Exhibit 99.1
July 19, 2007
Investors May Contact:
Kevin Stitt, Bank of America, 1.704.386.5667
Lee McEntire, Bank of America, 1.704.388.6780
Leyla Pakzad, Bank of America, 1.704.386.2024
Reporters May Contact:
Scott Silvestri, Bank of America, 1.980.388.9921
scott.silvestri@bankofamerica.com
Bank of America Second Quarter Earnings Per Share Rose 8 Percent
Businesses Generate Solid Revenue Growth Across Customer Segments
CHARLOTTE — Bank of America Corporation today reported second quarter net income rose 5 percent to $5.76 billion from $5.48 billion a year earlier. Diluted earnings per share increased 8 percent to $1.28 from $1.19. Return on average common shareholders’ equity was 17.55 percent.
All three business segments recorded revenue increases. Results were mainly driven by continued healthy capital markets activity as well as good consumer noninterest income growth.
“Bank of America, with its diverse business model, was able to continue attractive earnings growth despite challenging headwinds,” said Chairman and Chief Executive Officer Kenneth D. Lewis. “Our businesses are doing a good job of attracting new customers and expanding our relationships with existing clients. Our investments in a number of businesses such as capital markets, mortgage and services for the affluent, in addition to the equity investment gains produced in the current environment, are generating results that more than offset spread compression impacting virtually all of our businesses and the trend toward more normalized credit costs.”
More
Page 2
Second Quarter 2007 Highlights (vs. a year earlier)
| • | Investment banking income rose 26 percent. The company gained market share in mergers and acquisitions as Bank of America continues to build its platform. |
| • | Total sales of retail products rose 8 percent, generated by strong growth in sales of first mortgages, checking and savings accounts, credit cards and online banking activations. Net new retail checking accounts rose by 717,000. |
| • | Strong originations of first mortgages were boosted by the successful launch of No Fee Mortgage PLUS which accounted for 11 percent of first mortgage production in the second quarter. In addition, the company closed in late June on the purchase of Reverse Mortgage of America, which will significantly increase Bank of America’s offerings of reverse mortgages to seniors. |
| • |
Keep the ChangeTM passed the 5 million mark of customers who have saved more than $500 million since the inception of this innovative program. |
| • | Total unit sales to small businesses with less than $2.5 million in annual sales rose 41 percent, while average deposits grew 5 percent. Expanding relationships with small businesses is a key strategic priority. |
| • |
Total assets under management (AUM) in Global Wealth and Investment Management increased 13 percent to more than $566 billion. More than half of the increase represented net new investment inflows by clients. On a 3-year AUM weighted basis, 93 percent of Columbia’s equity funds were in the top 2 performance quartiles compared with their peer group. 1 |
| • | Premier Banking households using both bank and investment services rose 9 percent, reflecting the company’s strategy to meet more of the financial needs of these clients. |
1 Results shown are defined by Columbia Management’s calculation of its percentage of assets under management in the top two quartiles of categories based on Morningstar as of May 31, 2007. The category percentile rank was calculated by ranking the three year net return of share classes within the categories. The assets of the number of funds within the top 2 quartile results were added and then divided by Columbia Management’s total assets under management. Past performance is no guarantee of future results. The share class earning the ranking may have limited eligibility and may not be available to all investors.
More
Page 3
Second Quarter 2007 Financial Summary
Revenue
Revenue net of interest expense on a fully taxable-equivalent basis increased 8 percent to $19.96 billion from $18.52 billion in the second quarter of 2006.
Noninterest income rose 17 percent to $11.18 billion from $9.59 billion in the second quarter of 2006, driven by increases in equity investment gains, other income, investment banking and service charges. Equity investment gains included a $600 million gain related to the sale of private equity funds to Conversus Capital, an investment partnership, as well as higher dividends from strategic investments.
Net interest income on a managed basis increased 1 percent to $10.73 billion compared with the year-ago quarter. Net interest income on a held basis declined 3 percent to $8.39 billion from $8.63 billion a year earlier. The net interest margin decreased 26 basis points to 2.59 percent.
Efficiency
The efficiency ratio on a fully taxable-equivalent basis was 45.56 percent for the second quarter of 2007. Noninterest expense increased 4 percent to $9.09 billion from $8.72 billion a year earlier. Expenses rose mainly because of higher incentive compensation and other personnel expenses, reflecting investment in various business platforms and an increase in litigation reserves. Higher expenses were somewhat offset by lower pretax merger and restructuring charges of $75 million compared with $194 million a year earlier.
More
Page 4
Credit Quality
Overall credit quality remained sound, but continues to move toward more normalized levels. Compared with the second quarter of 2006, net charge-offs increased primarily reflecting seasoning and a trend toward more normalized loss levels in the consumer and small business portfolios as well as lower commercial recoveries. Provision expense in the second quarter rose from a year ago due to higher net charge-offs as well as increased reserves for portfolio seasoning and higher loss expectations in the small business and home equity portfolios reflecting the growth of these businesses.
| • | Net charge-offs were $1.50 billion, or 0.81 percent of total average loans and leases compared with $1.43 billion, or 0.81 percent, in the first quarter. In the year-ago quarter net charge-offs were $1.02 billion, or 0.65 percent. |
| • | Provision for credit losses was $1.81 billion, up from $1.24 billion in the first quarter and $1.01 billion in the second quarter of 2006. |
| • | Total managed net losses were $2.77 billion, or 1.30 percent of total average managed loans and leases, compared with $2.57 billion, or 1.26 percent, in the first quarter and $1.81 billion, or 0.98 percent, in the second quarter of 2006. |
| • | Nonperforming assets were $2.39 billion, or 0.32 percent of total loans, leases and foreclosed properties, at June 30. This compared with $2.06 billion, or 0.29 percent, at March 31 and $1.64 billion, or 0.25 percent, at June 30, 2006. |
| • | The allowance for loan and lease losses was $9.06 billion, or 1.20 percent of total loans and leases, at June 30 compared with $8.73 billion, or 1.21 percent at March 31 and $9.08 billion, or 1.36 percent, at June 30, 2006. |
Capital Management
Total shareholders’ equity was $135.75 billion at June 30. Period-end assets were $1.5 trillion. The Tier 1 capital ratio was 8.52 percent, down from 8.57 percent at March 31 and up from 8.33 percent a year ago.
During the quarter, Bank of America paid a cash dividend of $0.56 per share. The company also issued 11.3 million common shares related to employee stock options and ownership plans and repurchased 13.5 million common shares. Period-ending common shares issued and outstanding were 4.44 billion for the second quarter of 2007, compared with 4.44 billion for the first quarter and 4.53 billion for the second quarter of 2006.
More
Page 5
Second Quarter 2007 Business Segment Results
Global Consumer and Small Business Banking1
| (Dollars in millions) |
Q2 2007 | Q2 2006 | ||||||
| Total revenue, net of interest expense2 |
$ | 11,939 | $ | 11,377 | ||||
| Provision for credit losses3 |
3,094 | 1,807 | ||||||
| Noninterest expense |
4,969 | 4,508 | ||||||
| Net income |
2,459 | 3,204 | ||||||
| Efficiency ratio |
41.62 | % | 39.62 | % | ||||
| Return on average equity |
15.80 | 20.14 | ||||||
| Average managed loans and leases |
$ | 317,246 | $ | 282,390 | ||||
| Average deposits |
326,741 | 336,105 | ||||||
1 Managed basis. Managed basis assumes that loans that have been securitized were not sold and presents earnings on these loans in a manner similar to the way loans that have not been sold (i.e., held loans) are presented. For more information and a detailed reconciliation, please refer to the data pages supplied with this Press Release.
2 Fully taxable-equivalent basis
3 Represents the provision for credit losses on held loans combined with realized credit losses associated with the securitized loan portfolio.
Net revenue rose 5 percent as higher card income, service charges and mortgage banking income contributed to a 9 percent increase in noninterest income. Net income decreased 23 percent from a year ago as managed credit costs rose because of portfolio seasoning, growth in the businesses and the trend toward more normalized levels.
Growth from innovative products like Keep the ChangeTM, $0 Online Equity Trades and No Fee Mortgage PLUS generated increased customer activity.
| • |
Deposits net revenue increased 5 percent to $4.40 billion and net income increased 3 percent to $1.33 billion. Consumer deposit growth (excluding the impact of balance migration to Premier Banking and Investments) of 1 percent was driven by account growth, especially in promotional and Risk Free CDTM CD products. |
| • | Card Services managed net revenue rose 2 percent to $6.43 billion while net income declined 44 percent to $961 million as credit costs increased. |
| • | Consumer Real Estate, which includes the home equity and mortgage businesses, had $856 million in net revenue up 22 percent. Net income decreased 18 percent to $141 million because of higher provision expense from increased loss expectations in the home equity portfolio reflecting the growth of this business. |
More
Page 6
Global Corporate and Investment Banking
| (Dollars in millions) |
Q2 2007 | Q2 2006 | ||||||
| Total revenue, net of interest expense1 |
$ | 5,814 | $ | 5,315 | ||||
| Provision for credit losses |
41 | 22 | ||||||
| Noninterest expense |
3,135 | 2,764 | ||||||
| Net income |
1,670 | 1,595 | ||||||
| Efficiency ratio |
53.91 | % | 52.01 | % | ||||
| Return on average equity |
16.15 | 15.09 | ||||||
| Average loans and leases |
$ | 253,895 | $ | 231,073 | ||||
| Average trading-related assets |
377,171 | 330,816 | ||||||
| Average deposits |
220,063 | 193,620 | ||||||
1 Fully taxable-equivalent basis
Net revenue rose 9 percent as debt underwriting and advisory fees helped increase noninterest income by 11 percent. Net income increased 5 percent.
The revenue increase was driven by Capital Markets and Advisory Services as investments in personnel and trading infrastructure continued to produce strong results. Investment banking revenue rose 27 percent from the second quarter of 2006, as increased market activity and deal flow continued to produce higher debt underwriting and advisory fees.
Provision expense rose $19 million because of lower commercial recoveries.
| • | Business Lending net revenue and net income were flat at $1.50 billion and $589 million, respectively, as good loan growth and fee generation offset continued spread compression. |
| • | Capital Markets and Advisory Services net revenue increased 23 percent to $2.66 billion on strong investment banking fees and sales and trading revenue. Net income rose 32 percent. |
More
Page 7
| • | Treasury Services net revenue was relatively unchanged at $1.69 billion, reflecting higher card income and strong average deposit growth of $5.93 billion, offset by a continued customer shift from non-interest-bearing to interest-bearing deposits. Net income declined 3 percent reflecting continued investment in upgrading our payments platform. |
More
Page 8
Global Wealth and Investment Management
| (Dollars in millions) |
Q2 2007 | Q2 2006 | ||||||
| Total revenue, net of interest expense1 |
$ | 2,008 | $ | 1,853 | ||||
| Provision for credit losses |
(14 | ) | (40 | ) | ||||
| Noninterest expense |
1,044 | 971 | ||||||
| Net income |
619 | 582 | ||||||
| Efficiency ratio |
51.97 | % | 52.40 | % | ||||
| Return on average equity |
25.06 | 24.59 | ||||||
| Average loans and leases |
$ | 67,964 | $ | 59,803 | ||||
| Average deposits |
118,255 | 101,251 | ||||||
| (in billions) |
At 6/30/07 | At 6/30/06 | ||||||
| Assets under management |
$ | 566.2 | $ | 500.1 | ||||
1 Fully taxable-equivalent basis
Net revenue increased 8 percent as higher customer activity and improved client asset flows resulted in a 13 percent increase in noninterest income. Net interest income rose 4 percent as loans increased 14 percent and deposits increased 7 percent (excluding balance migration from Global Consumer and Small Business Banking) offset by spread compression. Net income increased 6 percent.
Asset management fees increased 13 percent from the second quarter of 2006 as net asset inflows of $34.33 billion and $31.79 billion of market value growth produced higher assets under management.
| • | Premier Banking and Investments net revenue rose 8 percent to $941 million on record results in investment and brokerage services, up 24 percent from a year ago. Net income increased 6 percent to $331 million. |
| • | The Private Bank had net revenue of $486 million, unchanged compared with a year earlier. Net income declined 18 percent to $125 million reflecting the impact of lower provision benefit and increased spread compression. |
| • | Columbia Management net revenue rose 25 percent to $471 million supported by strong client inflows and increased market values. Net income increased 48 percent to $120 million. |
More
Page 9
All Other1
| (Dollars in millions) |
Q2 2007 | Q2 2006 | ||||||
| Total revenue, net of interest expense 2 |
$ | 197 | $ | (30 | ) | |||
| Provision for credit losses3 |
(1,311 | ) | (784 | ) | ||||
| Noninterest expense |
(55 | ) | 474 | |||||
| Net income |
1,013 | 94 | ||||||
| Average loans and leases |
$ | 101,094 | $ | 62,383 | ||||
1 All Other consists primarily of equity investments, the residual impact of the allowance for credit losses and the cost allocation processes, Merger and Restructuring Charges, intersegment eliminations, and the results of certain consumer finance and commercial lending businesses that are being liquidated. All Other also includes the offsetting securitization impact to present Global Consumer and Small Business Banking on a managed basis. For more information and a detailed reconciliation, please refer to the data pages supplied with this Press Release.
2 Fully taxable-equivalent basis
3 Represents the provision for credit losses in All Other combined with the Global Consumer and Small Business Banking securitization offset.
All Other net income rose to $1.01 billion from $94 million a year earlier. Equity investment gains were $1.72 billion, up from $577 million. This was driven by an increase of $833 million in Principal Investing gains primarily related to the Conversus transaction and from a more than $200 million increase in income from strategic investments. Noninterest expense declined because of lower costs related to the sale of certain businesses and declining merger and restructuring charges.
Note: Chief Executive Officer Kenneth D. Lewis and Joe L. Price, chief financial officer, will discuss second quarter 2007 results in a conference call at 9:30 a.m. (Eastern Time) today. The call can be accessed via a Webcast available on the Bank of America Investor Relations Web site at http://investor.bankofamerica.com.
More
Page 10
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 57 million consumer and small business relationships with more than 5,700 retail banking offices, more than 17,000 ATMs and award-winning online banking with more than 22 million active users. Bank of America is the No. 1 overall Small Business Administration (SBA) lender in the United States and the No. 1 SBA lender to minority-owned small businesses. The company serves clients in 175 countries and has relationships with 98 percent of the U.S. Fortune 500 companies and 80 percent of the Fortune Global 500. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
Forward-Looking Statements
This press release contains forward-looking statements, including statements about the financial conditions, results of operations and earnings outlook of Bank of America Corporation. The forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results or earnings to differ materially from such forward-looking statements include, among others, the following: 1) projected business increases following process changes and other investments are lower than expected; 2) competitive pressure among financial services companies increases significantly; 3) general economic conditions are less favorable than expected; 4) political conditions including the threat of future terrorist activity and related actions by the United States abroad may adversely affect the company’s businesses and economic conditions as a whole; 5) changes in the interest rate environment reduce interest margins and impact funding sources; 6) changes in foreign exchange rates increases exposure; 7) changes in market rates and prices may adversely impact the value of financial products; 8) legislation or regulatory environments, requirements or changes adversely affect the businesses in which the company is engaged; 9) changes in accounting standards, rules or interpretations, 10) litigation liabilities, including costs, expenses, settlements and judgments, may adversely affect the company or its businesses; 11) mergers and acquisitions and their integration into the company; and 12) decisions to downsize, sell or close units or otherwise change the business mix of any of the company. For further information regarding Bank of America Corporation, please read the Bank of America reports filed with the SEC and available at www.sec.gov.
Please consider the investment objectives, risks, charges and expenses of Columbia mutual funds carefully before investing. Contact your financial advisor for a prospectus which contains this and other important information about the fund. Read it carefully before you invest.
Columbia Management is the primary investment management division of Bank of America Corporation. Columbia Management entities furnish investment management services and advise institutional and mutual fund portfolios. Columbia Funds are distributed by Columbia Management Distributors, Inc., member NASD, SIPC. Columbia Management Distributors, Inc. is part of Columbia Management and an affiliate of Bank of America Corporation.
www.bankofamerica.com
###
Bank of America Corporation
Selected Financial Data
(Dollars in millions, except per share data; shares in thousands)
| Summary Income Statement | Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||
| Net interest income |
8,386 | 8,630 | 16,654 | 17,406 | |||||||||||||||||||
| Total noninterest income |
11,177 | 9,589 | 21,064 | 18,504 | |||||||||||||||||||
| Total revenue, net of interest expense |
19,563 | 18,219 | 37,718 | 35,910 | |||||||||||||||||||
| Provision for credit losses |
1,810 | 1,005 | 3,045 | 2,275 | |||||||||||||||||||
| Other noninterest expense |
9,018 | 8,523 | 18,004 | 17,349 | |||||||||||||||||||
| Merger and restructuring charges |
75 | 194 | 186 | 292 | |||||||||||||||||||
| Income before income taxes |
8,660 | 8,497 | 16,483 | 15,994 | |||||||||||||||||||
| Income tax expense |
2,899 | 3,022 | 5,467 | 5,533 | |||||||||||||||||||
| Net income |
$ | 5,761 | $ | 5,475 | $ | 11,016 | $ | 10,461 | |||||||||||||||
| Earnings per common share |
1.29 | 1.21 | 2.47 | 2.29 | |||||||||||||||||||
| Diluted earnings per common share |
1.28 | 1.19 | 2.44 | 2.25 | |||||||||||||||||||
| Summary Average Balance Sheet | Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||
| Total loans and leases |
$ | 740,199 | $ | 635,649 | $ | 727,193 | $ | 625,863 | |||||||||||||||
| Debt securities |
177,834 | 236,968 | 182,142 | 235,793 | |||||||||||||||||||
| Total earning assets |
1,358,199 | 1,253,895 | 1,340,172 | 1,236,848 | |||||||||||||||||||
| Total assets |
1,561,649 | 1,456,004 | 1,541,644 | 1,436,298 | |||||||||||||||||||
| Total deposits |
697,035 | 674,796 | 691,898 | 667,350 | |||||||||||||||||||
| Shareholders’ equity |
133,551 | 127,373 | 133,569 | 129,253 | |||||||||||||||||||
| Common shareholders’ equity |
130,700 | 127,102 | 130,718 | 128,981 | |||||||||||||||||||
| Performance Ratios | Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||
| Return on average assets |
1.48 | % | 1.51 | % | 1.44 | % | 1.47 | % | |||||||||||||||
| Return on average common shareholders’ equity |
17.55 | 17.26 | 16.86 | 16.34 | |||||||||||||||||||
| Net interest yield |
2.59 | 2.85 | 2.60 | % | 2.91 | ||||||||||||||||||
| Credit Quality | Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||
| Net charge-offs |
$ | 1,495 | $ | 1,023 | $ | 2,922 | $ | 1,845 | |||||||||||||||
| Annualized net charge-offs as a % of average loans and leases outstanding (1) |
0.81 | % | 0.65 | % | 0.81 | % | 0.59 | % | |||||||||||||||
| Provision for credit losses |
$ | 1,810 | $ | 1,005 | $ | 3,045 | $ | 2,275 | |||||||||||||||
| Managed credit card net losses |
2,099 | 1,474 | 4,052 | 2,720 | |||||||||||||||||||
| Managed credit card net losses as a % of average managed credit card receivables |
5.02 | % | 3.67 | % | 4.88 | % | 3.39 | % | |||||||||||||||
| June 30 | |||||||||||||||||||||||
| 2007 | 2006 | ||||||||||||||||||||||
| Nonperforming assets |
$ | 2,392 | $ | 1,641 | |||||||||||||||||||
| Non performing assets as a % of total loans, leases and foreclosed properties (1) |
0.32 | % | 0.25 | % | |||||||||||||||||||
| Allowance for loan and lease losses |
$ | 9,060 | $ | 9,080 | |||||||||||||||||||
| Allowance for loan and lease losses as a % of total loans and leases (1) |
1.20 | % | 1.36 | % | |||||||||||||||||||
| Capital Management | June 30 | ||||||||||||||||||||||
| 2007 | 2006 | ||||||||||||||||||||||
| Risk-based capital ratios: |
|||||||||||||||||||||||
| Tier 1 |
8.52% | * | 8.33 | % | |||||||||||||||||||
| Total |
12.11 | * | 11.25 | ||||||||||||||||||||
| Tier 1 leverage ratio |
6.33 | * | 6.13 | ||||||||||||||||||||
| Period-end common shares issued and outstanding (in thousands) |
4,436,936 | 4,527,941 | |||||||||||||||||||||
| Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | ||||||||||||||||||||
| Shares issued |
11,316 | 29,673 | 40,235 | 68,608 | (2) | ||||||||||||||||||
| Shares repurchased |
13,450 | 83,050 | 61,450 | 171,500 | |||||||||||||||||||
| Average common shares issued and outstanding |
4,419,246 | 4,534,627 | 4,426,046 | 4,572,013 | |||||||||||||||||||
| Average diluted common shares issued and outstanding |
4,476,799 | 4,601,169 | 4,487,224 | 4,636,959 | |||||||||||||||||||
| Dividends paid per common share |
$ | 0.56 | $ | 0.50 | $ | 1.12 | $ | 1.00 | |||||||||||||||
| Summary Ending Balance Sheet | June 30 | ||||||||||||||||||||||
| 2007 | 2006 | ||||||||||||||||||||||
| Total loans and leases |
$ | 758,635 | $ | 667,953 | |||||||||||||||||||
| Total debt securities |
173,327 | 235,846 | |||||||||||||||||||||
| Total earning assets |
1,328,402 | 1,245,274 | |||||||||||||||||||||
| Total assets |
1,534,359 | 1,445,193 | |||||||||||||||||||||
| Total deposits |
699,409 | 676,865 | |||||||||||||||||||||
| Total shareholders’ equity |
135,751 | 127,841 | |||||||||||||||||||||
| Common shareholders’ equity |
132,900 | 127,570 | |||||||||||||||||||||
| Book value per share |
29.95 | 28.17 | |||||||||||||||||||||
| * | Preliminary data |
| (1) |
Ratios do not include loans measured at fair value in accordance with SFAS 159 at and for the three and six months ended June 30, 2007. |
| (2) |
Does not include 631,145 shares issued in conjunction with the merger with MBNA. |
Certain prior period amounts have been reclassified to conform to current period presentation.
Bank of America Corporation
Business Segment Results
(Dollars in millions)
| Global Consumer and Small Business Banking (1) | Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||||||
| Total revenue, net of interest expense (FTE) (2) |
$ | 11,939 | $ | 11,377 | $ | 23,362 | $ | 22,218 | ||||||||||||
| Provision for credit losses (3) |
3,094 | 1,807 | 5,505 | 3,708 | ||||||||||||||||
| Noninterest expense |
4,969 | 4,508 | 9,700 | 9,119 | ||||||||||||||||
| Net income |
2,459 | 3,204 | 5,154 | 5,929 | ||||||||||||||||
| Efficiency ratio |
41.62 | % | 39.62 | % | 41.52 | % | 41.04 | % | ||||||||||||
| Return on average equity |
15.80 | 20.14 | 16.67 | 18.42 | ||||||||||||||||
| Average loans and leases |
$ | 317,246 | $ | 282,390 | $ | 312,701 | $ | 280,821 | ||||||||||||
| Average deposits |
326,741 | 336,105 | 326,647 | 334,413 | ||||||||||||||||
| Deposits |
||||||||||||||||||||
| Total revenue, net of interest expense (FTE) (2) |
$ | 4,404 | $ | 4,193 | $ | 8,645 | $ | 8,099 | ||||||||||||
| Net income |
1,329 | 1,289 | 2,616 | 2,348 | ||||||||||||||||
| Card Services |
||||||||||||||||||||
| Total revenue, net of interest expense (FTE) (2) |
6,430 | 6,328 | 12,561 | 12,327 | ||||||||||||||||
| Net income |
961 | 1,715 | 2,112 | 3,144 | ||||||||||||||||
| CRE |
||||||||||||||||||||
| Total revenue, net of interest expense (FTE) (2) |
856 | 701 | 1,695 | 1,417 | ||||||||||||||||
| Net income |
141 | 173 | 371 | 359 | ||||||||||||||||
| Global Corporate and Investment Banking | Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||||||
| Total revenue, net of interest expense (FTE) (2) |
$ | 5,814 | $ | 5,315 | $ | 11,137 | $ | 10,599 | ||||||||||||
| Provision for credit losses |
41 | 22 | 156 | 47 | ||||||||||||||||
| Noninterest expense |
3,135 | 2,764 | 6,035 | 5,596 | ||||||||||||||||
| Net income |
1,670 | 1,595 | 3,117 | 3,120 | ||||||||||||||||
| Efficiency ratio |
53.91 | % | 52.01 | % | 54.18 | % | 52.80 | % | ||||||||||||
| Return on average equity |
16.15 | 15.09 | 15.27 | 14.91 | ||||||||||||||||
| Average loans and leases |
$ | 253,895 | $ | 231,073 | $ | 250,913 | $ | 228,080 | ||||||||||||
| Average deposits |
220,063 | 193,620 | 214,307 | 190,142 | ||||||||||||||||
| Business Lending |
||||||||||||||||||||
| Total revenue, net of interest expense (FTE) (2) |
$ | 1,502 | $ | 1,503 | $ | 2,850 | $ | 2,862 | ||||||||||||
| Net income |
589 | 593 | 1,047 | 1,121 | ||||||||||||||||
| Capital Markets and Advisory Services |
||||||||||||||||||||
| Total revenue, net of interest expense (FTE) (2) |
2,663 | 2,162 | 5,023 | 4,471 | ||||||||||||||||
| Net income |
639 | 483 | 1,167 | 1,007 | ||||||||||||||||
| Treasury Services |
||||||||||||||||||||
| Total revenue, net of interest expense (FTE) (2) |
1,689 | 1,673 | 3,312 | 3,299 | ||||||||||||||||
| Net income |
518 | 536 | 1,007 | 1,042 | ||||||||||||||||
| Global Wealth and Investment Management | Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||||||
| Total revenue, net of interest expense (FTE) (2) |
$ | 2,008 | $ | 1,853 | $ | 3,896 | $ | 3,682 | ||||||||||||
| Provision for credit losses |
(14) | (40) | 9 | (40) | ||||||||||||||||
| Noninterest expense |
1,044 | 971 | 2,061 | 1,938 | ||||||||||||||||
| Net income |
619 | 582 | 1,151 | 1,123 | ||||||||||||||||
| Efficiency ratio |
51.97 | % | 52.40 | % | 52.89 | % | 52.65 | % | ||||||||||||
| Return on average equity |
25.06 | 24.59 | 23.33 | 22.52 | ||||||||||||||||
| Average loans and leases |
$ | 67,964 | $ | 59,803 | $ | 66,908 | $ | 58,979 | ||||||||||||
| Average deposits |
118,255 | 101,251 | 116,615 | 101,140 | ||||||||||||||||
| The Private Bank |
||||||||||||||||||||
| Total revenue, net of interest expense (FTE) (2) |
$ | 486 | $ | 488 | $ | 943 | $ | 970 | ||||||||||||
| Net income |
125 | 153 | 205 | 273 | ||||||||||||||||
| Columbia Management |
||||||||||||||||||||
| Total revenue, net of interest expense (FTE) (2) |
471 | 378 | 896 | 742 | ||||||||||||||||
| Net income |
120 | 81 | 216 | 162 | ||||||||||||||||
| Premier Banking and Investments |
||||||||||||||||||||
| Total revenue, net of interest expense (FTE) (2) |
941 | 868 | 1,848 | 1,698 | ||||||||||||||||
| Net income |
331 | 311 | 644 | 583 | ||||||||||||||||
| All Other (1) | Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||||||
| Total revenue, net of interest expense (FTE) (2) |
$ | 197 | $ | (30) | $ | 47 | $ | (29) | ||||||||||||
| Provision for credit losses (4) |
(1,311) | (784) | (2,625) | (1,440) | ||||||||||||||||
| Noninterest expense |
(55) | 474 | 394 | 988 | ||||||||||||||||
| Net income |
1,013 | 94 | 1,594 | 289 | ||||||||||||||||
| Average loans and leases |
$ | 101,094 | $ | 62,383 | $ | 96,671 | $ | 57,983 | ||||||||||||
| Average deposits |
31,976 | 43,820 | 34,329 | 41,655 | ||||||||||||||||
| (1) |
GCSBB is presented on a managed basis with a corresponding offset recorded in All Other. |
| (2) |
Fully taxable-equivalent (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. |
| (3) |
Represents the provision for credit losses on held loans combined with realized credit losses associated with the securitized portfolio. |
| (4) |
Represents the provision for credit losses in All Other combined with the Global Consumer and Small Business Banking securitization offset. |
Certain prior period amounts have been reclassified to conform to current period presentation.
Bank of America Corporation
Supplemental Financial Data
(Dollars in millions)
| Fully taxable-equivalent basis data (1) | Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||||||||
| 2007 | 2006 | 2007 | 2006 | |||||||||||||||||
| Net interest income |
$ | 8,781 | $ | 8,926 | $ | 17,378 | $ | 17,966 | ||||||||||||
| Total revenue, net of interest expense |
19,958 | 18,515 | 38,442 | 36,470 | ||||||||||||||||
| Net interest yield |
2.59 | % | 2.85 | % | 2.60 | % | 2.91 | % | ||||||||||||
| Efficiency ratio |
45.56 | 47.08 | 47.32 | 48.37 | ||||||||||||||||
| Other Data | June 30 | |||||||||||||||||||
| 2007 | 2006 | |||||||||||||||||||
| Full-time equivalent employees |
195,675 | 201,898 | ||||||||||||||||||
| Number of banking centers - domestic |
5,749 | 5,779 | ||||||||||||||||||
| Number of branded ATMs - domestic |
17,183 | 16,984 | ||||||||||||||||||
| (1) |
Fully taxable-equivalent (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. |
Certain prior period amounts have been reclassified to conform to current period presentation.
Bank of America Corporation
Reconciliation - Managed to GAAP
(Dollars in millions; except as noted)
The Corporation reports its Global Consumer and Small Business Banking results, specifically Card Services, on a managed basis. The change to a managed basis is consistent with the way that management as well as analysts and rating agencies evaluate the results of Global Consumer and Small Business Banking. Managed basis assumes that loans that have been securitized were not sold and presents earnings on these loans in a manner similar to the way loans that have not been sold (i.e., held loans) are presented. Loan securitization is an alternative funding process that is used by the Corporation to diversify funding sources. Loan securitization removes loans from the Consolidated Balance Sheet through the sale of loans to an off-balance sheet qualified special purpose entity which is excluded from the Corporation’s consolidated financial statements in accordance with generally accepted accounting principles.
The performance of the managed portfolio is important in understanding Global Consumer and Small Business Banking’s and Card Services’ results as it demonstrates the results of the entire portfolio serviced by the business. Securitized loans continue to be serviced by the business and are subject to the same underwriting standards and ongoing monitoring as held loans. In addition, retained excess servicing income is exposed to similar credit risk and repricing of interest rates as held loans. Global Consumer and Small Business Banking’s managed income statement line items differ from its held basis reported in the prior periods as follows:
| • | Managed net interest income includes Global Consumer and Small Business Banking’s net interest income on held loans and interest income on the securitized loans less the internal funds transfer pricing allocation related to securitized loans. |
| • | Managed noninterest income includes Global Consumer and Small Business Banking’s noninterest income on a held basis less the reclassification of certain components of card income (e.g., excess servicing income) to record managed net interest income and provision for credit losses. Noninterest income, both on a held and managed basis, also includes the impact of adjustments to the interest-only strip that are recorded in card income as management continues to manage this impact within Global Consumer and Small Business Banking. |
| • | The provision for credit losses represents the provision for credit losses on held loans combined with realized credit losses associated with the securitized loan portfolio. |
Global Consumer and Small Business Banking
| Second Quarter 2007 | Second Quarter 2006 | |||||||||||||||||||||||||||||
| Managed Basis |
Securitization Impact (1) |
Held Basis |
Managed Basis |
Securitization Impact (1) |
Held Basis | |||||||||||||||||||||||||
| Net interest income (2) |
$ | 7,150 | $ | (1,981) | $ | 5,169 | $ | 6,967 | $ | (1,846) | $ | 5,121 | ||||||||||||||||||
| Noninterest income |
||||||||||||||||||||||||||||||
| Card income |
2,676 | 793 | 3,469 | 2,528 | 1,136 | 3,664 | ||||||||||||||||||||||||
| Service charges |
1,488 | - | 1,488 | 1,349 | - | 1,349 | ||||||||||||||||||||||||
| Mortgage banking income |
297 | - | 297 | 210 | - | 210 | ||||||||||||||||||||||||
| Gains (losses) on sales of debt securities |
- | - | - | - | - | - | ||||||||||||||||||||||||
| All other income |
328 | (74) | 254 | 323 | (67) | 256 | ||||||||||||||||||||||||
| Total noninterest income |
4,789 | 719 | 5,508 | 4,410 | 1,069 | 5,479 | ||||||||||||||||||||||||
| Total revenue, net of interest expense |
11,939 | (1,262) | 10,677 | 11,377 | (777) | 10,600 | ||||||||||||||||||||||||
| Provision for credit losses (3) |
3,094 | (1,262) | 1,832 | 1,807 | (777) | 1,030 | ||||||||||||||||||||||||
| Noninterest expense |
4,969 | - | 4,969 | 4,508 | - | 4,508 | ||||||||||||||||||||||||
| Income before income taxes |
3,876 | - | 3,876 | 5,062 | - | 5,062 | ||||||||||||||||||||||||
| Income tax expense (2) |
1,417 | - | 1,417 | 1,858 | - | 1,858 | ||||||||||||||||||||||||
| Net income |
$ | 2,459 | $ | - | $ | 2,459 | $ | 3,204 | $ | - | $ | 3,204 | ||||||||||||||||||
| Average loans and leases |
$ | 317,246 | $ | (101,905) | $ | 215,341 | $ | 282,390 | $ | (94,952) | $ | 187,438 | ||||||||||||||||||
| All Other | ||||||||||||||||||||||||||||||
| Second Quarter 2007 | Second Quarter 2006 | |||||||||||||||||||||||||||||
| Reported | Securitization Offset (1) |
As Adjusted |
Reported | Securitization Offset (1) |
As Adjusted | |||||||||||||||||||||||||
| Net interest income (2) |
$ | (1,945) | $ | 1,981 | $ | 36 | $ | (1,404) | $ | 1,846 | $ | 442 | ||||||||||||||||||
| Noninterest income |
||||||||||||||||||||||||||||||
| Card income |
676 | (793) | (117) | 961 | (1,136) | (175) | ||||||||||||||||||||||||
| Equity investment gains |
1,719 | - | 1,719 | 577 | - | 577 | ||||||||||||||||||||||||
| Gains (losses) on sales of debt securities |
2 | - | 2 | (5) | - | (5) | ||||||||||||||||||||||||
| All other income |
(255) | 74 | (181) | (159) | 67 | (92) | ||||||||||||||||||||||||
| Total noninterest income |
2,142 | (719) | 1,423 | 1,374 | (1,069) | 305 | ||||||||||||||||||||||||
| Total revenue, net of interest expense |
197 | 1,262 | 1,459 | (30) | 777 | 747 | ||||||||||||||||||||||||
| Provision for credit losses (4) |
(1,311) | 1,262 | (49) | (784) | 777 | (7) | ||||||||||||||||||||||||
| Merger and restructuring charges |
75 | - | 75 | 194 | - | 194 | ||||||||||||||||||||||||
| All other noninterest expense |
(130) | - | (130) | 280 | - | 280 | ||||||||||||||||||||||||
| Income before income taxes |
1,563 | - | 1,563 | 280 | - | 280 | ||||||||||||||||||||||||
| Income tax expense (benefit) (2) |
550 | - | 550 | 186 | - | 186 | ||||||||||||||||||||||||
| Net income |
$ | 1,013 | $ | - | $ | 1,013 | $ | 94 | $ | - | $ | 94 | ||||||||||||||||||
| Average loans and leases |
$ | 101,094 | $ | 101,905 | $ | 202,999 | $ | 62,383 | $ | 94,952 | $ | 157,335 | ||||||||||||||||||
| (1) |
The securitization impact on Net Interest Income is on a funds transfer pricing methodology consistent with the way we allocate funding costs to our businesses. |
| (2) |
Fully taxable-equivalent basis |
| (3) |
Represents the provision for credit losses on held loans combined with realized credit losses associated with the securitized portfolio. |
| (4) |
Represents the provision for credit losses in All Other combined with the Global Consumer and Small Business Banking securitization offset. |
Certain prior period amounts have been reclassified among the segments to conform to the current period presentation.