This excerpt taken from the BAC 8-K filed Jul 17, 2009.
Adds $4.7 Billion to Credit Loss Reserves
CHARLOTTE Bank of America Corporation today reported second-quarter 2009 net income of $3.2 billion. After deducting preferred dividends of $805 million, including $713 million paid to the U.S. government, diluted earnings per share were $0.33.
Those results compared with net income of $3.4 billion, or diluted earnings per share of $0.72 during the year-ago period.
For the first half of 2009, Bank of America earned $7.5 billion, or $0.75 per share.
Results were driven by continued strong revenue performance in the wholesale capital markets businesses as well as in home loans complemented by the previously announced gains on the sale of China Construction Bank (CCB) shares and the sale of the companys merchant processing business to a joint venture. These positives were somewhat offset by continuing high credit costs, including additions to the reserve for loan and lease losses, as well as significant negative credit valuation adjustments on certain liabilities including the Merrill Lynch structured notes and the impact of a special Federal Deposit Insurance Corp. (FDIC) assessment.
Bank of America finished the second quarter with its strongest capital position in recent memory, with a Tier 1 Capital ratio of 11.93 percent as well as a leading liquidity position among global banks.
Having positive net income in an extremely challenging environment speaks to the diversity and strength of our business model as well as the extraordinary effort put forth by all of our associates, said Kenneth D. Lewis, chief executive officer and president. Our goals during this difficult time have been to enhance the strength of our balance sheet and capital position and to continue to improve our earning power while dealing with the credit issues facing our industry due to the recession.
Difficult challenges lie ahead from continued weakness in the global economy, rising unemployment and deteriorating credit quality that will affect our performance for the rest of the year and into 2010, Lewis said. However, we are convinced that Bank of America will weather the storm and emerge as an acknowledged leader in financial services in the United States and around the world.
Most importantly, we continue to serve our customers and clients around the world every day, helping them with their accounts, meeting their financial needs and adding new business, Lewis added.