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Bank of America Earns $2.0 Billion in First Quarter

CHARLOTTE, N.C. (Source: Research and Markets) - Bank of America Corporation today reported net income of $2.0 billion, or $0.17 per diluted share, for the first quarter of 2011, compared with $3.2 billion, or $0.28 per diluted share, in the year-ago period and a net loss of $1.2 billion, or $0.16 per diluted share, in the fourth quarter of 2010. Results for the most recent quarter were positively affected by lower credit costs, gains from equity investments, and higher asset management fees and investment banking fees. These factors were partially offset by higher legacy mortgage-related costs, higher litigation expenses, and lower sales and trading revenue from the record levels reported in the first quarter of 2010.

“Strong growth in deposit balances and positive contributions from five of our six businesses reflect the steady improvement in the broader economy,” said Chief Executive Officer Brian Moynihan. “Our customer-focused strategy is working well, and we also benefited from improved credit quality.

“While still soft, the economy is healing; we see retail spending up versus the year-ago period and continued declines in bankruptcy filings and delinquency rates.”

First-Quarter 2011 Financial Highlights

  • U.S. credit card performance metrics continued to improve in the first quarter, with 30+ day delinquency rates near all-time lows, net losses declining for the sixth straight quarter, and customer payment rates improving for the seventh straight quarter.
  • Average deposit balances were above $1 trillion, gaining 4 percent from the year-ago period and 2 percent from the fourth quarter of 2010.
  • Tangible book value1 per share rose to $13.21 in the first quarter of 2011, up from $12.98 at the end of 2010 and $11.70 in the first quarter of 2010.
  • The company continued to strengthen the balance sheet with risk-weighted assets declining $23 billion and global excess liquidity increasing $50 billion from the end of 2010 to $386 billion at March 31, 2011.
  • Regulatory capital ratios remained strong with the Tier 1 common ratio at 8.64 percent at March 31, 2011, compared to 8.60 percent at December 31, 2010, and 7.60 percent at March 31, 2010. The increase from the fourth quarter of 2010 was largely due to higher retained earnings and a reduction in risk-weighted assets, partially offset by an increase in the company’s disallowed deferred tax asset (27 basis points of Tier 1 common). The tangible common equity ratio1 rose to 6.10 percent at March 31, 2011 from 5.99 percent at December 31, 2010 and 5.22 percent at March 31, 2010.
  • The provision for credit losses declined 61 percent from the year-ago quarter as net charge-offs fell for the fourth consecutive quarter, reflecting improved credit quality across most consumer and commercial portfolios.
  • The allowance for loan and lease losses to annualized net charge-off coverage ratio improved in the first quarter of 2011 to 1.63 times, compared with 1.56 times in the fourth quarter of 2010 and 1.07 times in the first quarter of 2010.

1 Tangible book value per share of common stock and the tangible common equity ratio are non-GAAP measures. Other companies may define or calculate this measure differently. For reconciliation to GAAP measures, refer to page 21 of this press release.

First-Quarter Business Highlights

  • The Deposits segment returned to profitability in the first quarter of 2011. Average deposit balances grew $5 billion, or 1 percent, from the fourth quarter of 2010, and the number of net new accounts rose as the business continued to focus on quality sales and retention of customer relationships.
  • Global Commercial Banking saw loan growth of 2 percent in its core middle-market segment, compared to the fourth quarter of 2010, and continued to support small and medium-sized businesses. Combined with the large corporate group, the company made $69 billion in non-commercial real estate loans and $7 billion in commercial real estate loans including renewals in the first quarter of 2011.
  • Bank of America continued to support the economic recovery by extending approximately $144 billion in credit in the first quarter of 2011, according to preliminary data. In addition to the numbers reported above, credit extensions included $57 billion in first mortgages, $4 billion in U.S. consumer and small business card, $2 billion in home equity products and $5 billion in other consumer credit.
  • Global Wealth and Investment Management (GWIM) reported one of its strongest quarters since the acquisition of Merrill Lynch, setting records for revenue, asset management fees and brokerage income. In addition, the business more than doubled long-term asset management flows and added 184 financial advisors since the end of 2010 through a combination of new hires and high advisor retention rates.
  • Bank of America Merrill Lynch (BAML) ranked No. 2 in both global and U.S. investment banking fees for the first quarter of 2011 with a market share of 7.9 percent and 12.3 percent, respectively, according to Dealogic. The global market share improved by 1.6 percentage points from the fourth quarter of 2010 and was the largest increase among the top 15 banks, according to Dealogic.
  • BAML gained market share in global and U.S. fee pools compared to the fourth quarter of 2010 and ranked in the top three globally in Leveraged Loans, Asset and Mortgage-Backed Securities, Investment Grade Corporate Debt, Syndicated Loans, High-Yield Corporate Debt and Common Stock Underwriting.
  • The $57 billion in first mortgages funded in the first quarter helped nearly 260,000 homeowners either purchase a home or refinance an existing mortgage. This included approximately 12,000 first-time homebuyer credit-qualified mortgages originated by our retail channels and more than 86,000 mortgages to low- and moderate-income borrowers. Approximately 31 percent of funded first mortgages were for home purchases and 69 percent were refinances.
  • Since the start of 2008, Bank of America and previously Countrywide have completed 840,000 loan modifications with customers. During the first quarter, more than 64,000 loan modifications were completed, a 17 percent decrease from the total modifications in the first quarter of 2010.

Source: Research and Markets

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