. Credit Costs Decline Across Most Loan Portfolios
. Record Sales and Trading Revenue
. Five of Six Business Segments Are Profitable
. Pretax, Pre-Provision Income at $14.5 Billion
CHARLOTTE, April 16 /PRNewswire-FirstCall/ -- Bank of America Corporation today reported first-quarter 2010 net income of $3.2 billion compared with a net loss of $194 million in the fourth quarter and net income of $4.2 billion a year earlier. After preferred dividends, the company earned $0.28 per diluted share in the first quarter, up from a loss of $0.60 per share in the fourth quarter and earnings of $0.44 per share in the first quarter of 2009.

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Two factors primarily drove results in the first quarter:

Provision for credit losses fell by $3.6 billion from the year-ago period, reflecting an improvement in credit quality.

Strong capital markets activity, including record sales and trading driven by industry-leading corporate and investment banking positions, helped drive results for Global Banking and Markets.

"With each day that passes, the 2010 story appears to be one of continuing credit recovery, and our results reflect a gradually improving economy," said Chief Executive Officer and President Brian T. Moynihan. "Our customers – individuals, companies, and institutional investors – increasingly see the value of our integrated capabilities. We also are seeing ample indications that those integrated capabilities hold promise for long-term shareholder value."

First-Quarter 2010 Business Highlights
Bank of America Merrill Lynch ranked No. 1 in both global high-yield debt and leveraged loans and No. 2 in overall global and U.S. net investment banking revenues with a 7 percent market share, according to Dealogic first-quarter 2010 league tables.

Average retail deposits during the quarter increased $15.2 billion, or 2 percent, from a year earlier, paced by strong organic growth in Merrill Lynch Global Wealth Management as momentum in the affluent customer base continued.

Consumer referrals and sales to Merrill Lynch Global Wealth Management clients accelerated in the first quarter. Approximately 60,000 lending and deposit products were sold to Merrill Lynch clients. Referrals between Global Wealth and Investment Management and the company's commercial and corporate businesses increased 56 percent compared with the fourth quarter of 2009.

During the quarter, Bank of America extended $150 billion in credit, according to preliminary data. Credit extensions included $70 billion in first mortgages, $56 billion in commercial non-real estate, $10 billion in commercial real estate, $3 billion in domestic consumer and small business card, $2 billion in home equity products and $9 billion in other consumer credit. Commercial credit extensions include a significant number of credit renewals.

Bank of America funded $69.5 billion in first mortgages, helping more than 320,000 people either purchase homes or refinance existing mortgages. This funding included $17.4 billion in mortgages made to nearly 115,000 low- and moderate-income borrowers. Approximately 37 percent of first mortgages were for home purchases.

Initiatives to Help Customers
Bank of America introduced several initiatives during the quarter to help customers. The company will eliminate debit point-of-sale transactions that would result in an overdraft if a customer does not have enough funds in their account.

The company introduced an earned principal forgiveness approach to modifying certain types of mortgages that are severely underwater to expand the company's existing aggressive homeowner retention programs.

Bank of America was the first to extend credit card assistance programs to small businesses.

Since the start of 2008, Bank of America and previously Countrywide have provided home ownership retention opportunities to customers for approximately 819,000 home loan modification transactions. This includes 569,000 loan modifications and approximately 251,000 consumers who were in trial-period modifications under the government's Making Home Affordable program at March 31, 2010. During the quarter, 77,000 loan modifications were completed with total unpaid principal balances of $17.8 billion, including 33,000 customers who converted from trial-period to permanent modifications under the government's Making Home Affordable program.

Bank of America Home Loans expanded its default management staff by nearly 7 percent to more than 16,000 during the quarter to help customers experiencing difficulty with their home loans.

Bank of America issued clarity statements on a number of consumer products to help customers better understand the products they use.

Bank of America helped more than 200,000 Global Card Services account holders by reducing their interest rates and providing more affordable payment terms during the quarter.


"We will continue to support our customers through these and other initiatives aimed at helping restore their financial health," Moynihan said. "We want to ensure quality relationships with our customers and earn their trust and future business. This will benefit not just our customers, but our company and our shareholders."

First-Quarter 2010 Financial Summary

Revenue and Expense
Revenue net of interest expense on a fully taxable-equivalent (FTE)(1) basis declined 11 percent to $32.3 billion from $36.1 billion a year ago. Revenue declines were driven by the absence of year-earlier credit-related gains on Merrill Lynch structured notes, the sale of an equity investment and lower mortgage banking volume and income.

Revenue was up 27 percent from the fourth quarter of 2009.

Net interest income on an FTE basis was $14.1 billion, compared with $12.8 billion a year earlier. On a managed FTE basis, net interest income declined from $15.6 billion a year earlier as loan demand decreased and charge-offs reduced loan balances. The increase in reported net interest income was primarily due to the adoption of new consolidation accounting guidance effective Jan. 1, which moved net assets of approximately $100 billion onto the balance sheet. The change, while having no material impact on net income, primarily affected net interest income, card income and the provision for loan and lease losses. The net interest yield widened 23 basis points to 2.93 percent, but average loans declined by 2 percent, reflecting economic conditions and lower demand.

Noninterest income declined 22 percent to $18.2 billion from $23.3 billion a year ago. Lower mortgage banking income and decreases in both card income and equity investment income drove the decline. Mortgage banking income declined, driven by less favorable mortgage servicing rights hedging results and lower production volume and margins. Card income declined due to the recent adoption of new accounting guidance and the CARD Act, while equity investment income was impacted by the absence of the gain a year earlier on the sale of China Construction Bank (CCB) shares. However, noninterest income was up 35 percent from the fourth quarter of 2009, reflecting record sales and trading revenue in the current quarter.

Noninterest expense increased 5 percent to $17.8 billion from $17.0 billion a year earlier as personnel costs and other general operating expenses rose. Pretax merger and restructuring charges declined to $521 million from $765 million a year earlier.

The efficiency ratio on an FTE basis was 55.05 percent, compared with 47.12 percent a year earlier.

(1) FTE basis is a non-GAAP measure. For a reconciliation to GAAP, refer to page 20 of this press release

Credit Quality
(Dollars in millions) Q1 2010 Q4 2009 Q1 2009
Provision for credit losses $ 9,805 $ 10,110 $ 13,380
Net charge-offs1 10,797 8,421 6,942
Net charge-off ratio1,2 4.44% 3.71% 2.85%
Total managed net losses3 - $ 11,347 $ 9,124
Total managed net loss ratio2,3 - 4.54% 3.40%

At 3/31/10 At 12/31/09 At 3/31/09
Nonperforming loans, leases and foreclosed properties $ 35,925 $ 35,747 $ 25,632
Nonperforming loans, leases and foreclosed properties ratio4 3.69% 3.98% 2.64%
Allowance for loan and lease losses $ 46,835 $ 37,200 $ 29,048
Allowance for loan and lease losses ratio5 4.82% 4.16% 3.00%

1 Current period reflects the adoption of new accounting guidance resulting in the addition of approximately $103 billion in loans to the balance sheet on January 1, 2010.

2 Net charge-off/loss ratios are calculated as annualized held net charge-offs or managed net losses divided by average outstanding held or managed loans and leases during the period.

3 Prior periods are shown on a managed basis, which prior to the adoption of new accounting guidance on January 1, 2010 included losses on securitized credit card and other loans which are reported in net charge-offs post adoption.

4 Nonperforming loans, leases and foreclosed properties ratios are calculated as nonperforming loans, leases and foreclosed properties divided by outstanding loans, leases and foreclosed properties at the end of the period.

5 Allowance for loan and lease losses ratios are calculated as allowance for loan and lease losses divided by loans and leases outstanding at the end of the period.

Note: Ratios do not include loans measured under the fair value option.

Credit quality continued to improve during the quarter, with net losses declining in most consumer portfolios. Credit costs, however, remain high amid relatively weak global economic conditions.

Credit quality across most commercial portfolios showed signs of improvement with criticized and nonperforming loans decreasing from the prior quarter. Net charge-offs in the commercial portfolios declined across a broad range of borrowers and industries.

Net charge-offs were $2.4 billion higher than the fourth quarter of 2009, driven mainly by the adoption of new accounting guidance that resulted in securitized credit card loans and other loans coming back onto the company's balance sheet. Also contributing to the increase were charge-offs on certain modified collateral-dependent consumer real estate loans. Excluding these factors, net charge-offs would have been $1.3 billion lower. Net charge-offs in the first quarter of $10.8 billion, or 4.44 percent, which reflect the new accounting guidance, are comparable with managed net losses of $11.3 billion, or 4.54 percent, in the prior quarter. Nonperforming loans, leases and foreclosed properties were $35.9 billion, compared with $35.7 billion at December 31, 2009.

The provision for credit losses was $9.8 billion, $305 million lower than the fourth quarter of 2009 and $3.6 billion lower than the same period a year earlier. Excluding the $10.8 billion increase to the reserve for credit losses associated with adopting the new accounting guidance, which did not initially impact provision, reserves were reduced $992 million during the quarter. This compares with a $1.7 billion addition to the reserve for credit losses in the fourth quarter and $6.4 billion a year earlier. The reduction from the fourth quarter of 2009 was primarily due to improved delinquencies and lower bankruptcies in consumer and small business products in Global Card Services and the stabilization of commercial portfolios. These were partially offset by higher reserve additions in the consumer real estate portfolios amid continued stress in the housing market, including reserve additions for purchased credit-impaired consumer portfolios obtained through acquisitions.

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