Bank of America Reports Fourth-quarter 2013 Net Income of $3.4 Billion, or $0.29 per Diluted Share, on Revenue of $21.7 Billion(A)
Fourth-quarter 2013 Results Included
-
Pretax Negative DVA/FVO Adjustments of
$0.6 Billion due to Tightening of the Company's Credit Spreads -
Pretax Litigation Expense of
$2.3 Billion - Effective Tax Rate of 10.6 Percent
Fourth-quarter 2013 Highlights Compared to Year-ago Quarter
-
Period-end Consolidated Deposit Balances Increased
$14 Billion to Record$1.12 Trillion -
Period-end Loan Balances Increased
$20 Billion to $928 Billion -
Combined Debit and Consumer Credit Card Spending Rose 4.0 Percent
to
$123 Billion -
Period-end Commercial Loan Balances Increased
$42 Billion to $396 Billion - Global Wealth and Investment Management Pretax Margin Increased to 26.6 Percent From 21.1 Percent
-
Record Global Banking Revenue of
$4.3 Billion , up 9 Percent - Achieved New BAC and Legacy Assets and Servicing 2013 Cost Savings Targets
- Credit Quality Continued to Improve With Net Charge-offs Down 49 Percent; Ratio at 0.68 Percent
-
Basel 1 Tier 1Common Capital of$145 Billion , Ratio of 11.19 Percent -
Basel 3 Tier 1 Common Capital Ratio of 9.96 Percent, up From 9.25 PercentD
Full-year 2013 Highlights Compared to Full-year 2012
-
Nearly
$90 Billion in Residential Home Loans and Home Equity Loans Funded in 2013 - More Than 3.9 Million New Consumer Credit Cards Issued in 2013
-
Record Earnings of
$3 Billion in Global Wealth and Investment Management -
Bank of America Merrill Lynch Gained Market Share and Maintained No . 2 Ranking in Global Investment Banking FeesC -
Liquidity Remained Strong at
$376 Billion ; Parent Company Time-to-required Funding Improved to 38 Months From 33 Months -
Initiated Capital Return to Shareholders Through Repurchase of
$3.2 Billion of Common Stock at an Average Price of$13.90 per Share
For the year ended December 31, 2013, net income increased to
"We are pleased to see the core businesses continue to perform well,
serving our customers and clients," said Chief Executive Officer
“We enter this year with one of the strongest balance sheets in our
company’s history,” said Chief Financial Officer
Selected Financial Highlights
Three Months Ended | Year Ended | ||||||||||||||
(Dollars in millions, except per share data) |
December 31 |
December 31 2012 |
December 31 2013 |
December 31 2012 |
|||||||||||
Net interest income, FTE basis1 | $ | 10,999 | $ | 10,555 | $ | 43,124 | $ | 41,557 | |||||||
Noninterest income | 10,702 | 8,336 | 46,677 | 42,678 | |||||||||||
Total revenue, net of interest expense, FTE basis | 21,701 | 18,891 | 89,801 | 84,235 | |||||||||||
Total revenue, net of interest expense, FTE basis, excluding DVA and FVO2 | 22,319 | 19,610 | 90,958 | 91,819 | |||||||||||
Provision for credit losses | 336 | 2,204 | 3,556 | 8,169 | |||||||||||
Noninterest expense | 17,307 | 18,360 | 69,214 | 72,093 | |||||||||||
Net income | $ | 3,439 | $ | 732 | $ | 11,431 | $ | 4,188 | |||||||
Diluted earnings per common share | $ | 0.29 | $ | 0.03 | $ | 0.90 | $ | 0.25 |
1 Fully taxable-equivalent (FTE) basis is a non-GAAP
financial measure. For reconciliation to GAAP financial measures, refer
to pages 23-25 of this press release. Net interest income on a GAAP
basis was
2 Total revenue, net of interest expense, on an FTE basis
excluding DVA and FVO adjustments is a non-GAAP financial measure. DVA
losses were
Revenue,
net of interest expense, on an FTE basisA rose
Net interest income, on an FTE basis, rose 4 percent from the year-ago
quarter to
Noninterest income increased 28 percent from the year-ago quarter, to
The provision for credit losses declined
Noninterest expense was
Income tax expense for the fourth quarter of 2013 was
Business Segment Results
The company reports results through five business segments: Consumer and Business Banking (CBB), Consumer Real Estate Services (CRES), Global Wealth and Investment Management (GWIM), Global Banking, and Global Markets, with the remaining operations recorded in All Other.
Unless otherwise noted, business segment revenue, net of interest expense, is on an FTE basis.
Consumer and Business Banking (CBB)
Three Months Ended | Year Ended | |||||||||||||||
(Dollars in millions) |
December 31 2013 |
December 31 2012 |
December 31 2013 |
December 31 2012 |
||||||||||||
Total revenue, net of interest expense, FTE basis | $ | 7,497 | $ | 7,401 | $ | 29,867 | $ | 29,790 | ||||||||
Provision for credit losses | 427 | 1,078 | 3,107 | 4,148 | ||||||||||||
Noninterest expense | 4,042 | 4,174 | 16,357 | 16,995 | ||||||||||||
Net income | $ | 1,967 | $ | 1,446 | $ | 6,588 | $ | 5,546 | ||||||||
Return on average allocated capital1, 2 | 26.03 | % | — | % | 21.98 | % | — | % | ||||||||
Return on average economic capital1, 2 | — | 23.46 | — | 23.12 | ||||||||||||
Average loans | $ | 163,152 | $ | 167,219 | $ | 164,570 | $ | 173,036 | ||||||||
Average deposits | 528,808 | 484,086 | 518,980 | 475,180 | ||||||||||||
At period-end | ||||||||||||||||
Brokerage assets | $ | 96,048 | $ | 75,946 |
1 Effective
2 Return on average allocated capital and return on average economic capital are non-GAAP financial measures. The company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the segments. Other companies may define or calculate these measures differently. For reconciliation to GAAP financial measures, refer to pages 23-25 of this press release.
Business Highlights
-
Average deposit balances for the quarter of
$528.8 billion increased$44.7 billion , or 9 percent, from the year-ago quarter. The increase was driven by growth in liquid products in the current low-rate environment and the$20 billion average impact of deposit transfers primarily from Global Wealth and Investment Management (GWIM). The average rate paid on deposits declined to 8 basis points in the fourth quarter of 2013 from 16 basis points in the year-ago quarter, due to pricing discipline and a shift in the mix of deposits. - The number of active mobile banking customers increased 20 percent from the year-ago quarter to 14.4 million.
- Total Corporate U.S. Consumer Credit Card (including balances in GWIM) retail spending per average active account increased 6 percent from the fourth quarter of 2012.
- Total Corporate U.S. Consumer Credit Card net credit loss rate for the fourth quarter of 2013 was 3.19 percent, the lowest since the first quarter of 2006.
- Return on average allocated capital increased to 26.03 percent in the fourth quarter of 2013 from 23.55 percent in the third quarter of 2013.
Financial Overview
Consumer and Business Banking reported net income of
Revenue of
Consumer Real Estate Services (CRES)
Three Months Ended | Year Ended | |||||||||||||||
(Dollars in millions) |
December 31 2013 |
December 31 2012 |
December 31 2013 |
December 31 2012 |
||||||||||||
Total revenue, net of interest expense, FTE basis | $ | 1,712 | $ | 475 | $ | 7,716 | $ | 8,751 | ||||||||
Provision for credit losses | (474 | ) | 485 | (156 | ) | 1,442 | ||||||||||
Noninterest expense | 3,794 | 5,607 | 16,013 | 17,190 | ||||||||||||
Net loss | $ | (1,061 | ) | $ | (3,704 | ) | $ | (5,155 | ) | $ | (6,439 | ) | ||||
Average loans and leases | 89,687 | 96,605 | 90,278 | 103,524 | ||||||||||||
At period-end | ||||||||||||||||
Loans and leases | $ | 89,753 | $ | 94,660 |
Business Highlights
-
Bank of America funded$13.5 billion in residential home loans and home equity loans during the fourth quarter of 2013, helping nearly 50,000 homeowners either refinance an existing mortgage or purchase a home through our retail channels. This included nearly 4,200 first-time homebuyer mortgages and more than 17,000 mortgages to low- and moderate-income borrowers. - Approximately 68 percent of funded first mortgages were refinances and 32 percent were for home purchases.
- The number of 60+ days delinquent first-mortgage loans serviced by LAS declined 18 percent during the fourth quarter of 2013 to 325,000 loans from 398,000 loans at the end of the third quarter of 2013, and declined 58 percent from 773,000 loans at the end of the fourth quarter of 2012.
Financial Overview
Consumer Real Estate Services reported a net loss of
Revenue increased
CRES first-mortgage originations declined 46 percent in the fourth
quarter of 2013 compared to the same period in 2012, reflecting a
corresponding decline in the overall market demand for mortgages. Core
production revenue declined in the fourth quarter of 2013 to
The provision for credit losses decreased
Noninterest expense decreased
A significant contributor to the year-over-year expense reduction was the improvement in the number of 60+ days delinquent first-mortgage loans serviced by LAS, which fell 58 percent to 325,000 loans from 773,000 loans at the end of the fourth quarter of 2012.
Global Wealth and Investment Management (GWIM)
Three Months Ended | Year Ended | |||||||||||||||
(Dollars in millions) |
December 31 2013 |
December 31 2012 |
December 31 2013 |
December 31 2012 |
||||||||||||
Total revenue, net of interest expense, FTE basis | $ | 4,480 | $ | 4,193 | $ | 17,790 | $ | 16,518 | ||||||||
Provision for credit losses | 26 | 112 | 56 | 266 | ||||||||||||
Noninterest expense | 3,264 | 3,196 | 13,038 | 12,721 | ||||||||||||
Net income | $ | 777 | $ | 576 | $ | 2,974 | $ | 2,245 | ||||||||
Return on average allocated capital1, 2 | 30.97 | % | — | % | 29.90 | % | — | % | ||||||||
Return on average economic capital1, 2 | — | 28.36 | — | 30.80 | ||||||||||||
Average loans and leases | $ | 115,546 | $ | 103,785 | $ | 111,023 | $ | 100,456 | ||||||||
Average deposits | 240,395 | 249,658 | 242,161 | 242,384 | ||||||||||||
At period-end (dollars in billions) | ||||||||||||||||
Assets under management | $ | 821.4 | $ | 698.1 | ||||||||||||
Total client balances3 | 2,366.4 | 2,151.6 |
1 Effective
2 Return on average allocated capital and return on average economic capital are non-GAAP financial measures. The company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the segments. Other companies may define or calculate these measures differently. For reconciliation to GAAP financial measures, refer to pages 23-25 of this press release.
3 Total client balances are defined as assets under management, assets in custody, client brokerage assets, client deposits and loans (including margin receivables).
Business Highlights
- Pretax margin increased to 26.6 percent from 21.1 percent in the year-ago quarter.
-
Asset management fees grew to
$1.8 billion , up 15 percent from the year-ago quarter. -
Client balances increased 10 percent to a record
$2.37 trillion , driven by higher market levels and net inflows. -
Period-end loan balances increased to a record
$115.8 billion , up 9 percent from the year-ago quarter. -
Fourth-quarter 2013 long-term AUM flows of
$9.4 billion were the 18th consecutive quarter of positive flows. For the full year, long-term AUM flows were a record$47.8 billion , up$21.4 billion or 81 percent from a year ago. - Return on average allocated capital increased to 30.97 percent in the fourth quarter of 2013 from 28.68 percent in the third quarter of 2013.
Financial Overview
Global Wealth and Investment Management reported strong results across
many measures in the fourth quarter of 2013 with record net income,
record asset management fees and strong client flows. Net income rose 35
percent from the fourth quarter of 2012 to a record
Revenue increased 7 percent from the year-ago quarter to
The provision for credit losses decreased
Client balances rose 10 percent from a year ago to
Global Banking
Three Months Ended | Year Ended | |||||||||||||||
(Dollars in millions) |
December 31 2013 |
December 31 2012 |
December 31 2013 |
December 31 2012 |
||||||||||||
Total revenue, net of interest expense, FTE basis | $ | 4,305 | $ | 3,951 | $ | 16,481 | $ | 15,674 | ||||||||
Provision for credit losses | 441 | 62 | 1,075 | (342 | ) | |||||||||||
Noninterest expense | 1,927 | 1,753 | 7,552 | 7,619 | ||||||||||||
Net income | $ | 1,267 | $ | 1,392 | $ | 4,974 | $ | 5,344 | ||||||||
Return on average allocated capital1, 2 | 21.86 | % | — | % | 21.64 | % | — | % | ||||||||
Return on average economic capital1, 2 | — | 28.97 | — | 27.69 | ||||||||||||
Average loans and leases | $ | 268,849 | $ | 232,396 | $ | 257,245 | $ | 224,336 | ||||||||
Average deposits | 259,762 | 242,817 | 237,457 | 223,940 |
1 Effective
2 Return on average allocated capital and return on average economic capital are non-GAAP financial measures. The company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the segments. Other companies may define or calculate these measures differently. For reconciliation to GAAP financial measures, refer to pages 23-25 of this press release.
Business Highlights
- Global Banking achieved record revenues and firmwide Investment Banking fees.
-
Firmwide investment banking fees of
$1.7 billion , excluding self-led deals, increased$441 million , or 34 percent, from the prior quarter and$138 million , or 9 percent, from the year-ago quarter. -
Bank of America Merrill Lynch (BAML) maintained its No. 2 ranking in global net investment banking fees in the fourth quarter of 2013, with an increase in market share to 8.0 percent from 7.3 percent in the third quarter of 2013, and was No. 1 in investment banking fees in theAmericas with 10.7 percent market share in the fourth quarter of 2013C. BAML was also ranked among the top three global financial institutions in announced mergers and acquisitions, leveraged loans, investment-grade corporate debt, mortgage-backed securities, asset-backed securities and syndicated loans during the fourth quarter of 2013C. -
Average loan and lease balances increased
$36.5 billion , or 16 percent, from the year-ago quarter, to$268.8 billion with growth primarily in the commercial and industrial loan portfolio and the commercial real estate portfolio. -
Average deposits rose
$16.9 billion , or 7 percent, from the year-ago quarter to$259.8 billion due to client liquidity and international growth.
Financial Overview
Global Banking reported net income of
Revenue of
Global Corporate Banking revenue increased to
Noninterest expense increased
Global Markets
Three Months Ended | Year Ended | |||||||||||||||
(Dollars in millions) |
December 31 2013 |
December 31 2012 |
December 31 2013 |
December 31 2012 |
||||||||||||
Total revenue, net of interest expense, FTE basis | $ | 3,624 | $ | 3,020 | $ | 16,058 | $ | 14,284 | ||||||||
Total revenue, net of interest expense, FTE basis, excluding DVA1 | 3,824 | 3,296 | 16,566 | 16,732 | ||||||||||||
Provision for credit losses | 104 | 17 | 140 | 34 | ||||||||||||
Noninterest expense | 3,284 | 2,627 | 12,013 | 11,295 | ||||||||||||
Net income | $ | 215 | $ | 181 | $ | 1,563 | $ | 1,229 | ||||||||
Net income, excluding DVA and U.K. tax1 | 341 | 355 | 3,009 | 3,552 | ||||||||||||
Return on average allocated capital, excluding DVA and U.K. tax2, 3, 4 | 4.54 | % | — | 10.06 | % | — | ||||||||||
Return on average economic capital,excluding DVA and U.K. tax2, 3, 4 | — | 9.98 | % | — | 25.76 | % | ||||||||||
Total average assets | $ | 603,110 | $ | 645,808 | $ | 632,804 | $ | 606,249 |
1 Total revenue, net of interest expense, on an FTE basis
excluding DVA and net income excluding DVA and the
2 Effective
3 Return on average allocated capital and return on average
economic capital, excluding DVA and
4 Return on average allocated capital and return on average economic capital are non-GAAP financial measures. The company believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the segments. Other companies may define or calculate these measures differently. For reconciliation to GAAP financial measures, refer to pages 23-25 of this press release.
Business Highlights
-
Sales and trading revenue, excluding DVAF, rose 19 percent
from the fourth quarter of 2012 to
$3.0 billion . - Equities sales and trading revenue, excluding DVAG, rose 27 percent from the fourth quarter of 2012, due to continued gains in market share and increased market volumes.
-
Bank of America Merrill Lynch was named "No. 1Global Research " firm for the third consecutive year by Institutional Investor.
Financial Overview
Global Markets reported net income of
Global Markets revenue increased
Fixed Income, Currency and Commodities sales and trading revenue,
excluding DVAG, was
Equities sales and trading revenue, excluding DVAG, was
Noninterest expense increased to
Total average assets declined 7 percent from the fourth quarter of 2012
to
All Other1
Three Months Ended | Year Ended | |||||||||||||||
(Dollars in millions) |
December 31 2013 |
December 31 2012 |
December 31 2013 |
December 31 2012 |
||||||||||||
Total revenue, net of interest expense, FTE basis2 | $ | 83 | $ | (149 | ) | $ | 1,889 | $ | (782 | ) | ||||||
Provision for credit losses | (188 | ) | 450 | (666 | ) | 2,621 | ||||||||||
Noninterest expense | 996 | 1,003 | 4,241 | 6,273 | ||||||||||||
Net income (loss) | $ | 274 | $ | 841 | $ | 487 | $ | (3,737 | ) | |||||||
Total average loans | 226,049 | 247,128 | 235,454 | 259,241 |
1 All Other consists of ALM activities, equity investments, the international consumer card business, liquidating businesses and other. ALM activities encompass the whole-loan residential mortgage portfolio and investment securities, interest rate and foreign currency risk management activities including the residual net interest income allocation, gains/losses on structured liabilities, the impact of certain allocation methodologies and accounting hedge ineffectiveness. Equity Investments include Global Principal Investments (GPI), strategic and certain other investments. Other includes certain residential mortgage loans that are managed by Legacy Assets and Servicing within CRES.
2 Revenue includes equity investment income of
All Other reported net income of
Credit Quality
Three Months Ended | Year Ended | |||||||||||||||
(Dollars in millions) |
December 31 2013 |
December 31 2012 |
December 31 2013 |
December 31 2012 |
||||||||||||
Provision for credit losses | $ | 336 | $ | 2,204 | $ | 3,556 | $ | 8,169 | ||||||||
Net charge-offs1 | 1,582 | 3,104 | 7,897 | 14,908 | ||||||||||||
Net charge-off ratio1, 2 | 0.68 | % | 1.40 | % | 0.87 | % | 1.67 | % | ||||||||
Net charge-off ratio, excluding the PCI loan portfolio2 | 0.70 | % | 1.44 | % | 0.90 | % | 1.73 | % | ||||||||
Net charge-off ratio, including PCI write-offs2 | 1.00 | 1.90 | 1.13 | 1.99 | ||||||||||||
December 31 2013 |
December 31 2012 |
|||||||||||||||
Nonperforming loans, leases and foreclosed properties | $ | 17,772 | $ | 23,555 | ||||||||||||
Nonperforming loans, leases and foreclosed properties ratio3 | 1.93 | % | 2.62 | % | ||||||||||||
Allowance for loan and lease losses | $ | 17,428 | $ | 24,179 | ||||||||||||
Allowance for loan and lease losses ratio4 | 1.90 | % | 2.69 | % |
1 Excludes write-offs of PCI loans of
2 Net charge-off ratios are calculated as net charge-offs divided by average outstanding loans and leases during the period; quarterly results are annualized.
3 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.
4 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 continued to improve in the fourth quarter of 2013, with net charge-offs declining across all major portfolios and the provision for credit losses decreasing from the year-ago quarter. The number of 30+ days performing delinquent loans, excluding fully-insured loans, declined across all consumer portfolios from the year-ago quarter, again reaching record low levels in the U.S. credit card portfolio. Additionally, reservable criticized balances and nonperforming loans, leases and foreclosed properties also continued to decline, down 19 percent and 25 percent from the year-ago period.
Net charge-offs were
The provision for credit losses was
The allowance for loan and lease losses to annualized net charge-off coverage ratio was 2.78 times in the fourth quarter of 2013, compared to 1.96 times in the fourth quarter of 2012. The allowance to annualized net charge-off coverage ratio, excluding PCI, was 2.38 times in the fourth quarter of 2013 and 1.51 times in the fourth quarter of 2012.
Nonperforming loans, leases and foreclosed properties were
Capital and Liquidity Management
(Dollars in millions, except per share information) |
At December 31 2013 |
At September 30 2013 |
At December 31 2012 |
||||||||
Total shareholders’ equity | $ | 232,685 | $ | 232,282 | $ | 236,956 | |||||
Tier 1 common capital | 145,235 | 142,825 | 133,403 | ||||||||
Tier 1 common capital ratio including Market Risk Final Rule2 | 11.19 | % | 11.08 | % | n/a | ||||||
Tangible common equity ratio1 | 7.20 | 7.08 | 6.74 | ||||||||
Common equity ratio | 10.43 | 10.30 | 9.87 | ||||||||
Tangible book value per share1 | $ | 13.79 | $ | 13.62 | $ | 13.36 | |||||
Book value per share | 20.71 | 20.50 | 20.24 |
1 Tangible common equity ratio and tangible book value per share are non-GAAP financial measures. For reconciliation to GAAP financial measures, refer to pages 23-25 of this press release.
2 As of
n/a = not applicable
The Tier 1 common capital ratio,
including the Market Risk Final Rule, was 11.19 percent at December 31,
2013, up from 11.08 percent at September 30, 2013.
As of December 31, 2013, the company's Tier 1 common capital ratio on a
The estimated
Based on the proposed increases to the U.S. supplementary leverage ratio
minimum requirements, the company expects that as of December 31, 2013,
the supplementary leverage ratio for
At December 31, 2013, the company's total Global Excess Liquidity
Sources totaled
During the fourth quarter of 2013, a cash dividend of
Period-end common shares issued and outstanding were 10.59 billion and
10.78 billion at December 31, 2013 and 2012. The company previously
announced that it was authorized to repurchase up to
Tangible book value per share of common stockH was
------------------------------
A Fully taxable-equivalent (FTE) basis is a non-GAAP financial measure.
For reconciliation to GAAP financial measures, refer to pages 23-25 of
this press release. Net interest income on a GAAP basis was
B Total revenue, net of interest expense, on an FTE basis excluding DVA
and FVO adjustments is a non-GAAP financial measure. DVA losses were
C Rankings per Dealogic as of
D
E The supplementary leverage ratio is calculated in accordance with the
U.S. Notice of Proposed Rulemaking issued in
F Revenue, sales and trading revenue, international revenue and net
income (loss) excluding the impact of DVA or the
G Fixed Income, Currency and Commodities (FICC) sales and trading
revenue, excluding DVA, and Equity sales and trading revenue, excluding
DVA, are non-GAAP financial measures. FICC DVA losses were
H Tangible book value per share of common stock is a non-GAAP measure. Other companies may define or calculate this measure differently. For reconciliation to GAAP measures, refer to pages 23-25 of this press release.
Note: Chief Executive Officer
A replay will be available via webcast through the
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
Forward-looking statements speak only as of the date they are made, and
For more
Bank of America Corporation and Subsidiaries | ||||||||||||||||||||
Selected Financial Data | ||||||||||||||||||||
(Dollars in millions, except per share data) | ||||||||||||||||||||
Summary Income Statement |
Year Ended December 31 |
Fourth Quarter 2013 |
Third Quarter 2013 |
Fourth Quarter 2012 |
||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Net interest income | $ | 42,265 | $ | 40,656 | $ | 10,786 | $ | 10,266 | $ | 10,324 | ||||||||||
Noninterest income | 46,677 | 42,678 | 10,702 | 11,264 | 8,336 | |||||||||||||||
Total revenue, net of interest expense | 88,942 | 83,334 | 21,488 | 21,530 | 18,660 | |||||||||||||||
Provision for credit losses | 3,556 | 8,169 | 336 | 296 | 2,204 | |||||||||||||||
Noninterest expense | 69,214 | 72,093 | 17,307 | 16,389 | 18,360 | |||||||||||||||
Income (loss) before income taxes | 16,172 | 3,072 | 3,845 | 4,845 | (1,904 | ) | ||||||||||||||
Income tax expense (benefit) | 4,741 | (1,116 | ) | 406 | 2,348 | (2,636 | ) | |||||||||||||
Net income | $ | 11,431 | $ | 4,188 | $ | 3,439 | $ | 2,497 | $ | 732 | ||||||||||
Preferred stock dividends | 1,349 | 1,428 | 256 | 279 | 365 | |||||||||||||||
Net income applicable to common shareholders | $ | 10,082 | $ | 2,760 | $ | 3,183 | $ | 2,218 | $ | 367 | ||||||||||
Earnings per common share | $ | 0.94 | $ | 0.26 | $ | 0.30 | $ | 0.21 | $ | 0.03 | ||||||||||
Diluted earnings per common share | 0.90 | 0.25 | 0.29 | 0.20 | 0.03 | |||||||||||||||
Summary Average Balance Sheet |
Year Ended December 31 |
Fourth Quarter 2013 |
Third Quarter 2013 |
Fourth Quarter 2012 |
||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Total loans and leases | $ | 918,641 | $ | 898,768 | $ | 929,777 | $ | 923,978 | $ | 893,166 | ||||||||||
Debt securities | 337,953 | 353,577 | 325,119 | 327,493 | 360,213 | |||||||||||||||
Total earning assets | 1,746,974 | 1,769,969 | 1,708,501 | 1,710,685 | 1,788,936 | |||||||||||||||
Total assets | 2,163,513 | 2,191,356 | 2,134,875 | 2,123,430 | 2,210,365 | |||||||||||||||
Total deposits | 1,089,735 | 1,047,782 | 1,112,674 | 1,090,611 | 1,078,076 | |||||||||||||||
Common shareholders’ equity | 218,468 | 216,996 | 220,088 | 216,766 | 219,744 | |||||||||||||||
Total shareholders’ equity | 233,947 | 235,677 | 233,415 | 230,392 | 238,512 | |||||||||||||||
Performance Ratios |
Year Ended December 31 |
Fourth Quarter 2013 |
Third Quarter 2013 |
Fourth Quarter 2012 |
||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Return on average assets | 0.53 | % | 0.19 | % | 0.64 | % | 0.47 | % | 0.13 | % | ||||||||||
Return on average tangible shareholders’ equity (1) | 7.13 | 2.60 | 8.53 | 6.32 | 1.77 | |||||||||||||||
Credit Quality |
Year Ended December 31 |
Fourth Quarter 2013 |
Third Quarter 2013 |
Fourth Quarter 2012 |
||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Total net charge-offs | $ | 7,897 | $ | 14,908 | $ | 1,582 | $ | 1,687 | $ | 3,104 | ||||||||||
Net charge-offs as a % of average loans and leases outstanding (2) | 0.87 | % | 1.67 | % | 0.68 | % | 0.73 | % | 1.40 | % | ||||||||||
Provision for credit losses | $ | 3,556 | $ | 8,169 | $ | 336 | $ | 296 | $ | 2,204 | ||||||||||
December 31 |
September 30 2013 |
December 31 2012 |
||||||||||||||||||
Total nonperforming loans, leases and foreclosed properties (3) | $ | 17,772 | $ | 20,028 | $ | 23,555 | ||||||||||||||
Nonperforming loans, leases and foreclosed properties as a % of total loans, leases and foreclosed properties (2) | 1.93 | % | 2.17 | % | 2.62 | % | ||||||||||||||
Allowance for loan and lease losses | $ | 17,428 | $ | 19,432 | $ | 24,179 | ||||||||||||||
Allowance for loan and lease losses as a % of total loans and leases outstanding (2) | 1.90 | % | 2.10 | % | 2.69 | % | ||||||||||||||
For footnotes see page 19. |
Bank of America Corporation and Subsidiaries | ||||||||||||||||||||
Selected Financial Data (continued) | ||||||||||||||||||||
(Dollars in millions, except per share data; shares in thousands) | ||||||||||||||||||||
Capital Management |
December 31 2013 |
September 30 2013 |
December 31 2012 |
|||||||||||||||||
Risk-based capital (4, 5): | ||||||||||||||||||||
Tier 1 common capital | $ | 145,235 | $ | 142,825 | $ | 133,403 | ||||||||||||||
Tier 1 common capital ratio (6) | 11.19 | % | 11.08 | % | 11.06 | % | ||||||||||||||
Tier 1 leverage ratio | 7.87 | 7.79 | 7.37 | |||||||||||||||||
Tangible equity ratio (7) | 7.86 | 7.73 | 7.62 | |||||||||||||||||
Tangible common equity ratio (7) | 7.20 | 7.08 | 6.74 | |||||||||||||||||
Period-end common shares issued and outstanding | 10,591,808 | 10,683,282 | 10,778,264 | |||||||||||||||||
Basel 1 to Basel 3 (fully phased-in) Reconciliation (5, 8) |
December 31 2013 |
September 30 2013 |
December 31 2012 |
|||||||||||||||||
Regulatory capital – Basel 1 to Basel 3 (fully phased-in) | ||||||||||||||||||||
Basel 1 Tier 1 capital | $ | 161,456 | $ | 159,008 | $ | 155,461 | ||||||||||||||
Deduction of qualifying preferred stock and trust preferred securities | (16,221 | ) | (16,183 | ) | (22,058 | ) | ||||||||||||||
Basel 1 Tier 1 common capital | 145,235 | 142,825 | 133,403 | |||||||||||||||||
Deduction of defined benefit pension assets | (829 | ) | (935 | ) | (737 | ) | ||||||||||||||
Deferred tax assets and threshold deductions (deferred tax asset temporary differences, MSRs and significant investments) | (4,803 | ) | (4,758 | ) | (3,020 | ) | ||||||||||||||
Other deductions, net | (7,288 | ) | (5,319 | ) | (1,020 | ) | ||||||||||||||
Basel 3 Advanced approach (fully phased-in) Tier 1 common capital | $ | 132,315 | $ | 131,813 | $ | 128,626 | ||||||||||||||
Risk-weighted assets – Basel 1 to Basel 3 (fully phased-in) | ||||||||||||||||||||
Basel 1 risk-weighted assets | $ | 1,297,529 | $ | 1,289,444 | $ | 1,205,976 | ||||||||||||||
Credit and other risk-weighted assets | 31,515 | 37,140 | 103,085 | |||||||||||||||||
Increase due to Market Risk Final Rule | — | — | 81,811 | |||||||||||||||||
Basel 3 Advanced approach (fully phased-in) risk-weighted assets | $ | 1,329,044 | $ | 1,326,584 | $ | 1,390,872 | ||||||||||||||
Tier 1 common capital ratios | ||||||||||||||||||||
Basel 1 | 11.19 | % | 11.08 | % | 11.06 | % | ||||||||||||||
Basel 3 Advanced approach (fully phased-in) | 9.96 | 9.94 | 9.25 | |||||||||||||||||
Year Ended December 31 |
Fourth Quarter 2013 |
Third Quarter 2013 |
Fourth Quarter 2012 |
|||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Common shares issued | 45,288 | 242,326 | 624 | 184 | 997 | |||||||||||||||
Average common shares issued and outstanding | 10,731,165 | 10,746,028 | 10,633,030 | 10,718,918 | 10,777,204 | |||||||||||||||
Average diluted common shares issued and outstanding | 11,491,418 | 10,840,854 | 11,404,438 | 11,482,226 | 10,884,921 | |||||||||||||||
Dividends paid per common share | $ | 0.04 | $ | 0.04 | $ | 0.01 | $ | 0.01 | $ | 0.01 | ||||||||||
Summary Period-End Balance Sheet |
December 31 2013 |
September 30 2013 |
December 31 2012 |
|||||||||||||||||
Total loans and leases | $ | 928,233 | $ | 934,392 | $ | 907,819 | ||||||||||||||
Total debt securities | 323,945 | 320,998 | 360,331 | |||||||||||||||||
Total earning assets | 1,668,680 | 1,712,648 | 1,788,305 | |||||||||||||||||
Total assets | 2,102,273 | 2,126,653 | 2,209,974 | |||||||||||||||||
Total deposits | 1,119,271 | 1,110,118 | 1,105,261 | |||||||||||||||||
Total shareholders’ equity | 232,685 | 232,282 | 236,956 | |||||||||||||||||
Common shareholders’ equity | 219,333 | 218,967 | 218,188 | |||||||||||||||||
Book value per share of common stock | $ | 20.71 | $ | 20.50 | $ | 20.24 | ||||||||||||||
Tangible book value per share of common stock (1) | 13.79 | 13.62 | 13.36 |
(1) Return on average tangible shareholders’ equity and tangible book value per share of common stock are non-GAAP financial measures. We believe the use of these non-GAAP financial measures provides additional clarity in assessing the results of the Corporation. Other companies may define or calculate non-GAAP financial measures differently. See Reconciliations to GAAP Financial Measures on pages 23-25.
(2) Ratios do not include loans accounted for under the fair value option during the period. Charge-off ratios are annualized for the quarterly presentation.
(3) Balances do not include past due consumer credit card, consumer
loans secured by real estate where repayments are insured by the
(4) Regulatory capital ratios are preliminary until filed with the Federal Reserve on Form Y-9C.
(5)
(6) Tier 1 common capital ratio equals Tier 1 capital excluding preferred stock, trust preferred securities, hybrid securities and minority interest divided by risk-weighted assets.
(7) 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 financial measures. We believe the use of these non-GAAP financial measures provides additional clarity in assessing the results of the Corporation. Other companies may define or calculate non-GAAP financial measures differently. See Reconciliations to GAAP Financial Measures on pages 23-25.
(8)
Certain prior period amounts have been reclassified to conform to current period presentation.
Bank of America Corporation and Subsidiaries | ||||||||||||||||||||||||
Quarterly Results by Business Segment | ||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||
Fourth Quarter 2013 | ||||||||||||||||||||||||
Consumer & Business Banking |
Consumer
Real Estate Services |
Global
Banking |
Global
Markets |
GWIM |
All
Other |
|||||||||||||||||||
Total revenue, net of interest expense (FTE basis) (1) | $ | 7,497 | $ | 1,712 | $ | 4,305 | $ | 3,624 | $ | 4,480 | $ | 83 | ||||||||||||
Provision for credit losses | 427 | (474 | ) | 441 | 104 | 26 | (188 | ) | ||||||||||||||||
Noninterest expense | 4,042 | 3,794 | 1,927 | 3,284 | 3,264 | 996 | ||||||||||||||||||
Net income (loss) | 1,967 | (1,061 | ) | 1,267 | 215 | 777 | 274 | |||||||||||||||||
Return on average allocated capital (2, 3) | 26.03 | % | n/m | 21.86 | % | 2.87 | % | 30.97 | % | n/m | ||||||||||||||
Balance Sheet | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Total loans and leases | $ | 163,152 | $ | 89,687 | $ | 268,849 | n/m | $ | 115,546 | $ | 226,049 | |||||||||||||
Total deposits | 528,808 | n/m | 259,762 | n/m | 240,395 | 34,030 | ||||||||||||||||||
Allocated capital (2, 3) | 30,000 | 24,000 | 23,000 | $ | 30,000 | 10,000 | n/m | |||||||||||||||||
Period end | ||||||||||||||||||||||||
Total loans and leases | $ | 165,090 | $ | 89,753 | $ | 269,469 | n/m | $ | 115,846 | $ | 220,694 | |||||||||||||
Total deposits | 531,707 | n/m | 265,718 | n/m | 244,901 | 27,702 | ||||||||||||||||||
Third Quarter 2013 | ||||||||||||||||||||||||
Consumer & Business Banking |
Consumer
Real Estate Services |
Global
Banking |
Global
Markets |
GWIM |
All
Other |
|||||||||||||||||||
Total revenue, net of interest expense (FTE basis) (1) | $ | 7,524 | $ | 1,577 | $ | 4,008 | $ | 3,376 | $ | 4,390 | $ | 868 | ||||||||||||
Provision for credit losses | 761 | (308 | ) | 322 | 47 | 23 | (549 | ) | ||||||||||||||||
Noninterest expense | 3,980 | 3,419 | 1,927 | 2,884 | 3,249 | 930 | ||||||||||||||||||
Net income (loss) | 1,779 | (1,000 | ) | 1,134 | (778 | ) | 719 | 643 | ||||||||||||||||
Return on average allocated capital (2, 3) | 23.55 | % | n/m | 19.57 | % | n/m | 28.68 | % | n/m | |||||||||||||||
Balance Sheet | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Total loans and leases | $ | 165,707 | $ | 88,406 | $ | 260,085 | n/m | $ | 112,752 | $ | 232,538 | |||||||||||||
Total deposits | 522,023 | n/m | 239,839 | n/m | 239,663 | 35,126 | ||||||||||||||||||
Allocated capital (2, 3) | 30,000 | 24,000 | 23,000 | $ | 30,000 | 10,000 | n/m | |||||||||||||||||
Period end | ||||||||||||||||||||||||
Total loans and leases | $ | 167,254 | $ | 87,586 | $ | 267,165 | n/m | $ | 114,175 | $ | 229,550 | |||||||||||||
Total deposits | 526,876 | n/m | 263,121 | n/m | 241,553 | 30,705 | ||||||||||||||||||
Fourth Quarter 2012 | ||||||||||||||||||||||||
Consumer & Business Banking |
Consumer
Real Estate Services |
Global
Banking |
Global
Markets |
GWIM |
All
Other |
|||||||||||||||||||
Total revenue, net of interest expense (FTE basis) (1) | $ | 7,401 | $ | 475 | $ | 3,951 | $ | 3,020 | $ | 4,193 | $ | (149 | ) | |||||||||||
Provision for credit losses | 1,078 | 485 | 62 | 17 | 112 | 450 | ||||||||||||||||||
Noninterest expense | 4,174 | 5,607 | 1,753 | 2,627 | 3,196 | 1,003 | ||||||||||||||||||
Net income (loss) | 1,446 | (3,704 | ) | 1,392 | 181 | 576 | 841 | |||||||||||||||||
Return on average economic capital (2, 3) | 23.46 | % | n/m | 28.97 | % | 5.12 | % | 28.36 | % | n/m | ||||||||||||||
Balance Sheet | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Total loans and leases | $ | 167,219 | $ | 96,605 | $ | 232,396 | n/m | $ | 103,785 | $ | 247,128 | |||||||||||||
Total deposits | 484,086 | n/m | 242,817 | n/m | 249,658 | 36,939 | ||||||||||||||||||
Economic capital (2, 3) | 24,561 | 12,474 | 19,123 | $ | 14,184 | 8,149 | n/m | |||||||||||||||||
Period end | ||||||||||||||||||||||||
Total loans and leases | $ | 169,266 | $ | 94,660 | $ | 242,340 | n/m | $ | 105,928 | $ | 241,981 | |||||||||||||
Total deposits | 496,159 | n/m | 243,306 | n/m | 266,188 | 36,061 |
(1) 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.
(2) Effective
(3) Return on average allocated capital and return on average economic capital are calculated as net income, adjusted for cost of funds and earnings credits and certain expenses related to intangibles, divided by average allocated capital or average economic capital, as applicable. Allocated capital, economic capital and the related returns are non-GAAP financial measures. The Corporation believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the segments. Other companies may define or calculate these measures differently. (See Exhibit A: Non-GAAP Reconciliations - Reconciliations to GAAP Financial Measures on pages 23-25.)
n/m = not meaningful
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
Bank of America Corporation and Subsidiaries | ||||||||||||||||||||||||
Annual Results by Business Segment | ||||||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||||||
Year Ended December 31, 2013 | ||||||||||||||||||||||||
Consumer &
Business Banking |
Consumer
Real Estate Services |
Global
Banking |
Global
Markets |
GWIM |
All
Other |
|||||||||||||||||||
Total revenue, net of interest expense (FTE basis) (1) | $ | 29,867 | $ | 7,716 | $ | 16,481 | $ | 16,058 | $ | 17,790 | $ | 1,889 | ||||||||||||
Provision for credit losses | 3,107 | (156 | ) | 1,075 | 140 | 56 | (666 | ) | ||||||||||||||||
Noninterest expense | 16,357 | 16,013 | 7,552 | 12,013 | 13,038 | 4,241 | ||||||||||||||||||
Net income (loss) | 6,588 | (5,155 | ) | 4,974 | 1,563 | 2,974 | 487 | |||||||||||||||||
Return on average allocated capital (2, 3) | 21.98 | % | n/m | 21.64 | % | 5.24 | % | 29.90 | % | n/m | ||||||||||||||
Balance Sheet | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Total loans and leases | $ | 164,570 | $ | 90,278 | $ | 257,245 | n/m | $ | 111,023 | $ | 235,454 | |||||||||||||
Total deposits | 518,980 | n/m | 237,457 | n/m | 242,161 | 34,617 | ||||||||||||||||||
Allocated capital (2, 3) | 30,000 | 24,000 | 23,000 | $ | 30,000 | 10,000 | n/m | |||||||||||||||||
Period end | ||||||||||||||||||||||||
Total loans and leases | $ | 165,090 | $ | 89,753 | $ | 269,469 | n/m | $ | 115,846 | $ | 220,694 | |||||||||||||
Total deposits | 531,707 | n/m | 265,718 | n/m | 244,901 | 27,702 | ||||||||||||||||||
Year Ended December 31, 2012 | ||||||||||||||||||||||||
Consumer &
Business Banking |
Consumer
Real Estate Services |
Global
Banking |
Global
Markets |
GWIM |
All
Other |
|||||||||||||||||||
Total revenue, net of interest expense (FTE basis) (1) | $ | 29,790 | $ | 8,751 | $ | 15,674 | $ | 14,284 | $ | 16,518 | $ | (782 | ) | |||||||||||
Provision for credit losses | 4,148 | 1,442 | (342 | ) | 34 | 266 | 2,621 | |||||||||||||||||
Noninterest expense | 16,995 | 17,190 | 7,619 | 11,295 | 12,721 | 6,273 | ||||||||||||||||||
Net income (loss) | 5,546 | (6,439 | ) | 5,344 | 1,229 | 2,245 | (3,737 | ) | ||||||||||||||||
Return on average economic capital (2, 3) | 23.12 | % | n/m | 27.69 | % | 8.95 | % | 30.80 | % | n/m | ||||||||||||||
Balance Sheet | ||||||||||||||||||||||||
Average | ||||||||||||||||||||||||
Total loans and leases | $ | 173,036 | $ | 103,524 | $ | 224,336 | n/m | $ | 100,456 | $ | 259,241 | |||||||||||||
Total deposits | 475,180 | n/m | 223,940 | n/m | 242,384 | 43,087 | ||||||||||||||||||
Economic capital (2, 3) | 24,051 | 13,676 | 19,312 | $ | 13,824 | 7,359 | n/m | |||||||||||||||||
Period end | ||||||||||||||||||||||||
Total loans and leases | $ | 169,266 | $ | 94,660 | $ | 242,340 | n/m | $ | 105,928 | $ | 241,981 | |||||||||||||
Total deposits | 496,159 | n/m | 243,306 | n/m | 266,188 | 36,061 |
(1) 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.
(2) Effective
(3) Return on average allocated capital and return on average economic capital are calculated as net income, adjusted for cost of funds and earnings credits and certain expenses related to intangibles, divided by average allocated capital or average economic capital, as applicable. Allocated capital, economic capital and the related returns are non-GAAP financial measures. The Corporation believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the segments. Other companies may define or calculate these measures differently. (See Exhibit A: Non-GAAP Reconciliations - Reconciliations to GAAP Financial Measures on pages 23-25.)
n/m = not meaningful
Certain prior period amounts have been reclassified among the segments to conform to current period presentation.
Bank of America Corporation and Subsidiaries | ||||||||||||||||||||
Supplemental Financial Data | ||||||||||||||||||||
(Dollars in millions) | ||||||||||||||||||||
Fully taxable-equivalent (FTE) basis data (1) |
Year Ended December 31 |
Fourth Quarter 2013 |
Third Quarter 2013 |
Fourth Quarter 2012 |
||||||||||||||||
2013 | 2012 | |||||||||||||||||||
Net interest income | $ | 43,124 | $ | 41,557 | $ | 10,999 | $ | 10,479 | $ | 10,555 | ||||||||||
Total revenue, net of interest expense | 89,801 | 84,235 | 21,701 | 21,743 | 18,891 | |||||||||||||||
Net interest yield (2) | 2.47 | % | 2.35 | % | 2.56 | % | 2.44 | % | 2.35 | % | ||||||||||
Efficiency ratio | 77.07 | 85.59 | 79.75 | 75.38 | 97.19 | |||||||||||||||
Other Data |
December 31 2013 |
September 30 2013 |
December 31 2012 |
|||||||||||||||||
Number of banking centers - U.S. | 5,151 | 5,243 | 5,478 | |||||||||||||||||
Number of branded ATMs - U.S. | 16,259 | 16,201 | 16,347 | |||||||||||||||||
Ending full-time equivalent employees | 242,117 | 247,943 | 267,190 |
(1) FTE basis is a non-GAAP financial measure. 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. See Reconciliations to GAAP Financial Measures on pages 23-25.
(2) Calculation includes fees earned on overnight deposits placed with
the Federal Reserve and, beginning in the third quarter of 2012, fees
earned on deposits, primarily overnight, placed with certain non-U.S.
central banks of
Certain prior period amounts have been reclassified to conform to current period presentation.
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 financial 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. For purposes of this calculation, the Corporation uses the federal statutory tax rate of 35 percent. 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 measures 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 financial measure. Tangible equity represents an adjusted shareholders’ equity or common shareholders’ equity amount which has been reduced by goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities. Return on average tangible common shareholders’ equity measures the Corporation’s earnings contribution as a percentage of adjusted average common shareholders’ equity. Return on average tangible shareholders’ equity measures the Corporation’s earnings contribution as a percentage of adjusted average total shareholders’ equity. The tangible common equity ratio represents adjusted ending common shareholders’ equity divided by total assets less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities. The tangible equity ratio represents adjusted ending shareholders’ equity 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 adjusted ending common shareholders’ equity divided by ending common shares outstanding. These measures are used to evaluate the Corporation’s use of equity. In addition, profitability, relationship and investment models all use return on average tangible shareholders’ equity as key measures to support our overall growth goals.
Effective
See the tables below and on pages 24-25 for reconciliations of these non-GAAP financial measures with financial measures defined by GAAP for the years ended December 31, 2013 and 2012, and the three months ended December 31, 2013, September 30, 2013 and December 31, 2012. The Corporation believes the use of these non-GAAP financial measures provides additional clarity in assessing the results of the Corporation. Other companies may define or calculate supplemental financial data differently.
Year Ended December 31 |
Fourth Quarter 2013 |
Third Quarter 2013 |
Fourth Quarter 2012 |
||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Reconciliation of net interest income to net interest income on a fully taxable-equivalent basis | |||||||||||||||||||||
Net interest income | $ | 42,265 | $ | 40,656 | $ | 10,786 | $ | 10,266 | $ | 10,324 | |||||||||||
Fully taxable-equivalent adjustment | 859 | 901 | 213 | 213 | 231 | ||||||||||||||||
Net interest income on a fully taxable-equivalent basis | $ | 43,124 | $ | 41,557 | $ | 10,999 | $ | 10,479 | $ | 10,555 | |||||||||||
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 | $ | 88,942 | $ | 83,334 | $ | 21,488 | $ | 21,530 | $ | 18,660 | |||||||||||
Fully taxable-equivalent adjustment | 859 | 901 | 213 | 213 | 231 | ||||||||||||||||
Total revenue, net of interest expense on a fully taxable-equivalent basis | $ | 89,801 | $ | 84,235 | $ | 21,701 | $ | 21,743 | $ | 18,891 | |||||||||||
Reconciliation of income tax expense (benefit) to income tax expense (benefit) on a fully taxable-equivalent basis | |||||||||||||||||||||
Income tax expense (benefit) | $ | 4,741 | $ | (1,116 | ) | $ | 406 | $ | 2,348 | $ | (2,636 | ) | |||||||||
Fully taxable-equivalent adjustment | 859 | 901 | 213 | 213 | 231 | ||||||||||||||||
Income tax expense (benefit) on a fully taxable-equivalent basis | $ | 5,600 | $ | (215 | ) | $ | 619 | $ | 2,561 | $ | (2,405 | ) | |||||||||
Reconciliation of average common shareholders’ equity to average tangible common shareholders’ equity | |||||||||||||||||||||
Common shareholders’ equity | $ | 218,468 | $ | 216,996 | $ | 220,088 | $ | 216,766 | $ | 219,744 | |||||||||||
Goodwill | (69,910 | ) | (69,974 | ) | (69,864 | ) | (69,903 | ) | (69,976 | ) | |||||||||||
Intangible assets (excluding mortgage servicing rights) | (6,132 | ) | (7,366 | ) | (5,725 | ) | (5,993 | ) | (6,874 | ) | |||||||||||
Related deferred tax liabilities | 2,328 | 2,593 | 2,231 | 2,296 | 2,490 | ||||||||||||||||
Tangible common shareholders’ equity | $ | 144,754 | $ | 142,249 | $ | 146,730 | $ | 143,166 | $ | 145,384 | |||||||||||
Reconciliation of average shareholders’ equity to average tangible shareholders’ equity | |||||||||||||||||||||
Shareholders’ equity | $ | 233,947 | $ | 235,677 | $ | 233,415 | $ | 230,392 | $ | 238,512 | |||||||||||
Goodwill | (69,910 | ) | (69,974 | ) | (69,864 | ) | (69,903 | ) | (69,976 | ) | |||||||||||
Intangible assets (excluding mortgage servicing rights) | (6,132 | ) | (7,366 | ) | (5,725 | ) | (5,993 | ) | (6,874 | ) | |||||||||||
Related deferred tax liabilities | 2,328 | 2,593 | 2,231 | 2,296 | 2,490 | ||||||||||||||||
Tangible shareholders’ equity | $ | 160,233 | $ | 160,930 | $ | 160,057 | $ | 156,792 | $ | 164,152 |
Certain prior period amounts have been reclassified to conform to current period presentation.
Bank of America Corporation and Subsidiaries | |||||||||||||||||||||
Reconciliations to GAAP Financial Measures (continued) | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
Year Ended December 31 |
Fourth Quarter 2013 |
Third Quarter 2013 |
Fourth Quarter 2012 |
||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Reconciliation of period-end common shareholders’ equity to period-end tangible common shareholders’ equity | |||||||||||||||||||||
Common shareholders’ equity | $ | 219,333 | $ | 218,188 | $ | 219,333 | $ | 218,967 | $ | 218,188 | |||||||||||
Goodwill | (69,844 | ) | (69,976 | ) | (69,844 | ) | (69,891 | ) | (69,976 | ) | |||||||||||
Intangible assets (excluding mortgage servicing rights) | (5,574 | ) | (6,684 | ) | (5,574 | ) | (5,843 | ) | (6,684 | ) | |||||||||||
Related deferred tax liabilities | 2,166 | 2,428 | 2,166 | 2,231 | 2,428 | ||||||||||||||||
Tangible common shareholders’ equity | $ | 146,081 | $ | 143,956 | $ | 146,081 | $ | 145,464 | $ | 143,956 | |||||||||||
Reconciliation of period-end shareholders’ equity to period-end tangible shareholders’ equity | |||||||||||||||||||||
Shareholders’ equity | $ | 232,685 | $ | 236,956 | $ | 232,685 | $ | 232,282 | $ | 236,956 | |||||||||||
Goodwill | (69,844 | ) | (69,976 | ) | (69,844 | ) | (69,891 | ) | (69,976 | ) | |||||||||||
Intangible assets (excluding mortgage servicing rights) | (5,574 | ) | (6,684 | ) | (5,574 | ) | (5,843 | ) | (6,684 | ) | |||||||||||
Related deferred tax liabilities | 2,166 | 2,428 | 2,166 | 2,231 | 2,428 | ||||||||||||||||
Tangible shareholders’ equity | $ | 159,433 | $ | 162,724 | $ | 159,433 | $ | 158,779 | $ | 162,724 | |||||||||||
Reconciliation of period-end assets to period-end tangible assets | |||||||||||||||||||||
Assets | $ | 2,102,273 | $ | 2,209,974 | $ | 2,102,273 | $ | 2,126,653 | $ | 2,209,974 | |||||||||||
Goodwill | (69,844 | ) | (69,976 | ) | (69,844 | ) | (69,891 | ) | (69,976 | ) | |||||||||||
Intangible assets (excluding mortgage servicing rights) | (5,574 | ) | (6,684 | ) | (5,574 | ) | (5,843 | ) | (6,684 | ) | |||||||||||
Related deferred tax liabilities | 2,166 | 2,428 | 2,166 | 2,231 | 2,428 | ||||||||||||||||
Tangible assets | $ | 2,029,021 | $ | 2,135,742 | $ | 2,029,021 | $ | 2,053,150 | $ | 2,135,742 | |||||||||||
Book value per share of common stock | |||||||||||||||||||||
Common shareholders’ equity | $ | 219,333 | $ | 218,188 | $ | 219,333 | $ | 218,967 | $ | 218,188 | |||||||||||
Ending common shares issued and outstanding | 10,591,808 | 10,778,264 | 10,591,808 | 10,683,282 | 10,778,264 | ||||||||||||||||
Book value per share of common stock | $ | 20.71 | $ | 20.24 | $ | 20.71 | $ | 20.50 | $ | 20.24 | |||||||||||
Tangible book value per share of common stock | |||||||||||||||||||||
Tangible common shareholders’ equity | $ | 146,081 | $ | 143,956 | $ | 146,081 | $ | 145,464 | $ | 143,956 | |||||||||||
Ending common shares issued and outstanding | 10,591,808 | 10,778,264 | 10,591,808 | 10,683,282 | 10,778,264 | ||||||||||||||||
Tangible book value per share of common stock | $ | 13.79 | $ | 13.36 | $ | 13.79 | $ | 13.62 | $ | 13.36 |
Certain prior period amounts have been reclassified to conform to current period presentation.
Bank of America Corporation and Subsidiaries | |||||||||||||||||||||
Reconciliations to GAAP Financial Measures (continued) | |||||||||||||||||||||
(Dollars in millions) | |||||||||||||||||||||
Year Ended December 31 |
Fourth Quarter 2013 |
Third Quarter 2013 |
Fourth Quarter 2012 |
||||||||||||||||||
2013 | 2012 | ||||||||||||||||||||
Reconciliation of return on average allocated capital/economic capital (1) | |||||||||||||||||||||
Consumer & Business Banking | |||||||||||||||||||||
Reported net income | $ | 6,588 | $ | 5,546 | $ | 1,967 | $ | 1,779 | $ | 1,446 | |||||||||||
Adjustment related to intangibles (2) | 7 | 13 | 1 | 2 | 3 | ||||||||||||||||
Adjusted net income | $ | 6,595 | $ | 5,559 | $ | 1,968 | $ | 1,781 | $ | 1,449 | |||||||||||
Average allocated equity (3) | $ | 62,045 | $ | 56,214 | $ | 62,007 | $ | 62,032 | $ | 56,673 | |||||||||||
Adjustment related to goodwill and a percentage of intangibles | (32,045 | ) | (32,163 | ) | (32,007 | ) | (32,032 | ) | (32,112 | ) | |||||||||||
Average allocated capital/economic capital | $ | 30,000 | $ | 24,051 | $ | 30,000 | $ | 30,000 | $ | 24,561 | |||||||||||
Global Banking | |||||||||||||||||||||
Reported net income | $ | 4,974 | $ | 5,344 | $ | 1,267 | $ | 1,134 | $ | 1,392 | |||||||||||
Adjustment related to intangibles (2) | 2 | 4 | — | 1 | 1 | ||||||||||||||||
Adjusted net income | $ | 4,976 | $ | 5,348 | $ | 1,267 | $ | 1,135 | $ | 1,393 | |||||||||||
Average allocated equity (3) | $ | 45,412 | $ | 41,742 | $ | 45,410 | $ | 45,413 | $ | 41,546 | |||||||||||
Adjustment related to goodwill and a percentage of intangibles | (22,412 | ) | (22,430 | ) | (22,410 | ) | (22,413 | ) | (22,423 | ) | |||||||||||
Average allocated capital/economic capital | $ | 23,000 | $ | 19,312 | $ | 23,000 | $ | 23,000 | $ | 19,123 | |||||||||||
Global Markets | |||||||||||||||||||||
Reported net income (loss) | $ | 1,563 | $ | 1,229 | $ | 215 | $ | (778 | ) | $ | 181 | ||||||||||
Adjustment related to intangibles (2) | 8 | 9 | 2 | 2 | 2 | ||||||||||||||||
Adjusted net income (loss) | $ | 1,571 | $ | 1,238 | $ | 217 | $ | (776 | ) | $ | 183 | ||||||||||
Average allocated equity (3) | $ | 35,373 | $ | 19,193 | $ | 35,381 | $ | 35,369 | $ | 19,562 | |||||||||||
Adjustment related to goodwill and a percentage of intangibles | (5,373 | ) | (5,369 | ) | (5,381 | ) | (5,369 | ) | (5,378 | ) | |||||||||||
Average allocated capital/economic capital | $ | 30,000 | $ | 13,824 | $ | 30,000 | $ | 30,000 | $ | 14,184 | |||||||||||
Global Wealth & Investment Management | |||||||||||||||||||||
Reported net income | $ | 2,974 | $ | 2,245 | $ | 777 | $ | 719 | $ | 576 | |||||||||||
Adjustment related to intangibles (2) | 16 | 22 | 4 | 4 | 5 | ||||||||||||||||
Adjusted net income | $ | 2,990 | $ | 2,267 | $ | 781 | $ | 723 | $ | 581 | |||||||||||
Average allocated equity (3) | $ | 20,292 | $ | 17,729 | $ | 20,265 | $ | 20,283 | $ | 18,489 | |||||||||||
Adjustment related to goodwill and a percentage of intangibles | (10,292 | ) | (10,370 | ) | (10,265 | ) | (10,283 | ) | (10,340 | ) | |||||||||||
Average allocated capital/economic capital | $ | 10,000 | $ | 7,359 | $ | 10,000 | $ | 10,000 | $ | 8,149 |
(1) There are no adjustments to reported net income (loss) or average allocated equity for Consumer Real Estate Services.
(2) Represents cost of funds, earnings credits and certain expenses related to intangibles.
(3) Average allocated equity is comprised of average allocated capital (or economic capital prior to 2013) plus capital for the portion of goodwill and intangibles specifically assigned to the business segment.
Certain prior period amounts have been reclassified to conform to current period presentation.
Source:
Investors May Contact:
Anne Walker, Bank of America, 1.646.855.3644
Lee
McEntire, Bank of America, 1.980.388.6780
Jonathan Blum, Bank of
America (Fixed Income), 1.212.449.3112
Reporters May Contact:
Jerry
Dubrowski, Bank of America, 1.980.388.2840
jerome.f.dubrowski@bankofamerica.com