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Bank of America argues that their customer strategy is working
Bank of America Corporation has announced net income of $2.6 billion, or $0.20 per diluted share, for the first quarter of 2013, compared to $653 million, or $0.03 per diluted share, in the first quarter of 2012. Revenue, net of interest expense, on a fully taxable-equivalent (FTE)C basis rose 5 percent to $23.7 billion from $22.5 billion a year ago.
Relative to the same period a year ago, the results for the first quarter of 2013 were driven by increased brokerage income, higher investment banking fees, and improved credit quality across all major portfolios, partially offset by lower mortgage banking income and lower net gains on the sales of debt securities.
The first quarter of 2013 included $893 million of pretax annual expense associated with retirement-eligible stock compensation costs, compared to $892 million in the first quarter of 2012. In addition, the year-ago quarter included significant negative Debit Valuation Adjustments (DVA), negative fair value option (FVO) adjustments on structured liabilities and gains on the redemption of debt and trust-preferred securities.
“Our strategy of connecting our customers to all we can do for them is working,” said Chief Executive Officer Brian Moynihan. “Solid increases in loan growth to small businesses and middle-market companies, four straight quarters of steady growth in mortgage originations, record earnings in wealth management, and another quarter near the top in investment banking fees show we are balanced, focused and moving forward.”
“There were many examples of progress this quarter,” said Chief Financial Officer Bruce Thompson.
“We reduced noninterest expense by nearly $1 billion year-over-year, and credit costs continued to decline. Our relentless focus on capital, liquidity, and expense reduction enables us to be in position to return excess capital to investors through the previously announced common stock repurchase program and preferred stock redemptions”.
In their results Bank of America cited:
- Deposit Balances up 5 Percent From Q1-12 to $1.1 Trillion
- First-lien Mortgage Production up 57 Percent From Q1-12 to $24 Billion
- Global Wealth and Investment Management Reports Record Post-merger Revenue, Net Income and Long-term Assets Under Management Flows
- Consumer Credit Loss Rates Reaching Five-year Lows
- Commercial Loan Balances up 17 Percent From Q1-12 to $367 Billion
- Maintains No. 2 Ranking in Global Investment Bank Fees; up 26 Percent From Q1-12 to $1.5 Billion
- Noninterest Expense Down Nearly $1.0 Billion From Q1-12, Driven Primarily by Project New BAC Initiatives
- Significant Progress in Legacy Assets and Servicing; Number of 60+ Days Delinquent Mortgage Loans Down 39 Percent From Q1-12 to 667,000 Loans
