Results Include a Total of $1.2 Billion in Negative Charges to Revenue ($0.07 per Share) for Market-related Net Interest Income Adjustment, Adoption of Funding Valuation Adjustments (FVA)(A), and Net Debit Valuation Adjustments (DVA)
CHARLOTTE, N.C. - Monday, January 26th 2015 [ME NewsWire]
Full-year 2014 Net Income of $4.8 Billion, or $0.36 per Diluted Share, on Revenue of $85.1 Billion(B)
Continued Business Momentum
Originated $15 Billion in Residential Mortgage Loans and Home Equity Loans in Q4-14, Helping Approximately 41,000 Home Owners Purchase a Home or Refinance a Mortgage
Issued 1.2 Million New Credit Cards in Q4-14, With 67 Percent Going to Existing Relationship Customers
Delivered Record Asset Management Fees in Global Wealth and Investment Management of $2.1 Billion; Pretax Margin of 25 Percent in Q4-14
Global Banking Increased Loans by $3.1 Billion, or 1.2 Percent, From Q4-13 to $273 Billion
Reduced Noninterest Expense to $14.2 Billion in Q4-14, Lowest Quarterly Expense Level Since Merrill Lynch Merger
Excluding Litigation, Noninterest Expense Down $1.2 Billion From Q4-13 to $13.8 Billion(C)
Legacy Assets and Servicing Expenses, Excluding Litigation, Down $0.7 Billion, or 38 Percent From Q4-13 to $1.1 Billion(D)
Credit Quality Continued to Improve With Net Charge-offs Down $0.7 Billion, or 44 Percent, From Q4-13 to $0.9 Billion; Net Charge-off Ratio of 0.40 Percent Is Lowest in a Decade
Record Capital and Liquidity Levels
Estimated Common Equity Tier 1 Ratio Under Basel 3 (Standardized Approach, Fully Phased-in) 10.0 Percent in Q4-14; Advanced Approaches 9.6 Percent in Q4-14(E)
Estimated Supplementary Leverage Ratios Above 2018 Required Minimums, With Bank Holding Company at 5.9 Percent and Primary Bank at 7.0 Percent(F)
Record Global Excess Liquidity Sources of $439 Billion, up $63 Billion from Q4-13; Time-to-required Funding at 39 Months
Tangible Book Value per Share Increased 5 Percent From Q4-13 to $14.43 per Share(G)
Book Value per Share Increased 3 Percent From Q4-13 to $21.32 per Share
(BUSINESS WIRE)--Bank of America Corporation today reported net income of $3.1 billion, or $0.25 per diluted share, for the fourth quarter of 2014, compared to $3.4 billion, or $0.29 per diluted share in the year-ago period. Revenue, net of interest expense, on an FTE basis(B) was $19.0 billion, compared to $21.7 billion in the fourth quarter of 2013.
Results for the most recent quarter include three adjustments that, in aggregate, reduced revenue in the fourth quarter of 2014 by $1.2 billion (pretax) and lowered earnings per share by $0.07. These adjustments were a $578 million negative market-related net interest income (NII) adjustment, driven by the acceleration of bond premium amortization on the company's debt securities portfolio due to lower long-term interest rates; a one-time transitional charge of $497 million related to the adoption of funding valuation adjustments on uncollateralized derivatives in the company's Global Markets business; and $129 million in net DVA losses related to a tightening of the company's credit spreads. This compares with $210 million in positive market-related NII adjustments and $618 million in net DVA losses in the year-ago quarter. Excluding the impact of FVA in the current period and the net DVA and market-related NII adjustments in both periods, revenue was $20.2 billion in the fourth quarter of 2014 compared to $22.1 billion in the year-ago quarter(H). Approximately $720 million of the decline from the fourth quarter of 2013 was due to lower gains from the sales of debt securities and equity investment income, and the remainder was attributable to lower mortgage banking income and lower trading account profits.
Noninterest expense declined from $17.3 billion in the fourth quarter of 2013 to $14.2 billion in the fourth quarter of 2014, the lowest quarterly expense reported by the company since the Merrill Lynch merger. Credit quality also continued to improve, with the provision for credit losses declining from $336 million in the fourth quarter of 2013 to $219 million in the fourth quarter of 2014, while the charge-off ratio was the lowest in a decade.
2014 Calendar Year Net Income $4.8 Billion
For the full year, net income was $4.8 billion, or $0.36 per diluted share, compared to $11.4 billion, or $0.90 per diluted share in 2013. Revenue, net of interest expense, on an FTE basis(B) was $85.1 billion in 2014, compared to $89.8 billion in 2013.
Noninterest expense was $75.1 billion, compared to $69.2 billion in 2013. Excluding litigation expense of $16.4 billion in 2014 and $6.1 billion in 2013, noninterest expense was $58.7 billion in 2014, down $4.4 billion, or 7 percent, from 2013(C).
"In 2014, we continued to invest in our businesses while reducing expenses and resolving our most significant litigation matters," said Chief Executive Officer Brian Moynihan. "Last quarter, consumer deposits and loan originations were solid; wealth management client balances grew to $2.5 trillion; we increased lending to middle-market and large companies; and we retained a leadership position in investment banking. There's more work and tremendous opportunity ahead as we improve on the platform we've built to serve our customers and clients, and we enter 2015 in good shape to manage both the opportunities and the challenges the markets and economy will offer."
"We continued our focus on optimizing the balance sheet this quarter, building capital and managing expenses in a challenging interest rate and geopolitical environment," said Chief Financial Officer Bruce Thompson. "Credit quality remained strong, reflecting the improving economy and our solid risk underwriting."
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