Summary
Bank of America Corporation (BAC) reported a net income of $2.05 billion for the first quarter of 2011, a decrease from $3.18 billion in the same quarter of the prior year. This decline was primarily driven by lower trading revenues, higher legacy mortgage-related costs, and increased litigation expenses, partially offset by lower credit costs and gains from equity investments. Revenue on a fully taxable-equivalent (FTE) basis decreased to $27.1 billion from $32.3 billion year-over-year. Despite the year-over-year decline in net income, the company highlighted improvements in credit quality with net charge-offs decreasing significantly. Management also noted the positive impact of lower credit costs, higher asset management fees, and investment banking fees in the current quarter. However, the company incurred substantial noninterest expense, largely due to mortgage-related assessments and waivers costs, and increased litigation expenses. Capital ratios remained strong, with the Tier 1 common equity ratio at 8.64%.
Financial Highlights
28 data points| Revenue | $26.88B |
| Interest Expense | $5.74B |
| Net Income | $2.05B |
| EPS (Basic) | $0.17 |
| EPS (Diluted) | $0.17 |
| Shares Outstanding (Basic) | 10.08B |
| Shares Outstanding (Diluted) | 10.18B |
Key Highlights
- 1Net income declined to $2.05 billion from $3.18 billion in the prior year's quarter, impacted by lower trading revenues and higher expenses.
- 2Total revenue (FTE basis) decreased to $27.1 billion from $32.3 billion year-over-year.
- 3Provision for credit losses significantly decreased to $3.81 billion from $9.81 billion year-over-year, reflecting improved credit quality.
- 4Net charge-offs decreased to $6.03 billion from $10.80 billion year-over-year.
- 5Noninterest expense increased by $2.5 billion to $20.28 billion, driven by mortgage-related assessments, waivers costs, and litigation expenses.
- 6Capital ratios remained robust, with Tier 1 common equity ratio at 8.64% and Total capital ratio at 15.98%.
- 7The company reached a settlement with Assured Guaranty for approximately $1.6 billion to resolve repurchase claims related to residential mortgage-backed securitization trusts.