Bank of America (NYSE:BAC) reported Q4 EPS of 4 cents after adjusted for a goodwill charge of $2.0 billion. BofA also recorded a $4.1 billion charge for mortgage claims which cut EPS by an additional 26 cents. Excluding that item, EPS would be 30 cents (non-GAAP), better than the 21-cent Street estimate. Revenue, net of interest expense, totaled $22.7 billion.
The bank also reported that the company continues to build capital and that deposits rose to a record $1 trillion at year-end. The company said its Tier 1 Capital ratio reached 8.6% at the end of December.
President and CEO Brian Moynihan said, "Last year was a necessary repair and rebuilding year. Our results reflect the progress we are making at putting legacy - primarily mortgage-related - issues behind us. We earned $10.2 billion before goodwill impairment charges, rebuilt our capital positions, reduced the risk on our balance sheet, and shed more than $19 billion in assets that didn't directly serve customers and clients.
Moynihan added, "We enter 2011 with the best customer franchise in the business against a backdrop of an improving economy. Full economic recovery depends on housing market stability. We will return value to shareholders by focusing on customers and clients, continuing to build capital, and executing our strategy."
BofA also reported improving credit conditions as Q4 net charge-offs were 2.87%, down for five-straight quarters on a managed basis.
Shares of Bank of America are trading about 1% lower in early trade.
SmarTrend is bullish on shares of Bank of America and our subscribers were alerted to buy on December 09, 2010 at $12.47. The stock has risen 16.6% since the alert was issued.
Write to Chip Brian at cbrian@tradethetrend.com
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