Bank of America (BAC)

Capital Management

Capital ratios increased from the prior quarter as the company reduced risk-weighted assets through balance sheet management. Tangible common equity benefited from the positive impact of market movement on available-for-sale securities.

During the quarter, a cash dividend of $0.01 per common share was paid and the company recorded $1.2 billion in preferred dividends. Period-end common shares issued and outstanding were 8.65 billion for the third and second quarters of 2009 and 4.56 billion for the third quarter of 2008.

Capital Management

Total shareholders’ equity was $255.2 billion at June 30. Period-end assets were $2.3 trillion. The Tier 1 Capital ratio was 11.93 percent, up from 10.09 percent at March 31, 2009 and from 8.25 percent a year ago. The Tier 1 Common Ratio was 6.90 percent, compared with 4.49 percent at March 31, 2009 and 4.78 percent at June 30, 2008. The Tangible Common Equity ratio was 4.67 percent, up from 3.13 percent at March 31, 2009 and 3.24 percent a year earlier. Tangible book value per share of common stock was $11.66, compared with $10.88 at March 31, 2009 and $11.87 a year earlier.

During the quarter the bank increased its Tier 1 common capital by nearly $40 billion, easily exceeding the $33.9 billion Supervisory Capital Assessment Program (SCAP) buffer set by the Federal Reserve in May. Actions contributing toward that goal during the quarter included: issuing shares of common stock; exchanging certain non-government preferred stock for common stock; the sale of a portion of shares in CCB; and the sale of the company’s merchant processing business to a joint venture.

During the quarter, Bank of America issued 1.25 billion, or $13.5 billion of common shares. Bank of America exchanged the equivalent of $14.8 billion of non-government preferred shares for approximately 1 billion shares of common stock through private exchanges and a tender offer. A cash dividend of $0.01 per common share was paid. The company recorded $1.4 billion in preferred dividends, partially offset by $576 million related to the exchange of preferred stock in the calculation of net income available to common shareholders. Period-end common shares issued and outstanding were 8.65 billion for the second quarter of 2009, 6.40 billion for the first quarter of 2009 and 4.45 billion for the year-ago quarter.

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Capital Management

Total shareholders’ equity was $239.5 billion at March 31. Period-end assets were $2.3 trillion. The Tier 1 Capital ratio was 10.09 percent, up from 9.15 percent at December 31, 2008 and higher than the 7.51 percent a year ago. The Tangible Common Equity ratio was 3.13 percent, up from 2.93 percent at December 31, 2008 and lower than 3.21 percent a year earlier.

In January, $20.5 billion of common shares were issued in connection with the Merrill Lynch acquisition. The company also issued $8.6 billion of preferred shares in exchange for outstanding Merrill Lynch preferred stock. Additionally, the company issued $30.0 billion in preferred stock related to the Troubled Asset Relief Program to the U.S. Department of the Treasury. Bank of America paid a cash dividend of $0.01 per common share. During the quarter preferred dividends decreased earnings available to common shareholders by $1.4 billion. Period-end common shares issued and outstanding were 6.40 billion for the first quarter of 2009, 5.02 billion for the fourth quarter of 2008 and 4.45 billion for the year-ago quarter.

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Capital Management

For 2008, Bank of America recorded $10.26 billion in dividends to common shareholders and $1.32 billion to preferred shareholders. The company also issued approximately 580 million common shares, including 455 million during the fourth quarter and 107 million related to the Countrywide acquisition. In addition, Bank of America obtained nearly $35 billion in additional capital in connection with preferred stock issuances throughout the year.

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