January 19, 2012

BofA Back in Black as Merrill Hires More FAs: Q4 Earnings

Merrill Lynch adds some 200 advisors in the latest quarter and nearly 1,700 in 2011 as part of its Merrill Edge expansion

Bank of America headquarters in Charlotte, NC. (Photo: AP) Bank of America headquarters in Charlotte, NC. (Photo: AP)

Bank of America (BAC) said Thursday that it had net income of $2 billion, or $0.15 per share, for the fourth quarter of 2011 vs. a net loss of $1.2 billion, or $0.16 per share in the same year-ago period, meeting analysts’ expectations. Revenue, net of interest expense, grew 11% to $25.1 billion on a fully taxable-equivalent basis.

As of Dec. 30, BofA employed 17,308 financial advisors, an increase of 214 from the previous quarter and 1,697 over the previous year. Much of the growth came from the hiring of Merrill Edge advisors, who serve client households with $250,000 or less in investable assets.

"We enter 2012 stronger and more efficient after two years of simplifying and streamlining our company," said CEO Officer Brian Moynihan in a press release. "We built our capital ratios to record levels during 2011 on the strength of our core businesses and by shedding those that are not core to serving customers and clients. I am proud of our team and their ability to serve our customers well while transforming the company."

In terms of net new assets, the global wealth operations of BofA had inflows of $5.49 billion in the fourth quarter vs. inflows of $1.92 billion in the third quarter and outflows of $2.4 billion in the year-ago period, which included flows associated with the sale of Columbia Management (on May 1, 2010).

For the full year, net new assets totaled $15.68 billion vs. outflows of $27.63 billion in 2010. Average sales (or fees and commissions) per advisor were $873,000 in 2011, up from $850,000 in 2010, excluding Merrill Edge advisors. For the quarter, however, average production per rep totaled $819,000–a drop from $854,000 in the previous quarter and $913,000 a year earlier.

More Segment Results

The global-wealth operations had net income of $249 million, which dropped $98 million from the third quarter and $70 million from the year-ago period due to lower market-driven revenue and higher expenses, the company said.  

The unit also reported slightly reduced revenue for the quarter, both sequentially and for the year, which it blamed on lower investment and brokerage income “driven by suppressed 3Q11 market levels and lower transactional activity.” For the year, sales were $17.38 billion, a 7% jump from 2010.

Client account balances increased 3.5% during the quarter to $2.14 billion thanks to higher 4Q11 market levels and strong AUM flows, according to BofA.

Assets held by Merrill Lynch clients totaled roughly $1.5 trillion, an increase of 3% from the third quarter and a drop of 1.3% from the same period of 2010.  

The company says that its advisor force has grown for 10 consecutive quarters.

See AdvisorOne's Q4 earnings calendar for the financial sector.

Page 2 of 2
Single page view Reprints Discuss this story
This is where the comments go.