Summary
Bank of America Corporation (BAC) reported a net loss of $276 million for the first quarter of 2014, a significant shift from the $1.5 billion net income in the same period of 2013. This loss was primarily driven by a substantial increase in litigation expense, largely due to the FHFA settlement and additional reserves for legacy mortgage-related matters, which totaled $6.0 billion for the quarter. Despite the net loss, the company highlighted continued improvement in credit quality, with lower net charge-offs and a reduced allowance for loan and lease losses. Capital and liquidity levels remained strong, supported by the ongoing transition to Basel 3 capital rules. Investors should note the company's announcement of revised regulatory capital amounts and the suspension of its 2014 capital actions due to an identified incorrect adjustment in its capital plan, necessitating a resubmission to the Federal Reserve.
Financial Highlights
35 data points| Revenue | $22.57B |
| Interest Expense | $2.85B |
| Net Income | -$276.00M |
| EPS (Basic) | $-0.05 |
| EPS (Diluted) | $-0.05 |
| Shares Outstanding (Basic) | 10.56B |
| Shares Outstanding (Diluted) | 10.56B |
Key Highlights
- 1Reported a net loss of $276 million for Q1 2014, compared to a net income of $1.5 billion in Q1 2013.
- 2Litigation expense increased significantly to $6.0 billion in Q1 2014, primarily due to the FHFA settlement and legacy mortgage-related reserves.
- 3Net interest income decreased to $10.3 billion on an FTE basis, primarily due to lower yields on debt securities and consumer loan balances.
- 4Noninterest income remained relatively stable at $12.5 billion, with increases in investment and brokerage services and equity investment income offset by a decrease in trading account profits.
- 5Provision for credit losses decreased to $1.0 billion from $1.7 billion in the prior year, reflecting portfolio improvement and lower net charge-offs.
- 6Capital ratios remained strong under Basel 3, with Common Equity Tier 1 capital at 11.8% on a transition basis at March 31, 2014.
- 7Announced revisions to regulatory capital amounts and ratios, leading to suspension of previously announced capital actions and requiring resubmission of the capital plan to the Federal Reserve.