Bank of America (NYSE: BAC) announced no Sunday that their full-year net income for 2009 totaled $6.3 billion, compared to a 2008 net income of $4.0 billion.
Although the company made several billion dollars in revenue, common stockholders will still face a net loss of $2.2 billion or about $0.29 per share because of preferred stock dividends and the negative impact from the company’s repayment of the U.S. government’s $45 billion preferred stock investment into the company under the Troubled Asset Relief Program. This compares lowly to common shareholders 2008 net income of $2.6 billion or $0.54 per share.
During the fourth quarter of 2009, the company’s net loss dropped to $194, compared to a loss of $1.8 billion just one year earlier. Including all dividends on preferred stock and the one-time $4 billion impact from the repayment of TARP debt, income applicable to shareholders during the period was a net loss of about $5.2 billion or $0.60 per share, compared to a net loss of $2.4 billion, or $0.48 per share, during the fourth quarter of 2008.
Bank of America’s disappointing fourth quarter results was largely a reflection of the continuation of higher credit costs. Although credit costs have declined between the third and fourth quarter, net interest income is still lower than it was a year ago because the bank has a lower asset liability management portfolio and there is a generally reduced loan demand. Non-interest income was up substantially due to higher income from its investments and brokerage services, equity investments and investment banking, partially due to the company’s take-over of Merrill Lynch.
Bank of America CEO Brian Moynihan commented in a statement about the loss, “While it’s disappointing to report a loss for the fourth quarter, there were a number of important accomplishments worth noting.” He continued, “As we look at 2010, we are encouraged by signs the economy is improving, as we have seen in the stabilization of our credit costs, particularly in the consumer businesses. That said, economic conditions remain fragile and we expect high unemployment levels to continue, creating an ongoing drag on consumer spending and growth.”
