BANK OF AMERICA CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2009

Summary

Bank of America Corporation (BAC) reported a net loss of $1,001 million for the third quarter of 2009, or $(0.26) per diluted share, a significant decline from the $1,177 million net income, or $0.15 per diluted share, reported in the same quarter of the prior year. This downturn was largely driven by a substantial increase in the provision for credit losses, which more than doubled year-over-year to $11,705 million, reflecting the ongoing economic pressures on both consumer and commercial portfolios. The company's total revenue, net of interest expense, saw a significant increase of 33% to $26,035 million, largely due to the inclusion of Merrill Lynch's operations and improved trading results. However, higher noninterest expenses, including merger and restructuring charges related to the Merrill Lynch acquisition, also impacted profitability. Despite the quarterly loss, the nine-month period ending September 30, 2009, showed a net income of $6,470 million, or $0.39 per diluted share, an increase from $5,797 million, or $1.09 per diluted share, in the same period of 2008. This year-to-date profitability was bolstered by significant gains from equity investments, notably the sale of a portion of its China Construction Bank (CCB) stake, and strong performance in Global Markets, partially offset by increased credit costs. The company's balance sheet also grew substantially following the Merrill Lynch acquisition, with total assets reaching $2.3 trillion. Bank of America's capital position remained strong, with its Tier 1 Common Capital ratio at 7.18% and total capital ratio at 16.53% as of September 30, 2009, exceeding regulatory requirements.

Key Highlights

• 1Net loss of $1,001 million for Q3 2009, compared to net income of $1,177 million in Q3 2008, driven by a significant increase in provision for credit losses.
• 2Total revenue, net of interest expense, increased to $26,035 million in Q3 2009 from $19,621 million in Q3 2008, largely due to the inclusion of Merrill Lynch operations and improved trading results.
• 3Provision for credit losses rose to $11,705 million in Q3 2009 from $6,450 million in Q3 2008, reflecting economic deterioration across consumer and commercial portfolios.
• 4Noninterest expense increased significantly, partly due to merger and restructuring charges related to the Merrill Lynch acquisition, and higher FDIC expenses.
• 5Total assets grew to $2.3 trillion at September 30, 2009, primarily reflecting the Merrill Lynch acquisition.
• 6Tier 1 Common Capital ratio remained strong at 7.18% at September 30, 2009, exceeding regulatory requirements.

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