Bank of America (BAC) Reports Q1 EPS of $0.44
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Bank of America Corporation (NYSE: BAC) reports Q1 net income of US$4.2 billion. After preferred dividends, including US$402 million paid to the U.S. government, diluted earnings per share were US$0.44.
Merrill Lynch contributed US$3.7 billion to net income, excluding certain merger costs, on strong capital markets revenue. Countrywide also added to net income as mortgage lending and refinancing volume increased.
CEO Kenneth D. Lewis said, ""The fact that we were able to post strong, positive net income for the quarter is extremely welcome news in this environment. It shows the power of our diversified business model as well as the ability of our associates to execute. We are especially gratified that our new teammates at Countrywide and Merrill Lynch had outstanding performance that contributed significantly to our success."
However, we understand that we continue to face extremely difficult challenges primarily from deteriorating credit quality driven by weakness in the economy and growing unemployment," Lewis said. "Our company continues to be a solid contributor to the effort to revitalize the U.S. economy through our industry-leading efforts to reform mortgage lending, restructure home loans where appropriate and mitigate foreclosures wherever possible. We look forward to continuing that role."
First Quarter 2009 Business Highlights:
- Bank of America Merrill Lynch was No. 2 in global and U.S. investment banking fees during the quarter and based on volume was No. 1 in U.S. equity capital markets, No. 1 in U.S. high yield debt, leveraged and syndicated loans, and was a top-five advisor on mergers and acquisitions globally and in the U.S., according to first-quarter league tables.
- Bank of America funded US$85 billion in first mortgages, helping more than 382,000 people either purchase a home or refinance their existing mortgage. Approximately 25 percent were for purchases.
- Credit extended during the quarter, including commercial renewals of US$44.3 billion, was US$183.1 billion compared with US$180.8 billion in the fourth quarter. New credit included US$85.2 billion in mortgages, US$70.9 billion in commercial non-real estate, US$11.2 billion in commercial real estate, US$5.5 billion in domestic and small business card, US$4.0 billion in home equity products and US$6.3 billion in other consumer credit. Excluding commercial renewals, new credit extended during the period was US$138.8 billion compared with more than US$115 billion in the fourth quarter.
- During the first quarter, Small Business Banking extended more than US$720 million in new credit comprised of credit cards, loans and lines of credit to more than 45,000 new customers.
- The company originated US$16 billion in mortgages made to 102,000 low-and moderate-income borrowers.
- To meet rising refinancing and first mortgage application volume, the company is in the process of adding approximately 5,000 positions in fulfillment. In addition, the company has more than 6,400 associates in place to address increasing needs from consumers for assistance with loan modifications.
- To help homeowners avoid foreclosure, Bank of America modified nearly 119,000 home loans during the quarter.
- Average retail deposits in the quarter increased US$140.0 billion, or 27 percent, from a year earlier, including US$107.3 billion in balances from Countrywide and Merrill Lynch. Excluding Countrywide and Merrill Lynch, Bank of America grew retail deposits US$32.7 billion, or 6 percent, from the year-ago quarter.
Credit quality deteriorated further across all lines of business as housing prices continued to fall and the economic environment weakened.
The provision for credit losses of US$13.4 billion rose from US$8.5 billion in the fourth quarter and included a US$6.4 billion net addition to the allowance for loan and lease losses.
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UPDATE: Click here to see some highlights from the company's Q1 conference call.
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