||||||||||||
Other general operating |
11,800 | 7,475 | 6,343 | 5,457 | 5,060 | 3,687 | 3,592 | |||||||||||||||||||||||
Goodwill impairment |
2,603 | | 2,603 | | 2,000 | 10,400 | | |||||||||||||||||||||||
Merger and restructuring charges |
361 | 1,029 | 159 | 202 | 370 | 421 | 508 | |||||||||||||||||||||||
Total noninterest expense |
43,139 | 35,028 | 22,856 | 20,283 | 20,864 | 27,216 | 17,253 | |||||||||||||||||||||||
Income (loss) before income taxes |
(10,095 | ) | 8,184 | (12,875 | ) | 2,780 | (3,595 | ) | (5,912 | ) | 3,795 | |||||||||||||||||||
Income tax expense (benefit) |
(3,318 | ) | 1,879 | (4,049 | ) | 731 | (2,351 | ) | 1,387 | 672 | ||||||||||||||||||||
Net income (loss) |
$ | (6,777 | ) | $ | 6,305 | $ | (8,826 | ) | $ | 2,049 | $ | (1,244 | ) | $ | (7,299 | ) | $ | 3,123 | ||||||||||||
Preferred stock dividends |
611 | 688 | 301 | 310 | 321 | 348 | 340 | |||||||||||||||||||||||
Net income (loss) applicable to common shareholders |
$ | (7,388 | ) | $ | 5,617 | $ | (9,127 | ) | $ | 1,739 | $ | (1,565 | ) | $ | (7,647 | ) | $ | 2,783 | ||||||||||||
Per common share information |
||||||||||||||||||||||||||||||
Earnings (loss) |
$ | (0.73 | ) | $ | 0.56 | $ | (0.90 | ) | $ | 0.17 | $ | (0.16 | ) | $ | (0.77 | ) | $ | 0.28 | ||||||||||||
Diluted earnings (loss) (1) |
(0.73 | ) | 0.55 | (0.90 | ) | 0.17 | (0.16 | ) | (0.77 | ) | 0.27 | |||||||||||||||||||
Dividends paid |
0.02 | 0.02 | 0.01 | 0.01 | 0.01 | 0.01 | 0.01 | |||||||||||||||||||||||
Average common shares issued and outstanding |
10,085,479 | 9,570,166 | 10,094,928 | 10,075,875 | 10,036,575 | 9,976,351 | 9,956,773 | |||||||||||||||||||||||
Average diluted common shares issued and outstanding (1) |
10,085,479 | 10,020,926 | 10,094,928 | 10,181,351 | 10,036,575 | 9,976,351 | 10,029,776 | |||||||||||||||||||||||
(1) | Due to a net loss applicable to common shareholders for the second quarter of 2011 and for the fourth and third quarters of 2010, the impact of antidilutive equity instruments was excluded from diluted earnings per share and average diluted common shares. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 4 |
Bank of America Corporation and Subsidiaries
Consolidated Balance Sheet
(Dollars in millions)
June 30 2011 |
March 31 2011 |
June 30 2010 |
||||||||||
Assets |
||||||||||||
Cash and cash equivalents |
$ | 119,527 | $ | 97,542 | $ | 151,034 | ||||||
Time deposits placed and other short-term investments |
20,291 | 23,707 | 20,718 | |||||||||
Federal funds sold and securities borrowed or purchased under agreements to resell |
235,181 | 234,056 | 247,667 | |||||||||
Trading account assets |
196,939 | 208,761 | 197,376 | |||||||||
Derivative assets |
66,598 | 65,334 | 87,839 | |||||||||
Debt securities: |
||||||||||||
Available-for-sale |
330,871 | 330,345 | 314,765 | |||||||||
Held-to-maturity, at cost |
181 | 431 | 435 | |||||||||
Total debt securities |
331,052 | 330,776 | 315,200 | |||||||||
Loans and leases |
941,257 | 932,425 | 956,177 | |||||||||
Allowance for loan and lease losses |
(37,312 | ) | (39,843 | ) | (45,255 | ) | ||||||
Loans and leases, net of allowance |
903,945 | 892,582 | 910,922 | |||||||||
Premises and equipment, net |
13,793 | 14,151 | 14,536 | |||||||||
Mortgage servicing rights (includes $12,372, $15,282 and $14,745 measured at fair value) |
12,642 | 15,560 | 15,041 | |||||||||
Goodwill |
71,074 | 73,869 | 85,801 | |||||||||
Intangible assets |
9,176 | 9,560 | 10,796 | |||||||||
Loans held-for-sale |
20,092 | 25,003 | 38,046 | |||||||||
Customer and other receivables |
86,550 | 97,318 | 86,466 | |||||||||
Other assets |
174,459 | 186,313 | 186,942 | |||||||||
Total assets |
$ | 2,261,319 | $ | 2,274,532 | $ | 2,368,384 | ||||||
Assets of consolidated VIEs included in total assets above (substantially all pledged as collateral) |
||||||||||||
Trading account assets |
$ | 10,746 | $ | 12,012 | $ | 10,675 | ||||||
Derivative assets |
2,293 | 2,280 | 2,094 | |||||||||
Available-for-sale debt securities |
251 | 2,104 | 9,493 | |||||||||
Loans and leases |
151,928 | 146,309 | 134,143 | |||||||||
Allowance for loan and lease losses |
(7,792 | ) | (8,335 | ) | (10,585 | ) | ||||||
Loans and leases, net of allowance |
144,136 | 137,974 | 123,558 | |||||||||
Loans held-for-sale |
1,561 | 1,605 | 3,371 | |||||||||
All other assets |
7,115 | 4,883 | 9,190 | |||||||||
Total assets of consolidated VIEs |
$ | 166,102 | $ | 160,858 | $ | 158,381 |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 5 |
Bank of America Corporation and Subsidiaries
Consolidated Balance Sheet (continued)
(Dollars in millions)
June 30 2011 |
March 31 2011 |
June 30 2010 |
||||||||||
Liabilities |
||||||||||||
Deposits in U.S. offices: |
||||||||||||
Noninterest-bearing |
$ | 301,558 | $ | 286,357 | $ | 258,988 | ||||||
Interest-bearing |
647,480 | 652,096 | 640,807 | |||||||||
Deposits in non-U.S. offices: |
||||||||||||
Noninterest-bearing |
6,555 | 7,894 | 5,791 | |||||||||
Interest-bearing |
82,815 | 73,828 | 68,881 | |||||||||
Total deposits |
1,038,408 | 1,020,175 | 974,467 | |||||||||
Federal funds purchased and securities loaned or sold under agreements to repurchase |
239,521 | 260,521 | 307,211 | |||||||||
Trading account liabilities |
74,989 | 88,478 | 89,982 | |||||||||
Derivative liabilities |
54,414 | 53,501 | 67,297 | |||||||||
Commercial paper and other short-term borrowings |
50,632 | 58,324 | 73,358 | |||||||||
Accrued expenses and other liabilities (includes $897, $961 and $1,413 of reserve for unfunded lending commitments) |
154,520 | 128,221 | 132,812 | |||||||||
Long-term debt |
426,659 | 434,436 | 490,083 | |||||||||
Total liabilities |
2,039,143 | 2,043,656 | 2,135,210 | |||||||||
Shareholders equity |
||||||||||||
Preferred stock, $0.01 par value; authorized -100,000,000 shares; issued and outstanding - 3,943,660, 3,943,660 and 3,960,660 shares |
16,562 | 16,562 | 17,993 | |||||||||
Common stock and additional paid-in capital, $0.01 par value; authorized - 12,800,000,000, 12,800,000,000 and 12,800,000,000 shares; issued and outstanding - 10,133,189,501, 10,131,803,417 and 10,033,016,719 shares |
151,567 | 151,379 | 149,175 | |||||||||
Retained earnings |
53,254 | 62,483 | 70,497 | |||||||||
Accumulated other comprehensive income (loss) |
793 | 463 | (4,447 | ) | ||||||||
Other |
| (11 | ) | (44 | ) | |||||||
Total shareholders equity |
222,176 | 230,876 | 233,174 | |||||||||
Total liabilities and shareholders equity |
$ | 2,261,319 | $ | 2,274,532 | $ | 2,368,384 | ||||||
Liabilities of consolidated VIEs included in total liabilities above |
||||||||||||
Commercial paper and other short-term borrowings |
$ | 5,421 | $ | 6,954 | $ | 17,848 | ||||||
Long-term debt |
64,745 | 65,197 | 85,186 | |||||||||
All other liabilities |
1,127 | 1,240 | 2,535 | |||||||||
Total liabilities of consolidated VIEs |
$ | 71,293 | $ | 73,391 | $ | 105,569 |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 6 |
Bank of America Corporation and Subsidiaries
Capital Management
(Dollars in millions)
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
||||||||||||||||||||||||||
Risk-based capital (1): |
||||||||||||||||||||||||||||||
Tier 1 common |
$ | 114,684 | $ | 123,882 | $ | 125,139 | $ | 124,756 | $ | 119,716 | ||||||||||||||||||||
Tier 1 capital |
153,133 | 162,295 | 163,626 | 164,763 | 159,551 | |||||||||||||||||||||||||
Total capital |
217,986 | 229,094 | 229,594 | 231,120 | 220,827 | |||||||||||||||||||||||||
Risk-weighted assets |
1,392,747 | 1,433,377 | 1,455,951 | 1,476,774 | 1,494,990 | |||||||||||||||||||||||||
Tier 1 common equity ratio (2) |
8.23 | % | 8.64 | % | 8.60 | % | 8.45 | % | 8.01 | % | ||||||||||||||||||||
Tier 1 capital ratio |
11.00 | 11.32 | 11.24 | 11.16 | 10.67 | |||||||||||||||||||||||||
Total capital ratio |
15.65 | 15.98 | 15.77 | 15.65 | 14.77 | |||||||||||||||||||||||||
Tier 1 leverage ratio |
6.86 | 7.25 | 7.21 | 7.21 | 6.68 | |||||||||||||||||||||||||
Tangible equity ratio (3) |
6.63 | 6.85 | 6.75 | 6.54 | 6.14 | |||||||||||||||||||||||||
Tangible common equity ratio (3) |
5.87 | 6.10 | 5.99 | 5.74 | 5.35 |
(1) | Reflects preliminary data for current period risk-based capital. |
(2) | Tier 1 common equity ratio equals Tier 1 capital excluding preferred stock, trust preferred securities, hybrid securities and minority interest divided by risk-weighted assets. |
(3) | Tangible equity ratio equals period end tangible shareholders equity divided by period end tangible assets. Tangible common equity equals period end tangible common shareholders equity divided by period end tangible assets. Tangible shareholders equity and tangible assets are non-GAAP measures. We believe the use of these non-GAAP measures provide additional clarity in assessing the results of the Corporation. (See Exhibit A: Non-GAAP Reconciliations - Reconciliation to GAAP Financial Measures on pages 44-45). |
* | Preliminary data on risk-based capital |
Outstanding Common Stock
No common shares were repurchased in the second quarter of 2011.
There is no existing Board authorized share repurchase program.
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 7 |
Bank of America Corporation and Subsidiaries
Core Net Interest Income
(Dollars in millions)
Six Months
Ended June 30 |
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
|||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income (1) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As reported (2) |
$ | 23,890 | $ | 27,267 | $ | 11,493 | $ | 12,397 | $ | 12,709 | $ | 12,717 | $ | 13,197 | ||||||||||||||||||||||||||||||||||||||||||
Impact of market-based net |
(1,965 | ) | (2,235 | ) | (914 | ) | (1,051 | ) | (1,150 | ) | (1,045 | ) | (1,049 | ) | ||||||||||||||||||||||||||||||||||||||||||
Core net interest income |
$ | 21,925 | $ | 25,032 | $ | 10,579 | $ | 11,346 | $ | 11,559 | $ | 11,672 | $ | 12,148 | ||||||||||||||||||||||||||||||||||||||||||
Average earning assets (4) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As reported |
$ | 1,857,124 | $ | 1,921,864 | $ | 1,844,525 | $ | 1,869,863 | $ | 1,883,539 | $ | 1,863,819 | $ | 1,910,790 | ||||||||||||||||||||||||||||||||||||||||||
Impact of market-based earning assets (3) |
(465,617 | ) | (533,180 | ) | (461,775 | ) | (469,503 | ) | (481,629 | ) | (503,890 | ) | (530,785 | ) | ||||||||||||||||||||||||||||||||||||||||||
Core average earning assets |
$ | 1,391,507 | $ | 1,388,684 | $ | 1,382,750 | $ | 1,400,360 | $ | 1,401,910 | $ | 1,359,929 | $ | 1,380,005 | ||||||||||||||||||||||||||||||||||||||||||
Net interest yield |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As reported (2) |
2.58 | % | 2.85 | % | 2.50 | % | 2.67 | % | 2.69 | % | 2.72 | % | 2.77 | % | ||||||||||||||||||||||||||||||||||||||||||
Impact of market-based |
0.58 | 0.77 | 0.56 | 0.59 | 0.60 | 0.70 | 0.76 | |||||||||||||||||||||||||||||||||||||||||||||||||
Core net interest yield on earning assets |
3.16 | % | 3.62 | % | 3.06 | % | 3.26 | % | 3.29 | % | 3.42 | % | 3.53 | % | ||||||||||||||||||||||||||||||||||||||||||
(1) | Fully taxable-equivalent basis |
(2) | Balance and calculation include fees earned on overnight deposits placed with the Federal Reserve of $112 million and $198 million for the six months ended June 30, 2011 and 2010; $49 million and $63 million for the second and first quarters of 2011, and $63 million, $107 million and $106 million for the fourth, third and second quarters of 2010, respectively. |
(3) | Represents the impact of market-based amounts included in Global Banking & Markets. |
(4) | For the three and six months ended June 30, 2011, $40.4 billion and $20.3 billion of non-interest earning equity securities were reclassified from trading account assets to other non-earning assets. Prior period amounts are immaterial and have not been restated. |
(5) | Calculated on an annualized basis. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 8 |
Bank of America Corporation and Subsidiaries
Quarterly Average Balances and Interest Rates - Fully Taxable-equivalent Basis
(Dollars in millions)
Second Quarter 2011 | First Quarter 2011 | Second Quarter 2010 | ||||||||||||||||||||||||||||||||||||||||||||
Interest | Interest | Interest | ||||||||||||||||||||||||||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||||||||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||||||||||||||||||||||
Earning assets |
||||||||||||||||||||||||||||||||||||||||||||||
Time deposits placed and other short-term investments (1) |
$ | 27,298 | $ | 106 | 1.56 | % | $ | 31,294 | $ | 88 | 1.14 | % | $ | 30,741 | $ | 70 | 0.93 | % | ||||||||||||||||||||||||||||
Federal funds sold and securities borrowed or purchased under agreements to resell |
259,069 | 597 | 0.92 | 227,379 | 517 | 0.92 | 263,564 | 457 | 0.70 | |||||||||||||||||||||||||||||||||||||
Trading account assets (2) |
186,760 | 1,576 | 3.38 | 221,041 | 1,669 | 3.05 | 213,927 | 1,853 | 3.47 | |||||||||||||||||||||||||||||||||||||
Debt securities (3) |
335,269 | 2,696 | 3.22 | 335,847 | 2,917 | 3.49 | 314,299 | 2,966 | 3.78 | |||||||||||||||||||||||||||||||||||||
Loans and leases (4): |
||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage (5) |
265,420 | 2,763 | 4.16 | 262,049 | 2,881 | 4.40 | 247,715 | 2,982 | 4.82 | |||||||||||||||||||||||||||||||||||||
Home equity |
131,786 | 1,261 | 3.83 | 136,089 | 1,335 | 3.96 | 148,219 | 1,537 | 4.15 | |||||||||||||||||||||||||||||||||||||
Discontinued real estate |
15,997 | 129 | 3.22 | 12,899 | 110 | 3.42 | 13,972 | 134 | 3.84 | |||||||||||||||||||||||||||||||||||||
U.S. credit card |
106,164 | 2,718 | 10.27 | 109,941 | 2,837 | 10.47 | 118,738 | 3,121 | 10.54 | |||||||||||||||||||||||||||||||||||||
Non-U.S. credit card |
27,259 | 760 | 11.18 | 27,633 | 779 | 11.43 | 27,706 | 854 | 12.37 | |||||||||||||||||||||||||||||||||||||
Direct/Indirect consumer (6) |
89,403 | 945 | 4.24 | 90,097 | 993 | 4.47 | 98,549 | 1,233 | 5.02 | |||||||||||||||||||||||||||||||||||||
Other consumer (7) |
2,745 | 47 | 6.87 | 2,753 | 45 | 6.58 | 2,958 | 46 | 6.32 | |||||||||||||||||||||||||||||||||||||
Total consumer |
638,774 | 8,623 | 5.41 | 641,461 | 8,980 | 5.65 | 657,857 | 9,907 | 6.03 | |||||||||||||||||||||||||||||||||||||
U.S. commercial |
190,479 | 1,827 | 3.85 | 191,353 | 1,926 | 4.08 | 195,144 | 2,005 | 4.12 | |||||||||||||||||||||||||||||||||||||
Commercial real estate (8) |
45,762 | 382 | 3.35 | 48,359 | 437 | 3.66 | 64,218 | 541 | 3.38 | |||||||||||||||||||||||||||||||||||||
Commercial lease financing |
21,284 | 235 | 4.41 | 21,634 | 322 | 5.95 | 21,271 | 261 | 4.90 | |||||||||||||||||||||||||||||||||||||
Non-U.S. commercial |
42,214 | 339 | 3.22 | 36,159 | 299 | 3.35 | 28,564 | 256 | 3.59 | |||||||||||||||||||||||||||||||||||||
Total commercial |
299,739 | 2,783 | 3.72 | 297,505 | 2,984 | 4.06 | 309,197 | 3,063 | 3.97 | |||||||||||||||||||||||||||||||||||||
Total loans and leases |
938,513 | 11,406 | 4.87 | 938,966 | 11,964 | 5.14 | 967,054 | 12,970 | 5.38 | |||||||||||||||||||||||||||||||||||||
Other earning assets |
97,616 | 866 | 3.56 | 115,336 | 922 | 3.24 | 121,205 | 994 | 3.29 | |||||||||||||||||||||||||||||||||||||
Total earning assets |
1,844,525 | 17,247 | 3.75 | 1,869,863 | 18,077 | 3.92 | 1,910,790 | 19,310 | 4.05 | |||||||||||||||||||||||||||||||||||||
Cash and cash equivalents (1) |
115,956 | 49 | 138,241 | 63 | 209,686 | 106 | ||||||||||||||||||||||||||||||||||||||||
Other assets, less allowance for loan and lease losses (2) |
378,629 | 330,434 | 373,956 | |||||||||||||||||||||||||||||||||||||||||||
Total assets |
$ | 2,339,110 | $ | 2,338,538 | $ | 2,494,432 | ||||||||||||||||||||||||||||||||||||||||
(1) | For this presentation, fees earned on overnight deposits placed with the Federal Reserve are included in the cash and cash equivalents line, consistent with the Corporations Consolidated Balance Sheet presentation of these deposits. Net interest income and net interest yield are calculated excluding these fees. |
(2) | For the second quarter of 2011, $40.4 billion of non-interest earning equity securities were reclassified from trading account assets to other non-earning assets. Prior period amounts are immaterial and have not been restated. |
(3) | Yields on available-for-sale debt securities are calculated based on fair value rather than the cost basis. The use of fair value does not have a material impact on net interest yield. |
(4) | Nonperforming loans are included in the respective average loan balances. Income on these nonperforming loans is recognized on a cash basis. Purchased credit-impaired loans were written down to fair value upon acquisition and accrete interest income over the remaining life of the loan. |
(5) | Includes non-U.S. residential mortgages of $94 million and $92 million in the second and first quarters of 2011, and $506 million in the second quarter of 2010. |
(6) | Includes non-U.S. consumer loans of $8.7 billion and $8.2 billion in the second and first quarters of 2011, and $7.7 billion in the second quarter of 2010. |
(7) | Includes consumer finance loans of $1.8 billion and $1.9 billion in the second and first quarters of 2011, and $2.1 billion in the second quarter of 2010; other non-U.S. consumer loans of $840 million and $777 million in the second and first quarters of 2011, and $679 million in the second quarter of 2010; and consumer overdrafts of $79 million and $76 million in the second and first quarters of 2011, and $155 million in the second quarter of 2010. |
(8) | Includes U.S. commercial real estate loans of $43.4 billion and $45.7 billion in the second and first quarters of 2011, and $61.6 billion in the second quarter of 2010, and non-U.S. commercial real estate loans of $2.4 billion and $2.7 billion in the second and first quarters of 2011, and $2.6 billion in the second quarter of 2010. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 9 |
Bank of America Corporation and Subsidiaries
Quarterly Average Balances and Interest Rates - Fully Taxable-equivalent Basis (continued)
(Dollars in millions)
Second Quarter 2011 | First Quarter 2011 | Second Quarter 2010 | ||||||||||||||||||||||||||||||||||||||||||||||
Interest | Interest | Interest | ||||||||||||||||||||||||||||||||||||||||||||||
Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | ||||||||||||||||||||||||||||||||||||||||
Balance | Expense | Rate | Balance | Expense | Rate | Balance | Expense | Rate | ||||||||||||||||||||||||||||||||||||||||
Interest-bearing liabilities |
||||||||||||||||||||||||||||||||||||||||||||||||
U.S. interest-bearing deposits: |
||||||||||||||||||||||||||||||||||||||||||||||||
Savings |
$ | 41,668 | $ | 31 | 0.30 | % | $ | 38,905 | $ | 32 | 0.34 | % | $ | 37,290 | $ | 43 | 0.46 | % | ||||||||||||||||||||||||||||||
NOW and money market deposit accounts |
478,690 | 304 | 0.25 | 475,954 | 316 | 0.27 | 442,262 | 372 | 0.34 | |||||||||||||||||||||||||||||||||||||||
Consumer CDs and IRAs |
113,728 | 281 | 0.99 | 118,306 | 300 | 1.03 | 147,425 | 441 | 1.20 | |||||||||||||||||||||||||||||||||||||||
Negotiable CDs, public funds and other time deposits |
13,842 | 42 | 1.22 | 13,995 | 39 | 1.11 | 17,355 | 59 | 1.36 | |||||||||||||||||||||||||||||||||||||||
Total U.S. interest-bearing deposits |
647,928 | 658 | 0.41 | 647,160 | 687 | 0.43 | 644,332 | 915 | 0.57 | |||||||||||||||||||||||||||||||||||||||
Non-U.S. interest-bearing deposits: |
||||||||||||||||||||||||||||||||||||||||||||||||
Banks located in non-U.S. countries |
19,234 | 37 | 0.77 | 21,534 | 38 | 0.72 | 19,751 | 36 | 0.72 | |||||||||||||||||||||||||||||||||||||||
Governments and official institutions |
2,131 | 2 | 0.38 | 2,307 | 2 | 0.35 | 4,214 | 3 | 0.28 | |||||||||||||||||||||||||||||||||||||||
Time, savings and other |
64,889 | 146 | 0.90 | 60,432 | 112 | 0.76 | 52,195 | 77 | 0.60 | |||||||||||||||||||||||||||||||||||||||
Total non-U.S. interest-bearing deposits |
86,254 | 185 | 0.86 | 84,273 | 152 | 0.73 | 76,160 | 116 | 0.61 | |||||||||||||||||||||||||||||||||||||||
Total interest-bearing deposits |
734,182 | 843 | 0.46 | 731,433 | 839 | 0.46 | 720,492 | 1,031 | 0.57 | |||||||||||||||||||||||||||||||||||||||
Federal funds purchased, securities loaned or sold under agreements to repurchase and other short-term borrowings |
338,692 | 1,342 | 1.59 | 371,573 | 1,184 | 1.29 | 454,051 | 891 | 0.79 | |||||||||||||||||||||||||||||||||||||||
Trading account liabilities |
96,108 | 627 | 2.62 | 83,914 | 627 | 3.03 | 100,021 | 715 | 2.87 | |||||||||||||||||||||||||||||||||||||||
Long-term debt |
435,144 | 2,991 | 2.75 | 440,511 | 3,093 | 2.84 | 497,469 | 3,582 | 2.88 | |||||||||||||||||||||||||||||||||||||||
Total interest-bearing liabilities |
1,604,126 | 5,803 | 1.45 | 1,627,431 | 5,743 | 1.43 | 1,772,033 | 6,219 | 1.41 | |||||||||||||||||||||||||||||||||||||||
Noninterest-bearing sources: |
||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
301,762 | 291,707 | 271,123 | |||||||||||||||||||||||||||||||||||||||||||||
Other liabilities |
198,155 | 188,631 | 217,815 | |||||||||||||||||||||||||||||||||||||||||||||
Shareholders equity |
235,067 | 230,769 | 233,461 | |||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders equity |
$ | 2,339,110 | $ | 2,338,538 | $ | 2,494,432 | ||||||||||||||||||||||||||||||||||||||||||
Net interest spread |
2.30 | % | 2.49 | % | 2.64 | % | ||||||||||||||||||||||||||||||||||||||||||
Impact of noninterest-bearing sources |
0.19 | 0.17 | 0.10 | |||||||||||||||||||||||||||||||||||||||||||||
Net interest income/yield on earning assets (1) |
$ | 11,444 | 2.49 | % | $ | 12,334 | 2.66 | % | $ | 13,091 | 2.74 | % | ||||||||||||||||||||||||||||||||||||
For footnotes see page 9.
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 10 |
Bank of America Corporation and Subsidiaries
Year-to-Date Average Balances and Interest Rates - Fully Taxable-equivalent Basis
(Dollars in millions)
Six Months Ended June 30 | ||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||
Average Balance |
Interest Income/ Expense |
Yield/ Rate |
Average Balance |
Interest Income/ Expense |
Yield/ Rate |
|||||||||||||||||||||||||||
Earning assets |
||||||||||||||||||||||||||||||||
Time deposits placed and other short-term investments (1) |
$ | 29,285 | $ | 194 | 1.34 | % | $ | 29,179 | $ | 130 | 0.90 | % | ||||||||||||||||||||
Federal funds sold and securities borrowed or purchased under agreements to resell |
243,311 | 1,114 | 0.92 | 264,810 | 905 | 0.69 | ||||||||||||||||||||||||||
Trading account assets (2) |
203,806 | 3,245 | 3.21 | 214,233 | 3,648 | 3.42 | ||||||||||||||||||||||||||
Debt securities (3) |
335,556 | 5,613 | 3.35 | 312,727 | 6,139 | 3.93 | ||||||||||||||||||||||||||
Loans and leases (4): |
||||||||||||||||||||||||||||||||
Residential mortgage (5) |
263,744 | 5,644 | 4.28 | 245,785 | 6,082 | 4.95 | ||||||||||||||||||||||||||
Home equity |
133,926 | 2,596 | 3.90 | 150,365 | 3,123 | 4.18 | ||||||||||||||||||||||||||
Discontinued real estate |
14,457 | 239 | 3.31 | 14,201 | 287 | 4.05 | ||||||||||||||||||||||||||
U.S. credit card |
108,042 | 5,555 | 10.37 | 122,027 | 6,491 | 10.73 | ||||||||||||||||||||||||||
Non-U.S. credit card |
27,445 | 1,539 | 11.31 | 28,783 | 1,760 | 12.33 | ||||||||||||||||||||||||||
Direct/Indirect consumer (6) |
89,748 | 1,938 | 4.36 | 99,728 | 2,535 | 5.13 | ||||||||||||||||||||||||||
Other consumer (7) |
2,748 | 92 | 6.75 | 2,981 | 94 | 6.34 | ||||||||||||||||||||||||||
Total consumer |
640,110 | 17,603 | 5.53 | 663,870 | 20,372 | 6.17 | ||||||||||||||||||||||||||
U.S. commercial |
190,914 | 3,753 | 3.96 | 198,882 | 3,975 | 4.03 | ||||||||||||||||||||||||||
Commercial real estate (8) |
47,053 | 819 | 3.51 | 66,361 | 1,116 | 3.39 | ||||||||||||||||||||||||||
Commercial lease financing |
21,458 | 557 | 5.18 | 21,472 | 565 | 5.26 | ||||||||||||||||||||||||||
Non-U.S. commercial |
39,203 | 638 | 3.28 | 28,682 | 520 | 3.65 | ||||||||||||||||||||||||||
Total commercial |
298,628 | 5,767 | 3.89 | 315,397 | 6,176 | 3.94 | ||||||||||||||||||||||||||
Total loans and leases |
938,738 | 23,370 | 5.01 | 979,267 | 26,548 | 5.45 | ||||||||||||||||||||||||||
Other earning assets |
106,428 | 1,788 | 3.39 | 121,648 | 2,047 | 3.39 | ||||||||||||||||||||||||||
Total earning assets |
1,857,124 | 35,324 | 3.84 | 1,921,864 | 39,417 | 4.14 | ||||||||||||||||||||||||||
Cash and cash equivalents (1) |
127,037 | 112 | 203,334 | 198 | ||||||||||||||||||||||||||||
Other assets, less allowance for loan and lease losses (2) |
354,665 | 380,261 | ||||||||||||||||||||||||||||||
Total assets |
$ | 2,338,826 | $ | 2,505,459 | ||||||||||||||||||||||||||||
(1) | Fees earned on overnight deposits placed with the Federal Reserve, which were included in the time deposits placed and other short-term investments line in prior periods, have been reclassified to cash and cash equivalents, consistent with the balance sheet presentation of these deposits. Net interest income and net interest yield are calculated excluding these fees. |
(2) | For the six months ended June 30, 2011, $20.3 billion of non-interest earning equity securities were reclassified from trading account assets to other non-earning assets. Prior period amounts are immaterial and have not been restated. |
(3) | Yields on AFS debt securities are calculated based on fair value rather than the cost basis. The use of fair value does not have a material impact on net interest yield. |
(4) | Nonperforming loans are included in the respective average loan balances. Income on these nonperforming loans is recognized on a cash basis. Purchased credit-impaired loans were written down to fair value upon acquisition and accrete interest income over the remaining life of the loan. |
(5) | Includes non-U.S. residential mortgages of $93 million and $522 million for the six months ended June 30, 2011 and 2010. |
(6) | Includes non-U.S. consumer loans of $8.4 billion and $7.9 billion for the six months ended June 30, 2011 and 2010. |
(7) | Includes consumer finance loans of $1.9 billion and $2.2 billion, other non-U.S. consumer loans of $809 million and $671 million, and consumer overdrafts of $78 million and $144 million for the six months ended June 30, 2011 and 2010. |
(8) | Includes U.S. commercial real estate loans of $44.5 billion and $63.6 billion, and non-U.S. commercial real estate loans of $2.5 billion and $2.8 billion for the six months ended June 30, 2011 and 2010. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 11 |
Bank of America Corporation and Subsidiaries
Year-to-Date Average Balances and Interest Rates - Fully Taxable-equivalent Basis (continued)
(Dollars in millions)
Six Months Ended June 30 | ||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||
Average Balance |
Interest Income/ Expense |
Yield/ Rate |
Average Balance |
Interest Income/ Expense |
Yield/ Rate |
|||||||||||||||||||||||||||
Interest-bearing liabilities |
||||||||||||||||||||||||||||||||
U.S. interest-bearing deposits: |
||||||||||||||||||||||||||||||||
Savings |
$ | 40,294 | $ | 63 | 0.32 | % | $ | 36,214 | $ | 86 | 0.48 | % | ||||||||||||||||||||
NOW and money market deposit accounts |
477,330 | 620 | 0.26 | 429,258 | 713 | 0.33 | ||||||||||||||||||||||||||
Consumer CDs and IRAs |
116,004 | 581 | 1.01 | 156,755 | 1,008 | 1.30 | ||||||||||||||||||||||||||
Negotiable CDs, public funds and other time deposits |
13,918 | 81 | 1.17 | 18,552 | 122 | 1.33 | ||||||||||||||||||||||||||
Total U.S. interest-bearing deposits |
647,546 | 1,345 | 0.42 | 640,779 | 1,929 | 0.61 | ||||||||||||||||||||||||||
Non-U.S. interest-bearing deposits: |
||||||||||||||||||||||||||||||||
Banks located in non-U.S. countries |
20,378 | 75 | 0.74 | 19,091 | 68 | 0.72 | ||||||||||||||||||||||||||
Governments and official institutions |
2,219 | 4 | 0.36 | 4,916 | 6 | 0.25 | ||||||||||||||||||||||||||
Time, savings and other |
62,673 | 258 | 0.83 | 53,534 | 150 | 0.57 | ||||||||||||||||||||||||||
Total non-U.S. interest-bearing deposits |
85,270 | 337 | 0.80 | 77,541 | 224 | 0.58 | ||||||||||||||||||||||||||
Total interest-bearing deposits |
732,816 | 1,682 | 0.46 | 718,320 | 2,153 | 0.60 | ||||||||||||||||||||||||||
Federal funds purchased and securities loaned or sold under agreements to repurchase and other short-term borrowings |
355,042 | 2,526 | 1.43 | 481,041 | 1,709 | 0.72 | ||||||||||||||||||||||||||
Trading account liabilities |
90,044 | 1,254 | 2.81 | 95,105 | 1,374 | 2.91 | ||||||||||||||||||||||||||
Long-term debt |
437,812 | 6,084 | 2.80 | 505,507 | 7,112 | 2.82 | ||||||||||||||||||||||||||
Total interest-bearing liabilities |
1,615,714 | 11,546 | 1.44 | 1,799,973 | 12,348 | 1.38 | ||||||||||||||||||||||||||
Noninterest-bearing sources: |
||||||||||||||||||||||||||||||||
Noninterest-bearing deposits |
296,762 | 268,024 | ||||||||||||||||||||||||||||||
Other liabilities |
193,420 | 205,767 | ||||||||||||||||||||||||||||||
Shareholders equity |
232,930 | 231,695 | ||||||||||||||||||||||||||||||
Total liabilities and shareholders equity |
$ | 2,338,826 | $ | 2,505,459 | ||||||||||||||||||||||||||||
Net interest spread |
2.40 | % | 2.76 | % | ||||||||||||||||||||||||||||
Impact of noninterest-bearing sources |
0.17 | 0.06 | ||||||||||||||||||||||||||||||
Net interest income/yield on earning assets (1) |
$ | 23,778 | 2.57 | % | $ | 27,069 | 2.82 | % | ||||||||||||||||||||||||
For footnotes see page 11.
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 12 |
Bank of America Corporation and Subsidiaries
Debt Securities and Available-for-Sale Marketable Equity Securities
(Dollars in millions)
June 30, 2011 | ||||||||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
|||||||||||||
Available-for-sale debt securities |
||||||||||||||||
U.S. Treasury and agency securities |
$ | 49,874 | $ | 684 | $ | (1,289 | ) | $ | 49,269 | |||||||
Mortgage-backed securities: |
||||||||||||||||
Agency |
180,151 | 3,128 | (1,663 | ) | 181,616 | |||||||||||
Agency collateralized mortgage obligations |
48,212 | 930 | (31 | ) | 49,111 | |||||||||||
Non-agency residential |
19,564 | 568 | (557 | ) | 19,575 | |||||||||||
Non-agency commercial |
6,018 | 702 | (2 | ) | 6,718 | |||||||||||
Non-U.S. securities |
4,314 | 62 | (16 | ) | 4,360 | |||||||||||
Corporate bonds |
4,388 | 154 | (4 | ) | 4,538 | |||||||||||
Other taxable securities (1) |
12,010 | 79 | (66 | ) | 12,023 | |||||||||||
Total taxable securities |
$ | 324,531 | $ | 6,307 | $ | (3,628 | ) | $ | 327,210 | |||||||
Tax-exempt securities |
3,808 | 18 | (165 | ) | 3,661 | |||||||||||
Total available-for-sale debt securities |
$ | 328,339 | $ | 6,325 | $ | (3,793 | ) | $ | 330,871 | |||||||
Held-to-maturity debt securities |
181 | | | 181 | ||||||||||||
Total debt securities |
$ | 328,520 | $ | 6,325 | $ | (3,793 | ) | $ | 331,052 | |||||||
Available-for-sale marketable equity securities (2) |
$ | 8,536 | $ | 10,445 | $ | (19 | ) | $ | 18,962 | |||||||
March 31, 2011 | ||||||||||||||||
Amortized Cost |
Gross Unrealized Gains |
Gross Unrealized Losses |
Fair Value |
|||||||||||||
Available-for-sale debt securities |
||||||||||||||||
U.S. Treasury and agency securities |
$ | 49,361 | $ | 625 | $ | (887 | ) | $ | 49,099 | |||||||
Mortgage-backed securities: |
||||||||||||||||
Agency |
192,301 | 2,605 | (3,136 | ) | 191,770 | |||||||||||
Agency collateralized mortgage obligations |
34,819 | 237 | (29 | ) | 35,027 | |||||||||||
Non-agency residential |
20,625 | 536 | (507 | ) | 20,654 | |||||||||||
Non-agency commercial |
6,116 | 684 | (1 | ) | 6,799 | |||||||||||
Non-U.S. securities |
4,250 | 63 | (11 | ) | 4,302 | |||||||||||
Corporate bonds |
4,340 | 134 | (5 | ) | 4,469 | |||||||||||
Other taxable securities (1) |
12,883 | 75 | (90 | ) | 12,868 | |||||||||||
Total taxable securities |
$ | 324,695 | $ | 4,959 | $ | (4,666 | ) | $ | 324,988 | |||||||
Tax-exempt securities |
5,546 | 31 | (220 | ) | 5,357 | |||||||||||
Total available-for-sale debt securities |
$ | 330,241 | $ | 4,990 | $ | (4,886 | ) | $ | 330,345 | |||||||
Held-to-maturity debt securities |
431 | | | 431 | ||||||||||||
Total debt securities |
$ | 330,672 | $ | 4,990 | $ | (4,886 | ) | $ | 330,776 | |||||||
Available-for-sale marketable equity securities (2) |
$ | 8,535 | $ | 11,925 | $ | (15 | ) | $ | 20,445 | |||||||
(1) | Substantially all asset-backed securities. |
(2) | Classified in other assets on the Consolidated Balance Sheet. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 13 |
Bank of America Corporation and Subsidiaries
Quarterly Results by Business Segment
(Dollars in millions)
Second Quarter 2011 | ||||||||||||||||||||||||||||||||||
Total Corporation |
Deposits | Global Card Services |
Consumer Real Estate Services |
Global Commercial Banking |
Global Banking & Markets |
GWIM | All Other |
|||||||||||||||||||||||||||
Net interest income (1) |
$ | 11,493 | $ | 2,281 | $ | 3,611 | $ | 579 | $ | 1,827 | $ | 1,791 | $ | 1,571 | $ | (167 | ) | |||||||||||||||||
Noninterest income (loss) |
1,990 | 1,020 | 1,925 | (11,894 | ) | 983 | 5,005 | 2,919 | 2,032 | |||||||||||||||||||||||||
Total revenue, net of interest expense |
13,483 | 3,301 | 5,536 | (11,315 | ) | 2,810 | 6,796 | 4,490 | 1,865 | |||||||||||||||||||||||||
Provision for credit losses |
3,255 | 31 | 481 | 1,507 | (417 | ) | (82 | ) | 72 | 1,663 | ||||||||||||||||||||||||
Noninterest expense |
22,856 | 2,599 | 1,882 | 8,647 | 1,068 | 4,713 | 3,631 | 316 | ||||||||||||||||||||||||||
Income (loss) before income taxes |
(12,628 | ) | 671 | 3,173 | (21,469 | ) | 2,159 | 2,165 | 787 | (114 | ) | |||||||||||||||||||||||
Income tax expense (benefit) (1) |
(3,802 | ) | 241 | 1,138 | (6,949 | ) | 778 | 607 | 281 | 102 | ||||||||||||||||||||||||
Net income (loss) |
$ | (8,826 | ) | $ | 430 | $ | 2,035 | $ | (14,520 | ) | $ | 1,381 | $ | 1,558 | $ | 506 | $ | (216 | ) | |||||||||||||||
Average |
||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 938,513 | n/m | $ | 156,788 | $ | 121,683 | $ | 189,346 | $ | 109,473 | $ | 102,200 | $ | 258,397 | |||||||||||||||||||
Total assets (2) |
2,339,110 | $ | 451,554 | 161,776 | 198,030 | 320,428 | 750,908 | 289,050 | 167,364 | |||||||||||||||||||||||||
Total deposits |
1,035,944 | 426,684 | n/m | n/m | 166,481 | 118,133 | 255,219 | 46,684 | ||||||||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 941,257 | n/m | $ | 153,280 | $ | 121,553 | $ | 189,434 | $ | 114,165 | $ | 102,878 | $ | 259,285 | |||||||||||||||||||
Total assets (2) |
2,261,319 | $ | 449,123 | 161,756 | 185,398 | 280,289 | 691,249 | 284,294 | 209,210 | |||||||||||||||||||||||||
Total deposits |
1,038,408 | 424,579 | n/m | n/m | 170,156 | 123,618 | 255,580 | 42,355 | ||||||||||||||||||||||||||
First Quarter 2011 |
||||||||||||||||||||||||||||||||||
Total Corporation |
Deposits | Global Card Services |
Consumer Real Estate Services |
Global Commercial Banking |
Global Banking & Markets |
GWIM | All Other |
|||||||||||||||||||||||||||
Net interest income (1) |
$ | 12,397 | $ | 2,205 | $ | 3,747 | $ | 896 | $ | 1,850 | $ | 2,037 | $ | 1,569 | $ | 93 | ||||||||||||||||||
Noninterest income |
14,698 | 984 | 1,940 | 1,167 | 801 | 5,849 | 2,923 | 1,034 | ||||||||||||||||||||||||||
Total revenue, net of interest expense |
27,095 | 3,189 | 5,687 | 2,063 | 2,651 | 7,886 | 4,492 | 1,127 | ||||||||||||||||||||||||||
Provision for credit losses |
3,814 | 33 | 961 | 1,098 | 79 | (202 | ) | 46 | 1,799 | |||||||||||||||||||||||||
Noninterest expense |
20,283 | 2,592 | 1,969 | 4,801 | 1,106 | 4,722 | 3,599 | 1,494 | ||||||||||||||||||||||||||
Income (loss) before income taxes |
2,998 | 564 | 2,757 | (3,836 | ) | 1,466 | 3,366 | 847 | (2,166 | ) | ||||||||||||||||||||||||
Income tax expense (benefit) (1) |
949 | 209 | 1,022 | (1,421 | ) | 543 | 1,232 | 314 | (950 | ) | ||||||||||||||||||||||||
Net income (loss) |
$ | 2,049 | $ | 355 | $ | 1,735 | $ | (2,415 | ) | $ | 923 | $ | 2,134 | $ | 533 | $ | (1,216 | ) | ||||||||||||||||
Average |
||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 938,966 | n/m | $ | 162,425 | $ | 120,560 | $ | 192,437 | $ | 103,704 | $ | 100,851 | $ | 258,350 | |||||||||||||||||||
Total assets (2) |
2,338,538 | $ | 443,461 | 165,768 | 209,329 | 312,570 | 710,684 | 297,335 | 199,391 | |||||||||||||||||||||||||
Total deposits |
1,023,140 | 418,298 | n/m | n/m | 160,217 | 112,028 | 258,518 | 48,608 | ||||||||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 932,425 | n/m | $ | 158,444 | $ | 118,749 | $ | 190,749 | $ | 105,651 | $ | 101,286 | $ | 256,931 | |||||||||||||||||||
Total assets (2) |
2,274,532 | $ | 456,248 | 164,084 | 204,485 | 309,930 | 698,458 | 285,472 | 155,855 | |||||||||||||||||||||||||
Total deposits |
1,020,175 | 431,022 | n/m | n/m | 161,584 | 115,212 | 256,526 | 34,818 | ||||||||||||||||||||||||||
Second Quarter 2010 |
||||||||||||||||||||||||||||||||||
Total Corporation |
Deposits | Global Card Services |
Consumer Real Estate Services |
Global Commercial Banking |
Global Banking & Markets |
GWIM | All Other |
|||||||||||||||||||||||||||
Net interest income (1) |
$ | 13,197 | $ | 2,144 | $ | 4,442 | $ | 992 | $ | 2,097 | $ | 2,002 | $ | 1,443 | $ | 77 | ||||||||||||||||||
Noninterest income |
16,253 | 1,551 | 2,506 | 1,712 | 786 | 3,902 | 2,746 | 3,050 | ||||||||||||||||||||||||||
Total revenue, net of interest expense |
29,450 | 3,695 | 6,948 | 2,704 | 2,883 | 5,904 | 4,189 | 3,127 | ||||||||||||||||||||||||||
Provision for credit losses |
8,105 | 61 | 3,796 | 2,390 | 623 | (133 | ) | 122 | 1,246 | |||||||||||||||||||||||||
Noninterest expense |
17,253 | 2,572 | 1,852 | 2,738 | 974 | 4,735 | 3,269 | 1,113 | ||||||||||||||||||||||||||
Income (loss) before income taxes |
4,092 | 1,062 | 1,300 | (2,424 | ) | 1,286 | 1,302 | 798 | 768 | |||||||||||||||||||||||||
Income tax expense (benefit) (1) |
969 | 388 | 474 | (882 | ) | 471 | 404 | 469 | (355 | ) | ||||||||||||||||||||||||
Net income (loss) |
$ | 3,123 | $ | 674 | $ | 826 | $ | (1,542 | ) | $ | 815 | $ | 898 | $ | 329 | $ | 1,123 | |||||||||||||||||
Average |
||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 967,054 | n/m | $ | 177,076 | $ | 130,662 | $ | 206,603 | $ | 95,839 | $ | 98,811 | $ | 257,322 | |||||||||||||||||||
Total assets (2) |
2,494,432 | $ | 443,520 | 187,138 | 227,595 | 305,788 | 779,060 | 259,801 | 291,530 | |||||||||||||||||||||||||
Total deposits |
991,615 | 418,480 | n/m | n/m | 145,499 | 112,565 | 226,276 | 64,709 | ||||||||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 956,177 | n/m | $ | 172,531 | $ | 129,797 | $ | 203,659 | $ | 95,756 | $ | 99,157 | $ | 254,516 | |||||||||||||||||||
Total assets (2) |
2,368,384 | $ | 439,770 | 184,213 | 223,998 | 306,234 | 718,563 | 252,507 | 243,099 | |||||||||||||||||||||||||
Total deposits |
974,467 | 414,470 | n/m | n/m | 147,414 | 105,678 | 226,572 | 57,424 |
(1) | Fully taxable-equivalent basis |
(2) | Total assets include asset allocations to match liabilities (i.e., deposits). |
n/m | = not meaningful |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 14 |
Bank of America Corporation and Subsidiaries
Year-to-Date Results by Business Segment
(Dollars in millions)
Six Months Ended June 30, 2011 | ||||||||||||||||||||||||||||||||||
Total Corporation |
Deposits | Global
Card Services |
Consumer Real Estate Services |
Global Commercial Banking |
Global Banking & Markets |
GWIM | All Other |
|||||||||||||||||||||||||||
Net interest income (1) |
$ | 23,890 | $ | 4,486 | $ | 7,358 | $ | 1,475 | $ | 3,677 | $ | 3,828 | $ | 3,140 | $ | (74 | ) | |||||||||||||||||
Noninterest income (loss) |
16,688 | 2,004 | 3,865 | (10,727 | ) | 1,784 | 10,854 | 5,842 | 3,066 | |||||||||||||||||||||||||
Total revenue, net of interest expense |
40,578 | 6,490 | 11,223 | (9,252 | ) | 5,461 | 14,682 | 8,982 | 2,992 | |||||||||||||||||||||||||
Provision for credit losses |
7,069 | 64 | 1,442 | 2,605 | (338 | ) | (284 | ) | 118 | 3,462 | ||||||||||||||||||||||||
Noninterest expense |
43,139 | 5,191 | 3,851 | 13,448 | 2,174 | 9,435 | 7,230 | 1,810 | ||||||||||||||||||||||||||
Income (loss) before income taxes |
(9,630 | ) | 1,235 | 5,930 | (25,305 | ) | 3,625 | 5,531 | 1,634 | (2,280 | ) | |||||||||||||||||||||||
Income tax expense (benefit) (1) |
(2,853 | ) | 450 | 2,160 | (8,370 | ) | 1,321 | 1,839 | 595 | (848 | ) | |||||||||||||||||||||||
Net income (loss) |
$ | (6,777 | ) | $ | 785 | $ | 3,770 | $ | (16,935 | ) | $ | 2,304 | $ | 3,692 | $ | 1,039 | $ | (1,432 | ) | |||||||||||||||
Average |
||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 938,738 | n/m | $ | 159,591 | $ | 121,125 | $ | 190,883 | $ | 106,604 | $ | 101,529 | $ | 258,374 | |||||||||||||||||||
Total assets (2) |
2,338,826 | $ | 447,530 | 163,761 | 203,648 | 316,521 | 730,907 | 293,170 | n/m | |||||||||||||||||||||||||
Total deposits |
1,029,578 | 422,514 | n/m | n/m | 163,366 | 115,097 | 256,859 | 47,642 | ||||||||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 941,257 | n/m | $ | 153,280 | $ | 121,553 | $ | 189,434 | $ | 114,165 | $ | 102,878 | $ | 259,285 | |||||||||||||||||||
Total assets (2) |
2,261,319 | $ | 449,123 | 161,756 | 185,398 | 280,289 | 691,249 | 284,294 | n/m | |||||||||||||||||||||||||
Total deposits |
1,038,408 | 424,579 | n/m | n/m | 170,156 | 123,618 | 255,580 | 42,355 | ||||||||||||||||||||||||||
Six Months Ended June 30, 2010 | ||||||||||||||||||||||||||||||||||
Total Corporation |
Deposits | Global Card Services |
Consumer Real Estate Services |
Global Commercial Banking |
Global Banking & Markets |
GWIM | All Other |
|||||||||||||||||||||||||||
Net interest income (1) |
$ | 27,267 | $ | 4,319 | $ | 9,262 | $ | 2,199 | $ | 4,290 | $ | 4,172 | $ | 2,907 | $ | 118 | ||||||||||||||||||
Noninterest income |
34,473 | 3,094 | 4,576 | 4,038 | 1,685 | 11,425 | 5,323 | 4,332 | ||||||||||||||||||||||||||
Total revenue, net of interest expense |
61,740 | 7,413 | 13,838 | 6,237 | 5,975 | 15,597 | 8,230 | 4,450 | ||||||||||||||||||||||||||
Provision for credit losses |
17,910 | 98 | 7,331 | 5,990 | 1,559 | 103 | 363 | 2,466 | ||||||||||||||||||||||||||
Noninterest expense |
35,028 | 5,139 | 3,664 | 5,985 | 2,005 | 9,024 | 6,368 | 2,843 | ||||||||||||||||||||||||||
Income (loss) before income taxes |
8,802 | 2,176 | 2,843 | (5,738 | ) | 2,411 | 6,470 | 1,499 | (859 | ) | ||||||||||||||||||||||||
Income tax expense (benefit) (1) |
2,497 | 804 | 1,049 | (2,119 | ) | 891 | 2,333 | 731 | (1,192 | ) | ||||||||||||||||||||||||
Net income (loss) |
$ | 6,305 | $ | 1,372 | $ | 1,794 | $ | (3,619 | ) | $ | 1,520 | $ | 4,137 | $ | 768 | $ | 333 | |||||||||||||||||
Average |
||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 979,267 | n/m | $ | 182,909 | $ | 132,195 | $ | 210,450 | $ | 97,427 | $ | 98,826 | $ | 256,742 | |||||||||||||||||||
Total assets (2) |
2,505,459 | $ | 442,691 | 191,913 | 230,076 | 301,925 | 781,949 | 256,510 | n/m | |||||||||||||||||||||||||
Total deposits |
986,345 | 417,665 | n/m | n/m | 144,572 | 108,124 | 223,956 | 67,770 | ||||||||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 956,177 | n/m | $ | 172,531 | $ | 129,797 | $ | 203,659 | $ | 95,756 | $ | 99,157 | $ | 254,516 | |||||||||||||||||||
Total assets (2) |
2,368,384 | $ | 439,770 | 184,213 | 223,998 | 306,234 | 718,563 | 252,507 | n/m | |||||||||||||||||||||||||
Total deposits |
974,467 | 414,470 | n/m | n/m | 147,414 | 105,678 | 226,572 | 57,424 |
(1) | Fully taxable-equivalent basis |
(2) | Total assets include asset allocations to match liabilities (i.e., deposits). |
n/m | = not meaningful |
Certain prior period amounts have been reclassified among the segments to conform to the current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 15 |
Bank of America Corporation and Subsidiaries
Deposits Segment Results
(Dollars in millions)
Six Months Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
|||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||||||||
Net interest income (1) |
$ | 4,486 | $ | 4,319 | $ | 2,281 | $ | 2,205 | $ | 2,006 | $ | 1,954 | $ | 2,144 | ||||||||||||||||||||||||||||||||
Noninterest income: |
||||||||||||||||||||||||||||||||||||||||||||||
Service charges |
1,888 | 2,973 | 965 | 923 | 947 | 1,138 | 1,494 | |||||||||||||||||||||||||||||||||||||||
All other income |
116 | 121 | 55 | 61 | 50 | 54 | 57 | |||||||||||||||||||||||||||||||||||||||
Total noninterest income |
2,004 | 3,094 | 1,020 | 984 | 997 | 1,192 | 1,551 | |||||||||||||||||||||||||||||||||||||||
Total revenue, net of interest expense |
6,490 | 7,413 | 3,301 | 3,189 | 3,003 | 3,146 | 3,695 | |||||||||||||||||||||||||||||||||||||||
Provision for credit losses |
64 | 98 | 31 | 33 | 41 | 62 | 61 | |||||||||||||||||||||||||||||||||||||||
Noninterest expense |
5,191 | 5,139 | 2,599 | 2,592 | 3,262 | 2,762 | 2,572 | |||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes |
1,235 | 2,176 | 671 | 564 | (300 | ) | 322 | 1,062 | ||||||||||||||||||||||||||||||||||||||
Income tax expense (benefit) (1) |
450 | 804 | 241 | 209 | (105 | ) | 116 | 388 | ||||||||||||||||||||||||||||||||||||||
Net income (loss) |
$ | 785 | $ | 1,372 | $ | 430 | $ | 355 | $ | (195 | ) | $ | 206 | $ | 674 | |||||||||||||||||||||||||||||||
Net interest yield (1) |
2.15 | % | 2.09 | % | 2.15 | % | 2.14 | % | 1.93 | % | 1.89 | % | 2.06 | % | ||||||||||||||||||||||||||||||||
Return on average equity |
6.70 | 11.45 | 7.30 | 6.09 | n/m | 3.34 | 11.16 | |||||||||||||||||||||||||||||||||||||||
Return on average economic capital (2) |
27.93 | 44.82 | 30.41 | 25.43 | n/m | 12.85 | 43.52 | |||||||||||||||||||||||||||||||||||||||
Efficiency ratio (1) |
79.99 | 69.32 | 78.75 | 81.28 | 108.61 | 87.81 | 69.59 | |||||||||||||||||||||||||||||||||||||||
Balance sheet |
||||||||||||||||||||||||||||||||||||||||||||||
Average |
||||||||||||||||||||||||||||||||||||||||||||||
Total earning assets (3) |
$ | 421,313 | $ | 416,185 | $ | 425,363 | $ | 417,218 | $ | 411,765 | $ | 410,330 | $ | 417,132 | ||||||||||||||||||||||||||||||||
Total assets (3) |
447,530 | 442,691 | 451,554 | 443,461 | 438,346 | 436,479 | 443,520 | |||||||||||||||||||||||||||||||||||||||
Total deposits |
422,514 | 417,665 | 426,684 | 418,298 | 413,150 | 411,117 | 418,480 | |||||||||||||||||||||||||||||||||||||||
Allocated equity |
23,627 | 24,179 | 23,612 | 23,641 | 24,128 | 24,402 | 24,226 | |||||||||||||||||||||||||||||||||||||||
Economic capital (4) |
5,672 | 6,202 | 5,662 | 5,683 | 6,161 | 6,424 | 6,239 | |||||||||||||||||||||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||||||||||||||||||||
Total earning assets (3) |
$ | 422,646 | $ | 413,648 | $ | 422,646 | $ | 429,956 | $ | 414,215 | $ | 408,734 | $ | 413,648 | ||||||||||||||||||||||||||||||||
Total assets (3) |
449,123 | 439,770 | 449,123 | 456,248 | 440,954 | 434,854 | 439,770 | |||||||||||||||||||||||||||||||||||||||
Total deposits |
424,579 | 414,470 | 424,579 | 431,022 | 415,189 | 409,365 | 414,470 |
(1) | Fully taxable-equivalent basis |
(2) | Return on average economic capital is calculated as net income, excluding cost of funds and earnings credit on intangibles, divided by average economic capital. |
(3) | Total earning assets and total assets include asset allocations to match liabilities (i.e., deposits). |
(4) | Economic capital represents allocated equity less goodwill and a percentage of intangible assets. |
n/m | = not meaningful |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 16 |
Bank of America Corporation and Subsidiaries
Deposits Key Indicators
(Dollars in millions, except as noted)
Six Months
Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average deposit balances |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Checking |
$ | 163,576 | $ | 149,385 | $ | 166,666 | $ | 160,452 | $ | 154,333 | $ | 150,117 | $ | 152,130 | ||||||||||||||||||||||||||||||||||||||||||||||
Savings |
37,962 | 34,412 | 39,209 | 36,701 | 35,120 | 35,135 | 35,467 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
MMS |
127,251 | 119,489 | 128,546 | 125,941 | 124,446 | 122,996 | 122,123 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
CDs and IRAs |
90,425 | 111,218 | 88,912 | 91,954 | 95,860 | 99,702 | 105,592 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-U.S. and other |
3,300 | 3,161 | 3,351 | 3,250 | 3,391 | 3,167 | 3,168 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total average deposit balances |
$ | 422,514 | $ | 417,665 | $ | 426,684 | $ | 418,298 | $ | 413,150 | $ | 411,117 | $ | 418,480 | ||||||||||||||||||||||||||||||||||||||||||||||
Deposit spreads (excludes noninterest costs) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Checking |
3.43 | % | 3.82 | % | 3.36 | % | 3.50 | % | 3.60 | % | 3.76 | % | 3.81 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Savings |
3.37 | 3.72 | 3.32 | 3.42 | 3.51 | 3.63 | 3.70 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
MMS |
1.50 | 0.81 | 1.46 | 1.55 | 1.55 | 1.53 | 0.84 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
CDs and IRAs |
0.35 | 0.17 | 0.36 | 0.35 | 0.32 | 0.28 | 0.22 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-U.S. and other |
3.90 | 4.37 | 3.83 | 3.97 | 4.10 | 4.24 | 4.34 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total deposit spreads |
2.18 | 1.96 | 2.16 | 2.20 | 2.20 | 2.23 | 2.02 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Cost per dollar deposit (1) |
2.52 | % | 2.48 | % | 2.44 | % | 2.60 | % | 2.65 | % | 2.67 | % | 2.46 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Client brokerage assets (2) |
$ | 69,000 | $ | 51,102 | $ | 69,000 | $ | 66,703 | $ | 63,597 | $ | 59,984 | $ | 51,102 | ||||||||||||||||||||||||||||||||||||||||||||||
Online banking (end of period) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Active accounts (units in thousands) |
29,660 | 29,195 | 29,660 | 30,065 | 29,345 | 29,313 | 29,195 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Active billpay accounts (units in thousands) |
15,356 | 14,902 | 15,356 | 15,345 | 14,986 | 14,941 | 14,902 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Online Only (units in thousands) |
14,304 | 14,293 | 14,304 | 14,720 | 14,359 | 14,372 | 14,293 |
(1) | Cost per dollar deposit represents annualized noninterest expense, excluding one-time expenses, as a percentage of average deposits. |
(2) | During the first quarter of 2011, the Merrill Edge business was moved from GWIM along with historical results. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 17 |
Bank of America Corporation and Subsidiaries
Global Card Services Segment Results
(Dollars in millions)
Six Months
Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
|||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||
Net interest income (1) |
$ | 7,358 | $ | 9,262 | $ | 3,611 | $ | 3,747 | $ | 4,206 | $ | 4,364 | $ | 4,442 | ||||||||||||||||||
Noninterest income: |
||||||||||||||||||||||||||||||||
Card income |
3,562 | 3,784 | 1,833 | 1,729 | 2,000 | 1,879 | 1,901 | |||||||||||||||||||||||||
All other income (loss) |
303 | 792 | 92 | 211 | 125 | (403 | ) | 605 | ||||||||||||||||||||||||
Total noninterest income |
3,865 | 4,576 | 1,925 | 1,940 | 2,125 | 1,476 | 2,506 | |||||||||||||||||||||||||
Total revenue, net of interest expense |
11,223 | 13,838 | 5,536 | 5,687 | 6,331 | 5,840 | 6,948 | |||||||||||||||||||||||||
Provision for credit losses |
1,442 | 7,331 | 481 | 961 | 2,144 | 3,177 | 3,796 | |||||||||||||||||||||||||
Goodwill impairment |
| | | | | 10,400 | | |||||||||||||||||||||||||
All other noninterest expense |
3,851 | 3,664 | 1,882 | 1,969 | 1,807 | 1,750 | 1,852 | |||||||||||||||||||||||||
Income (loss) before income taxes |
5,930 | 2,843 | 3,173 | 2,757 | 2,380 | (9,487 | ) | 1,300 | ||||||||||||||||||||||||
Income tax expense (1) |
2,160 | 1,049 | 1,138 | 1,022 | 882 | 334 | 474 | |||||||||||||||||||||||||
Net income (loss) |
$ | 3,770 | $ | 1,794 | $ | 2,035 | $ | 1,735 | $ | 1,498 | $ | (9,821 | ) | $ | 826 | |||||||||||||||||
Net interest yield (1) |
9.19 | % | 10.13 | % | 9.12 | % | 9.26 | % | 9.92 | % | 10.07 | % | 9.97 | % | ||||||||||||||||||
Return on average equity |
29.73 | 8.61 | 32.66 | 26.89 | 21.51 | n/m | 8.14 | |||||||||||||||||||||||||
Return on average economic capital (2) |
59.01 | 19.74 | 66.26 | 52.32 | 40.33 | 15.19 | 19.40 | |||||||||||||||||||||||||
Efficiency ratio (1) |
34.31 | 26.49 | 33.99 | 34.62 | 28.54 | n/m | 26.68 | |||||||||||||||||||||||||
Efficiency ratio, excluding goodwill impairment charge (1) |
34.31 | 26.49 | 33.99 | 34.62 | 28.54 | 29.97 | 26.68 | |||||||||||||||||||||||||
Balance sheet |
||||||||||||||||||||||||||||||||
Average |
||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 159,591 | $ | 182,909 | $ | 156,788 | $ | 162,425 | $ | 166,683 | $ | 170,706 | $ | 177,076 | ||||||||||||||||||
Total earning assets |
161,462 | 184,326 | 158,861 | 164,093 | 168,173 | 171,999 | 178,646 | |||||||||||||||||||||||||
Total assets |
163,761 | 191,913 | 161,776 | 165,768 | 168,273 | 178,255 | 187,138 | |||||||||||||||||||||||||
Allocated equity |
25,573 | 41,994 | 24,982 | 26,171 | 27,626 | 35,391 | 40,677 | |||||||||||||||||||||||||
Economic capital (3) |
12,915 | 18,767 | 12,341 | 13,496 | 14,916 | 15,643 | 17,501 | |||||||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 153,280 | $ | 172,531 | $ | 153,280 | $ | 158,444 | $ | 166,899 | $ | 168,366 | $ | 172,531 | ||||||||||||||||||
Total earning assets |
156,058 | 174,278 | 156,058 | 160,529 | 168,706 | 170,037 | 174,278 | |||||||||||||||||||||||||
Total assets |
161,756 | 184,213 | 161,756 | 164,084 | 170,311 | 170,317 | 184,213 |
(1) | Fully taxable-equivalent basis |
(2) | Return on average economic capital is calculated as net income, excluding goodwill impairment charge, cost of funds and earnings credit on intangibles, divided by average economic capital. |
(3) | Economic capital represents allocated equity less goodwill and a percentage of intangible assets. |
n/m | = not meaningful |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 18 |
Bank of America Corporation and Subsidiaries
Global Card Services Key Indicators
(Dollars in millions)
Six Months Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Card Data (1) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average credit card outstandings |
$ | 135,487 | $ | 150,810 | $ | 133,423 | $ | 137,574 | $ | 140,130 | $ | 142,298 | $ | 146,444 | ||||||||||||||||||||||||||||||||||||||||||||||
Ending credit card outstandings |
130,696 | 143,130 | 130,696 | 134,342 | 141,250 | 140,871 | 143,130 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit quality |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net charge-offs |
$ | 5,036 | $ | 9,053 | $ | 2,360 | $ | 2,676 | $ | 2,911 | $ | 3,270 | $ | 4,459 | ||||||||||||||||||||||||||||||||||||||||||||||
7.50 | % | 12.11 | % | 7.09 | % | 7.89 | % | 8.24 | % | 9.12 | % | 12.21 | % | |||||||||||||||||||||||||||||||||||||||||||||||
30+ delinquency |
$ | 5,478 | $ | 8,256 | $ | 5,478 | $ | 6,478 | $ | 7,268 | $ | 7,643 | $ | 8,256 | ||||||||||||||||||||||||||||||||||||||||||||||
4.19 | % | 5.77 | % | 4.19 | % | 4.82 | % | 5.15 | % | 5.43 | % | 5.77 | % | |||||||||||||||||||||||||||||||||||||||||||||||
90+ delinquency |
$ | 3,020 | $ | 4,542 | $ | 3,020 | $ | 3,570 | $ | 3,919 | $ | 4,007 | $ | 4,542 | ||||||||||||||||||||||||||||||||||||||||||||||
2.31 | % | 3.17 | % | 2.31 | % | 2.65 | % | 2.77 | % | 2.84 | % | 3.17 | % | |||||||||||||||||||||||||||||||||||||||||||||||
Other Global Card Services Key Indicators |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit card data |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Gross interest yield |
10.57 | % | 11.04 | % | 10.47 | % | 10.67 | % | 10.92 | % | 11.13 | % | 10.89 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Risk adjusted margin |
5.41 | 1.58 | 5.87 | 4.97 | 5.40 | 3.28 | 1.33 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
New account growth (in thousands) |
1,859 | 1,403 | 941 | 918 | 790 | 710 | 664 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Purchase volumes |
$ | 106,683 | $ | 102,600 | $ | 56,187 | $ | 50,496 | $ | 56,458 | $ | 54,257 | $ | 53,924 | ||||||||||||||||||||||||||||||||||||||||||||||
Debit card data |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debit purchase volumes |
$ | 124,045 | $ | 115,203 | $ | 64,049 | $ | 59,996 | $ | 60,866 | $ | 58,011 | $ | 59,136 |
(1) | Credit Card includes U.S., Europe and Canada consumer credit card and does not include business card, debit card and unsecured consumer lending. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 19 |
Bank of America Corporation and Subsidiaries
Consumer Real Estate Services Segment Results
(Dollars in millions; except as noted)
Six Months Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
|||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income (1) |
$ | 1,475 | $ | 2,199 | $ | 579 | $ | 896 | $ | 1,124 | $ | 1,339 | $ | 992 | ||||||||||||||||||||||||||||||||||||||||||
Noninterest income: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage banking income (loss) |
(12,323 | ) | 2,661 | (13,018 | ) | 695 | (1,254 | ) | 1,757 | 1,020 | ||||||||||||||||||||||||||||||||||||||||||||||
Insurance income |
730 | 1,051 | 299 | 431 | 484 | 527 | 513 | |||||||||||||||||||||||||||||||||||||||||||||||||
All other income (loss) |
866 | 326 | 825 | 41 | 126 | (12 | ) | 179 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total noninterest income (loss) |
(10,727 | ) | 4,038 | (11,894 | ) | 1,167 | (644 | ) | 2,272 | 1,712 | ||||||||||||||||||||||||||||||||||||||||||||||
Total revenue, net of interest expense |
(9,252 | ) | 6,237 | (11,315 | ) | 2,063 | 480 | 3,611 | 2,704 | |||||||||||||||||||||||||||||||||||||||||||||||
Provision for credit losses |
2,605 | 5,990 | 1,507 | 1,098 | 1,198 | 1,302 | 2,390 | |||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill impairment |
2,603 | | 2,603 | | 2,000 | | | |||||||||||||||||||||||||||||||||||||||||||||||||
All other noninterest expense |
10,845 | 5,985 | 6,044 | 4,801 | 3,980 | 2,924 | 2,738 | |||||||||||||||||||||||||||||||||||||||||||||||||
Loss before income taxes |
(25,305 | ) | (5,738 | ) | (21,469 | ) | (3,836 | ) | (6,698 | ) | (615 | ) | (2,424 | ) | ||||||||||||||||||||||||||||||||||||||||||
Income tax benefit (1) |
(8,370 | ) | (2,119 | ) | (6,949 | ) | (1,421 | ) | (1,761 | ) | (222 | ) | (882 | ) | ||||||||||||||||||||||||||||||||||||||||||
Net loss |
$ | (16,935 | ) | $ | (3,619 | ) | $ | (14,520 | ) | $ | (2,415 | ) | $ | (4,937 | ) | $ | (393 | ) | $ | (1,542 | ) | |||||||||||||||||||||||||||||||||||
Net interest yield (1) |
1.80 | % | 2.36 | % | 1.46 | % | 2.11 | % | 2.48 | % | 2.87 | % | 2.13 | % | ||||||||||||||||||||||||||||||||||||||||||
Efficiency ratio (1) |
n/m | 95.96 | n/m | n/m | n/m | 80.97 | 101.27 | |||||||||||||||||||||||||||||||||||||||||||||||||
Balance sheet |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 121,125 | $ | 132,195 | $ | 121,683 | $ | 120,560 | $ | 124,933 | $ | 127,712 | $ | 130,662 | ||||||||||||||||||||||||||||||||||||||||||
Total earning assets |
165,469 | 188,222 | 158,674 | 172,339 | 180,030 | 184,994 | 186,873 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total assets |
203,648 | 230,076 | 198,030 | 209,329 | 218,085 | 221,909 | 227,595 | |||||||||||||||||||||||||||||||||||||||||||||||||
Allocated equity |
17,933 | 26,641 | 17,139 | 18,736 | 24,310 | 26,493 | 26,174 | |||||||||||||||||||||||||||||||||||||||||||||||||
Economic capital (2) |
15,211 | 21,837 | 14,437 | 15,994 | 19,511 | 21,692 | 21,371 | |||||||||||||||||||||||||||||||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 121,553 | $ | 129,797 | $ | 121,553 | $ | 118,749 | $ | 122,933 | $ | 127,700 | $ | 129,797 | ||||||||||||||||||||||||||||||||||||||||||
Total earning assets |
149,908 | 186,819 | 149,908 | 166,265 | 172,082 | 178,068 | 186,819 | |||||||||||||||||||||||||||||||||||||||||||||||||
Total assets |
185,398 | 223,998 | 185,398 | 204,485 | 212,413 | 214,498 | 223,998 | |||||||||||||||||||||||||||||||||||||||||||||||||
Period end (in billions) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage servicing portfolio (3) |
$ | 1,996.7 | $ | 2,127.6 | $ | 1,996.7 | $ | 2,028.0 | $ | 2,056.8 | $ | 2,079.5 | $ | 2,127.6 |
(1) | Fully taxable-equivalent basis |
(2) | Economic capital represents allocated equity less goodwill and a percentage of intangible assets (excluding mortgage servicing rights). |
(3) | Servicing of residential mortgage loans, home equity lines of credit, home equity loans and discontinued real estate mortgage loans. |
n/m | = not meaningful |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 20 |
Bank of America Corporation and Subsidiaries
Consumer Real Estate Services Results (1)
(Dollars in millions)
Six Months Ended June 30, 2011 | ||||||||||||||||||||
Total Consumer Real Estate Services |
Home Loans | Legacy Asset Servicing |
Other | |||||||||||||||||
Net interest income (2) |
$ | 1,475 | $ | 1,056 | $ | 460 | $ | (41 | ) | |||||||||||
Noninterest income: |
||||||||||||||||||||
Mortgage banking income (loss) |
(12,323 | ) | 1,696 | (13,149 | ) | (870 | ) | |||||||||||||
Insurance income |
730 | 730 | | | ||||||||||||||||
All other income |
866 | 822 | 44 | | ||||||||||||||||
Total noninterest income (loss) |
(10,727 | ) | 3,248 | (13,105 | ) | (870 | ) | |||||||||||||
Total revenue, net of interest expense |
(9,252 | ) | 4,304 | (12,645 | ) | (911 | ) | |||||||||||||
Provision for credit losses |
2,605 | 121 | 2,484 | | ||||||||||||||||
Goodwill impairment |
2,603 | | | 2,603 | ||||||||||||||||
Noninterest expense |
10,845 | 3,221 | 7,624 | | ||||||||||||||||
Income (loss) before income taxes |
(25,305 | ) | 962 | (22,753 | ) | (3,514 | ) | |||||||||||||
Income tax expense (benefit) (2) |
(8,370 | ) | 354 | (8,388 | ) | (336 | ) | |||||||||||||
Net income (loss) |
$ | (16,935 | ) | $ | 608 | $ | (14,365 | ) | $ | (3,178 | ) | |||||||||
Balance sheet |
||||||||||||||||||||
Average |
||||||||||||||||||||
Total loans and leases |
$ | 121,125 | $ | 55,632 | $ | 65,493 | $ | | ||||||||||||
Total earning assets |
165,469 | 75,695 | 67,565 | 22,209 | ||||||||||||||||
Total assets |
203,648 | 77,052 | 83,531 | 43,065 | ||||||||||||||||
Allocated equity |
17,933 | n/a | n/a | n/a | ||||||||||||||||
Economic capital (3) |
15,211 | n/a | n/a | n/a | ||||||||||||||||
Period end |
||||||||||||||||||||
Total loans and leases |
$ | 121,553 | $ | 55,454 | $ | 66,099 | $ | | ||||||||||||
Total earning assets |
149,908 | 69,822 | 68,114 | 11,972 | ||||||||||||||||
Total assets |
185,398 | 71,723 | 83,412 | 30,263 | ||||||||||||||||
Three Months Ended June 30, 2011 | ||||||||||||||||||||
Total Consumer Real Estate Services |
Home Loans | Legacy Asset Servicing |
Other | |||||||||||||||||
Net interest income (2) |
$ | 579 | $ | 481 | $ | 129 | $ | (31 | ) | |||||||||||
Noninterest income: |
||||||||||||||||||||
Mortgage banking income (loss) |
(13,018 | ) | 938 | (13,083 | ) | (873 | ) | |||||||||||||
Insurance income |
299 | 299 | | | ||||||||||||||||
All other income |
825 | 795 | 30 | | ||||||||||||||||
Total noninterest income (loss) |
(11,894 | ) | 2,032 | (13,053 | ) | (873 | ) | |||||||||||||
Total revenue, net of interest expense |
(11,315 | ) | 2,513 | (12,924 | ) | (904 | ) | |||||||||||||
Provision for credit losses |
1,507 | 121 | 1,386 | | ||||||||||||||||
Goodwill impairment |
2,603 | | | 2,603 | ||||||||||||||||
Noninterest expense |
6,044 | 1,553 | 4,491 | | ||||||||||||||||
Income (loss) before income taxes |
(21,469 | ) | 839 | (18,801 | ) | (3,507 | ) | |||||||||||||
Income tax expense (benefit) (2) |
(6,949 | ) | 308 | (6,924 | ) | (333 | ) | |||||||||||||
Net income (loss) |
$ | (14,520 | ) | $ | 531 | $ | (11,877 | ) | $ | (3,174 | ) | |||||||||
Balance sheet |
||||||||||||||||||||
Average |
||||||||||||||||||||
Total loans and leases |
$ | 121,683 | $ | 55,267 | $ | 66,416 | $ | | ||||||||||||
Total earning assets |
158,674 | 71,876 | 68,444 | 18,354 | ||||||||||||||||
Total assets |
198,030 | 73,377 | 84,616 | 40,037 | ||||||||||||||||
Allocated equity |
17,139 | n/a | n/a | n/a | ||||||||||||||||
Economic capital (3) |
14,437 | n/a | n/a | n/a | ||||||||||||||||
Period end |
||||||||||||||||||||
Total loans and leases |
$ | 121,553 | $ | 55,454 | $ | 66,099 | $ | | ||||||||||||
Total earning assets |
149,908 | 69,822 | 68,114 | 11,972 | ||||||||||||||||
Total assets |
185,398 | 71,723 | 83,411 | 30,264 | ||||||||||||||||
Three Months Ended March 31, 2011 | ||||||||||||||||||||
Total Consumer Real Estate Services |
Home Loans | Legacy Asset Servicing |
Other | |||||||||||||||||
Net interest income (2) |
$ | 896 | $ | 575 | $ | 331 | $ | (10 | ) | |||||||||||
Noninterest income: |
||||||||||||||||||||
Mortgage banking income (loss) |
695 | 758 | (66 | ) | 3 | |||||||||||||||
Insurance income |
431 | 431 | | | ||||||||||||||||
All other income |
41 | 27 | 14 | | ||||||||||||||||
Total noninterest income (loss) |
1,167 | 1,216 | (52 | ) | 3 | |||||||||||||||
Total revenue, net of interest expense |
2,063 | 1,791 | 279 | (7 | ) | |||||||||||||||
Provision for credit losses |
1,098 | | 1,098 | | ||||||||||||||||
Noninterest expense |
4,801 | 1,668 | 3,133 | | ||||||||||||||||
Income (loss) before income taxes |
(3,836 | ) | 123 | (3,952 | ) | (7 | ) | |||||||||||||
Income tax expense (benefit) (2) |
(1,421 | ) | 46 | (1,464 | ) | (3 | ) | |||||||||||||
Net income (loss) |
$ | (2,415 | ) | $ | 77 | $ | (2,488 | ) | $ | (4 | ) | |||||||||
Balance sheet |
||||||||||||||||||||
Average |
||||||||||||||||||||
Total loans and leases |
$ | 120,560 | $ | 55,990 | $ | 64,570 | $ | | ||||||||||||
Total earning assets |
172,339 | 79,469 | 66,763 | 26,107 | ||||||||||||||||
Total assets |
209,329 | 80,686 | 82,517 | 46,126 | ||||||||||||||||
Allocated equity |
18,736 | n/a | n/a | n/a | ||||||||||||||||
Economic capital (3) |
15,994 | n/a | n/a | n/a | ||||||||||||||||
Period end |
||||||||||||||||||||
Total loans and leases |
$ | 118,749 | $ | 55,608 | $ | 63,141 | $ | | ||||||||||||
Total earning assets |
166,265 | 74,047 | 65,228 | 26,990 | ||||||||||||||||
Total assets |
204,485 | 74,783 | 80,303 | 49,399 |
(1) | Consumer Real Estate Services includes Home Loans and Legacy Asset Servicing with results related to mortgage servicing rights included in Other. |
(2) | Fully taxable-equivalent basis |
(3) | Economic capital represents allocated equity less goodwill and a percentage of intangible assets (excluding mortgage servicing rights). |
n/a | = not applicable |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 21 |
Bank of America Corporation and Subsidiaries
Consumer Real Estate Services Key Indicators
(Dollars in millions, except as noted)
Six Months Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage servicing rights at fair value rollforward: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance, beginning of period |
$ | 14,900 | $ | 19,465 | $ | 15,282 | $ | 14,900 | $ | 12,251 | $ | 14,745 | $ | 18,842 | ||||||||||||||||||||||||||||||||||||||||||||||
Net additions |
1,017 | 2,014 | 176 | 841 | 757 | 745 | 882 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Impact of customer payments |
(1,345 | ) | (2,037 | ) | (639 | ) | (706 | ) | (799 | ) | (923 | ) | (981 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Other changes in mortgage servicing rights fair value (1) |
(2,200 | ) | (4,697 | ) | (2,447 | ) | 247 | 2,691 | (2,316 | ) | (3,998 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance, end of period |
$ | 12,372 | $ | 14,745 | $ | 12,372 | $ | 15,282 | $ | 14,900 | $ | 12,251 | $ | 14,745 | ||||||||||||||||||||||||||||||||||||||||||||||
Capitalized mortgage servicing rights |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(% of loans serviced for investors) |
78 | bps | 86 | bps | 78 | bps | 95 | bps | 92 | bps | 73 | bps | 86 | bps | ||||||||||||||||||||||||||||||||||||||||||||||
Mortgage loans serviced for investors (in billions) |
$ | 1,578 | $ | 1,706 | $ | 1,578 | $ | 1,610 | $ | 1,628 | $ | 1,669 | $ | 1,706 | ||||||||||||||||||||||||||||||||||||||||||||||
Loan production: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer Real Estate Services |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
First mortgage |
$ | 90,839 | $ | 136,106 | $ | 38,320 | $ | 52,519 | $ | 81,255 | $ | 69,875 | $ | 69,141 | ||||||||||||||||||||||||||||||||||||||||||||||
Home equity |
2,454 | 3,602 | 879 | 1,575 | 2,024 | 2,000 | 1,831 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Corporation (2) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
First mortgage |
97,104 | 141,440 | 40,370 | 56,734 | 84,673 | 71,925 | 71,938 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Home equity |
2,782 | 4,184 | 1,054 | 1,728 | 2,137 | 2,136 | 2,137 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Mortgage banking income (loss) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Production income (loss): |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Core production revenue |
$ | 1,492 | $ | 2,711 | $ | 824 | $ | 668 | $ | 1,622 | $ | 1,849 | $ | 1,428 | ||||||||||||||||||||||||||||||||||||||||||||||
Representations and warranties provision |
(15,050 | ) | (1,774 | ) | (14,037 | ) | (1,013 | ) | (4,140 | ) | (872 | ) | (1,248 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Total production income (loss) |
(13,558 | ) | 937 | (13,213 | ) | (345 | ) | (2,518 | ) | 977 | 180 | |||||||||||||||||||||||||||||||||||||||||||||||||
Servicing income: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Servicing fees |
3,162 | 3,218 | 1,556 | 1,606 | 1,634 | 1,623 | 1,649 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Impact of customer payments (3) |
(1,345 | ) | (2,037 | ) | (639 | ) | (706 | ) | (799 | ) | (923 | ) | (981 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Fair value changes of mortgage servicing rights, net of economic hedge results (4) |
(870 | ) | 209 | (873 | ) | 3 | 257 | (89 | ) | 12 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other servicing-related revenue |
288 | 334 | 151 | 137 | 172 | 169 | 160 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total net servicing income |
1,235 | 1,724 | 195 | 1,040 | 1,264 | 780 | 840 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Consumer Real Estate Services mortgage banking income (loss) |
(12,323 | ) | 2,661 | (13,018 | ) | 695 | (1,254 | ) | 1,757 | 1,020 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other business segments mortgage banking loss (5) |
(243 | ) | (263 | ) | (178 | ) | (65 | ) | (165 | ) | (2 | ) | (122 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Total consolidated mortgage banking income (loss) |
$ | (12,566 | ) | $ | 2,398 | $ | (13,196 | ) | $ | 630 | $ | (1,419 | ) | $ | 1,755 | $ | 898 | |||||||||||||||||||||||||||||||||||||||||||
(1) | These amounts reflect the change in discount rates and prepayment speed assumptions, mostly due to changes in interest rates, as well as the effect of changes in other assumptions. |
(2) | In addition to loan production in Consumer Real Estate Services, the remaining first mortgage and home equity loan production is primarily in GWIM. |
(3) | Represents the change in the market value of the mortgage servicing rights asset due to the impact of customer payments received during the year. |
(4) | Includes sale of mortgage servicing rights. |
(5) | Includes the effect of transfers of mortgage loans from Consumer Real Estate Services to the asset and liability management portfolio included in All Other. |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 22 |
Bank of America Corporation and Subsidiaries
Global Commercial Banking Segment Results
(Dollars in millions)
Six Months Ended June 30 |
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income (1) |
$ | 3,677 | $ | 4,290 | $ | 1,827 | $ | 1,850 | $ | 1,865 | $ | 1,853 | $ | 2,097 | ||||||||||||||||||||||||||||||||||||||||||||||
Noninterest income: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Service charges |
1,182 | 1,188 | 576 | 606 | 563 | 589 | 589 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
All other income |
602 | 497 | 407 | 195 | 186 | 191 | 197 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total noninterest income |
1,784 | 1,685 | 983 | 801 | 749 | 780 | 786 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenue, net of interest expense |
5,461 | 5,975 | 2,810 | 2,651 | 2,614 | 2,633 | 2,883 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for credit losses |
(338 | ) | 1,559 | (417 | ) | 79 | (136 | ) | 556 | 623 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest expense |
2,174 | 2,005 | 1,068 | 1,106 | 1,061 | 1,061 | 974 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes |
3,625 | 2,411 | 2,159 | 1,466 | 1,689 | 1,016 | 1,286 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax expense (1) |
1,321 | 891 | 778 | 543 | 636 | 372 | 471 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 2,304 | $ | 1,520 | $ | 1,381 | $ | 923 | $ | 1,053 | $ | 644 | $ | 815 | ||||||||||||||||||||||||||||||||||||||||||||||
Net interest yield (1) |
2.66 | % | 3.26 | % | 2.60 | % | 2.73 | % | 2.67 | % | 2.61 | % | 3.13 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Return on average equity |
11.33 | 6.93 | 13.67 | 9.02 | 9.72 | 5.96 | 7.46 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Return on average economic capital (2) |
22.85 | 13.04 | 27.92 | 17.96 | 18.76 | 11.52 | 14.14 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Efficiency ratio (1) |
39.81 | 33.56 | 38.01 | 41.72 | 40.58 | 40.28 | 33.80 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance sheet |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 190,883 | $ | 210,450 | $ | 189,346 | $ | 192,437 | $ | 195,293 | $ | 199,320 | $ | 206,603 | ||||||||||||||||||||||||||||||||||||||||||||||
Total earning assets (3) |
278,272 | 265,125 | 281,844 | 274,662 | 277,402 | 281,749 | 268,552 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets (3) |
316,521 | 301,925 | 320,428 | 312,570 | 314,781 | 318,395 | 305,788 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total deposits |
163,366 | 144,572 | 166,481 | 160,217 | 156,672 | 148,605 | 145,499 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocated equity |
41,008 | 44,222 | 40,515 | 41,506 | 42,992 | 42,925 | 43,869 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Economic capital (4) |
20,309 | 23,558 | 19,817 | 20,806 | 22,289 | 22,218 | 23,159 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 189,434 | $ | 203,659 | $ | 189,434 | $ | 190,749 | $ | 194,038 | $ | 196,333 | $ | 203,659 | ||||||||||||||||||||||||||||||||||||||||||||||
Total earning assets (3) |
242,272 | 269,508 | 242,272 | 272,424 | 274,637 | 267,834 | 269,508 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets (3) |
280,289 | 306,234 | 280,289 | 309,930 | 312,802 | 304,534 | 306,234 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total deposits |
170,156 | 147,414 | 170,156 | 161,584 | 161,279 | 150,994 | 147,414 |
(1) | Fully taxable-equivalent basis |
(2) | Return on average economic capital is calculated as net income, excluding cost of funds and earnings credit on intangibles, divided by average economic capital. |
(3) | Total earning assets and total assets include asset allocations to match liabilities (i.e., deposits). |
(4) | Economic capital represents allocated equity less goodwill and a percentage of intangible assets. |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 23 |
Bank of America Corporation and Subsidiaries
Global Commercial Banking Key Indicators
(Dollars in millions)
Six Months Ended June 30 |
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue, net of interest expense by service segment |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business lending |
$ | 3,045 | $ | 3,493 | $ | 1,564 | $ | 1,481 | $ | 1,491 | $ | 1,536 | $ | 1,635 | ||||||||||||||||||||||||||||||||||||||||||||
Treasury services |
2,416 | 2,482 | 1,246 | 1,170 | 1,123 | 1,097 | 1,248 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenue, net of interest expense (1) |
$ | 5,461 | $ | 5,975 | $ | 2,810 | $ | 2,651 | $ | 2,614 | $ | 2,633 | $ | 2,883 | ||||||||||||||||||||||||||||||||||||||||||||
Average loans and leases by product |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. commercial |
$ | 104,766 | $ | 106,161 | $ | 104,829 | $ | 104,703 | $ | 102,914 | $ | 101,447 | $ | 104,262 | ||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate |
41,690 | 55,808 | 40,597 | 42,796 | 45,854 | 49,747 | 53,721 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Direct/Indirect consumer |
41,752 | 46,088 | 41,078 | 42,436 | 44,185 | 45,885 | 46,272 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other |
2,675 | 2,393 | 2,842 | 2,502 | 2,340 | 2,241 | 2,348 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total average loans and leases |
$ | 190,883 | $ | 210,450 | $ | 189,346 | $ | 192,437 | $ | 195,293 | $ | 199,320 | $ | 206,603 | ||||||||||||||||||||||||||||||||||||||||||||
Loan spread |
2.33 | % | 2.31 | % | 2.26 | % | 2.40 | % | 2.27 | % | 2.29 | % | 2.32 | % | ||||||||||||||||||||||||||||||||||||||||||||
Credit quality |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reservable utilized criticized exposure (2) |
$ | 27,041 | $ | 37,613 | $ | 27,041 | $ | 30,643 | $ | 32,816 | $ | 36,332 | $ | 37,613 | ||||||||||||||||||||||||||||||||||||||||||||
14.27 | % | 18.50 | % | 14.27 | % | 15.83 | % | 16.74 | % | 18.45 | % | 18.50 | % | |||||||||||||||||||||||||||||||||||||||||||||
Nonperforming loans, leases and foreclosed properties (3) |
$ | 7,373 | $ | 10,027 | $ | 7,373 | $ | 8,321 | $ | 8,681 | $ | 9,414 | $ | 10,027 | ||||||||||||||||||||||||||||||||||||||||||||
3.88 | % | 4.92 | % | 3.88 | % | 4.36 | % | 4.47 | % | 4.79 | % | 4.92 | % | |||||||||||||||||||||||||||||||||||||||||||||
Average deposit balances |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing |
$ | 53,655 | $ | 54,192 | $ | 52,643 | $ | 54,679 | $ | 55,354 | $ | 53,565 | $ | 54,195 | ||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing |
109,711 | 90,380 | 113,838 | 105,538 | 101,318 | 95,040 | 91,304 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total |
$ | 163,366 | $ | 144,572 | $ | 166,481 | $ | 160,217 | $ | 156,672 | $ | 148,605 | $ | 145,499 | ||||||||||||||||||||||||||||||||||||||||||||
(1) | Fully taxable-equivalent basis |
(2) | Criticized exposure corresponds to the Special Mention, Substandard and Doubtful asset categories defined by regulatory authorities. The reservable criticized exposure is on an end-of-period basis and is also shown as a percentage of total reservable commercial utilized credit exposure, including loans and leases, standby letters of credit, financial guarantees, commercial letters of credit and bankers acceptances. |
(3) | Nonperforming loans, leases and foreclosed properties are presented on an end-of-period basis. The nonperforming ratio is calculated as nonperforming loans, leases and foreclosed properties divided by loans, leases and foreclosed properties. |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 24 |
Bank of America Corporation and Subsidiaries
Global Banking & Markets Segment Results
(Dollars in millions)
Six Months Ended June 30 |
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income (1) |
$ | 3,828 | $ | 4,172 | $ | 1,791 | $ | 2,037 | $ | 2,007 | $ | 1,901 | $ | 2,002 | ||||||||||||||||||||||||||||||||||||||||||||
Noninterest income: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Service charges |
917 | 931 | 442 | 475 | 501 | 459 | 468 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Investment and brokerage services |
1,264 | 1,299 | 587 | 677 | 562 | 580 | 676 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Investment banking income |
3,148 | 2,517 | 1,637 | 1,511 | 1,583 | 1,306 | 1,301 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Trading account profits |
4,691 | 6,273 | 2,071 | 2,620 | 961 | 2,454 | 1,202 | |||||||||||||||||||||||||||||||||||||||||||||||||||
All other income (loss) |
834 | 405 | 268 | 566 | (210 | ) | 407 | 255 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total noninterest income |
10,854 | 11,425 | 5,005 | 5,849 | 3,397 | 5,206 | 3,902 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenue, net of interest expense |
14,682 | 15,597 | 6,796 | 7,886 | 5,404 | 7,107 | 5,904 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for credit losses |
(284 | ) | 103 | (82 | ) | (202 | ) | (112 | ) | (157 | ) | (133 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Noninterest expense |
9,435 | 9,024 | 4,713 | 4,722 | 4,383 | 4,391 | 4,735 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes |
5,531 | 6,470 | 2,165 | 3,366 | 1,133 | 2,873 | 1,302 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax expense (1) |
1,839 | 2,333 | 607 | 1,232 | 478 | 1,434 | 404 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 3,692 | $ | 4,137 | $ | 1,558 | $ | 2,134 | $ | 655 | $ | 1,439 | $ | 898 | ||||||||||||||||||||||||||||||||||||||||||||
Return on average equity |
18.61 | % | 15.99 | % | 16.44 | % | 20.59 | % | 5.47 | % | 11.25 | % | 7.03 | % | ||||||||||||||||||||||||||||||||||||||||||||
Return on average economic capital (2) |
25.86 | 20.28 | 23.40 | 28.02 | 7.30 | 14.42 | 9.06 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Efficiency ratio (1) |
64.26 | 57.86 | 69.35 | 59.88 | 81.12 | 61.78 | 80.19 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Balance sheet |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total trading-related assets (3, 4) |
$ | 459,278 | $ | 519,767 | $ | 460,153 | $ | 458,394 | $ | 485,161 | $ | 507,014 | $ | 522,304 | ||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases |
106,604 | 97,427 | 109,473 | 103,704 | 100,606 | 98,874 | 95,839 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total earning assets (3,5) |
572,701 | 628,193 | 569,517 | 575,920 | 591,238 | 599,621 | 622,820 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets (5) |
730,907 | 781,949 | 750,908 | 710,684 | 744,643 | 752,159 | 779,060 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total deposits |
115,097 | 108,124 | 118,133 | 112,028 | 114,942 | 106,472 | 112,565 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Allocated equity |
40,004 | 52,182 | 38,001 | 42,029 | 47,511 | 50,756 | 51,245 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Economic capital (6) |
29,126 | 41,582 | 27,078 | 31,197 | 36,810 | 40,237 | 40,705 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total trading-related assets (4) |
$ | 445,220 | $ | 483,769 | $ | 445,220 | $ | 455,958 | $ | 417,714 | $ | 516,875 | $ | 483,769 | ||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases |
114,165 | 95,756 | 114,165 | 105,651 | 99,964 | 99,525 | 95,756 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total earning assets (5) |
557,327 | 565,208 | 557,327 | 563,943 | 514,462 | 607,436 | 565,208 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets (5) |
691,249 | 718,563 | 691,249 | 698,458 | 655,778 | 755,075 | 718,563 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total deposits |
123,618 | 105,678 | 123,618 | 115,212 | 110,971 | 109,601 | 105,678 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Trading-related assets (average) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Trading account securities (3) |
$ | 190,004 | $ | 204,068 | $ | 174,009 | $ | 206,177 | $ | 201,006 | $ | 201,494 | $ | 204,139 | ||||||||||||||||||||||||||||||||||||||||||||
Reverse repurchases |
162,655 | 195,590 | 173,403 | 151,788 | 166,070 | 183,246 | 193,905 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Securities borrowed |
49,616 | 56,100 | 54,044 | 45,140 | 51,294 | 54,899 | 57,292 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative assets |
57,003 | 64,009 | 58,697 | 55,289 | 66,791 | 67,375 | 66,968 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total trading-related assets (3, 4) |
$ | 459,278 | $ | 519,767 | $ | 460,153 | $ | 458,394 | $ | 485,161 | $ | 507,014 | $ | 522,304 | ||||||||||||||||||||||||||||||||||||||||||||
(1) | Fully taxable-equivalent basis |
(2) | For the three and six months ended June 30, 2011, $40.4 billion and $20.3 billion of non-interest earning equity securities were reclassified from trading account assets to other non-earning assets. Prior period amounts are immaterial and have not been restated. |
(3) | Return on average economic capital is calculated as net income, excluding cost of funds and earnings credit on intangibles, divided by average economic capital. |
(4) | Includes assets which are not considered earning assets (i.e. derivative assets). |
(5) | Total earning assets and total assets include asset allocations to match liabilities (i.e. deposits). |
(6) | Economic capital represents allocated equity less goodwill and a percentage of intangible assets. |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 25 |
Bank of America Corporation and Subsidiaries
Global Banking & Markets Key Indicators
(Dollars in millions)
Six Months Ended June 30 |
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales and trading revenue |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed income, currency and commodities |
$ | 6,343 | $ | 7,717 | $ | 2,697 | $ | 3,646 | $ | 1,673 | $ | 3,477 | $ | 2,230 | ||||||||||||||||||||||||||||||||||||||||||||
Equity income |
2,330 | 2,396 | 1,081 | 1,249 | 781 | 967 | 882 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total sales and trading revenue (1) |
$ | 8,673 | $ | 10,113 | $ | 3,778 | $ | 4,895 | $ | 2,454 | $ | 4,444 | $ | 3,112 | ||||||||||||||||||||||||||||||||||||||||||||
Investment banking income |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advisory (2) |
$ | 700 | $ | 409 | $ | 381 | $ | 319 | $ | 336 | $ | 273 | $ | 242 | ||||||||||||||||||||||||||||||||||||||||||||
Debt issuance |
1,679 | 1,509 | 880 | 799 | 808 | 743 | 773 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Equity issuance |
769 | 599 | 376 | 393 | 439 | 290 | 286 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total investment banking income |
$ | 3,148 | $ | 2,517 | $ | 1,637 | $ | 1,511 | $ | 1,583 | $ | 1,306 | $ | 1,301 | ||||||||||||||||||||||||||||||||||||||||||||
Corporate Banking |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business lending |
$ | 1,626 | $ | 1,747 | $ | 758 | $ | 868 | $ | 750 | $ | 778 | $ | 872 | ||||||||||||||||||||||||||||||||||||||||||||
Treasury services |
1,237 | 1,218 | 624 | 613 | 617 | 579 | 619 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenue, net of interest expense |
$ | 2,863 | $ | 2,965 | $ | 1,382 | $ | 1,481 | $ | 1,367 | $ | 1,357 | $ | 1,491 | ||||||||||||||||||||||||||||||||||||||||||||
Global Corporate & Investment Banking Key Indicators |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average deposit balances |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest-bearing |
$ | 55,347 | $ | 52,870 | $ | 57,524 | $ | 53,145 | $ | 59,068 | $ | 55,833 | $ | 55,109 | ||||||||||||||||||||||||||||||||||||||||||||
Noninterest-bearing |
52,650 | 46,730 | 53,081 | 52,214 | 48,454 | 43,981 | 49,009 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total average deposits |
$ | 107,997 | $ | 99,600 | $ | 110,605 | $ | 105,359 | $ | 107,522 | $ | 99,814 | $ | 104,118 | ||||||||||||||||||||||||||||||||||||||||||||
Loan spread |
1.92 | % | 1.94 | % | 1.57 | % | 2.29 | % | 1.62 | % | 1.77 | % | 1.94 | % | ||||||||||||||||||||||||||||||||||||||||||||
Provision for credit losses |
$ | (238 | ) | $ | 10 | $ | (74 | ) | $ | (164 | ) | $ | (110 | ) | $ | (102 | ) | $ | (191 | ) | ||||||||||||||||||||||||||||||||||||||
Credit quality (3, 4) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reservable utilized criticized exposure |
$ | 4,801 | $ | 7,290 | $ | 4,801 | $ | 5,298 | $ | 5,924 | $ | 7,131 | $ | 7,290 | ||||||||||||||||||||||||||||||||||||||||||||
4.26 | % | 7.29 | % | 4.26 | % | 4.87 | % | 5.67 | % | 6.95 | % | 7.29 | % | |||||||||||||||||||||||||||||||||||||||||||||
Nonperforming loans, leases and foreclosed properties |
$ | 327 | $ | 905 | $ | 327 | $ | 314 | $ | 645 | $ | 993 | $ | 905 | ||||||||||||||||||||||||||||||||||||||||||||
0.34 | % | 1.13 | % | 0.34 | % | 0.35 | % | 0.76 | % | 1.19 | % | 1.13 | % | |||||||||||||||||||||||||||||||||||||||||||||
Average loans and leases by product |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
U.S. commercial |
$ | 34,039 | $ | 34,878 | $ | 34,369 | $ | 33,704 | $ | 33,522 | $ | 32,681 | $ | 33,593 | ||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate |
68 | 33 | 54 | 82 | 24 | 26 | 31 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial lease financing |
23,259 | 23,472 | 23,041 | 23,478 | 23,271 | 23,356 | 23,250 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Non-U.S. commercial |
32,757 | 22,309 | 35,267 | 30,220 | 26,550 | 24,650 | 22,710 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other |
42 | 45 | 41 | 46 | 42 | 43 | 43 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Total average loans and leases |
$ | 90,165 | $ | 80,737 | $ | 92,772 | $ | 87,530 | $ | 83,409 | $ | 80,756 | $ | 79,627 | ||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Sales and trading revenue breakdown: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Interest Income |
$ | 2,037 | $ | 2,328 | $ | 952 | $ | 1,085 | $ | 1,183 | $ | 1,090 | $ | 1,083 | ||||||||||||||||||||||||||||||||||||||||||||
Commissions |
1,255 | 1,258 | 583 | 672 | 542 | 560 | 657 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Trading |
4,618 | 6,244 | 2,031 | 2,587 | 925 | 2,427 | 1,189 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Other |
763 | 283 | 212 | 551 | (196 | ) | 367 | 183 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total sales and trading revenue |
$ | 8,673 | $ | 10,113 | $ | 3,778 | $ | 4,895 | $ | 2,454 | $ | 4,444 | $ | 3,112 | ||||||||||||||||||||||||||||||||||||||||||||
(2) | Advisory includes fees on debt and equity advisory and mergers and acquisitions. |
(3) | Criticized exposure corresponds to the Special Mention, Substandard and Doubtful asset categories defined by regulatory authorities. The reservable criticized exposure is on an end-of-period basis and is also shown as a percentage of total reservable commercial utilized credit exposure, including loans and leases, standby letters of credit, financial guarantees, commercial letters of credit and bankers acceptances. |
(4) | Nonperforming loans, leases and foreclosed properties are on an end-of-period basis and defined as nonperforming loans and leases plus foreclosed properties. The nonperforming ratio is nonperforming assets divided by commercial loans and leases plus commercial foreclosed properties. |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 26 |
Bank of America Corporation and Subsidiaries
Credit Default Swaps with Monoline Financial Guarantors
(Dollars in millions)
June 30, 2011 | ||||||||||||||||||||||||
Super Senior CDOs |
Other Guaranteed Positions |
Total | ||||||||||||||||||||||
Notional |
$ | 2,968 | $ | 32,656 | $ | 35,624 | ||||||||||||||||||
Mark-to-market or guarantor receivable |
2,578 | 6,150 | 8,728 | |||||||||||||||||||||
Credit valuation adjustment |
(2,363 | ) | (3,314 | ) | (5,677 | ) | ||||||||||||||||||
Total |
$ | 215 | $ | 2,836 | $ | 3,051 | ||||||||||||||||||
Credit valuation adjustment % |
92 | % | 54 | % | 65 | % | ||||||||||||||||||
Losses during the three months ended June 30, 2011 |
$ | (38 | ) | $ | (223 | ) | $ | (261 | ) | |||||||||||||||
Losses during the six months ended June 30, 2011 |
(314 | ) | (354 | ) | (668 | ) | ||||||||||||||||||
March 31, 2011 | ||||||||||||||||||||||||
Super Senior CDOs |
Other Guaranteed Positions |
Total | ||||||||||||||||||||||
Notional |
$ | 3,225 | $ | 35,273 | $ | 38,498 | ||||||||||||||||||
Mark-to-market or guarantor receivable |
2,693 | 5,623 | 8,316 | |||||||||||||||||||||
Credit valuation adjustment |
(2,444 | ) | (2,838 | ) | (5,282 | ) | ||||||||||||||||||
Total |
$ | 249 | $ | 2,785 | $ | 3,034 | ||||||||||||||||||
Credit valuation adjustment % |
91 | % | 50 | % | 64 | % | ||||||||||||||||||
Losses during the three months ended March 31, 2011 |
$ | (276 | ) | $ | (131 | ) | $ | (407 | ) |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 27 |
Bank of America Corporation and Subsidiaries
Investment Banking Product Rankings
Six Months Ended June 30, 2011 | ||||||||||||||||||||
Global | U.S. | |||||||||||||||||||
Product Ranking |
Market Share |
Product Ranking |
Market Share |
|||||||||||||||||
High-yield corporate debt |
3 | 9.7 | % | 2 | 11.4 | % | ||||||||||||||
Leveraged loans |
2 | 14.1 | 2 | 17.8 | ||||||||||||||||
Mortgage-backed securities |
2 | 11.1 | 1 | 14.4 | ||||||||||||||||
Asset-backed securities |
1 | 13.0 | 1 | 20.3 | ||||||||||||||||
Convertible debt |
5 | 6.3 | 4 | 10.3 | ||||||||||||||||
Common stock underwriting |
2 | 7.7 | 4 | 9.9 | ||||||||||||||||
Investment grade corporate debt |
2 | 6.8 | 1 | 14.4 | ||||||||||||||||
Syndicated loans |
2 | 10.2 | 2 | 19.2 | ||||||||||||||||
Net investment banking revenue |
2 | 7.9 | 2 | 11.9 | ||||||||||||||||
Announced mergers and acquisitions |
6 | 14.1 | 7 | 21.1 | ||||||||||||||||
Equity capital markets |
2 | 7.5 | 4 | 10.0 | ||||||||||||||||
Debt capital markets |
4 | 5.7 | 2 | 10.6 |
Source: Dealogic data as of July 5, 2011. Figures above include self-led transactions.
| Rankings based on deal volumes except for investment banking revenue rankings which reflect fees. |
| Debt capital markets excludes loans but includes agencies. |
| Mergers and acquisitions fees included in investment banking revenues reflect 10 percent fee credit at announcement and 90 percent fee credit at completion as per Dealogic. |
| Mergers and acquisitions volume rankings are for announced transactions and provide credit to all investment banks advising the target or acquiror. |
| Each advisor receives full credit for the deal amount unless advising a minority stakeholder. |
Highlights
Global top 3 rankings in: |
||
High-yield corporate debt |
Common stock underwriting | |
Leveraged loans |
Investment grade corporate debt | |
Mortgage-backed securities |
Syndicated loans | |
Asset-backed securities |
Equity capital markets | |
U.S. top 3 rankings in: |
||
High-yield corporate debt |
Investment grade corporate debt | |
Leveraged loans |
Syndicated loans | |
Mortgage-backed securities |
Debt capital markets | |
Asset-backed securities |
Excluding self-mandated deals:
Global: #1 - Asset-backed securities, Investment grade corporate debt
Global: #2 - High-yield corporate debt, Leveraged loans, Mortgage-backed securities, Common stock underwriting, Syndicated loans, Equity capital markets
US: #1 - Asset-backed securities, Investment grade corporate debt
US: #2 - High-yield corporate debt, Leveraged loans, Mortgage-backed securities, Syndicated loans, Debt capital markets
This information is preliminary and based on company data available at the time of the presentation. | 28 |
Bank of America Corporation and Subsidiaries
Global Wealth & Investment Management Segment Results
(Dollars in millions, except as noted)
Six Months Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income (1) |
$ | 3,140 | $ | 2,907 | $ | 1,571 | $ | 1,569 | $ | 1,425 | $ | 1,345 | $ | 1,443 | ||||||||||||||||||||||||||||||||||||||||||||||
Noninterest income: |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment and brokerage services |
4,756 | 4,303 | 2,378 | 2,378 | 2,266 | 2,091 | 2,195 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
All other income |
1,086 | 1,020 | 541 | 545 | 470 | 462 | 551 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total noninterest income |
5,842 | 5,323 | 2,919 | 2,923 | 2,736 | 2,553 | 2,746 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total revenue, net of interest expense |
8,982 | 8,230 | 4,490 | 4,492 | 4,161 | 3,898 | 4,189 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision for credit losses |
118 | 363 | 72 | 46 | 155 | 127 | 122 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Noninterest expense |
7,230 | 6,368 | 3,631 | 3,599 | 3,485 | 3,364 | 3,269 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes |
1,634 | 1,499 | 787 | 847 | 521 | 407 | 798 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Income tax expense (1) |
595 | 731 | 281 | 314 | 199 | 150 | 469 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net income |
$ | 1,039 | $ | 768 | $ | 506 | $ | 533 | $ | 322 | $ | 257 | $ | 329 | ||||||||||||||||||||||||||||||||||||||||||||||
Net interest yield (1) |
2.32 | % | 2.49 | % | 2.34 | % | 2.30 | % | 2.10 | % | 2.18 | % | 2.42 | % | ||||||||||||||||||||||||||||||||||||||||||||||
Return on average equity |
11.80 | 8.61 | 11.54 | 12.06 | 7.00 | 5.66 | 7.27 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Return on average economic capital (2) |
30.21 | 22.76 | 29.97 | 30.44 | 18.12 | 15.20 | 19.10 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Efficiency ratio (1) |
80.50 | 77.37 | 80.88 | 80.12 | 83.76 | 86.29 | 78.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance sheet |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Average |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 101,529 | $ | 98,826 | $ | 102,200 | $ | 100,851 | $ | 100,306 | $ | 99,103 | $ | 98,811 | ||||||||||||||||||||||||||||||||||||||||||||||
Total earning assets (3) |
272,958 | 235,284 | 268,968 | 276,992 | 268,872 | 245,146 | 239,186 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets (3) |
293,170 | 256,510 | 289,050 | 297,335 | 289,643 | 265,641 | 259,801 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total deposits |
256,859 | 223,956 | 255,219 | 258,518 | 246,281 | 234,807 | 226,276 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Allocated equity |
17,755 | 18,002 | 17,574 | 17,938 | 18,227 | 18,039 | 18,179 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Economic capital (4) |
7,038 | 7,209 | 6,868 | 7,210 | 7,475 | 7,264 | 7,380 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 102,878 | $ | 99,157 | $ | 102,878 | $ | 101,286 | $ | 100,724 | $ | 99,511 | $ | 99,157 | ||||||||||||||||||||||||||||||||||||||||||||||
Total earning assets (3) |
263,867 | 231,375 | 263,867 | 264,753 | 275,260 | 245,370 | 231,375 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets (3) |
284,294 | 252,507 | 284,294 | 285,472 | 296,251 | 266,489 | 252,507 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total deposits |
255,580 | 226,572 | 255,580 | 256,526 | 257,982 | 240,381 | 226,572 |
(1) | Fully taxable-equivalent basis |
(2) | Return on average economic capital is calculated as net income, excluding cost of funds and earnings credit on intangibles, divided by average economic capital. |
(3) | Total earning assets and total assets include asset allocations to match liabilities (i.e., deposits). |
(4) | Economic capital represents allocated equity less goodwill and a percentage of intangible assets. |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 29 |
Bank of America Corporation and Subsidiaries
Global Wealth & Investment Management - Key Indicators and Metrics
(Dollars in millions, except as noted)
Six Months Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
|||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||
Revenues |
||||||||||||||||||||||||||||||||
Merrill Lynch Global Wealth Management |
$ | 7,034 | $ | 6,126 | $ | 3,494 | $ | 3,540 | $ | 3,428 | $ | 3,177 | $ | 3,138 | ||||||||||||||||||
U.S. Trust |
1,407 | 1,323 | 711 | 696 | 708 | 691 | 682 | |||||||||||||||||||||||||
Retirement Services |
545 | 483 | 273 | 272 | 226 | 242 | 244 | |||||||||||||||||||||||||
Other (1) |
(4 | ) | 298 | 12 | (16 | ) | (201 | ) | (212 | ) | 125 | |||||||||||||||||||||
Total revenues |
$ | 8,982 | $ | 8,230 | $ | 4,490 | $ | 4,492 | $ | 4,161 | $ | 3,898 | $ | 4,189 | ||||||||||||||||||
Client Balances |
||||||||||||||||||||||||||||||||
Client Balances by Business |
||||||||||||||||||||||||||||||||
Merrill Lynch Global Wealth Management |
$ | 1,539,798 | $ | 1,402,547 | $ | 1,539,798 | $ | 1,554,294 | $ | 1,515,896 | $ | 1,466,346 | $ | 1,402,547 | ||||||||||||||||||
U.S. Trust |
341,911 | 327,342 | 341,911 | 345,092 | 340,341 | 334,150 | 327,342 | |||||||||||||||||||||||||
Retirement Services |
252,379 | 224,930 | 252,379 | 255,573 | 246,774 | 234,249 | 224,930 | |||||||||||||||||||||||||
Other (1, 2) |
67,875 | 92,227 | 67,875 | 71,759 | 78,275 | 86,199 | 92,227 | |||||||||||||||||||||||||
Client Balances by Type |
||||||||||||||||||||||||||||||||
Assets under management (2) |
$ | 660,928 | $ | 591,872 | $ | 660,928 | $ | 664,466 | $ | 630,498 | $ | 611,461 | $ | 591,872 | ||||||||||||||||||
Client brokerage assets |
1,066,078 | 1,010,751 | 1,066,078 | 1,087,624 | 1,077,049 | 1,055,384 | 1,010,751 | |||||||||||||||||||||||||
Assets in custody |
116,499 | 118,694 | 116,499 | 116,816 | 115,033 | 114,207 | 118,694 | |||||||||||||||||||||||||
Client deposits |
255,580 | 226,572 | 255,580 | 256,526 | 257,982 | 240,381 | 226,572 | |||||||||||||||||||||||||
Loans and leases |
102,878 | 99,157 | 102,878 | 101,286 | 100,724 | 99,511 | 99,157 | |||||||||||||||||||||||||
Total client balances |
$ | 2,201,963 | $ | 2,047,046 | $ | 2,201,963 | $ | 2,226,718 | $ | 2,181,286 | $ | 2,120,944 | $ | 2,047,046 | ||||||||||||||||||
Assets Under Management Flows (2) |
||||||||||||||||||||||||||||||||
Liquidity assets under management (3) |
$ | (10,430 | ) | $ | (27,066 | ) | $ | (3,771 | ) | $ | (6,659 | ) | $ | (8,050 | ) | $ | (6,599 | ) | $ | (9,788 | ) | |||||||||||
Long-term assets under management (4) |
18,694 | 4,401 | 4,535 | 14,159 | 5,648 | 4,032 | 1,366 | |||||||||||||||||||||||||
Total assets under management flows |
$ | 8,264 | $ | (22,665 | ) | $ | 764 | $ | 7,500 | $ | (2,402 | ) | $ | (2,567 | ) | $ | (8,422 | ) | ||||||||||||||
Associates (5) |
||||||||||||||||||||||||||||||||
Number of Financial Advisors |
16,241 | 15,299 | 16,241 | 15,695 | 15,511 | 15,486 | 15,299 | |||||||||||||||||||||||||
Total Wealth Advisors |
17,817 | 16,781 | 17,817 | 17,201 | 17,025 | 16,983 | 16,781 | |||||||||||||||||||||||||
Total Client Facing Professionals |
20,876 | 19,744 | 20,876 | 20,273 | 20,068 | 20,013 | 19,744 | |||||||||||||||||||||||||
Merrill Lynch Global Wealth Management Metrics |
||||||||||||||||||||||||||||||||
Financial Advisor Productivity (6) (in thousands) |
$ | 912 | $ | 826 | $ | 894 | $ | 931 | $ | 913 | $ | 846 | $ | 843 | ||||||||||||||||||
U.S. Trust Metrics |
||||||||||||||||||||||||||||||||
Client Facing Professionals |
2,280 | 2,277 | 2,280 | 2,313 | 2,311 | 2,302 | 2,277 |
(1) | Other includes the results of BofA Global Capital Management (the former Columbia cash management business) and residual net interest income. |
(2) | Includes the Columbia Management long-term asset management business through the date of sale on May 1, 2010. |
(3) | Assets under advisory and discretion of GWIM in which the investment strategy seeks a high level of income while maintaining liquidity and capital preservation. The duration of these strategies are less than one year. |
(4) | Assets under advisory and discretion of GWIM in which the duration of the investment strategy is longer than one year. |
(5) | Includes Merrill Edge ® |
(6) | Financial Advisor Productivity is defined as annualized MLGWM total revenue divided by the total number of financial advisors (excluding Merrill Edge Financial Advisors). |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 30 |
Bank of America Corporation and Subsidiaries
All Other Results (1)
(Dollars in millions)
Six Months Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
|||||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||||||
Net interest income (2) |
$ | (74 | ) | $ | 118 | $ | (167 | ) | $ | 93 | $ | 76 | $ | (39 | ) | $ | 77 | |||||||||||||||
Noninterest income: |
||||||||||||||||||||||||||||||||
Equity investment income |
2,547 | 2,765 | 1,139 | 1,408 | 1,501 | 267 | 2,253 | |||||||||||||||||||||||||
Gains on sales of debt securities |
1,299 | 662 | 831 | 468 | 858 | 794 | 14 | |||||||||||||||||||||||||
All other income (loss) |
(780 | ) | 905 | 62 | (842 | ) | (1,760 | ) | (275 | ) | 783 | |||||||||||||||||||||
Total noninterest income |
3,066 | 4,332 | 2,032 | 1,034 | 599 | 786 | 3,050 | |||||||||||||||||||||||||
Total revenue, net of interest expense |
2,992 | 4,450 | 1,865 | 1,127 | 675 | 747 | 3,127 | |||||||||||||||||||||||||
Provision for credit losses |
3,462 | 2,466 | 1,663 | 1,799 | 1,839 | 329 | 1,246 | |||||||||||||||||||||||||
Merger and restructuring charges |
361 | 1,029 | 159 | 202 | 370 | 421 | 508 | |||||||||||||||||||||||||
All other noninterest expense |
1,449 | 1,814 | 157 | 1,292 | 516 | 143 | 605 | |||||||||||||||||||||||||
Income (loss) before income taxes |
(2,280 | ) | (859 | ) | (114 | ) | (2,166 | ) | (2,050 | ) | (146 | ) | 768 | |||||||||||||||||||
Income tax expense (benefit) (2) |
(848 | ) | (1,192 | ) | 102 | (950 | ) | (2,410 | ) | (515 | ) | (355 | ) | |||||||||||||||||||
Net income (loss) |
$ | (1,432 | ) | $ | 333 | $ | (216 | ) | $ | (1,216 | ) | $ | 360 | $ | 369 | $ | 1,123 | |||||||||||||||
Balance sheet |
||||||||||||||||||||||||||||||||
Average |
||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 258,374 | $ | 256,742 | $ | 258,397 | $ | 258,350 | $ | 252,180 | $ | 238,442 | $ | 257,322 | ||||||||||||||||||
Total assets (3) |
183,289 | 300,395 | 167,364 | 199,391 | 196,487 | 206,559 | 291,530 | |||||||||||||||||||||||||
Total deposits |
47,642 | 67,770 | 46,684 | 48,608 | 44,841 | 44,871 | 64,709 | |||||||||||||||||||||||||
Allocated equity (4) |
67,030 | 24,475 | 73,244 | 60,748 | 50,731 | 35,972 | 29,091 | |||||||||||||||||||||||||
Period end |
||||||||||||||||||||||||||||||||
Total loans and leases |
$ | 259,285 | $ | 254,516 | $ | 259,285 | $ | 256,931 | $ | 255,212 | $ | 241,798 | $ | 254,516 | ||||||||||||||||||
Total assets (5) |
209,210 | 243,099 | 209,210 | 155,855 | 176,400 | 193,893 | 243,099 | |||||||||||||||||||||||||
Total deposits |
42,355 | 57,424 | 42,355 | 34,818 | 38,748 | 37,652 | 57,424 |
(1) | All Other consists of two broad groupings, Equity Investments and Other. Equity Investments includes Global Principal Investments, Strategic and other investments, and Corporate Investments. BlackRock, Inc., previously included in Strategic and other investments, was sold during 2011. Substantially all of the equity investments in Corporate Investments were sold during 2010. Other includes liquidating businesses, merger and restructuring charges, ALM functions (i.e., residential mortgage portfolio and investment securities) and related activities (i.e., economic hedges, fair value option on structured liabilities), and the impact of certain allocation methodologies. Other also includes certain residential mortgage and discontinued real estate products that are managed by Legacy Asset Servicing within Consumer Real Estate Services). |
(2) | Fully taxable-equivalent basis |
(3) | Includes elimination of segments excess asset allocations to match liabilities (i.e., deposits) of $672.3 billion and $600.1 billion for the six months ended June 30, 2011 and 2010; $676.7 billion, $667.9 billion, $660.7 billion, $633.8 billion and $611.2 billion for the second and first quarters of 2011, and the fourth, third and second quarters of 2010, respectively. |
(4) | Represents both the risk-based capital and the portion of goodwill and intangibles assigned to All Other as well as the remaining portion of equity not specifically allocated to the segments. |
(5) | Includes elimination of segments excess asset allocations to match liabilities (i.e., deposits) of $629.6 billion, $661.1 billion, $647.3 billion, $621.1 billion and $603.5 billion at June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010, respectively. |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 31 |
Bank of America Corporation and Subsidiaries
Equity Investments
(Dollars in millions)
Global Principal Investments Exposures | Equity
Investment Income |
|||||||||||||||||||||||
June 30, 2011 | March 31, 2011 |
June 30, 2011 | ||||||||||||||||||||||
Book Value |
Unfunded Commitments |
Total | Total | Three Months Ended |
Six Months Ended |
|||||||||||||||||||
Global Principal Investments: |
||||||||||||||||||||||||
Private Equity Investments |
$ | 5,021 | $ | 133 | $ | 5,154 | $ | 5,194 | $ | 210 | $ | 1,413 | ||||||||||||
Global Real Estate |
1,505 | 214 | 1,719 | 1,704 | 42 | 116 | ||||||||||||||||||
Global Strategic Capital |
2,522 | 406 | 2,928 | 2,933 | 182 | 275 | ||||||||||||||||||
Legacy/Other Investments |
1,757 | 369 | 2,126 | 2,656 | (35 | ) | (40 | ) | ||||||||||||||||
Total Global Principal Investments |
$ | 10,805 | $ | 1,122 | $ | 11,927 | $ | 12,487 | $ | 399 | $ | 1,764 | ||||||||||||
Components of Equity Investment Income
(Dollars in millions)
Six Months Ended June 30 |
Second Quarter |
First Quarter |
Fourth Quarter |
Third Quarter |
Second Quarter |
|||||||||||||||||||||||||||
2011 | 2010 | 2011 | 2011 | 2010 | 2010 | 2010 | ||||||||||||||||||||||||||
Global Principal Investments |
$ | 1,764 | $ | 1,391 | $ | 399 | $ | 1,365 | $ | 867 | $ | 46 | $ | 814 | ||||||||||||||||||
Corporate Investments |
| (305 | ) | | | 6 | 6 | 6 | ||||||||||||||||||||||||
Strategic and other investments (1) |
783 | 1,679 | 740 | 43 | 628 | 215 | 1,433 | |||||||||||||||||||||||||
Total equity investment income included in All Other |
2,547 | 2,765 | 1,139 | 1,408 | 1,501 | 267 | 2,253 | |||||||||||||||||||||||||
Total equity investment income included in the business segments |
140 | 626 | 73 | 67 | 11 | 90 | 513 | |||||||||||||||||||||||||
Total consolidated equity investment income |
$ | 2,687 | $ | 3,391 | $ | 1,212 | $ | 1,475 | $ | 1,512 | $ | 357 | $ | 2,766 | ||||||||||||||||||
(1) | Includes the Corporations equity investment interest in BlackRock prior to its sale in the second quarter of 2011. |
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 32 |
Bank of America Corporation and Subsidiaries
Outstanding Loans and Leases
(Dollars in millions)
June 30 2011 |
March 31 2011 |
Increase (Decrease) |
||||||||||
Consumer |
||||||||||||
Residential mortgage (1) |
$ | 266,333 | $ | 261,934 | $ | 4,399 | ||||||
Home equity |
130,654 | 133,629 | (2,975 | ) | ||||||||
Discontinued real estate (2) |
12,003 | 12,694 | (691 | ) | ||||||||
U.S. credit card |
104,659 | 107,107 | (2,448 | ) | ||||||||
Non-U.S. credit card |
26,037 | 27,235 | (1,198 | ) | ||||||||
Direct/Indirect consumer (3) |
90,258 | 89,444 | 814 | |||||||||
Other consumer (4) |
2,762 | 2,754 | 8 | |||||||||
Total consumer loans excluding loans measured at fair value |
632,706 | 634,797 | (2,091 | ) | ||||||||
Consumer loans measured at fair value (5) |
5,194 | | 5,194 | |||||||||
Total consumer |
637,900 | 634,797 | 3,103 | |||||||||
Commercial |
||||||||||||
U.S. commercial (6) |
190,606 | 188,449 | 2,157 | |||||||||
Commercial real estate (7) |
44,028 | 47,008 | (2,980 | ) | ||||||||
Commercial lease financing |
21,391 | 21,563 | (172 | ) | ||||||||
Non-U.S. commercial |
42,929 | 36,921 | 6,008 | |||||||||
Total commercial loans excluding loans measured at fair value |
298,954 | 293,941 | 5,013 | |||||||||
Commercial loans measured at fair value (5) |
4,403 | 3,687 | 716 | |||||||||
Total commercial |
303,357 | 297,628 | 5,729 | |||||||||
Total loans and leases |
$ | 941,257 | $ | 932,425 | $ | 8,832 | ||||||
(1) | Includes non-U.S. residential mortgages of $90 million and $92 million at June 30, 2011 and March 31, 2011. |
(2) | Includes $10.7 billion and $11.4 billion of pay option loans, and $1.3 billion and $1.3 billion of subprime loans at June 30, 2011 and March 31, 2011. The Corporation no longer originates these products. |
(3) | Includes dealer financial services loans of $42.1 billion and $41.5 billion, consumer lending of $9.9 billion and $11.1 billion, U.S. securities-based lending margin loans of $21.3 billion and $19.7 billion, student loans of $6.3 billion and $6.6 billion, non-U.S. consumer loans of $8.7 billion and $8.5 billion, and other consumer loans of $2.0 billion and $2.1 billion at June 30, 2011 and March 31, 2011. |
(4) | Includes consumer finance loans of $1.8 billion and $1.9 billion, other non-U.S. consumer loans of $866 million and $818 million, and consumer overdrafts of $104 million and $69 million at June 30, 2011 and March 31, 2011. |
(5) | Certain consumer loans are accounted for under the fair value option and include residential mortgages of $1.2 billion and discontinued real estate of $4.0 billion at June 30, 2011. Certain commercial loans are accounted for under the fair value option and include U.S. commercial loans of $1.6 billion and $1.4 billion, non-U.S. commercial loans of $2.8 billion and $2.3 billion, and commercial real estate loans of $11 million and $68 million at June 30, 2011 and March 31, 2011. |
(6) | Includes U.S. small business commercial loans, including card related products, of $13.9 billion and $14.3 billion at June 30, 2011 and March 31, 2011. |
(7) | Includes U.S. commercial real estate loans of $41.7 billion and $44.6 billion, and non-U.S. commercial real estate loans of $2.3 billion and $2.4 billion at June 30, 2011 and March 31, 2011. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 33 |
Bank of America Corporation and Subsidiaries
Quarterly Average Loans and Leases by Business Segment
(Dollars in millions)
Second Quarter 2011 | ||||||||||||||||||||||||||||||||||
Total Corporation |
Deposits | Global Card Services |
Consumer Real Estate Services |
Global Commercial Banking |
Global Banking & Markets |
GWIM | All Other | |||||||||||||||||||||||||||
Consumer |
||||||||||||||||||||||||||||||||||
Residential mortgage |
$ | 265,420 | $ | | $ | | $ | 1,167 | $ | 263 | $ | 101 | $ | 36,367 | $ | 227,522 | ||||||||||||||||||
Home equity |
131,786 | | | 115,250 | 1,033 | | 15,248 | 255 | ||||||||||||||||||||||||||
Discontinued real estate |
15,997 | | | 3,548 | | | | 12,449 | ||||||||||||||||||||||||||
U.S. credit card |
106,164 | | 106,164 | | | | | | ||||||||||||||||||||||||||
Non-U.S. credit card |
27,259 | | 27,259 | | | | | | ||||||||||||||||||||||||||
Direct/Indirect consumer |
89,403 | 52 | 10,932 | 94 | 41,078 | 561 | 30,231 | 6,455 | ||||||||||||||||||||||||||
Other consumer |
2,745 | 414 | 835 | | | 5 | 17 | 1,474 | ||||||||||||||||||||||||||
Total consumer |
638,774 | 466 | 145,190 | 120,059 | 42,374 | 667 | 81,863 | 248,155 | ||||||||||||||||||||||||||
Commercial |
||||||||||||||||||||||||||||||||||
U.S. commercial |
190,479 | 157 | 10,421 | 1,619 | 104,829 | 45,755 | 18,322 | 9,376 | ||||||||||||||||||||||||||
Commercial real estate |
45,762 | 3 | 277 | 5 | 40,597 | 908 | 1,792 | 2,180 | ||||||||||||||||||||||||||
Commercial lease financing |
21,284 | | | | | 23,042 | 34 | (1,792 | ) | |||||||||||||||||||||||||
Non-U.S. commercial |
42,214 | | 900 | | 1,546 | 39,101 | 189 | 478 | ||||||||||||||||||||||||||
Total commercial |
299,739 | 160 | 11,598 | 1,624 | 146,972 | 108,806 | 20,337 | 10,242 | ||||||||||||||||||||||||||
Total loans and leases |
$ | 938,513 | $ | 626 | $ | 156,788 | $ | 121,683 | $ | 189,346 | $ | 109,473 | $ | 102,200 | $ | 258,397 | ||||||||||||||||||
First Quarter 2011 | ||||||||||||||||||||||||||||||||||
Total Corporation |
Deposits | Global Card Services |
Consumer Real Estate Services |
Global Commercial Banking |
Global Banking & Markets |
GWIM | All Other | |||||||||||||||||||||||||||
Consumer |
||||||||||||||||||||||||||||||||||
Residential mortgage |
$ | 262,049 | $ | | $ | | $ | | $ | 283 | $ | 99 | $ | 35,752 | $ | 225,915 | ||||||||||||||||||
Home equity |
136,089 | | | 119,123 | 1,013 | | 15,686 | 267 | ||||||||||||||||||||||||||
Discontinued real estate |
12,899 | | | | | | | 12,899 | ||||||||||||||||||||||||||
U.S. credit card |
109,941 | | 109,941 | | | | | | ||||||||||||||||||||||||||
Non-U.S. credit card |
27,633 | | 27,633 | | | | | | ||||||||||||||||||||||||||
Direct/Indirect consumer |
90,097 | 56 | 12,284 | 97 | 42,436 | 371 | 28,110 | 6,743 | ||||||||||||||||||||||||||
Other consumer |
2,753 | 383 | 772 | (16 | ) | 2 | 5 | 18 | 1,589 | |||||||||||||||||||||||||
Total consumer |
641,461 | 439 | 150,630 | 119,204 | 43,734 | 475 | 79,566 | 247,413 | ||||||||||||||||||||||||||
Commercial |
||||||||||||||||||||||||||||||||||
U.S. commercial |
191,353 | 198 | 10,521 | 1,349 | 104,703 | 45,511 | 19,355 | 9,716 | ||||||||||||||||||||||||||
Commercial real estate |
48,359 | 2 | 257 | 5 | 42,796 | 934 | 1,731 | 2,634 | ||||||||||||||||||||||||||
Commercial lease financing |
21,634 | | | | | 23,478 | 34 | (1,878 | ) | |||||||||||||||||||||||||
Non-U.S. commercial |
36,159 | | 1,017 | 2 | 1,204 | 33,306 | 165 | 465 | ||||||||||||||||||||||||||
Total commercial |
297,505 | 200 | 11,795 | 1,356 | 148,703 | 103,229 | 21,285 | 10,937 | ||||||||||||||||||||||||||
Total loans and leases |
$ | 938,966 | $ | 639 | $ | 162,425 | $ | 120,560 | $ | 192,437 | $ | 103,704 | $ | 100,851 | $ | 258,350 | ||||||||||||||||||
Second Quarter 2010 | ||||||||||||||||||||||||||||||||||
Total Corporation |
Deposits | Global Card Services |
Consumer Real Estate Services |
Global Commercial Banking |
Global Banking & Markets |
GWIM | All Other | |||||||||||||||||||||||||||
Consumer |
||||||||||||||||||||||||||||||||||
Residential mortgage |
$ | 247,715 | $ | | $ | | $ | | $ | 304 | $ | 513 | $ | 35,204 | $ | 211,694 | ||||||||||||||||||
Home equity |
148,219 | | | 129,010 | 923 | | 16,409 | 1,877 | ||||||||||||||||||||||||||
Discontinued real estate |
13,972 | | | | | | | 13,972 | ||||||||||||||||||||||||||
U.S. credit card |
118,738 | | 118,738 | | | | | | ||||||||||||||||||||||||||
Non-U.S. credit card |
27,706 | | 27,706 | | | | | | ||||||||||||||||||||||||||
Direct/Indirect consumer |
98,549 | 69 | 17,159 | 101 | 46,272 | 82 | 24,112 | 10,754 | ||||||||||||||||||||||||||
Other consumer |
2,958 | 326 | 673 | (210 | ) | | 7 | 19 | 2,143 | |||||||||||||||||||||||||
Total consumer |
657,857 | 395 | 164,276 | 128,901 | 47,499 | 602 | 75,744 | 240,440 | ||||||||||||||||||||||||||
Commercial |
||||||||||||||||||||||||||||||||||
U.S. commercial |
195,144 | 341 | 11,562 | 1,754 | 104,262 | 44,952 | 20,872 | 11,401 | ||||||||||||||||||||||||||
Commercial real estate |
64,218 | 5 | 193 | 7 | 53,721 | 1,363 | 2,019 | 6,910 | ||||||||||||||||||||||||||
Commercial lease financing |
21,271 | | | | 1 | 23,250 | 30 | (2,010 | ) | |||||||||||||||||||||||||
Non-U.S. commercial |
28,564 | | 1,045 | | 1,120 | 25,672 | 146 | 581 | ||||||||||||||||||||||||||
Total commercial |
309,197 | 346 | 12,800 | 1,761 | 159,104 | 95,237 | 23,067 | 16,882 | ||||||||||||||||||||||||||
Total loans and leases |
$ | 967,054 | $ | 741 | $ | 177,076 | $ | 130,662 | $ | 206,603 | $ | 95,839 | $ | 98,811 | $ | 257,322 | ||||||||||||||||||
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 34 |
Bank of America Corporation and Subsidiaries
Commercial Credit Exposure by Industry (1, 2, 3)
(Dollars in millions)
Commercial Utilized | Total Commercial Committed | |||||||||||||||||||||||
June 30 2011 |
March 31 2011 |
Increase (Decrease) |
June 30 2011 |
March 31 2011 |
Increase (Decrease) |
|||||||||||||||||||
Diversified financials |
$ | 51,889 | $ | 54,085 | $ | (2,196 | ) | $ | 79,056 | $ | 81,676 | $ | (2,620 | ) | ||||||||||
Real estate (4) |
53,597 | 56,084 | (2,487 | ) | 67,093 | 69,273 | (2,180 | ) | ||||||||||||||||
Government and public education |
42,153 | 42,292 | (139 | ) | 58,027 | 58,174 | (147 | ) | ||||||||||||||||
Capital goods |
23,880 | 22,151 | 1,729 | 46,822 | 45,833 | 989 | ||||||||||||||||||
Healthcare equipment and services |
28,757 | 29,227 | (470 | ) | 45,608 | 46,124 | (516 | ) | ||||||||||||||||
Retailing |
25,530 | 24,994 | 536 | 45,604 | 44,506 | 1,098 | ||||||||||||||||||
Consumer services |
23,195 | 23,261 | (66 | ) | 37,735 | 38,441 | (706 | ) | ||||||||||||||||
Materials |
17,696 | 16,162 | 1,534 | 35,831 | 34,277 | 1,554 | ||||||||||||||||||
Banks |
32,005 | 29,454 | 2,551 | 35,461 | 32,894 | 2,567 | ||||||||||||||||||
Commercial services and supplies |
20,740 | 21,013 | (273 | ) | 31,344 | 31,139 | 205 | |||||||||||||||||
Energy |
12,661 | 10,426 | 2,235 | 29,817 | 27,471 | 2,346 | ||||||||||||||||||
Food, beverage and tobacco |
14,697 | 14,789 | (92 | ) | 28,920 | 28,550 | 370 | |||||||||||||||||
Utilities |
6,407 | 7,355 | (948 | ) | 24,697 | 26,325 | (1,628 | ) | ||||||||||||||||
Insurance, including monolines |
16,306 | 16,673 | (367 | ) | 23,059 | 23,483 | (424 | ) | ||||||||||||||||
Individuals and trusts |
16,249 | 16,935 | (686 | ) | 20,498 | 21,802 | (1,304 | ) | ||||||||||||||||
Media |
10,730 | 10,517 | 213 | 20,461 | 19,944 | 517 | ||||||||||||||||||
Transportation |
11,778 | 11,721 | 57 | 18,129 | 17,894 | 235 | ||||||||||||||||||
Pharmaceuticals and biotechnology |
4,998 | 4,569 | 429 | 12,152 | 12,063 | 89 | ||||||||||||||||||
Technology hardware and equipment |
4,557 | 4,270 | 287 | 11,005 | 10,798 | 207 | ||||||||||||||||||
Religious and social organizations |
8,087 | 8,013 | 74 | 10,319 | 10,384 | (65 | ) | |||||||||||||||||
Telecommunication services |
3,890 | 3,717 | 173 | 10,096 | 9,527 | 569 | ||||||||||||||||||
Software and services |
3,480 | 3,358 | 122 | 8,995 | 8,882 | 113 | ||||||||||||||||||
Consumer durables and apparel |
4,329 | 4,247 | 82 | 8,938 | 8,599 | 339 | ||||||||||||||||||
Food and staples retailing |
3,123 | 3,824 | (701 | ) | 6,521 | 6,940 | (419 | ) | ||||||||||||||||
Automobiles and components |
2,466 | 2,256 | 210 | 6,391 | 5,905 | 486 | ||||||||||||||||||
Other |
3,521 | 7,556 | (4,035 | ) | 7,191 | 11,122 | (3,931 | ) | ||||||||||||||||
Total commercial credit exposure by industry |
$ | 446,721 | $ | 448,949 | $ | (2,228 | ) | $ | 729,770 | $ | 732,026 | $ | (2,256 | ) | ||||||||||
Net credit default protection purchased on total commitments (5) |
$ | (19,861 | ) | $ | (19,179 | ) |
(1) | Includes loans and leases, standby letters of credit and financial guarantees, derivative assets, assets held-for-sale, commercial letters of credit, bankers acceptances, securitized assets, foreclosed properties and other collateral acquired. Derivative assets are reported on a mark-to-market basis and have been reduced by the amount of cash collateral applied of $58.8 billion and $57.7 billion at June 30, 2011 and March 31, 2011. Not reflected in utilized and committed exposure is additional non-cash derivative collateral held of $14.0 billion and $14.9 billion which consists primarily of other marketable securities at June 30, 2011 and March 31, 2011. |
(2) | Total commercial utilized and total commercial committed exposure includes loans and letters of credit measured at fair value and are comprised of loans outstanding of $4.0 billion and $3.7 billion and issued letters of credit at notional value of $1.2 billion and $1.4 billion at June 30, 2011 and March 31, 2011. In addition, total commercial committed exposure includes unfunded loan commitments at notional value of $26.8 billion and $27.0 billion at June 30, 2011 and March 31, 2011. |
(3) | Includes U.S. small business commercial exposure. |
(4) | Industries are viewed from a variety of perspectives to best isolate the perceived risks. For purposes of this table, the real estate industry is defined based upon the borrowers or counterparties primary business activity using operating cash flows and primary source of repayment as key factors. |
(5) | Represents net notional credit protection purchased. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 35 |
Bank of America Corporation and Subsidiaries
Net Credit Default Protection by Maturity Profile (1)
June 30 2011 |
March 31 2011 |
|||||||||||||||
Less than or equal to one year |
14 | % | 13 | % | ||||||||||||
Greater than one year and less than or equal to five years |
80 | 78 | ||||||||||||||
Greater than five years |
6 | 9 | ||||||||||||||
Total net credit default protection |
100 | % | 100 | % |
(1) | To mitigate the cost of purchasing credit protection, credit exposure can be added by selling credit protection. The distribution of maturities for net credit default protection purchased is shown above. |
Net Credit Default Protection by Credit Exposure Debt Rating (1, 2)
(Dollars in millions)
June 30, 2011 | March 31, 2011 | |||||||||||||||||||||||
Ratings (3) | Net Notional | Percent | Net Notional | Percent | ||||||||||||||||||||
AA |
$ | (313 | ) | 1.6 | % | $ | (223 | ) | 1.2 | % | ||||||||||||||
A |
(7,016 | ) | 35.3 | (6,967 | ) | 36.3 | ||||||||||||||||||
BBB |
(7,542 | ) | 38.0 | (7,105 | ) | 37.0 | ||||||||||||||||||
BB |
(1,659 | ) | 8.4 | (1,871 | ) | 9.8 | ||||||||||||||||||
B |
(1,381 | ) | 7.0 | (1,231 | ) | 6.4 | ||||||||||||||||||
CCC and below |
(756 | ) | 3.8 | (756 | ) | 3.9 | ||||||||||||||||||
NR (4) |
(1,194 | ) | 5.9 | (1,026 | ) | 5.4 | ||||||||||||||||||
Total net credit default protection |
$ | (19,861 | ) | 100.0 | % | $ | (19,179 | ) | 100.0 | % |
(1) | To mitigate the cost of purchasing credit protection, credit exposure can be added by selling credit protection. The distribution of debt rating for net notional credit default protection purchased is shown as a negative and the net notional credit protection sold is shown as a positive amount. |
(2) | Ratings are refreshed on a quarterly basis. |
(3) | The Corporation considers ratings of BBB- or higher to meet the definition of investment grade. |
(4) | In addition to names which have not been rated, NR includes $(1.1) billion and $(921) million in net credit default swap index positions at June 30, 2011 and March 31, 2011. While index positions are principally investment grade, credit default swaps indices include names in and across each of the ratings categories. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 36 |
Bank of America Corporation and Subsidiaries
Selected Emerging Markets (1)
(Dollars in millions)
Loans and Leases, and Loan Commitments |
Other Financing (2) |
Derivative Assets (3) |
Securities
/ Other Investments (4) |
Total Crossborder |
Local Country Exposure Net of Local Liabilities (6) |
Total Emerging Markets Exposure at June 30, 2011 |
Increase (Decrease) from March 31, 2011 |
|||||||||||||||||||||||||
Region/Country |
||||||||||||||||||||||||||||||||
Asia Pacific |
||||||||||||||||||||||||||||||||
China (7) |
$ | 2,534 | $ | 425 | $ | 990 | $ | 21,494 | $ | 25,443 | $ | 99 | $ | 25,542 | $ | (612 | ) | |||||||||||||||
India |
4,154 | 1,485 | 551 | 2,381 | 8,571 | 516 | 9,087 | 271 | ||||||||||||||||||||||||
South Korea |
873 | 1,255 | 401 | 2,105 | 4,634 | 1,774 | 6,408 | (856 | ) | |||||||||||||||||||||||
Taiwan |
472 | 78 | 74 | 603 | 1,227 | 1,519 | 2,746 | 400 | ||||||||||||||||||||||||
Singapore |
616 | 43 | 428 | 1,488 | 2,575 | | 2,575 | 80 | ||||||||||||||||||||||||
Hong Kong |
518 | 396 | 178 | 1,056 | 2,148 | 287 | 2,435 | 389 | ||||||||||||||||||||||||
Thailand |
20 | 15 | 32 | 878 | 945 | | 945 | 313 | ||||||||||||||||||||||||
Malaysia |
85 | 10 | 132 | 476 | 703 | 2 | 705 | 366 | ||||||||||||||||||||||||
Indonesia |
148 | 15 | 5 | 519 | 687 | 7 | 694 | 166 | ||||||||||||||||||||||||
Other Asia Pacific (8) |
226 | 92 | 53 | 381 | 752 | | 752 | 246 | ||||||||||||||||||||||||
Total Asia Pacific |
9,646 | 3,814 | 2,844 | 31,381 | 47,685 | 4,204 | 51,889 | 763 | ||||||||||||||||||||||||
Latin America |
||||||||||||||||||||||||||||||||
Brazil |
1,254 | 375 | 407 | 3,213 | 5,249 | 1,848 | 7,097 | (658 | ) | |||||||||||||||||||||||
Mexico |
2,029 | 475 | 257 | 3,032 | 5,793 | | 5,793 | 2,496 | ||||||||||||||||||||||||
Chile |
1,069 | 58 | 336 | 27 | 1,490 | 41 | 1,531 | 19 | ||||||||||||||||||||||||
Peru |
373 | 114 | 20 | 92 | 599 | | 599 | 107 | ||||||||||||||||||||||||
Other Latin America (8) |
263 | 346 | 39 | 334 | 982 | 152 | 1,134 | (136 | ) | |||||||||||||||||||||||
Total Latin America |
4,988 | 1,368 | 1,059 | 6,698 | 14,113 | 2,041 | 16,154 | 1,828 | ||||||||||||||||||||||||
Middle East and Africa |
||||||||||||||||||||||||||||||||
United Arab Emirates |
1,088 | 30 | 126 | 85 | 1,329 | | 1,329 | 203 | ||||||||||||||||||||||||
Bahrain |
79 | 1 | 4 | 1,001 | 1,085 | 2 | 1,087 | 1 | ||||||||||||||||||||||||
South Africa |
361 | 22 | 88 | 48 | 519 | | 519 | 109 | ||||||||||||||||||||||||
Other Middle East and Africa (8) |
513 | 103 | 93 | 209 | 918 | 28 | 946 | 20 | ||||||||||||||||||||||||
Total Middle East and Africa |
2,041 | 156 | 311 | 1,343 | 3,851 | 30 | 3,881 | 333 | ||||||||||||||||||||||||
Central and Eastern Europe |
||||||||||||||||||||||||||||||||
Russian Federation |
819 | 117 | 12 | 187 | 1,135 | 11 | 1,146 | 644 | ||||||||||||||||||||||||
Turkey |
321 | 45 | 6 | 217 | 589 | 96 | 685 | (53 | ) | |||||||||||||||||||||||
Other Central and Eastern Europe (8) |
116 | 84 | 221 | 492 | 913 | | 913 | (578 | ) | |||||||||||||||||||||||
Total Central and Eastern Europe |
1,256 | 246 | 239 | 896 | 2,637 | 107 | 2,744 | 13 | ||||||||||||||||||||||||
Total emerging market exposure |
$ | 17,931 | $ | 5,584 | $ | 4,453 | $ | 40,318 | $ | 68,286 | $ | 6,382 | $ | 74,668 | $ | 2,937 |
(1) | There is no generally accepted definition of emerging markets. The definition that we use includes all countries in Asia Pacific excluding Japan, Australia and New Zealand; all countries in Latin America excluding Cayman Islands and Bermuda; all countries in Middle East and Africa; and all countries in Central and Eastern Europe. At June 30, 2011 and March 31, 2011, there was $474 million and $368 million in emerging market exposure accounted for under the fair value option. |
(2) | Includes acceptances, due froms, standby letters of credit, commercial letters of credit and formal guarantees. |
(3) | Derivative assets are carried at fair value and have been reduced by the amount of cash collateral applied of $1.1 billion and $881 million at June 30, 2011 and March 31, 2011. At June 30, 2011 and March 31, 2011, there were $226 million and $306 million of other marketable securities collateralizing derivative assets. |
(4) | Generally, cross-border resale agreements are presented based on the domicile of the counterparty, consistent with Federal Financial Institutions Examination Council (FFIEC) reporting requirements. Cross-border resale agreements where the underlying securities are U.S. Treasury securities, in which case the domicile is the U.S., are excluded from this presentation. |
(5) | Cross-border exposure includes amounts payable to the Corporation by borrowers or counterparties with a country of residence other than the one in which the credit is booked, regardless of the currency in which the claim is denominated, consistent with FFIEC reporting requirements. |
(6) | Local country exposure includes amounts payable to the Corporation by borrowers with a country of residence in which the credit is booked, regardless of the currency in which the claim is denominated. Local funding or liabilities are subtracted from local exposures consistent with FFIEC reporting requirements. Total amount of available local liabilities funding local country exposure at June 30, 2011 was $21.4 billion compared to $18.4 billion at March 31, 2011. Local liabilities at June 30, 2011 in Asia Pacific, Latin America, and Middle East and Africa were $19.2 billion, $1.6 billion and $579 million, respectively, of which $8.8 billion was in Singapore, $2.6 billion in Hong Kong, $2.4 billion in China, $2.1 billion in India, $1.5 billion in Mexico, $1.0 billion in Korea, $949 million in Indonesia and $579 million in South Africa. There were no other countries with available local liabilities funding local country exposure greater than $500 million. |
(7) | Securities/Other Investments includes an investment of $19.6 billion in China Construction Bank. |
(8) | No country included in Other Asia Pacific, Other Latin America, Other Middle East and Africa, or Other Central and Eastern Europe had total non-U.S. exposure of more than $500 million. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 37 |
Bank of America Corporation and Subsidiaries
Selected European Countries
(Dollars in millions)
Loans and Leases, and Loan Commitments |
Other Financing (1) |
Derivative Assets (2) |
Securities/ Other Investments (3) |
Total Crossborder |
Local Country Exposure Net of Local Liabilities (5) |
Total at |
Credit Default Protection (6) |
|||||||||||||||||||||||||
Greece |
||||||||||||||||||||||||||||||||
Sovereign |
$ | | $ | | $ | | $ | 17 | $ | 17 | $ | | $ | 17 | $ | (7 | ) | |||||||||||||||
Non-sovereign |
399 | 5 | 52 | 47 | 503 | | 503 | | ||||||||||||||||||||||||
Total Greece |
$ | 399 | $ | 5 | $ | 52 | $ | 64 | $ | 520 | $ | | $ | 520 | $ | (7 | ) | |||||||||||||||
Ireland |
||||||||||||||||||||||||||||||||
Sovereign |
$ | 1 | $ | | $ | 10 | $ | 25 | $ | 36 | $ | | $ | 36 | $ | | ||||||||||||||||
Non-sovereign |
1,625 | 570 | 304 | 298 | 2,797 | | 2,797 | (41 | ) | |||||||||||||||||||||||
Total Ireland |
$ | 1,626 | $ | 570 | $ | 314 | $ | 323 | $ | 2,833 | $ | | $ | 2,833 | $ | (41 | ) | |||||||||||||||
Italy |
||||||||||||||||||||||||||||||||
Sovereign |
$ | 28 | $ | | $ | 1,320 | $ | 16 | $ | 1,364 | $ | 9 | $ | 1,373 | $ | (1,361 | ) | |||||||||||||||
Non-sovereign |
1,165 | 18 | 655 | 1,233 | 3,071 | 2,450 | 5,521 | (252 | ) | |||||||||||||||||||||||
Total Italy |
$ | 1,193 | $ | 18 | $ | 1,975 | $ | 1,249 | $ | 4,435 | $ | 2,459 | $ | 6,894 | $ | (1,613 | ) | |||||||||||||||
Portugal |
||||||||||||||||||||||||||||||||
Sovereign |
$ | | $ | | $ | 32 | $ | | $ | 32 | $ | | $ | 32 | $ | (30 | ) | |||||||||||||||
Non-sovereign |
280 | 22 | 6 | 80 | 388 | | 388 | | ||||||||||||||||||||||||
Total Portugal |
$ | 280 | $ | 22 | $ | 38 | $ | 80 | $ | 420 | $ | | $ | 420 | $ | (30 | ) | |||||||||||||||
Spain |
||||||||||||||||||||||||||||||||
Sovereign |
$ | 27 | $ | | $ | 39 | $ | 5 | $ | 71 | $ | 52 | $ | 123 | $ | (64 | ) | |||||||||||||||
Non-sovereign |
911 | 102 | 241 | 2,199 | 3,453 | 2,490 | 5,943 | (14 | ) | |||||||||||||||||||||||
Total Spain |
$ | 938 | $ | 102 | $ | 280 | $ | 2,204 | $ | 3,524 | $ | 2,542 | $ | 6,066 | $ | (78 | ) | |||||||||||||||
Total |
||||||||||||||||||||||||||||||||
Sovereign |
$ | 56 | $ | | $ | 1,401 | $ | 63 | $ | 1,520 | $ | 61 | $ | 1,581 | $ | (1,462 | ) | |||||||||||||||
Non-sovereign |
4,380 | 717 | 1,258 | 3,857 | 10,212 | 4,940 | 15,152 | (307 | ) | |||||||||||||||||||||||
Total selected European exposure |
$ | 4,436 | $ | 717 | $ | 2,659 | $ | 3,920 | $ | 11,732 | $ | 5,001 | $ | 16,733 | $ | (1,769 | ) |
(1) | Includes acceptances, due froms, standby letters of credit, commercial letters of credit and formal guarantees. |
(2) | Derivative assets are carried at fair value and have been reduced by the amount of cash collateral applied of $3.1 billion at June 30, 2011. At June 30, 2011, there was $77 million of other marketable securities collateralizing derivative assets. |
(3) | Generally, cross-border resale agreements are presented based on the domicile of the counterparty, consistent with FFIEC reporting requirements. Cross-border resale agreements where the underlying securities are U.S. Treasury securities, in which case the domicile is the U.S., are excluded from this presentation. |
(4) | Cross-border exposure includes amounts payable to the Corporation by borrowers or counterparties with a country of residence other than the one in which the credit is booked, regardless of the currency in which the claim is denominated, consistent with FFIEC reporting requirements. |
(5) | Local country exposure includes amounts payable to the Corporation by borrowers with a country of residence in which the credit is booked regardless of the currency in which the claim is denominated. Local funding or liabilities of $957 million are subtracted from local exposures consistent with FFIEC reporting requirements. Of the $957 million applied for exposure reduction, $389 million was in Italy, $362 million in Ireland, $158 million in Spain and $48 million in Greece. |
(6) | Represents net notional credit default protection purchased to hedge counterparty risk. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 38 |
Bank of America Corporation and Subsidiaries
Nonperforming Loans, Leases and Foreclosed Properties
(Dollars in millions)
June 30 2011 |
March 31 2011 |
December 31 2010 |
September 30 2010 |
June 30 2010 |
||||||||||||||||
Residential mortgage |
$ | 16,726 | $ | 17,466 | $ | 17,691 | $ | 18,291 | $ | 18,283 | ||||||||||
Home equity |
2,345 | 2,559 | 2,694 | 2,702 | 2,951 | |||||||||||||||
Discontinued real estate |
324 | 327 | 331 | 297 | 293 | |||||||||||||||
Direct/Indirect consumer |
58 | 68 | 90 | 83 | 85 | |||||||||||||||
Other consumer |
25 | 36 | 48 | 56 | 72 | |||||||||||||||
Total consumer |
19,478 | 20,456 | 20,854 | 21,429 | 21,684 | |||||||||||||||
U.S. commercial (1) |
2,767 | 3,056 | 3,453 | 3,894 | 4,217 | |||||||||||||||
Commercial real estate |
5,051 | 5,695 | 5,829 | 6,376 | 6,704 | |||||||||||||||
Commercial lease financing |
23 | 53 | 117 | 123 | 140 | |||||||||||||||
Non-U.S. commercial |
108 | 155 | 233 | 272 | 130 | |||||||||||||||
7,949 | 8,959 | 9,632 | 10,665 | 11,191 | ||||||||||||||||
U.S. small business commercial |
156 | 172 | 204 | 202 | 222 | |||||||||||||||
Total commercial |
8,105 | 9,131 | 9,836 | 10,867 | 11,413 | |||||||||||||||
Total nonperforming loans and leases |
27,583 | 29,587 | 30,690 | 32,296 | 33,097 | |||||||||||||||
Foreclosed properties |
2,475 | 2,056 | 1,974 | 2,260 | 2,501 | |||||||||||||||
Total nonperforming loans, leases and foreclosed properties (2, 3, 4) |
$ | 30,058 | $ | 31,643 | $ | 32,664 | $ | 34,556 | $ | 35,598 | ||||||||||
Fully insured home loans past due 90 days or more and still accruing |
$ | 20,047 | $ | 19,754 | $ | 16,768 | $ | 16,427 | $ | 15,338 | ||||||||||
Other loans past due 90 days or more and still accruing |
4,243 | 5,129 | 5,611 | 5,781 | 6,448 | |||||||||||||||
Total loans past due 90 days or more and still accruing (3, 5) |
$ | 24,290 | $ | 24,883 | $ | 22,379 | $ | 22,208 | $ | 21,786 | ||||||||||
Nonperforming loans, leases and foreclosed properties/Total assets (6) |
1.33 | % | 1.39 | % | 1.44 | % | 1.48 | % | 1.51 | % | ||||||||||
Allowance for loan and lease losses (excluding the valuation allowance for purchased credit-impaired loans)/Total loans and leases (excluding purchased credit-impaired loans) (6) |
3.24 | 3.58 | 3.94 | 4.25 | 4.37 | |||||||||||||||
Nonperforming loans, leases and foreclosed properties/Total loans, leases and foreclosed properties (6) |
3.22 | 3.40 | 3.48 | 3.71 | 3.73 | |||||||||||||||
Nonperforming loans and leases/Total loans and leases (6) |
2.96 | 3.19 | 3.27 | 3.47 | 3.48 | |||||||||||||||
Allowance for credit losses: |
||||||||||||||||||||
Allowance for loan and lease losses (7) |
$ | 37,312 | $ | 39,843 | $ | 41,885 | $ | 43,581 | $ | 45,255 | ||||||||||
Reserve for unfunded lending commitments |
897 | 961 | 1,188 | 1,294 | 1,413 | |||||||||||||||
Total allowance for credit losses |
$ | 38,209 | $ | 40,804 | $ | 43,073 | $ | 44,875 | $ | 46,668 | ||||||||||
Allowance for loan and lease losses/Total loans and leases (6) |
4.00 | % | 4.29 | % | 4.47 | % | 4.69 | % | 4.75 | % | ||||||||||
Allowance for loan and lease losses/Total nonperforming loans and leases (8) |
135 | 135 | 136 | 135 | 137 | |||||||||||||||
Allowance for loan and lease losses (excluding the valuation allowance for purchased credit-impaired loans)/Total nonperforming loans and leases |
105 | 108 | 116 | 118 | 121 | |||||||||||||||
Commercial utilized reservable criticized exposure (9) |
$ | 35,110 | $ | 39,435 | $ | 42,621 | $ | 47,698 | $ | 50,319 | ||||||||||
Commercial utilized reservable criticized exposure/Commercial utilized reservable exposure (9) |
9.73 | % | 10.94 | % | 11.80 | % | 13.06 | % | 13.48 | % | ||||||||||
Total commercial utilized criticized exposure/Commercial utilized exposure (9) |
10.80 | 11.73 | 12.43 | 13.61 | 14.26 |
(1) | Excludes U.S. small business commercial loans. |
(2) | Balances do not include past due consumer credit card, business card loans, consumer loans secured by real estate where repayments are insured by the Federal Housing Administration, individually insured long-term credit protection agreements and in general, consumer loans not secured by real estate. |
(3) | Balances do not include purchased credit-impaired loans even though the customer may be contractually past due. Purchased credit-impaired loans were written down to fair value upon acquisition and accrete interest income over the remaining life of the loan. |
(4) Balances do not include the following: | June 30 2011 |
March 31 2011 |
December 31 2010 |
September 30 2010 |
June 30 2010 |
|||||||||||||||
Nonperforming loans held-for-sale |
$ | 2,119 | $ | 2,421 | $ | 2,540 | $ | 3,654 | $ | 4,044 | ||||||||||
Nonperforming loans accounted for under the fair value option |
2,389 | 15 | 30 | 15 | 15 | |||||||||||||||
Nonaccruing troubled debt restructured loans removed from the purchased credit-impaired portfolio prior to January 1, 2010 |
465 | 456 | 426 | 378 | 403 |
(5) | Balances do not include loans held-for-sale past due 90 days or more and still accruing of $19 million, $48 million, $60 million, $79 million and $158 million at June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010, respectively. At June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010 there were no loans accounted for under the fair value option past due 90 days or more and still accruing interest. |
(6) | Total assets and total loans and leases do not include loans accounted for under the fair value option of $9.6 billion, $3.7 billion, $3.3 billion, $3.7 billion and $3.9 billion at June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010, respectively. |
(7) | Balances include the allowance for loan and lease losses on purchased credit-impaired loans of $8.4 billion, $8.0 billion, $6.4 billion, $5.6 billion and $5.3 billion at June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010, respectively. |
(8) | Allowance for loan and lease losses includes $19.9 billion, $22.1 billion, $22.9 billion, $23.7 billion and $24.3 billion allocated to products (primarily Global Card Services portfolios and purchased credit-impaired loans) that are excluded from nonperforming loans and leases at June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010, respectively. Excluding these amounts, allowance for loan and lease losses as a percentage of total nonperforming loans and leases was 63 percent, 60 percent, 62 percent, 62 percent and 63 percent at June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010, respectively. |
(9) | Criticized exposure corresponds to the Special Mention, Substandard and Doubtful asset categories defined by regulatory authorities. The reservable criticized exposure excludes loans held-for-sale, exposure accounted for under the fair value option and other nonreservable exposure. |
Loans are classified as U.S. or non-U.S. based upon the domicile of the borrower.
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 39 |
Bank of America Corporation and Subsidiaries
Nonperforming Loans, Leases and Foreclosed Properties Activity (1)
(Dollars in millions)
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
||||||||||||||||
Nonperforming Consumer Loans: |
||||||||||||||||||||
Balance, beginning of period |
$ | 20,456 | $ | 20,854 | $ | 21,429 | $ | 21,684 | $ | 21,557 | ||||||||||
Additions to nonperforming loans: |
||||||||||||||||||||
New nonaccrual loans |
4,044 | 4,127 | 4,568 | 4,551 | 5,409 | |||||||||||||||
Reductions in nonperforming loans: |
||||||||||||||||||||
Paydowns and payoffs |
(1,003 | ) | (779 | ) | (739 | ) | (917 | ) | (528 | ) | ||||||||||
Returns to performing status (2) |
(1,311 | ) | (1,340 | ) | (1,841 | ) | (1,469 | ) | (1,816 | ) | ||||||||||
Charge-offs (3) |
(2,300 | ) | (2,020 | ) | (2,261 | ) | (1,987 | ) | (2,607 | ) | ||||||||||
Transfers to foreclosed properties |
(408 | ) | (386 | ) | (302 | ) | (433 | ) | (331 | ) | ||||||||||
Total net additions (reductions) to nonperforming loans |
(978 | ) | (398 | ) | (575 | ) | (255 | ) | 127 | |||||||||||
Total nonperforming consumer loans, end of period |
19,478 | 20,456 | 20,854 | 21,429 | 21,684 | |||||||||||||||
Foreclosed properties |
1,797 | 1,331 | 1,249 | 1,485 | 1,744 | |||||||||||||||
Total nonperforming consumer loans and foreclosed properties, end of period |
$ | 21,275 | $ | 21,787 | $ | 22,103 | $ | 22,914 | $ | 23,428 | ||||||||||
Nonperforming Commercial Loans and Leases (4): |
||||||||||||||||||||
Balance, beginning of period |
$ | 9,131 | $ | 9,836 | $ | 10,867 | $ | 11,413 | $ | 12,060 | ||||||||||
Additions to nonperforming loans and leases: |
||||||||||||||||||||
New nonaccrual loans and leases |
1,042 | 1,299 | 1,820 | 1,852 | 2,256 | |||||||||||||||
Advances |
52 | 67 | 102 | 83 | 62 | |||||||||||||||
Reductions in nonperforming loans and leases: |
||||||||||||||||||||
Paydowns and payoffs |
(1,023 | ) | (764 | ) | (1,113 | ) | (906 | ) | (1,148 | ) | ||||||||||
Sales |
(141 | ) | (247 | ) | (228 | ) | (187 | ) | (256 | ) | ||||||||||
Return to performing status (5) |
(362 | ) | (320 | ) | (465 | ) | (415 | ) | (404 | ) | ||||||||||
Charge-offs (6) |
(291 | ) | (488 | ) | (767 | ) | (628 | ) | (870 | ) | ||||||||||
Transfers to foreclosed properties |
(241 | ) | (200 | ) | (304 | ) | (217 | ) | (205 | ) | ||||||||||
Transfers to loans held-for-sale |
(62 | ) | (52 | ) | (76 | ) | (128 | ) | (82 | ) | ||||||||||
Total net reductions in nonperforming loans and leases |
(1,026 | ) | (705 | ) | (1,031 | ) | (546 | ) | (647 | ) | ||||||||||
Total nonperforming commercial loans and leases, end of period |
8,105 | 9,131 | 9,836 | 10,867 | 11,413 | |||||||||||||||
Foreclosed properties |
678 | 725 | 725 | 775 | 757 | |||||||||||||||
Total nonperforming commercial loans, leases and foreclosed properties, end of period |
$ | 8,783 | $ | 9,856 | $ | 10,561 | $ | 11,642 | $ | 12,170 | ||||||||||
(1) | For amounts excluded from nonperforming loans, leases and foreclosed properties, see footnotes to Nonperforming Loans, Leases and Foreclosed Properties table on page 39. |
(2) | Consumer loans may be returned to performing status when all principal and interest is current and full repayment of the remaining contractual principal and interest is expected, or when the loan otherwise becomes well-secured and is in the process of collection. Certain troubled debt restructurings are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrowers sustained repayment performance for a reasonable period, generally six months. |
(3) | Our policy is not to classify consumer credit card and consumer loans not secured by real estate as nonperforming; therefore, the charge-offs on these loans have no impact on nonperforming activity and therefore are excluded from this table. |
(4) | Includes U.S. small business commercial activity. |
(5) | Commercial loans and leases may be restored to performing status when all principal and interest is current and full repayment of the remaining contractual principal and interest is expected or when the loan otherwise becomes well-secured and is in the process of collection. Troubled debt restructurings are generally classified as performing after a sustained period of demonstrated payment performance. |
(6) | Business card loans are not classified as nonperforming; therefore, the charge-offs on these loans have no impact on nonperforming activity and accordingly are excluded from this table. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 40 |
Bank of America Corporation and Subsidiaries
Quarterly Net Charge-offs and Net Charge-off Ratios (1)
(Dollars in millions)
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
||||||||||||||||||||||||||||||||||||
Net Charge-offs | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||
Residential mortgage |
$ | 1,104 | 1.67 | % | $ | 905 | 1.40 | % | $ | 970 | 1.51 | % | $ | 660 | 1.10 | % | $ | 971 | 1.57 | % | ||||||||||||||||||||
Home equity |
1,263 | 3.84 | 1,179 | 3.51 | 1,271 | 3.61 | 1,372 | 3.80 | 1,741 | 4.71 | ||||||||||||||||||||||||||||||
Discontinued real estate |
26 | 0.84 | 20 | 0.61 | 11 | 0.35 | 17 | 0.48 | 19 | 0.54 | ||||||||||||||||||||||||||||||
U.S. credit card |
1,931 | 7.29 | 2,274 | 8.39 | 2,572 | 9.05 | 2,975 | 10.24 | 3,517 | 11.88 | ||||||||||||||||||||||||||||||
Non-U.S. credit card |
429 | 6.31 | 402 | 5.91 | 339 | 4.90 | 295 | 4.32 | 942 | 13.64 | ||||||||||||||||||||||||||||||
Direct/Indirect consumer |
366 | 1.64 | 525 | 2.36 | 641 | 2.78 | 707 | 2.93 | 879 | 3.58 | ||||||||||||||||||||||||||||||
Other consumer |
43 | 6.44 | 40 | 5.93 | 50 | 6.96 | 80 | 10.68 | 73 | 10.01 | ||||||||||||||||||||||||||||||
Total consumer |
5,162 | 3.27 | 5,345 | 3.38 | 5,854 | 3.62 | 6,106 | 3.81 | 8,142 | 4.96 | ||||||||||||||||||||||||||||||
U.S. commercial (2) |
60 | 0.14 | (21 | ) | (0.05 | ) | 210 | 0.47 | 206 | 0.47 | 179 | 0.41 | ||||||||||||||||||||||||||||
Commercial real estate |
163 | 1.43 | 288 | 2.42 | 347 | 2.67 | 410 | 2.93 | 645 | 4.03 | ||||||||||||||||||||||||||||||
Commercial lease financing |
(8 | ) | (0.15 | ) | 1 | 0.02 | 20 | 0.38 | 19 | 0.34 | (3 | ) | (0.06 | ) | ||||||||||||||||||||||||||
Non-U.S. commercial |
13 | 0.13 | 103 | 1.22 | 8 | 0.10 | 12 | 0.17 | 66 | 0.98 | ||||||||||||||||||||||||||||||
228 | 0.32 | 371 | 0.54 | 585 | 0.83 | 647 | 0.91 | 887 | 1.23 | |||||||||||||||||||||||||||||||
U.S. small business commercial |
275 | 7.78 | 312 | 8.68 | 344 | 9.13 | 444 | 11.38 | 528 | 12.94 | ||||||||||||||||||||||||||||||
Total commercial |
503 | 0.68 | 683 | 0.94 | 929 | 1.25 | 1,091 | 1.46 | 1,415 | 1.86 | ||||||||||||||||||||||||||||||
Total net charge-offs |
$ | 5,665 | 2.44 | $ | 6,028 | 2.61 | $ | 6,783 | 2.87 | $ | 7,197 | 3.07 | $ | 9,557 | 3.98 | |||||||||||||||||||||||||
By Business Segment |
||||||||||||||||||||||||||||||||||||||||
Deposits |
$ | 36 | 23.58 | % | $ | 34 | 21.34 | % | $ | 40 | 25.64 | % | $ | 70 | 39.43 | % | $ | 66 | 35.64 | % | ||||||||||||||||||||
Global Card Services |
2,879 | 7.37 | 3,342 | 8.34 | 3,693 | 8.79 | 4,230 | 9.83 | 5,672 | 12.85 | ||||||||||||||||||||||||||||||
Consumer Real Estate Services |
1,213 | 4.16 | 1,114 | 3.75 | 1,183 | 3.76 | 1,323 | 4.11 | 1,664 | 5.11 | ||||||||||||||||||||||||||||||
Global Commercial Banking |
321 | 0.68 | 514 | 1.08 | 639 | 1.30 | 730 | 1.45 | 960 | 1.86 | ||||||||||||||||||||||||||||||
Global Banking & Markets |
(9 | ) | (0.03 | ) | (3 | ) | (0.01 | ) | 25 | 0.10 | 52 | 0.22 | 87 | 0.38 | ||||||||||||||||||||||||||
Global Wealth & Investment Management |
129 | 0.50 | 88 | 0.36 | 131 | 0.52 | 112 | 0.45 | 115 | 0.47 | ||||||||||||||||||||||||||||||
All Other |
1,096 | 1.70 | 939 | 1.47 | 1,072 | 1.69 | 680 | 1.13 | 993 | 1.55 | ||||||||||||||||||||||||||||||
Total net charge-offs |
$ | 5,665 | 2.44 | $ | 6,028 | 2.61 | $ | 6,783 | 2.87 | $ | 7,197 | 3.07 | $ | 9,557 | 3.98 | |||||||||||||||||||||||||
(1) | Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding loans and leases excluding loans accounted for under the fair value option during the period for each loan and lease category. |
(2) | Excludes U.S. small business commercial loans. |
Loans are classified as U.S. or non-U.S. based upon the domicile of the borrower.
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 41 |
Bank of America Corporation and Subsidiaries
Year-to-Date Net Charge-offs and Net Charge-off Ratios (1)
(Dollars in millions)
Six Months Ended June 30 | ||||||||||||||||
2011 | 2010 | |||||||||||||||
Net Charge-offs | Amount | Percent | Amount | Percent | ||||||||||||
Residential mortgage |
$ | 2,009 | 1.54 | % | $ | 2,040 | 1.67 | % | ||||||||
Home equity |
2,442 | 3.68 | 4,138 | 5.55 | ||||||||||||
Discontinued real estate |
46 | 0.73 | 40 | 0.57 | ||||||||||||
U.S. credit card |
4,205 | 7.85 | 7,480 | 12.36 | ||||||||||||
Non-U.S. credit card |
831 | 6.11 | 1,573 | 11.02 | ||||||||||||
Direct/Indirect consumer |
891 | 2.00 | 1,988 | 4.02 | ||||||||||||
Other consumer |
83 | 6.19 | 131 | 8.90 | ||||||||||||
Total consumer |
10,507 | 3.32 | 17,390 | 5.28 | ||||||||||||
U.S. commercial (2) |
39 | 0.05 | 465 | 0.52 | ||||||||||||
Commercial real estate |
451 | 1.93 | 1,260 | 3.83 | ||||||||||||
Commercial lease financing |
(7 | ) | (0.06 | ) | 18 | 0.17 | ||||||||||
Non-U.S. commercial |
116 | 0.64 | 91 | 0.68 | ||||||||||||
599 | 0.43 | 1,834 | 1.26 | |||||||||||||
U.S. small business commercial |
587 | 8.24 | 1,130 | 13.59 | ||||||||||||
Total commercial |
1,186 | 0.81 | 2,964 | 1.92 | ||||||||||||
Total net charge-offs |
$ | 11,693 | 2.53 | $ | 20,354 | 4.21 | ||||||||||
By Business Segment |
||||||||||||||||
Deposits |
$ | 70 | 22.45 | % | $ | 109 | 41.53 | % | ||||||||
Global Card Services |
6,221 | 7.86 | 11,682 | 12.88 | ||||||||||||
Consumer Real Estate Services |
2,327 | 3.95 | 3,981 | 6.07 | ||||||||||||
Global Commercial Banking |
835 | 0.88 | 2,037 | 1.95 | ||||||||||||
Global Banking & Markets |
(12 | ) | (0.02 | ) | 230 | 0.50 | ||||||||||
Global Wealth & Investment Management |
217 | 0.43 | 234 | 0.48 | ||||||||||||
All Other |
2,035 | 1.59 | 2,081 | 1.64 | ||||||||||||
Total net charge-offs |
$ | 11,693 | 2.53 | $ | 20,354 | 4.21 | ||||||||||
(1) | Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding loans and leases excluding loans accounted for under the fair value option during the period for each loan and lease category. |
(2) | Excludes U.S. small business commercial loans. |
Loans are classified as U.S. or non-U.S. based upon the domicile of the borrower.
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 42 |
Bank of America Corporation and Subsidiaries
Allocation of the Allowance for Credit Losses by Product Type
(Dollars in millions)
June 30, 2011 | March 31, 2011 | June 30, 2010 | ||||||||||||||||||||||||||||||||||||||||||||||
Allowance for loan and lease losses | Amount | Percent of Total |
Percent of Loans and Leases Outstanding (1) |
Amount | Percent of Total |
Percent of Loans and Leases Outstanding (1) |
Amount | Percent of Total |
Percent of Loans and Leases Outstanding (1) |
|||||||||||||||||||||||||||||||||||||||
Residential mortgage |
$ | 5,845 | 15.66 | % | 2.19 | % | $ | 5,369 | 13.48 | % | 2.05 | % | $ | 5,086 | 11.24 | % | 2.07 | % | ||||||||||||||||||||||||||||||
Home equity |
13,111 | 35.14 | 10.03 | 12,857 | 32.27 | 9.62 | 12,840 | 28.37 | 8.78 | |||||||||||||||||||||||||||||||||||||||
Discontinued real estate |
1,997 | 5.35 | 16.64 | 1,871 | 4.69 | 14.74 | 912 | 2.02 | 6.62 | |||||||||||||||||||||||||||||||||||||||
U.S. credit card |
7,540 | 20.21 | 7.20 | 9,100 | 22.84 | 8.50 | 12,384 | 27.36 | 10.61 | |||||||||||||||||||||||||||||||||||||||
Non-U.S.credit card |
1,771 | 4.75 | 6.80 | 2,069 | 5.19 | 7.60 | 2,197 | 4.85 | 8.32 | |||||||||||||||||||||||||||||||||||||||
Direct/Indirect consumer |
1,475 | 3.95 | 1.63 | 1,939 | 4.87 | 2.17 | 2,929 | 6.47 | 2.98 | |||||||||||||||||||||||||||||||||||||||
Other consumer |
145 | 0.39 | 5.25 | 163 | 0.41 | 5.92 | 182 | 0.41 | 6.08 | |||||||||||||||||||||||||||||||||||||||
Total consumer |
31,884 | 85.45 | 5.04 | 33,368 | 83.75 | 5.26 | 36,530 | 80.72 | 5.62 | |||||||||||||||||||||||||||||||||||||||
U.S. commercial (2) |
2,792 | 7.48 | 1.46 | 3,156 | 7.92 | 1.67 | 4,495 | 9.93 | 2.35 | |||||||||||||||||||||||||||||||||||||||
Commercial real estate |
2,314 | 6.20 | 5.26 | 2,904 | 7.29 | 6.18 | 3,593 | 7.94 | 5.83 | |||||||||||||||||||||||||||||||||||||||
Commercial lease financing |
99 | 0.27 | 0.46 | 124 | 0.31 | 0.57 | 269 | 0.60 | 1.26 | |||||||||||||||||||||||||||||||||||||||
Non-U.S.commercial |
223 | 0.60 | 0.52 | 291 | 0.73 | 0.79 | 368 | 0.81 | 1.32 | |||||||||||||||||||||||||||||||||||||||
Total commercial (3) |
5,428 | 14.55 | 1.82 | 6,475 | 16.25 | 2.20 | 8,725 | 19.28 | 2.89 | |||||||||||||||||||||||||||||||||||||||
Allowance for loan and lease |
37,312 | 100.00 | % | 4.00 | 39,843 | 100.00 | % | 4.29 | 45,255 | 100.00 | % | 4.75 | ||||||||||||||||||||||||||||||||||||
Reserve for unfunded lending |
897 | 961 | 1,413 | |||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses (4) |
$ | 38,209 | $ | 40,804 | $ | 46,668 | ||||||||||||||||||||||||||||||||||||||||||
(1) | Ratios are calculated as allowance for loan and lease losses as a percentage of loans and leases outstanding excluding loans accounted for under the fair value option for each loan and lease category. Loans accounted for under the fair value option include residental mortgage loans of $1.2 billion and discontinued real estate loans of $4.0 billion at June 30, 2011. They also include U.S. commercial loans of $1.6 billion, $1.4 billion and $2.1 billion, non-U.S. commercial loans of $2.8 billion, $2.3 billion and $1.7 billion, and commercial real estate loans of $11 million, $68 million and $114 million at June 30, 2011, March 31, 2011 and June 30, 2010, respectively. |
(2) | Includes allowance for U.S. small business commercial loans of $1.0 billion, $1.3 billion and $2.0 billion at June 30, 2011, March 31, 2011 and June 30, 2010, respectively. |
(3) | Includes allowance for loan and lease losses for impaired commercial loans of $778 million, $996 million and $1.4 billion at June 30, 2011, March 31, 2011 and June 30, 2010, respectively. |
(4) | Includes $8.4 billion, $8.0 billion and $5.3 billion of allowance for credit losses related to purchased credit-impaired loans at June 30, 2011, March 31, 2011 and June 30, 2010, respectively. |
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 43 |
Exhibit A: Non-GAAP Reconciliations
Bank of America Corporation and Subsidiaries
Reconciliations to GAAP Financial Measures
(Dollars in millions)
The Corporation evaluates its business based on a fully taxable-equivalent basis, a non-GAAP measure. The Corporation believes managing the business with net interest income on a fully taxable-equivalent basis provides a more accurate picture of the interest margin for comparative purposes. Total revenue, net of interest expense, includes net interest income on a fully taxable-equivalent basis and noninterest income. The Corporation views related ratios and analyses (i.e., efficiency ratios and net interest yield) on a fully taxable-equivalent basis. To derive the fully taxable-equivalent basis, net interest income is adjusted to reflect tax exempt income on an equivalent before-tax basis with a corresponding increase in income tax expense. This measure ensures comparability of net interest income arising from taxable and tax-exempt sources. The efficiency ratio measures the costs expended to generate a dollar of revenue, and net interest yield evaluates the basis points the Corporation earns over the cost of funds.
The Corporation also evaluates its business based on the following ratios that utilize tangible equity, a non-GAAP measure. Return on average tangible common shareholders equity measures the Corporations earnings contribution as a percentage of common shareholders equity plus any Common Equivalent Securities less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities. Return on average tangible shareholders equity measures the Corporations earnings contribution as a percentage of average shareholders equity less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities. The tangible common equity ratio represents common shareholders equity plus any Common Equivalent Securities 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. The tangible equity ratio represents total 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. Tangible book value per common share represents ending common shareholders equity less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities divided by ending common shares outstanding. These measures are used to evaluate the Corporations use of equity (i.e., capital). In addition, profitability, relationship and investment models all use return on average tangible shareholders equity as key measures to support our overall growth goals.
In certain presentations, earnings and diluted earnings per common share, the efficiency ratio, return on average assets, return on common shareholders equity, return on average tangible common shareholders equity and return on average tangible shareholders equity are calculated excluding the impact of goodwill impairment charges of $2.6 billion recorded in the second quarter of 2011, and $2.0 billion and $10.4 billion recorded in the fourth and third quarters of 2010. Accordingly, these are non-GAAP measures.
See the tables below and on page 45 for reconciliations of these non-GAAP measures with financial measures defined by GAAP for the three months ended June 30, 2011, March 31, 2011, December 31, 2010, September 30, 2010 and June 30, 2010 and the six months ended June 30, 2011 and 2010. The Corporation believes the use of these non-GAAP measures provides additional clarity in assessing the results of the Corporation. Other companies may define or calculate supplemental financial data differently.
Six Months Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
|||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||
Reconciliation of net interest income to net interest income on a fully taxable-equivalent basis |
| |||||||||||||||||||||||||||
Net interest income |
$ | 23,425 | $ | 26,649 | $ | 11,246 | $ | 12,179 | $ | 12,439 | $ | 12,435 | $ | 12,900 | ||||||||||||||
Fully taxable-equivalent adjustment |
465 | 618 | 247 | 218 | 270 | 282 | 297 | |||||||||||||||||||||
Net interest income on a fully taxable-equivalent basis |
$ | 23,890 | $ | 27,267 | $ | 11,493 | $ | 12,397 | $ | 12,709 | $ | 12,717 | $ | 13,197 | ||||||||||||||
Reconciliation of total revenue, net of interest expense to total revenue, net of interest expense on a fully taxable-equivalent basis |
| |||||||||||||||||||||||||||
Total revenue, net of interest expense |
$ | 40,113 | $ | 61,122 | $ | 13,236 | $ | 26,877 | $ | 22,398 | $ | 26,700 | $ | 29,153 | ||||||||||||||
Fully taxable-equivalent adjustment |
465 | 618 | 247 | 218 | 270 | 282 | 297 | |||||||||||||||||||||
Total revenue, net of interest expense on a fully taxable-equivalent basis |
$ | 40,578 | $ | 61,740 | $ | 13,483 | $ | 27,095 | $ | 22,668 | $ | 26,982 | $ | 29,450 | ||||||||||||||
Reconciliation of total noninterest expense to total noninterest expense, excluding goodwill impairment charges |
| |||||||||||||||||||||||||||
Total noninterest expense |
$ | 43,139 | $ | 35,028 | $ | 22,856 | $ | 20,283 | $ | 20,864 | $ | 27,216 | $ | 17,253 | ||||||||||||||
Goodwill impairment charges |
(2,603 | ) | | (2,603 | ) | | (2,000 | ) | (10,400 | ) | | |||||||||||||||||
Total noninterest expense, excluding goodwill impairment charges |
$ | 40,536 | $ | 35,028 | $ | 20,253 | $ | 20,283 | $ | 18,864 | $ | 16,816 | $ | 17,253 | ||||||||||||||
Reconciliation of income tax expense (benefit) to income tax expense (benefit) on a fully taxable-equivalent basis |
| |||||||||||||||||||||||||||
Income tax expense (benefit) |
$ | (3,318 | ) | $ | 1,879 | $ | (4,049 | ) | $ | 731 | $ | (2,351 | ) | $ | 1,387 | $ | 672 | |||||||||||
Fully taxable-equivalent adjustment |
465 | 618 | 247 | 218 | 270 | 282 | 297 | |||||||||||||||||||||
Income tax expense (benefit) on a fully taxable-equivalent basis |
$ | (2,853 | ) | $ | 2,497 | $ | (3,802 | ) | $ | 949 | $ | (2,081 | ) | $ | 1,669 | $ | 969 | |||||||||||
Reconciliation of net income (loss) to net income (loss), excluding goodwill impairment charges |
| |||||||||||||||||||||||||||
Net income (loss) |
$ | (6,777 | ) | $ | 6,305 | $ | (8,826 | ) | $ | 2,049 | $ | (1,244 | ) | $ | (7,299 | ) | $ | 3,123 | ||||||||||
Goodwill impairment charges |
2,603 | | 2,603 | | 2,000 | 10,400 | | |||||||||||||||||||||
Net income (loss), excluding goodwill impairment charges |
$ | (4,174 | ) | $ | 6,305 | $ | (6,223 | ) | $ | 2,049 | $ | 756 | $ | 3,101 | $ | 3,123 | ||||||||||||
Reconciliation of net income (loss) applicable to common shareholders to net income (loss) applicable to common shareholders, excluding goodwill impairment charges | ||||||||||||||||||||||||||||
Net income (loss) applicable to common shareholders |
$ | (7,388 | ) | $ | 5,617 | $ | (9,127 | ) | $ | 1,739 | $ | (1,565 | ) | $ | (7,647 | ) | $ | 2,783 | ||||||||||
Goodwill impairment charges |
2,603 | | 2,603 | | 2,000 | 10,400 | | |||||||||||||||||||||
Net income (loss) applicable to common shareholders, excluding goodwill impairment charges |
$ | (4,785 | ) | $ | 5,617 | $ | (6,524 | ) | $ | 1,739 | $ | 435 | $ | 2,753 | $ | 2,783 | ||||||||||||
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 44 |
Exhibit A: Non-GAAP Reconciliations - continued
Bank of America Corporation and Subsidiaries
Reconciliations to GAAP Financial Measures
(Dollars in millions)
Six Months Ended June 30 |
Second Quarter 2011 |
First Quarter 2011 |
Fourth Quarter 2010 |
Third Quarter 2010 |
Second Quarter 2010 |
|||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||||||
Reconciliation of average common shareholders equity to average tangible common shareholders equity |
| |||||||||||||||||||||||||||
Common shareholders equity |
$ | 216,367 | $ | 207,975 | $ | 218,505 | $ | 214,206 | $ | 218,728 | $ | 215,911 | $ | 215,468 | ||||||||||||||
Common Equivalent Securities |
| 5,848 | | | | | | |||||||||||||||||||||
Goodwill |
(73,834 | ) | (86,225 | ) | (73,748 | ) | (73,922 | ) | (75,584 | ) | (82,484 | ) | (86,099 | ) | ||||||||||||||
Intangible assets (excluding mortgage servicing rights) |
(9,580 | ) | (11,559 | ) | (9,394 | ) | (9,769 | ) | (10,211 | ) | (10,629 | ) | (11,216 | ) | ||||||||||||||
Related deferred tax liabilities |
2,983 | 3,446 | 2,932 | 3,035 | 3,121 | 3,214 | 3,395 | |||||||||||||||||||||
Tangible common shareholders equity |
$ | 135,936 | $ | 119,485 | $ | 138,295 | $ | 133,550 | $ | 136,054 | $ | 126,012 | $ | 121,548 | ||||||||||||||
Reconciliation of average shareholders equity to average tangible shareholders equity |
| |||||||||||||||||||||||||||
Shareholders equity |
$ | 232,930 | $ | 231,695 | $ | 235,067 | $ | 230,769 | $ | 235,525 | $ | 233,978 | $ | 233,461 | ||||||||||||||
Goodwill |
(73,834 | ) | (86,225 | ) | (73,748 | ) | (73,922 | ) | (75,584 | ) | (82,484 | ) | (86,099 | ) | ||||||||||||||
Intangible assets (excluding mortgage servicing rights) |
(9,580 | ) | (11,559 | ) | (9,394 | ) | (9,769 | ) | (10,211 | ) | (10,629 | ) | (11,216 | ) | ||||||||||||||
Related deferred tax liabilities |
2,983 | 3,446 | 2,932 | 3,035 | 3,121 | 3,214 | 3,395 | |||||||||||||||||||||
Tangible shareholders equity |
$ | 152,499 | $ | 137,357 | $ | 154,857 | $ | 150,113 | $ | 152,851 | $ | 144,079 | $ | 139,541 | ||||||||||||||
Reconciliation of period end common shareholders equity to period end tangible common shareholders equity |
| |||||||||||||||||||||||||||
Common shareholders equity |
$ | 205,614 | $ | 215,181 | $ | 205,614 | $ | 214,314 | $ | 211,686 | $ | 212,391 | $ | 215,181 | ||||||||||||||
Goodwill |
(71,074 | ) | (85,801 | ) | (71,074 | ) | (73,869 | ) | (73,861 | ) | (75,602 | ) | (85,801 | ) | ||||||||||||||
Intangible assets (excluding mortgage servicing rights) |
(9,176 | ) | (10,796 | ) | (9,176 | ) | (9,560 | ) | (9,923 | ) | (10,402 | ) | (10,796 | ) | ||||||||||||||
Related deferred tax liabilities |
2,853 | 3,215 | 2,853 | 2,933 | 3,036 | 3,123 | 3,215 | |||||||||||||||||||||
Tangible common shareholders equity |
$ | 128,217 | $ | 121,799 | $ | 128,217 | $ | 133,818 | $ | 130,938 | $ | 129,510 | $ | 121,799 | ||||||||||||||
Reconciliation of period end shareholders equity to period end tangible shareholders equity |
| |||||||||||||||||||||||||||
Shareholders equity |
$ | 222,176 | $ | 233,174 | $ | 222,176 | $ | 230,876 | $ | 228,248 | $ | 230,495 | $ | 233,174 | ||||||||||||||
Goodwill |
(71,074 | ) | (85,801 | ) | (71,074 | ) | (73,869 | ) | (73,861 | ) | (75,602 | ) | (85,801 | ) | ||||||||||||||
Intangible assets (excluding mortgage servicing rights) |
(9,176 | ) | (10,796 | ) | (9,176 | ) | (9,560 | ) | (9,923 | ) | (10,402 | ) | (10,796 | ) | ||||||||||||||
Related deferred tax liabilities |
2,853 | 3,215 | 2,853 | 2,933 | 3,036 | 3,123 | 3,215 | |||||||||||||||||||||
Tangible shareholders equity |
$ | 144,779 | $ | 139,792 | $ | 144,779 | $ | 150,380 | $ | 147,500 | $ | 147,614 | $ | 139,792 | ||||||||||||||
Reconciliation of period end assets to period end tangible assets |
| |||||||||||||||||||||||||||
Assets |
$ | 2,261,319 | $ | 2,368,384 | $ | 2,261,319 | $ | 2,274,532 | $ | 2,264,909 | $ | 2,339,660 | $ | 2,368,384 | ||||||||||||||
Goodwill |
(71,074 | ) | (85,801 | ) | (71,074 | ) | (73,869 | ) | (73,861 | ) | (75,602 | ) | (85,801 | ) | ||||||||||||||
Intangible assets (excluding mortgage servicing rights) |
(9,176 | ) | (10,796 | ) | (9,176 | ) | (9,560 | ) | (9,923 | ) | (10,402 | ) | (10,796 | ) | ||||||||||||||
Related deferred tax liabilities |
2,853 | 3,215 | 2,853 | 2,933 | 3,036 | 3,123 | 3,215 | |||||||||||||||||||||
Tangible assets |
$ | 2,183,922 | $ | 2,275,002 | $ | 2,183,922 | $ | 2,194,036 | $ | 2,184,161 | $ | 2,256,779 | $ | 2,275,002 | ||||||||||||||
Certain prior period amounts have been reclassified to conform to current period presentation.
This information is preliminary and based on company data available at the time of the presentation. | 45 |
Appendix: Selected Slides from the
Second Quarter 2011 Earnings Release Presentation
This information is preliminary and based on company data available at the time of the presentation. | 46 |
2Q11 Highlights
2Q11 reported net loss of $8.8B ($0.90 EPS) reflects $20.7B pre-tax mortgage related charges and $2.5B net pre-tax gains from other selected items
Excluding mortgage and selected items, net income was $3.7B or $0.33 EPS 1
Took important steps to address a substantial portion of our mortgage-related matters
Customer-focused strategy generating strong results
Credit quality continues to improve
Liquidity increasing
Deposits growing
Loans reflect growth in our corporate lending portfolio and a $6.6B reduction in loan run-off
Capital ratios remain solid; Basel III preparation continues
Strong credit reserve coverage
Efficiency initiative has begun
1 Represents a non-GAAP financial measure. Refer to Press Release for list of all adjusting items.
Deposits
Inc/(Dec)
$ in millions 2Q11 1Q11 2Q10
Net interest income 1 $2,281 $76 $137
Noninterest income 1,020 36 (531)
Total revenue 3,301 112 (394)
Provision for credit losses 31 (2) (30)
Noninterest expense 2,599 7 27
Income tax expense 1 241 32 (147)
Net income $430 $75 ($244)
Key Indicators ($ in billions) 2Q11 1Q11 2Q10
Average deposits $426.7 $418.3 $418.5
Client brokerage assets $69.0 $66.7 $51.1
Cost per $ deposit 2.44% 2.60% 2.46%
Rates paid on deposits 0.29% 0.32% 0.45%
Return on average economic capital 30.4% 25.4% 43.5%
Commentary
Net income of $430MM in 2Q11 increased $75MM from 1Q11
2% deposit growth from 1Q11 due to seasonal tax refunds and prolonged low interest rate environment
Rates paid on deposits decreased 3bps from 1Q11 to 29bps
Improvement in checking account closures and new accounts reflects continued focus on quality relationships and retention
Second consecutive quarter of positive net new accounts
Cost per $ deposit improved 16bps to 2.44% from 1Q11 highlighting our efficiency and competitive edge in maintaining a low cost distribution channel
Customer Solutions pilot trending above expectations
Nationwide roll out is expected to begin in early 2012
Merrill Edge® continues to grow as brokerage assets increased 3% from 1Q11
1 Fully taxable-equivalent basis.
Global Wealth & Investment Management
Inc/(Dec)
$ in millions 2Q11 1Q11 2Q10
Net interest income 1 $1,571 $2 $128
Noninterest income 2,919 (4) 173
Total revenue 4,490 (2) 301
Provision for credit losses 72 26 (50)
Noninterest expense 3,631 32 362
Income tax expense 1 281 (33) (188)
Net income $506 ($27) $177
Key Indicators ($ in billions) 2Q11 1Q11 2Q10
Total client balances $2,201.9 $2,226.7 $2,047.0
Average loans and leases $102.2 $100.9 $98.8
Average deposits $255.2 $258.5 $226.3
Liquidity AUM flows ($3.8) ($6.7) ($9.8)
Long-term AUM flows $4.5 $14.2 $1.4
Financial advisors (in thousands) 16.2 15.7 15.3
Pre-tax margin 17.5% 18.9% 19.1%
Return on average economic capital 30.0% 30.4% 19.1%
Commentary
Net income of $506MM was down $27MM from 1Q11 on higher expenses from increased investment in advisors and higher credit costs
Revenue nearly flat to 1Q11 record levels
Record Asset Management fees driven by market and long-term AUM flows
Lower brokerage revenue reflecting lower market activity
Client balances fell by 1% driven by lower market valuations and seasonal outflow in deposits and brokerage offset by AUM inflows
Average loans up $1.3B from 1Q11, the 5th consecutive quarter of loan growth
Provision expense increased from decline in residential mortgage valuations
8th consecutive quarter of increased client facing associates driven by the addition of more than 500 financial advisors in 2Q11
1 Fully taxable-equivalent basis.
Global Commercial Banking
Inc/(Dec)
$ in millions 2Q11 1Q11 2Q10
Net interest income 1 $1,827 ($23) ($270)
Noninterest income 983 182 197
Total revenue 2,810 159 (73)
Provision for credit losses (417) (496) (1,040)
Noninterest expense 1,068 (38) 94
Income tax expense 1 778 235 307
Net income $1,381 $458 $566
Key Indicators ($ in billions) 2Q11 1Q11 2Q10
Average loans and leases $189.3 $192.4 $206.6
Nonperforming loans, leases and
foreclosed properties $7.4 $8.3 $10.0
Average deposits $166.5 $160.2 $145.5
Credit revenue $1.6 $1.5 $1.6
Treasury revenue $1.2 $1.2 $1.2
Return on average economic capital 27.9% 18.0% 14.1%
Commentary
Net income of $1.4B improved $458MM from 1Q11 driven by improved credit costs and higher revenue Average deposits grew $6.3B as customers remain highly liquid Average loans declined $3.1B from 1Q11
Commercial Real Estate declined $2.2B
Commercial and Industrial increased $467MM driven by Middle Market Middle market revolver utilization rates declined slightly from 35.3% to 34.5% Asset quality improved
Net charge-offs declined $193MM from 1Q11 to $321MM, primarily in Commercial Real Estate
Nonperforming loans, leases and foreclosed properties declined from $8.3B in 1Q11 to $7.4B in 2Q11
1 Fully taxable-equivalent basis.
Global Banking and Markets
IInc/(Dec) $ in millions 2Q11 1Q11 2Q10
Net interest income 1 $1,791 ($246) ($211) Noninterest income 5,005 (844) 1,103 Total revenue 6,796 (1,090) 892 Provision for credit losses (82) 120 51 Noninterest expense 4,713 (9) (22) Income tax expense 1 607 (625) 203 Net income $1,558 ($576) $660
Key Indicators ($ in billions) 2Q11 1Q11 2Q10
Average loans and leases $109.5 $103.7 $95.8 Average deposits $118.1 $112.0 $112.6 Average trading-related assets $460.2 $458.4 $522.3 Sales and trading revenue $3.8 $4.9 $3.1 Investment banking fees $1.6 $1.5 $1.3 Corporate banking revenue $1.4 $1.5 $1.5 Percent of profitable trading days 97% 100% 81% Return on average economic capital 23.4% 28.0% 9.1% $460.2
1 Fully taxable-equivalent basis.
Commentary
Net income of $1.6B fell seasonally $576MM from 1Q11 on lower sales and trading results partially offset by higher investment banking fees
Sales and trading revenue of $3.8B declined $1.1B from 1Q11 but increased $666MM from 2Q10
Results include DVA gains of $121MM in 2Q11 compared to losses of $357MM in 1Q11 and gains of $77MM in 2Q10
As market uncertainty increased towards the end of the quarter due to European debt crisis and global economic concerns, we reduced risk
Sales and trading RWA declined $37B as we reduced legacy assets, exited proprietary trading and continued to optimize the balance sheet
Investment banking fees excluding self-led were a record high since the Merrill Lynch acquisition
Average loan and lease balances increased $5.8B from 1Q11, primarily from international growth in commercial loans and trade finance in the Corporate Bank
Consumer Real Estate Services (CRES)
2Q11
Less Mortgage- Adjusted 2Q11
2Q11 reported related and Other CRES Less
$ in millions results Selected Selected Items 1
Adjustments
Total revenue, net of interest expense 2 ($11,315) ($14,786) $3,471
Provision for credit losses 1,507 - 1,507
Noninterest expense 8,647 5,219 3,428
Income tax benefit 2 (6,949) (6,439) (510)
Net loss ($14,520) ($13,566) ($954)
1Q11
Less Mortgage- Adjusted 1Q11
1Q11 reported related and Other CRES Less
$ in millions results Selected Selected Items 1
Adjustments
Total revenue, net of interest expense 2 $2,063 ($1,541) $3,604
Provision for credit losses 1,098 - 1,098
Noninterest expense 4,801 1,659 3,142
Income tax benefit 2 (1,421) (1,184) (237)
Net loss ($2,415) ($2,016) ($399)
Selected CRES related items ($ in millions) 3 2Q11 1Q11
Representation and warranties provision ($14,037) ($1,013)
MSR write-down 4 (1,501) (528)
Balboa sale gain, net of fees 752 -
Goodwill impairment charge (2,603) -
Litigation expense (1,900) (785)
Assessments and waivers costs (716) (874)
Key Indicators ($ in billions) 2Q11 1Q11
Average loans and leases $121.7 $120.6
MSR, end of period 12.4 15.3
Capitalized MSR (bps) 78 95
Servicing portfolio (EOP, $ in trillions) 2.0 2.0
Commentary
Net loss of $14.5B includes $14.0B in representation and warranties provision as well as other charges for the MSR write-down related to higher servicing costs, goodwill impairment, litigation expense and assessments and waivers costs related to foreclosure delays, and also includes the Balboa gain
Excluding selected items noted, CRES reported an adjusted net loss of $954MM
The adjusted loss was $555MM greater than adjusted 1Q11 results as revenue was impacted by the sale of the insurance business and expenses were impacted by increased operating costs
Provision expense increased $409MM as a result of the non-purchased credit-impaired (PCI) portfolio
During the quarter, the MSR asset decreased by $2.9B from $15.3B in 1Q11 to $12.4B
The capitalized MSR rate ended the period at 78bps vs. 95bps in 1Q11
1 Represents a non-GAAP financial measure.
2 Fully taxable-equivalent basis.
3 Items shown are on a pre-tax basis.
4 Excludes net positive hedge activity of approximately $628MM and $531MM in 2Q11 and 1Q11, respectively.
Home Loans Business (within CRES)
2Q11
Less Mortgage-
related and Other Home Loans less
$ in millions Home Loans Selected Selected Items 1
Adjustments
Total revenue, net of interest expense 2 $2,513 $706 $1,807
Provision for credit losses 121 - 121
Noninterest expense 1,553 - 1,553
Income tax expense 2 308 261 47
Net income $531 $445 $86
1Q11
Less Mortgage-
related and Other Home Loans less
$ in millions Home Loans Selected Selected Items 1
Adjustments
Total revenue, net of interest expense 2 $1,791 $- $1,791
Provision for credit losses - - -
Noninterest expense 1,668 - 1,668
Income tax expense 2 46 - 46
Net income $77 $- $77
Selected mortgage-related and other items ($ in millions) 3 2Q11 1Q11
Representations and warranties provision ($46) $-
Balboa sale gain (net of fees) 752 -
Key Indicators ($ in billions) 2Q11 1Q11
Total Corporation Home Loan Originations
First mortgage $40.4 $56.7
Home equity 1.1 1.7
Average loans and leases 55.3 56.0
Commentary on Home Loans Business
Recorded net income of $531MM in 2Q11
Excluding items noted, the business was marginally profitable in 2Q11 and slightly higher than 1Q11
Originations of $40.4B first-lien mortgages across the enterprise in 2Q11 were down 29% from 1Q11
Expenses were down as personnel was reduced to reflect the lower origination volumes
Commentary on Other 4
Other within CRES recorded a net loss of $3.2B which includes the results of the MSR and the goodwill impairment charge of $2.6B
MSR valuation changes net of hedge were $876MM unfavorable to 1Q11driven by the change in value of the MSRs related to higher servicing costs
Higher estimated costs to service given changes to the ongoing servicing of delinquent loans
Additional servicing obligations under the settlement agreement and consent orders
Extension of default workout timelines in judicial states
1 Represents a non-GAAP financial measure.
2 Fully taxable-equivalent basis.
3 Items shown are on a pre-tax basis.
4 CRES consists of Home Loans, Legacy Asset Servicing and Other; see Other (within CRES) for additional information on Other.
Legacy Asset Servicing Business (within CRES)
2Q11
Less Mortgage- Legacy Asset
Legacy Asset related and Other Services less
$ in millions Services Selected Selected Items 1
Adjustments
Total revenue, net of interest expense 2 ($12,924) ($13,991) $1,067
Provision for credit losses 1,386 - 1,386
Noninterest expense 4,491 2,616 1,875
Income tax benefit 2 (6,924) (6,145) (779)
Net loss ($11,877) ($10,462) ($1,415)
1Q11
Less Mortgage- Legacy Asset
Legacy Asset related and Other Services less
$ in millions Services Selected Selected Items 1
Adjustments
Total revenue, net of interest expense 2 $279 ($1,013) $1,292
Provision for credit losses 1,098 - 1,098
Noninterest expense 3,133 1,659 1,474
Income tax benefit 2 (1,464) (989) (475)
Net loss ($2,488) ($1,683) ($805)
Selected mortgage-related items ($ in millions) 3 2Q11 1Q11
Representations and warranties provision ($13,991) ($1,013)
Litigation (1,900) (785)
Assessments and waivers costs (716) (874)
Key Indicators ($ in billions) 2Q11 1Q11
Average loans and leases $66.4 $64.6
# of loans serviced (in thousands) 4,362 4,513
# of loans 60 day delinquent (in thousands) 1,211 1,274
Commentary
Net loss of $11.9B in 2Q11
Excluding selected large items noted, the net loss was $1.4B and widened $0.6B over 1Q11 driven in part by higher servicing costs as well as higher credit costs
As previously announced, 2Q11 included $14.0B R&W provision expense
$8.6B settlement on legacy Countrywide non- GSE private-label securitizations
$5.4B additional reserve on other non-GSE, and to a lesser extent GSE
Noninterest expense adjusted for the items noted increased $402MM to $1.9B as staffing levels increased to elevated levels
Provision expense increased $288MM driven by reserve increases in the non-PCI portfolio
Number of first mortgage loans serviced by Legacy Asset Servicing declined by 151K in 2Q11 driven by foreclosure and short sales
60+ day delinquencies declined 5% to 1.2MM units
1 Represents a non-GAAP financial measure.
2 Fully taxable-equivalent basis.
All Other 1
Inc/(Dec)
$ in millions 2Q11 1Q11 2Q10
Total revenue, net of interest expense 2
Provision for credit losses
Noninterest expense
Income tax expense 2
Net income (loss)
$1,865 $738 ($1,262)
1,663 (136) 417
316 (1,178) (797)
102 1,052 457
($216) $1,000 ($1,339)
Key Indicators ($ in billions) 2Q11 1Q11 2Q10
Average loans and leases
Average deposits
Book value of Global Principal Investments
$258.4 $258.4 $257.3
$46.7 $48.6 $64.7
$10.8 $11.2 $13.0
Commentary
Net loss of $216MM is a result of elevated credit costs related to valuation refreshes on consumer real estate loans and lower revenue
Revenue is impacted by the following selected items:
$ in millions 2Q11 1Q11 2Q10
FVO on structured notes $214 ($586) $1,173
Gains on sales of debt securities 831 468 14
Equity investment income 1,139 1,408 2,253
Noninterest expense improved as 1Q included the annual retirement eligible stock-based compensation expense
1 All Other includes the discontinued real estate business, Global Principal Investing business, activities of our strategic investment portfolio and our discretionary portfolio used to provide interest rate risk management on our balance sheet.
2 Fully taxable-equivalent basis.
Expenses
2Q11 Noninterest Expense ($B)
2Q11 1Q11 4Q10
Total noninterest expense $22.9 $20.3 $20.9
Selected large mortgage-related items
Litigation expense 1.9 0.8 0.6
Mortgage-related assessments and waivers costs 0.7 0.9 0.2
CRES goodwill impairment charge 2.6 - 2.0
Commentary vs. 1Q11
Expense increased $2.6B from 1Q11
Excluding the selected mortgage-related items in the quarter, noninterest expense was in line with 1Q11, excluding the $1.0B cost of retirement eligible stock-based compensation expense which only happens in the first quarter
2Q included increased servicing costs in our mortgage business as well as increased costs of adding client-facing professionals across targeted growth areas offset by reduced personnel in other areas of the company
Among the many client facing associates added in growth areas during the quarter were more than 500 financial advisors and nearly 100 small business bankers
Average FTE in 2Q11 287,839 vs. 288,062 in 1Q11
Company-wide efficiency initiative launched (New BAC)
Team of internal and external experts driving process
Tangible results on expense levels from New BAC are expected in 2012
Consumer Credit Trends
Inc/(Dec)
2Q11
$ in millions 1Q11 2Q10
Net charge-offs $5,162 ($183) ($2,980)
30+ performing delinquencies 1 13,517 (1,594) (5,290)
Nonperforming loans and foreclosed properties 21,275 (512) (2,153)
Allowance for loan and lease losses 31,884 (1,484) (4,646)
% coverage of loans and leases 5.04% (22)bps (58)bps
# times of annualized net charge-offs 1.54x 0.00x 0.42x
# times of annualized net charge-offs excl. PCI 1.14x (0.04)x 0.18 x
Consumer Net Charge-offs ($MM)
$5,000
$4,000
$3,000
$2,360
$2,000
$1,263
$1,000 $1,104
$366
$- $43
2Q10 3Q10 4Q10 1Q11 2Q11
Residential mortgage Home equity
Credit card Direct/Indirect
Other Consumer
Commentary
Net charge-offs declined $183MM in 2Q11 compared to 1Q11
Driven by continued improvement in the U.S. credit card portfolio partially offset by increases in consumer real estate
30+ performing delinquencies (excluding fully insured home loans) improved 11% from 1Q11
Nonperforming loans and foreclosed properties declined 2% from 1Q11
Total provision expense was $3.8B ($5.2B charge- offs and reserve reduction of $1.4B)
2Q11 included $412MM reserve addition for PCI loans driven primarily by deterioration in home prices
$31.9B allowance for loan and lease losses provides coverage for 5.04% of loans compared to $33.4B and 5.26% coverage in 1Q11
Allowance covers 1.54 times current period annualized net charge-offs; remains unchanged from 1Q11 (excluding PCI allowance: 1.14 times in 2Q11 vs. 1.18 times in 1Q11)
1 Excludes FHA-insured loans and other loans individually insured under long-term credit protection agreements.
Residential Mortgage and Home Equity 30+ Day Performing Delinquencies
Residential Mortgage, 30+ Days Past Due ($B, %) 1, 2
$8.0 3.2% 3.5%
2.7% 2.8% 2.8% 3.0%
$7.1 2.6% 2.5%
2.5%
$6.0 2.1%
2.0%
$5.5
$5.0 $5.3 $5.2 1.5%
$4.0 $4.4 $4.3 1.0%
0.5%
$2.0 0.0%
2Q08 2Q09 2Q10 3Q10 4Q10 1Q11 2Q11
30+ day past due 30+ day past due %
Home Equity, 30+ Days Past Due ($B, %) 2
$2.5 2.0%
1.6%
1.5% 1.5% 1.5%
1.4% 1.4%
1.3% 1.5%
$2.0
$2.0 $2.0 $2.0 $1.9
$1.8 1.0%
$1.5 $1.7
$1.5 0.5%
$1.0 0.0%
2Q08 2Q09 2Q10 3Q10 4Q10 1Q11 2Q11
30+ day past due 30+ day past due %
1 Excludes FHA-insured loans and other loans individually insured under long-term credit protection agreements.
2 Excludes PCI loans.
Consumer Nonperforming Loans, Leases and Foreclosed Properties (NPAs)
Residential Mortgage NPAs ($MM)
$25,000
$19,504 $19,396
$20,000 $18,676 $18,493 $17,971
$15,000
12,835 13,393
13,734 13,703 13,364
$10,000
$5,000
6,669 6,003
4,942 4,790 4,607
$0
2Q10 3Q10 4Q10 1Q11 2Q11
Resi<180 DPD Resi>180 DPD
Home Equity NPAs ($MM)
$4,000
$3,500
$3,010 $2,768
$3,000 $2,763
$2,633
807 $2,417
$2,500
878 985
$2,000 1,008
984
$ 1,500
$1,000 2,203
1,890 1,778
1,625 1,433
$500
$0
2Q10 3Q10 4Q10 1Q11 2Q11
Home Equity<180 DPD Home Equity>180 DPD
Commentary
Consumer Real Estate NPAs continue to show improvement
Inflows of nonaccrual loans are steadily declining; down 25% from 2Q10
Paydowns and payoffs increasing
Charge-offs remain elevated on refreshed valuation losses even though frequency of loss continues to improve
Foreclosures have restarted (principally non-judicial states) which helped reduce the backlog
Commercial Credit Trends
Inc/(Dec)
2Q11
$ in millions 1Q11 2Q10
Net charge-offs $503 ($180) ($912)
Nonperforming loans, leases and foreclosed
properties 8,783 (1,073) (3,387)
Reservable Criticized 35,110 (4,325) (15,209)
Allowance for loan and lease losses 5,428 (1,047) (3,297)
% coverage of loans and leases 1 1.82% (38)bps (107)bps
# times annualized net charge-offs 2.69x 0.35x 1.15x
Commercial Net Charge-offs 1 ($MM)
$800
$600
$400
$275
$200
$163
$73
$-
2Q10 3Q10 4Q10 1Q11 2Q11
Commercial & Industrial Small business Commercial real estate
1 Excludes FVO loans.
Commentary
Net charge-offs declined $180MM in 2Q11 compared to 1Q11
Continued improvement in Commercial Real Estate resulted in both higher recoveries and lower charge-offs Nonperforming loans, leases and foreclosed properties have declined for 6 consecutive quarters, a 35% decline from 4Q09 peak
Reservable criticized decreased $4.3B (11%) from 1Q11 and $15.2B (30%) from 2Q10 Total provision benefit of $523MM included a reserve reduction of $1.0B $5.4B allowance for loan and lease losses now covers 2.69 times current period annualized net charge-offs compared to 2.34 times in 1Q11
Selected Items in 2Q11
2Q11 Selected Items Included in Earnings ($B, except EPS)
Approximate
Pre-tax EPS Impact 1
Revenue
Mortgage-related
Representations and warranties provision ($14.0) ($0.88)
MSR negative valuation from servicing changes (1.5) (0.09)
Asset sales and other selected
Securities gains 0.9 0.06
CCB dividend 0.8 0.05
Gain on sale of Balboa 0.8 0.05
Gain on sale of BlackRock stake 0.4 0.02
Strategic investment impairment (0.5) (0.03)
Other 0.1 0.00
Expense
Mortgage-related
Litigation expense (1.9) (0.11)
Assessments and waivers costs (0.7) (0.04)
Goodwill impairment (2.6) (0.26)
1 Reflects estimated diluted EPS impact
2Q11 Results by Business Segment
2Q11 Results by Business Segment ($MM)
Consumer Global Global Global
Total Global Card Wealth &
Deposits Real Estate Commercial Banking & All Other
Corporation Services Investment
Services Banking Markets Management
Net interest income 1, 2 $11,493 $2,281 $3,611 $579 $1,827 $1,791 $1,571($167)
Card income 1,967 1 1,83384 27 21 1
Service charges 2,012 965 5576 442 21 3
Investment and brokerage services 3,009 43- 7 587 2,378(6)
Investment banking income (loss) 1,684-(27) 11 1,637 94(31)
Equity investment income (loss) 1,212153(5) 24 1,139
Trading account profits (losses) 2,091(13) 2,071 35(2)
Mortgage banking income (loss)(13,196)-(13,018)8 4(190)
Insurance income (loss) 400 1(23) 299- 83 40
Gains on sales of debt securities 899- 1751831
All other income 1,912 10 109 835 265 187 259 247
Total noninterest income (loss) 1,990 1,020 1,925(11,894) 983 5,005 2,919 2,032
Total revenue, net of interest expense 1, 2 13,483 3,301 5,536(11,315) 2,810 6,796 4,490 1,865
Total noninterest expense 22,856 2,599 1,882 8,647 1,068 4,713 3,631 316
Pre-tax, pre-provision earnings (loss) 1, 2(9,373) 702 3,654(19,962) 1,742 2,083 859 1,549
Provision for credit losses 3,255 31 481 1,507(417)(82) 72 1,663
Income (loss) before income taxes(12,628) 671 3,173(21,469) 2,159 2,165 787(114)
Income tax expense (benefit) 1, 2(3,802) 241 1,138(6,949) 778 607 281 102
Net income (loss)($8,826) $430 $2,035($14,520) $1,381 $1,558 $506($216)
1 Fully taxable-equivalent basis.
2 Represents a non-GAAP financial measure.
Other (within CRES)
2Q11
Less Mortgage-
Other related and Other Other less
$ in millions Selected Selected Items 1
Adjustments
Total revenue, net of interest expense 2($904)($1,501) $597
Noninterest expense 2,603 2,603 -
Income tax expense (benefit) 2(333)(555) 222
Net income (loss)($3,174)($3,549) $375
1Q11
Less Mortgage-
Other related and Other Other less
$ in millions Selected Selected Items 1
Adjustments
Total revenue, net of interest expense 2($7)($528) $521
Income tax expense (benefit) 2(3)(195) 192
Net income (loss)($4)($333) $329
Selected mortgage-related items ($ in millions) 3 2Q11 1Q11
Goodwill impairment charge($2,603) $-
MSR write-down 4(1,501)(528)
1 Represents a non-GAAP financial measure.
2 Fully taxable-equivalent basis.
3 Items shown are on a pre-tax basis.
4 Excludes net positive hedge activity of approximately $628MM and $531MM in 2Q11 and 1Q11, respectively.
Impact of FHA and Other Fully Insured Home Loans on Delinquencies 1
FHA and Other Fully Insured Home Loans ($MM)
2Q10 3Q10 4Q10 1Q11 2Q11
FHA and Other Fully insured Home Loans 30+ Day Performing Delinquencies $17,053 $18,256 $19,150 $22,961 $23,802
Change from prior period 2,066 1,203 894 3,811 841
30+ Day Performing Delinquency Amounts
Total consumer as reported 35,860 36,167 36,254 38,072 37,319
Total consumer excluding FHA and other fully insured home loans 2 18,807 17,911 17,104 15,111 13,517
Residential mortgages as reported 22,536 23,573 24,267 27,381 28,091
Residential mortgages excluding FHA and other fully insured home loans 2 5,483 5,317 5,117 4,420 4,289
30+ Day Performing Delinquency Ratios
Total consumer as reported 5.52% 5.70% 5.63% 6.00% 5.90%
Total consumer excluding FHA and other fully insured home loans 2 3.24% 3.23% 3.16% 2.90% 2.63%
Residential mortgages as reported 9.18% 9.69% 9.41% 10.45% 10.55%
Residential mortgages excluding FHA and other fully insured home loans 2 2.72% 2.82% 2.84% 2.57% 2.52%
Commentary vs. 1Q11
During 2Q11 we continued to repurchase delinquent fully-insured home loans which masks the continued improvement in our 30+ day performing delinquency trends
Total consumer 30+ day performing delinquency excluding fully-insured home loans improved for the 9th consecutive quarter, down $1.6B
U.S. credit card of $831MM led the decline while first- and second-lien mortgages declined as well
1 Includes FHA-insured loans and loans individually insured under long-term credit protection agreements.
2 Excludes PCI loans.
Home Loan Asset Quality Key Indicators
Home Loan Asset Quality Indicators ($MM)
Residential Mortgage 1 Home Equity Discontinued Real Estate 1
2Q11 1Q11 2Q11 1Q11 2Q11 1Q11
Excluding Excluding
Countrywide Countrywide Excluding Excluding Excluding Excluding
Purchased Purchased Countrywide Countrywide Countrywide Countrywide
As As As As As As
Credit- Credit- Purchased Purchased Purchased Purchased
Reported Reported Reported Reported Reported Reported
impaired and impaired and Credit- Credit- Credit- Credit-
Fully Insured Fully Insured impaired impaired impaired impaired
Loans Loans
Loans end of period $266,333 $169,865 $261,934 $171,996 $130,654 $118,339 $133,629 $121,160 $12,003 $1,126 $12,694 $1,399
Loans average 264,258 171,285 262,049 176,153 131,786 119,416 136,089 123,589 12,450 1,292 12,899 1,424
Net charge-offs $1,104 $1,104 $905 $905 $1,263 $1,263 $1,179 $1,179 $26 $26 $20 $20
% of average loans 1.68% 2.58% 1.40% 2.08% 3.84% 4.24% 3.51% 3.87% 0.84% 8.07% 0.61% 5.57%
Allowance for loan losses $5,845 $4,600 $5,369 $4,276 $13,111 $8,037 $12,857 $7,915 $1,997 $78 $1,871 $61
% of loans 2.19% 2.71% 2.05% 2.49% 10.03% 6.79% 9.62% 6.53% 16.64% 6.91% 14.74% 4.39%
Average refreshed (C)LTV 2 85 83 88 86 83 80
90%+ refreshed (C)LTV 2 38% 36% 47% 44% 32% 28%
Average refreshed FICO 715 714 725 723 636 637
% below 620 FICO 15% 15% 12% 13% 47% 46%
1 Excludes fair value option loans which were added to the residential mortgage and discontinued real estate portfolios beginning in 2Q11.
2 Loan-to-value (LTV) calculations apply to the residential mortgage and discontinued real estate portfolio. Combined loan-to-value (CLTV) calculations apply to the home equity portfolio.
Home Equity Loans
Loan Balances ($B, end of period)
$200.0
$146.3 $141.6 $150.0 $138.0 $133.6 $130.7
$100.0
$50.0
$0.0
2Q10 3Q10 4Q10 1Q11 2Q11
Non-purchased credit-impaired second lien First-lien Purchased credit-impaired
Net Charge-offs ($B) 1
$3.0 2Q10 includes $128MM
of collateral dependent
modified loans
$2.0 $1.7
$1.4
$1.3 $1.3
$1.2
$1.0
$0.0
2Q10 3Q10 4Q10 1Q11 2Q11
Allowance for Non-purchased Credit-impaired Loans ($B)
$10.0 $8.7 $8.5 $8.4 $7.9 $8.0 $8.0
$6.0 $4.0 $2.0
$0.0
2Q10 3Q10 4Q10 1Q11 2Q11
Home Equity Portfolio Characteristics
91% of portfolio is stand-alone originations versus piggy back loans $12.3B legacy Countrywide PCI loan portfolio, for which we have a $5.1B allowance at 6/30/11 For the non-PCI portfolio:
$25.1B are in first-lien position; $93.3B are second-lien positions
Of second-liens, ~43% or $40.4B have CLTV greater than 100%
Does not mean 100% severity in the event of default
Assuming proceeds of 85% of the collateral value, we estimate collateral value of $10.5B available for second liens
Additionally, on 94% of second-liens with CLTVs greater than 100%, the customer is current Allowance on the non-PCI home equity portfolio is $8.0B
1 Charge-offs do not include Countrywide PCI portfolio as those losses were considered in establishing the nonaccretable difference in the original purchase accounting.