The decline in revenue was primarily driven by lower equity investment income, $1.2 billion in gains related to exchanges of trust preferred securities in the year-ago quarter and a decrease of $1.0 billion in gains on the sale of debt securities from the fourth quarter of 2011. This decline was partially offset by lower negative FVO adjustments in the most recent quarter compared to a year ago. Negative FVO adjustments totaled $442 million in the fourth quarter of 2012, compared to a negative $814 million in the fourth quarter of 2011.

Equity investment income was $570 million in the fourth quarter of 2012, compared to $3.1 billion in the year-ago quarter. The fourth quarter of 2012 included a $370 million gain on the sale of our interest in the Japanese brokerage joint venture and the year-ago period included a $2.9 billion gain on the sale of a portion of the company's investment in CCB. Gains on the sale of debt securities totaled $116 million in the fourth quarter of 2012, down from $1.1 billion in the year-ago quarter.

The decrease in the provision for credit losses was driven primarily by the impact of an improved home price outlook on the discontinued real estate and residential mortgage PCI portfolios driving reserve reductions in the current quarter compared to reserve builds a year ago. Noninterest expense decreased compared to the fourth quarter of 2011 as the year-ago period included a $581 million goodwill impairment charge in the European consumer card business.

Corporate Overview

Revenue and Expense
    Three Months Ended   Year Ended
(Dollars in millions, except per share data)     December 31 2012   December 312011   December 31 2012   December 312011
Net interest income, FTE basis 1 $ 10,555   $ 10,959 $ 41,557   $ 45,588
Noninterest income 8,336 14,187 42,678 48,838
Total revenue, net of interest expense, FTE basis 18,891 25,146 84,235 94,426
Total revenue, net of interest expense, FTE basis, excluding DVA and FVO 2 19,610 26,434 91,819 90,106
Provision for credit losses 2,204 2,934 8,169 13,410
Noninterest expense 3 18,360 18,941 72,093 77,090
Goodwill impairment charges 581 3,184
Net income $ 732 $ 1,991 $ 4,188 $ 1,446
Diluted earnings per common share     $ 0.03     $ 0.15     $ 0.25     $ 0.01

1 Fully taxable-equivalent (FTE) basis is a non-GAAP financial measure. For reconciliation to GAAP financial measures, refer to pages 25-28 of this press release. Net interest income on a GAAP basis was $10.3 billion and $10.7 billion for the three months ended December 31, 2012 and 2011, and $40.7 billion and $44.6 billion for the years ended December 31, 2012 and 2011. Total revenue, net of interest expense, on a GAAP basis, was $18.7 billion and $24.9 billion for the three months ended December 31, 2012 and 2011, and $83.3 billion and $93.5 billion for the years ended December 31, 2012 and 2011.

2 Total revenue, net of interest expense, on an FTE basis excluding DVA and FVO adjustments is a non-GAAP financial measure. DVA gains (losses) were $(277) million and $(474) million for the three months ended December 31, 2012 and 2011 and $(2.5) billion and $1.0 billion for the years ended December 31, 2012 and 2011. Valuation gains (losses) related to FVO were $(442) million and $(814) million for the three months ended December 31, 2012 and 2011, and $(5.1) billion and $3.3 billion for the years ended December 31, 2012 and 2011.

3 Excludes goodwill impairment charges of $581 million for the three months ended December 31, 2011, and $3.2 billion for the year ended December 31, 2011. Noninterest expense, excluding goodwill impairment charges, is a non-GAAP financial measure.

Revenue, net of interest expense, on an FTE basis was $18.9 billion, down from $25.1 billion in the fourth quarter of 2011, driven largely by mortgage banking losses as a result of the recently announced settlements with Fannie Mae, lower equity investment income, reduced gains on the sale of debt securities and lower other income. These decreases were partially offset by higher investment banking income and increased trading account profits.

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