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Bank of America Corporation
2013 Annual Report
New
New York
Charlo
Charlotte
Los Ang
Los Angeles
ouston
Houston
cago
Chicago
Boston
Phoenix
Phoenix
London
Johannesburg
Johannesburg
Johannesburg
Johannesburg
Sydn
Sydney
Hong
Hong Kong
Wherever we do business,
our success depends on
understanding what’s important
to our customers and clients
and connecting them to what
they need to help make
their financial lives better.
Life’s better when
we’re connected™

Table of contents

  • Page 1
    Bank of America Corporation 2013 Annual Report New York Charlotte Charlo Los Angeles Ang Houston ouston Chicago cago Boston Phoenix London Johannesburg Sydney Sydn Hong Kong Wherever we do business, our success depends on understanding what's important to our customers and clients and connecting ...

  • Page 2
    ... returning excess capital over time through both repurchases and dividends. Life's better when we're connected For Bank of America, growth means making everyday connections - every day. Here's how: 50M consumer and small business relationships in the U.S. 14M+ banking customers are now making...

  • Page 3
    ...wealth management. And, we're investing in the systems that serve our large corporate clients and institutional investors. We have commercial banking relationships with 83 percent of the 2013 Global Fortune 500 and 98 percent of the 2013 U.S. Fortune 500. While our earnings nearly tripled from 2012...

  • Page 4
    ...11 '12 '13 Life's better when we're connected ATM with Teller Assist This next-generation banking offering combines the technology and convenience of an ATM with the human touch of a teller. Customers have access to a range of services during extended hours to address their daily banking needs, and...

  • Page 5
    ...active duty with jobs, training and education, or how we are improving financial literacy through our Better Money Habits program in partnership with Khan Academy, these and many other initiatives demonstrate our commitment to helping our customers, clients, employees and community partners address...

  • Page 6
    ... make our company more straightforward; a strategy to serve the core financial needs of our customers; a strategy to manage risk, maintain strong capital and liquidity, and to operate efficiently and reduce costs. This is what will drive results and progress. In the summer of 2014, Bank of America...

  • Page 7
    No two places are exactly the same, but every customer and client needs the right connections, whether creating a start-up in Charlotte, starting a family in Brooklyn, investing for retirement in Houston or seeking to leverage opportunities in markets across the globe. Life's better when we're ...

  • Page 8
    ..., we've worked closely with Panda Express to provide a broad array of advisory and strategic services, including working capital, financing, and cash management and depository services. Panda Express is optimistic about the future, with a goal of becoming a global brand. Bank of America is also...

  • Page 9
    ... with a dream of quadrupling his business. Bank of America helped the family purchase its current facility in 1995 and has since connected the growing business with everything from equipment loans to wealth management services. Today, the company distributes its products nationwide with exports to...

  • Page 10
    ... them with mentors who are established leaders, including our Bank of America Merrill Lynch leaders. • As a part of our focus on making connections to help improve lives, Bank of America is working with several partner organizations to support global health issues. In recognition of World AIDS...

  • Page 11
    ... need for safe water. Through a variety of financial solutions, Bank of America Merrill Lynch has helped the company connect international resources to local suppliers and manage currency, fraud risk and cash ï¬,ow, as well as increase donation processing. Most importantly, we helped keep Water.org...

  • Page 12
    ..., publicly traded entity from parent company, United Online, in 2012, the Bank of America Merrill Lynch team proposed a debt refinancing that would save FTD more than $5 million in interest savings. The successful offering cemented our relationship with FTD. Throughout 2013, FTD's management team...

  • Page 13
    ...of the city's diverse neighborhoods. In 2012, the event contributed $243 million in business activity and helped charities raise $15 million. In 2013, we expect even higher contributions locally and to have helped create the equivalent of more than 1,600 full-time jobs and provided millions worth of...

  • Page 14
    ... thrive O en described as the financial capital of the world, New York City is home to the New York Stock Exchange and NASDAQ, the world's largest stock exchanges by market capitalization and trading activity. But New York State is also highly diverse with a vibrant multifaceted economy that...

  • Page 15
    Brooklyn Brewery was founded in 1988 by Steve Hindy and is helping revitalize a community as they continue to expand internationally. The Hain Celestial Group, Inc., a leading organic and natural food and personal care manufacturer, is 83rd on Fortune's Fastest-Growing Companies list. 13

  • Page 16
    ...Bank of America is proud to invest in community partners addressing the area's most pressing needs such as New Hope Housing and SER-Jobs for Progress, and support arts and culture partners, including the Children's Museum of Houston and Houston Grand Opera, which are working to expand their programs...

  • Page 17
    ...a complementary cash ï¬,ow review, they determined he was able to refinance his existing practice as well as finance an entirely new location - Southlake Pediatric Dentistry. This relationship between Bank of America and Dr. Kendrick is built on a shared commitment to quality customer service that...

  • Page 18
    ... year end Total loans and leases Total assets Total deposits Total shareholders' equity Book value per common share Tangible book value per common share1 Market price per common share Common shares issued and outstanding Tier 1 common capital ratio Tangible common equity ratio1 2013 $ 928,233 2,102...

  • Page 19
    2013 Financial Review

  • Page 20
    ... Business Banking Consumer Real Estate Services Global Wealth & Investment Management Global Banking Global Markets All Other Off-Balance Sheet Arrangements and Contractual Obligations Regulatory Matters Managing Risk Strategic Risk Management Capital Management Liquidity Risk Credit Risk Management...

  • Page 21
    ...Report on Form 10-K and in any of the Corporation's subsequent Securities and Exchange Commission filings: the Corporation's ability to resolve representations and warranties repurchase claims made by monolines and private-label and other investors, including as a result of any adverse court rulings...

  • Page 22
    ... in international markets, we provide a diversified range of banking and nonbanking financial services and products through five business segments: Consumer & Business Banking (CBB), Consumer Real Estate Services (CRES), Global Wealth & Investment Management (GWIM), Global Banking and Global Markets...

  • Page 23
    ... Note 7 - Representations and Warranties Obligations and Corporate Guarantees to the Consolidated Financial Statements. In 2010, we had entered into an agreement with FHLMC to resolve all outstanding and potential representations and warranties claims related to loans sold by Countrywide Financial...

  • Page 24
    ... for loan and lease losses. For more information on purchased credit-impaired write-offs, see Consumer Portfolio Credit Risk Management - Purchased Credit-impaired Loan Portfolio on page 81. Presents capital ratios in accordance with the Basel 1 - 2013 Rules, which include the Market Risk Final Rule...

  • Page 25
    ..., higher yields on debt securities including the impact of market-related premium amortization expense, lower rates paid on deposits, higher commercial loan balances and increased trading-related net interest income, partially offset by lower consumer loan balances as well as lower asset yields and...

  • Page 26
    ...provision of $1.1 billion in 2012 for the 2013 Independent Foreclosure Review (IFR) Acceleration Agreement, lower Federal Deposit Insurance Corporation (FDIC) expense, and lower defaultrelated servicing expenses in Legacy Assets & Servicing and mortgage-related assessments, waivers and similar costs...

  • Page 27
    ... rates. For more information on debt securities, see Note 3 - Securities to the Consolidated Financial Statements. Assets Federal Funds Sold and Securities Borrowed or Purchased Under Agreements to Resell Federal funds transactions involve lending reserve balances on a short-term basis. Securities...

  • Page 28
    ... for credit losses. During 2013, net cash provided by investing activities was $25.1 billion primarily driven by a decrease in federal funds sold and securities borrowed or purchased under agreements to resell and net sales of debt securities, partially offset by net increases in loans and leases...

  • Page 29
    ... purchased credit-impaired loan portfolio on asset quality, see Consumer Portfolio Credit Risk Management on page 73. (5) Includes the allowance for loan and lease losses and the reserve for unfunded lending commitments. (6) Balances and ratios do not include loans accounted for under the fair value...

  • Page 30
    ...1.00 1.10 Average balance sheet Total loans and leases Total assets Total deposits Long-term debt Common shareholders' equity Total shareholders' equity Asset quality (4) Allowance for credit losses (5) Nonperforming loans, leases and foreclosed properties (6) Allowance for loan and lease losses as...

  • Page 31
    ... certain ratios that utilize tangible equity, a non-GAAP financial measure. Tangible equity represents an adjusted shareholders' equity or common shareholders' equity amount which has been reduced by goodwill and intangible assets (excluding mortgage servicing rights (MSRs)), net of related deferred...

  • Page 32
    ... primarily due to declines in consumer loans, debt securities and other earning assets, partially offset by an increase in commercial loans. Net interest yield on earning assets excluding trading-related activities increased 17 bps to 3.07 percent for 2013 compared to 2012 due to the same factors as...

  • Page 33
    ... and Global Markets, with the remaining operations recorded in All Other. The primary activities, products or businesses of the business segments and All Other are shown below. For additional detailed information, see the business segment and All Other discussions which follow. Bank of America 2013...

  • Page 34
    ... for the carrying value of its reporting units. For additional information, see Note 8 - Goodwill and Intangible Assets to the Consolidated Financial Statements. Allocated capital is subject to change over time, and as part of our normal annual planning process, the capital being allocated to our...

  • Page 35
    .... Also during 2013, consumer Dealer Financial Services (DFS) results were moved into CBB from Global Banking to align this business more closely with our consumer lending activity and better serve the needs of our customers. As a result, Card Services was renamed Consumer Lending. Prior periods...

  • Page 36
    ... generally with annual sales of $1 million to $50 million. Our lending products and services include commercial loans, lines of credit and real estate lending. Our capital management and treasury solutions include treasury management, foreign exchange and short-term investing options. Deposits also...

  • Page 37
    ...millions) 2013 9.73% 8.68 3,911 $ 205,914 $ 267,087 2012 10.02% 7.54 3,258 $193,500 $258,363 Total Corporation U.S. credit card (1) Gross interest yield Risk-adjusted margin New accounts (in thousands) Purchase volumes Debit card purchase volumes (1) In addition to the U.S. credit card portfolio...

  • Page 38
    ... needs, home equity lines of credit (HELOCs) and home equity loans. First mortgage products are generally either sold into the secondary mortgage market to investors, while we retain MSRs (which are on the balance sheet of Legacy Assets & Servicing) and the Bank of America customer relationships...

  • Page 39
    ... Legacy Assets & Servicing, partially offset by higher litigation expense. Home Loans Home Loans products are available to our customers through our retail network, direct telephone and online access delivered by a sales force of 3,200 mortgage loan officers, including 1,700 banking center mortgage...

  • Page 40
    ... billion of home equity loans and HELOCs at December 31, 2013, 2012 and 2011, respectively. Non-Legacy Portfolio As previously discussed, Legacy Assets & Servicing is responsible for all of our servicing activities. The table below summarizes the balances of the residential mortgage loans that are...

  • Page 41
    ..., Foreclosure and Other Mortgage Matters on page 53. For more information on MSRs, see Note 23 - Mortgage Servicing Rights to the Consolidated Financial Statements. Key Statistics (Dollars in millions, except as noted) 2013 2012 Loan production Total Corporation (1): First mortgage Home equity...

  • Page 42
    ... Return on average economic capital (1) Efficiency ratio (FTE basis) Balance Sheet Average Total loans and leases Total earning assets Total assets Total deposits Allocated capital (1) Economic capital (1) Year end Total loans and leases Total earning assets Total assets Total deposits (1) $ 2013...

  • Page 43
    ... brokerage assets, assets in custody, deposits, and loans and leases. Client Balances by Type (Dollars in millions) Net Migration Summary (Dollars in millions) Assets under management Brokerage assets Assets in custody Deposits Loans and leases (1) Total client balances (1) December 31 2013 2012...

  • Page 44
    ... our network of offices and client relationship teams. Our lending products and services include commercial loans, leases, commitment facilities, trade finance, real estate lending and asset-based lending. Our treasury solutions business includes treasury management, foreign exchange and short-term...

  • Page 45
    ...including commercial loans, leases, commitment facilities, trade finance, real estate lending and asset-based lending. Treasury Services includes deposits, treasury management, credit card, foreign exchange, and short-term investment and custody solutions to corporate and commercial banking clients...

  • Page 46
    ...and mortgage-related products. As a result of our market-making activities in these products, we may be required to manage risk in a broad range of financial products including government securities, equity and equity-linked securities, high-grade and high-yield corporate debt securities, syndicated...

  • Page 47
    ... and abroad as well as the write-down of a receivable related to the MBIA Settlement in 2013. For more information on the MBIA Settlement, see Note 7 - Representations and Warranties Obligations and Corporate Guarantees to the Consolidated Financial Statements. Equities revenue, including net DVA...

  • Page 48
    ... $1.5 billion. Partially offsetting the increases were $1.6 billion in gains related to debt repurchases and exchanges of trust preferred securities in 2012 and a decrease of $280 million in gains on sales of debt securities. The provision for credit losses improved $3.3 billion to a benefit of $666...

  • Page 49
    ... of an equity investment. Total Corporation equity investment income was $2.9 billion in 2013, an increase of $831 million from 2012, due to the same factors as described above, partially offset by gains in 2012 on equity investments included in the business segments. Bank of America 2013 47

  • Page 50
    ... and our representations and warranties repurchase claims and exposures, see Note 7 - Representations and Warranties Obligations and Corporate Guarantees and Note 12 - Commitments and Contingencies to the Consolidated Financial Statements and Item 1A. Risk Factors of this Annual Report on Form 10...

  • Page 51
    ...and the related impact on the representations and warranties provision and liability, see Note 7 - Representations and Warranties Obligations and Corporate Guarantees and Note 12 - Commitments and Contingencies to the Consolidated Financial Statements. Unresolved Repurchase Claims Repurchase claims...

  • Page 52
    ... provision for 2013 Experience with Investors Other than Governmentsponsored Enterprises In prior years, legacy companies and certain subsidiaries sold pools of first-lien residential mortgage loans and home equity loans as private-label securitizations or in the form of whole loans originated from...

  • Page 53
    ... include monoline insurance. Over time, there has been an increase in requests for loan files from certain private-label securitization trustees, as well as requests for tolling agreements to toll the applicable statute of limitations relating to representations and warranties repurchase claims, and...

  • Page 54
    ... information on the MBIA Settlement, see Note 7 - Representations and Warranties Obligations and Corporate Guarantees to the Consolidated Financial Statements. Open Mortgage Insurance Rescission Notices In addition to repurchase claims, we receive notices from mortgage insurance companies of claim...

  • Page 55
    ...and warranties liability and the corresponding estimated range of possible loss, see Item 1A. Risk Factors of this Annual Report on Form 10-K and Note 7 - Representations and Warranties Obligations and Corporate Guarantees to the Consolidated Financial Statements and, for more information related to...

  • Page 56
    .... Finally, the time to complete foreclosure sales may continue to be protracted, which may result in a greater number of nonperforming loans and increased servicing advances, and may impact the collectability of such advances and the value of our MSR asset, MBS and real estate owned properties...

  • Page 57
    ... relating to other mortgage-related activities such as the purchase, sale, pooling, and origination and securitization of loans, as well as structuring, marketing, underwriting and issuance of MBS and other securities, including claims relating to the adequacy and accuracy of disclosures in offering...

  • Page 58
    ... (collectively, banking entities) from engaging in short-term proprietary trading of certain securities, derivatives, commodity futures and options for their own account. The Volcker Rule also imposes limits on banking entities' investments in, and other relationships with, hedge funds or private...

  • Page 59
    ... to which the Corporation is subject, including, but not limited to, the Equal Credit Opportunity Act, Home Mortgage Disclosure Act, Electronic Fund Transfer Act, Fair Credit Reporting Act, Real Estate Settlement Procedures Act (RESPA), Truth in Lending (TILA) and Truth in Savings Act are enforced...

  • Page 60
    ... businesses, governance and control functions, and Corporate Audit are also clearly defined. The risk management process 58 Bank of America 2013 includes four critical elements: identify and measure risk, mitigate and control risk, monitor and test risk, and report and review risk, and is applied...

  • Page 61
    ...performance management process and individual compensation to encourage employees to work toward enterprise-wide risk goals. Enterprise-wide Stress Testing As a part of our core risk management practices, we conduct enterprise-wide stress tests on a periodic basis to better understand balance sheet...

  • Page 62
    ... operating plans. Management monitors, and the Board oversees, through the Credit, Enterprise Risk and Audit Committees, financial performance, execution of the strategic and financial operating plans, compliance with the risk appetite and the adequacy of internal controls. 60 Bank of America 2013

  • Page 63
    ... As a financial services holding company, we are subject to the general risk-based capital rules issued by federal banking regulators which was Basel 1 through December 31, 2012. On January 1, 2013, Basel 1 was amended prospectively, introducing changes to the measurement of risk-weighted assets for...

  • Page 64
    ... the obligor or guarantor type and collateral, if applicable. Off-balance sheet exposures include financial guarantees, unfunded lending commitments, letters of credit and derivatives. Market risk-weighted assets are calculated using risk models for trading account positions, including all foreign...

  • Page 65
    ...of this amendment. For more information on the Series T Preferred Stock, see Note 13 - Shareholders' Equity to the Consolidated Financial Statements. At December 31, 2013, an increase or decrease in our Tier 1 common, Tier 1 or Total capital ratios by one bp would require a change of $130 million in...

  • Page 66
    ...benefit pension assets, and the inclusion of unrealized gains and losses on AFS debt and certain marketable equity securities recorded in accumulated OCI, each of which will be impacted by future changes in interest rates, overall earnings performance or other corporate actions. 64 Bank of America...

  • Page 67
    ..., other than mortgage servicing rights and goodwill; defined benefit pension fund net assets; net gains (losses) related to changes in own credit risk on liabilities, including derivatives, measured at fair value; direct and indirect investments in own Tier 1 common capital instruments; certain...

  • Page 68
    ... (losses) in accumulated OCI on AFS debt and certain marketable equity securities, and employee benefit plans Other deductions, net Basel 3 Advanced approach (fully phased-in) Tier 1 common capital Risk-weighted assets - Basel 1 to Basel 3 (fully phased-in) Basel 1 risk-weighted assets Credit and...

  • Page 69
    ... average total assets of Common Stock Dividends For a summary of our declared quarterly cash dividends on common stock during 2013 and through February 25, 2014, see Note 13 - Shareholders' Equity to the Consolidated Financial Statements. Liquidity Risk Funding and Liquidity Risk Management We...

  • Page 70
    ... of America Corporation, or the parent company and selected subsidiaries in the form of cash and high-quality, liquid, unencumbered securities. These assets, which we call our Global Excess Liquidity Sources, serve as our primary means of liquidity risk mitigation. Our cash is primarily on deposit...

  • Page 71
    ... Funding Sources We fund our assets primarily with a mix of deposits and secured and unsecured liabilities through a centralized, globally coordinated funding strategy. We diversify our funding globally across products, programs, markets, currencies and investor groups. The primary benefits...

  • Page 72
    ...For more information on secured financing agreements, see Note 10 - Federal Funds Sold or Purchased, Securities Financing Agreements and Short-term Borrowings to the Consolidated Financial Statements. We issue the majority of our long-term unsecured debt at the parent company. During 2013, we issued...

  • Page 73
    ...Other factors that influence our credit ratings include changes to the rating agencies' methodologies for our industry or certain security types, the rating agencies' assessment of the general operating environment for financial services companies, our mortgage exposures (including litigation), our...

  • Page 74
    ... other trading agreements as a result of such a credit rating downgrade, see Note 2 - Derivatives to the Consolidated Financial Statements and Item 1A. Risk Factors of this Annual Report on Form 10-K. On October 15, 2013, Fitch placed its AAA long-term and F1+ short-term sovereign credit rating on...

  • Page 75
    ...and line management, collection practices and strategies, and determination of the allowance for loan and lease losses and allocated capital for credit risk. From January 2008 through 2013, Bank of America and Countrywide have completed more than 1.3 million loan modifications with customers. During...

  • Page 76
    ... mortgage loans of $2.0 billion and $1.0 billion and home equity loans of $147 million and $0 at December 31, 2013 and 2012. For more information on the fair value option, see Consumer Portfolio Credit Risk Management - Consumer Loans Accounted for Under the Fair Value Option on page 85 and Note...

  • Page 77
    ... loan and lease losses. Net charge-off ratios including the PCI write-offs were 3.05 percent for home equity and 0.85 percent for residential mortgage in 2013, and 6.02 percent for home equity in 2012. For more information on PCI write-offs, see Consumer Portfolio Credit Risk Management - Purchased...

  • Page 78
    ... page 85 and Note 21 - Fair Value Option to the Consolidated Financial Statements. Net charge-offs exclude write-offs in the PCI loan portfolio of $1.2 billion in home equity and $1.1 billion in residential mortgage in 2013, which are included in the Legacy Assets & Servicing portfolio, compared to...

  • Page 79
    ...term stand-by agreements with FNMA and FHLMC, we have mitigated a portion of our credit risk on the residential mortgage portfolio through the use of synthetic securitization vehicles as described in Note 4 - Outstanding Loans and Leases to the Consolidated Financial Statements. At December 31, 2013...

  • Page 80
    ... mortgage PCI loan portfolio in 2013 compared to none in 2012. These write-offs decreased the PCI valuation allowance included as part of the allowance for loan and lease losses. For more information on PCI write-offs, see Consumer Portfolio Credit Risk Management - Purchased Credit-impaired Loan...

  • Page 81
    ... of home equity loans accounted for under the fair value option at December 31, 2013 compared to none at December 31, 2012. For more information on the fair value option, see Consumer Portfolio Credit Risk Management - Consumer Loans Accounted for Under the Fair Value Option on page 85 and Note 21...

  • Page 82
    ... to make a fullyamortizing payment until 2015 or later. Although we do not actively track how many of our home equity customers pay only the minimum amount due on their home equity loans and lines, we can infer some of this information through a review of our HELOC portfolio that we service and...

  • Page 83
    ... related to our home equity portfolio, see Off-Balance Sheet Arrangements and Contractual Obligations - Representations and Warranties on page 48 and Note 7 - Representations and Warranties Obligations and Corporate Guarantees to the Consolidated Financial Statements. Table 33 Home Equity State...

  • Page 84
    ... is added to the loan balance until the loan balance increases to a specified limit, which can be no more than 115 percent of the original loan amount, at which time a new monthly payment amount adequate to repay the loan over its remaining contractual life is established. 82 Bank of America 2013

  • Page 85
    ... card totaled $315.1 billion and $335.5 billion at December 31, 2013 and 2012. The $20.4 billion decrease was driven by closure of inactive accounts, partially offset by new originations and credit line increases. Table 36 Outstanding Purchased Credit-impaired Loan Portfolio - Home Equity State...

  • Page 86
    ...the GWIM International Wealth Management (IWM) businesses based outside of the U.S. and student loans). Outstandings in the direct/indirect portfolio decreased $1.0 billion in 2013 as a loan sale in the securities-based lending portfolio in connection with the Corporation's agreement to sell the IWM...

  • Page 87
    ... 31, 2013 was $1.4 billion of real estate that was acquired upon foreclosure of delinquent FHA-insured loans. We hold this real estate on our balance sheet until we convey these properties to the FHA. We exclude these amounts from our nonperforming loans and foreclosed properties activity as we...

  • Page 88
    ... are insured by the FHA and have entered foreclosure of $1.4 billion and $2.5 billion at December 31, 2013 and 2012. (8) Outstanding consumer loans and leases exclude loans accounted for under the fair value option. n/a = not applicable Our policy is to record any losses in the value of foreclosed...

  • Page 89
    ...Note 4 - Outstanding Loans and Leases to the Consolidated Financial Statements. measure and evaluate concentrations within portfolios. In addition, risk ratings are a factor in determining the level of allocated capital and the allowance for credit losses. For information on our accounting policies...

  • Page 90
    ... 2012. For more information on the fair value option, see Note 21 - Fair Value Option to the Consolidated Financial Statements. Outstanding commercial loans and leases increased $41.9 billion in 2013, primarily in U.S. commercial and non-U.S. commercial product types. Nonperforming commercial loans...

  • Page 91
    ... managed in Global Banking, 17 percent in Global Markets, 10 percent in GWIM (business-purpose loans for high net-worth clients) and the remainder primarily in CBB. U.S. commercial loans, excluding loans accounted for under the fair value option, increased $15.4 billion, or eight percent, in 2013...

  • Page 92
    ... 23 percent of commercial real estate loans and leases at December 31, 2013 and 2012. The commercial real estate portfolio is predominantly managed in Global Banking and consists of loans made primarily to public and private developers, and commercial real estate firms. Outstanding loans increased...

  • Page 93
    ...real estate (1) $ Net charge-off ratios are calculated as net charge-offs divided by average outstanding loans excluding loans accounted for under the fair value option. At December 31, 2013, total committed non-residential exposure was $68.6 billion compared to $54.5 billion at December 31, 2012...

  • Page 94
    ... of the non-U.S. commercial loan portfolio was managed in Global Banking and 30 percent in Global Markets. Outstanding loans, excluding loans accounted for under the fair value option, increased $15.3 billion in 2013 primarily due to increased demand from large corporate clients and client financing...

  • Page 95
    ... of the month in which the loan becomes 180 days past due. For more information on TDRs, see Note 4 - Outstanding Loans and Leases to the Consolidated Financial Statements. Table 51 Commercial Troubled Debt Restructurings December 31 (Dollars in millions) U.S. commercial Commercial real estate Non...

  • Page 96
    ...' primary business activity using operating cash flows and primary source of repayment as key factors. Represents net notional credit protection purchased. For additional information, see Commercial Portfolio Credit Risk Management - Risk Mitigation on page 95. 94 Bank of America 2013

  • Page 97
    ... information regarding our exposure to representations and warranties, see Off-Balance Sheet Arrangements and Contractual Obligations - Representations and Warranties on page 48 and Note 7 - Representations and Warranties Obligations and Corporate Guarantees to the Consolidated Financial Statements...

  • Page 98
    ...and collateral. For additional information, see Note 2 - Derivatives to the Consolidated Financial Statements. Table 59 presents our total non-U.S. exposure broken out by region at December 31, 2013 and 2012. Non-U.S. exposure is presented on an internal risk management basis and includes sovereign...

  • Page 99
    ... to continue as policymakers address the fundamental challenges of competitiveness, growth and fiscal solvency. We expect to continue to support client activities in the region and our exposures may vary over time as we monitor the situation and manage our risk profile. Bank of America 2013 97

  • Page 100
    ... used to mitigate the Corporation's risk to country exposures as listed, including $4.5 billion, consisting of $3.0 billion in net single-name CDS purchased and $1.5 billion in net indexed and tranched CDS purchased, to hedge loans and securities, $2.3 billion in additional credit default protection...

  • Page 101
    ... in the value of sovereign debt and other asset classes posted as collateral, disruptions in capital markets, widening of credit spreads of U.S. and non-U.S. financial institutions, loss of investor confidence in the financial services industry, a slowdown in global economic activity and other...

  • Page 102
    ... for credit losses related to the PCI loan portfolio was a benefit of $707 million in 2013 primarily due to improvement in our home price outlook compared to a benefit of $103 million in 2012. The provision for credit losses for the commercial portfolio, including unfunded lending commitments...

  • Page 103
    ... key credit statistics for the credit card and other unsecured consumer lending portfolios. The allowance for loan and lease losses for the commercial portfolio, as presented in Table 65, was $4.0 billion at December 31, 2013, a $899 million increase from December 31, 2012, as continued improvement...

  • Page 104
    ...and lease losses and the reserve for unfunded lending commitments, for 2013 and 2012. Table 64 Allowance for Credit Losses (Dollars in millions) Allowance for loan and lease losses, January 1 Loans and leases charged off Residential mortgage Home equity U.S. credit card Non-U.S. credit card Direct...

  • Page 105
    ... in the PCI loan portfolio in 2013 and 2012. These write-offs decreased the PCI valuation allowance included as part of the allowance for loan and lease losses. For more information on PCI write-offs, see Consumer Portfolio Credit Risk Management - Purchased Credit-impaired Loan Portfolio on page...

  • Page 106
    ... deposits. Mortgage Risk Mortgage risk represents exposures to changes in the values of mortgage-related instruments. The values of these instruments are sensitive to prepayment rates, mortgage rates, agency debt ratings, default, market liquidity, government participation and 104 Bank of America...

  • Page 107
    ... as part of our mortgage origination activities. For more information on MSRs, see Note 1 - Summary of Significant Accounting Principles and Note 23 - Mortgage Servicing Rights to the Consolidated Financial Statements. Hedging instruments used to mitigate this risk include contracts and derivatives...

  • Page 108
    ... is within the Global Markets segment. Table 66 presents year-end, average, high and low daily trading VaR for 2013 and 2012. Table 66 Market Risk VaR for Trading Activities 2013 (Dollars in millions) Foreign exchange Interest rate Credit Real estate/mortgage Equities Commodities Portfolio...

  • Page 109
    ... markets. Trading account assets and liabilities are reported at fair value. For more information on fair value, see Note 20 - Fair Value Measurements to the Consolidated Financial Statements. Trading-related revenues can be volatile and are largely driven by general market conditions and customer...

  • Page 110
    ... trading portfolio scenarios in that they have a longer time horizon and the results are forecasted over multiple periods for use in consolidated capital and liquidity planning. For additional information, see Managing Risk - Enterprise-wide Stress Testing on page 59. 108 Bank of America 2013

  • Page 111
    ... incorporate balance sheet assumptions such as loan and deposit growth and pricing, changes in funding mix, product repricing and maturity characteristics. Our overall goal is to manage interest rate risk so that movements in interest rates do not significantly adversely affect earnings and capital...

  • Page 112
    ... to our servicing agreements with GNMA, which is part of our mortgage banking activities. For more information on the FNMA Settlement, see Note 7 - Representations and Warranties Obligations and Corporate Guarantees to the Consolidated Financial Statements. During 2013, CRES and GWIM originated $44...

  • Page 113
    ... at December 31, 2013 and 2012. These amounts do not include derivative hedges on our MSRs. Table 70 Asset and Liability Management Interest Rate and Foreign Exchange Contracts December 31, 2013 Expected Maturity (Dollars in millions, average estimated duration in years) Fair Value $ 5,074 Total...

  • Page 114
    ... Committee. Mortgage Banking Risk Management We originate, fund and service mortgage loans, which subject us to credit, liquidity and interest rate risks, among others. We determine whether loans will be HFI or held-for-sale at the time of commitment and manage credit and liquidity risks by selling...

  • Page 115
    ..., controlling, monitoring, testing and reviewing operational risk, and reporting operational risk information to management and the Board. A sound internal governance structure enhances the effectiveness of the Corporation's Operational Risk Management Program and is accomplished at the enterprise...

  • Page 116
    ... Mortgage Banking Risk Management on page 112. For more information on MSRs, including the sensitivity of weighted-average lives and the fair value of MSRs to changes in modeled assumptions, see Note 23 - Mortgage Servicing Rights to the Consolidated Financial Statements. 114 Bank of America 2013

  • Page 117
    ... company or a specific market sector. In these instances, fair value is determined based on limited available market information and other factors, principally from reviewing the issuer's financial statements and changes in credit ratings made by one or more rating agencies. Trading account profits...

  • Page 118
    ... of Level 3 during 2013, see Note 20 - Fair Value Measurements to the Consolidated Financial Statements. Accrued Income Taxes and Deferred Tax Assets Accrued income taxes, reported as a component of accrued expenses and other liabilities on the Consolidated Balance Sheet, represent the net amount...

  • Page 119
    .... In 2013, the consumer DFS business, including $1.7 billion of goodwill, was moved from Global Banking to CBB in order to align this business more closely with our consumer lending activity and better serve the needs of our customers. In 2012, the International Wealth Management businesses within...

  • Page 120
    ...Balance Sheet Arrangements and Contractual Obligations - Representations and Warranties on page 48, as well as Note 7 - Representations and Warranties Obligations and Corporate Guarantees and Note 12 - Commitments and Contingencies to the Consolidated Financial Statements. 118 Bank of America 2013

  • Page 121
    ... to direct such activities. For VIEs that hold financial assets, the party that services the assets or makes investment management decisions may have the power to direct the most significant activities of a VIE. Alternatively, a third party that has the unilateral right to replace the servicer or...

  • Page 122
    ... preferred stock dividends, net income applicable to common shareholders was $2.8 billion, or $0.25 per diluted share for 2012 and $85 million, or $0.01 per diluted share for 2011. billion in representations and warranties provision related to the agreement to resolve nearly all legacy Countrywide...

  • Page 123
    ... over the related U.S. tax liability. Global Wealth & Investment Management GWIM recorded net income of $2.2 billion in 2012 compared to $1.7 billion in 2011 with the increase driven by lower noninterest expense and lower provision for credit losses. Revenue remained Bank of America 2013 121

  • Page 124
    ... Changes in Net Interest Income - FTE Basis Table III - Preferred Stock Cash Dividend Summary Table IV - Outstanding Loans and Leases Table V - Nonperforming Loans, Leases and Foreclosed Properties Table VI - Accruing Loans and Leases Past Due 90 Days or More Table VII - Allowance for Credit Losses...

  • Page 125
    ... Federal funds sold and securities borrowed or purchased under agreements to resell Trading account assets Debt securities (2) Loans and leases (3): Residential mortgage (4) Home equity U.S. credit card Non-U.S. credit card Direct/Indirect consumer Other consumer (6) Total consumer U.S. commercial...

  • Page 126
    ... Net Change Increase (decrease) in interest income Time deposits placed and other short-term investments (2) Federal funds sold and securities borrowed or purchased under agreements to resell Trading account assets Debt securities Loans and leases: Residential mortgage Home equity U.S. credit card...

  • Page 127
    ...per depositary share, each representing a 1/25th interest in a share of preferred stock. For more information on the restructuring of the Series T Preferred Stock, which is subject to shareholder approval, see Capital Management - Capital Composition and Ratios on page 62. Bank of America 2013 125

  • Page 128
    ...depositary share, each representing a 1/1,200th interest in a share of preferred stock. Dividends per depositary share, each representing a 1/40th interest in a share of preferred stock. These series were redeemed on June 28, 2013. This series was redeemed on May 28, 2013. 126 Bank of America 2013

  • Page 129
    ... excluding loans accounted for under the fair value option Commercial loans accounted for under the fair value option (5) Total commercial Total loans and leases (1) (2) $ (3) (4) (5) (6) (7) 2013, 2012, 2011 and 2010 are presented in accordance with consolidation guidance that was effective...

  • Page 130
    ... at fair value upon acquisition and accrete interest income over the remaining life of the loan. In addition, balances do not include foreclosed properties that are insured by the FHA and have entered foreclosure of $1.4 billion, $2.5 billion and $1.4 billion at December 31, 2013, 2012 and 2011...

  • Page 131
    ...Our policy is to classify consumer real estate-secured loans as nonperforming at 90 days past due, except the PCI loan portfolio, the fully-insured loan portfolio and loans accounted for under the fair value option as referenced in footnote 3. Balances are fully-insured loans. Balances exclude loans...

  • Page 132
    ... for loan and lease losses related to credit card loans of $8.5 billion which were exchanged for $7.8 billion in held-to-maturity debt securities that were issued by the Corporation's U.S. Credit Card Securitization Trust and retained by the Corporation. The 2013, 2012, 2011 and 2010 amounts...

  • Page 133
    ... in the PCI loan portfolio in 2013 and 2012. These write-offs decreased the PCI valuation allowance included as part of the allowance for loan and lease losses. For more information on PCI write-offs, see Consumer Portfolio Credit Risk Management - Purchased Credit-impaired Loan Portfolio on page...

  • Page 134
    ... mortgage Home equity U.S. credit card Non-U.S. credit card Direct/Indirect consumer Other consumer Total consumer U.S. commercial (1) Commercial real estate Commercial lease financing Non-U.S. commercial Total commercial (2) Allowance for loan and lease losses Reserve for unfunded lending...

  • Page 135
    ... maturities under contractual terms. Includes loans accounted for under the fair value option. Loan maturities include non-U.S. commercial and commercial real estate loans. Table X Non-exchange Traded Commodity Contracts December 31, 2013 (Dollars in millions) Asset Positions $ 4,041 5,110...

  • Page 136
    ... Credit Risk Management on page 73. (5) Includes the allowance for loan and lease losses and the reserve for unfunded lending commitments. (6) Balances and ratios do not include loans accounted for under the fair value option. For additional exclusions from nonperforming loans, leases and foreclosed...

  • Page 137
    ... millions) Average balance sheet Total loans and leases Total assets Total deposits Long-term debt Common shareholders' equity Total shareholders' equity Asset quality (4) Allowance for credit losses (5) Nonperforming loans, leases and foreclosed properties (6) Allowance for loan and lease losses as...

  • Page 138
    ... assets Time deposits placed and other short-term investments (1) Federal funds sold and securities borrowed or purchased under agreements to resell Trading account assets Debt securities (2) Loans and leases (3): Residential mortgage (4) Home equity U.S. credit card Non-U.S. credit card Direct...

  • Page 139
    ... assets Time deposits placed and other short-term investments (1) Federal funds sold and securities borrowed or purchased under agreements to resell Trading account assets Debt securities (2) Loans and leases (3): Residential mortgage (4) Home equity U.S. credit card Non-U.S. credit card Direct...

  • Page 140
    ... to GAAP financial measures, see Statistical Table XVII. Net interest income and net interest yield include fees earned on overnight deposits placed with the Federal Reserve and fees earned on deposits, primarily overnight, placed with certain non-U.S. central banks. 138 Bank of America 2013

  • Page 141
    ... calculate these measures differently. For more information on non-GAAP financial measures and ratios we use in assessing the results of the Corporation, see Supplemental Financial Data on page 29. On February 24, 2010, the common equivalent shares converted into common shares. Bank of America 2013...

  • Page 142
    ... of goodwill and intangibles specifically assigned to the business segment. For more information on allocated capital and economic capital, see Business Segment Operations on page 31 and Note 8 - Goodwill and Intangible Assets to the Consolidated Financial Statements. 140 Bank of America 2013

  • Page 143
    ... in assessing the results of the Corporation. Other companies may define or calculate these measures differently. For more information on non-GAAP financial measures and ratios we use in assessing the results of the Corporation, see Supplemental Financial Data on page 29. Bank of America 2013 141

  • Page 144
    ... Rules - Financial services holding companies are subject to the general risk-based capital rules issued by federal banking regulators which was Basel 1 through December 31, 2012. As of January 1, 2013, Basel 1 was amended prospectively, introducing changes to the measurement of risk-weighted assets...

  • Page 145
    ... loans secured by real estate that are insured by the FHA or through long-term credit protection agreements with FNMA and FHLMC (fully-insured loan portfolio), are not placed on nonaccrual status and are, therefore, not reported as nonperforming loans and leases. Purchased Credit-impaired (PCI) Loan...

  • Page 146
    ... SEC VA VIE Asset-backed securities Available-for-sale Asset and liability management Asset Liability and Market Risk Committee Adjustable-rate mortgage Bank holding company Comprehensive Capital Analysis and Review Collateralized debt obligation Collateralized loan obligation Commercial mortgage...

  • Page 147
    ... Balance Sheet Consolidated Statement of Changes in Shareholders' Equity Consolidated Statement of Cash Flows Note 1 - Summary of Significant Accounting Principles Note 2 - Derivatives Note 3 - Securities Note Note Note Note 4 5 6 7 - - - - Outstanding Loans and Leases Allowance for Credit Losses...

  • Page 148
    ... to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management assessed the effectiveness of the Corporation's internal control over financial reporting as of December 31, 2013 based on...

  • Page 149
    ... Sheet and the related Consolidated Statement of Income, Consolidated Statement of Comprehensive Income, Consolidated Statement of Changes in Shareholders' Equity and Consolidated Statement of Cash Flows present fairly, in all material respects, the financial position of Bank of America Corporation...

  • Page 150
    ... income Loans and leases Debt securities Federal funds sold and securities borrowed or purchased under agreements to resell Trading account assets Other interest income Total interest income Interest expense Deposits Short-term borrowings Trading account liabilities Long-term debt Total interest...

  • Page 151
    Bank of America Corporation and Subsidiaries Consolidated Statement of Comprehensive Income (Dollars in millions) Net income Other comprehensive income (loss), net-of-tax: Net change in available-for-sale debt and marketable equity securities Net change in derivatives Employee benefit plan ...

  • Page 152
    Bank of America Corporation and Subsidiaries Consolidated Balance Sheet (Dollars in millions) December 31 2013 2012 $ 131,322 11,540 190,328 200,993 47,495 $ 110,752 18,694 219,924 227,775 53,497 Assets Cash and cash equivalents Time deposits placed and other short-term investments Federal funds ...

  • Page 153
    ... at fair value) Deposits in non-U.S. offices: Noninterest-bearing Interest-bearing Total deposits Federal funds purchased and securities loaned or sold under agreements to repurchase (includes $33,684 and $42,639 measured at fair value) Trading account liabilities Derivative liabilities Short-term...

  • Page 154
    ... securities Common stock issued under employee plans and related tax effects Balance, December 31, 2012 Net income Net change in available-for-sale debt and marketable equity securities Net change in derivatives Employee benefit plan adjustments Net change in foreign currency translation adjustments...

  • Page 155
    ...in) operating activities Investing activities Net decrease in time deposits placed and other short-term investments Net (increase) decrease in federal funds sold and securities borrowed or purchased under agreements to resell Proceeds from sales of debt securities carried at fair value Proceeds from...

  • Page 156
    ... and related information, see the Consolidated Statement of Comprehensive Income and Note 14 - Accumulated Other Comprehensive Income (Loss). On January 15, 2014, the FASB issued new guidance on accounting for qualified affordable housing projects which permits entities to make an accounting policy...

  • Page 157
    ... financial instrument), index, currency or commodity at a predetermined rate or price during a period or at a date in the future. Option agreements can be transacted on organized exchanges or directly between parties. All derivatives are recorded on the Consolidated Balance Sheet at fair value...

  • Page 158
    ...servicing rights (MSRs), interest rate lock commitments (IRLCs) and first mortgage loans held-for-sale (LHFS) that are originated by the Corporation are recorded in mortgage banking income (loss). Changes in the fair value of derivatives that serve to mitigate interest rate risk and foreign currency...

  • Page 159
    Securities Debt securities are recorded on the Consolidated Balance Sheet as of their trade date. Debt securities bought principally with the intent to buy and sell in the short term as part of the Corporation's trading activities are reported at fair value in trading account assets with unrealized ...

  • Page 160
    ... is a change in the expected lives of the loans. The present value of the expected 158 Bank of America 2013 Allowance for Credit Losses The allowance for credit losses, which includes the allowance for loan and lease losses and the reserve for unfunded lending commitments, represents management...

  • Page 161
    ...difficulties. Loans accounted for under the fair value option, PCI loans and LHFS are not reported as nonperforming. In accordance with the Corporation's policies, consumer real estate-secured loans, including residential mortgages and home equity loans, are generally placed on nonaccrual status and...

  • Page 162
    ... status. Credit card and other unsecured consumer loans that have been renegotiated and placed on a fixed payment plan after July 1, 2012 are generally charged off no later than the end of the month in which the account becomes 120 days past due. Commercial loans and leases whose contractual terms...

  • Page 163
    ... function. Mortgage Servicing Rights The Corporation accounts for consumer MSRs, including residential mortgage and home equity MSRs, at fair value with changes in fair value recorded in mortgage banking income (loss). To reduce the volatility of earnings related to interest rate and market value...

  • Page 164
    ... commercial and consumer loans and loan commitments, LHFS, other short-term borrowings, securities financing agreements, asset-backed secured financings, long-term deposits and long-term debt. The following describes the three-level hierarchy. Level 1 Unadjusted quoted prices in active markets...

  • Page 165
    ...debt and marketable equity securities, gains and losses on cash flow accounting hedges, certain employee benefit plan adjustments, foreign currency translation adjustments and related hedges of net investments in foreign operations, and the cumulative adjustment related to certain accounting changes...

  • Page 166
    ...3 - Securities Note 4 - Outstanding Loans and Leases Note 6 - Securitizations and Other Variable Interest Entities Note 7 - Representations and Warranties Obligations and Corporate Guarantees Note 12 - Commitments and Contingencies Note 15 - Earnings Per Common Share Note 17 - Employee Benefit Plans...

  • Page 167
    ...information on the Corporation's derivatives and hedging activities, see Note 1 - Summary of Significant Accounting Principles. The following tables present derivative instruments included on the Consolidated Balance Sheet in derivative assets and liabilities at December 31, 2013 and 2012. Balances...

  • Page 168
    ... derivative assets and liabilities in the table to derive net derivative assets and liabilities. For more information on offsetting of securities financing agreements, see Note 10 - Federal Funds Sold or Purchased, Securities Financing Agreements and Short-term Borrowings. 166 Bank of America 2013

  • Page 169
    ...by changes in market conditions such as interest rate movements. To mitigate the interest rate risk in mortgage banking production income, the Corporation utilizes forward loan sale commitments and other derivative instruments including purchased options, and certain debt securities. The Corporation...

  • Page 170
    ...Corporation purchases credit derivatives to manage credit risk related to certain funded and unfunded credit exposures. Credit derivatives include credit default swaps (CDS), total return swaps and swaptions. These derivatives are recorded on the Consolidated Balance Sheet at fair value with changes...

  • Page 171
    ... Effectiveness Testing (1) - - - (134) (Dollars in millions, amounts pre-tax) Cash flow hedges Interest rate risk on variable-rate portfolios Price risk on restricted stock awards Total Net investment hedges Foreign exchange risk (321) $ 477 156 $ 1,024 $ 2012 (1,102) $ 329 (773) $ (355) $ Cash...

  • Page 172
    ... in millions) Price risk on mortgage banking production income (1, 2) Market-related risk on mortgage banking servicing income (1) Credit risk on loans (3) Interest rate and foreign currency risk on ALM activities (4) Price risk on restricted stock awards (5) Other Total (1) (2) 2013 2012 2011 968...

  • Page 173
    ...statement line items attributable to the Corporation's sales and trading revenue in Global Markets, categorized by primary risk, for 2013, 2012 and 2011. The difference between total trading account profits in the table below and in the Consolidated Statement of Income represents trading activities...

  • Page 174
    ... grade includes non-rated credit derivative instruments. The Corporation discloses internal categorizations of investment grade and non-investment grade consistent with how risk is managed for these instruments. Credit Derivative Instruments December 31, 2013 Carrying Value (Dollars in millions...

  • Page 175
    ... loan obligation (CLO) and credit-linked note vehicles. These instruments are primarily classified as trading securities. The carrying value of these instruments equals the Corporation's maximum exposure to loss. The Corporation is not obligated to make any payments to the entities under the terms...

  • Page 176
    ... are affected by changes in market spreads, non-credit related market factors such as interest rate and currency changes that affect the expected exposure, and other factors like changes in collateral arrangements and partial payments. Credit spreads and non-credit factors can move independently...

  • Page 177
    ...at fair value into one line item on the Consolidated Balance Sheet. Previously, the portfolio of debt securities carried at fair value with unrealized gains and losses recorded in other income (loss) was classified in other assets. The Corporation may hedge these debt securities with risk management...

  • Page 178
    ... value of the Corporation's debt securities carried at fair value and HTM debt securities from Fannie Mae (FNMA), the Government National Mortgage Association (GNMA) and Freddie Mac (FHLMC), where the investment exceeded 10 percent of consolidated shareholders' equity at December 31, 2013 and 2012...

  • Page 179
    ... impaired available-for-sale debt securities $ 5,770 U.S. Treasury and agency securities Mortgage-backed securities: 132,032 Agency 13,438 Agency-collateralized mortgage obligations 819 Non-agency residential 286 Commercial - Non-U.S. securities 106 Corporate/Agency bonds 116 Other taxable...

  • Page 180
    ...collateral using internal credit, interest rate and prepayment risk models that incorporate management's best estimate of current key assumptions such as default rates, loss severity and prepayment rates. Assumptions used for the underlying loans that support the mortgage-backed securities (MBS) can...

  • Page 181
    ... the Consolidated Statement of Income. At December 31, 2012, these shares, representing approximately one percent of CCB, were classified as AFS marketable equity securities and carried at fair value with the after-tax unrealized gain included in accumulated OCI. The strategic assistance agreement...

  • Page 182
    ...Purchased Creditimpaired (4) Loans Accounted for Under the Fair Value Option Total Outstandings Home loans Core portfolio Residential mortgage Home equity Legacy Assets & Servicing portfolio Residential mortgage (5) Home equity Credit card and other consumer U.S. credit card Non-U.S. credit card...

  • Page 183
    ... Residential mortgage (5) Home equity Legacy Assets & Servicing portfolio Residential mortgage (6) Home equity Credit card and other consumer U.S. credit card Non-U.S. credit card Direct/Indirect consumer (7) Other consumer (8) Total consumer Consumer loans accounted for under the fair value option...

  • Page 184
    ... insured and therefore the Corporation does not record an allowance for credit losses related to these loans. For additional information, see Note 7 - Representations and Warranties Obligations and Corporate Guarantees. Nonperforming Loans and Leases The Corporation classifies junior-lien home...

  • Page 185
    ... More 2013 2012 2013 2012 Home loans Core portfolio Residential mortgage (2) Home equity Legacy Assets & Servicing portfolio Residential mortgage (2) Home equity Credit card and other consumer U.S. credit card Non-U.S. credit card Direct/Indirect consumer Other consumer Total consumer Commercial...

  • Page 186
    ...value option. U.S. small business commercial includes $289 million of criticized business card and small business loans which are evaluated using refreshed FICO scores or internal credit metrics, including delinquency status, rather than risk ratings. At December 31, 2013, 99 percent of the balances...

  • Page 187
    ...value option. U.S. small business commercial includes $366 million of criticized business card and small business loans which are evaluated using refreshed FICO scores or internal credit metrics, including delinquency status, rather than risk ratings. At December 31, 2012, 98 percent of the balances...

  • Page 188
    ...-modification. At December 31, 2013 and 2012, remaining commitments to lend additional funds to debtors whose terms have been modified in a home loan TDR were immaterial. Home loan foreclosed properties totaled $533 million and $650 million at December 31, 2013 and 2012. 186 Bank of America 2013

  • Page 189
    ... modified again during the period. These TDRs are managed by Legacy Assets & Servicing. Home Loans - TDRs Entered into During 2013, 2012 and 2011 (1) Unpaid Principal Balance $ $ 11,233 878 12,111 $ $ December 31, 2013 PreModification Carrying Interest Rate Value 10,016 521 10,537 5.30% 5.29 5.30...

  • Page 190
    ... carrying value for home loans that were modified in a TDR during 2013, 2012 and 2011 by type of modification. Home Loans - Modification Programs TDRs Entered into During 2013 (Dollars in millions) Residential Mortgage $ 1,815 35 100 1,950 2,799 132 469 105 3,505 3,410 1,151 10,016 $ Home Equity...

  • Page 191
    ... rate on the account without placing the customer on a fixed payment plan, and are also considered TDRs. In all cases, the customer's available line of credit is canceled. The Corporation makes loan modifications directly with borrowers for debt held only by the Corporation (internal programs...

  • Page 192
    ... as interest cash collections on nonaccruing impaired loans for which the principal is considered collectible. The table below provides information on the Corporation's primary modification programs for the renegotiated TDR portfolio at December 31, 2013 and 2012. Credit Card and Other Consumer...

  • Page 193
    ... information on the Corporation's primary modification programs for the renegotiated TDR portfolio for loans that were modified in TDRs during 2013, 2012 and 2011. Credit Card and Other Consumer - Renegotiated TDRs Entered into During the Period by Program Type 2013 (Dollars in millions) Internal...

  • Page 194
    ... time of modification. For more information on modifications for the U.S. small business commercial portfolio, see Credit Card and Other Consumer in this Note. At December 31, 2013 and 2012, remaining commitments to lend additional funds to debtors whose terms have been modified in a commercial loan...

  • Page 195
    ... TDR loans and related allowance. Interest income recognized includes interest accrued and collected on the outstanding balances of accruing impaired loans as well as interest cash collections on nonaccruing impaired loans for which the principal is considered collectible. Bank of America 2013 193

  • Page 196
    ...in connection with the FNMA Settlement. For more information on the FNMA Settlement, see Note 7 - Representations and Warranties Obligations and Corporate Guarantees. The amount of accretable yield is affected by changes in credit outlooks, including metrics such as default rates and loss severities...

  • Page 197
    ...for loan and lease losses related to Canadian consumer card loans that were transferred to LHFS. The "Other" amount under the reserve for unfunded lending commitments primarily represents accretion of the Merrill Lynch & Co., Inc. (Merrill Lynch) purchase accounting adjustment. Bank of America 2013...

  • Page 198
    ...and $97 million related to impaired U.S. small business commercial loans at December 31, 2013 and 2012. (3) Amounts are presented gross of the allowance for loan and lease losses. (4) Outstanding loan and lease balances and ratios do not include loans accounted for under the fair value option of $10...

  • Page 199
    ...Debt. The Corporation also uses VIEs in the form of synthetic securitization vehicles to mitigate a portion of the credit risk on its residential mortgage loan portfolio, as described in Note 4 - Outstanding Loans and Leases. The Corporation uses VIEs, such as cash funds managed within Global Wealth...

  • Page 200
    ... information, see Note 7 - Representations and Warranties Obligations and Corporate Guarantees and Note 23 - Mortgage Servicing Rights. As a holder of these securities, the Corporation receives scheduled principal and interest payments. During 2013 and 2012, there were no OTTI losses recorded...

  • Page 201
    ...period. During this period, cash payments from borrowers are accumulated to repay outstanding debt securities and the Corporation continues to make advances to borrowers when they draw on their lines of credit. At December 31, 2013 and 2012, home equity loan securitizations in rapid amortization for...

  • Page 202
    ... cash and short-term investment accounts and unbilled accrued interest and fees. The Corporation holds subordinate securities with a notional principal amount of $7.9 billion and $10.1 billion at December 31, 2013 and 2012, and a stated interest rate of zero percent issued by certain credit card...

  • Page 203
    ... positions Total assets of VIEs (4) Consolidated VIEs Maximum loss exposure On-balance sheet assets Trading account assets Loans and leases Allowance for loan and lease losses All other assets Total assets On-balance sheet liabilities Short-term borrowings Long-term debt All other liabilities...

  • Page 204
    ...) Maximum loss exposure On-balance sheet assets Trading account assets Derivative assets Debt securities carried at fair value Loans and leases Allowance for loan and lease losses Loans held-for-sale All other assets Total On-balance sheet liabilities Short-term borrowings Long-term debt (1) All...

  • Page 205
    ... to any credit loss on the repurchased mortgage loans after accounting for any mortgage insurance (MI) or mortgage guarantee payments that it may receive. Subject to the requirements and limitations of the applicable sales and securitization agreements, these representations and warranties can be...

  • Page 206
    ... past losses and potential future losses relating to denials, rescissions and cancellations of mortgage insurance. In 2010, the Corporation had entered into an agreement with FHLMC to resolve all outstanding and potential representations and warranties claims related to loans sold by Countrywide to...

  • Page 207
    ... financial statements. Syncora Settlement On July 17, 2012, the Corporation entered into a settlement with a monoline insurer, Syncora Guarantee Inc. and Syncora Holdings, Ltd. (Syncora), to resolve all of Syncora's outstanding and potential claims related to alleged representations and warranties...

  • Page 208
    ... at December 31, 2013 and 2012. The unresolved repurchase claims include only claims where the Corporation believes that the counterparty has the contractual right to submit claims. For additional information, see Whole-loan Sales and Private-label Securitizations Experience in this Note and Note 12...

  • Page 209
    ... guarantee provider, $1.8 billion submitted by the GSEs for both Countrywide and legacy Bank of America originations not covered by the bulk settlements with the GSEs, $222 million submitted by whole-loan investors and $50 million submitted by monoline insurers. During 2013, $16.7 billion in claims...

  • Page 210
    ... claims relating to the origination, sale and delivery of residential mortgage loans that were sold directly to FNMA through December 31, 2008 and to FHLMC through December 31, 2009, subject to certain exclusions, which the Corporation does not believe are material. 208 Bank of America 2013

  • Page 211
    ... balance of $9.8 billion and $9.3 billion at the time of the settlement. During 2013, there was minimal loan-level repurchase claim activity with the monolines and the monolines did not request any loan files for review through the representations and warranties process. Open Mortgage Insurance...

  • Page 212
    ... For loans sold to GSEs or private-label securitization trusts (including those wrapped by the monoline bond insurers), when the Corporation receives a MI rescission notice from a mortgage insurance company, it may give rise to a claim for breach of the applicable representations and warranties from...

  • Page 213
    ... activity can vary by transaction or investor. A direct relationship between the type of defect that causes the breach of representations and warranties and the severity of the realized loss has not been observed. Transactions to repurchase loans or make indemnification payments related...

  • Page 214
    ...Real Estate Services (CRES) at December 31, 2013 and 2012. In 2013, the consumer Dealer Financial Services (DFS) business, including $1.7 billion of goodwill, was moved from Global Banking to CBB in order to align this business more closely with the Corporation's consumer lending activity and better...

  • Page 215
    ... Treasury tax and loan notes, and term federal funds purchased, are included in short-term borrowings on the Consolidated Balance Sheet. For information regarding the long-term notes that have been issued under the $75 billion bank note program, see Note 11 - Long-term Debt. Bank of America 2013 213

  • Page 216
    ... to resell, and in federal funds purchased and securities loaned or sold under agreements to repurchase at December 31, 2013 and 2012. Balances are presented on a gross basis, prior to the application of counterparty netting. Gross assets and liabilities are adjusted on an aggregate basis to take...

  • Page 217
    .... Effective with this merger, Bank of America Corporation assumed outstanding Merrill Lynch & Co., Inc. debt including trust preferred securities. Bank of America Corporation and Bank of America, N.A. maintain various U.S. and non-U.S. debt programs to offer both senior and subordinated notes...

  • Page 218
    ... date. In 2013 and 2012, in a combination of tender offers, calls and open-market transactions, the Corporation purchased senior and subordinated long-term debt with a carrying value of $9.2 billion and $12.4 billion, and recorded net losses of $59 million and net gains of $1.3 billion in connection...

  • Page 219
    .... Also effective as of May 25, 2012, the Corporation's 6.875% Junior Subordinated Notes, due 2055 underlying the capital securities of BAC Capital Trust XII, became the covered debt with respect to and in accordance with the terms of the Replacement Capital Covenant. Bank of America 2013 217

  • Page 220
    ...table details the outstanding Trust Securities and the related Notes previously issued which remained outstanding at December 31, 2013. For more information on Trust Securities for regulatory capital purposes, see Note 16 - Regulatory Requirements and Restrictions. Trust Securities Summary (Dollars...

  • Page 221
    ... purchase $1.4 billion of equity securities and, in the event the commitment is funded, intends to sell the underlying securities purchased under this commitment. At December 31, 2013 and 2012, the Corporation had commitments to purchase loans (e.g., residential mortgage and commercial real estate...

  • Page 222
    ... guarantees have been de minimis. The Corporation has assessed the probability of making such payments in the future as remote. Merchant Services In accordance with credit and debit card association rules, the Corporation sponsors merchant processing servicers that process credit and debit card...

  • Page 223
    ... agreements and other transactions. Payment Protection Insurance Claims Matter In the U.K., the Corporation previously sold payment protection insurance (PPI) through its international card services business to credit card customers and consumer loan customers. PPI covers a consumer's loan or debt...

  • Page 224
    ... 1, 2013, the European Commission (Commission) announced that it had addressed a Statement of Objections (SO) to the Corporation, BANA and Banc of America Securities LLC (together, the Bank of America Entities); a number of other financial institutions; Markit Group Limited; and the International...

  • Page 225
    ...July 29, 2013, which otherwise would have been paid to issuers and which effectively reduces credit interchange for that period of time; and (iii) modifications to certain Visa and MasterCard rules regarding merchant point of sale practices. In re Bank of America Securities, Derivative and Employee...

  • Page 226
    ... of the other LIBOR panel banks in a series of individual and class actions in various U.S. federal and state courts relating to defendants' LIBOR contributions. All cases naming the Corporation have been or are in the process of being consolidated for pre-trial purposes in the U.S. District Court...

  • Page 227
    ... International Group, Inc., et al. v. Bank of America Corporation, et al. AIG has named the Corporation, Merrill Lynch, Countrywide Home loans, Inc. (CHL) and a number of related entities as defendants. AIG's complaint asserts certain MBS Claims pertaining to 347 MBS offerings and two private...

  • Page 228
    ... claims with prejudice on December 9, 2013. On March 15, 2010, the Federal Home Loan Bank of San Francisco (FHLB San Francisco) filed an action in California Superior Court, San Francisco County, entitled Federal Home Loan Bank of San Francisco v. Credit Suisse Securities (USA) LLC, et al. FHLB San...

  • Page 229
    ...December 10, 2012 ruling as so clarified. On February 5, 2014, the U.S. Court of Appeals for the District of Bank of America 2013 227 Ocala Litigation Ocala Investor Actions On November 25, 2009, BNP Paribas Mortgage Corporation and Deutsche Bank AG each filed claims (the 2009 Actions) against BANA...

  • Page 230
    ... 2009 offering. The amended complaint asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Sections 11 and 15 of the Securities Act of 1933, and alleged that the Corporation's public statements: (i) concealed problems in the Corporation's mortgage servicing...

  • Page 231
    ... On April 11, 2012, the Policemen's Annuity & Benefit Fund of the City of Chicago, on its own behalf and on behalf of a proposed class of purchasers of 41 RMBS trusts collateralized mostly by Washington Mutual-originated (WaMu) mortgages, filed a proposed class action complaint against BANA and...

  • Page 232
    ... uses of capital, stock trading price, and general market conditions, and may be suspended at any time. The remaining common stock repurchases may be effected through open market purchases or privately negotiated transactions, including repurchase plans that satisfy the conditions of Rule 10b5-1 of...

  • Page 233
    ... on, or to repurchase, any outstanding common stock or any of the Corporation's outstanding preferred stock of any series. Following payment in full of accrued but unpaid dividends on the Series T Preferred Stock, the dividend rate remains at eight percent per annum. Bank of America 2013 231

  • Page 234
    ... declared, thereafter. (7) Ownership is held in the form of depositary shares, each representing a 1/1,200th interest in a share of preferred stock, paying a quarterly cash dividend, if and when declared. (8) Subject to 3.00% minimum rate per annum. n/a = not applicable 232 Bank of America 2013

  • Page 235
    ... of the Series L Preferred Stock, at its option, at any time or from time to time, to be converted into shares of common stock at the then-applicable conversion rate if, for 20 trading days during any period of 30 consecutive trading days, the closing price of common stock exceeds 130 percent of the...

  • Page 236
    ... Income (Loss) The table below presents the changes in accumulated OCI after-tax for 2011, 2012 and 2013. Available-forSale Debt Securities $ $ $ $ Available-forSale Marketable Equity Securities (Dollars in millions) Derivatives (3,236) (549) (3,785) 916 (2,869) 592 (2,277) Employee Benefit Plans...

  • Page 237
    ... (loss) Income (loss) before income taxes Income tax expense (benefit) Reclassification to net Income Total reclassification adjustments $ Employee benefit plans: Prior service cost Transition obligation Net actuarial losses Settlements and curtailments Foreign currency: $ Bank of America 2013...

  • Page 238
    ...been antidilutive under the treasury stock method. In connection with the preferred stock actions described in Note 13 - Shareholders' Equity, the Corporation recorded a $100 million non-cash preferred stock dividend in 2013, a $44 million reduction to preferred stock dividends in 2012 and a net $36...

  • Page 239
    ... and lease losses, a portion of net unrealized gains on AFS marketable equity securities and other adjustments. The Corporation's total capital is the total of Tier 1 capital plus supplementary Tier 2 capital. Tier 3 capital includes subordinated debt that is unsecured, fully paid, has an original...

  • Page 240
    ... as the Basel 1 - 2013 Rules. At December 31, 2013, the Corporation measured and reported its capital ratios and related information in accordance with the Basel 1 - 2013 Rules, which introduced new measures of market risk including a charge related to stressed Value-at-Risk (VaR), an incremental...

  • Page 241
    ... agencies of the Corporation's internal analytical models used to calculate risk-weighted assets. Regulatory Capital Transitions Important differences in determining the composition of regulatory capital between Basel 1 - 2013 Rules and Basel 3 include changes in capital deductions related...

  • Page 242
    ...capital rules and a change to measure written credit derivatives using a notional-based approach capped at the maximum loss with limited netting permitted. U.S. banking regulators may consider the Basel Committee's final guidance in connection with the July 2013 NPR. funding risk over a longer time...

  • Page 243
    ... guarantee feature for account balances with participant-selected earnings, applied at the time a benefit payment is made from the plan that effectively provides principal protection for participant balances transferred and certain compensation credits. The Corporation is responsible for funding...

  • Page 244
    ...return on plan assets Company contributions Plan participant contributions Settlements and curtailments Benefits paid Federal subsidy on benefits paid Foreign currency exchange rate changes Fair value, December 31 Change in projected benefit obligation Projected benefit obligation, January 1 Service...

  • Page 245
    ...31 Discount rate Expected return on plan assets Rate of compensation increase n/a = not applicable $ $ $ 3 152 (141) - (8) 16 3 25 5.20% 5.25 4.00 $ $ $ Net periodic postretirement health and life expense was determined using the "projected unit credit" actuarial method. Gains and losses for...

  • Page 246
    ...$ 7,032 Net actuarial loss (gain) Prior service cost (credits) Amounts recognized in accumulated OCI 2013 $ 2,794 - $ 2,794 2012 $ 6,164 - $ 6,164 2013 2013 2012 $ (171) $ (28) $ 3,749 15 24 29 $ (147) $ 1 $ 3,764 Pre-tax amounts recognized in OCI for employee benefit plans in 2013 included the...

  • Page 247
    ... Plan 30 - 60 40 - 70 0 - 10 0-5 Equity securities for the Qualified Pension Plan include common stock of the Corporation in the amounts of $200 million (1.10 percent of total plan assets) and $156 million (0.96 percent of total plan assets) at December 31, 2013 and 2012. Bank of America 2013...

  • Page 248
    ... Equity commingled/mutual funds Public real estate investment trusts Real estate Private real estate Real estate commingled/mutual funds Limited partnerships Other investments (1) Total plan investment assets, at fair value $ $ $ $ December 31, 2012 Cash and short-term investments Money market...

  • Page 249
    ... 3) during 2013, 2012 and 2011. Level 3 Fair Value Measurements 2013 Actual Return on Plan Assets Still Held at the Reporting Date 13 10 110 324 231 129 817 $ - (2) 4 15 8 (6) 19 $ (Dollars in millions) Balance January 1 $ Purchases - - 7 123 23 13 166 $ Sales and Settlements (1) (2) (2) - (89...

  • Page 250
    ... 2013, is accrued over the vesting period and adjusted to fair value based upon changes in the share price of the Corporation's common stock. From time to time, the Corporation enters into equity total return swaps to hedge a portion of RSUs granted to certain employees as part of their compensation...

  • Page 251
    ... Exercise Price $ 46.22 38.73 48.23 48.23 Total income tax expense (benefit) does not reflect the deferred tax effects of unrealized gains and losses on AFS debt and marketable equity securities, foreign currency translation adjustments, derivatives and employee benefit plan adjustments that...

  • Page 252
    ... taxes resulting from: State tax expense (benefit), net of federal effect Non-U.S. tax differential (1) Affordable housing credits/other credits Tax-exempt income, including dividends Changes in prior period UTBs, including interest Non-U.S. statutory rate reductions Nondeductible expenses Goodwill...

  • Page 253
    ... for credit losses Security, loan and debt valuations Employee compensation and retirement benefits State income taxes Available-for-sale securities Other Gross deferred tax assets Valuation allowance Total deferred tax assets, net of valuation allowance Deferred tax liabilities Equipment lease...

  • Page 254
    ... value is determined based on limited available market information and other factors, principally from reviewing the issuer's financial statements and changes in credit ratings made by one or more rating agencies. Valuation Processes and Techniques The Corporation has various processes and controls...

  • Page 255
    ...'s current origination rates for similar loans adjusted to reflect the inherent credit risk. Short-term Borrowings and Long-term Debt The Corporation issues structured liabilities that have coupons or repayment terms linked to the performance of debt or equity securities, indices, currencies or...

  • Page 256
    ... other debt securities carried at fair value Loans and leases Mortgage servicing rights Loans held-for-sale Other assets Total assets Liabilities Interest-bearing deposits in U.S. offices Federal funds purchased and securities loaned or sold under agreements to repurchase Trading account liabilities...

  • Page 257
    ... other debt securities carried at fair value Loans and leases Mortgage servicing rights Loans held-for-sale Other assets Total assets Liabilities Interest-bearing deposits in U.S. offices Federal funds purchased and securities loaned or sold under agreements to repurchase Trading account liabilities...

  • Page 258
    ...Losses) in OCI Gross Transfers into Level 3 Gross Transfers out of Level 3 Balance December 31 2013 (Dollars in millions) Purchases Sales Issuances Settlements Trading account assets: Corporate securities, trading loans and other Equity securities Non-U.S. sovereign debt Mortgage trading loans...

  • Page 259
    ... (Losses) in OCI Gross Transfers into Level 3 Gross Transfers out of Level 3 Balance December 31 2012 (Dollars in millions) Purchases Sales Issuances Settlements Trading account assets: Corporate securities, trading loans and other (2) Equity securities Non-U.S. sovereign debt Mortgage trading...

  • Page 260
    ...agency commercial Non-U.S. securities Corporate/Agency bonds Other taxable securities Tax-exempt securities Total AFS debt securities Loans and leases (3, 4) Mortgage servicing rights (4) Loans held-for-sale (3) Other assets (5) Trading account liabilities - Corporate securities and other Short-term...

  • Page 261
    ... AFS debt securities Loans and leases (3) Mortgage servicing rights Loans held-for-sale (3) Other assets Trading account liabilities - Corporate securities and other Accrued expenses and other liabilities (3) Long-term debt (3) Total $ $ $ 5 9 3 17 136 - 60 (410) - - (32) (229) $ 2012 Trading...

  • Page 262
    ... AFS debt securities: Non-agency residential MBS Corporate/Agency bonds Other taxable securities Tax-exempt securities Total AFS debt securities Loans and leases (3) Mortgage servicing rights Loans held-for-sale (3) Other assets Trading account liabilities - Corporate securities and other Short-term...

  • Page 263
    ... (Losses) Relating to Assets and Liabilities Still Held at Reporting Date 2013 Trading Account Profits (Losses) $ (130) $ 40 80 (174) (184) (1,375) - - - - (4) (1,563) $ Mortgage Banking Income (Loss) (1 42 (34) 1,541 6 166 - 1,721 $ 2012 Trading account assets: Corporate securities, trading loans...

  • Page 264
    ... real estate assets Trading account assets - Mortgage trading loans and ABS Loans and leases Loans held-for-sale Commercial loans, debt securities and other Trading account assets - Corporate securities, trading loans and other Trading account assets - Non-U.S. sovereign debt Trading account assets...

  • Page 265
    ... real estate assets Other assets Commercial loans, debt securities and other Trading account assets - Corporate securities, trading loans and other Trading account assets - Mortgage trading loans and ABS AFS debt securities - Other taxable securities Loans and leases Auction rate securities Trading...

  • Page 266
    ..., whole loans, mortgage CDOs and net monoline exposure. Commercial loans, debt securities and other includes corporate CLOs and CDOs, commercial loans and bonds, and securities backed by non-real estate assets. Structured liabilities primarily include equity-linked notes that are accounted for under...

  • Page 267
    ...estate assets, commercial real estate assets, and commercial loans, debt securities and other, a significant increase in market yields, default rates, loss severities or duration would result in a significantly lower fair value for long positions. Short positions would be impacted in a directionally...

  • Page 268
    ... OREO discount Cost to sell December 31, 2012 Yield Prepayment speed Default rate Loss severity OREO discount Cost to sell Yield Loss severity Ranges of Inputs 0% to 19% 8% Weighted Average 8% n/a Instruments backed by residential real estate assets Loans and leases $ 5,240 Market comparables...

  • Page 269
    ...financing agreements Other assets Long-term deposits Asset-backed secured financings Unfunded loan commitments Short-term borrowings Long-term debt (2, 3) (1) A significant portion of the loans reported as trading account assets are distressed loans which trade and were purchased at a deep discount...

  • Page 270
    ... Sheet. Short-term Financial Instruments The carrying value of short-term financial instruments, including cash and cash equivalents, time deposits placed and other shortterm investments, federal funds sold and purchased, certain 268 Bank of America 2013 resale and repurchase agreements, customer...

  • Page 271
    ...applicable allowance for loan losses and excludes leases. The Corporation elected to account for certain commercial loans and residential mortgage loans under the fair value option. Financial assets Loans Loans held-for-sale Financial liabilities Deposits Long-term debt December 31, 2012 Financial...

  • Page 272
    ...to manage the risk in the MSRs are classified in other assets with changes in the fair value of the securities and the related interest income recorded in mortgage banking income (loss). The table below presents activity for residential mortgage and home equity MSRs for 2013 and 2012. Commercial and...

  • Page 273
    ... and mortgage-related products. As a result of market-making activities in these products, Global Markets may be required to manage risk in a broad range of financial products including government securities, equity and equity-linked securities, high-grade and high-yield corporate debt securities...

  • Page 274
    ... of the ALM activities. ALM activities include external product pricing decisions including deposit pricing strategies, the effects of the Corporation's internal funds transfer pricing process and the net effects of other ALM activities. Certain expenses not directly attributable to a specific...

  • Page 275
    ... Banking 2013 2012 2011 $ 20,051 $ 19,853 $ 22,249 9,816 9,937 11,572 29,867 29,790 33,821 3,107 4,148 3,677 505 626 759 - - - 15,852 16,369 17,153 10,403 8,647 12,232 3,815 3,101 4,431 $ 6,588 $ 5,546 $ 7,801 $ 592,978 $554,915 Global Wealth & Investment Management Consumer Real Estate Services...

  • Page 276
    ...,915 5,508 138,974 (537,597) $ 2,209,974 Includes negative fair value adjustments on structured liabilities related to changes in the Corporation's credit spreads of $649 million and $5.1 billion in 2013 and 2012 compared to positive adjustments of $3.3 billion in 2011. 274 Bank of America 2013

  • Page 277
    ... of representations and warranties provision, which is presented as a component of mortgage banking income on the Consolidated Statement of Income, litigation expense and in 2012 an expense related to an agreement with the Federal Reserve and the OCC to cease the Independent Foreclosure Review and...

  • Page 278
    ... activities Net sales of securities Net payments from subsidiaries Other investing activities, net Net cash provided by investing activities Financing activities Net increase (decrease) in short-term borrowings Net increase (decrease) in other advances Proceeds from issuance of long-term debt...

  • Page 279
    ... report, in recording, processing, summarizing and reporting information required to be disclosed by the Corporation in reports that it files or submits under the Exchange Act, within the time periods specified in the Securities and Exchange Commission's rules and forms. Bank of America 2013 277

  • Page 280
    ... by the Securities and Exchange Commission. In our opinion, Management's Assertion that the Corporation's disclosure controls and procedures were effective as of December 31, 2013 is fairly stated, in all material respects, based on criteria established in Internal Control - Integrated Framework...

  • Page 281
    ... of Human Resources Ron D. Sturzenegger Legacy Asset Servicing Executive Bruce R. Thompson* Chief Financial Officer Darnell* Board of Directors Charles O. Holliday, Jr. Chairman of the Board Bank of America Corporation Sharon L. Allen Former Chairman Deloitte LLP Susan S. Bies Former Member Board...

  • Page 282
    ... the Investor Relations area of the Bank of America website, http://investor.bankofamerica.com, for stock and dividend information, financial news releases, links to Bank of America SEC filings, electronic versions of our annual reports and other items of interest to the Corporation's shareholders...

  • Page 283
    ...directed online investing. U.S. Trust, BanC of America Private Wealth Management operates through BanC of America, N.A., and other subsidiaries of BAC. BanC of America Merrill Lynch is a marCeting name for the Retirement and Philanthropic Services businesses of BAC. BofAâ„¢ Global Capital Management...

  • Page 284
    Bank of America Corporation 2013 Annual Report Miami Atlanta San n Francisco Denver ver Jacksonville onville São Paulo ulo Nashville St. Louis St Dallas Dall Tokyo Please recycle Bank of America Corporation 2013 Annual Report 00-04-1368B 3/2014