The performance of the managed portfolio is important in understanding Global Card Services' results as it demonstrates the results of the entire portfolio serviced by the business. Securitized loans continue to be serviced by the business and are subject to the same underwriting standards and ongoing monitoring as held loans. In addition, retained excess servicing income is exposed to similar credit risk and repricing of interest rates as held loans. Global Card Services' managed income statement line items differ from a held basis reported as follows:
-- Managed net interest income includes Global Card Services' net
interest income on held loans and interest income on the
securitized loans less the internal funds transfer pricing
allocation related to securitized loans.
-- Managed noninterest income includes Global Card Services'
noninterest income on a held basis less the reclassification of
certain components of card income (e.g., excess servicing income)
to record securitized net interest income and provision for
credit losses. Noninterest income, both on a held and managed
basis, also includes the impact of adjustments to the
interest-only strip that are recorded in card income as
management continues to manage this impact within Global Card
Services.
-- Provision for credit losses represents the provision for credit
losses on held loans combined with realized credit losses
associated with the securitized loan portfolio.
Global Card Services
Year Ended December 31, Year Ended December 31,
2009 2008
Securiti- Securiti-
Managed zation Held Managed zation Held
Basis (1) Impact(2) Basis Basis(1) Impact(2) Basis
------- -------- ------- ------- -------- -------
Net interest
income (3) $20,264 $(9,250) $11,014 $19,589 $(8,701) $10,888
Noninterest
income:
Card income 8,555 (2,034) 6,521 10,033 2,250 12,283
All other
income 523 (115) 408 1,598 (219) 1,379
Total
noninterest
income 9,078 (2,149) 6,929 11,631 2,031 13,662
Total revenue,
net of
interest
expense 29,342 (11,399) 17,943 31,220 (6,670) 24,550
Provision for
credit losses 30,081 (11,399) 18,682 20,164 (6,670) 13,494
Noninterest
expense 7,961 - 7,961 9,160 - 9,160
Income (loss)
before income
taxes (8,700) - (8,700) 1,896 - 1,896
Income tax
expense
(benefit) (3) (3,145) - (3,145) 662 - 662
Net income
(loss) $(5,555) $- $(5,555) $1,234 $- $1,234
Average - total
loans and
leases $216,654 $(98,453) $118,201 $236,714 $(104,401) $132,313
All Other
Year Ended December 31, Year Ended December 31,
2009 2008
Securiti- Securiti-
Reported zation As Reported zation As
Basis Offset Adjusted Basis Offset Adjusted
(4) (2) (4) (2)
Net interest
income
(loss) (3) $(6,922) $9,250 $2,328 $(8,019) $8,701 $682
Noninterest
income:
Card income
(loss) (895) 2,034 1,139 2,164 (2,250) (86)
Equity
investment
income 9,020 - 9,020 265 - 265
Gains on sales
of debt
securities 4,440 - 4,440 1,133 - 1,133
All other
income (loss) (6,735) 115 (6,620) (711) 219 (492)
Total
noninterest
income 5,830 2,149 7,979 2,851 (2,031) 820
Total revenue,
net of
interest
expense (1,092) 11,399 10,307 (5,168) 6,670 1,502
Provision for
credit losses (3,431) 11,399 7,968 (3,769) 6,670 2,901
Merger and
restructuring
charges 2,721 - 2,721 935 - 935
All other
noninterest
expense 1,997 - 1,997 189 - 189
Loss before
income
taxes (2,379) - (2,379) (2,523) - (2,523)
Income tax
benefit (3) (2,857) - (2,857) (1,283) - (1,283)
Net income
(loss) $478 $- $478 $(1,240) $- $(1,240)
Average - total
loans and
leases $155,561 $98,453 $254,014 $135,789 $104,401 $240,190
(1) Provision for credit losses represents provision for credit losses on held loans combined with realized credit losses associated with the securitized loan portfolio.
(2) The securitization impact/offset on net interest income is on a funds transfer pricing methodology consistent with the way funding costs are allocated to the businesses.
(3) FTE basis
(4) Provision for credit losses represents provision for credit losses in All Other combined with the Global Card Services securitization offset.
Certain prior period amounts have been reclassified among the segments to conform to the current period presentation.
Information for periods beginning July 1, 2008 include the Countrywide acquisition. Information for the period beginning January 1, 2009 includes the Merrill Lynch acquisition. Prior periods have not been restated.
This information is preliminary and based on company data available at the time of the presentation.
CHARLOTTE, North Carolina, January 20 /PRNewswire/ --
CHARLOTTE, North Carolina, January 20 /PRNewswire/ --
Investors, Kevin Stitt, +1-704-386-5667 or Lee McEntire, +1-704-388-6780; or Reporters, Scott Silvestri, +1-980-388-9921, scott.silvestri@bankofamerica.com; all of Bank of America
