Bank of America 2010 Annual Report Download - page 29

Management’s Discussion and Analysis of Financial Condition and Results of
Operations
This report, the documents that it incorporates by reference and the docu-
ments into which it may be incorporated by reference may contain, and from
time to time Bank of America Corporation (collectively with its subsidiaries, the
Corporation) and its management may make, certain statements that con-
stitute forward-looking statements within the meaning of the Private Securi-
ties Litigation Reform Act of 1995. These statements can be identified by the
fact that they do not relate strictly to historical or current facts. Forward-
looking statements often use words such as “expects,” “anticipates,” “be-
lieves,” “estimates,” “targets,” “intends,” “plans,” “goal” and other similar
expressions or future or conditional verbs such as “will,” “may,” “might,”
“should,” “would” and “could.” The forward-looking statements made repre-
sent the current expectations, plans or forecasts of the Corporation regarding
the Corporation’s future results and revenues, and future business and
economic conditions more generally, including statements concerning: the
adequacy of the liability for the remaining representations and warranties
exposure to the government-sponsored enterprises (GSEs) and the future
impact to earnings; the potential assertion and impact of additional claims
not addressed by the GSE agreements; the expected repurchase claims on
the 2004-2008 loan vintages; representations and warranties liabilities (also
commonly referred to as reserves), and range of possible loss estimates,
expenses and repurchase claims and resolution of those claims; the proposal
to modestly increase dividends in the second half of 2011; the charge to
income tax expense resulting from a reduction in the United Kingdom (U.K.)
corporate income tax rate; future payment protection insurance claims in the
U.K.; future risk-weighted assets and any mitigation efforts to reduce risk-
weighted assets; net interest income; credit trends and conditions, including
credit losses, credit reserves, charge-offs, delinquency trends and nonper-
forming asset levels; consumer and commercial service charges, including
the impact of changes in the Corporation’s overdraft policy as well as from the
Electronic Fund Transfer Act and the Corporation’s ability to mitigate a decline
in revenues; liquidity; capital levels determined by or established in accor-
dance with accounting principles generally accepted in the United States of
America (GAAP) and with the requirements of various regulatory agencies,
including our ability to comply with any Basel capital requirements endorsed by
U.S. regulators without raising additional capital; the revenue impact of the
Credit Card Accountability Responsibility and Disclosure Act of 2009 (the
CARD Act); the revenue impact resulting from, and any mitigation actions
taken in response to, the Dodd-Frank Wall Street Reform and Consumer
Protection Act (the Financial Reform Act) including the impact of the Volcker
Rule and derivatives regulations; mortgage production levels; long-term debt
levels; run-off of loan portfolios; the impact of various legal proceedings
discussed in “Litigation and Regulatory Matters” in Note 14 – Commitments
and Contingencies to the Consolidated Financial Statements; the number of
delayed foreclosure sales and the resulting financial impact and other similar
matters; and other matters relating to the Corporation and the securities that
we may offer from time to time. The foregoing is not an exclusive list of all
forward-looking statements the Corporation makes. These statements are
not guarantees of future results or performance and involve certain risks,
uncertainties and assumptions that are difficult to predict and often are
beyond the Corporation’s control. Actual outcomes and results may differ
materially from those expressed in, or implied by, the Corporation’s forward-
looking statements.
You should not place undue reliance on any forward-looking statement and
should consider the following uncertainties and risks, as well as the risks and
uncertainties more fully discussed elsewhere in this report, including Item 1A.
“Risk Factors” of this Annual Report on Form 10-K, and in any of the
Corporation’s subsequent Securities and Exchange Commission (SEC) filings:
the Corporation’s resolution of certain representations and warranties
obligations with the GSEs and our ability to resolve any remaining claims;
the Corporation’s ability to resolve any representations and warranties obli-
gations with monolines and private investors; failure to satisfy our obligations
as servicer in the residential mortgage securitization process; the adequacy
of the liability and/or range of possible loss estimates for the representations
and warranties exposures to the GSEs, monolines and private-label and other
investors; the potential assertion and impact of additional claims not ad-
dressed by the GSE agreements; the foreclosure review and assessment
process, the effectiveness of the Corporation’s response and any govern-
mental or private third-party claims asserted in connection with these fore-
closure matters; the adequacy of the reserve for future payment protection
insurance claims in the U.K.; negative economic conditions generally including
continued weakness in the U.S. housing market, high unemployment in the
U.S., as well as economic challenges in many non-U.S. countries in which we
operate and sovereign debt challenges; the Corporation’s mortgage modifi-
cation policies and related results; the level and volatility of the capital
markets, interest rates, currency values and other market indices; changes
in consumer, investor and counterparty confidence in, and the related impact
on, financial markets and institutions, including the Corporation as well as its
business partners; the Corporation’s credit ratings and the credit ratings of its
securitizations; estimates of the fair value of certain of the Corporation’s
assets and liabilities; legislative and regulatory actions in the U.S. (including
the impact of the Financial Reform Act, the Electronic Fund Transfer Act, the
CARD Act and related regulations and interpretations) and internationally; the
identification and effectiveness of any initiatives to mitigate the negative
impact of the Financial Reform Act; the impact of litigation and regulatory
investigations, including costs, expenses, settlements and judgments as well
as any collateral effects on our ability to do business and access the capital
markets; various monetary, tax and fiscal policies and regulations of the
U.S. and non-U.S. governments; changes in accounting standards, rules and
interpretations (including new consolidation guidance), inaccurate estimates
or assumptions in the application of accounting policies, including in deter-
mining reserves, applicable guidance regarding goodwill accounting and the
impact on the Corporation’s financial statements; increased globalization of
the financial services industry and competition with other U.S. and interna-
tional financial institutions; adequacy of the Corporation’s risk management
framework; the Corporation’s ability to attract new employees and retain and
motivate existing employees; technology changes instituted by the Corpora-
tion, its counterparties or competitors; mergers and acquisitions and their
integration into the Corporation, including the Corporation’s ability to realize
the benefits and cost savings from and limit any unexpected liabilities ac-
quired as a result of the Merrill Lynch and Countrywide acquisitions; the
Corporation’s reputation, including the effects of continuing intense public
and regulatory scrutiny of the Corporation and the financial services industry;
the effects of any unauthorized disclosures of our or our customers’ private or
confidential information and any negative publicity directed toward the Cor-
poration; and decisions to downsize, sell or close units or otherwise change
the business mix of the Corporation.
Forward-looking statements speak only as of the date they are made, and
the Corporation undertakes no obligation to update any forward-looking
statement to reflect the impact of circumstances or events that arise after
the date the forward-looking statement was made.
Notes to the Consolidated Financial Statements referred to in the Man-
agement’s Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) are incorporated by reference into the MD&A. Certain prior
period amounts have been reclassified to conform to current period
presentation.
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