Bank of America 2015 Annual Report Download - page 107

Bank of America 2015 105
Global Markets
Global Markets recorded net income of $2.7 billion in 2014
compared to $1.1 billion in 2013. In 2014, we implemented an
FVA into valuation estimates resulting in an initial charge of $497
million. Excluding net DVA/FVA and charges in 2013 related to the
U.K. corporate income tax rate reduction, net income decreased
$135 million to $2.9 billion in 2014 primarily driven by lower trading
account profits and net interest income, partially offset by a
decrease in noninterest expense, a $240 million gain in 2014
related to the IPO of an equity investment and higher investment
and brokerage services income. Net DVA/FVA losses were $240
million in 2014 compared to losses of $1.2 billion in 2013.
Noninterest expense decreased $232 million to $11.9 billion in
2014 due to lower litigation expense and revenue-related
incentives, partially offset by higher technology costs and
investments in infrastructure.
Legacy Assets & Servicing
LAS recorded a net loss of $13.1 billion in 2014 compared to a
net loss of $4.9 billion in 2013 with the increase in the net loss
primarily driven by significantly higher litigation expense, which is
included in noninterest expense, as a result of the settlements
with the DoJ and FHFA, a lower tax benefit rate resulting from the
non-deductible treatment of a portion of the DoJ Settlement, lower
mortgage banking income and higher provision for credit losses.
Mortgage banking income decreased $1.6 billion to $1.0 billion
in 2014 primarily due to lower servicing income, partially offset by
a lower representations and warranties provision. The provision
for credit losses increased $410 million to $127 million in 2014
driven by additional costs associated with the consumer relief
portion of the DoJ Settlement. Noninterest expense increased
$8.2 billion to $20.6 billion in 2014 due to an $11.4 billion
increase in litigation expense, partially offset by a decline in
default-related servicing expenses, including mortgage-related
assessments, waivers and similar costs related to foreclosure
delays.
All Other
All Other recorded net income of $64 million in 2014 compared
to $717 million in 2013 with the decrease due to the negative
impact on net interest income of market-related premium
amortization expense on debt securities of $1.2 billion in 2014
compared to a benefit of $784 million in 2013, a decrease of $2.0
billion in equity investment income and a $363 million increase
in U.K. PPI costs. Partially offsetting these decreases were gains
related to the sales of residential mortgage loans, a $313 million
improvement in the provision (benefit) for credit losses and a
decrease of $1.8 billion in noninterest expense. The decrease in
noninterest expense was primarily due to a decline in litigation
expense. Also, the income tax benefit increased $547 million.