Bank of America Reports Second-Quarter 2012 Net Income of $2.5 Billion or $0.19 Per Diluted Share
Bank of America Reports Second-Quarter 2012 Net Income of $2.5 Billion or
$0.19 Per Diluted Share
Record Tier 1 Common Capital Ratio of 11.24 Percent Under Basel 1, up 46 Basis
Points Since March 31, 2012
Tier 1 Common Capital Ratio Under Basel 3 Estimated at 8.10 Percent at
June 30, 2012^1
Long-term Debt Down $53 Billion From Q1-12, Driven by Maturities and Liability
Management Actions; Time-to-Required Funding Improved to Record 37 Months
Investment Bank Ranked No. 2 in Global Net Investment Banking Fees for
First-half 2012
Global Wealth and Investment Management Reported Record Asset Management Fees
of $1.6 Billion, Driven by Market Gains and Solid Long-term Assets Under
Management Flows
First-lien Mortgage Originations up 18 Percent From Q1-12
Consumer and Business Banking Average Deposit Balances up $10.3 Billion, or
2.2 Percent From Q1-12
Provision for Credit Losses Declined to Lowest Level Since Q1-07 as Credit
Quality Continues to Improve
Phase 2 of New BAC Expected to Yield Cost Annualized Savings of $3 Billion by
Mid-2015, Total New BAC Annualized Cost Savings Now Projected to Be $8 Billion
Business Wire
CHARLOTTE, N.C. -- July 18, 2012
Bank of America Corporation today reported net income of $2.5 billion, or
$0.19 per diluted share, for the second quarter of 2012, compared to a net
loss of $8.8 billion, or $0.90 per diluted share in the second quarter of
2011. The year-ago quarter included a total of $18.2 billion in pretax charges
for certain mortgage-related items and other selected adjustments, including
provisions for representations and warranties and goodwill impairment.^2
Relative to the same quarter a year ago, the results for the second quarter of
2012 reflect higher mortgage banking income, driven largely by lower
provisions for representations and warranties, the absence of the goodwill
impairment charge and improved credit quality across most major portfolios. In
addition, the company had solid contributions from the wealth management and
corporate and commercial banking businesses. This was partially offset by
lower net interest income from the continued low-rate environment and lower
loan levels.
“In a challenging global economy, we still see opportunities to do more with
our customers and clients. Lending to commercial businesses increased for the
sixth straight quarter -- with small business lending and commitments up 23
percent in a year -- and consumer credit is in the best shape in years,†said
Brian Moynihan, chief executive officer. “This quarter we surpassed 10
million mobile banking customers, up 34 percent in a year. With about 45,000
new mobile customers a week, we are adapting to meet customer needs and to do
more with them.â€
“Once again, we had strong capital generation this quarter through a
combination of earnings growth and a reduction in risk-weighted assets,†said
Chief Financial Officer Bruce Thompson. “In one year, our Tier 1 common
capital ratios have gone from being the lowest of the major U.S. banks to
among the highest, and we've maintained our strong liquidity levels even as we
reduced our long-term debt by $125 billion.â€
As of June 30, 2012, the company's Basel 3 Tier 1 common capital ratio on a
fully phased-in basis was estimated at 8.10 percent. This compares with the
company's previous guidance of achieving a Basel 3 Tier 1 common capital ratio
of more than 7.50 percent on a fully phased-in basis by year-end 2012.
“The fact that we exceeded our previous guidance for Basel 3 six months
ahead of schedule points to the significant progress we have made this year to
build capital, reduce risk-weighted assets and position the company for
long-term growth,†Thompson added.
The Basel Tier 1 common capital ratio is based on certain assumptions
with respect to the final Basel 3 rules and is expected to evolve over
^1 Â time, as the Basel 3 rules evolve and the Company's businesses change.
For more information, see Capital and Liquidity section of this press
release on page 15.
Refer to pages 15-16 of the company's second-quarter 2011 earnings press
^2 release dated July 19, 2011 for table indicating mortgage-related items
and other selected adjustments.
Â
Selected Financial Highlights
Â
  Three Months Ended
(Dollars in millions except per   June 30   March 31   June 30
share data) 2012 2012 2011
Net interest income, FTE $ 9,782 Â Â $ 11,053 Â Â $ 11,493
basis^1
Noninterest income 12,420 11,432 1,990
Total revenue, net of interest 22,202 22,485 13,483
expense, FTE basis
Provision for credit losses 1,773 2,418 3,255
Noninterest expense^2 17,048 19,141 22,856
Net income (loss) 2,463 653 (8,826 )
Diluted earnings per common   $ 0.19   $ 0.03   $ (0.90 )
share
Fully taxable-equivalent (FTE) basis is a non-GAAP financial measure.
For reconciliation to GAAP financial measures, refer to pages 24-27 of
this press release. Net interest income on a GAAP basis was $9.5
^1 Â billion, $10.8 billion and $11.2 billion for the three months ended June
30, 2012, March 31, 2012 and June 30, 2011. Total revenue, net of
interest expense on a GAAP basis, was $22.0 billion, $22.3 billion and
$13.2 billion for the three months ended June 30, 2012, March 31, 2012
and June 30, 2011.
^2 Includes a goodwill impairment charge of $2.6 billion in the second
quarter of 2011.
Â
Key Business Highlights
The company made significant progress in the second quarter of 2012 in line
with its operating principles, including the following developments:
Be customer-driven
* Bank of America extended approximately $107 billion in credit in the
second quarter of 2012. This included $68.4 billion in commercial non-real
estate loans, $18.0 billion in residential first mortgages, $8.2 billion
in commercial real estate loans, $4.3 billion in U.S. consumer and small
business card, $930 million in home equity products and $6.7 billion in
other consumer credit.
* The $18.0 billion in residential first mortgages funded in the second
quarter helped more than 72,000 homeowners either purchase a home or
refinance an existing mortgage. This included more than 5,000 first-time
homebuyer mortgages originated by retail channels, and nearly 22,000
mortgages to low- and moderate-income borrowers. Approximately 19 percent
of funded first mortgages were for home purchases and 81 percent were
refinances.
* The company originated approximately $4.0 billion in small business loans
and commitments in the first six months of 2012, up 23 percent from the
year-ago period, reflecting its continued focus on supporting small
businesses.
* The company raised $125 billion in capital for clients in the second
quarter of 2012, which helped clients support the economy.
* Period-end loan balances in Global Wealth and Investment Management grew
$2.5 billion, or 2.4 percent, from the first quarter of 2012 to a record
$105.4 billion on higher securities-based lending.
* Bank of America continued to add to its team of more than 17,500 Financial
Advisors during the second quarter of 2012. The total number of Wealth
Advisors in Global Wealth and Investment Management, including those
Financial Advisors in Consumer and Business Banking, rose for the 12^th
consecutive quarter.
* The company continued to deepen relationships with customers. The number
of mobile banking customers rose 34 percent from the year-ago quarter to
10.3 million customers, and the number of new U.S. consumer credit card
accounts opened in the second quarter of 2012 was up 7 percent from the
year-ago quarter.
* The company continued to expand relationships with corporate and
commercial banking clients, with average commercial and industrial loan
and lease balances up 11.5 percent from the second quarter of 2011.
* Bank of America Merrill Lynch (BofA Merrill) continued to rank No. 2
globally in net investment banking fees during the first half of 2012,
including self-led deals, as reported by Dealogic.
Continue to build a fortress balance sheet
* Regulatory capital ratios increased significantly, with the Tier 1 common
capital ratio under Basel 1 increasing to 11.24 percent in the second
quarter of 2012, up 46 bps from the first quarter of 2012 and 301 bps
higher than the second quarter of 2011.
* The Tier 1 common capital ratio under Basel 3 on a fully phased-in basis
was estimated at 8.10 percent as of June 30, 2012. This compares with the
company's previous guidance of achieving a Basel 3 Tier 1 common capital
ratio of more than 7.50 percent on a fully phased-in basis at year-end
2012.^1
* The company continued to maintain strong liquidity in the second quarter
of 2012 while significantly reducing long-term debt. Global Excess
Liquidity Sources totaled $378 billion at June 30, 2012, compared to $406
billion at March 31, 2012 and $402 billion at June 30, 2011. Long-term
debt declined to $302 billion at June 30, 2012 from $355 billion at
March 31, 2012 and $427 billion at June 30, 2011.
* Time-to-required funding increased to a record 37 months at June 30,
2012, from 31 months at March 31, 2012 and 22 months at June 30, 2011.
The Basel Tier 1 common capital ratio is based on certain assumptions
with respect to the final Basel 3 rules and is expected to evolve over
^1 Â time, as the Basel 3 rules evolve and the company's businesses change.
For more information, see the Capital and Liquidity section of this
press release on page 15.
Â
Manage risk well
* The provision for credit losses declined 46 percent from the year-ago
quarter, reflecting improved credit quality across most major consumer and
commercial portfolios and the impact of underwriting changes implemented
over the past several years.
* The allowance for loan and lease losses to annualized net charge-off
coverage ratio was 2.08 times in the second quarter of 2012, compared with
1.97 times in the first quarter of 2012 and 1.64 times in the second
quarter of 2011. Excluding purchased credit-impaired loans, the allowance
to annualized net charge-off coverage ratio was 1.46 times, 1.43 times and
1.28 times for the same periods, respectively.
* The company continued to manage its sovereign and non-sovereign exposures
in Europe. Total exposure to Greece, Italy, Ireland, Portugal and Spain,
including net credit default protection, declined to $9.6 billion at
June 30, 2012, from $9.8 billion at March 31, 2012 and $16.7 billion at
June 30, 2011.
Deliver for our shareholders
* The company continued to focus on strengthening the balance sheet by
increasing capital and maintaining strong liquidity and reserve levels.
* Tangible book value per share^1 increased to $13.22 at June 30, 2012,
compared to $12.87 at March 31, 2012 and $12.65 at June 30, 2011. Book
value per share was $20.16 at June 30, 2012, compared to $19.83 at March
31, 2012 and $20.29 at June 30, 2011.
* During the quarter, the company retired $5.5 billion of debt and
trust-preferred securities for cash that resulted in total gains of $505
million. These actions, combined with the debt maturities in the second
quarter of 2012 and additional liability management actions announced for
the third quarter of 2012, are expected to benefit quarterly net interest
income by approximately $300 million, of which $60 million was recognized
in the second quarter of 2012.
Tangible book value per share of common stock is a non-GAAP measure.
^1 Â Other companies may define or calculate this measure differently. For
reconciliation to GAAP measures, refer to pages 24-27 of this press
release.
Â
Manage efficiency well
* Noninterest expense declined to $17.0 billion in the second quarter of
2012 from $19.1 billion in the first quarter of 2012 and $22.9 billion in
the second quarter of 2011 as the company continued to focus on
streamlining and simplifying its businesses.
* The company continued to approve and implement employee-generated ideas as
part of Project New BAC. To date, more than 3,100 employee-submitted ideas
have been accepted as initiatives.
* Bank of America remains on track to exceed its previously announced goal
of achieving 20 percent of the $5 billion in annualized targeted cost
savings from Phase 1 by the end of 2012. With Phase 2 evaluations now
complete, the company expects a total of $8 billion in annualized cost
savings from New BAC by mid-2015.
* At June 30, 2012, the company had 275,460 full-time employees, down 3,228
from the end of the prior quarter, and 12,624 less than June 30, 2011.
Excluding FTE increases in Legacy Assets and Servicing to handle
increasing government and private programs for housing, the number of
full-time employees is down nearly 20,000 from the year-ago quarter.
Business Segment Results
The company reports results through five business segments: Consumer and
Business Banking (CBB), Consumer Real Estate Services (CRES), Global Banking,
Global Markets, and Global Wealth and Investment Management (GWIM), with the
remaining operations recorded in All Other.
Consumer and Business Banking
Â
  Three Months Ended
(Dollars in millions) Â Â June 30 Â Â March 31 Â Â June 30
2012 2012 2011
Total revenue, net of
interest expense, FTE $ 7,326 Â Â $ 7,422 Â Â $ 8,681
basis
Provision for credit 1,131 877 400
losses
Noninterest expense 4,359 4,247 4,377
Net income 1,156 1,455 2,502
Return on average 8.70 % 11.05 % 19.10 %
equity
Return on average 20.31 26.16 45.87
economic capital^1
Average loans $ 136,872 $ 141,578 $ 155,122
Average deposits 476,580 466,240 467,179
Â
At June 30 Â Â At March 31 Â Â At June 30
2012 2012 2011
Client brokerage   $ 72,226    $ 73,422    $ 69,000 Â
assets
Return on average economic capital is a non-GAAP financial measure. For
^1 Â reconciliation to GAAP financial measures, refer to pages 24-27 of this
press release.
Â
Business Highlights
* Successfully integrated 11.0 million customers and 18.5 million deposit
accounts into one banking platform, which provides our customers with a
convenient and consistent banking network across the franchise.
* The number of new U.S. credit card accounts opened in the second quarter
of 2012 was up 7 percent from the year-ago quarter. During the second
quarter of 2012, the number of BankAmericard Cash Rewards cards grew by 37
percent to 1.4 million.
* Average deposit balances increased 2.0 percent from the year-ago quarter,
driven by growth in liquid products in a low rate environment. The rates
paid on deposits declined 8 basis points in the second quarter of 2012
from the year-ago quarter due to pricing discipline and a shift in the mix
of deposits.
Financial Overview
Consumer and Business Banking reported net income of $1.2 billion, down $1.3
billion from the year-ago quarter, due to lower revenue and higher credit
costs.
Revenue of $7.3 billion decreased $1.4 billion from the year-ago quarter. Net
interest income of $4.7 billion decreased $845 million primarily from lower
average loans and the continued low rate environment.
Noninterest income declined $510 million to $2.6 billion, primarily from the
implementation of debit card interchange fee rules as a result of the Durbin
Amendment and a gain on the sale of certain portfolios in the second quarter
of 2011. Provision for credit losses, primarily within the Card Services
business, increased $731 million from the year-ago quarter to $1.1 billion as
portfolio trends began to stabilize. Net charge-offs declined to $1.7 billion
in the second quarter of 2012 from $2.6 billion in the year-ago quarter.
Noninterest expense of $4.4 billion remained relatively flat from the year-ago
quarter as lower operating expenses were offset by an increase in litigation
expense.
Consumer Real Estate Services
Â
  Three Months Ended
(Dollars in millions) Â Â June 30 Â Â March 31 Â Â June 30
2012 2012 2011
Total revenue, net of
interest expense, FTE $ 2,521 Â Â $ 2,674 Â Â $ (11,315 )
basis
Provision for credit 186 507 1,507
losses
Noninterest expense^1 3,556 3,905 8,625
Net loss (768 ) (1,145 ) (14,506 )
Average loans 106,725 110,755 121,683
Â
At June 30 Â Â At March 31 Â Â At June 30
2012 2012 2011
Period-end loans   $ 105,304    $ 109,264    $ 121,553 Â
^1 Includes a goodwill impairment charge of $2.6 billion in the second quarter
of 2011.
Business Highlights
* Bank of America funded $18.9 billion in residential home loans and home
equity loans during the second quarter of 2012, compared to $16.0 billion
in the first quarter of 2012 and $19.6 billion in the second quarter of
2011, excluding correspondent originations.
* The mortgage portfolio serviced for investors declined to $1.2 trillion at
the end of the second quarter of 2012 from $1.3 trillion at the end of the
first quarter of 2012 and $1.6 trillion at the end of the second quarter
of 2011. Capitalized mortgage servicing rights (MSR) as a percent of the
portfolio declined to 47 basis points at June 30, 2012 from 58 basis
points at March 31, 2012 and 78 basis points at June 30, 2011. The MSR
balance was $5.7 billion at June 30, 2012, compared with $7.6 billion at
March 31, 2012 and $12.4 billion at June 30, 2011.
* The number of 60+ day delinquent first mortgage loans serviced by Legacy
Assets and Servicing declined to 1.06 million loans at the end of the
second quarter of 2012 from 1.09 million at the end of the first quarter
of 2012, and 1.28 million at the end of the second quarter of 2011.
Financial Overview
Consumer Real Estate Services reported a net loss of $768 million for the
second quarter of 2012, compared to a net loss of $14.5 billion for the same
period in 2011. The improvement was due primarily to higher mortgage-related
charges in the prior year period, including $14.0 billion in representations
and warranties provision, a $2.6 billion non-cash goodwill impairment charge
and $2.6 billion in other mortgage-related costs.
While the home loan production businesses remained profitable, the continued
high costs of managing delinquent and defaulted loans in the servicing
portfolio combined with the costs associated with managing other legacy
mortgage exposures resulted in the overall net loss for CRES for the quarter.
Revenue increased $13.8 billion from the second quarter of 2011 to $2.5
billion in the second quarter of 2012, driven by higher mortgage banking
income, partially offset by lower insurance income due to the sale of Balboa
Insurance in mid-2011. Both revenue and mortgage banking income increased from
the year-ago quarter due to lower representations and warranties provision and
higher servicing income, driven by more favorable MSR results, net of hedges.
While CRES loan fundings declined by 62 percent compared to the same period in
2011, largely due to the exit from the correspondent channel in late 2011,
core production revenue increased slightly due to the higher margins on direct
originations.
Representations and warranties provision was $395 million in the second
quarter of 2012, compared to $14.0 billion in the second quarter of 2011. In
the year-ago period, the company recorded $8.6 billion in provision and other
expenses related to the agreement to resolve nearly all of the legacy
Countrywide-issued first-lien non-GSE RMBS repurchase exposures, and $5.4
billion in provision related to other non-GSE, and to a lesser extent, GSE
exposures.
The provision for credit losses in the second quarter of 2012 decreased $1.3
billion from the year-ago quarter to $186 million, driven by improved
portfolio trends.
Noninterest expense, excluding the $2.6 billion non-cash goodwill impairment
charge in the second quarter of 2011, decreased 41 percent to $3.6 billion,
primarily due to lower litigation expense and mortgage-related assessments,
waivers and other similar costs associated with foreclosure delays, as well as
lower direct production expenses due to lower volume and the exit from
correspondent lending. These declines were partially offset by higher default
related servicing expenses.
Global Banking
Â
  Three Months Ended
(Dollars in millions) Â Â June 30 Â Â March 31 Â Â June 30
2012 2012 2011
Total revenue, net of
interest expense, FTE $ 4,285 Â Â $ 4,450 Â Â $ 4,659
basis
Provision for credit (113 ) (238 ) (557 )
losses
Noninterest expense 2,165 2,177 2,221
Net income 1,406 1,590 1,921
Return on average 12.31 % 13.98 % 16.37 %
equity
Return on average 26.83 30.67 34.06
economic capital^1
Average loans and $ 267,812 $ 277,074 $ 260,144
leases
Average deposits   239,054    237,531    235,662 Â
Return on average economic capital is a non-GAAP financial measure. For
^1 Â reconciliation to GAAP financial measures, refer to pages 24-27 of this
press release.
Â
Business Highlights
* Bank of America Merrill Lynch (BofA Merrill) was ranked No. 2 globally in
net investment banking fees, including self-led deals, for the first half
of 2012 according to Dealogic. During the second quarter of 2012, based on
deal volume, BofA Merrill was ranked No. 1 globally in equity capital
markets and was among the top three banks in high-yield corporate debt,
leveraged loans, convertible debt, common stock underwriting,
investment-grade corporate debt, asset-backed securities and syndicated
loans.
* Average loans and leases increased $7.7 billion, or 3 percent, and average
deposits rose $3.4 billion, or 1 percent, from the year-ago quarter.
* Credit quality continued to improve as nonperforming assets declined by
$2.7 billion, or 45 percent, and total reservable criticized loans
declined by $12.0 billion, or 45 percent, compared to the year-ago
quarter.
Financial Overview
Global Banking reported net income of $1.4 billion, down $515 million from
the year-ago quarter, from lower revenues and provision expense benefit
partially offset by a decline in noninterest expense. Revenue of $4.3 billion
was down 8 percent from the year-ago quarter, primarily due to lower
investment banking fees, the lower rate environment and accretion on certain
acquired portfolios.
Global Corporate Banking revenue increased to $1.5 billion in the second
quarter of 2012 from $1.4 billion in the year-ago quarter, while Global
Commercial Banking revenue declined to $2.0 billion in the second quarter of
2012 from $2.3 billion in the second quarter of 2011. Business Lending revenue
was $2.0 billion in the second quarter of 2012, down from $2.2 billion in the
year-ago quarter. Treasury Services revenue was $1.5 billion in the second
quarter of 2012, compared to $1.6 billion in the second quarter of 2011.
Firmwide investment banking fees, including self-led deals, declined to $1.2
billion from $1.7 billion in the year-ago quarter, mainly due to lower
underwriting fee revenue.
The provision for credit losses was a benefit of $113 million in the second
quarter of 2012, compared to a benefit of $557 million in the prior-year
quarter. Asset quality continued to improve across all major portfolios with
declines in reservable criticized loan balances. Noninterest expense was $2.2
billion, down 3 percent from the year-ago quarter, primarily from lower
personnel expense.
Average loans and leases increased $7.7 billion, or 3 percent from the
year-ago quarter, due to growth in domestic and international commercial and
industrial loans and international trade finance. Average deposits increased
$3.4 billion from the prior-year quarter as balances continued to grow from
excess market liquidity and limited alternative investment options.
Global Markets
Â
  Three Months Ended
(Dollars in millions) Â Â June 30 Â Â March 31 Â Â June 30
2012 2012 2011
Total revenue, net of
interest expense, FTE $ 3,365 Â Â $ 4,193 Â Â $ 4,413
basis
Provision for credit (14 ) (20 ) (8 )
losses
Noninterest expense 2,711 3,076 3,263
Net income 462 798 911
Return on average 10.84 % 17.52 % 15.90 %
equity
Return on average 14.92 23.54 19.99
economic capital^1
Total average assets   $ 581,952    $ 558,594    $ 622,915 Â
Return on average economic capital is a non-GAAP financial measure. For
^1 Â reconciliation to GAAP financial measures, refer to pages 24-27 of this
press release.
Â
Business Highlights
* Sales and trading revenue was $3.2 billion in the second quarter of 2012,
compared to $3.8 billion in the first quarter of 2012 and $3.7 billion in
the second quarter of 2011. Sales and trading revenue, excluding DVA
losses, was $3.3 billion in the second quarter of 2012, compared to $5.2
billion in the first quarter of 2012 and $3.6 billion in the second
quarter of 2011.
* Risk-weighted assets in the Global Markets business declined to $196
billion in the second quarter of 2012 from $243 billion in the second
quarter of 2011 as the company continued to reduce legacy risk exposures.
Financial Overview
Global Markets revenue declined $1.0 billion from the year-ago quarter to $3.4
billion due to lower trading volumes, new issuance activity and client flows.
The current quarter included DVA losses of $156 million, compared to gains of
$123 million in the year-ago quarter.
Net income was $462 million in the second quarter of 2012, compared with net
income of $911 million in the year-ago quarter. Noninterest expense of $2.7
billion was $552 million lower than the year-ago quarter primarily driven by a
decrease in personnel-related expense.
Fixed Income, Currency and Commodities sales and trading revenue, excluding
DVA, was $2.6 billion in the second quarter of 2012, flat from the year-ago
quarter and $1.6 billion lower than the first quarter of 2012. Market
uncertainty stemming from the eurozone crisis and slower economic growth
contributed to a decline in trading volumes and a lower appetite for risk
among investors. Equities sales and trading revenue was $759 million, a
decline of $318 million from the year-ago quarter. Volumes remained at low
levels impacting trading and commission revenues.
Global Wealth and Investment Management
Â
  Three Months Ended
(Dollars in millions) Â Â June 30 Â Â March 31 Â Â June 30
2012 2012 2011
Total revenue, net of
interest expense, FTE $ 4,317 Â Â $ 4,360 Â Â $ 4,495
basis
Provision for credit 47 46 72
losses
Noninterest expense 3,408 3,450 3,624
Net income 543 547 513
Return on average 12.15 % 12.78 % 11.71 %
equity
Return on average 30.03 33.81 30.45
economic capital^1
Average loans $ 104,102 $ 103,036 $ 102,201
Average deposits 251,121 252,705 255,432
Â
(Dollars in billions) At June 30 Â Â At March 31 Â Â At June 30
2012 2012 2011
Assets under $ 682.2 $ 693.0 $ 661.0
management
Total client   2,192.1    2,241.3    2,205.7 Â
balances^2
Return on average economic capital is a non-GAAP financial measure. For
^1 Â reconciliation to GAAP financial measures, refer to pages 24-27 of this
press release.
Total client balances are defined as assets under management, assets in
^2 custody, client brokerage assets, client deposits and loans (including
margin receivables).
Â
Business Highlights
* Pretax margin for the second quarter of 2012 was 20 percent, compared with
18 percent in the year-ago quarter.
* Record asset management fees of $1.6 billion were driven by market gains
and solid long-term assets under management flows.
* Period-end loan balances for Global Wealth and Investment Management grew
$2.5 billion, or 2.4 percent, from the first quarter of 2012 to a record
$105.4 billion on higher securities-based lending.
* The number of Wealth Advisors grew for the 12^th consecutive quarter
including Financial Advisors within the company's Consumer and Business
Banking segment.
Financial Overview
Net income for Global Wealth and Investment Management rose 6 percent from the
year-ago quarter to $543 million as lower revenue was more than offset by
decreases in noninterest expense and lower provision for credit losses.
Revenue declined 4 percent to $4.3 billion largely as a result of lower net
interest income, primarily from the continued low rate environment, and lower
transactional activity.
Noninterest expense decreased 6 percent from the year-ago quarter to $3.4
billion, due to lower FDIC expense and other volume-driven expenses as well as
lower litigation and legal costs. The provision for credit losses decreased
$25 million to $47 million from the year-ago quarter due to improving
portfolio trends within the residential mortgage portfolio.
Assets under management (AUM) rose $21.2 billion to $682.2 billion from the
year-ago quarter, driven by long-term AUM flows, while period-end loan
balances were up $2.5 billion from the year-ago quarter to $105.4 billion.
All Other ^1
Â
  Three Months Ended
(Dollars in millions) Â Â June 30 Â Â March 31 Â Â June 30
2012 2012 2011
Total revenue, net of $ 388 Â Â $ (614 ) Â Â $ 2,550
interest expense, FTE basis
Provision for credit losses 536 1,246 1,841
Noninterest expense 849 2,286 746
Net loss (336 ) (2,592 ) (167 )
Total average loans   257,341    264,112    287,840 Â
All Other consists of two broad groupings, Equity Investments and Other.
Equity Investments includes Global Principal Investments, Strategic and
other investments. Other includes liquidating businesses, merger and
restructuring charges, ALM activities such as the residential mortgage
^1 Â portfolio and investment securities, and activities including economic
hedges, gains/losses on structured liabilities, the impact of certain
allocation methodologies and accounting hedge ineffectiveness. Other
also includes certain residential mortgage and discontinued real estate
loans that are managed by Legacy Assets and Servicing within Consumer
Real Estate Services.
Â
All Other reported a net loss of $336 million in the second quarter of 2012,
compared to a net loss of $167 million for the same period a year ago, as a
decline in revenue was partially offset by lower provision for credit losses.
Equity investment income results reflected a loss of $63 million in the second
quarter of 2012, compared to income of $1.1 billion in the year-ago quarter,
as the year-ago quarter included dividends and gains on sales of certain
equity investments. Gains on the sale of debt securities totaled $354 million
in the second quarter of 2012, down from $831 million in the same period a
year ago.
The second quarter of 2012 also included $505 million of net gains resulting
from the repurchase of certain debt and trust-preferred securities and
negative fair value adjustments on structured liabilities of $62 million,
compared to positive fair value adjustments of $214 million in the second
quarter of 2011. The first quarter of 2012 included negative fair value
adjustments of $3.3 billion.
The decrease in the provision for credit losses was driven primarily by
continued improvement in credit quality in the residential mortgage portfolio
as well as a lower provision related to the Countrywide-purchased
credit-impaired discontinued real estate and residential mortgage portfolios.
Corporate Overview
Revenue and Expense
Â
  Three Months Ended
(Dollars in millions) Â Â June 30 Â Â March 31 Â Â June 30
2012 2012 2011
Net interest income, FTE $ 9,782 Â Â $ 11,053 Â Â $ 11,493
basis^1
Noninterest income 12,420 11,432 1,990
Total revenue, net of
interest expense, FTE 22,202 22,485 13,483
basis
Provision for credit 1,773 2,418 3,255
losses
Noninterest expense^2 17,048 19,141 22,856
Net income   2,463    653    (8,826 )
Fully taxable-equivalent (FTE) basis is a non-GAAP financial measure.
For reconciliation to GAAP financial measures, refer to pages 24-27 of
this press release. Net interest income on a GAAP basis was $9.5
^1 Â billion, $10.8 billion and $11.2 billion for the three months ended June
30, 2012, March 31, 2012 and June 30, 2011. Total revenue, net of
interest expense on a GAAP basis, was $22.0 billion, $22.3 billion and
$13.2 billion for the three months ended June 30, 2012, March 31, 2012
and June 30, 2011.
^2 Includes a goodwill impairment charge of $2.6 billion in the second
quarter of 2011.
Â
Revenue, net of interest expense, on an FTE basis rose $8.7 billion, or 65
percent, from the second quarter of 2011, driven largely by $14.0 billion of
representations and warranties provision recorded in the year-ago quarter,
partially offset by lower net interest income compared with the year-ago
quarter.
Net interest income on an FTE basis decreased 15 percent from the year-ago
quarter. The net interest yield fell 29 basis points from the year-ago
quarter. These decreases were primarily driven by lower consumer loan balances
and yields and decreased investment securities yields, partially offset by
ongoing reductions in long-term debt balances. Net interest income for the
second quarter of 2012 included unfavorable market-related impacts of premium
amortization of $319 million and hedge ineffectiveness of $182 million.
Noninterest income increased $10.4 billion from the year-ago quarter, driven
largely by a significant reduction in the provision for representations and
warranties, partially offset by lower other income in the second quarter of
2012. The year-ago quarter included $14.0 billion in representations and
warranties provision and a net gain on the sale of Balboa's lender-placed
insurance business of $752 million.
Noninterest expense decreased $5.8 billion, or 25 percent from the year-ago
quarter, to $17.0 billion. This was primarily due to a $2.6 billion non-cash,
non-tax deductible goodwill impairment charge recorded in the year-ago
quarter, lower litigation expense and a reduction in mortgage-related
assessments, waivers and similar costs related to delayed foreclosures.
Litigation expense was $963 million in the second quarter of 2012, compared to
$2.2 billion in the year-ago quarter.
Income tax expense for the second quarter of 2012 was $684 million, resulting
in a 22 percent effective tax rate. This compares to an income tax benefit of
$4.0 billion on a $12.9 billion pretax loss in the year-ago quarter.
Credit Quality
Â
  Three Months Ended
(Dollars in millions) Â Â June 30 Â Â March 31 Â Â June 30
2012 2012 2011
Provision for credit $ 1,773 Â Â $ 2,418 Â Â $ 3,255
losses
Net charge-offs 3,626 4,056 5,665
Net charge-off ratio^1 1.64 % 1.80 % 2.44 %
Â
At June 30 Â Â At March 31 Â Â At June 30
2012 2012 2011
Nonperforming loans,
leases and foreclosed $ 25,377 $ 27,790 $ 30,058
properties
Nonperforming loans,
leases and foreclosed 2.87 % 3.10 % 3.22 %
properties ratio^2
Allowance for loan and $ 30,288 $ 32,211 $ 37,312
lease losses
Allowance for loan and   3.43 %   3.61 %   4.00 %
lease losses ratio^3
Net charge-off/loss ratios are calculated as net charge-offs divided by
^1 Â average outstanding loans and leases during the period; quarterly
results are annualized.
Nonperforming loans, leases and foreclosed properties ratios are
^2 calculated as nonperforming loans, leases and foreclosed properties
divided by outstanding loans, leases and foreclosed properties at the
end of the period.
Allowance for loan and lease losses ratios are calculated as allowance
^3 for loan and lease losses divided by loans and leases outstanding at the
end of the period.
Â
Note: Ratios do not include loans measured under the fair value option.
Credit quality continued to improve in the second quarter of 2012, with net
charge-offs declining across most major portfolios and the provision for
credit losses decreasing significantly, compared to the second quarter of
2011. Additionally, 30+ day performing delinquent loans, excluding
fully-insured loans, declined across most major portfolios, and reservable
criticized balances also continued to decline, down 42 percent from the
year-ago period.
Net charge-offs of $3.6 billion for the second quarter of 2012 declined $430
million from the first quarter of 2012 and $2.0 billion from the second
quarter of 2011. The improvement compared to both prior periods was impacted
by the Card Services portfolios within CBB due to fewer delinquent loans. Also
impacting the improvement from the year-ago period were lower bankruptcy
filings. In addition, net charge-offs declined in the consumer real estate
portfolios from both the first quarter of 2012 and the year-ago quarter,
driven by fewer delinquent loans and lower refreshed valuation losses on loans
greater than 180 days past due.
The provision for credit losses declined to $1.8 billion in the second quarter
of 2012 from $2.4 billion in the first quarter of 2012 and $3.3 billion in the
second quarter of 2011. The provision for credit losses for the second quarter
of 2012 was $1.9 billion lower than net charge-offs, resulting in a reduction
in the allowance for credit loss. This was driven primarily by reductions in
the home equity portfolio primarily due to continued portfolio stabilization,
as well as improvement in bankruptcies and delinquencies across the Card
Services portfolio within CBB. The reserve reduction was also due to
improvement in economic conditions impacting the core commercial portfolio, as
evidenced by continued declines in reservable criticized and commercial
nonperforming balances.
The allowance for loan and lease losses to annualized net charge-off coverage
ratio increased in the second quarter of 2012 to 2.08 times, compared with
1.97 times in the first quarter of 2012 and 1.64 times in the second quarter
of 2011. Excluding purchased credit-impaired loans, the allowance to
annualized net charge-off coverage ratio was 1.46 times, 1.43 times and 1.28
times for the same periods, respectively.
Nonperforming loans, leases and foreclosed properties were $25.4 billion at
June 30, 2012, a decrease from $27.8 billion at March 31, 2012 and $30.1
billion at June 30, 2011.
Capital and Liquidity Management
Â
(Dollars in millions, At June 30 At March 31 At June 30
except per share   2012   2012   2011
information)
Total shareholders’   $ 235,975   $ 232,499   $ 222,176
equity
Tier 1 common equity 134,082 131,602 114,684
Tier 1 common capital 11.24 % 10.78 % 8.23 %
ratio
Tier 1 capital ratio 13.80 13.37 11.00
Common equity ratio 10.05 9.80 9.09
Tangible book value $ 13.22 $ 12.87 $ 12.65
per share^1
Book value per share   20.16    19.83    20.29 Â
Tangible book value per share is a non-GAAP financial measure. For
^1 Â reconciliation to GAAP financial measures, refer to pages 24-27 of this
press release.
Â
The Tier 1 common capital ratio under Basel 1 increased significantly during
the second quarter to 11.24 percent from 10.78 percent at March 31, 2012 and
8.23 percent at June 30, 2011. The Tier 1 capital ratio was 13.80 percent at
June 30, 2012. This compares with 13.37 percent at March 31, 2012 and 11.00
percent at June 30, 2011.
In late 2010, the Basel Committee on Banking Supervision proposed Basel 3
rules with an implementation date of January 2013. U.S. regulators issued
proposed rules for Basel 3 and final market risk rules in June 2012. Among
other things, Basel 3 would substantially raise minimum capital requirements,
change the definition of regulatory capital, introduce new liquidity and
coverage ratios and propose a phased implementation of these changes over
several years, with full implementation targeted for 2019.
The company's estimates under Basel 3, do not reflect the proposed U.S. Basel
3 rules, but are based on its current understanding of both the final U.S.
market risk rules and BIS Basel 3 guidelines, assuming all relevant regulatory
model approvals. These estimates under Basel 3 will evolve over time as the
company's businesses change and as a result of further rulemaking or
clarification by U.S. regulatory agencies. The final U.S. market risk rules
and BIS Basel 3 guidelines require approval by banking regulators of certain
models used as part of risk-weighted asset calculations. If these models are
not approved, the company's capital ratio would likely be adversely impacted,
which in some cases could be significant. In addition to Basel 1 requirements
and capital ratios, these estimates assist management, investors and analysts
in assessing capital adequacy and comparability under Basel 3 capital
standards to other financial services companies. The company continues to
evaluate the potential impact of proposed rules and anticipates it will be in
compliance with any final rules by the proposed effective dates.
As of June 30, 2012, the company's Tier 1 common capital ratio on a Basel 3
fully phased-in basis was estimated at 8.10 percent.
At June 30, 2012, the company's total Global Excess Liquidity Sources were
$378 billion, down only $28 billion from the first quarter of 2012 even as the
company reduced long-term debt by $53 billion. On June 30, 2011, Global Excess
Liquidity Sources were $402 billion. Time-to-required funding increased to a
record 37 months at June 30, 2012 from 31 months at March 31, 2012 and 22
months at June 30, 2011.
During the second quarter of 2012, a cash dividend of $0.01 per common share
was paid and the company recorded $365 million in preferred dividends.
Period-end common shares issued and outstanding were 10.78 billion and 10.13
billion for the second quarter of 2012 and 2011, respectively.
Note: Chief Executive Officer Brian Moynihan and Chief Financial Officer Bruce
Thompson will discuss second-quarter 2012 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 1.785.424.1734 (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 56
million consumer and small business relationships with approximately 5,600
retail banking offices and approximately 16,200 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,â€
“targets,†“expects,†“estimates,†“intends,†“plans,â€
“goals,†“believes†and other similar expressions or future or
conditional verbs such as “will,†“should,†“would†and “could.â€
The forward-looking statements made represent Bank of America's current
expectations, plans or forecasts of its future results and revenues, including
the expectation that Phase 2 of New BAC will yield annualized cost savings of
$3 billion by mid-2015 and total New BAC savings of $8 billion; the company
exceeding its previously announced 20 percent targeted Phase 1 cost savings by
the end of 2012; the company's position for long-term growth; the company
anticipates it will be in compliance with any final capital rules by the
proposed effective dates; Basel 3 Tier 1 common ratio estimates are expected
to evolve over time along with the Basel 3 rules, and changes in businesses
and economic conditions will impact these estimates; and the company's
liability management actions in the second quarter of 2012, and additional
actions announced in the third quarter of 2012, are expected to benefit
quarterly net interest income by approximately $300 million; 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.
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
2011 Annual Report on Form 10-K, and in any of Bank of America's subsequent
SEC filings; the company's resolution of differences with the
government-sponsored enterprises (GSEs) regarding representations and
warranties repurchase claims, including with respect to mortgage insurance
rescissions, and foreclosure delays; the company's ability to resolve
representations and warranties claims made by monolines and private-label and
other investors, including as a result of any adverse court rulings, and the
chance that the company could face related servicing, securities, fraud,
indemnity or other claims from one or more of the monolines or private-label
and other investors; if future representations and warranties losses occur in
excess of the company's recorded liability for GSE exposures and in excess of
the recorded liability and estimated range of possible loss for non-GSE
exposures; uncertainties about the financial stability of several countries in
the European Union (EU), the increasing risk that those countries may default
on their sovereign debt or exit the EU and related stresses on financial
markets, the Euro and the EU and the company's direct and indirect exposures
to such risks; the uncertainty regarding the timing and final substance of any
capital or liquidity standards, including the final Basel 3 requirements and
their implementation for U.S. banks through rulemaking by the Federal Reserve,
including anticipated requirements to hold higher levels of regulatory
capital, liquidity and meet higher regulatory capital ratios as a result of
final Basel 3 or other capital or liquidity standards; the negative impact of
the Dodd-Frank Wall Street Reform and Consumer Protection Act on the company's
businesses and earnings, including as a result of additional regulatory
interpretation and rulemaking and the success of the company's actions to
mitigate such impacts; the company's satisfaction of its borrower assistance
programs under the global settlement agreement with federal agencies and state
attorneys general; adverse changes to the company's credit ratings from the
major credit rating agencies; estimates of the fair value of certain of the
company's assets and liabilities; unexpected claims, damages and fines
resulting from pending or future litigation and regulatory proceedings; the
company's ability to fully realize the cost savings and other anticipated
benefits from Project New BAC, including in accordance with currently
anticipated timeframes; and other similar matters.
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
Managementâ€) 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.
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 Affiliatesâ€), 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://newsroom.bankofamerica.com.
www.bankofamerica.com
Bank of America Corporation and Subsidiaries  Â
Selected Financial Data  Â
(Dollars in millions, except per share data; shares in
thousands)
Summary Income Six Months Ended  Second First Second
Statement June 30 Quarter Quarter Quarter
2012 Â 2011 2012 2012 2011
Net interest $ 20,394 $ 23,425 $ 9,548 $ 10,846 $ 11,246
income
Noninterest 23,852 Â 16,688 Â 12,420 Â 11,432 Â 1,990 Â
income
Total revenue,
net of interest 44,246 40,113 21,968 22,278 13,236
expense
Provision for 4,191 7,069 1,773 2,418 3,255
credit losses
Goodwill — 2,603 — — 2,603
impairment
Merger and
restructuring — 361 — — 159
charges
All other
noninterest 36,189 Â 40,175 Â 17,048 Â 19,141 Â 20,094 Â
expense ^(1)
Income (loss)
before income 3,866 (10,095 ) 3,147 719 (12,875 )
taxes
Income tax
expense 750 Â (3,318 ) 684 Â 66 Â (4,049 )
(benefit)
Net income $ 3,116 Â $ (6,777 ) $ 2,463 Â $ 653 Â $ (8,826 )
(loss)
Preferred stock 690 Â 611 Â 365 Â 325 Â 301 Â
dividends
Net income
(loss)
applicable to $ 2,426 Â $ (7,388 ) $ 2,098 Â $ 328 Â $ (9,127 )
common
shareholders
Â
Earnings (loss)
per common $ 0.23 $ (0.73 ) $ 0.19 $ 0.03 $ (0.90 )
share
Diluted
earnings (loss) 0.22 (0.73 ) 0.19 0.03 (0.90 )
per common
share
Â
Summary Average Six Months Ended Second First Second
Balance Sheet June 30 Quarter Quarter Quarter
2012 2011 2012 2012 2011
Total loans and $ 906,610 $ 938,738 $ 899,498 $ 913,722 $ 938,513
leases
Debt securities 335,001 335,556 342,244 327,758 335,269
Total earning 1,770,336 1,857,124 1,772,568 1,768,105 1,844,525
assets
Total assets 2,190,868 2,338,826 2,194,563 2,187,174 2,339,110
Total deposits 1,031,500 1,029,578 1,032,888 1,030,112 1,035,944
Common
shareholders’ 215,466 216,367 216,782 214,150 218,505
equity
Total
shareholders’ 234,062 232,930 235,558 232,566 235,067
equity
Â
Performance Six Months Ended Second First Second
Ratios June 30 Quarter Quarter Quarter
2012 2011 2012 2012 2011
Return on 0.29 % n/m 0.45 % 0.12 % n/m
average assets
Return on
average
tangible 3.94 n/m 6.16 1.67 n/m
shareholders’
equity ^(2)
Â
Credit Quality Six Months Ended Second First Second
June 30 Quarter Quarter Quarter
2012 2011 2012 2012 2011
Total net $ 7,682 $ 11,693 $ 3,626 $ 4,056 $ 5,665
charge-offs
Net charge-offs
as a % of
average loans 1.72 % 2.53 % 1.64 % 1.80 % 2.44 %
and leases
outstanding
^(3)
Provision for $ 4,191 $ 7,069 $ 1,773 $ 2,418 $ 3,255
credit losses
Â
June 30 March 31 June 30
2012 2012 2011
Total
nonperforming
loans, leases $ 25,377 $ 27,790 $ 30,058
and foreclosed
properties ^(4)
Nonperforming
loans, leases
and foreclosed
properties as a 2.87 % 3.10 % 3.22 %
% of total
loans, leases
and foreclosed
properties ^(3)
Allowance for
loan and lease $ 30,288 $ 32,211 $ 37,312
losses
Allowance for
loan and lease
losses as a %
of total loans 3.43 % 3.61 % 4.00 %
and leases
outstanding
^(3)
         Â
For footnotes
see page 20.
Â
This information is preliminary and based on company data available at the
time of the presentation.
Bank of America Corporation and Subsidiaries Â
Selected Financial Data (continued) Â Â
(Dollars in millions, except per share data; shares in
thousands)
   Â
Capital June 30 March 31 June 30
Management 2012 2012 2011
Risk-based
capital ^(5):
Tier 1 common $ 134,082 $ 131,602 $ 114,684
capital ^(6)
Tier 1 common
capital ratio 11.24 % 10.78 % 8.23 %
^(6)
Tier 1 leverage 7.82 7.79 6.86
ratio
Tangible equity 7.73 7.48 6.63
ratio ^(7)
Tangible common
equity ratio 6.83 6.58 5.87
^(7)
Â
Period-end
common shares 10,776,869 10,775,604 10,133,190
issued and
outstanding
Â
Six Months Ended Second First Second
June 30 Quarter Quarter Quarter
2012 2011 2012 2012 2011
Common shares 240,931 48,035 1,265 239,666 1,387
issued
Average common
shares issued 10,714,881 10,085,479 10,775,695 10,651,367 10,094,928
and outstanding
Average diluted
common shares 11,509,945 10,085,479 11,556,011 10,761,917 10,094,928
issued and
outstanding
Dividends paid
per common $ 0.02 $ 0.02 $ 0.01 $ 0.01 $ 0.01
share
Â
Summary June 30 March 31 June 30
Period-End 2012 2012 2011
Balance Sheet
Total loans and $ 892,315 $ 902,294 $ 941,257
leases
Total debt 335,217 331,245 331,052
securities
Total earning 1,737,809 1,744,452 1,772,293
assets
Total assets 2,160,854 2,181,449 2,261,319
Total deposits 1,035,225 1,041,311 1,038,408
Total
shareholders’ 235,975 232,499 222,176
equity
Common
shareholders’ 217,213 213,711 205,614
equity
Book value per
share of common $ 20.16 $ 19.83 $ 20.29
stock
Tangible book
value per share 13.22 12.87 12.65
of common stock
^(2)
(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. Other companies may define or calculate
non-GAAP financial measures differently. See Reconciliations to GAAP Financial
Measures on pages 24-27.
(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 capital ratio equals Tier 1 capital excluding preferred
stock, trust preferred securities, hybrid securities and minority interest
divided by risk-weighted assets.
(7) Tangible equity ratio equals period-end tangible shareholders’ equity
divided by period-end tangible assets. Tangible common equity equals
period-end tangible common shareholders’ equity divided by period-end
tangible assets. Tangible shareholders’ equity and tangible assets are
non-GAAP financial measures. We believe the use of these non-GAAP financial
measures provides additional clarity in assessing the results of the
Corporation. Other companies may define or calculate non-GAAP financial
measures differently. See Reconciliations to GAAP Financial Measures on pages
24-27.
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.
Bank of America Corporation and Subsidiaries
Quarterly Results by Business Segment
(Dollars in millions)
    Second Quarter 2012
Consumer & Consumer
Global Global All
Business   Real Estate       GWIM  Â
Banking Markets Other
Banking Services
Total
revenue,
net of
interest $ 7,326 $ 2,521 $ 4,285 $ 3,365 $ 4,317 $ 388
expense
(FTE basis)
^(1)
Provision
for credit 1,131 186 (113 ) (14 ) 47 536
losses
Noninterest 4,359 3,556 2,165 2,711 3,408 849
expense
Net income 1,156 (768 ) 1,406 462 543 (336 )
(loss)
Return on
average 8.70 % n/m 12.31 % 10.84 % 12.15 % n/m
allocated
equity
Return on
average
economic 20.31 n/m 26.83 14.92 30.03 n/m
capital ^
(2)
Balance
Sheet
Average
Total loans $ 136,872 $ 106,725 $ 267,812 n/m $ 104,102 $ 257,341
and leases
Total 476,580 n/m 239,054 n/m 251,121 31,274
deposits
Allocated 53,452 14,116 45,958 $ 17,132 17,974 86,926
equity
Economic
capital 22,967 14,116 21,102 12,524 7,353 n/m
^(2)
Period end
Total loans $ 135,523 $ 105,304 $ 265,393 n/m $ 105,395 $ 253,505
and leases
Total 481,939 n/m 241,344 n/m 249,755 27,157
deposits
Â
First Quarter 2012
Consumer & Consumer
Global Global All
Business Real Estate GWIM
Banking Markets Other
Banking Services
Total
revenue,
net of
interest $ 7,422 $ 2,674 $ 4,450 $ 4,193 $ 4,360 $ (614 )
expense
(FTE basis)
^(1)
Provision
for credit 877 507 (238 ) (20 ) 46 1,246
losses
Noninterest 4,247 3,905 2,177 3,076 3,450 2,286
expense
Net income 1,455 (1,145 ) 1,590 798 547 (2,592 )
(loss)
Return on
average 11.05 % n/m 13.98 % 17.52 % 12.78 % n/m
allocated
equity
Return on
average
economic 26.16 n/m 30.67 23.54 33.81 n/m
capital
^(2)
Balance
Sheet
Average
Total loans $ 141,578 $ 110,755 $ 277,074 n/m $ 103,036 $ 264,112
and leases
Total 466,240 n/m 237,531 n/m 252,705 39,774
deposits
Allocated 52,947 14,791 45,719 $ 18,317 17,228 83,564
equity
Economic
capital 22,425 14,791 20,858 13,669 6,587 n/m
^(2)
Period end
Total loans $ 138,909 $ 109,264 $ 272,279 n/m $ 102,903 $ 260,005
and leases
Total 486,162 n/m 237,602 n/m 252,755 30,150
deposits
Second Quarter 2011
Consumer & Consumer
Global Global All
Business Real Estate GWIM
Banking Markets Other
Banking Services
Total
revenue,
net of
interest $ 8,681 $ (11,315 ) $ 4,659 $ 4,413 $ 4,495 $ 2,550
expense
(FTE basis)
^ (1)
Provision
for credit 400 1,507 (557 ) (8 ) 72 1,841
losses
Noninterest 4,377 8,625 2,221 3,263 3,624 746
expense
Net income 2,502 (14,506 ) 1,921 911 513 (167 )
(loss)
Return on
average 19.10 % n/m 16.37 % 15.90 % 11.71 % n/m
allocated
equity
Return on
average
economic 45.87 n/m 34.06 19.99 30.45 n/m
capital
^(2)
Balance
Sheet
Average
Total loans $ 155,122 $ 121,683 $ 260,144 n/m $ 102,201 $ 287,840
and leases
Total 467,179 n/m 235,662 n/m 255,432 48,109
deposits
Allocated 52,559 17,139 47,060 $ 22,990 17,560 77,759
equity
Economic
capital 21,903 14,437 22,632 18,344 6,854 n/m
^(2)
Period end
Total loans $ 153,391 $ 121,553 $ 263,065 n/m $ 102,878 $ 287,424
and leases
Total 465,457 n/m 244,025 n/m 255,796 43,768
deposits
(1) Fully taxable-equivalent basis is a performance measure used by management
in operating the business that management believes provides investors with a
more accurate picture of the interest margin for comparative purposes.
(2) 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
24-27.
n/m = not meaningful
Certain prior period amounts have been reclassified among the segments to
conform to current period presentation.
This information is preliminary and based on company data available at the
time of the presentation.
Bank of America Corporation and Subsidiaries
Year-to-Date Results by Business Segment
(Dollars in millions)
 Six Months Ended June 30, 2012
Consumer & Consumer
Global Global All
Business  Real Estate    GWIM Â
Banking Markets Other
Banking Services
Total
revenue,
net of
interest $ 14,748 $ 5,195 $ 8,735 $ 7,558 $ 8,677 $ (226 )
expense
(FTE basis)
^(1)
Provision
for credit 2,008 693 (351 ) (34 ) 93 1,782
losses
Noninterest 8,606 7,461 4,342 5,787 6,858 3,135
expense
Net income 2,611 (1,913 ) 2,996 1,260 1,090 (2,928 )
(loss)
Return on
average 9.87 % n/m 13.14 % 14.29 % 12.46 % n/m
allocated
equity
Return on
average
economic 23.20 n/m 28.74 19.42 31.81 n/m
capital ^
(2)
Balance
Sheet
Average
Total loans $ 139,225 $ 108,740 $ 272,443 n/m $ 103,569 $ 260,727
and leases
Total 471,410 n/m 238,292 n/m 251,913 35,524
deposits
Allocated 53,199 14,454 45,838 $ 17,725 17,601 85,245
equity
Economic
capital 22,696 14,454 20,980 13,096 6,970 n/m
^(2)
Period end
Total loans $ 135,523 $ 105,304 $ 265,393 n/m $ 105,395 $ 253,505
and leases
Total 481,939 n/m 241,344 n/m 249,755 27,157
deposits
Â
Six Months Ended June 30, 2011
Consumer & Consumer
Global Global All
Business Real Estate GWIM
Banking Markets Other
Banking Services
Total
revenue,
net of
interest $ 17,147 $ (9,252 ) $ 9,360 $ 9,685 $ 8,991 $ 4,647
expense
(FTE basis)
^(1)
Provision
for credit 1,061 2,605 (681 ) (41 ) 118 4,007
losses
Noninterest 8,938 13,402 4,531 6,376 7,213 2,679
expense
Net income 4,544 (16,906 ) 3,504 2,306 1,055 (1,280 )
(loss)
Return on
average 17.25 % n/m 14.75 % 18.85 % 11.98 % n/m
allocated
equity
Return on
average
economic 40.90 n/m 30.14 23.23 30.72 n/m
capital
^(2)
Balance
Sheet
Average
Total loans $ 158,033 $ 121,125 $ 258,508 n/m $ 101,530 $ 288,068
and leases
Total 462,136 n/m 230,744 n/m 257,066 49,110
deposits
Allocated 53,126 17,933 47,891 $ 24,667 17,745 71,568
equity
Economic
capital 22,450 15,211 23,461 20,069 7,028 n/m
^(2)
Period end
Total loans $ 153,391 $ 121,553 $ 263,065 n/m $ 102,878 $ 287,424
and leases
Total 465,457 n/m 244,025 n/m 255,796 43,768
deposits
(1) Fully taxable-equivalent basis is a performance measure used by management
in operating the business that management believes provides investors with a
more accurate picture of the interest margin for comparative purposes.
(2) 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
24-27.
n/m = not meaningful
Certain prior period amounts have been reclassified among the segments to
conform to current period presentation.
This information is preliminary and based on company data available at the
time of the presentation.
Bank of America Corporation and Subsidiaries
Supplemental          Â
Financial Data
(Dollars in     Â
millions)
Â
Fully
taxable-equivalent Six Months Ended Second First Second
(FTE) basis data June 30 Quarter Quarter Quarter
^(1) 2012 2012 2011
2012 2011
Net interest $ 20,835 23,890 $ 9,782 $ 11,053 $ 11,493
income
Total revenue, net
of interest 44,687 40,578 22,202 22,485 13,483
expense
Net interest yield 2.36 % 2.58 % 2.21 % 2.51 % 2.50 %
^(2)
Efficiency ratio 80.98 n/m 76.79 85.13 n/m
Â
Â
Other Data June 30 March 31 June 30
2012 2012 2011
Number of banking 5,594 5,651 5,742
centers - U.S.
Number of branded 16,220 17,255 17,817
ATMs - U.S.
Ending full-time
equivalent 275,460 278,688 288,084
employees
(1) FTE basis is a non-GAAP financial measure. FTE basis is a performance
measure used by management in operating the business that management believes
provides investors with a more accurate picture of the interest margin for
comparative purposes. See Reconciliations to GAAP Financial Measures on pages
24-27.
(2) Calculation includes fees earned on overnight deposits placed with the
Federal Reserve of $99 million and $112 million for the six months ended June
30, 2012 and 2011; $52 million and $47 million for the second and first
quarters of 2012, and $49 million for the second quarter of 2011,
respectively.
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.
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 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
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
a goodwill impairment charge of $2.6 billion recorded in the second quarter of
2011. Accordingly, these are non-GAAP financial measures.
See the tables below and on pages 25-27 for reconciliations of these non-GAAP
financial measures with financial measures defined by GAAP for the three
months ended June 30, 2012, March 31, 2012 and June 30, 2011 and the six
months ended June 30, 2012 and 2011. 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.
 Six Months Ended   Second  First Second
June 30 Quarter Quarter  Quarter
2012 Â 2011 2012 2012 2011
Reconciliation of
net interest
income to net
interest income on
a fully
taxable-equivalent
basis
Â
Net interest $ 20,394 $ 23,425 $ 9,548 $ 10,846 $ 11,246
income
Fully
taxable-equivalent 441 Â 465 Â 234 Â 207 Â 247 Â
adjustment
Net interest
income on a fully $ 20,835 Â $ 23,890 Â $ 9,782 Â $ 11,053 Â $ 11,493 Â
taxable-equivalent
basis
Â
Reconciliation of
total revenue, net
of interest
expense to total
revenue, net of
interest expense
on a fully
taxable-equivalent
basis
Â
Total revenue, net
of interest $ 44,246 $ 40,113 $ 21,968 $ 22,278 $ 13,236
expense
Fully
taxable-equivalent 441 Â 465 Â 234 Â 207 Â 247 Â
adjustment
Total revenue, net
of interest
expense on a fully $ 44,687 Â $ 40,578 Â $ 22,202 Â $ 22,485 Â $ 13,483 Â
taxable-equivalent
basis
Â
Reconciliation of
total noninterest
expense to total
noninterest
expense, excluding
goodwill
impairment charge
Â
Total noninterest $ 36,189 $ 43,139 $ 17,048 $ 19,141 $ 22,856
expense
Goodwill —  (2,603 ) —  —  (2,603 )
impairment charge
Total noninterest
expense, excluding $ 36,189 Â $ 40,536 Â $ 17,048 Â $ 19,141 Â $ 20,253 Â
goodwill
impairment charge
Â
Reconciliation of
income tax expense
(benefit) to
income tax expense
(benefit) on a
fully
taxable-equivalent
basis
Â
Income tax expense $ 750 $ (3,318 ) $ 684 $ 66 $ (4,049 )
(benefit)
Fully
taxable-equivalent 441 Â 465 Â 234 Â 207 Â 247 Â
adjustment
Income tax expense
(benefit) on a
fully $ 1,191 Â $ (2,853 ) $ 918 Â $ 273 Â $ (3,802 )
taxable-equivalent
basis
Â
Reconciliation of
net income (loss)
to net income
(loss), excluding
goodwill
impairment charge
Â
Net income (loss) $ 3,116 $ (6,777 ) $ 2,463 $ 653 $ (8,826 )
Goodwill —  2,603  —  —  2,603 Â
impairment charge
Net income (loss),
excluding goodwill $ 3,116 Â $ (4,174 ) $ 2,463 Â $ 653 Â $ (6,223 )
impairment charge
Â
Reconciliation of
net income (loss)
applicable to
common
shareholders to
net income (loss)
applicable to
common
shareholders,
excluding goodwill
impairment charge
Â
Net income (loss)
applicable to $ 2,426 $ (7,388 ) $ 2,098 $ 328 $ (9,127 )
common
shareholders
Goodwill —  2,603  —  —  2,603 Â
impairment charge
Net income (loss)
applicable to
common $ 2,426 Â $ (4,785 ) $ 2,098 Â $ 328 Â $ (6,524 )
shareholders,
excluding goodwill
impairment charge
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.
Bank of America
Corporation and      Â
Subsidiaries
Reconciliations
to GAAP
Financial          Â
Measures
(continued)
(Dollars in
millions)
Six Months Ended Second First Second
June 30 Quarter Quarter Quarter
2012 2011 2012 2012 2011
Reconciliation
of average
common
shareholders’
equity to
average
tangible common
shareholders’
equity
Â
Common
shareholders’ $ 215,466 $ 216,367 $ 216,782 $ 214,150 $ 218,505
equity
Goodwill (69,971 ) (73,834 ) (69,976 ) (69,967 ) (73,748 )
Intangible
assets
(excluding (7,701 ) (9,580 ) (7,533 ) (7,869 ) (9,394 )
mortgage
servicing
rights)
Related
deferred tax 2,663 Â 2,983 Â 2,626 Â 2,700 Â 2,932 Â
liabilities
Tangible common
shareholders’ $ 140,457  $ 135,936  $ 141,899  $ 139,014  $ 138,295 Â
equity
Â
Reconciliation
of average
shareholders’
equity to
average
tangible
shareholders’
equity
Â
Shareholders’ $ 234,062 $ 232,930 $ 235,558 $ 232,566 $ 235,067
equity
Goodwill (69,971 ) (73,834 ) (69,976 ) (69,967 ) (73,748 )
Intangible
assets
(excluding (7,701 ) (9,580 ) (7,533 ) (7,869 ) (9,394 )
mortgage
servicing
rights)
Related
deferred tax 2,663 Â 2,983 Â 2,626 Â 2,700 Â 2,932 Â
liabilities
Tangible
shareholders’ $ 159,053  $ 152,499  $ 160,675  $ 157,430  $ 154,857 Â
equity
Â
Reconciliation
of period-end
common
shareholders’
equity to
period-end
tangible common
shareholders’
equity
Â
Common
shareholders’ $ 217,213 $ 205,614 $ 217,213 $ 213,711 $ 205,614
equity
Goodwill (69,976 ) (71,074 ) (69,976 ) (69,976 ) (71,074 )
Intangible
assets
(excluding (7,335 ) (9,176 ) (7,335 ) (7,696 ) (9,176 )
mortgage
servicing
rights)
Related
deferred tax 2,559 Â 2,853 Â 2,559 Â 2,628 Â 2,853 Â
liabilities
Tangible common
shareholders’ $ 142,461  $ 128,217  $ 142,461  $ 138,667  $ 128,217 Â
equity
Â
Reconciliation
of period-end
shareholders’
equity to
period-end
tangible
shareholders’
equity
Â
Shareholders’ $ 235,975 $ 222,176 $ 235,975 $ 232,499 $ 222,176
equity
Goodwill (69,976 ) (71,074 ) (69,976 ) (69,976 ) (71,074 )
Intangible
assets
(excluding (7,335 ) (9,176 ) (7,335 ) (7,696 ) (9,176 )
mortgage
servicing
rights)
Related
deferred tax 2,559 Â 2,853 Â 2,559 Â 2,628 Â 2,853 Â
liabilities
Tangible
shareholders’ $ 161,223  $ 144,779  $ 161,223  $ 157,455  $ 144,779 Â
equity
Â
Reconciliation
of period-end
assets to
period-end
tangible assets
Â
Assets $ 2,160,854 $ 2,261,319 $ 2,160,854 $ 2,181,449 $ 2,261,319
Goodwill (69,976 ) (71,074 ) (69,976 ) (69,976 ) (71,074 )
Intangible
assets
(excluding (7,335 ) (9,176 ) (7,335 ) (7,696 ) (9,176 )
mortgage
servicing
rights)
Related
deferred tax 2,559 Â 2,853 Â 2,559 Â 2,628 Â 2,853 Â
liabilities
Tangible assets $ 2,086,102 Â $ 2,183,922 Â $ 2,086,102 Â $ 2,106,405 Â $ 2,183,922 Â
Â
Book value per
share of common
stock
Â
Common
shareholders’ $ 217,213 $ 205,614 $ 217,213 $ 213,711 $ 205,614
equity
Ending common
shares issued 10,776,869 Â 10,133,190 Â 10,776,869 Â 10,775,604 Â 10,133,190 Â
and outstanding
Book value per
share of common $ 20.16 Â $ 20.29 Â $ 20.16 Â $ 19.83 Â $ 20.29 Â
stock
Â
Tangible book
value per share
of common stock
Â
Tangible common
shareholders’ $ 142,461 $ 128,217 $ 142,461 $ 138,667 $ 128,217
equity
Ending common
shares issued 10,776,869 Â 10,133,190 Â 10,776,869 Â 10,775,604 Â 10,133,190 Â
and outstanding
Tangible book
value per share $ 13.22 Â $ 12.65 Â $ 13.22 Â $ 12.87 Â $ 12.65 Â
of common stock
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.
Bank of
America
Corporation      Â
and
Subsidiaries
Reconciliations to GAAP
Financial Measures         Â
(continued)
(Dollars in
millions)
Six Months Ended Second First Second
June 30 Quarter Quarter Quarter
2012 Â 2011 2012 2012 2011
Reconciliation
of return on
average
economic
capital
Â
Consumer &
Business
Banking
Â
Reported net $ 2,611 $ 4,544 $ 1,156 $ 1,455 $ 2,502
income
Adjustment
related to 7 Â Â 9 Â 4 Â Â 3 Â Â 2 Â
intangibles
^(1)
Adjusted net $ 2,618 Â Â $ 4,553 Â $ 1,160 Â Â $ 1,458 Â Â $ 2,504 Â
income
Â
Average
allocated $ 53,199 $ 53,126 $ 53,452 $ 52,947 $ 52,559
equity
Adjustment
related to
goodwill and a (30,503 ) (30,676 ) (30,485 ) (30,522 ) (30,656 )
percentage of
intangibles
Average
economic $ 22,696 Â $ 22,450 Â $ 22,967 Â $ 22,425 Â $ 21,903 Â
capital
Â
Consumer Real
Estate
Services
Â
Reported net $ (1,913 ) $ (16,906 ) $ (768 ) $ (1,145 ) $ (14,506 )
loss
Adjustment
related to — — — — —
intangibles
^(1)
Goodwill
impairment —  2,603  —  —  2,603 Â
charge
Adjusted net $ (1,913 ) $ (14,303 ) $ (768 ) $ (1,145 ) $ (11,903 )
loss
Â
Average
allocated $ 14,454 $ 17,933 $ 14,116 $ 14,791 $ 17,139
equity
Adjustment
related to
goodwill and a
percentage of
intangibles —  (2,722 ) —  —  (2,702 )
(excluding
mortgage
servicing
rights)
Average
economic $ 14,454 Â $ 15,211 Â $ 14,116 Â $ 14,791 Â $ 14,437 Â
capital
Â
Global Banking
Â
Reported net $ 2,996 $ 3,504 $ 1,406 $ 1,590 $ 1,921
income
Adjustment
related to 2 Â 3 Â 1 Â 1 Â 1 Â
intangibles
^(1)
Adjusted net $ 2,998 Â $ 3,507 Â $ 1,407 Â $ 1,591 Â $ 1,922 Â
income
Â
Average
allocated $ 45,838 $ 47,891 $ 45,958 $ 45,719 $ 47,060
equity
Adjustment
related to
goodwill and a (24,858 ) (24,430 ) (24,856 ) (24,861 ) (24,428 )
percentage of
intangibles
Average
economic $ 20,980 Â $ 23,461 Â $ 21,102 Â $ 20,858 Â $ 22,632 Â
capital
Â
Global Markets
Â
Reported net $ 1,260 $ 2,306 $ 462 $ 798 $ 911
income
Adjustment
related to 5 Â 6 Â 3 Â 2 Â 3 Â
intangibles
^(1)
Adjusted net $ 1,265 Â $ 2,312 Â $ 465 Â $ 800 Â $ 914 Â
income
Â
Average
allocated $ 17,725 $ 24,667 $ 17,132 $ 18,317 $ 22,990
equity
Adjustment
related to
goodwill and a (4,629 ) (4,598 ) (4,608 ) (4,648 ) (4,646 )
percentage of
intangibles
Average
economic $ 13,096 Â $ 20,069 Â $ 12,524 Â $ 13,669 Â $ 18,344 Â
capital
Â
Global Wealth
& Investment
Management
Â
Reported net $ 1,090 $ 1,055 $ 543 $ 547 $ 513
income
Adjustment
related to 12 Â 16 Â 6 Â 6 Â 7 Â
intangibles
^(1)
Adjusted net $ 1,102 Â $ 1,071 Â $ 549 Â $ 553 Â $ 520 Â
income
Â
Average
allocated $ 17,601 $ 17,745 $ 17,974 $ 17,228 $ 17,560
equity
Adjustment
related to
goodwill and a (10,631 ) (10,717 ) (10,621 ) (10,641 ) (10,706 )
percentage of
intangibles
Average
economic $ 6,970 Â $ 7,028 Â $ 7,353 Â $ 6,587 Â $ 6,854 Â
capital
For footnote see page 27.
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.
<td c*Story too large*
Bank of America
Corporation and      Â
Subsidiaries
Reconciliations
to GAAP
Financial           Â
Measures
(continued)
(Dollars in
millions)
Six Months Ended Second First Second
June 30 Quarter Quarter Quarter
2012 2011 2012 2012 2011
Consumer &
Business
Banking
Â
Deposits
Â
Reported net $ 500 $ 795 $ 190 $ 310 $ 433
income
Adjustment
related to 1  1  1  —  — Â
intangibles
^(1)
Adjusted net $ 501 Â $ 796 Â $ 191 Â $ 310 Â $ 433 Â
income
Â
Average
allocated $ 23,588 $ 23,627 $ 23,982 $ 23,194 $ 23,612
equity
Adjustment
related to
goodwill and a (17,929 ) (17,955 ) (17,926 ) (17,932 ) (17,951 )
percentage of
intangibles
Average
economic $ 5,659 Â $ 5,672 Â $ 6,056 Â $ 5,262 Â $ 5,661 Â
capital
Â
Card Services
Â
Reported net $ 1,967 $ 3,516 $ 929 $ 1,038 $ 1,944
income
Adjustment
related to 6 Â 8 Â 3 Â 3 Â 2 Â
intangibles
^(1)
Adjusted net $ 1,973 Â $ 3,524 Â $ 932 Â $ 1,041 Â $ 1,946 Â
income
Â
Average
allocated $ 20,598 $ 21,580 $ 20,525 $ 20,671 $ 21,016
equity
Adjustment
related to
goodwill and a (10,476 ) (10,624 ) (10,460 ) (10,492 ) (10,607
percentage of
intangibles
[TRUNCATED]
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