BANK OF AMERICA CORP /DE/ Quarterly Report for Q3 Ended Sep 30, 2013

Summary

Bank of America Corporation (BAC) reported a strong third quarter for 2013, with net income increasing to $2.5 billion, or $0.20 per diluted share, a significant improvement from the $340 million net income in the same period last year. This performance was driven by a combination of revenue stabilization, cost reductions through "Project New BAC," improved credit quality, and a favorable decrease in the provision for credit losses. Key financial highlights include a notable increase in net interest income, driven by reduced long-term debt balances and higher yields on debt securities, alongside growth in investment and brokerage services income. The bank also reported a substantial reduction in noninterest expense, largely due to lower litigation expenses and ongoing efficiency initiatives. The company continued its capital return program, repurchasing common shares and managing its liability structure. While the company navigates evolving regulatory landscapes like Basel 3 and the Financial Reform Act, its capital ratios remain robust, with Tier 1 common capital at 11.08% at the end of the quarter. Overall, the report indicates a positive operational and financial performance for Bank of America in Q3 2013, demonstrating progress in strategic initiatives aimed at strengthening the balance sheet and improving profitability, though challenges remain in areas like mortgage banking income and certain regulatory compliance costs.

Key Highlights

• 1Net income surged to $2.5 billion ($0.20 per diluted share) for the third quarter of 2013, up from $340 million ($0.00 per diluted share) in the same period of 2012.
• 2Net interest income on a FTE basis increased to $10.5 billion for the quarter, driven by lower debt balances and improved asset yields.
• 3Noninterest expense decreased by $1.2 billion to $16.4 billion, largely due to lower litigation and legacy asset servicing expenses.
• 4Provision for credit losses decreased significantly to $296 million from $1.8 billion in the prior year's quarter, reflecting improved credit quality.
• 5The company reported total assets of $2.1 trillion and total common shareholders' equity of $219 billion at the end of the quarter.
• 6Tier 1 common capital ratio was 11.08% at September 30, 2013, indicating strong capital adequacy.
• 7The sale of remaining equity investment in China Construction Bank Corporation resulted in a pre-tax gain of $753 million.

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