Fourth-quarter net income increased $4.8 billion compared with a net loss of $3.7 billion in the same period last year. Net revenue increased due to a more favorable trading environment from the prior year, including significantly lower market disruption charges and the addition of Merrill Lynch.
Global Wealth and Investment Management
(Dollars in millions) 2009 2008
--------------------- ---- ----
Total revenue, net of interest $18,123 $7,809
Expense(1)
Provision for credit losses 1,061 664
Noninterest expense 13,077 4,910
Net income 2,539 1,428
Efficiency ratio(1) 72.16% 62.87%
Return on average equity 13.44 12.20
Loans(2) $103,398 $87,593
Deposits(2) 225,980 160,702
(in billions) At 12/31/09 At 12/31/08
------------- ----------- -----------
Assets under management $749.8 $523.1
Total net client assets(3) $2,172.9 $917.6
(1) Fully taxable-equivalent basis
(2) Balances averaged for period
(3) Client assets are defined as assets under management, client brokerage assets, other assets in custody and client deposits
Global Wealth and Investment Management net income rose to $2.5 billion driven by the addition of Merrill Lynch, partially offset by lower residual net interest income and higher credit costs.
Net revenue more than doubled to $18.1 billion on higher investment and brokerage service income from the addition of Merrill Lynch, a $1.1 billion gain related to the BlackRock equity investment and the lower level of support for certain cash funds.
The provision for credit losses increased $397 million to $1.1 billion driven by higher net charge-offs in the consumer real estate portfolio, as well as higher net charge-offs and reserve increases in the commercial portfolios.
- Merrill Lynch Global Wealth Management net income increased
22 percent to $1.5 billion from a year earlier as the impact of lower
residual net interest income, the migration of deposits and loan
balances to the Deposits and Home Loans and Insurance businesses and
higher credit costs were more than offset by the addition of Merrill
Lynch.
- U.S. Trust, Bank of America Private Wealth Management net income
declined to $174 million as net revenue fell and credit costs
increased significantly, including the impact of a single large
commercial charge-off in the third quarter. Net revenue declined 11
percent to $2.7 billion driven by a lower residual net interest income
allocation and the effect of lower valuations in equity markets on asset
management fee income.
- Columbia Management net loss narrowed to $7 million compared with a
net loss of $469 million a year earlier, driven by a $917 million
reduction in support provided to certain cash funds, partially offset by
the impact of lower valuations in the equity markets, as well as net
outflows in the cash complex. As a result of actions taken during the
year, Columbia's money market funds no longer have exposure to
structured investment vehicles or other troubled assets and all capital
support agreements have been terminated.
Fourth-quarter net income increased $816 million to $1.3 billion, compared with the same period last year as revenue increased to $5.5 billion. The increase in revenue was driven primarily by the Merrill Lynch acquisition and the gain related to the BlackRock equity interest.
All Other
(Dollars in millions) 2009 2008
--------------------- ---- ----
Total revenue, net of interest
expense(1) $(1,092) $(5,168)
Provision for credit losses(2) (3,431) (3,769)
Noninterest expense 4,718 1,124
Net income (loss) 478 (1,240)
Loans and leases(3) $155,561 $135,789
(1) Fully taxable-equivalent basis
(2) Numbers in parentheses represent a provision benefit
(3) Balances averaged for period
All Other reported net income of $478 million. Higher equity investment income and increased gains on the sale of debt securities were offset by $4.9 billion mark-to-market losses mainly related to certain Merrill Lynch structured notes as credit spreads improved. Results were also impacted by other-than-temporary impairment charges related to non-agency collateralized mortgage obligations. Excluding the securitization impact to show Global Card Services on a managed basis, the provision for credit losses increased compared with the same period last year due to higher losses in the residential mortgage portfolio. Noninterest expense increased due to merger and restructuring charges related to the Merrill Lynch acquisition and a pretax charge to pay the U.S. government to terminate its asset guarantee term sheet.
All Other consists primarily of equity investments, the residential mortgage portfolio associated with asset and liability management (ALM) activities, the residual impact of the cost allocation process, merger and restructuring charges, intersegment eliminations, fair-value adjustments related to certain Merrill Lynch structured notes 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 Card Services on a managed basis. For more information and detailed reconciliation, please refer to the data pages supplied with this press release. Effective January 1, 2009, All Other includes the results of First Republic Bank, which was acquired as part of the Merrill Lynch acquisition.
Note: Chief Executive Officer and President Brian T. Moynihan and Chief Financial Officer Joe L. Price will discuss 2009 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 1.888.245.1801 (U.S.) or 1.785.424.1732 (international) and the conference ID: 79795.
Bank of America
Bank of America is one of the world's largest financial institutions, serving individual consumers, small- and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 59 million consumer and small business relationships with 6,000 retail banking offices, more than 18,000 ATMs and award-winning online banking with nearly 30 million active users. Bank of America is among the world's leading wealth management companies and is a global leader in corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to more than 4 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients in more than 150 countries. Bank of America Corporation stock (NYSE: BAC) is a component of the Dow Jones Industrial Average and is listed on the New York Stock Exchange.
Forward-Looking Statements
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