April 20, 2009

Merrill Boosts BofA's Q109 Results

Bank of America Corporation has reported first-quarter 2009 results that include Merrill Lynch, bought January 1, 2009, and Countrywide Financial, bought July 1, 2008. In the most recent three-months, BofA had net income of $4.2 billion and diluted earnings per share of $0.44 vs. net income of $1.2 billion and EPS of $0.23 a year earlier.

Merrill Lynch contributed $3.7 billion to net income, excluding certain merger costs, on strong capital markets revenue, the company says.

"The fact that we were able to post strong, positive net income for the quarter is extremely welcome news in this environment," explains Chairman and CEO Kenneth D. Lewis. "We are especially gratified that our new teammates at Countrywide and Merrill Lynch had outstanding performance that contributed significantly to our success."

In its financial statements, BofA reports that it now has 15,822 advisors worldwide vs. 1,952 a year ago. Annualized total revenue per advisor now stands at $808,000. BofA says its legacy advisors "historically have had higher amounts of credit and banking activity in their portfolios" and had yearly sales of $1.7 million in the first quarter of 2008.

Client balances in the Global Wealth Advisors segment stood at $1.3 trillion on March 31, 2009, up from $310 billion a year earlier - thanks to the $1 trillion in assets gained by the Merrill acquisition. (Client balances include deposits, AUM, client-brokerage assets and other assets in custody.)

The company also highlighted the following results:

- Bank of America-Merrill Lynch was No. 2 in global and U.S. investment banking fees during the quarter and based on volume was No. 1 in U.S. equity capital markets, No. 1 in U.S. high yield debt, leveraged and syndicated loans, and was a top-five advisor on mergers and acquisitions globally and in the U.S., according to first-quarter league tables.

- Average retail deposits in the quarter increased $140.0 billion, or 27 percent, from a year earlier, including $107.3 billion in balances from Countrywide and Merrill Lynch.

The bank says that the integration of Merrill Lynch is "on track and expected to meet targeted cost savings."

"Merrill Lynch financial advisors and Bank of America are engaged in client referrals. Merrill Lynch financial advisors are in the process of integrating Bank of America's broad product set to offer clients. The business has had early success with a sales program for certificates of deposit, which booked more than $135 million in CDs in Florida alone. The program soon will be rolled out nationally," the bank explains in a statement.

Global Wealth Advisors, which includes the wealth management organization of Merrill Lynch, had net income of $565 million in the first quarter, compared with $176 million a year earlier, driven by the positive impact on earnings from the acquisition, according to the bank. Net revenue increased to $3.3 billion compared with $983 million as asset management fees and brokerage income rose due to the acquisition of Merrill Lynch partially offset by the effect of lower equity markets and spread compression.

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