Financial Analysis of Bank of America

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Financial Statement Analysis of Bank of America

Group 1
Chen, Yelin
Dong, Xiaoxu
Gransbach, Jennifer
Shuai, Wang
Weiss, Charles

1Financial Statements of Bank of America1
1.1Balance sheet1
1.2Income statement2
1.3Regulatory capital ratios2
1.4Investment portfolio2
1.5Impact of the FSP FAS 115-2 and FAS 124-2 on OTTI3
1.5.1Bank of America3
1.5.2JP Morgan Chase3
1.5.3Citi Group3
1.6Netting Financial Instruments3
1.6.1Bank of America4
1.6.2Comparable banks4
1.6.3Analysis of the impact4
2Fair Value Accounting for Financial Instruments4
2.1Fair value accounting4
Table 6 Summary of the Fair Value Income5
2.2Opinions about fair value accounting5
3Interest Rate Risk and Net Interest Earnings6
3.1Net interest margin6
3.2Interest rate risk7
4Credit Risk and Losses7
4.1Main loss reserve adequacy ratios8
4.2Policy to designate past due loans as non-performing8
4.3Adequacy of the bank’s allowance for loan losses8
4.4Disclosure policies relating to loans8
5Appendix9

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Part 1 Financial Statements of Bank of America . 1.1 Balance sheet
Bank of America’s balance sheet has total assets of $2,129,046 million in 2011, which is less than last year’s $2,264,909 million, a fairly significant decline. There are a few primary assets on the balance sheet. The largest asset is loans and leases which makes up 41.92% of the total assets. The next largest asset was Available-For-Sale securities making up 12.97% of total assets. Total liabilities on the balance sheet were $1,898,945 million, with the primary liability being deposits in U.S. offices both interest bearing and noninterest bearing, at 50.4% of total liabilities. The next largest liability was long-term debt at 19.6% of total liabilities. In millions| 2011| % of total assets| 2010| % of total assets| % chg from 2010-2011| Total asset| 2,029,046 | 100.00%| 2,264,909 | 100.00%| -10.41%| Loans and leases| 892,417 | 43.98%| 898,555 | 39.67%| -0.68%| Available-for-sale| 276,151 | 13.61%| 337,627 | 14.91%| -18.21%| Total liabilities| 1,898,945 | 93.59%| 2,036,661 | 89.92%| -6.76%| Total deposits| 1,033,041 | 50.91%| 1,010,430 | 44.61%| 2.24%| Deposits in U.S. offices| 957,042 | 47.17%| 930,913 | 41.10%| 2.81%| Long-term debt| 372,265 | 18.35%| 448,431 | 19.80%| -16.98%| Leverage ratio| 14.60 |  | 8.92 |  | 63.58%|

Table 1 Selected Financial Data from Balance Sheet of Bank of America Chase and Citi are fairly similar in size and distribution of their balance sheets. Chase and Citi have total assets of 2,265,792 and 1,873,878(单位?) respectively, both with slightly lower loans as a percentage of total assets at slightly over 30%, while AFS securities are around 16% of total assets for each. Liabilities are also very similar, with Chase having total liabilities of $2,082,219 million and Citi $1,694,305 million. The primary line items are also very similar once again with Chase’s total deposits 54.16% and long-term debt 22.77% of total liabilities, while Citi has deposits 51.11% and long-term debt of 19.09%. According to the deposits in U.S. offices, BOA focus more in U.S market and Citi focus more on market outside U.S. In millions| Bank of America| % of total assets| JP Morgan Chase| % of total assets| Citi Group| % of total assets| Total asset| 2,129,046 | 100.00%| 2,265,792 | 100.00%| 1,873,878 | 100.00%| Loans and leases| 892,417 | 41.92%| 696,111 | 30.72%| 617,127 | 32.93%| Available-for-sale| 276,151 | 12.97%| 364,793 | 16.10%| 293,413 | 15.66%|  |  |  |  |  |  |  |

In millions| Bank of America| % of total liabilities| JP Morgan Chase| % of total liabilities| Citi Group| % of total liabilities| Total liabilities| 1,898,945 | 100.00%| 2,082,219 | 100.00%|...
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