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» VISIT US ONLINE @ DSNEWS.COM 21 SETTLEMENTS CUT INTO CITIGROUP, BANK OF AMERICA NET EARNINGS FOR Q4, FULL- YEAR 2014 Settlements with the federal government for mortgage servicing misconduct led to sharp year-over-year declines for Citigroup and Bank of America in both fourth-quarter and full-year net incomes in 2014, according to Q 4 2014 and year-end earnings statements for both banks released. Burdened by legal and related expenses and repositioning charges, Citigroup reported fourth quarter 2014 net earnings that were only a frac- tion of what they were in the same quarter a year earlier. Citigroup reported net earnings of $350 million on $17.8 billion in revenues for Q 4 2014, way down from the net earnings of $2.5 billion the bank rolled in for Q 4 2013 on the same rev- enues, $17.8 billion. Net income per diluted share fell from $0.77 in Q 4 2013 all the way down to a mere $0.06 for Q 4 2014 for Citigroup. Bank of America reported relatively minor losses in the fourth quarter of 2014 with a net income of $3.1 billion on $19.0 billion in revenues compared to $3.4 billion on $21.7 billion in rev- enues in the same quarter of 2013. Both institutions had a rough year in 2014 on the regulatory side of things. In July, Citigroup settled with the Department of Justice (DOJ) for $7 billion over the sale of toxic mortgage- backed securities. A month later, Bank of America settled with the DOJ for a record $16.65 billion over similar matters. e money paid out in penalties and consumer relief in 2014 took a toll on year-end net incomes for both institu- tions. Citigroup's full-year net income for 2014 was only slightly more than half of what it was for 2013, $7.3 billion in 2014 compared to $13.7 billion for 2013. Revenues were similar and were actually slightly higher in 2014, $76.9 billion compared to $76.4 billion for 2013. "While the overall results for 2014 fell short of our expectations, we did make significant progress on our top priorities. During the year, we increased our market share among our target institutional clients, grew our core loan book, and improved both our net interest revenue and margin from 2013 levels," said Michael Corbat, CEO of Citigroup. "For the first time since its establishment, Citi Holdings was profitable for the full year, and we accelerated the utilization of our deferred tax assets. We strengthened our capital planning process and made Citi a safer and stronger institution, as evidenced by the increases to our capital, leverage and liquidity ratios. Although we made some difficult deci- sions over the course of the year, I believe they allowed us to put our franchise in a position to have a successful 2015." Bank of America's full-year net income was $4.8 billion for 2014, compared with $11.4 billion for 2013. Net income per diluted share fell from $0.90 in 2013 to $0.36 in 2014. Revenues for Bank of America dropped down to $85.1 billion in 2014, compared to $89.8 billion in 2013. On the positive side, the bank originated $15 billion in residential mortgage loans and home equity loans during Q 4 2014, which helped approxi- mately 41,000 homeowners purchase a home or refinance a mortgage. "In 2014, we continued to invest in our busi- nesses while reducing expenses and resolving our most significant litigation matters," Bank of America CEO Brian Moynihan said. "Last quarter, consumer deposits and loan originations were solid; wealth management client balances grew to $2.5 trillion; we increased lending to middle-market and large companies; and we retained a leadership position in investment banking. ere's more work and tremendous op- portunity ahead as we improve on the platform we've built to serve our customers and clients, and we enter 2015 in good shape to manage both the opportunities and the challenges the markets and economy will offer." GOLDMAN SACHS REPORTS SLIGHT INCREASE IN NET INCOME FOR 2014 New York-based investment bank Goldman Sachs reported a slight year-over-year decline in Q 4 2014 net earnings, but for the whole year of 2014 the firm reported a slight uptick from 2013, according to the firm's Q 4 and year-end earn- ings statement released on Friday. Goldman Sachs's net earnings for 2014 were $8.48 billion on $34.53 billion in revenues, com- pared to a net income of $8.04 billion on $34.21 billion in revenues for all of 2013. Diluted earn- ings per share rose from $15.46 in 2013 to $17.07 in 2014. e firm was first worldwide in announced and completed mergers and acquisitions for 2014, having advised on announced transactions valued at a combined $1 trillion. Net revenues on investment banking for 2014 totaled $6.46 billion, the second-highest annual total in the firm's history and an increase from $6.0 billion for 2013. "We are pleased with our performance during a year characterized by mixed global economic and financial conditions," said Lloyd C. Blankfein, chairman and CEO. "e depth of our global client franchise and our continued discipline on expenses and capital management produced a solid return for our shareholders. Looking ahead, we see evidence of a continued pick up in momentum for the global economy that will improve the opportunity set for 2015." For Q 4 2014, Goldman Sachs reported a net income of $2.17 billion on $7.69 billion in revenues, down slightly from the net earnings of $2.33 billion on $8.78 billion in revenues for the same quarter a year earlier. For fixed income, currency, and commodi- ties client execution, Goldman Sachs reported net revenues of $8.46 billion for 2014, a 2 percent decrease from 2013. e minor decline can be attributed to slightly lower net revenues in interest rate products and mortgages, combined with significantly lower rates for credit prod- ucts, offset by higher rates in both commodities and currency (significantly higher in the case of commodities). Credit products, interest rate products, and mortgages experienced generally low levels of activity in 2014 due to economic uncertainty. The number of jobs added nationwide in January 2015, about 27,000 more than economists' predictions of 230,000 for the month. Source: U.S. Bureau of Labor Statistics STAT INSIGHT 257,000

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