CHARLOTTE, N.C, Thursday, July 29th 2010 [ME NewsWire]:
Credit Quality Continues to Improve, Especially in Credit Card
Capital Ratios Strengthened
Investment Bank Moves up to No. 1 in U.S. Investment Banking Fees
Strong Asset Management Fees and Brokerage Income Drive Wealth Management
Average Retail Deposit Balances Rise 3 Percent
CHARLOTTE, N.C.--(BUSINESS WIRE)-- Bank of America Corporation today reported second-quarter 2010 net income of $3.1 billion, compared to net income of $3.2 billion a year ago. After preferred dividends, earnings were $0.27 per diluted share, compared to $0.33 in the second quarter of 2009.
Results were driven by lower credit costs, which improved for the fourth straight quarter, and the sale of non-core assets as the company focused on strengthening key business lines and divesting assets that do not directly contribute to providing financial services to customers. These positives were partially offset by lower trading account profits, reduced mortgage banking income and increased costs associated with the United Kingdom payroll tax on certain year-end incentive payments.
“Our quarterly results show that we are making progress on our strategy to align around our three core customer groups – consumers, businesses, and institutional investors – and create the financial institution that customers tell us they want, built on a broad relationship of clarity, transparency, and helping them manage through challenging times,” said Chief Executive Officer and President Brian Moynihan. “We improved our capital foundation through retained earnings, and credit quality improved even faster than expected. We have the most complete financial franchise in the world, and we are focused on executing our strategy and delivering outstanding long-term value to our customers and shareholders.”
Second-Quarter Business Highlights
* Bank of America continued to leverage its global franchise and increase the number of referrals. Approximately 80,000 lending and deposit products were delivered to Merrill Lynch clients in the second quarter, up from 60,000 in the first quarter of 2010 and 35,000 in all of 2009. Referrals between Global Wealth and Investment Management and the company’s commercial and corporate businesses increased 24 percent from the first quarter of 2010.
* Bank of America Merrill Lynch ranked No. 1 in U.S. net investment banking revenues with a 13 percent market share, according to Dealogic second-quarter 2010 league tables, as well as No. 1 in global leveraged loans, No. 1 in global investment grade corporate debt and No. 1 in global syndicated loans.
* Average retail deposit balances rose 3 percent from a year ago to $649.6 billion, paced by strong organic growth in Merrill Lynch Global Wealth Management.
* Bank of America extended approximately $174 billion in credit in the second quarter of 2010, according to preliminary data. Credit extensions included $72 billion in first mortgages, $76 billion in commercial non-real estate, $13 billion in commercial real estate, $3 billion in domestic consumer and small business card, $2 billion in home equity products and $8 billion in other consumer credit. Commercial credit extensions include a significant number of credit renewals.
* Bank of America funded $72 billion in first mortgages, helping more than 342,000 people either purchase homes or refinance existing mortgages during the quarter. This funding included approximately 35,000 first-time homebuyer credit-qualified mortgages, and more than 129,000 mortgages to low- and moderate-income borrowers.
* Approximately 53 percent of funded first mortgages were for home purchases.
* Since the start of 2008, Bank of America and previously Countrywide have completed nearly 650,000 loan modifications with customers. During the quarter, more than 80,000 loan modifications were completed, including 38,000 consumers who converted from trial modifications under the government’s Making Home Affordable program.
* During the quarter, Global Wealth and Investment Management launched Merrill Edge, which combines the investment expertise of Merrill Lynch and the banking strength of Bank of America. Merrill Edge is designed for self-directed and mass affluent clients to more effectively manage their investments, savings, credit, banking and retirement assets via an online platform, phone channels and branch offices. Since its introduction a few weeks ago, the company has followed up with 7,000 qualified contacts.
* Global Wealth and Investment Management reported strong asset management fees during the quarter and the second-highest quarterly brokerage income since the acquisition of Merrill Lynch.
* Bank of America sold or agreed to sell a number of non-core assets during the quarter as part of the company’s strategy to focus on its core businesses and strengthen capital ratios. The transactions included the following:
o The sale of the company’s preferred and common shares of Itaú Unibanco Holding S.A., which generated a $1.2 billion pretax gain.
o The sale of the company’s equity position in MasterCard, resulting in a pretax gain of approximately $440 million.
o The sale of Columbia Management’s long-term asset management business, which generated a $60 million pretax gain and resulted in a reduction in goodwill and intangibles of approximately $800 million.
o An agreement to sell the company’s entire 24.9 percent stake in Grupo Financiero Santander, S.A.B. de C.V. back to an affiliate of its parent company in a private transaction for $2.5 billion. This generated a pretax loss of $428 million.
o An agreement to sell a $1.9 billion portfolio of limited partnership interests in private equity funds to AXA Private Equity at a pretax loss of approximately $160 million.
click here for full press release including tables.
For media enquiries, please contact:
Investors May Contact:
Kevin Stitt, Bank of America,
1.704.386.5667
Lee McEntire, Bank of America,
1.704.388.6780
Reporters May Contact:
Jerry Dubrowski, Bank of America,
1.980.388.2840
jerome.f.dubrowski@bankofamerica.com
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