8-KEarnings & ResultsOther EventsExhibits & Filings

BANK OF AMERICA CORP /DE/ 8-K Report, Financial Results (May 6, 2013)

Summary

Bank of America Corporation (BAC) announced a significant settlement agreement with MBIA Inc. and its affiliates on May 6, 2013. This settlement resolves all outstanding claims between the two entities. As a subsequent event impacting the first quarter of 2013, BAC will record an additional $1.6 billion in pretax charges. This includes $1.3 billion directly related to the MBIA settlement and additional charges for other monolines. The financial impact of these charges will reduce BAC's reported first-quarter 2013 net income to $1.5 billion, or $0.10 per diluted common share, down from the previously reported $2.6 billion, or $0.20 per diluted common share. Investors should note that these adjustments will be reflected in the company's upcoming Form 10-Q filing for the period ended March 31, 2013.

Key Highlights

  • 1Bank of America (BAC) enters into a comprehensive settlement agreement with MBIA Inc. and its affiliates.
  • 2The settlement resolves all outstanding representations and warranties claims and other disputes between BAC and MBIA.
  • 3BAC will record an additional $1.6 billion in pretax charges for the first quarter of 2013 due to the settlement.
  • 4Of the total charges, $1.3 billion is directly attributable to the MBIA settlement.
  • 5The settlement's financial impact will reduce reported first-quarter 2013 net income to $1.5 billion ($0.10/share) from $2.6 billion ($0.20/share).
  • 6These charges are considered subsequent events related to conditions existing at the March 31, 2013 balance sheet date.
  • 7The full financial impact will be detailed in BAC's upcoming Form 10-Q filing for the period ended March 31, 2013.

Frequently Asked Questions

This 8-K filing announces a significant settlement agreement between Bank of America (BAC) and MBIA Inc., which impacts BAC's first-quarter 2013 financial results.

Bank of America will record an additional $1.6 billion in pretax charges, reducing its reported first-quarter 2013 net income from $2.6 billion to $1.5 billion, and diluted earnings per share from $0.20 to $0.10.

The additional charges and their impact will be reflected in Bank of America's Quarterly Report on Form 10-Q for the period ended March 31, 2013, which is expected to be filed on or before May 10, 2013.

The settlement involves BAC making certain payments to MBIA, terminating credit default swap protection agreements, MBIA issuing warrants to BAC for its common stock, and BAC providing a senior secured credit facility to MBIA.