Bank Of America Corporation · NYSE:BAC
Bank Of America — Bank of America Corp /De/ (Bac, Bac-Pb, Bac-Pe, Bac-Pk, Bac-Pl, Bac-Pm, Bac-Pn, Bac-Po, Bac-Pp, Bml-Pg, Bml-Ph, Bml-Pj, Bml-Pl) — Corporate Update (June 2011)
16 slides from Bank Of America's corporate update, Jun 29, 2011
Slide 1: Addressing Legacy Mortgage Issues
Exhibit 99.4 Addressing Legacy Mortgage Issues June 29, 2011
Slide 2: Key Takeaways
Key Takeaways • Today we are announcing a settlement agreement, a related institutional investor agreement and several 2Q11 mortgage actions that represent important steps in putting representations and warranties (“R & W”) risk behind us • Following today's agreements (which include an $8.5B cash p
Slide 3: Summary Review of Today’s Agreements
Summary Review of Today’s Agreements Announced Agreements: • Settlement with Bank of New York Mellon (“BNY”), as Trustee, regarding repurchase and servicing claims for 530 legacy Countrywide private-label residential mortgage-backed securities trusts – BNY, as Trustee, will release the claims on beh
Slide 4: Scope of Private-Label Settlement Agreement
Scope of Private-Label Settlement Agreement Scope of Settlement: • Covers 530 Countrywide residential mortgage-backed private-label Original Unpaid Principal Balance trusts of 530 Countrywide Private Label – $424B of Original Unpaid Principal Balance Mortgage Trusts in Settlement • Does not address
Slide 5: Rationale for Settlement
Rationale for Settlement • Continued and substantial progress in addressing R & W exposure – January 3, 2011 - Settlements with Fannie Mae and Freddie Mac for certain Countrywide exposure – April 15, 2011 - Assured Guaranty Settlement – June 28, 2011 - Countrywide-issued Private-Label Settlement – T
Slide 6: Preliminary Financial Impact of Today’s Announcements
Preliminary Financial Impact of Today’s Announcements • $8.5B settlement payment will be accrued for in 2Q11, but is not payable until after final court approval of settlement agreement • Expect to record additional 2Q11 mortgage items: – Additional $5.5B provision for R & W liability for non-GSE ex
Slide 7: 2Q11 Preliminary Results
2Q11 Preliminary Results 4 • Expect to report a net loss of $8.6B to $9.1B on July 19; EPS loss of $0.88 to $0.93 – $0.26 EPS impact of $2.6B goodwill impairment charge • Earnings ex goodwill impairment expected to include the following mortgage-related pre-tax charges: – R & W expense $14.0B – Addi
Slide 8: Estimated Regulatory Capital Impact
Estimated Regulatory Capital Impact • Tier 1 Common Ratio (under Basel I) BAC expected to be above Tier 1 Common 8% at 6/30/11 Ratio (Basel I) 5 5 Reflects the 12/31/09 information adjusted to include 1/1/10 adoption of FAS 166/167 as reported in our SEC filings. 7
Slide 9: Estimated Impact on Capital Metrics
Estimated Impact on Capital Metrics • Tangible Book Value Per Share expected Tangible Book Value to be above $12.50 Per Share at 6/30/11 6 • Book Value Per Share expected to be above $20.00 at 6/30/11 Book Value Per Share 5 Reflects the 12/31/09 information adjusted to include 1/1/10 adoption of FAS
Slide 10: Estimated Impact on Capital Metrics (cont’d)
Estimated Impact on Capital Metrics (cont’d) • Tangible Common Equity Ratio expected to be above Tangible 5.7% at 6/30/11 6 Common Equity Ratio 5 • Common Equity Ratio expected to be above roughly 9.0% Common at 6/30/11 Equity Ratio 5 5 Reflects the 12/31/09 information adjusted to include 1/1/10 ad
Slide 11: Capital and Basel III
Capital and Basel III • Including currently identified RWA mitigation, 12/31/12 RWA is estimated at ~$1.8T; mitigation efforts will continue after 12/31/12 • Also actively mitigating against Basel III capital numerator deductions which phase in starting in 2014 • Expect our ratios to be in excess of
Slide 12: Key Takeaways
Key Takeaways • Making substantial progress in addressing legacy issues • Today’s announcement addresses significant exposure on potential representations and warranties losses • 2Q11 results include other mortgage-related costs • Although results include a significant cost to shareholders, we belie
Slide 13: Forward-Looking Statements
Forward-Looking Statements Certain statements in this Presentation represent the current expectations, plans or forecasts of Bank of America and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by
Slide 14: Note Relating to Non-GAAP Financial Disclosures
Note Relating to Non-GAAP Financial Disclosures This presentation contains non-GAAP financial information. We believe the use of these non-GAAP measures provides additional clarity in assessing the results of the Corporation. Other companies may define or calculate these measures and ratios differen
Slide 15: Note Relating to Non-GAAP Financial Disclosures
Note Relating to Non-GAAP Financial Disclosures This page presents a reconciliation of estimated earnings adjusted for large items expected to be recorded during the second quarter of 2011. The after-tax amounts shown on large items assumes a 37% tax rate which could be different as actual results a
Slide 16: Bank of America
Bank of America 4