Bank Of America Generated Positive Net Income In Q1

Bank of America Corporation reports first quarter 2009 net income of USD4.2 billion. After preferred dividends, including USD402 million paid to the U.S. government, diluted earnings per share were USD 0.44. Those results compared with net income of USD1.2 billion,

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Bank of America Corporation reports first-quarter 2009 net income of USD4.2 billion. After preferred dividends, including USD402 million paid to the U.S. government, diluted earnings per share were USD 0.44.

Those results compared with net income of USD1.2 billion, or diluted earnings per share of USD0.23 after preferred dividends, during the same period last year.

Results for the quarter include Merrill Lynch & Co., which Bank of America and Countrywide Financial. Merrill Lynch contributed USD3.7 billion to net income, excluding certain merger costs, on strong capital markets revenue. Countrywide also added to net income as mortgage lending and refinancing volume increased. The year-ago period does not include Merrill Lynch and Countrywide results.

First Quarter 2009 Business Highlights:

-Bank of America funded USD85 billion in first mortgages, helping more than 382,000 people either purchase a home or refinance their existing mortgage. Approximately 25% were for purchases.

-Credit extended during the quarter, including commercial renewals of USD44.3 billion, was USD183.1 billion compared with USD180.8 billion in the fourth quarter. New credit included USD85.2 billion in mortgages, USD70.9 billion in commercial non-real estate, USD11.2 billion in commercial real estate, USD5.5 billion in domestic and small business card, USD4.0 billion in home equity products and USD6.3 billion in other consumer credit. Excluding commercial renewals, new credit extended during the period was USD138.8 billion compared with more than USD115 billion in the fourth quarter.

-During the first quarter, Small Business Banking extended more than USD720 million in new credit comprised of credit cards, loans and lines of credit to more than 45,000 new customers.

-The company originated USD16 billion in mortgages made to 102,000 low- and moderate-income borrowers.

-To meet rising refinancing and first mortgage application volume, the company is in the process of adding approximately 5,000 positions in fulfillment. In addition, the company has more than 6,400 associates in place to address increasing needs from consumers for assistance with loan modifications.

-To help homeowners avoid foreclosure, Bank of America modified nearly 119,000 home loans during the quarter. Last year, the company embarked on a loan modification program projected to modify over USD100 billion in loans to help keep up to 630,000 borrowers in their homes.

The centerpiece of the program is a proactive loan modification process to provide relief to eligible borrowers who are seriously delinquent or are likely to become seriously delinquent as a result of loan features, such as rate resets or payment recasts. In some instances, innovative new approaches will be employed to include automatic streamlined loan modifications across certain classes of borrowers. Also during the first quarter, the company began a new program that utilizes affordability measures to qualify borrowers for loan modifications.

-Average retail deposits in the quarter increased USD140.0 billion, or 27%, from a year earlier, including USD107.3 billion in balances from Countrywide and Merrill Lynch. Excluding Countrywide and Merrill Lynch, Bank of America grew retail deposits USD32.7 billion, or 6%, from the year-ago quarter.

“The fact that we were able to post strong, positive net income for the quarter is extremely welcome news in this environment,” says Kenneth D. Lewis, chairman and chief executive officer. “It shows the power of our diversified business model as well as the ability of our associates to execute. We are especially gratified that our new teammates at Countrywide and Merrill Lynch had outstanding performance that contributed significantly to our success.”

“However, we understand that we continue to face extremely difficult challenges primarily from deteriorating credit quality driven by weakness in the economy and growing unemployment,” continues Lewis.

“Our company continues to be a solid contributor to the effort to revitalize the U.S. economy through our industry-leading efforts to reform mortgage lending, restructure home loans where appropriate and mitigate foreclosures wherever possible. We look forward to continuing that role.”