January 19, 2012
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 Fourth-Quarter 2011 Net Income of $2.0 Billion, or $0.15 Per Diluted Share

Full-Year 2011 Net Income of $1.4 Billion, or $0.01 Per Diluted Share

Strong Capital Generation With Tier 1 Common Equity Ratio at 9.86 Percent

Global Excess Liquidity Sources Remain Strong at $378 Billion, up $42 Billion in 2011

Investment Bank Maintained No. 2 Global Ranking in Net Investment Banking Fees and Gained Market Share in 2011

Bank of America Merrill Lynch Named "Top Global Research Firm of 2011"

Total Average Commercial and Industrial Loan Balances Increased 13 Percent From the Fourth Quarter of 2010

Small Business Loan Originations and Commitments up Approximately 20 Percent in 2011, More Than 500 Small Business Bankers Hired in 2011

Global Wealth and Investment Management Adds Nearly 1,700 Financial Advisors in 2011
 
Extended Approximately $557 Billion in Credit and Raised $644 Billion in Capital for Clients During 2011

More Than 1 Million Mortgage Loan Modifications Completed Since 2008

CHARLOTTE — Bank of America Corporation today reported net income of $2.0 billion, or $0.15 per diluted share, for the fourth quarter of 2011, compared with a net loss of $1.2 billion, or $0.16 per diluted share in the year-ago period. Revenue, net of interest expense, on a fully taxable-equivalent (FTE)1 basis rose 11 percent to $25.1 billion.


1Fully taxable-equivalent (FTE) basis is a non-GAAP financial measure. For reconciliation to GAAP financial measures, refer to pages 25-27 of this press release. Total revenue, net of interest expense on a GAAP basis, was $24.9 billion and $22.4 billion for the three months ended December 31, 2011 and 2010, and $93.5 billion and $110.2 billion for the years ended December 31, 2011 and 2010.

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For the full year, the company reported net income of $1.4 billion, or $0.01 per diluted share, compared with a net loss of $2.2 billion, or $0.37 per diluted share in 2010. Revenue, net of interest expense, on an FTE basis1 declined 15 percent to $94.4 billion.

"We enter 2012 stronger and more efficient after two years of simplifying and streamlining our company," said Chief Executive Officer Brian Moynihan. "We built our capital ratios to record levels during 2011 on the strength of our core businesses and by shedding those that are not core to serving customers and clients. I am proud of our team and their ability to serve our customers well while transforming the company."

“Our fourth-quarter results reflect the aggressive steps we have been taking to strengthen the balance sheet and position the company for long-term growth," said Chief Financial Officer Bruce Thompson. “During the quarter, we significantly increased capital and liquidity. Our Tier 1 common equity ratio increased to 9.86 percent from 8.65 percent in the third quarter of 2011, and our time-to-required funding increased to 29 months from 27 months. For 2012, our focus is to continue to build capital and liquidity and manage expenses."

“Reflecting a gradually improving economy,” continued Moynihan, "we saw solid business activity by companies of all sizes, with commercial and industrial loan balances rising 13 percent from the fourth quarter of 2010, and small business loan originations increasing approximately 20 percent in calendar year 2011."

Selected Financial Highlights

 
Three Months Ended
 
Year Ended
(Dollars in millions except per share data)
December 31
2011
 
December 31
2010
 
December 31
2011
 
December 31
2010
Net interest income, FTE basis1
$
10,959

 
$
12,709

 
$
45,588

 
$
52,693

Noninterest income
14,187

 
9,959

 
48,838

 
58,697

Total revenue, net of interest expense, FTE basis
25,146

 
22,668

 
94,426

 
111,390

Provision for credit losses
2,934

 
5,129

 
13,410

 
28,435

Noninterest expense 2
18,941

 
18,864

 
77,090

 
70,708

Goodwill impairment charges
581

 
2,000

 
3,184

 
12,400

Net income (loss)
1,991

 
(1,244
)
 
1,446

 
(2,238
)
Diluted earnings (loss) per common share
$
0.15

 
$
(0.16
)
 
$
0.01

 
$
(0.37
)
1Fully taxable-equivalent (FTE) basis is a non-GAAP financial measure. For reconciliation to GAAP financial measures, refer to pages 25-27 of this press release. Net interest income on a GAAP basis was $10.7 billion and $12.4 billion for the three months ended December 31, 2011 and 2010, and $44.6 billion and $51.5 billion for the years ended December 31, 2011 and 2010. Total revenue, net of interest expense on a GAAP basis, was $24.9 billion and $22.4 billion for the three months ended December 31, 2011 and 2010, and $93.5 billion and $110.2 billion for the years ended December 31, 2011 and 2010.
2 Excludes goodwill impairment charges of $581 million and $2.0 billion in the three months ended December 31, 2011 and 2010, and $3.2 billion and $12.4 billion for the years ended December 31, 2011 and 2010. Noninterest expense, excluding goodwill charges, is a non-GAAP financial measure.


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The following is a list of selected items that affected fourth-quarter 2011 financial results.

Selected Fourth-Quarter 2011 Items1
(Dollars in billions)
 
Gain on sale of China Construction Bank shares
$
2.9

Gain on exchange of trust preferred securities
1.2

Gains on sales of debt securities
1.2

Representations and warranties provision
(0.3
)
Debit Valuation Adjustments (DVA) on trading liabilities
(0.5
)
Goodwill impairment
(0.6
)
Fair value adjustment on structured liabilities
(0.8
)
Mortgage-related litigation expense
(1.5
)
1All items pretax.

Key Business Highlights

The company made significant progress in 2011 in line with its operating principles, including the following developments:

Focus on customer-driven businesses

•
Bank of America extended approximately $557 billion in credit in 2011. This included $317.7 billion in commercial non-real estate loans, $151.8 billion in residential first mortgages, $36.5 billion in commercial real estate loans, $19.4 billion in U.S. consumer and small business card, $4.4 billion in home equity products and $27.5 billion in other consumer credit.

•
The $151.8 billion in residential first mortgages funded in 2011 helped more than 695,000 homeowners either purchase a home or refinance an existing mortgage. This included approximately 47,000 first-time homebuyer mortgages originated by retail channels, and more than 237,000 mortgages to low- and moderate-income borrowers. Approximately 40 percent of funded first mortgages were for home purchases and 60 percent were refinances.

•
The company originated $6.4 billion in small business loans and commitments in 2011 and hired more than 500 new small business bankers during the year to further support small business customers.

•
The company raised $644 billion in capital for clients in 2011 to help support the economy.

•
Average deposit balances rose nearly $25 billion to $1.03 trillion in the fourth quarter of 2011 from $1.01 trillion in the fourth quarter of 2010.

•
Global Wealth and Investment Management added more than 200 Financial Advisors in the fourth quarter of 2011, bringing the total number of Financial Advisors added in 2011 to nearly 1,700.


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•
Business activity with corporate banking clients continued to increase with average loans and leases up 29 percent from the fourth quarter of 2010 and average deposit balances up 10 percent from the fourth quarter of 2010.

•
Bank of America Merrill Lynch maintained its No. 2 global ranking in net investment banking fees and increased its market share in 2011 to 7.4 percent from 6.8 percent in 2010, excluding self-led deals, as reported by Dealogic. Also, Bank of America Merrill Lynch was named "Top Global Research Firm of 2011" by Institutional Investor.

Building a fortress balance sheet

•
Regulatory capital ratios increased significantly, with the Tier 1 common equity ratio increasing to 9.86 percent in the fourth quarter of 2011, up 121 basis points from the third quarter of 2011 and 126 basis points higher than the fourth quarter of 2010. The tangible common equity ratio2 increased to 6.64 percent in the fourth quarter of 2011, up 39 basis points from the third quarter of 2011 and 65 basis points higher than the fourth quarter of 2010.

•
The company substantially improved its funding position in 2011 by increasing overall liquidity and reducing debt. Global Excess Liquidity Sources increased to $378 billion at December 31, 2011, up from $363 billion at September 30, 2011 and $336 billion at December 31, 2010. Long-term debt declined to $372 billion at December 31, 2011 from $399 billion at September 30, 2011 and $448 billion at December 31, 2010.

•
Time-to-required funding increased to 29 months at the end of 2011 from 27 months at September 30, 2011 and 24 months at December 31, 2010.

•
In 2011, Bank of America generated $34 billion in proceeds from the sale of non-core assets and businesses, generating 79 basis points of Tier 1 common equity and reducing risk-weighted assets by $29 billion.

Pursuing operational excellence in efficiency and risk management

•
The company continued to focus on strengthening its risk culture in 2011, driving accountability more deeply into the company, and simplifying the organization by selling non-core assets and businesses.

•
The provision for credit losses declined 43 percent from the year-ago quarter, reflecting improved credit quality across all major consumer and commercial portfolios and underwriting changes implemented over the past several years.







2 Tangible common equity ratio is a non-GAAP financial measure. For a reconciliation to GAAP financial measures, refer to pages 25-27 of this press release. The common equity ratio was 9.94 percent at December 31, 2011, 9.50 percent at September 30, 2011 and 9.35 percent at December 31, 2010.

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•
The allowance for loan and lease losses to annualized net charge-off coverage ratio increased in the fourth quarter to 2.10 times, compared with 1.74 times in the third quarter of 2011 and 1.56 times in the fourth quarter of 2010. Excluding purchased credit-impaired loans, the allowance to annualized net charge-off coverage ratio was 1.57 times, 1.33 times and 1.32 times for the same periods, respectively.

•
The company continued to prudently manage its sovereign and non-sovereign exposures in Europe. Total exposure to Greece, Italy, Ireland, Portugal, and Spain, excluding net credit default protection, declined to $14.4 billion at December 31, 2011, compared to $15.8 billion at December 31, 2010. Since the end of 2009, total exposure to these countries is down 44 percent.

•
At December 31, 2011, the number of full-time employees was down to 281,791 from 288,739 at the end of the third quarter of 2011 and 288,128 at December 31, 2010.

•
At the center of the company's pursuit of operational excellence is Project New BAC, a comprehensive two-phase initiative designed to simplify and streamline the company, align expenses and increase revenues. Phase 1 evaluations were completed in the third quarter of 2011. Phase 2 evaluations, which began in the fourth quarter of 2011, are expected to continue into early 2012 and cover the balance of businesses and operations that were not evaluated in Phase 1.

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 while focusing on reducing expenses to position the company for long-term growth.

•
Tangible book value per share3 was $12.95 at December 31, 2011, compared to $12.98 at December 31, 2010. Book value per share was $20.09 at December 31, 2011, compared to $20.99 at December 31, 2010.

•
The company took significant actions during the fourth quarter to strengthen the balance sheet. In aggregate, these actions increased the Tier 1 common equity ratio by 121 basis points from the third quarter of 2011.











3 Tangible book value per share is a non-GAAP financial measure. For a reconciliation to GAAP financial measures, refer to pages 25-27 of this press release.

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Continuing to address legacy issues

•
Since 2008, more than 1 million modifications of first and second lien mortgages have been completed, of which 78 percent were completed using Bank of America proprietary programs, and the remainder were completed through the federal government's HAMP and 2MP programs.

•
The mortgage servicing portfolio declined to $1.8 trillion at the end of 2011 from $1.9 trillion at the end of the third quarter of 2011 and $2.1 trillion at the end of 2010 as the company continued to reduce the size of this portfolio.

•
The number of 60+ day delinquent first mortgage loans serviced by Legacy Asset Servicing declined to 1.1 million at the end of the fourth quarter of 2011 from 1.2 million at the end of the third quarter of 2011 and 1.4 million at the end of the fourth quarter of 2010.

•
The company ended 2011 with $15.9 billion reserved to address potential representations and warranties mortgage repurchase claims, a significant increase from the year-ago liability of $5.4 billion.


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Business Segment Results

Deposits

 
Three Months Ended
 
Year Ended
(Dollars in millions)
December 31
2011
 
December 31
2010
 
December 31
2011
 
December 31
2010
Total revenue, net of interest expense, FTE basis
$
3,080

 
$
3,003

 
$
12,689

 
$
13,562

Provision for credit losses
57

 
41

 
173

 
201

Noninterest expense
2,798

 
3,270

 
10,633

 
11,196

Net income (loss)
$
141

 
$
(200
)
 
$
1,192

 
$
1,362

Return on average equity
2.34
%
 
n/m

 
5.02
%
 
5.62
%
Return on average economic capital1
9.51
%
 
n/m

 
20.66
%
 
21.97
%
Average deposits
$
417,110

 
$
413,150

 
$
421,106

 
$
414,877

 
 
 
 
 
At December 31, 2011
 
At December 31, 2010
Client brokerage assets
 
 
 
 
$
66,576

 
$
63,597

1 Return on average economic capital is a non-GAAP financial measure. For reconciliation to GAAP financial measures, refer to pages 25-27 of this press release.
n/m = not meaningful

Business Highlights
 
•
Average deposit balances increased $4.0 billion from the year-ago quarter, driven by growth in liquid products in a low-rate environment. The rates paid on deposits declined 12 basis points to 0.23 percent in the fourth quarter of 2011 from 0.35 percent in the year-ago quarter due to pricing discipline and a shift in the mix of deposits.
 
•
The number of mobile banking customers continued to grow in 2011, with total mobile banking customers increasing 45 percent from a year ago to 9.2 million customers.

Financial Overview
 
Deposits reported net income of $141 million, up $341 million from the year-ago quarter, largely due to lower noninterest expense and higher revenue.
 
Revenue of $3.1 billion was up $77 million from the year-ago quarter, driven by higher noninterest income. Net interest income of $2.0 billion was relatively flat from the year-ago quarter.

Noninterest expense was down $472 million from the year-ago quarter to $2.8 billion primarily due to litigation expense in the year-ago quarter and a decrease in operating expenses partially offset by elevated FDIC expense.


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Card Services

 
Three Months Ended
 
Year Ended
(Dollars in millions)
December 31
2011
 
December 31
2010
 
December 31
2011
 
December 31
2010
Total revenue, net of interest expense, FTE basis
$
4,060

 
$
5,357

 
$
18,143

 
$
22,340

Provision for credit losses
1,138

 
1,846

 
3,072

 
10,962

Noninterest expense1
1,393

 
1,463

 
6,024

 
16,357

Net income (loss)
$
1,022

 
$
1,289

 
$
5,788

 
$
(6,980
)
Return on average equity
19.69
%
 
21.74
%
 
27.40
%
 
n/m

Return on average economic capital 2
40.48
%
 
40.28
%
 
55.08
%
 
23.62
%
Average loans
$
121,124

 
$
136,738

 
$
126,084

 
$
145,081

 
 
 
 
 
At December 31, 2011
 
At December 31, 2010
Period-end loans
 
 
 
 
$
120,669

 
$
137,024

1 Includes a goodwill impairment charge of $10.4 billion in the third quarter of 2010.
2 Return on average economic capital is a non-GAAP financial measure. For reconciliation to GAAP financial measures, refer to pages 25-27 of this press release.
n/m = not meaningful

Business Highlights
 
•
New U.S. credit card accounts grew 53 percent in the fourth quarter of 2011 as compared to the year-ago quarter.

•
Credit quality continued to improve with the 30+ day delinquency rate declining for the 11th consecutive quarter.

•
Return on average equity remained strong at 19.69 percent in the fourth quarter of 2011.
 
Financial Overview
 
Card Services reported net income of $1.0 billion, compared to $1.3 billion in the year-ago quarter. The decrease in net income is due to lower revenue, partially offset by lower credit costs.
 
Revenue declined 24 percent to $4.1 billion from the year-ago quarter, driven by a decrease in net interest income of $647 million from lower average loans and yields. Also contributing to the decline in revenue was lower noninterest income due to the implementation of new interchange fee rules in the fourth quarter of 2011 as a result of the Durbin Amendment, which reduced revenue by $430 million. Average loans declined $15.6 billion from the year-ago quarter due to higher payment volumes, charge-offs, continued non-core portfolio runoff and divestitures.
 
Provision for credit losses decreased $708 million from the year-ago quarter to $1.1 billion, reflecting improving delinquencies and collections, and fewer bankruptcies as a result of improving economic conditions and lower loan balances.


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Global Wealth and Investment Management

 
Three Months Ended
 
Year Ended
(Dollars in millions)
December 31
2011
 
December 31
2010
 
December 31
2011
 
December 31
2010
Total revenue, net of interest expense, FTE basis
$
4,164

 
$
4,161

 
$
17,376

 
$
16,289

Provision for credit losses
118

 
155

 
398

 
646

Noninterest expense
3,649

 
3,489

 
14,395

 
13,227

Net income
$
249

 
$
319

 
$
1,635

 
$
1,340

Return on average equity
5.54
%
 
6.94
%
 
9.19
%
 
7.42
%
Return on average economic capital1
14.13
%
 
17.97
%
 
23.44
%
 
19.57
%
Average loans
$
102,708

 
$
100,306

 
$
102,143

 
$
99,269

Average deposits
249,814

 
246,281

 
254,777

 
232,318

(in billions)
 
 
 
 
At December 31, 2011
 
At December 31, 2010
Assets under management
 
 
 
 
$
647.1

 
$
643.3

Total client balances 2
 
 
 
 
2,135.8

 
2,181.3

1 Return on average economic capital is a non-GAAP financial measure. For reconciliation to GAAP financial measures, refer to pages 25-27 of this press release.
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 increased 4 percent from the year-ago quarter to $1.5 billion, driven by strong long-term assets under management flows of $27 billion in 2011, compared to $14 billion in 2010.
 
•
Full-year average deposit balances increased 10 percent from 2010 to $254.8 billion, and full-year average loan balances grew 3 percent to $102.1 billion.
 
Financial Overview
 
Global Wealth and Investment Management net income decreased 22 percent from the year-ago quarter. Revenue was flat compared to the year-ago quarter at $4.2 billion as higher net interest income and asset management fees were offset by lower transactional activity.
 
The provision for credit losses decreased $37 million from the year-ago quarter, reflecting fewer delinquencies and improving portfolio trends within the consumer real estate portfolios, partially offset by increased reserves in the commercial portfolio.
 
Noninterest expense increased 5 percent from the year-ago quarter to $3.6 billion, due primarily to higher personnel costs associated with the continued build-out of the business, and certain expenses in the fourth quarter of 2011, including elevated FDIC expense, litigation and other related losses and severance costs. These were partially offset by lower revenue-related compensation.


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Consumer Real Estate Services

 
Three Months Ended
 
Year Ended
(Dollars in millions)
December 31
2011
 
December 31
2010
 
December 31
2011
 
December 31
2010
Total revenue, net of interest expense, FTE basis
$
3,276

 
$
480

 
$
(3,154
)
 
$
10,329

Provision for credit losses
1,001

 
1,198

 
4,524

 
8,490

Noninterest expense1
4,596

 
5,980

 
21,893

 
14,886

Net loss
$
(1,459
)
 
$
(4,937
)
 
$
(19,529
)
 
$
(8,947
)
Average loans
116,993

 
124,933

 
119,820

 
129,234

 
 
 
 
 
At December 31, 2011
 
At December 31, 2010
Period-end loans
 
 
 
 
$
112,359

 
$
122,933

1 Includes goodwill impairment charges of $2.6 billion in the second quarter of 2011 and $2.0 billion in the fourth quarter of 2010.

Business Highlights
 
•
The company funded $22.4 billion in residential home loans and home equity loans during the fourth quarter of 2011.
 
•
The company continued to make progress on legacy issues. The mortgage servicing portfolio declined to $1.8 trillion at the end of 2011 from $1.9 trillion at the end of the third quarter of 2011 and $2.1 trillion at the end of fourth quarter of 2010. The number of 60+ day delinquent first mortgage loans serviced by Legacy Asset Servicing declined to 1.1 million at the end of the fourth quarter of 2011 from 1.2 million at the end of the third quarter of 2011 and 1.4 million at the end of the fourth quarter of 2010.
 
Financial Overview
 
Consumer Real Estate Services reported a net loss of $1.5 billion for the fourth quarter of 2011, compared to a net loss of $4.9 billion for the same period in 2010. Revenue increased from $480 million in the fourth quarter of 2010 to $3.3 billion.
 
The increase in revenue was primarily driven by a $3.9 billion decrease in representations and warranties provision and a $908 million increase in MSR results, net of hedge, partially offset by a $1.1 billion decline in core production income and lower insurance income due to the sale of Balboa Insurance during the second quarter of 2011. The decrease in core production income was due to a 74 percent decline in new loan originations caused primarily by the exit from the correspondent lending channel and a decrease in retail market share.
 
Representations and warranties provision was $263 million in the fourth quarter of 2011, compared to $4.1 billion in the fourth quarter of 2010 which included the impact of the settlement agreements with the GSEs.
 
Provision for credit losses in the fourth quarter of 2011 decreased $197 million from the year-ago quarter to $1.0 billion, reflecting improving delinquencies.

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Noninterest expense, excluding a goodwill impairment charge of $2.0 billion in the fourth quarter of 2010, increased 15 percent to $4.6 billion. The increase reflected higher litigation expense of $1.5 billion in the fourth quarter of 2011, compared to $632 million in the same period in 2010, as well as higher default-related and other loss mitigation expenses. This was partially offset by lower production and insurance expenses and lower mortgage-related assessments and waivers costs associated with foreclosure delays.

Global Commercial Banking
 
Three Months Ended
 
Year Ended
(Dollars in millions)
December 31
2011
 
December 31
2010
 
December 31
2011
 
December 31
2010
Total revenue, net of interest expense, FTE basis
$
2,556

 
$
2,614

 
$
10,553

 
$
11,226

Provision for credit losses
(146
)
 
(136
)
 
(634
)
 
1,979

Noninterest expense
1,039

 
1,061

 
4,234

 
4,130

Net income
$
1,048

 
$
1,053

 
$
4,402

 
$
3,218

Return on average equity
10.22
%
 
9.72
%
 
10.77
%
 
7.38
%
Return on average economic capital1
20.78
%
 
18.75
%
 
21.83
%
 
14.07
%
Average loans and leases
$
187,905

 
$
195,293

 
$
189,415

 
$
203,824

Average deposits
176,010

 
156,672

 
169,192

 
148,638

1 Return on average economic capital is a non-GAAP financial measure. For reconciliation to GAAP financial measures, refer to pages 25-27 of this press release.

Business Highlights
 
•
Average commercial and industrial loans grew $4 billion, or 4 percent, from the year-ago quarter driven by middle-market clients.

•
Credit quality continued to improve as nonperforming assets declined by $3.1 billion, or 35 percent, and total reservable criticized loans declined by $12.6 billion, or 38 percent, versus the year-ago quarter.
 
Financial Overview
 
Global Commercial Banking reported net income of $1.0 billion, flat from the year-ago quarter, reflecting a reduction in revenue, partially offset by lower credit costs from improved asset quality. Revenue was $2.6 billion, down 2 percent from the year-ago quarter, primarily due to lower loan balances. Noninterest expense was $1.0 billion, down 2 percent from the year-ago quarter as the business tightly managed costs.
 
The provision for credit losses was relatively flat compared to the year-ago quarter with a benefit of $146 million.

Average deposit balances continued to grow, increasing by $19.3 billion from the year-ago quarter, as clients continued to maintain higher levels of liquidity. Average commercial and industrial loan balances continued to show modest growth, increasing 4 percent from a year ago. However, total average loans and leases decreased $7.4 billion primarily due to reductions in the reservable criticized loans in the commercial real estate banking portfolio.

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Global Banking and Markets

 
Three Months Ended
 
Year Ended
(Dollars in millions)
December 31
2011
 
December 31
2010
 
December 31
2011
 
December 31
2010
Total revenue, net of interest expense, FTE basis
$
3,722

 
$
5,364

 
$
23,618

 
$
27,949

Provision for credit losses
(27
)
 
(112
)
 
(296
)
 
(166
)
Noninterest expense
4,287

 
4,321

 
18,179

 
17,535

Net income (loss)
$
(433
)
 
$
669

 
$
2,967

 
$
6,297

Return on average equity
n/m

 
5.65
%
 
7.97
%
 
12.58
%
Return on average economic capital1
n/m

 
7.28
%
 
11.22
%
 
15.82
%
Total average assets
$
694,727

 
$
733,732

 
$
725,177

 
$
753,844

Total average deposits
115,267

 
104,655

 
116,088

 
97,858

1 Return on average economic capital is a non-GAAP financial measure. For reconciliation to GAAP financial measures, refer to pages 25-27 of this press release.
n/m = not meaningful

Business Highlights

•
Average loan and lease balances and average deposit balances increased 30 percent and 10 percent versus the year-ago quarter, primarily driven by strong growth across all regions.

•
Bank of America Merrill Lynch maintained its No. 2 global ranking in net investment banking fees and increased its market share in 2011 to 7.4 percent from 6.8 percent in 2010, excluding self-led deals, as reported by Dealogic. Also, Bank of America Merrill Lynch was named "Top Global Research Firm of 2011" by Institutional Investor.

Financial Overview

Global Banking and Markets reported a net loss of $433 million, compared to net income of $669 million in the year-ago quarter. Revenue declined 31 percent to $3.7 billion, primarily driven by lower sales and trading revenue and investment banking fees.
 
Noninterest expense of $4.3 billion was relatively flat compared to the year-ago quarter.
 
Provision for credit losses increased by $85 million from the year-ago quarter to a lower benefit of $27 million. This was due to reduced reserves and the impact from loan growth in the current period.

Sales and trading revenue was $1.4 billion in the fourth quarter of 2011, a decrease of 44 percent from the prior-year quarter. The current quarter includes DVA losses of $474 million as the company's credit spreads tightened at the end of this year, compared to gains of $1.7 billion in the third quarter of 2011 and gains of $31 million in the year-ago period. Excluding the impact of DVA, sales and trading revenue was $1.9 billion in the fourth quarter of 2011, compared to $1.1 billion in the third quarter of 2011 and $2.4 billion in the fourth quarter of 2010.

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Fixed Income, Currency and Commodities sales and trading revenue, excluding DVA losses, was $1.2 billion, a decrease of $416 million compared to the prior-year quarter due to a challenging trading environment as markets remain volatile reflecting ongoing concerns over the Eurozone sovereign debt crisis, economic activity, and political uncertainty. Equities sales and trading revenue was $660 million, a decrease of $127 million from the year-ago quarter, primarily driven by lower volumes and commission related revenue.
 
Firmwide investment banking fees, including self-led deals, declined to $1.1 billion from $1.7 billion in the fourth quarter of 2010, mainly due to challenging market conditions during the second half of 2011 following the U.S. debt downgrade and Eurozone crisis. Twenty-three percent of investment banking fees were originated outside of the Americas, compared to 18 percent for the same period last year. Total investment banking fees, excluding self-led deals, were down 36 percent from the year-ago quarter.

Corporate Bank revenues of $1.3 billion continued to remain strong as average loans and leases increased 29 percent from the year-ago quarter to $107.5 billion with growth in both domestic and international commercial loans and international trade finance. Average deposits within the Corporate Bank increased 10 percent from the fourth quarter of 2010 to $107.1 billion as balances continued to grow from excess market liquidity and limited alternative investment options.

All Other 1 

 
Three Months Ended
 
Year Ended
(Dollars in millions)
December 31
2011
 
December 31
2010
 
December 31
2011
 
December 31
2010
Total revenue, net of interest expense, FTE basis
$
4,288

 
$
1,689

 
$
15,201

 
$
9,695

Provision for credit losses
793

 
2,137

 
6,173

 
6,323

Noninterest expense 
1,760

 
1,280

 
4,916

 
5,777

Net income
$
1,423

 
$
563

 
$
4,991

 
$
1,472

Total average loans
272,807

 
282,125

 
283,890

 
281,642

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 net income of $1.4 billion in the fourth quarter of 2011, compared to net income of $563 million for the same period a year ago, due to higher revenue and lower provision for credit losses, partially offset by higher noninterest expense. Revenue increased $2.6 billion due primarily to higher equity investment income, a gain of $1.2 billion in connection with the exchange of trust preferred securities for common stock and senior debt and $814 million of negative fair value adjustments on structured liabilities compared to negative fair value adjustments of $1.2 billion in the year-ago quarter.


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Page 14

Equity investment income was $1.6 billion higher as the current quarter included the gain on the sale of a majority of the company's investment in China Construction Bank (CCB). The increase in noninterest expense was primarily related to a goodwill impairment charge of $581 million during the fourth quarter of 2011 as a result of a change in the estimated value of the European consumer card businesses.

Provision for credit losses decreased $1.3 billion to $793 million, driven primarily by lower reserve additions to the Countrywide purchased credit-impaired discontinued real estate and residential mortgage portfolios, recoveries on the sale of previously charged-off U.K. credit card loans and improvement in portfolio trends in residential mortgage.

Corporate Overview

Revenue and Expense

 
Three Months Ended
 
Year Ended
(Dollars in millions)
December 31
2011
 
December 31
2010
 
December 31
2011
 
December 31
2010
Net interest income, FTE basis1
$
10,959

 
$
12,709

 
$
45,588

 
$
52,693

Noninterest income
14,187

 
9,959

 
48,838

 
58,697

Total revenue, net of interest expense, FTE basis
$
25,146

 
$
22,668

 
$
94,426

 
$
111,390

Noninterest expense2
$
18,941

 
$
18,864

 
$
77,090

 
$
70,708

Goodwill impairment charges
581

 
2,000

 
3,184

 
12,400

Net income (loss)
$
1,991

 
$
(1,244
)
 
$
1,446

 
$
(2,238
)
1 Fully taxable-equivalent (FTE) basis is a non-GAAP financial measure. For reconciliation to GAAP financial measures, refer to pages 25-27 of this press release. Net interest income on a GAAP basis was $10.7 billion and $12.4 billion for the three months ended December 31, 2011 and 2010 and $44.6 billion and $51.5 billion for the years ended December 31, 2011 and 2010. Total revenue, net of interest expense on a GAAP basis was $24.9 billion and $22.4 billion for the three months ended December 31, 2011 and 2010, and $93.5 billion and $110.2 billion for the years ended December 31, 2011 and 2010.
2 Excludes goodwill impairment charges of $581 million and $2.0 billion in the fourth quarters of 2011 and 2010, and $3.2 billion and $12.4 billion for the years ended December 31, 2011 and 2010, respectively. Noninterest expense, excluding goodwill impairment charges, is a non-GAAP financial measure.

Revenue, net of interest expense, on a fully taxable-equivalent (FTE) basis rose 11 percent from the fourth quarter of 2010, reflecting higher noninterest income partially offset by lower net interest income.

Net interest income on an FTE basis decreased 14 percent from the year-ago quarter. The net interest yield fell 24 basis points from the year-ago quarter, driven by lower investment security yields along with reductions in consumer loan balances and yields.


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Page 15

Noninterest income increased $4.2 billion from the year-ago quarter largely due to higher mortgage banking income, equity investment income and other income, partially offset by lower trading account profits and card income. Mortgage banking income increased due to significantly lower representations and warranties provision as compared to the year-ago quarter. Equity investment income was higher as the current quarter included the $2.9 billion gain on sale of a majority of the company's investment in CCB and the increase in other income was primarily related to a $1.2 billion gain recorded during the current quarter from the exchange of trust preferred securities for common stock and senior debt. Trading account profits declined due to a challenging trading environment, and card income was lower due to the impact of implementation of the Durbin Amendment in the fourth quarter of 2011 compared to the fourth quarter of 2010.

Noninterest expense decreased $1.3 billion, or 6 percent from the year-ago quarter, to $19.5 billion primarily due to a goodwill impairment charge of $581 million, compared to $2.0 billion in the year-ago quarter, partially offset by elevated FDIC expense and higher litigation expense in the fourth quarter of 2011. Excluding the goodwill impairment charges, noninterest expense was relatively flat compared to the year-ago quarter.

The tax provision for the fourth quarter of 2011 was $441 million, resulting in an 18.13 percent effective tax rate. The effective tax rate during the quarter included tax benefits from net reductions in a deferred tax asset valuation allowance and tax reserves. Partially offsetting these benefits was the impact of the non-deductible goodwill impairment charge.
 

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Page 16

Credit Quality

 
Three Months Ended
 
Year Ended
(Dollars in millions)
December 31
2011
 
December 31
2010
 
December 31
2011
 
December 31
2010
Provision for credit losses
$
2,934

 
$
5,129

 
$
13,410

 
$
28,435

Net charge-offs
4,054

 
6,783

 
20,833

 
34,334

Net charge-off ratio1
1.74
%
 
2.87
%
 
2.24
%
 
3.60
%
 
 
 
 
 
At December 31, 2011
 
At December 31, 2010
Nonperforming loans, leases and foreclosed properties
 
 
 
 
$
27,708

 
$
32,664

Nonperforming loans, leases and foreclosed properties ratio2
 
 
 
 
3.01
%
 
3.48
%
Allowance for loan and lease losses
 
 
 
 
$
33,783

 
$
41,885

Allowance for loan and lease losses ratio3
 
 
 
 
3.68
%
 
4.47
%
1 Net charge-off/loss ratios are calculated as net charge-offs divided by average outstanding loans and leases during the period; quarterly results are annualized.
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 continued to improve in the fourth quarter, with net charge-offs declining across all major portfolios, compared to the fourth quarter of 2010. Provision for credit losses decreased significantly from a year ago. Additionally, 30+ day performing delinquent loans, excluding Federal Housing Administration-insured loans and long-term standby agreements, declined across all major portfolios, and reservable criticized balances also continued to decline, down 36 percent from the year-ago period.

Net charge-offs declined to $4.1 billion in the fourth quarter of 2011 from $5.1 billion in the third quarter of 2011 and $6.8 billion in the fourth quarter of 2010, reflecting improvement in all major consumer and commercial portfolios. The decrease was primarily driven by fewer delinquent loans, improved collection rates and lower bankruptcy filings across the Card Services loan portfolio, as well as lower net charge-offs in the home equity portfolio, driven by fewer delinquent loans, and recoveries from the sale of previously charged-off U.K. credit card loans.

The provision for credit losses declined to $2.9 billion in the fourth quarter of 2011 from $3.4 billion in the third quarter of 2011 and $5.1 billion in the fourth quarter of 2010. Results for the fourth quarter of 2011 included reserve reductions of $1.1 billion driven primarily by projected improvement in delinquencies, collections and bankruptcies across the Card Services portfolios and by improvement in economic conditions impacting the core commercial portfolio, as evidenced by continued declines in reservable criticized and nonperforming balances.


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Page 17

The allowance for loan and lease losses to annualized net charge-off coverage ratio increased in the fourth quarter of 2011 to 2.10 times, compared with 1.74 times in the third quarter of 2011 and 1.56 times in the fourth quarter of 2010. Excluding purchased credit-impaired loans, the allowance to annualized net charge-off coverage ratio was 1.57 times, 1.33 times and 1.32 times for the same periods, respectively.
Nonperforming loans, leases and foreclosed properties were $27.7 billion at December 31, 2011, down from $29.1 billion at September 30, 2011, and $32.7 billion at December 31, 2010.

Capital and Liquidity Management

(Dollars in millions, except per share information)
At December 31 2011
 
At September 30 2011
 
At December 31 2010
Total shareholders’ equity
$
230,101

 
$
230,252

 
$
228,248

Tier 1 common equity
126,690

 
117,658

 
125,139

Tier 1 common equity ratio
9.86
%
 
8.65
%
 
8.60
%
Tangible common equity ratio1
6.64

 
6.25

 
5.99

Common equity ratio
9.94

 
9.50

 
9.35

Tangible book value per share1
$
12.95

 
$
13.22

 
$
12.98

Book value per share
20.09

 
20.80

 
20.99

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 25-27 of this press release.

Regulatory capital ratios increased significantly during the fourth quarter, compared to the prior quarter and the fourth quarter of 2010, with the Tier 1 common equity ratio at 9.86 percent, and the Tangible common equity ratio at 6.64 percent. This compares with a Tier 1 common equity ratio of 8.65 percent at September 30, 2011 and 8.60 percent at December 31, 2010, and a Tangible common equity ratio of 6.25 percent at September 30, 2011 and 5.99 percent at December 31, 2010.

Significant capital actions taken during the quarter that contributed to these increases were the exchange of preferred and trust preferred securities for 400 million shares of common stock and $2.3 billion of senior debt, the sale of CCB shares and the sale of the Canadian consumer card business. Capital planning for 2012 includes the consideration of issuing approximately $1 billion of immediately tradable shares of common stock to certain employees in February 2012 in lieu of a portion of their 2011 year-end cash incentive.

The company's total Global Excess Liquidity Sources increased approximately $42 billion from the end of the fourth quarter of 2010 to $378 billion at December 31, 2011. Time-to-required funding increased to 29 months at the end of 2011 from 27 months at September 30, 2011 and 24 months at December 31, 2010.

During the fourth quarter of 2011, a cash dividend of $0.01 per common share was paid and the company recorded $407 million in preferred dividends. Period-end common shares issued and outstanding were 10.54 billion and 10.09 billion for the fourth quarter of 2011 and 2010, reflecting the issuance of 400 million common shares in the exchanges of preferred and trust preferred securities for common stock and senior debt.


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Page 18

Note: Chief Executive Officer Brian Moynihan and Chief Financial Officer Bruce Thompson will discuss fourth-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 1.877.200.4456 (U.S.) or 1.785.424.1733 (international) and the conference ID: 79795.

Bank of America

Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 57 million consumer and small business relationships with approximately 5,700 retail banking offices and approximately 17,750 ATMs and award-winning online banking with 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to 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 America's current expectations, plans or forecasts of its future results and revenues, the company's continued reduction in the size of its mortgage servicing portfolio; the implementation and completion of, and expected impact from, Project New BAC, including estimated expense reductions and the expected continuation of Phase 2 into early 2012 to cover the balance of businesses and operations not evaluated in Phase 1; projected improvement in delinquencies; that Bank of America's focus in 2012 is to continue to build capital and liquidity and to manage expenses; the consideration of issuing approximately $1 billion of immediately tradable shares of common stock to certain employees in February 2012 in lieu of a portion of their 2011 year-end cash incentive; Bank of America's focus on retail distribution for mortgage products and services following the exit of the Home Loans correspondent mortgage lending channel; the substantial completion of the non-core asset sales; the actions taken to position the company for long-term growth; and other similar matters. These statements are not guarantees of future results or performance and involve certain risks, uncertainties and assumptions that are difficult to predict and are often beyond Bank of America's control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements.
 

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Page 19

You should not place undue reliance on any forward-looking statement and should consider all of the following uncertainties and risks, as well as those more fully discussed under Item 1A. “Risk Factors” of Bank of America's 2010 Annual Report on Form 10-K and Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2011, and in any of Bank of America's subsequent SEC filings: the company's ability to implement, manage and realize the anticipated benefits and expense savings from Project New BAC; the company's timing and determinations regarding any potential revised comprehensive capital plan submission and the Federal Reserve Board's response; the impact and ultimate resolution of the private-label securitization settlement (the settlement) with The Bank of New York Mellon (BNY Mellon) and of any additional claims not addressed by the BNY Mellon settlement or other prior settlement agreements; the company's ability to resolve any representations and warranties claims from GSEs, monolines and private investors; increased repurchase claims and repurchases due to mortgage insurance cancellations, rescissions and denials; the company's failure to satisfy its obligations as servicer in the residential mortgage securitization process; the foreclosure review and assessment process, the effectiveness of the company's response to such process and any governmental or private third-party claims asserted in connection with these foreclosure matters; the ability to achieve resolution in negotiations with law enforcement authorities and federal agencies, including the U.S. Department of Justice and the U.S. Department of Housing and Urban Development, involving mortgage servicing practices, including the timing and any settlement terms; the company's 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 risk of any additional credit ratings downgrades of the U.S. government; the company's credit ratings and the credit ratings of its securitizations, including the risk that the company or its securities will be the subject of additional or further credit ratings downgrades; the impact resulting from international and domestic sovereign credit uncertainties, including the current challenges facing European economies; 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; legislative and regulatory actions in the U.S. and internationally, including the identification and effectiveness of any initiatives to mitigate the negative impacts; the impact of litigation and regulatory investigations, including costs, expenses, settlements and judgments as well as any collateral effects on its ability to do business and access the capital markets; negative economic 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; various monetary, tax and fiscal policies of the U.S. and non-U.S. governments.

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. 


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Page 20

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 Corporation's 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.

For more Bank of America news, visit the Bank of America newsroom at http://mediaroom.bankofamerica.com.


www.bankofamerica.com



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Page 21

Bank of America Corporation and Subsidiaries
 
 
 
 
 
 
Selected Financial Data
 
 
(Dollars in millions, except per share data; shares in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Summary Income Statement
 
Year Ended
December 31
 
Fourth
Quarter
2011
 
Third
Quarter
2011
 
Fourth
Quarter
2010
 
 
2011
 
2010
 
 
 
Net interest income
 
$
44,616

 
$
51,523

 
$
10,701

 
$
10,490

 
$
12,439

Noninterest income
 
48,838

 
58,697

 
14,187

 
17,963

 
9,959

Total revenue, net of interest expense
 
93,454

 
110,220

 
24,888

 
28,453

 
22,398

Provision for credit losses
 
13,410

 
28,435

 
2,934

 
3,407

 
5,129

Goodwill impairment
 
3,184

 
12,400

 
581

 
—

 
2,000

Merger and restructuring charges
 
638

 
1,820

 
101

 
176

 
370

All other noninterest expense (1)
 
76,452

 
68,888

 
18,840

 
17,437

 
18,494

Income (loss) before income taxes
 
(230
)
 
(1,323
)
 
2,432

 
7,433

 
(3,595
)
Income tax expense (benefit)
 
(1,676
)
 
915

 
441

 
1,201

 
(2,351
)
Net income (loss)
 
$
1,446

 
$
(2,238
)
 
$
1,991

 
$
6,232

 
$
(1,244
)
Preferred stock dividends
 
1,361

 
1,357

 
407

 
343

 
321

Net income (loss) applicable to common shareholders
 
$
85

 
$
(3,595
)
 
$
1,584

 
$
5,889

 
$
(1,565
)
 
 
 
 
 
 
 
 
 
 
 
Earnings (loss) per common share
 
$
0.01

 
$
(0.37
)
 
$
0.15

 
$
0.58

 
$
(0.16
)
Diluted earnings (loss) per common share
 
0.01

 
(0.37
)
 
0.15

 
0.56

 
(0.16
)
 
 
 
 
 
 
 
 
 
Summary Average Balance Sheet
 
Year Ended
December 31
 
Fourth
Quarter
2011
 
Third
Quarter
2011
 
Fourth
Quarter
2010
  
 
2011
 
2010
 
 
 
Total loans and leases
 
$
938,096

 
$
958,331

 
$
932,898

 
$
942,032

 
$
940,614

Debt securities
 
337,120

 
323,946

 
332,990

 
344,327

 
341,867

Total earning assets
 
1,834,659

 
1,897,573

 
1,783,986

 
1,841,135

 
1,883,539

Total assets
 
2,296,322

 
2,439,606

 
2,207,567

 
2,301,454

 
2,370,258

Total deposits
 
1,035,802

 
988,586

 
1,032,531

 
1,051,320

 
1,007,738

Common shareholders’ equity
 
211,709

 
212,686

 
209,324

 
204,928

 
218,728

Total shareholders’ equity
 
229,095

 
233,235

 
228,235

 
222,410

 
235,525

 
 
 
 
 
 
 
 
 
Performance Ratios
 
Year Ended
December 31
 
Fourth
Quarter
2011
 
Third
Quarter
2011
 
Fourth
Quarter
2010
  
 
2011
 
2010
 
 
 
Return on average assets
 
0.06
%
 
n/m

 
0.36
%
 
1.07
%
 
n/m

Return on average tangible shareholders’ equity (2)
 
0.96

 
n/m

 
5.20

 
17.03

 
n/m

 
 
 
 
 
 
 
 
 
Credit Quality
 
Year Ended
December 31
 
Fourth
Quarter
2011
 
Third
Quarter
2011
 
Fourth
Quarter
2010
  
 
2011
 
2010
 
 
 
Total net charge-offs
 
$
20,833

 
$
34,334

 
$
4,054

 
$
5,086

 
$
6,783

Net charge-offs as a % of average loans and leases outstanding (3)
 
2.24
%
 
3.60
%
 
1.74
%
 
2.17
%
 
2.87
%
Provision for credit losses
 
$
13,410

 
$
28,435

 
$
2,934

 
$
3,407

 
$
5,129

 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
December 31
2011
 
September 30
2011
 
December 31
2010
  
 
 
 
 
 
Total nonperforming loans, leases and foreclosed properties (4)
 
 
 
 
 
$
27,708

 
$
29,059

 
$
32,664

Nonperforming loans, leases and foreclosed properties as a % of total loans, leases and foreclosed properties (3)
 
 
 
 
 
3.01
%
 
3.15
%
 
3.48
%
Allowance for loan and lease losses
 
 
 
 
 
$
33,783

 
$
35,082

 
$
41,885

Allowance for loan and lease losses as a % of total loans and leases outstanding (3)
 
 
 
 
 
3.68
%
 
3.81
%
 
4.47
%
 
 
 
 
 
 
 
 
 
 
 
For footnotes, see page 22.
 
 
 
 
 
 
 
 
 
 

More
This information is preliminary and based on company data available at the time of the presentation.
Page 22

Bank of America Corporation and Subsidiaries
 
 
Selected Financial Data
 
 
(Dollars in millions, except per share data; shares in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital Management
 
 
 
 
 
December 31
2011
 
September 30
2011
 
December 31
2010
 
 
 
 
 
Risk-based capital (5):
 
 
 
 
 
 
 
 
 
 
Tier 1 common equity(6)
 
 
 
 
 
$
126,690

 
$
117,658

 
$
125,139

Tier 1 common equity ratio (6)
 
 
 
 
 
9.86
%
 
8.65
%
 
8.60
%
Tier 1 leverage ratio
 
 
 
 
 
7.53

 
7.11

 
7.21

Tangible equity ratio (7)
 
 
 
 
 
7.54

 
7.16

 
6.75

Tangible common equity ratio (7)
 
 
 
 
 
6.64

 
6.25

 
5.99

 
 
 
 
 
 
 
 
 
 
 
Period-end common shares issued and outstanding
 
 
 
 
 
10,535,938

 
10,134,432

 
10,085,155

 
 
 
 
 
 
 
 
 
 
 
  
 
Year Ended
December 31
 
Fourth
Quarter
2011
 
Third
Quarter
2011
 
Fourth
Quarter
2010
  
 
2011
 
2010
 
 
 
Common shares issued (8)
 
450,783

 
1,434,911

 
401,506

 
1,242

 
51,450

Average common shares issued and outstanding
 
10,142,625

 
9,790,472

 
10,281,397

 
10,116,284

 
10,036,575

Average diluted common shares issued and outstanding
 
10,254,824

 
9,790,472

 
11,124,523

 
10,464,395

 
10,036,575

Dividends paid per common share
 
$
0.04

 
$
0.04

 
$
0.01

 
$
0.01

 
$
0.01

 
 
 
 
 
 
 
 
 
 
 
Summary Period-End Balance Sheet
 
 
 
 
 
December 31
2011
 
September 30
2011
 
December 31
2010
 
 
 
 
 
Total loans and leases
 
 
 
 
 
$
926,200

 
$
932,531

 
$
940,440

Total debt securities
 
 
 
 
 
311,416

 
350,725

 
338,054

Total earning assets
 
 
 
 
 
1,704,855

 
1,797,600

 
1,819,659

Total assets
 
 
 
 
 
2,129,046

 
2,219,628

 
2,264,909

Total deposits
 
 
 
 
 
1,033,041

 
1,041,353

 
1,010,430

Total shareholders’ equity
 
 
 
 
 
230,101

 
230,252

 
228,248

Common shareholders’ equity
 
 
 
 
 
211,704

 
210,772

 
211,686

Book value per share of common stock
 
 
 
 
 
$
20.09

 
$
20.80

 
$
20.99

Tangible book value per share of common stock (2)
 
 
 
 
 
12.95

 
13.22

 
12.98

 
 
 
 
 
 
 
 
 
 
 
(1) 
Excludes merger and restructuring charges and goodwill impairment charges.
(2) 
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. See Reconciliations to GAAP Financial Measures on pages 25-27.
(3) 
Ratios do not include loans accounted for under the fair value option during the period. Charge-off ratios are annualized for the quarterly presentation.
(4) 
Balances do not include past due consumer credit card, consumer loans secured by real estate where repayments are insured by the Federal Housing Administration and individually insured long-term stand-by agreements (fully-insured home loans), and in general, other consumer and commercial 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.
(5) 
Reflects preliminary data for current period risk-based capital.
(6) 
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.
(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. See Reconciliations to GAAP Financial Measures on pages 25-27.
(8) 
Includes 400 million of common shares issued as part of the exchange of trust preferred securities and preferred stock during the fourth quarter of 2011.

n/m = not meaningful

Certain prior period amounts have been reclassified to conform to current period presentation.



More
This information is preliminary and based on company data available at the time of the presentation.
Page 23

Bank of America Corporation and Subsidiaries
Quarterly Results by Business Segment
(Dollars in millions)
 
 
Fourth Quarter 2011
 
 
Deposits    
 
Card
Services (1)
 
Consumer
Real Estate
Services
 
Global
Commercial
Banking
 
Global
  Banking &  
Markets
 
GWIM    
 
All
    Other (1)   
Total revenue, net of interest expense (2)
 
$
3,080

 
$
4,060

 
$
3,276

 
$
2,556

 
$
3,722

 
$
4,164

 
$
4,288

Provision for credit losses
 
57

 
1,138

 
1,001

 
(146
)
 
(27
)
 
118

 
793

Noninterest expense
 
2,798

 
1,393

 
4,596

 
1,039

 
4,287

 
3,649

 
1,760

Net income (loss)
 
141

 
1,022

 
(1,459
)
 
1,048

 
(433
)
 
249

 
1,423

Return on average equity
 
2.34
%
 
19.69
%
 
n/m

 
10.22
%
 
n/m

 
5.54
%
 
n/m

Return on average economic capital (3)
 
9.51

 
40.48

 
n/m

 
20.78

 
n/m

 
14.13

 
n/m

Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans and leases
 
n/m

 
$
121,124

 
$
116,993

 
$
187,905

 
$
130,640

 
$
102,708

 
$
272,807

Total deposits
 
$
417,110

 
n/m

 
n/m

 
176,010

 
115,267

 
249,814

 
46,057

Allocated equity
 
23,862

 
20,610

 
14,757

 
40,718

 
33,707

 
17,860

 
76,721

Economic capital (3)
 
5,923

 
10,061

 
14,757

 
20,026

 
22,749

 
7,196

 
n/m

Period end
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans and leases
 
n/m

 
$
120,669

 
$
112,359

 
$
188,262

 
$
133,126

 
$
103,459

 
$
267,621

Total deposits
 
$
421,871

 
n/m

 
n/m

 
176,941

 
122,296

 
253,029

 
32,870

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Third Quarter 2011
 
 
Deposits
 
Card
Services (1)
 
Consumer
Real Estate
Services
 
Global
Commercial
Banking
 
Global
Banking &
Markets
 
GWIM
 
All
Other (1)
Total revenue, net of interest expense (2)
 
$
3,119

 
$
4,505

 
$
2,822

 
$
2,533

 
$
5,222

 
$
4,230

 
$
6,271

Provision for credit losses
 
52

 
1,037

 
918

 
(150
)
 
15

 
162

 
1,373

Noninterest expense
 
2,627

 
1,457

 
3,852

 
1,018

 
4,480

 
3,516

 
663

Net income (loss)
 
276

 
1,263

 
(1,137
)
 
1,050

 
(302
)
 
347

 
4,735

Return on average equity
 
4.61
%
 
24.13
%
 
n/m

 
10.22
%
 
n/m

 
7.72
%
 
n/m

Return on average economic capital (3)
 
18.78

 
49.31

 
n/m

 
20.78

 
n/m

 
19.66

 
n/m

Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans and leases
 
n/m

 
$
123,547

 
$
120,079

 
$
188,037

 
$
120,143

 
$
102,785

 
$
286,753

Total deposits
 
$
422,331

 
n/m

 
n/m

 
173,837

 
121,389

 
255,658

 
52,855

Allocated equity
 
23,820

 
20,755

 
14,240

 
40,726

 
36,372

 
17,839

 
68,658

Economic capital (3)
 
5,873

 
10,194

 
14,240

 
20,037

 
25,589

 
7,148

 
n/m

Period end
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans and leases
 
n/m

 
$
122,223

 
$
119,823

 
$
188,650

 
$
124,527

 
$
102,361

 
$
274,269

Total deposits
 
$
424,267

 
n/m

 
n/m

 
171,297

 
115,724

 
251,027

 
52,947

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fourth Quarter 2010
 
 
Deposits
 
Card
Services (1)
 
Consumer
Real Estate
Services
 
Global
Commercial
Banking
 
Global
Banking &
Markets
 
GWIM
 
All
Other (1)
Total revenue, net of interest expense (2)
 
$
3,003

 
$
5,357

 
$
480

 
$
2,614

 
$
5,364

 
$
4,161

 
$
1,689

Provision for credit losses
 
41

 
1,846

 
1,198

 
(136
)
 
(112
)
 
155

 
2,137

Noninterest expense
 
3,270

 
1,463

 
5,980

 
1,061

 
4,321

 
3,489

 
1,280

Net income (loss)
 
(200
)
 
1,289

 
(4,937
)
 
1,053

 
669

 
319

 
563

Return on average equity
 
n/m

 
21.74
%
 
n/m

 
9.72
%
 
5.65
%
 
6.94
%
 
n/m

Return on average economic capital (3)
 
n/m

 
40.28

 
n/m

 
18.75

 
7.28

 
17.97

 
n/m

Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans and leases
 
n/m

 
$
136,738

 
$
124,933

 
$
195,293

 
$
100,606

 
$
100,306

 
$
282,125

Total deposits
 
$
413,150

 
n/m

 
n/m

 
156,672

 
104,655

 
246,281

 
55,301

Allocated equity
 
24,128

 
23,518

 
24,310

 
42,997

 
46,935

 
18,227

 
55,410

Economic capital (3)
 
6,161

 
12,846

 
19,511

 
22,294

 
36,695

 
7,475

 
n/m

Period end
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans and leases
 
n/m

 
$
137,024

 
$
122,933

 
$
194,038

 
$
99,964

 
$
100,724

 
$
285,087

Total deposits
 
$
415,189

 
n/m

 
n/m

 
161,279

 
109,691

 
257,982

 
40,142

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) 
During the third quarter of 2011, as a result of the decision to exit the international consumer card business, the Global Card Services business segment was renamed to Card Services. The international consumer card business results have been moved to All Other and prior periods have been reclassified.
(2) 
Fully taxable-equivalent basis. 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.
(3) 
Return on average economic capital is calculated as net income adjusted for cost of funds and earnings credits and certain expenses related to intangibles, divided by average economic capital. Economic capital represents allocated equity less goodwill and a percentage of intangible assets (excluding mortgage servicing rights). Economic capital and return on average economic capital are non-GAAP financial measures. We believe 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 Reconciliations to GAAP Financial Measures on pages 25-27.

n/m = not meaningful

Certain prior period amounts have been reclassified among the segments to conform to current period presentation.

More
This information is preliminary and based on company data available at the time of the presentation.
Page 24

Bank of America Corporation and Subsidiaries
Year-to-Date Results by Business Segment
(Dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2011
 
 
Deposits
 
Card
Services (1)
 
Consumer
Real Estate
Services
 
Global
Commercial
Banking
 
Global
Banking &
Markets
 
GWIM
 
All
Other (1)
Total revenue, net of interest expense (2)
 
$
12,689

 
$
18,143

 
$
(3,154
)
 
$
10,553

 
$
23,618

 
$
17,376

 
$
15,201

Provision for credit losses
 
173

 
3,072

 
4,524

 
(634
)
 
(296
)
 
398

 
6,173

Noninterest expense
 
10,633

 
6,024

 
21,893

 
4,234

 
18,179

 
14,395

 
4,916

Net income (loss)
 
1,192

 
5,788

 
(19,529
)
 
4,402

 
2,967

 
1,635

 
4,991

Return on average equity
 
5.02
%
 
27.40
%
 
n/m

 
10.77
%
 
7.97
%
 
9.19
%
 
n/m

Return on average economic capital (3)
 
20.66

 
55.08

 
n/m

 
21.83

 
11.22

 
23.44

 
n/m

Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans and leases
 
n/m

 
$
126,084

 
$
119,820

 
$
189,415

 
$
116,075

 
$
102,143

 
$
283,890

Total deposits
 
$
421,106

 
n/m

 
n/m

 
169,192

 
116,088

 
254,777

 
49,283

Allocated equity
 
23,735

 
21,128

 
16,202

 
40,867

 
37,233

 
17,802

 
72,128

Economic capital (3)
 
5,786

 
10,539

 
14,852

 
20,172

 
26,583

 
7,106

 
n/m

Period end
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans and leases
 
n/m 

 
$
120,669

 
$
112,359

 
$
188,262

 
$
133,126

 
$
103,459

 
$
267,621

Total deposits
 
$
421,871

 
n/m

 
n/m

 
176,941

 
122,296

 
253,029

 
32,870

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended December 31, 2010
 
 
Deposits
 
Card
Services (1)
 
Consumer
Real Estate
Services
 
Global
Commercial
Banking
 
Global
Banking &
Markets
 
GWIM
 
All
Other (1)
Total revenue, net of interest expense (2)
 
$
13,562

 
$
22,340

 
$
10,329

 
$
11,226

 
$
27,949

 
$
16,289

 
$
9,695

Provision for credit losses
 
201

 
10,962

 
8,490

 
1,979

 
(166
)
 
646

 
6,323

Noninterest expense
 
11,196

 
16,357

 
14,886

 
4,130

 
17,535

 
13,227

 
5,777

Net income (loss)
 
1,362

 
(6,980
)
 
(8,947
)
 
3,218

 
6,297

 
1,340

 
1,472

Return on average equity
 
5.62
%
 
n/m

 
n/m

 
7.38
%
 
12.58
%
 
7.42
%
 
n/m

Return on average economic capital (3)
 
21.97

 
23.62

 
n/m

 
14.07

 
15.82

 
19.57

 
n/m

Balance Sheet
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans and leases
 
n/m 

 
$
145,081

 
$
129,234

 
$
203,824

 
$
98,593

 
$
99,269

 
$
281,642

Total deposits
 
$
414,877

 
n/m

 
n/m

 
148,638

 
97,858

 
232,318

 
67,945

Allocated equity
 
24,222

 
32,418

 
26,016

 
43,590

 
50,037

 
18,068

 
38,884

Economic capital (3)
 
6,247

 
14,774

 
21,214

 
22,906

 
39,931

 
7,290

 
n/m

Period end
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans and leases
 
n/m 

 
$
137,024

 
$
122,933

 
$
194,038

 
$
99,964

 
$
100,724

 
$
285,087

Total deposits
 
$
415,189

 
n/m

 
n/m

 
161,279

 
109,691

 
257,982

 
40,142

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1) 
During the third quarter of 2011, as a result of the decision to exit the international consumer card business, the Global Card Services business segment was renamed to Card Services. The international consumer card business results have been moved to All Other and prior periods have been reclassified.
(2) 
Fully taxable-equivalent basis. 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.
(3) 
Return on average economic capital is calculated as net income adjusted for cost of funds and earnings credits and certain expenses related to intangibles, divided by average economic capital. Economic capital represents allocated equity less goodwill and a percentage of intangible assets (excluding mortgage servicing rights). Economic capital and return on average economic capital are non-GAAP financial measures. We believe 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 Reconciliations to GAAP Financial Measures on pages 25-27.

n/m = not meaningful

Certain prior period amounts have been reclassified among the segments to conform to the current period presentation.


More
This information is preliminary and based on company data available at the time of the presentation.
Page 25

Bank of America Corporation and Subsidiaries
Supplemental Financial Data
 
 
 
 
 
 
 
 
 
 
 
(Dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
Fully taxable-equivalent basis data (1)
 
Year Ended
December 31
 
 
Fourth
Quarter
2011
 
Third
Quarter
2011
 
Fourth
Quarter
2010
 
 
2011
 
2010
 
 
Net interest income
 
$
45,588

 
$
52,693

 
 
$
10,959

 
$
10,739

 
$
12,709

Total revenue, net of interest expense
 
94,426

 
111,390

 
 
25,146

 
28,702

 
22,668

Net interest yield (2)
 
2.48
%
 
2.78
%
 
 
2.45
%
 
2.32
%
 
2.69
%
Efficiency ratio
 
85.01

 
74.61

 
 
77.64

 
61.37

 
92.04

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Data
 
 
 
 
 
 
December 31
2011
 
September 30
2011
 
December 31
2010
Number of banking centers - U.S.
 
 
 
 
 
 
5,702

 
5,715

 
5,856

Number of branded ATMs - U.S.
 
 
 
 
 
 
17,756

 
17,752

 
17,926

Full-time equivalent employees
 
 
 
 
 
 
284,635

 
290,509

 
288,471

 
 
 
 
 
 
 
 
 
 
 
 
(1) 
Fully taxable-equivalent basis is a non-GAAP financial 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 Reconciliations to GAAP Financial Measures on pages 25-27.
(2) 
Calculation includes fees earned on overnight deposits placed with the Federal Reserve of $186 million and $368 million for the years ended December 31, 2011 and 2010; $36 million and $38 million for the fourth and third quarters of 2011, and $63 million for the fourth quarter of 2010, respectively.

n/m = not meaningful

Certain prior period amounts have been reclassified to conform to current period presentation.

More
This information is preliminary and based on company data available at the time of the presentation.

Page 26
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. 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 financial measure. Return on average tangible common shareholders’ equity measures the Corporation’s earnings contribution as a percentage of average 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 Corporation’s 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 ending 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 ending 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 Corporation’s 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 addition, the Corporation evaluates its business segment results based on return on average economic capital, a non-GAAP financial measure. Return on average economic capital for the segments is calculated as net income adjusted for cost of funds and earnings credits and certain expenses related to intangibles, divided by average economic capital. Economic capital represents average allocated equity less goodwill and a percentage of intangible assets. It also believes the use of this non-GAAP financial measure provides additional clarity in assessing the segments.
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 $581 million and $2.6 billion recorded in the fourth and second quarters of 2011, and $2.0 billion and $10.4 billion recorded in the fourth and third quarters of 2010. Accordingly, these are non-GAAP financial measures.
See the tables below and on pages 25-26 for reconciliations of these non-GAAP financial measures with financial measures defined by GAAP for the three months ended December 31, 2011, September 30, 2011 and December 31, 2010, and the years ended December 31, 2011 and 2010. 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
2011
 
Third
Quarter
2011
 
Fourth
Quarter
2010
 
 
2011
 
2010
 
 
Reconciliation of net interest income to net interest income on a fully taxable-equivalent basis
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
 
$
44,616

 
$
51,523

 
 
$
10,701

 
$
10,490

 
$
12,439

Fully taxable-equivalent adjustment
 
972

 
1,170

 
 
258

 
249

 
270

Net interest income on a fully taxable-equivalent basis
 
$
45,588

 
$
52,693

 
 
$
10,959

 
$
10,739

 
$
12,709

 
 
 
 
 
 
 
 
 
 
 
 
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
 
$
93,454

 
$
110,220

 
 
$
24,888

 
$
28,453

 
$
22,398

Fully taxable-equivalent adjustment
 
972

 
1,170

 
 
258

 
249

 
270

Total revenue, net of interest expense on a fully taxable-equivalent basis
 
$
94,426

 
$
111,390

 
 
$
25,146

 
$
28,702

 
$
22,668

 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of total noninterest expense to total noninterest expense, excluding goodwill impairment charges
 
 
 
 
 
 
 
 
 
 
 
 
Total noninterest expense
 
$
80,274

 
$
83,108

 
 
$
19,522

 
$
17,613

 
$
20,864

Goodwill impairment charges
 
(3,184
)
 
(12,400
)
 
 
(581
)
 
—

 
(2,000
)
Total noninterest expense, excluding goodwill impairment charges
 
$
77,090

 
$
70,708

 
 
$
18,941

 
$
17,613

 
$
18,864

 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of income tax expense (benefit) to income tax expense (benefit) on a fully taxable-equivalent basis
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense (benefit)
 
$
(1,676
)
 
$
915

 
 
$
441

 
$
1,201

 
$
(2,351
)
Fully taxable-equivalent adjustment
 
972

 
1,170

 
 
258

 
249

 
270

Income tax expense (benefit) on a fully taxable-equivalent basis
 
$
(704
)
 
$
2,085

 
 
$
699

 
$
1,450

 
$
(2,081
)
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of net income (loss) to net income, excluding goodwill impairment charges
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
 
$
1,446

 
$
(2,238
)
 
 
$
1,991

 
$
6,232

 
$
(1,244
)
Goodwill impairment charges
 
3,184

 
12,400

 
 
581

 
—

 
2,000

Net income, excluding goodwill impairment charges
 
$
4,630

 
$
10,162

 
 
$
2,572

 
$
6,232

 
$
756

 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of net income (loss) applicable to common shareholders to net income applicable to common shareholders, excluding goodwill impairment charges
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) applicable to common shareholders
 
$
85

 
$
(3,595
)
 
 
$
1,584

 
$
5,889

 
$
(1,565
)
Goodwill impairment charges
 
3,184

 
12,400

 
 
581

 
—

 
2,000

Net income applicable to common shareholders, excluding goodwill impairment charges
 
$
3,269

 
$
8,805

 
 
$
2,165

 
$
5,889

 
$
435

 
 
 
 
 
 
 
 
 
 
 
 

Certain prior period amounts have been reclassified to conform to current period presentation.

More
This information is preliminary and based on company data available at the time of the presentation.
Page 27

Bank of America Corporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
 
Reconciliations to GAAP Financial Measures - continued
(Dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended
December 31
 
 
Fourth
Quarter
2011
 
Third
Quarter
2011
 
Fourth
Quarter
2010
 
 
2011
 
2010
 
 
Reconciliation of average common shareholders’ equity to average tangible common shareholders’ equity
 
 
 
 
 
 
 
 
 
 
 
 
Common shareholders’ equity
 
$
211,709

 
$
212,686

 
 
$
209,324

 
$
204,928

 
$
218,728

Common Equivalent Securities
 
—

 
2,900

 
 
—

 
—

 
—

Goodwill
 
(72,334
)
 
(82,600
)
 
 
(70,647
)
 
(71,070
)
 
(75,584
)
Intangible assets (excluding mortgage servicing rights)
 
(9,180
)
 
(10,985
)
 
 
(8,566
)
 
(9,005
)
 
(10,211
)
Related deferred tax liabilities
 
2,898

 
3,306

 
 
2,775

 
2,852

 
3,121

Tangible common shareholders’ equity
 
$
133,093

 
$
125,307

 
 
$
132,886

 
$
127,705

 
$
136,054

 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of average shareholders’ equity to average tangible shareholders’ equity
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders’ equity
 
$
229,095

 
$
233,235

 
 
$
228,235

 
$
222,410

 
$
235,525

Goodwill
 
(72,334
)
 
(82,600
)
 
 
(70,647
)
 
(71,070
)
 
(75,584
)
Intangible assets (excluding mortgage servicing rights)
 
(9,180
)
 
(10,985
)
 
 
(8,566
)
 
(9,005
)
 
(10,211
)
Related deferred tax liabilities
 
2,898

 
3,306

 
 
2,775

 
2,852

 
3,121

Tangible shareholders’ equity
 
$
150,479

 
$
142,956

 
 
$
151,797

 
$
145,187

 
$
152,851

 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of period-end common shareholders’ equity to period-end tangible common shareholders’ equity
 
 
 
 
 
 
 
 
 
 
 
 
Common shareholders’ equity
 
$
211,704

 
$
211,686

 
 
$
211,704

 
$
210,772

 
$
211,686

Goodwill
 
(69,967
)
 
(73,861
)
 
 
(69,967
)
 
(70,832
)
 
(73,861
)
Intangible assets (excluding mortgage servicing rights)
 
(8,021
)
 
(9,923
)
 
 
(8,021
)
 
(8,764
)
 
(9,923
)
Related deferred tax liabilities
 
2,702

 
3,036

 
 
2,702

 
2,777

 
3,036

Tangible common shareholders’ equity
 
$
136,418

 
$
130,938

 
 
$
136,418

 
$
133,953

 
$
130,938

 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of period-end shareholders’ equity to period-end tangible shareholders’ equity
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders’ equity
 
$
230,101

 
$
228,248

 
 
$
230,101

 
$
230,252

 
$
228,248

Goodwill
 
(69,967
)
 
(73,861
)
 
 
(69,967
)
 
(70,832
)
 
(73,861
)
Intangible assets (excluding mortgage servicing rights)
 
(8,021
)
 
(9,923
)
 
 
(8,021
)
 
(8,764
)
 
(9,923
)
Related deferred tax liabilities
 
2,702

 
3,036

 
 
2,702

 
2,777

 
3,036

Tangible shareholders’ equity
 
$
154,815

 
$
147,500

 
 
$
154,815

 
$
153,433

 
$
147,500

 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of period-end assets to period-end tangible assets
 
 
 
 
 
 
 
 
 
 
 
 
Assets
 
$
2,129,046

 
$
2,264,909

 
 
$
2,129,046

 
$
2,219,628

 
$
2,264,909

Goodwill
 
(69,967
)
 
(73,861
)
 
 
(69,967
)
 
(70,832
)
 
(73,861
)
Intangible assets (excluding mortgage servicing rights)
 
(8,021
)
 
(9,923
)
 
 
(8,021
)
 
(8,764
)
 
(9,923
)
Related deferred tax liabilities
 
2,702

 
3,036

 
 
2,702

 
2,777

 
3,036

Tangible assets
 
$
2,053,760

 
$
2,184,161

 
 
$
2,053,760

 
$
2,142,809

 
$
2,184,161

 
 
 
 
 
 
 
 
 
 
 
 
Book value per share of common stock
 
 
 
 
 
 
 
 
 
 
 
 
Common shareholders’ equity
 
$
211,704

 
$
211,686

 
 
$
211,704

 
$
210,772

 
$
211,686

Ending common shares issued and outstanding
 
10,535,938

 
10,085,155

 
 
10,535,938

 
10,134,432

 
10,085,155

Book value per share of common stock
 
$
20.09

 
$
20.99

 
 
$
20.09

 
$
20.80

 
$
20.99

 
 
 
 
 
 
 
 
 
 
 
 
Tangible book value per share of common stock
 
 
 
 
 
 
 
 
 
 
 
 
Tangible common shareholders’ equity
 
$
136,418

 
$
130,938

 
 
$
136,418

 
$
133,953

 
$
130,938

Ending common shares issued and outstanding
 
10,535,938

 
10,085,155

 
 
10,535,938

 
10,134,432

 
10,085,155

Tangible book value per share of common stock
 
$
12.95

 
$
12.98

 
 
$
12.95

 
$
13.22

 
$
12.98

 
 
 
 
 
 
 
 
 
 
 
 

Certain prior period amounts have been reclassified to conform to current period presentation.









More
This information is preliminary and based on company data available at the time of the presentation.
Page 28

Bank of America Corporation and Subsidiaries
Reconciliations to GAAP Financial Measures - continued
(Dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
Year Ended
December 31
 
 
Fourth
Quarter
2011
 
Third
Quarter
2011
 
Fourth
Quarter
2010
 
2011
 
2010
 
 
Reconciliation of return on average economic capital
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported net income (loss)
$
1,192

 
$
1,362

 
 
$
141

 
$
276

 
$
(200
)
Adjustment related to intangibles (1)
3

 
10

 
 
2

 
1

 
2

Adjusted net income (loss)
$
1,195

 
$
1,372

 
 
$
143

 
$
277

 
$
(198
)
 
 
 
 
 
 
 
 
 
 
 
Average allocated equity
$
23,735

 
$
24,222

 
 
$
23,862

 
$
23,820

 
$
24,128

Adjustment related to goodwill and a percentage of intangibles
(17,949
)
 
(17,975
)
 
 
(17,939
)
 
(17,947
)
 
(17,967
)
Average economic capital
$
5,786

 
$
6,247

 
 
$
5,923

 
$
5,873

 
$
6,161

 
 
 
 
 
 
 
 
 
 
 
Card Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported net income (loss)
$
5,788

 
$
(6,980
)
 
 
$
1,022

 
$
1,263

 
$
1,289

Adjustment related to intangibles (1)
17

 
70

 
 
5

 
4

 
15

Goodwill impairment charge
—

 
10,400

 
 
—

 
—

 
—

Adjusted net income
$
5,805

 
$
3,490

 
 
$
1,027

 
$
1,267

 
$
1,304

 
 
 
 
 
 
 
 
 
 
 
Average allocated equity
$
21,128

 
$
32,418

 
 
$
20,610

 
$
20,755

 
$
23,518

Adjustment related to goodwill and a percentage of intangibles
(10,589
)
 
(17,644
)
 
 
(10,549
)
 
(10,561
)
 
(10,672
)
Average economic capital
$
10,539

 
$
14,774

 
 
$
10,061

 
$
10,194

 
$
12,846

 
 
 
 
 
 
 
 
 
 
 
Consumer Real Estate Services
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported net loss
$
(19,529
)
 
$
(8,947
)
 
 
$
(1,459
)
 
$
(1,137
)
 
$
(4,937
)
Adjustment related to intangibles (1)
—

 
3

 
 
—

 
—

 
—

Goodwill impairment charges
2,603

 
2,000

 
 
—

 
—

 
2,000

Adjusted net loss
$
(16,926
)
 
$
(6,944
)
 
 
$
(1,459
)
 
$
(1,137
)
 
$
(2,937
)
 
 
 
 
 
 
 
 
 
 
 
Average allocated equity
$
16,202

 
$
26,016

 
 
$
14,757

 
$
14,240

 
$
24,310

Adjustment related to goodwill and a percentage of intangibles
(1,350
)
 
(4,802
)
 
 
—

 
—

 
(4,799
)
Average economic capital
$
14,852

 
$
21,214

 
 
$
14,757

 
$
14,240

 
$
19,511

 
 
 
 
 
 
 
 
 
 
 
Global Commercial Bank
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported net income
$
4,402

 
$
3,218

 
 
$
1,048

 
$
1,050

 
$
1,053

Adjustment related to intangibles (1)
2

 
5

 
 
—

 
—

 
1

Adjusted net income
$
4,404

 
$
3,223

 
 
$
1,048

 
$
1,050

 
$
1,054

 
 
 
 
 
 
 
 
 
 
 
Average allocated equity
$
40,867

 
$
43,590

 
 
$
40,718

 
$
40,726

 
$
42,997

Adjustment related to goodwill and a percentage of intangibles
(20,695
)
 
(20,684
)
 
 
(20,692
)
 
(20,689
)
 
(20,703
)
Average economic capital
$
20,172

 
$
22,906

 
 
$
20,026

 
$
20,037

 
$
22,294

 
 
 
 
 
 
 
 
 
 
 
Global Banking and Markets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported net income (loss)
$
2,967

 
$
6,297

 
 
$
(433
)
 
$
(302
)
 
$
669

Adjustment related to intangibles (1)
17

 
19

 
 
4

 
5

 
4

Adjusted net income (loss)
$
2,984

 
$
6,316

 
 
$
(429
)
 
$
(297
)
 
$
673

 
 
 
 
 
 
 
 
 
 
 
Average allocated equity
$
37,233

 
$
50,037

 
 
$
33,707

 
$
36,372

 
$
46,935

Adjustment related to goodwill and a percentage of intangibles
(10,650
)
 
(10,106
)
 
 
(10,958
)
 
(10,783
)
 
(10,240
)
Average economic capital
$
26,583

 
$
39,931

 
 
$
22,749

 
$
25,589

 
$
36,695

 
 
 
 
 
 
 
 
 
 
 
Global Wealth and Investment Management
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reported net income
$
1,635

 
$
1,340

 
 
$
249

 
$
347

 
$
319

Adjustment related to intangibles (1)
30

 
86

 
 
7

 
7

 
20

Adjusted net income
$
1,665

 
$
1,426

 
 
$
256

 
$
354

 
$
339

 
 
 
 
 
 
 
 
 
 
 
Average allocated equity
$
17,802

 
$
18,068

 
 
$
17,860

 
$
17,839

 
$
18,227

Adjustment related to goodwill and a percentage of intangibles
(10,696
)
 
(10,778
)
 
 
(10,664
)
 
(10,691
)
 
(10,752
)
Average economic capital
$
7,106

 
$
7,290

 
 
$
7,196

 
$
7,148

 
$
7,475

 
 
 
 
 
 
 
 
 
 
 
(1) 
Represents cost of funds and earnings credit on intangibles.


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.