Summary
Bank of America Corporation (BAC) reported a net income of $4.8 billion for the fiscal year ended December 30, 2014, a significant decrease from $11.4 billion in 2013. This decline was primarily driven by a substantial increase in litigation expenses, totaling $10.3 billion, largely due to settlements with the Department of Justice and the Federal Housing Finance Agency. Despite the drop in net income, the company's capital ratios remained strong, with a Common Equity Tier 1 capital ratio of 12.3% under Basel 3 Standardized – Transition. Total assets remained relatively stable at approximately $2.1 trillion, while shareholders' equity saw an increase, benefiting from preferred stock issuances and a rise in accumulated other comprehensive income. Operationally, the company focused on balance sheet optimization and preparing for new Basel 3 liquidity coverage ratio requirements, leading to a shift towards more liquid debt securities. While net interest income declined due to premium amortization on debt securities and lower loan yields, noninterest income saw an increase, primarily driven by higher asset management fees in Global Wealth & Investment Management. The company's risk management framework remains robust, with management assessing risks across seven categories, including credit, market, liquidity, compliance, operational, strategic, and reputational risks. The report highlights efforts to manage credit risk through improved economic conditions, leading to lower net charge-offs and delinquencies across portfolios.
Financial Highlights
35 data points| Revenue | $85.89B |
| Interest Expense | $10.94B |
| Net Income | $5.52B |
| EPS (Basic) | $0.43 |
| EPS (Diluted) | $0.42 |
| Shares Outstanding (Basic) | 10.53B |
| Shares Outstanding (Diluted) | 10.58B |
Key Highlights
- 1Net income decreased to $4.8 billion in 2014 from $11.4 billion in 2013, primarily due to a $10.3 billion increase in litigation expenses.
- 2Total assets remained stable at approximately $2.1 trillion as of December 31, 2014.
- 3Common Equity Tier 1 capital ratio was 12.3% under Basel 3 Standardized – Transition.
- 4Investment and brokerage services income increased by $1.0 billion, driven by higher asset management fees.
- 5The provision for credit losses decreased by $1.3 billion due to improved credit quality across portfolios.
- 6Noninterest expense increased by $5.9 billion, largely due to the aforementioned litigation expenses.
- 7The company completed its Project New BAC expense program ahead of schedule, achieving its target of $2 billion in quarterly cost savings.