Summary
Bank of America Corporation (BAC) reported net income of $14.98 billion for the fiscal year ended December 31, 2007. This represents a notable decrease from $21.13 billion in 2006, impacted by significant market dislocations, particularly in the credit markets and subprime mortgage sector that emerged in the second half of 2007. These disruptions led to substantial losses, especially within the Global Corporate and Investment Banking segment, which experienced a sharp decline in net income due to CDO exposure and other trading losses. The company completed several significant acquisitions in 2007, including LaSalle Bank Corporation for $21.0 billion and U.S. Trust Corporation for $3.3 billion, which expanded its market presence and capabilities. Despite the challenging market environment, BAC maintained strong capital ratios, with its Tier 1 capital ratio at 6.87% and its Tier 1 Leverage ratio at 5.04% as of December 31, 2007, exceeding regulatory requirements for well-capitalized institutions. The company also continued its commitment to shareholder returns through dividends, increasing its quarterly dividend by 14% to $0.64 per share.
Financial Highlights
25 data points| Revenue | $66.83B |
| Interest Expense | $52.86B |
| Net Income | $14.98B |
| EPS (Basic) | $3.32 |
| EPS (Diluted) | $3.29 |
| Shares Outstanding (Basic) | 4.42B |
| Shares Outstanding (Diluted) | 4.46B |
Key Highlights
- 1Net income decreased by 29% to $14.98 billion in 2007 from $21.13 billion in 2006, primarily due to market dislocations and significant trading losses in the Global Corporate and Investment Banking segment.
- 2Total assets grew to $1.716 trillion as of December 31, 2007, up from $1.460 trillion at the end of 2006, reflecting organic growth and significant acquisitions, notably LaSalle Bank Corporation and U.S. Trust Corporation.
- 3The company's capital ratios remained strong, with a Tier 1 capital ratio of 6.87% and a Tier 1 Leverage ratio of 5.04% as of December 31, 2007, exceeding regulatory requirements.
- 4Provision for credit losses increased significantly by 67% to $8.39 billion in 2007, driven by higher net charge-offs and increased reserves, particularly in the home equity and small business portfolios, reflecting the impact of the weak housing market.
- 5Noninterest income decreased by 16% to $31.89 billion in 2007, largely due to a substantial decline in trading account profits (losses) from $3.17 billion in 2006 to a loss of $5.13 billion in 2007, primarily impacted by CDO exposure.
- 6Bank of America announced plans to reduce activities in certain structured products and resize its international platform within its Global Corporate and Investment Banking business, including a reduction of 650 front-office personnel.
- 7The company announced its agreement to acquire Countrywide Financial Corporation for approximately $4.0 billion in early 2008, aiming to strengthen its position in the mortgage lending market.