Bank of America Corporation today reported net income of $2.0 billion for the fourth quarter of 2011, compared with a net loss of $1.2 billion in the year-ago period. Revenue, net of interest expense, on a fully taxable-equivalent basis rose 11% to $25.1 billion.
For the full year, the company reported net income of $1.4 billion, compared with a net loss of $2.2 billion in 2010. Revenue, net of interest expense, on an FTE basis declined 15% to $94.4 billion.
Total average commercial and industrial loan balances Increased 13% from the fourth quarter of 2010.
"We enter 2012 stronger and more efficient after two years of simplifying and streamlining our company," said Chief Executive Officer Brian Moynihan. "We built our capital ratios to record levels during 2011 on the strength of our core businesses and by shedding those that are not core to serving customers and clients. I am proud of our team and their ability to serve our customers well while transforming the company."
“Our fourth-quarter results reflect the aggressive steps we have been taking to strengthen the balance sheet and position the company for long-term growth," said Chief Financial Officer Bruce Thompson. “During the quarter, we significantly increased capital and liquidity. Our Tier 1 common equity ratio increased to 9.86% from 8.65% in the third quarter of 2011, and our time-to-required funding increased to 29 months from 27 months. For 2012, our focus is to continue to build capital and liquidity and manage expenses."
“Reflecting a gradually improving economy,” continued Moynihan, "we saw solid business activity by companies of all sizes, with commercial and industrial loan balances rising 13% from the fourth quarter of 2010, and small business loan originations increasing approximately 20% in calendar year 2011."
Global Commercial Banking Highlights
• Average commercial and industrial loans grew $4 billion, or 4%, from the year-ago quarter driven by middle-market clients.
• Credit quality continued to improve as nonperforming assets declined by $3.1 billion, or 35%, and total reservable criticized loans declined by $12.6 billion, or 38%, versus the year-ago quarter.
• The provision for credit losses was relatively flat compared to the year-ago quarter with a benefit of $146 million.
Credit Quality
Credit quality continued to improve in the fourth quarter, with net charge-offs declining across all major portfolios, compared to the fourth quarter of 2010. Provision for credit losses decreased significantly from a year ago. Additionally, 30+ day performing delinquent loans, excluding Federal Housing Administration-insured loans and long-term standby agreements, declined across all major portfolios, and reservable criticized balances also continued to decline, down 36 percent from the year-ago period.
Net charge-offs declined to $4.1 billion in the fourth quarter of 2011 from $5.1 billion in the third quarter of 2011 and $6.8 billion in the fourth quarter of 2010, reflecting improvement in all major consumer and commercial portfolios.
The decrease was primarily driven by fewer delinquent loans, improved collection rates and lower bankruptcy filings across the Card Services loan portfolio, as well as lower net charge-offs in the home equity portfolio, driven by fewer delinquent loans, and recoveries from the sale of previously charged-off U.K. credit card loans.
The provision for credit losses declined to $2.9 billion in the fourth quarter of 2011 from $3.4 billion in the third quarter of 2011 and $5.1 billion in the fourth quarter of 2010. Results for the fourth quarter of 2011 included reserve reductions of $1.1 billion driven primarily by projected improvement in delinquencies, collections and bankruptcies across the Card Services portfolios and by improvement in economic conditions impacting the core commercial portfolio, as evidenced by continued declines in reservable criticized and nonperforming balances.
The allowance for loan and lease losses to annualized net charge-off coverage ratio increased in the fourth quarter of 2011 to 2.10 times, compared with 1.74 times in the third quarter of 2011 and 1.56 times in the fourth quarter of 2010. Excluding purchased credit-impaired loans, the allowance to annualized net charge-off coverage ratio was 1.57 times, 1.33 times and 1.32 times for the same periods, respectively.
Nonperforming loans, leases and foreclosed properties were $27.7 billion at December 31, 2011, down from $29.1 billion at September 30, 2011, and $32.7 billion at December 31, 2010.