Bank of America Corporation today reported first-quarter 2008 net income declined to $1.21 billion from $5.26 billion a year earlier. Diluted earnings per share fell 80 percent to $0.23 from $1.16 in the same period in 2007.
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"Despite revenue growth in most of our businesses, these results clearly did not meet our expectations," said Kenneth D. Lewis, chairman and chief executive officer. "The weakness in the economy and prolonged disruptions in the capital markets took their toll on our performance. That said, we are continuing to invest in growth initiatives across the company, and believe our core strengths - including our diverse income stream, liquidity and capital - put us in a strong position to withstand the jolts to the system and emerge even stronger when conditions improve."

With regard to the outlook for the U.S. economy, Lewis noted that gross domestic product (GDP) growth is expected to be minimal at best in the second quarter, with a slight pickup in the second half of the year.

"Our earnings power from our core business activities is strong and growing," Lewis added. "We are bringing innovative new products to market, taking market share and expanding customer relationships across the company. Nevertheless, we remain concerned about the health of the consumer given the prolonged housing slump, subprime issues, employment levels and higher fuel and food prices."

The primary factors reducing first-quarter earnings were the following:

-- Provision expense increased by $4.78 billion from a year-ago, to $6.01
billion due to rising credit costs - particularly in the home equity,
small business and homebuilder portfolios - including a $3.30 billion
increase to the reserve.

-- Trading-related losses were $1.31 billion compared with income of $1.66
billion a year earlier, driven primarily by $1.47 billion in writedowns
of collateralized debt obligations (CDOs) and $439 million in
writedowns of leveraged loans. Trading-related losses were $5.15
billion in the fourth quarter of 2007, which included CDO-related
writedowns of $5.28 billion.


First Quarter 2008 Business Highlights

-- Total retail sales increased 10 percent to 13 million products, driven
by strong growth in checking and savings, debit and online banking. Net
new retail checking accounts grew 14 percent or by 557,000. Key
contributors of growth include free Online Checking and our Affinity
and Group Banking products. Additionally 45 percent of new checking
account openings participated in Keep the Change™, Bank of America's
savings program that combines debit cards and deposit products.

-- Total average retail deposits increased $51 billion, or 11 percent, on
solid increases in certificates of deposit and consumer checking
accounts and the addition of U.S. Trust and LaSalle. Debit card
purchase volume increased 15 percent.

-- Direct-to-consumer mortgage originations in the quarter rose 32
percent, resulting in the highest quarter since 2003, as low mortgage
rates in January spurred refinancing activity.

-- Business Lending, a unit within Global Corporate and Investment
Banking, had organic loan growth of 11 percent, or 30 percent including
the acquisition of LaSalle. Capital Markets and Advisory Services,
also within Global Corporate and Investment Banking, had a record
quarter in foreign exchange, a very strong quarter in interest rate
products and earned a #3 ranking in U.S. equity underwriting(1)

-- Within Global Wealth and Investment Management, loans rose 30 percent
and deposits increased 29 percent, including the impact of the U.S.
Trust and LaSalle acquisitions.

-- Total assets under management (AUM) in Global Wealth and Investment
Management increased to more than $607 billion, including the impact of
the U.S. Trust and LaSalle acquisitions and the sale of Marsico Capital
Management in the second half of 2007. On a 1-year and 3-year AUM-
weighted basis, 75 percent and 86 percent, respectively, of the
Columbia and Excelsior equity funds were in the top 2 performance
quartiles compared with their peer group.(2)

-- The integration of U.S. Trust and LaSalle remains on schedule. In May,
U.S. Trust is scheduled to convert trust, custody and investment
management accounts for legacy U.S. Trust clients to the Bank of
America platform, and LaSalle will convert to the Bank of America
brand, providing LaSalle customers with even greater access to Bank of
America products and services. The Countrywide acquisition is still
expected to close in the third quarter of 2008.


First Quarter 2008 Business Accomplishments

-- The $0 Online Equity Trades initiative resulted in more than 20,000 net
new self-directed accounts.

-- Mobile Banking recorded approximately 224,000 activations reaching
840,000 active customers.

-- Keep the Change™ reached 8 million net new enrollments since
inception, with 974,000 customers alone signing up in the first
quarter.

-- Columbia Management ranked #1 out of 61 mutual fund families by
Lipper/Barron's in its annual Fund Families Survey for the 5 year
period ending December 31, 2007.(3)


(1) Based on Thomson Financial Rankings
(2) Results shown are defined by Global Wealth and Investment Management's
calculation of the percentage of assets under management in the top
two quartiles of categories based on Morningstar as of March 31, 2008.
The category percentile rank was calculated by ranking the one and
three year net returns of share classes within the categories. The
assets of the number of funds within the top 2 quartile results were
added and then divided by Columbia Management's total equity fund
assets under management. Past performance is no guarantee of future
results. The share class earning the ranking may have limited
eligibility and may not be available to all investors.
(3) Barron's, February 4, 2008. Rankings for the five year period include
performance of Excelsior Funds that were acquired by Bank of America
Corporation from U.S. Trust on July 1, 2007. For additional
important information, please refer to the end of the text section of
this press release.


First Quarter 2008 Financial Summary

Revenue and Expense
Revenue net of interest expense on a fully taxable-equivalent basis declined 6 percent to $17.30 billion from $18.48 billion in the first quarter a year earlier.

Net interest income on a fully taxable-equivalent basis rose 20 percent to $10.29 billion from $8.60 billion in the first quarter of 2007 on strong loan growth; an increase from market-based net interest income; and the addition of LaSalle. The increase was partially offset by higher funding costs. The net interest yield improved 12 basis points to 2.73 percent.

Noninterest income declined 29 percent to $7.01 billion from $9.89 billion a year earlier. Increases in service charges, card income, mortgage-banking income and investment and brokerage services were more than offset by trading account losses and lower other income related to CDO writedowns. Equity investment income remained essentially unchanged as the gain from the Visa, Inc. initial public offering was offset by reductions in Principal Investing gains.

Noninterest expense was relatively flat compared to a year earlier as lower personnel expenses and the reversal of litigation costs related to Visa were offset by modest increases in most other expense categories. Pretax merger and restructuring charges related to acquisitions were $170 million compared with $111 million a year earlier due to the addition of U.S. Trust and LaSalle.

Credit Quality

Credit quality deteriorated from more favorable levels experienced in the first half of 2007. Weak markets, particularly geographic regions that have experienced the most significant home price declines, and the slowing economy resulted in credit deterioration in several portfolios particularly home equity, small business and homebuilders.

Provision expense rose $4.78 billion from the year-ago period mainly because of additions to the allowance for loan and lease losses in consumer and commercial portfolios directly tied to housing. Portfolio seasoning and the impact of a slowing economy on domestic consumer and small business portfolios also drove reserve additions compared with reductions a year earlier from securitization activities and the sale of a portfolio. Net charge-offs increased $1.29 billion from a year ago, also reflecting housing market deterioration and slowing economic conditions.

-- Provision for credit losses was $6.01 billion, up from $3.31 billion in
the fourth quarter of 2007, and $1.24 billion in the first quarter of
2007.

-- Net charge-offs were $2.72 billion, or 1.25 percent, of total average
loans and leases compared with $1.99 billion, or 0.91 percent, in the
fourth quarter of 2007 and $1.43 billion, or 0.81 percent, in the first
quarter of 2007.

-- Total managed net losses were $4.14 billion, or 1.69 percent, of total
average managed loans and leases compared with $3.31 billion, or 1.34
percent, in the fourth quarter of 2007 and $2.57 billion, or 1.26
percent, in the first quarter of 2007.

-- Nonperforming assets were $7.83 billion, or 0.90 percent, of total
loans, leases and foreclosed properties at quarter-end compared to
$5.95 billion, or 0.68 percent, at December 31, 2007 and $2.06 billion,
or 0.29 percent, at March 31, 2007. Results for the period ended March
31, 2007 do not include LaSalle.

-- The allowance for loan and lease losses was $14.89 billion, or 1.71
percent, of loans and leases measured at historical cost, at March 31,
2008. That compared with $11.59 billion, or 1.33 percent, at December
31, 2007 and $8.73 billion, or 1.21 percent, at March 31, 2007. Results
for the period ended March 31, 2007 do not include LaSalle.


Capital Management
Total shareholders' equity was $156.31 billion at March 31. Period-end assets were $1.74 trillion. The Tier 1 Capital ratio was 7.51 percent, up from 6.87 percent at December 31, 2007 after the company raised about $13 billion in capital through the issuance of preferred stock in January. The Tier 1 ratio was 8.57 percent in the year ago quarter.

Bank of America paid a cash dividend of $0.64 per share in the quarter. The company also issued about 15 million common shares primarily related to restricted stock activity and did not repurchase any shares. Period-end common shares issued and outstanding were 4.45 billion for the first quarter of 2008 and 4.44 billion for the fourth and first quarters of 2007.

2008 First Quarter Business Segment Results

Global Consumer and Small Business Banking (1)


(Dollars in millions) Q1 2008 Q1 2007

Total managed revenue, net of interest
expense (2) $13,306 $11,331

Provision for credit losses 6,452 2,411
Noninterest expense 5,139 4,675

Net income 1,090 2,672

Efficiency ratio 38.62 % 41.26 %
Return on average equity 6.64 17.62

Managed loans (3) $363,001 $308,105
Deposits (3) 343,436 326,480

At 3/31/08 At 3/31/07
Period ending deposits $349,606 $334,918


(1) Managed basis. Managed basis assumes that loans that have been
securitized were not sold and presents earnings on these loans in a
manner similar to the way loans that have not been sold (i.e. held
loans) are presented. For more information and detailed
reconciliation, please refer to the data pages supplied with this
Press Release.
(2) Fully taxable-equivalent basis
(3) Balances averaged for period
Managed net revenue rose 17 percent as mortgage banking income more than doubled and both card income and service charges increased 14 percent helping generate a 30 percent increase in noninterest income.

Net income fell 59 percent from a year ago, as credit costs rose and expenses increased 10 percent.

The provision for credit losses increased by $4.04 billion to $6.45 billion compared with a year ago. The increase was due to reserve additions for home equity reflecting the impacts of housing weakness and the slowing economy, as well as seasoning of the consumer portfolios and deterioration in the small business portfolio. Net losses increased $1.25 billion to $3.69 billion, reflecting housing market deterioration and weakened economic conditions.

-- Deposits net revenue declined 4 percent to $4.09 billion as spread
compression and competitive pricing of deposits negatively impacted net
interest income despite strong average deposit growth of 5 percent.
Noninterest expenses increased $327 million, largely due to the
acquisition of LaSalle and higher deposit levels and transaction
volume, resulting in net income of $995 million, down 25 percent.

-- Card Services managed net revenue increased 21 percent to $7.33 billion
due to 15 percent growth in net interest income and 33 percent growth
in non interest income driven by 14 percent growth in average loans and
leases, Card Services allocation of the Visa, Inc. IPO gain and higher
card income. Net income of $670 million was down 39 percent as the
higher net revenue and the reversal of litigation costs related to
Visa were more than offset by higher credit costs.

-- Consumer Real Estate had $1.31 billion in net revenue, a 57 percent
increase, as mortgage banking income more than doubled to $656 million.
Net income fell to a loss of $773 million due to higher credit costs
related to deterioration in the home equity portfolio.


Global Corporate and Investment Banking

(Dollars in millions) Q1 2008 Q1 2007

Total revenue, net of interest expense (1) $3,168 $5,400

Provision for credit losses 523 115
Noninterest expense 2,461 2,930

Net income 115 1,477

Efficiency ratio 77.68 % 54.26 %
Return on average equity 0.78 14.41

Loans and leases (2) $324,733 $247,898
Trading-related assets (2) 361,921 360,530
Deposits (2) 235,800 208,561


(1) Fully taxable-equivalent basis
(2) Balances averaged for period
Net revenue decreased 41 percent and net income fell 92 percent on CDO and leveraged finance-related writedowns. Also impacting net income was an increase in credit costs offset in part by a decline in noninterest expense.

The provision for credit losses increased $408 million to $523 million. The impact of the housing market slowdown on the homebuilder loan portfolio drove additions to the credit loss reserves and higher net charge-offs. Higher net charge-offs related to seasoning of the dealer-related retail portfolios, and modest increases in middle market net charge-offs from very low prior year levels also contributed to the increased provision.

-- Business Lending net revenue increased 22 percent to $1.64 billion due
to improvements in net interest income, driven by an increase in
average loans and leases of 30 percent due to the acquisition of
LaSalle and organic loan growth. Net income declined 27 percent to
$337 million as the revenue increase was more than offset by the
increase in credit costs.

-- Capital Markets and Advisory Services had negative net revenue of $621
million compared with net revenue of $2.37 billion a year earlier. This
was due primarily to CDO-related losses and writedowns on leveraged
loans and commitments. The business had a net loss of $1.10 billion
compared with net income of $528 million a year earlier.

-- Treasury Services net revenue increased 24 percent to $2.14 billion due
to its allocation of the gain from the Visa, Inc. IPO and increased
service charges. Net income increased 68 percent to $875 million as a
result of the increased revenues and due to lower expenses related
primarily to the reversal of litigation costs related to Visa.


Global Wealth and Investment Management

(Dollars in millions) Q1 2008 Q1 2007

Total revenue, net of interest expense (1) $1,922 $1,781

Provision for credit losses 243 23
Noninterest expense 1,316 975

Net income 228 491

Efficiency ratio 68.49 % 54.75 %
Return on average equity 7.92 22.61

Loans (2) $85,642 $65,839
Deposits (2) 148,500 114,955

(in billions) At 3/31/08 At 3/31/07
Assets under management $607.5 $547.4


(1) Fully taxable-equivalent basis
(2) Balances averaged for period
Net revenue in Global Wealth and Investment Management increased 8 percent. Asset management fees rose 39 percent to $899 million mainly from the addition of U.S. Trust and LaSalle. The increase was offset by a $220 million loss related to support provided to certain cash funds.

Net income declined 54 percent as noninterest expense rose 35 percent due mainly to the additions of U.S. Trust and LaSalle combined with increased expenses related to the retirement and mass affluent initiatives. Provision for credit losses increased to $243 million from $23 million a year ago due to deterioration in the home equity portfolio from housing market weakness.

-- U.S. Trust, Bank of America Private Wealth Management net revenue rose
47 percent to $675 million driven by the acquisition of U.S. Trust and
LaSalle. Net income rose 31 percent to $106 million.

-- Columbia Management net revenue declined 44 percent to $179 million,
reflecting the support provided to certain cash funds, offset in part
by the addition of U.S. Trust and growth in investment and brokerage
services revenue. A net loss of $79 million resulted from the cash
funds support and higher revenue-related operating expenses.

-- Premier Banking and Investments net revenue decreased 8 percent to $841
million on lower net interest income related to spread compression,
driven by deposit mix and competitive pricing of deposits. Net income
fell 67 percent to $104 million as credit costs increased by $238
million reflecting home equity portfolio deterioration.


All Other (1)

(Dollars in millions) Q1 2008 Q1 2007

Total revenue, net of interest expense (2) $(1,093) $(28)


Provision for credit losses (1,208) (1,314)
Noninterest expense 279 517

Net income (223) 615

Loans and leases (3) $102,285 $92,200


(1) All Other consists primarily of equity investments, the residual
impact of the allowance for credit losses and the cost allocation
processes, Merger and Restructuring Charges, intersegment
eliminations, and the results of certain consumer finance, investment
management and commercial lending businesses that are being
liquidated. All Other also includes the offsetting securitization
impact to present Global Consumer and Small Business Banking on a
managed basis. For more information and detailed reconciliation,
please refer to the data pages supplied with this Press Release.
(2) Fully taxable-equivalent basis
(3) Balances averaged for period
All Other recorded a net loss of $223 million compared to net income of $615 million in the year earlier period. The decline was mainly due to lower equity investment income in Principal Investing and the absence of earnings from certain liquidated businesses when compared to last year. These decreases were partially offset by increases in gains on sales of debt securities and lower expenses related to stock-based compensation granted to retirement- eligible employees.

Note: Chief Executive Officer Kenneth D. Lewis and Chief Financial Officer Joe L. Price will discuss first quarter 2008 results in a conference call at 9:30 a.m. EDT today. The presentation and supporting materials can be accessed on the Bank of America Investor Relations web site at http://investor.bankofamerica.com/. For a listen-only connection to the conference call, dial 800.894.5910 and the conference ID: 79795.

reactie XEA.nl
Zijn de cijfers nu wel zo slecht?
Rekeninghoudende met de situatie in de VS vinden wij dat er best wel positieven zaken in dit bericht staan.
Ook de aankoop van La Salle zal de nodige aandacht gevraagd hebben. Wat gaat die straks bijdragen?
Natuurlijk is de wpa sterk lager op $0,23 komende van $1,16
Maar er wordt nog steeds winstgemaakt, vergeet dat niet.