-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, KZMACz5+U6DCDS7zVGlZ0xOPGsZIVGj5h8ztyDLnIKzc2q9jTX872us5CN4fl5fV 1QXGH5uzx7ZAg7QQSQ6s7Q== 0000950168-01-000085.txt : 20010123 0000950168-01-000085.hdr.sgml : 20010123 ACCESSION NUMBER: 0000950168-01-000085 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010116 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010116 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANK OF AMERICA CORP /DE/ CENTRAL INDEX KEY: 0000070858 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 560906609 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-06523 FILM NUMBER: 1508663 BUSINESS ADDRESS: STREET 1: NATIONSBANK CORPORATE CENTER STREET 2: 100 N TRYON ST CITY: CHARLOTTE STATE: NC ZIP: 28255 BUSINESS PHONE: 7043865000 MAIL ADDRESS: STREET 1: NATIONALSBANK CORPORATE CENTER STREET 2: NC1007 19 04 CITY: CHARLOTTE STATE: NC ZIP: 28255 FORMER COMPANY: FORMER CONFORMED NAME: BANKAMERICA CORP/DE/ DATE OF NAME CHANGE: 19981022 FORMER COMPANY: FORMER CONFORMED NAME: NATIONSBANK CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: NCNB CORP DATE OF NAME CHANGE: 19920107 8-K 1 0001.txt REPORT OF JANUARY 2001 As filed with the Securities and Exchange Commission on January 16, 2001 ------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ----------------------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): January 16, 2001 BANK OF AMERICA CORPORATION (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 1-6523 (Commission File Number) 56-0906609 (IRS Employer Identification No.) 100 North Tryon Street Charlotte, North Carolina (Address of principal executive offices) 28255 (Zip Code) (888) 279-3457 (Registrant's telephone number, including area code) ITEM 5. OTHER EVENTS. On January 16, 2001, Bank of America Corporation (the "Registrant") announced financial results for the fourth quarter ended December 31, 2000, reporting earnings of $ 1.39 billion and earnings per common share of $ 0.85. A copy of the press release announcing the Registrant's results for the fourth quarter ended December 31, 2000 is attached hereto as Exhibit 99.1 and incorporated by reference herein. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits. The following exhibits are filed herewith: EXHIBIT NO. DESCRIPTION OF EXHIBIT 99.1 Press Release dated January 16, 2001 with respect to the Registrant's financial results for the fourth quarter ended December 31, 2000 99.2 Script prepared for use on January 16, 2001 by James H. Hance, Jr., Vice Chairman and Chief Financial Officer, discussing financial results for the fourth quarter ended December 31, 2000, and financial and strategic goals for Fiscal Year 2001 (the "Script") ITEM 9. REGULATION FD DISCLOSURE. On January 16, 2001, the Registrant held an investor conference and webcast to discuss financial results for the fourth quarter ended December 31, 2000 as well as financial and strategic goals for 2001. The Script prepared for use by Mr. Hance at this conference is furnished herewith as Exhibits 99.2 and incorporated by reference in Item 9. All information in the Script is presented as of January 16, 2001, and the Registrant does not assume any obligation to update said information in the future. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BANK OF AMERICA CORPORATION By: /s/ Marc D. Oken -------------------------------------------- Marc D. Oken Executive Vice President and Principal Financial Executive Dated: January 16, 2001 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION OF EXHIBIT 99.1 Press Release dated January 16, 2001 with respect to the Registrant's financial results for the fourth quarter ended December 31, 2000 99.2 Script prepared for use on January 16, 2001 by James H. Hance, Jr., Vice Chairman and Chief Financial Officer, discussing financial results for the fourth quarter ended December 31, 2000, and financial and strategic goals for Fiscal Year 2001 (the "Script") EX-99.1 2 0002.txt FINANCIALS (BANK OF AMERICA LOGO) January 16, 2001 EXHIBIT 99.1 Contact: Investors Susan Carr (704-386-8059) or Kevin Stitt (704-386-5667) Media Bob Stickler (704-386-8465) Bank of America Announces Earnings of $7.9 Billion for 2000 CHARLOTTE, January 16, 2001 - Bank of America Corporation today reported fourth quarter earnings of $1.39 billion, or $.85 per share (diluted), in line with the company's estimates last December that higher loan losses and reduced capital markets related business associated with a slowing economy would impact results. A year ago, the company reported net income of $1.90 billion, or $1.10 per share, including a $213 million after-tax charge to cover costs associated with the merger of NationsBank and BankAmerica corporations. Cash-basis earnings - which exclude the amortization of intangibles - were $1.60 billion, or $ .98 per share, in the latest quarter. For the full year, Bank of America's operating earnings were $7.86 billion, or $4.72 per share. A year earlier, the company's operating earnings totaled $8.24 billion, or $4.68 per share. The return on common equity for 2000 was 16.70 percent while the return on average assets was 1.17 percent. In 2000, Bank of America's net income was $7.52 billion, or $4.52 per share, compared to $7.88 billion, or $4.48 per share, in 1999. Results in 2000 and 1999 included after-tax charges associated with growth initiatives and mergers of $346 million and $358 million, respectively. more Page 2 Fourth Quarter Financial Highlights (compared to a year ago) - ------------------------------------------------------------ o Managed loans increased 9 percent to $422 billion. o Deposits grew 5 percent to $358 billion. o Deposit and loan growth more than offset the impact of lower spreads and the cost of share repurchases to produce 5 percent growth in net interest income. o Card fee revenue rose 7 percent. o Investment and Brokerage Service revenues were up 10 percent. o Provision expense exceeded net charge-offs by $135 million in the fourth quarter of 2000. o Results included a gain from the sale of the company's factoring unit. Revenue - ------- Revenue declined 1 percent in the fourth quarter from the previous year, mostly reflecting the impact of declines in the market value of equity investments and increased lease residual charges. Fully taxable-equivalent net interest income increased 5 percent to $4.79 billion, reflecting a 9 percent increase in earning assets, partly offset by continued spread compression and the cost of share repurchases. Despite moderating growth in the fourth quarter due to slowing economic conditions and strategic efforts to reduce portfolio levels, average managed loans were 9 percent above a year ago. Deposits were up 5 percent, in part reflecting initiatives aimed at expanding balances with core relationship customers. The impact of lower estimated auto lease residual values reduced net interest income by $24 million. Noninterest income declined 8 percent to $3.30 billion, as revenue increases in card services, investment and brokerage services and service charges were offset by declines in equity investment gains, mortgage servicing, investment banking and trading revenue. Debit card fees rose 25 percent as marketing efforts paid off in a sharp increase in market penetration. more Page 3 Among the factors offsetting these and other improvements were a $208 million decline in the market value of equity investments and a $57 million increase in auto lease residual writedowns. Trading account profits were down 8 percent while investment banking fees declined by 7 percent from a year ago, due to the slowdown in capital markets. Efficiency - ---------- Noninterest expense increased 2 percent to $4.64 billion, reflecting a 5 percent reduction in personnel expense offset by higher marketing and legal expenses plus costs related to the downsizing of operations in Columbia and Venezuela. The efficiency ratio was 57.4 percent. Credit Quality - -------------- As the company projected late last year, loan losses and nonperforming assets increased significantly in the fourth quarter as the economy slowed. Higher provision expense accounted for the majority of the decline in net income. o The provision for credit losses in the fourth quarter was $1.21 billion compared to $350 million a year earlier. Provision expense exceeded net charge-offs by $135 million. o Net charge-offs were $1.08 billion, or 1.07 percent of loans and leases, up from $501 million, or .55 percent, a year ago. Net charge-offs included a one-time addition of $104 million to conform to new FFIEC standards on consumer loans and a significant writedown of one large credit as announced in the company's 10-Q last November. o Nonperforming assets were $5.5 billion, or 1.39 percent of loans, leases and foreclosed properties at December 31, 2000, compared to $3.2 billion, or .86 percent a year earlier. The increase in nonperforming assets was centered in the commercial domestic portfolio, where nonperforming loans were up $1.7 billion from a year earlier. A $497 million increase in consumer finance nonperforming loans, associated with the growth in that portfolio, also contributed to the rise in problem assets. o The allowance for credit losses totaled $6.8 billion at December 31, 2000, up $10 million from a year ago, and equaled 1.74 percent of loans and leases. more Page 4 Capital Management - ------------------ Total shareholders' equity was $47.6 billion at December 31, 2000, up 7 percent from 12 months earlier. This represented 7.42 percent of period-end assets of $642 billion. The Tier 1 Capital Ratio was 7.50 percent. During the quarter, the company repurchased 18 million shares. Since June 1999, 146 million shares have been repurchased, representing an investment in Bank of America stock of $8.1 billion. Average (diluted) common shares outstanding were 1.639 billion in the fourth quarter, down 5 percent from 1.725 billion a year earlier. Full Year Summary - ----------------- Revenue rose 2 percent over the previous year. Net interest income increased 2 percent to $18.76 billion. o A 9 percent increase in managed loans and higher trading related revenues more than offset spread compression caused in part by a change in mix and the cost of share repurchases. o The deterioration in auto lease residual values created a $107 million increase in auto lease residual charges to net interest income. Noninterest income increased 3 percent to $14.49 billion. o Card fee revenue, investment and brokerage service fees and trading revenue all grew by double digits. o The absence of loan sales and securitizations, which boosted the year-ago results, and the impact of a $278 million increase in auto lease residual charges were the primary factors in reducing other income to $775 million from $1.5 billion. Noninterest expense was virtually unchanged. Deterioration in credit quality in the second half of the year resulted in higher loan losses and provision expense. o Provision expense rose 39 percent to $2.5 billion due to an increase in loan losses and nonperforming assets in the fourth quarter. more Page 5 o Net charge-offs totaled $2.4 billion compared to $2.0 billion in 1999. A sharp increase in the fourth quarter of 2000, driven by a one-time addition of $104 million to conform to new FFIEC standards on consumer loans and a significant writedown of one large credit, more than accounted for the rise. o Nonperforming assets rose 70 percent to $5.5 billion at December 31, 2000. o The reserve for loan losses ended 2000 at $6.8 billion, or 1.74 percent of loans and leases, compared to $6.8 billion, or 1.84 percent a year ago. Consumer and Commercial Banking - ------------------------------- For the full year, Consumer and Commercial Banking earnings declined 2 percent to $4.64 billion. Revenue declined 2 percent while expenses fell 4 percent. The Card businesses, which include consumer, commercial, debit and government cards and merchant processing, all achieved double-digit growth. Total card fee revenue was up 11 percent and purchase volume rose 17 percent. Service charge revenue was up 4 percent in the Banking Regions. A $385 million increase in auto lease residual charges, the impact of divestitures and fewer one-time gains than a year earlier more than offset these positive trends. Personnel expense was lower due to growth and productivity initiatives. Global Corporate and Investment Banking - --------------------------------------- Global Corporate and Investment Banking earnings declined 10 percent to $2.1 billion, reflecting higher loan losses and slower capital markets activity at the end of the year. Revenue increased 9 percent and expenses were up 11 percent. Revenue growth in 2000 was driven by the buildout of the investment banking and trading platforms. Global Capital Raising reported 38 percent revenue growth due to higher investment banking fees and trading revenue. This growth resulted in a steady increase in market shares and rankings. Bank of America ranked in the top ten in all key product areas. The decline in earnings was primarily the result of higher credit costs. more Page 6 Asset Management - ---------------- Asset Management earned $601 million, 18 percent above a year earlier. Revenue rose 7 percent while expenses were up 2 percent. Mutual fund fees grew 30 percent, reflecting an increase in mutual fund assets under management during the year of almost $29 billion to $110 billion. Total assets under management were up $30 billion to $277 billion. Higher expenses reflected the company's investments to expand the number of private banking offices and sales personnel across the asset management businesses. Equity Investments - ------------------ Equity Investments earned $460 million, 39 percent above a year earlier. Revenues rose 26 percent to $864 million, driven by strong gains in strategic investments and alliances as well as in principal investing. Bank of America is the largest bank in the United States. With full-service operations in 21 states and the District of Columbia, it provides financial products and services to almost 40 percent of the households in its retail footprint and two million businesses. The bank also supports business transactions in 190 countries. Its stock (ticker: BAC) is listed on the New York, Pacific and London stock exchanges. Certain shares also are listed on the Tokyo Stock Exchange. NOTE: James H. Hance Jr., vice chairman and chief financial officer, will discuss the results for the fourth quarter and the full year 2000 as well as the outlook for 2001 in a conference call at 9:30 a.m. (EDT) today. The call can be accessed through a webcast available on the Bank of America website at http://www.bankofamerica.com/investor www.bankofamerica.com more Page 7 Forward Looking Statements - -------------------------- This press release contains forward-looking statements with respect to the financial conditions and results of operations of Bank of America, including, without limitation, statements relating to the earnings outlook of the company. These forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) projected business increases following process changes and other investments are lower than expected; (2) competitive pressure among financial services companies increases significantly; (3) costs or difficulties related to the integration of acquisitions are greater than expected; (4) general economic conditions, internationally, nationally or in the states in which the company does business, are less favorable than expected; (5) changes in the interest rate environment reduce interest margins and affect funding sources; (6) changes in market rates and prices may adversely affect the value of financial products; and (7) legislation or regulatory requirements or changes adversely affect the businesses in which the company is engaged; and (8) decisions to downsize, sell or close units or otherwise change the business mix of the company. For further information, please refer to Bank of America's reports filed with the SEC. Bank of America
Three Months Twelve Months Ended December 31 Ended December 31 ---------------------------- -------------------------------- 2000 1999 2000 1999 --------- --------- --------- --------- Financial Summary - ----------------- (In millions, except per share data) Operating net income .............................. $ 1,385 $ 2,115 $ 7,863 $ 8,240 Operating earnings per common share ................................ 0.85 1.24 4.77 4.77 Diluted operating earnings per common share ................................ 0.85 1.23 4.72 4.68 Cash basis earnings (1) ........................... 1,599 2,334 8,727 9,128 Cash basis earnings per common share .................................... 0.98 1.37 5.30 5.28 Cash basis diluted earnings per common share ................................ 0.98 1.35 5.24 5.19 Dividends per common share ........................ .56 .50 2.06 1.85 Closing market price per common share ................................ 45.88 50.19 45.88 50.19 Average common shares issued and outstanding ................................. 1,623.721 1,701.092 1,646.398 1,726.006 Average diluted common shares issued and outstanding .......................... 1,638.863 1,725.187 1,664.929 1,760.058 Summary Income Statement (Operating Basis) - ------------------------------------------ (Taxable-equivalent basis in millions) Net interest income ............................... $ 4,788 $ 4,541 $ 18,764 $ 18,452 Provision for credit losses ....................... (1,210) (350) (2,535) (1,820) Gains on sales of securities ...................... 2 14 25 240 Noninterest income ................................ 3,298 3,596 14,489 14,069 Other noninterest expense ......................... (4,637) (4,550) (18,083) (17,986) --------- --------- --------- --------- Income before income taxes ........................ 2,241 3,251 12,660 12,955 Income taxes - including taxable- equivalent basis adjustment ...................... 856 1,136 4,797 4,715 --------- --------- --------- --------- Operating net income .............................. $ 1,385 $ 2,115 $ 7,863 $ 8,240 ========= ========= ========= ========= Summary Balance Sheet - --------------------- (Average balances in billions) Loans and leases .................................. $ 399.549 $ 364.210 $ 392.622 $ 362.783 Managed loans and leases(2) ....................... 422.171 387.898 418.597 382.445 Securities ........................................ 79.501 86.442 84.211 80.127 Earning assets .................................... 590.728 543.564 583.467 531.511 Total assets ...................................... 677.458 630.743 671.573 616.838 Deposits .......................................... 357.554 341.913 353.294 341.748 Shareholders' equity .............................. 47.639 46.792 47.132 46.601 Common shareholders' equity ....................... 47.565 46.714 47.057 46.527 Performance Indices (Operating Basis) - ------------------------------------- Return on average common shareholders' equity ............................. 11.57% 17.95% 16.70% 17.70% Return on average tangible common shareholders' equity ...................... 18.54 28.38 26.06 28.46 Return on average assets .......................... 0.81 1.33 1.17 1.34 Return on average tangible assets ........................................... 0.96 1.50 1.33 1.52 Net interest yield ................................ 3.23 3.32 3.22 3.47 Efficiency ratio .................................. 57.35 55.91 54.38 55.30 Cash basis efficiency ratio ....................... 54.70 53.22 51.78 52.57 Shareholder Value Added (SVA) ..................... $ 164 $ 921 $ 3,081 $ 3,544 Net charge-offs (in millions) ..................... 1,075 501 2,400 2,000 % of average loans and leases .................... 1.07% .55% .61% .55% Managed bankcard net charge-offs as a % of average managed bankcard receivables ............................. 4.33 5.29 4.66 5.57 Reported Results (Including Merger and Restructuring Charges) - ------------------------------------------------------------- (In millions, except per share data) Net income ........................................ $ 1,385 $ 1,902 $ 7,517 $ 7,882 Earnings per common share ........................ 0.85 1.12 4.56 4.56 Diluted earnings per common share ................................ 0.85 1.10 4.52 4.48 Return on average common shareholders' equity ............................. 11.57% 16.14% 15.96% 16.93%
(1) Cash basis earnings equals operating net income excluding amortization of intangibles. (2) Prior periods have been restated for comparability (e.g. acquisitions, divestitures and securitizations). Bank of America - Continued
December 31 ------------------------------------ 2000 1999 ------------------------------------ Balance Sheet highlights - ------------------------ (In billions, except per share data) Loans and leases ........................ $ 392.193 $ 370.662 Securities .............................. 65.838 83.069 Earning assets .......................... 549.736 544.940 Total assets ............................ 642.191 632.574 Deposits ................................ 364.244 347.273 Shareholders' equity .................... 47.628 44.432 Common shareholders' equity ............. 47.556 44.355 Per share .............................. 29.47 26.44 Total equity to assets ratio (period-end) 7.42% 7.02% Risk-based capital ratios: Tier 1 ................................. 7.50 7.35 Total .................................. 11.04 10.88 Leverage ratio .......................... 6.12 6.26 Period-end common shares issued and outstanding (in millions) .......... 1,613.632 1,677.273 Allowance for credit losses ............. $ 6.838 $ 6.828 Allowance for credit losses as a % of loans and leases ............. 1.74% 1.84% Allowance for credit losses as a % of nonperforming loans .......... 131.30 224.48 Nonperforming loans ..................... $ 5.208 $ 3.042 Nonperforming assets .................... 5.457 3.205 Nonperforming assets as a % of: Total assets ........................... .85% .51% Loans, leases and foreclosed properties 1.39 .86 OTHER DATA - ---------- Full-time equivalent employees .......... 142,724 155,906 Number of banking centers ............... 4,390 4,524 Number of ATM's ......................... 13,963 14,019
BUSINESS SEGMENT RESULTS - Three Months Ended December 31, 2000 (Dollars in millions)
Total Operating Avg Loans Return On Revenue Net Income and Leases Equity ------- ---------- ---------- ------ Consumer and Commercial Banking .. $ 5,293 $ 1,172 $263,222 19.3% Asset Management Group 585 129 23,371 28.9 Global Corporate and Investment Banking .. 2,022 164 112,597 4.7 Equity Investments ... (89) (73) 462 (13.4) Other ................ 275 (7) n/m n/m
n/m = not meaningful
Bank of America Consolidated Financial Highlights (Excludes Merger and Restructuring Charges) - ------------------------------------------------------------------------------------------------------------------------------ (Dollars in millions, except per share information; shares in millions) Fourth Third Second First Fourth Quarter Quarter Quarter Quarter Quarter 2000 2000 2000 2000 1999 -------------------------------------------------------------------- Operating net income $ 1,385 $ 2,175 $ 2,063 $ 2,240 $ 2,115 Cash basis earnings 1,599 2,390 2,281 2,457 2,334 Operating earnings per common share 0.85 1.33 1.25 1.34 1.24 Diluted operating earnings per common share 0.85 1.31 1.23 1.33 1.23 Cash basis earnings per common share 0.98 1.46 1.38 1.47 1.37 Cash basis diluted earnings per common share 0.98 1.44 1.36 1.46 1.35 Dividends per common share 0.56 0.50 0.50 0.50 0.50 Average common shares issued and outstanding 1,623.721 1,639.392 1,653.495 1,669.311 1,701.092 Average diluted common shares issued and outstanding 1,638.863 1,661.031 1,676.089 1,688.318 1,725.187 Period-end common shares issued and outstanding 1,613.632 1,630.824 1,645.701 1,657.754 1,677.273 Period-end managed loans and leases* $ 414,038 $ 412,308 $ 411,489 $ 395,038 $ 386,830 Average managed loans and leases* 422,171 422,364 412,086 400,034 387,898 *Prior periods have been restated for comparison (e.g. acquisitions, divestitures and securitizations) Performance ratios (Operating basis): Return on average assets 0.81 % 1.26 % 1.23 % 1.38 % 1.33 % Return on average tangible assets 0.96 1.42 1.39 1.55 1.50 Return on average common shareholders' equity 11.57 18.15 17.63 19.59 17.95 Return on average tangible common shareholders' equity 18.54 27.81 27.51 30.83 28.38 Efficiency ratio 57.35 53.01 53.77 53.49 55.91 Cash basis efficiency ratio 54.70 50.43 51.12 50.98 53.22 Net interest yield 3.23 3.12 3.24 3.27 3.32 Shareholder value added (SVA) $ 164 $ 953 $ 878 $ 1,086 $ 921 Book value per common share 29.47 28.69 27.82 27.28 26.44 Market price per share of common stock: High for the period 54.7500 57.6250 61.0000 55.1875 67.5000 Low for the period 36.3125 43.6250 42.9844 42.3125 47.6250 Closing price 45.8750 52.3750 43.0000 52.4375 50.1875 Other data: Number of banking centers 4,390 4,419 4,450 4,502 4,524 Number of ATM's 13,963 13,878 13,944 13,954 14,019 Full-time equivalent employees 142,724 146,346 150,854 152,948 155,906
(1) Cash basis earnings equals operating net income excluding amortization of intangibles. Page 1
Bank of America Corporation Consolidated Statement of Income - ----------------------------------------------------------------------------------------------------------------------------------- (Dollars in millions, except per share information) Fourth Third Second First Fourth Quarter Quarter Quarter Quarter Quarter 2000 2000 2000 2000 1999 ----------------------------------------------------------- Interest income Interest and fees on loan and leases $ 8,250 $ 8,305 $ 7,923 $ 7,394 $ 7,063 Interest and dividends on securities 1,184 1,259 1,271 1,331 1,300 Federal funds sold and securities purchased under agreements to resell 551 633 595 575 458 Trading account assets 751 744 694 536 535 Other interest income 434 324 254 250 266 ----------------------------------------------------------- Total interest income 11,170 11,265 10,737 10,086 9,622 ----------------------------------------------------------- Interest expense Deposits 2,927 2,868 2,720 2,495 2,324 Short-term borrowings 1,942 2,223 1,990 1,802 1,638 Trading account liabilities 285 237 189 181 190 Long-term debt 1,322 1,344 1,207 1,084 995 ----------------------------------------------------------- Total interest expense 6,476 6,672 6,106 5,562 5,147 ----------------------------------------------------------- Net interest income 4,694 4,593 4,631 4,524 4,475 Provision for credit losses 1,210 435 470 420 350 ----------------------------------------------------------- Net interest income after provision for credit losses 3,484 4,158 4,161 4,104 4,125 Gains on sales of securities 2 11 6 6 14 Noninterest income Consumer service charges 706 684 646 618 669 Corporate service charges 489 489 479 489 477 ----------------------------------------------------------- Total service charges 1,195 1,173 1,125 1,107 1,146 ----------------------------------------------------------- Consumer investment and brokerage services 358 357 387 364 334 Corporate investment and brokerage services 123 114 105 121 103 ----------------------------------------------------------- Total investment and brokerage services 481 471 492 485 437 ----------------------------------------------------------- Mortgage servicing income 152 144 136 128 210 Investment banking income 366 376 373 397 394 Equity investment gains (65) 422 134 563 205 Card income 595 594 556 484 558 Trading account profits 263 372 471 724 287 Other income 311 93 213 158 359 ----------------------------------------------------------- Total noninterest income 3,298 3,645 3,500 4,046 3,596 ----------------------------------------------------------- Other noninterest expense Personnel 2,257 2,298 2,311 2,534 2,378 Occupancy 434 419 411 418 419 Equipment 291 285 296 301 336 Marketing 223 147 132 119 98 Professional fees 154 100 93 105 178 Amortization of intangibles 214 215 218 217 219 Data processing 172 167 169 159 195 Telecommunications 136 127 133 131 142 Other general operating 585 509 505 515 456 General administrative 171 143 145 124 129 ----------------------------------------------------------- Total other noninterest expense 4,637 4,410 4,413 4,623 4,550 ----------------------------------------------------------- Operating income before income taxes 2,147 3,404 3,254 3,533 3,185 Income tax expense 762 1,229 1,191 1,293 1,070 ----------------------------------------------------------- Operating net income $ 1,385 $ 2,175 $ 2,063 $ 2,240 $ 2,115 ----------------------------------------------------------- Operating income available to common shareholders $ 1,383 $ 2,174 $ 2,061 $ 2,239 $ 2,114 ----------------------------------------------------------- Per share information Operating earnings per common share $.85 $1.33 $1.25 $1.34 $1.24 ----------------------------------------------------------- Diluted operating earnings per common share $.85 $1.31 $1.23 $1.33 $1.23 ----------------------------------------------------------- Dividends per common share $ .56 $ .50 $ .50 $ .50 $ .50 ----------------------------------------------------------- Average common shares issued and outstanding (in thousands) 1,623,721 1,639,392 1,653,495 1,669,311 1,701,092 ----------------------------------------------------------- Average diluted common shares issued and outstanding (in thousands) 1,638,863 1,661,031 1,676,089 1,688,318 1,725,187 ----------------------------------------------------------- As reported (includes merger and restructuring charges, net of tax): Net income $ 1,385 $ 1,829 $ 2,063 $ 2,240 $ 1,902 Net income available to common shareholders 1,383 1,828 2,061 2,239 1,901 Earnings per common share 0.85 1.11 1.25 1.34 1.12 Diluted earnings per common share 0.85 1.10 1.23 1.33 1.10
Certain prior period amounts have been reclassified to conform to current period classifications. Page 2
Bank of America Corporation Consolidated Balance Sheet - ------------------------------------------------------------------------------------------------------------------------------------ December 31 September 30 December 31 (Dollars in millions) 2000 2000 1999 - ------------------------------------------------------------------------------------------------------------------------------------ Assets Cash and cash equivalents $ 27,513 $ 24,395 $ 26,989 Time deposits placed and other short-term investments 5,448 5,467 4,838 Federal funds sold and securities purchased under agreements to resell 28,055 33,408 37,928 Trading account assets 43,041 47,198 38,460 Derivative-dealer assets 15,534 15,398 16,055 Securities: Available-for-sale 64,651 79,747 81,647 Held-to-maturity 1,187 1,356 1,422 - ----------------------------------------------------------------------------------------------------------------------------------- Total securities 65,838 81,103 83,069 - ----------------------------------------------------------------------------------------------------------------------------------- Loans and leases 392,193 402,592 370,662 Allowance for credit losses (6,838) (6,739) (6,828) - ----------------------------------------------------------------------------------------------------------------------------------- Loans and leases, net of allowance for credit losses 385,355 395,853 363,834 - ----------------------------------------------------------------------------------------------------------------------------------- Premises and equipment, net 6,433 6,450 6,713 Customers' acceptance liability 1,972 2,277 1,869 Interest receivable 4,432 4,620 3,777 Mortgage servicing rights 3,762 4,029 4,093 Goodwill 11,643 11,803 12,262 Core deposit and other intangibles 1,499 1,554 1,730 Other assets 41,666 38,170 30,957 - ----------------------------------------------------------------------------------------------------------------------------------- Total assets $ 642,191 $ 671,725 $ 632,574 - ----------------------------------------------------------------------------------------------------------------------------------- Liabilities Deposits in domestic offices: Noninterest-bearing $ 98,722 $ 92,050 $ 93,476 Interest-bearing 211,978 207,801 207,048 Deposits in foreign offices: Noninterest-bearing 1,923 1,515 1,993 Interest-bearing 51,621 52,622 44,756 - ----------------------------------------------------------------------------------------------------------------------------------- Total deposits 364,244 353,988 347,273 - ----------------------------------------------------------------------------------------------------------------------------------- Federal funds purchased and securities sold under agreements to repurchase 49,411 72,896 74,561 Trading account liabilities 20,947 25,354 20,958 Derivative-dealer liabilities 22,402 18,877 16,200 Commercial paper 6,955 10,330 7,331 Other short-term borrowings 35,243 45,271 40,340 Acceptances outstanding 1,972 2,277 1,869 Accrued expenses and other liabilites 20,887 21,506 19,169 Long-term debt 67,547 69,412 55,486 Trust preferred securities 4,955 4,955 4,955 - ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities 594,563 624,866 588,142 - ----------------------------------------------------------------------------------------------------------------------------------- Shareholders' equity Preferred stock, $0.01 par value; authorized - 100,000,000 shares; issued and outstanding 1,692,172; 1,732,349 and 1,797,702 shares 72 74 77 Common stock, $0.01 par value; authorized - 5,000,000,000 shares; issued and outstanding 1,613,632,036; 1,630,823,577 and 1,677,273,267 shares 8,613 9,397 11,671 Retained earnings 39,815 39,338 35,681 Accumulated other comprehensive losses (746) (1,808) (2,658) Other (126) (142) (339) - ----------------------------------------------------------------------------------------------------------------------------------- Total shareholders' equity 47,628 46,859 44,432 - ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities and shareholders' equity $ 642,191 $ 671,725 $ 632,574 - -----------------------------------------------------------------------------------------------------------------------------------
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Bank of America Corporation Quarterly Taxable-Equivalent Data - ------------------------------------------------------------------------------------------------------------------------------------ (Dollars in millions) Fourth Quarter 2000 Third Quarter 2000 --------------------------------------------------------------------- Interest Interest Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate ----------- -------------------- ----------- ------------ --------- Earning assets: Time deposits placed and other short-term investments $ 5,663 $ 99 6.96 % $ 4,700 $ 83 6.97 % Federal funds sold and securities purchased under agreements to resell 37,936 551 5.79 40,763 633 6.20 Trading account assets 53,251 758 5.68 53,793 749 5.55 Securities: Available-for-sale (1) 78,242 1,193 6.09 82,333 1,254 6.08 Held-to-maturity 1,259 19 6.12 1,395 30 8.59 --------------------------------------------------------------------- Total securities 79,501 1,212 6.09 83,728 1,284 6.12 --------------------------------------------------------------------- Loans and leases (2): Commercial - domestic 147,336 3,057 8.26 151,903 3,173 8.31 Commercial - foreign 30,408 563 7.36 29,845 555 7.39 Commercial real estate - domestic 27,220 622 9.09 26,113 597 9.09 Commercial real estate - foreign 264 6 8.44 235 5 8.30 --------------------------------------------------------------------- Total commercial 205,228 4,248 8.23 208,096 4,330 8.28 --------------------------------------------------------------------- Residential mortgage 92,679 1,733 7.47 94,380 1,759 7.45 Home equity lines 21,117 483 9.11 20,185 466 9.18 Direct/Indirect consumer 40,390 843 8.30 41,905 848 8.06 Consumer finance 25,592 570 8.91 25,049 559 8.93 Bankcard 12,295 384 12.43 10,958 344 12.49 Foreign consumer 2,248 48 8.49 2,190 48 8.79 --------------------------------------------------------------------- Total consumer 194,321 4,061 8.34 194,667 4,024 8.25 --------------------------------------------------------------------- Total loans and leases 399,549 8,309 8.28 402,763 8,354 8.26 --------------------------------------------------------------------- Other earning assets 14,828 335 9.00 11,501 241 8.39 --------------------------------------------------------------------- Total earning assets (3) 590,728 11,264 7.60 597,248 11,344 7.57 --------------------------------------------------------------------- Cash and cash equivalents 23,458 24,191 Other assets, less allowance for credit losses 63,272 63,578 --------------------------------------------------------------------- Total assets $677,458 $685,017 --------------------------------------------------------------------- Interest-bearing liabilities: Domestic interest-bearing deposits: Savings $22,454 80 1.42 $23,195 78 1.33 NOW and money market deposit accounts 101,376 788 3.09 99,710 740 2.96 Consumer CDs and IRAs 78,298 1,108 5.63 77,864 1,083 5.53 Negotiable CDs, public funds and other time deposits 7,570 127 6.68 8,598 140 6.46 --------------------------------------------------------------------- Total domestic interest-bearing deposits 209,698 2,103 3.99 209,367 2,041 3.88 --------------------------------------------------------------------- Foreign interest-bearing deposits (4): Banks located in foreign countries 26,223 424 6.43 18,845 286 6.03 Governments and official institutions 5,884 61 4.14 11,182 177 6.30 Time, savings, and other 24,064 339 5.62 25,972 364 5.58 --------------------------------------------------------------------- Total foreign interest-bearing deposits 56,171 824 5.84 55,999 827 5.87 --------------------------------------------------------------------- Total interest-bearing deposits 265,869 2,927 4.38 265,366 2,868 4.30 --------------------------------------------------------------------- Federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings 122,680 1,942 6.30 136,007 2,223 6.51 Trading account liabilities 27,548 285 4.13 24,233 237 3.88 Long-term debt (5) 73,041 1,322 7.24 74,022 1,344 7.26 --------------------------------------------------------------------- Total interest-bearing liabilities (6) 489,138 6,476 5.27 499,628 6,672 5.32 --------------------------------------------------------------------- Noninterest-bearing sources: Noninterest-bearing deposits 91,685 91,368 Other liabilities 48,996 46,286 Shareholders' equity 47,639 47,735 -------------------------------------------------------------------- Total liabilities and shareholders' equity $677,458 $685,017 --------------------------------------------------------------------- Net interest spread 2.33 2.25 Impact of noninterest-bearing sources .90 .87 --------------------------------------------------------------------- Net interest income/yield on earning assets $4,788 3.23 % $4,672 3.12 % ---------------------------------------------------------------------
(1) The average balance and yield on available-for-sale securities are based on the average of historical amortized cost balances. (2) Nonperforming loans are included in the average loan balances. Income on such nonperforming loans is recognized on a cash basis. (3) Interest income includes taxable-equivalent basis adjustments of $94, $79, $78 and $71 in the fourth, third, second and first quarters of 2000 and $66 in the fourth quarter of 1999, respectively. Interest income also includes the impact of risk management interest rate contracts, which (decreased) increased interest income on the underlying assets $(31), $(13), $(11) and $7 in the fourth, third, second and first quarters of 2000 and $57 in the fourth quarter of 1999, respectively. (4) Primarily consists of time deposits in denominations of $100,000 or more. (5) Long-term debt includes trust preferred securities. (6) Interest expense includes the impact of risk management interest rate contracts, which (increased) decreased interest expense on the underlying liabilities $(7), $(16), $(5) and $(8) in the fourth, third, second and first quarters of 2000 and $(2) in the fourth quarter of 1999, respectively. Page 4
- --------------------------------------------------------------------------------------------------------------------------------- Second Quarter 2000 First Quarter 2000 Fourth Quarter 1999 - --------------------------------------------------------------------------------------------------------------------------------- Interest Interest Interest Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate Balance Expense Rate - ---------------- ------------- ---------- --------------- ------------ ---------- ---------------- ------------ --------- $ 4,578 $ 79 7.02 % $ 4,504 $ 75 6.65 % $ 4,512 $ 73 6.33 % 43,983 595 5.43 45,459 575 5.07 39,700 458 4.60 48,874 702 5.77 39,733 542 5.47 38,453 544 5.63 84,054 1,270 6.05 86,878 1,332 6.15 85,009 1,301 6.10 1,406 27 7.68 1,333 24 7.19 1,433 25 7.25 - ---------------------------------------------------------------------------------------------------------------------------------- 85,460 1,297 6.08 88,211 1,356 6.16 86,442 1,326 6.12 - ---------------------------------------------------------------------------------------------------------------------------------- 148,034 3,023 8.21 145,362 2,824 7.81 140,674 2,707 7.64 29,068 515 7.12 27,927 486 6.99 27,430 453 6.56 25,497 563 8.88 24,664 517 8.43 24,345 506 8.23 376 8 9.15 344 8 9.29 306 6 8.96 - ---------------------------------------------------------------------------------------------------------------------------------- 202,975 4,109 8.14 198,297 3,835 7.78 192,755 3,672 7.56 - ---------------------------------------------------------------------------------------------------------------------------------- 91,825 1,696 7.40 85,427 1,566 7.34 79,783 1,450 7.26 19,067 422 8.91 17,573 377 8.62 16,882 345 8.12 41,757 867 8.36 41,858 887 8.52 42,442 888 8.30 24,123 545 9.03 22,798 486 8.53 21,340 440 8.18 9,429 279 11.87 8,404 234 11.22 8,578 245 11.32 2,228 48 8.81 2,227 50 9.00 2,430 54 8.77 - ---------------------------------------------------------------------------------------------------------------------------------- 188,429 3,857 8.21 178,287 3,600 8.10 171,455 3,422 7.94 - ---------------------------------------------------------------------------------------------------------------------------------- 391,404 7,966 8.17 376,584 7,435 7.93 364,210 7,094 7.74 - ---------------------------------------------------------------------------------------------------------------------------------- 8,191 176 8.53 8,679 174 8.11 10,247 193 7.51 - ---------------------------------------------------------------------------------------------------------------------------------- 582,490 10,815 7.45 563,170 10,157 7.24 543,564 9,688 7.09 - ---------------------------------------------------------------------------------------------------------------------------------- 25,605 25,830 25,467 64,493 62,019 61,712 - ---------------------------------------------------------------------------------------------------------------------------------- $672,588 $651,019 $630,743 - ---------------------------------------------------------------------------------------------------------------------------------- $23,936 78 1.32 $24,237 78 1.29 $25,082 80 1.27 100,186 734 2.94 98,424 679 2.78 97,481 639 2.60 77,384 1,034 5.38 76,074 983 5.20 74,653 932 4.95 7,361 111 6.09 6,966 103 5.93 6,825 98 5.73 - ---------------------------------------------------------------------------------------------------------------------------------- 208,867 1,957 3.77 205,701 1,843 3.60 204,041 1,749 3.40 - ---------------------------------------------------------------------------------------------------------------------------------- 15,823 232 5.92 14,180 188 5.33 14,305 178 4.93 9,885 151 6.12 8,745 124 5.72 7,121 99 5.53 27,697 380 5.51 26,382 340 5.17 24,993 298 4.72 - ---------------------------------------------------------------------------------------------------------------------------------- 53,405 763 5.74 49,307 652 5.31 46,419 575 4.91 - ---------------------------------------------------------------------------------------------------------------------------------- 262,272 2,720 4.17 255,008 2,495 3.93 250,460 2,324 3.68 - ---------------------------------------------------------------------------------------------------------------------------------- 135,817 1,990 5.89 131,517 1,802 5.51 120,858 1,638 5.38 20,532 189 3.70 23,013 181 3.16 19,223 190 3.92 69,779 1,207 6.92 64,256 1,084 6.75 59,972 995 6.63 - ---------------------------------------------------------------------------------------------------------------------------------- 488,400 6,106 5.02 473,794 5,562 4.72 450,513 5,147 4.54 - ---------------------------------------------------------------------------------------------------------------------------------- 91,154 90,366 91,453 45,922 40,829 41,985 47,112 46,030 46,792 - ---------------------------------------------------------------------------------------------------------------------------------- $672,588 $651,019 $630,743 - ---------------------------------------------------------------------------------------------------------------------------------- 2.43 2.52 2.55 .81 .75 .77 - ---------------------------------------------------------------------------------------------------------------------------------- $4,709 3.24 % $4,595 3.27 % $4,541 3.32 % - ----------------------------------------------------------------------------------------------------------------------------------
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Bank of America Credit Quality - Nonperforming Assets - ----------------------------------------------------------------------------------------------------------------------------------- (Dollars in millions) December 31 September 30 June 30 March 31 December 31 2000 2000 2000 2000 1999 --------------- --------------- ----------- ---------------------------- Nonperforming loans: Commercial - domestic $2,777 $1,950 $1,535 $1,301 $1,163 Commercial - foreign 486 564 588 500 486 Commercial real estate - domestic 236 136 164 208 191 Commercial real estate - foreign 3 1 2 3 3 ------------- --------------- --------- -------------- ------------ Total Commercial Product 3,502 2,651 2,289 2,012 1,843 ------------- --------------- --------- -------------- ------------ Residential mortgage 551 502 505 483 529 Home equity lines 32 47 44 45 46 Direct/Indirect consumer 19 19 20 18 19 Consumer finance 1,095 951 826 737 598 Foreign consumer 9 7 7 7 7 ------------- --------------- --------- -------------- ------------ Total Consumer Product 1,706 1,526 1,402 1,290 1,199 ------------- --------------- --------- -------------- ------------ Total nonperforming loans 5,208(1) 4,177(1) 3,691 3,302 3,042 Foreclosed properties 249 226 195 179 163 ------------- --------------- --------- -------------- ------------ Total nonperforming assets $5,457 $4,403 $3,886 $3,481 $3,205 ------------- --------------- --------- -------------- ------------ Loans past due 90 days or more and still accruing $495 $503 $482 $461 $521 Nonperforming assets as a percentage of: Total assets .85 % .65 % .57 % .53 % .51 % Loans, leases and foreclosed properties 1.39 1.09 .97 .91 .86 - ---------------------------------------------------------------------------------------------------------------------------------- Total nonperforming assets by business segment: Consumer and Commercial Banking $2,744 $2,370 $2,176 $1,994 $1,823 Asset Management Group 166 36 42 18 33 Global Corporate and Investment Banking 2,526 1,983 1,655 1,455 1,336 Equity Investments 20 12 12 12 8 Corporate Other 1 2 1 2 5 ------------- --------------- --------- -------------- ------------ Total nonperforming assets $5,457 $4,403 $3,886 $3,481 $3,205 ------------- --------------- --------- -------------- ------------
(1) Balance does not include $124 million and $95 million of loans held for sale included in Other assets at December 31, 2000 and September 30, 2000, respectively, which would have been classified as nonperforming had they been included in Loans. Page 6
Bank of America Credit Quality - Loan Losses - --------------------------------------------------------------------------------------------------------------------------------- (Dollars in millions) Fourth Third Second First Fourth Quarter Quarter Quarter Quarter Quarter 2000 2000 2000 2000 1999 ------------ ------------ ------------- ----------- ------------ Net charge-offs: Commercial - domestic $ 704 $ 185 $ 226 $ 172 $ 191 Commercial - foreign 34 23 24 5 22 Commercial real estate - domestic 3 (2) 6 6 1 Commercial real estate - foreign - - - (2) - Total Commercial 741 206 256 181 214 Residential mortgage 13 6 4 4 6 Home equity lines 12 2 3 3 4 Bankcard* 101 79 77 81 94 Direct/Indirect consumer 111 61 61 91 110 Consumer finance 82 68 59 57 72 Other consumer domestic 14 12 10 2 - Foreign consumer 1 1 - 1 1 ------------ ------------ ------------- ----------- ------------ Total Consumer 334 229 214 239 287 ------------ ------------ ------------- ----------- ------------ Total $ 1,075 $ 435 $ 470 $ 420 $ 501 ------------ ------------ ------------- ----------- ------------ Loss ratios: Commercial - domestic 1.90 % .48 % .62 % .47 % .54 % Commercial - foreign .45 .30 .33 .08 .32 Commercial real estate - domestic - - .09 .10 .02 Commercial real estate - foreign .05 .21 .16 - .44 Total Commercial 1.44 .39 .51 .37 .44 Residential mortgage .05 .03 .02 .02 .03 Home equity lines .24 .04 .05 .07 .10 Bankcard** 3.25 2.89 3.30 3.86 4.34 Direct/Indirect consumer 1.10 .57 .58 .88 1.02 Consumer finance 1.27 1.08 .97 1.01 1.33 Other consumer domestic - - - - - Foreign consumer .18 .20 .09 .12 .25 ------------ ------------ ------------- ----------- ------------ Total Consumer .69 .47 .46 .54 .66 Total 1.07 .43 .48 .45 .55 Loss ratios by business segment: Consumer and Commercial Banking .81 % .45 % .48 % .52 % .78 % Asset Management Group .64 n/m n/m n/m .22 Global Corporate and Investment Banking 1.78 .48 .62 .35 .39 Equity Investments 1.14 n/m n/m 1.41 4.45 Allowance for credit losses ($6,838) ($6,739) ($6,815) ($6,827) ($6,828) Allowance for credit losses as a percentage of loans and leases 1.74 % 1.67 % 1.70 % 1.79 % 1.84 % - -------------------------------------------------------------------------------------------------------------------------------- * Managed Bankcard receivable net charge-offs $ 234 $ 216 $ 237 $ 257 $ 257 ** Managed Bankcard portfolio loss ratios 4.33 % 4.15 % 4.84 % 5.43 % 5.29 % (1)Average managed Bankcard receivables $ 21,461 $ 20,681 $ 19,677 $ 19,051 $ 18,601
(1) Prior periods have been restated for comparison (e.g. acquisitions, divestitures and securitizations) Page 7
Bank of America Capital - ---------------------------------------------------------------------------------------------------------------------------- (Dollars in millions) Fourth Third Second First Fourth Quarter Quarter Quarter Quarter Quarter 2000 2000 2000 2000 1999 ------------ ---------- ----------- ----------- ---------- Beginning total shareholders' equity $46,859 $45,861 $45,299 $44,432 $45,889 Net income 1,385 1,829 2,063 2,240 1,902 Dividends (909) (821) (825) (833) (852) Common stock issued 59 98 117 25 154 Common stock repurchased (812) (821) (712) (911) (1,954) Change in FAS 115 adjustment-net unrealized gains (losses) 1,058 733 (47) 166 (726) Change in preferred equity (2) (1) (2) - (1) Foreign currency translation adjustment and other (10) (19) (32) 180 20 ------------ ---------- ----------- ----------- ---------- Ending total shareholders' equity $47,628 $46,859 $45,861 $45,299 $44,432 ------------ ---------- ----------- ----------- ---------- Preferred equity (72) (74) (75) (77) (77) ------------ ---------- ----------- ----------- ---------- Ending common equity $47,556 $46,785 $45,786 $45,222 $44,355 ------------ ---------- ----------- ----------- ---------- FAS 115 adjustment - end of period ($560) ($1,618) ($2,351) ($2,304) ($2,470) Total equity as a percentage of total assets 7.42 % 6.98 % 6.75 % 6.90 % 7.02 % Risk-based capital ratios: Tier 1 capital $40,667 $40,696 $40,257 $39,355 $38,651 Tier 1 capital ratio 7.50 % 7.32 % 7.40 % 7.42 % 7.35 % Total capital $59,826 $60,063 $60,027 $58,376 $57,192 Total capital ratio 11.04 % 10.80 % 11.03 % 11.00 % 10.88 % Leverage ratio 6.12 6.06 6.11 6.17 6.26 Risk-weighted assets, net $542,169 $556,146 $543,987 $530,514 $525,625
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Bank of America Corporation Consumer and Commercial Banking Segment - ------------------------------------------------------------------------------------------------------------------------------ Consumer and Commercial Banking Segment Results - ---------------------------------------------------------------------------------------------------------------------------- Quarterly Year-to-Date -------------------------- --------------------------- Key Measures (in millions) 4Q00 3Q00 2000 1999 - --------------------------- -------- -------- -------- -------- Total Revenue $5,293 $5,142 $20,621 $21,079 Net Income 1,172 1,179 4,643 4,756 Cash Basis Earnings (1) 1,337 1,344 5,311 5,450 Shareholder Value Added 610 617 2,417 2,593 Average Equity to Average Assets 7.61 % 7.61 % 7.77 % 8.26 % Return on Average Equity 19.3 19.4 19.2 20.0 Return on Tangible Equity (1) 27.4 27.5 27.4 29.1 Efficiency Ratio 54.8 56.3 55.8 57.0 Cash Basis Efficiency Ratio (1) 51.7 53.1 52.6 53.7 Selected Average Balance Sheet Components (in millions) - --------------------------------- Total Loans and Leases $263,222 $265,267 $258,848 $235,966 Total Deposits 256,163 254,983 255,153 251,580 Total Earning Assets 288,982 290,065 283,030 261,171 Consumer and Commercial Banking Sub-Segment Results - --------------------------------------------------------------------------------------------------------------------------- Quarterly Year-to-Date -------------------------- --------------------------- Key Measures (in millions) 4Q00 3Q00 2000 1999 - --------------------------- -------- -------- -------- -------- Banking Regions - --------------- Total Revenue $3,114 $3,068 $12,040 $11,852 Shareholder Value Added 486 488 1,739 1,488 Cash Basis Earnings (1) 822 825 3,095 2,898 Cash Basis Efficiency Ratio (1) 56.2 % 56.1 % 57.8 % 61.5 % Consumer Products - ----------------- Total Revenue $1,440 $1,303 $5,555 $6,193 Shareholder Value Added 123 44 434 681 Cash Basis Earnings (1) 383 305 1,456 1,628 Cash Basis Efficiency Ratio (1) 44.2 % 47.8 % 44.0 % 42.8 % Commercial Banking - ------------------ Total Revenue $739 $771 $3,026 $3,034 Shareholder Value Added 1 85 244 424 Cash Basis Earnings (1) 132 214 760 924 Cash Basis Efficiency Ratio (1) 47.0 % 50.1 % 47.8 % 45.9 %
(1) Cash basis calculations exclude goodwill and other intangible assets and their related amortization expense. Page 9
Bank of America Corporation Global Corporate and Investment Banking Segment - ----------------------------------------------------------------------------------------------------------------------------------- Global Corporate and Investment Banking Segment Results - ----------------------------------------------------------------------------------------------------------------------------------- Quarterly Year-to-Date ---------------------------- -------------------------- Key Measures (in millions) 4Q00 3Q00 2000 1999 - --------------------------- -------- -------- -------- -------- Total Revenue $2,022 $2,189 $8,965 $8,242 Net Income 164 592 2,052 2,292 Cash Basis Earnings (1) 204 633 2,213 2,450 Shareholder Value Added (213) 203 556 848 Average Equity to Average Assets 5.57 % 5.65 % 5.64 % 6.14 % Return on Average Equity 4.7 16.5 14.9 17.2 Return on Tangible Equity (1) 6.5 19.5 17.7 20.4 Efficiency Ratio 66.8 54.4 57.1 55.9 Cash Basis Efficiency Ratio (1) 64.8 52.5 55.3 54.0 Selected Average Balance Sheet Components (in millions) - --------------------------------- Total Loans and Leases $112,597 $114,580 $111,323 $108,246 Total Deposits 69,909 73,550 69,980 65,057 Total Earning Assets 210,820 213,735 206,382 183,020 Global Corporate and Investment Banking Sub-Segment Results - ------------------------------------------------------------------------------------------------------------------------------------ Quarterly Year-to-Date ---------------------------- -------------------------- Key Measures (in millions) 4Q00 3Q00 2000 1999 - --------------------------- -------- -------- -------- -------- Global Credit Products - ---------------------- Total Revenue $730 $760 $3,066 $3,110 Shareholder Value Added (167) 76 101 530 Cash Basis Earnings (1) 92 336 1,112 1,511 Cash Basis Efficiency Ratio (1) 29.0 % 20.9 % 23.5 % 21.6 % Global Capital Raising - ---------------------- Total Revenue $579 $745 $2,837 $2,060 Shareholder Value Added (91) 45 66 (58) Cash Basis Earnings (1) (6) 141 412 212 Cash Basis Efficiency Ratio (1) 97.3 % 70.8 % 77.7 % 87.2 % Global Markets - -------------- Total Revenue $379 $342 $1,707 $1,704 Shareholder Value Added 32 46 274 269 Cash Basis Earnings (1) 75 90 454 511 Cash Basis Efficiency Ratio (1) 69.4 % 59.2 % 58.2 % 55.6 % Global Treasury Services - ------------------------ Total Revenue $334 $342 $1,355 $1,368 Shareholder Value Added 13 36 115 107 Cash Basis Earnings (1) 43 66 235 216 Cash Basis Efficiency Ratio (1) 81.6 % 76.2 % 77.1 % 75.4 %
(1) Cash basis calculations exclude goodwill and other intangible assets and their related amortization expense. Page 10
Bank of America Corporation Asset Management Group Segment - ------------------------------------------------------------------------------------------------------------------------------ Asset Management Group Segment Results - ------------------------------------------------------------------------------------------------------------------------------ Quarterly Year-to-Date -------------------------- ---------------------------- Key Measures (in millions) 4Q00 3Q00 2000 1999 - --------------------------- ------- ------- ------- ------- Total Revenue $585 $555 $2,284 $2,141 Net Income 129 154 601 510 Cash Basis Earnings (1) 135 160 625 535 Shareholder Value Added 81 106 413 330 Average Equity to Average Assets 7.04 % 7.29 % 7.41 % 8.39 % Return on Average Equity 28.9 34.5 34.0 29.9 Return on Tangible Equity (1) 33.5 39.8 39.3 35.3 Efficiency Ratio 57.0 54.6 55.0 57.6 Cash Basis Efficiency Ratio (1) 56.0 53.6 53.9 56.4 Selected Average Balance Sheet Components (in millions) ------------------------------- Total Loans and Leases $23,371 $22,634 $22,130 $18,725 Total Deposits 11,343 11,438 11,366 11,405 Total Earning Assets 24,388 23,615 23,078 19,464
(1) Cash basis calculations exclude goodwill and other intangible assets and their related amortization expense.
Bank of America Corporation Equity Investments Segment - ---------------------------------------------------------------------------------------------------------------------------- Equity Investments Segment Results - ---------------------------------------------------------------------------------------------------------------------------- Quarterly Year-to-Date -------------------------- ------------------------- Key Measures (in millions) 4Q00 3Q00 2000 1999 - --------------------------- ---------- ------- -------- -------- Total Revenue $(89) $346 $864 $686 Net Income (73) 197 460 330 Cash Basis Earnings (1) (70) 200 471 341 Shareholder Value Added (136) 140 243 176 Average Equity to Average Assets 33.75 % 35.60 % 34.70 % 36.44 % Return on Average Equity (13.4) 39.7 24.3 24.1 Return on Tangible Equity (1) (13.4) 41.9 25.9 26.3 Efficiency Ratio (32.1) 6.9 12.7 18.6 Cash Basis Efficiency Ratio (1) (29.1) 6.1 11.4 17.0 Selected Average Balance Sheet Components (in millions) - --------------------------------- Total Loans and Leases $462 $450 $436 $309 Total Deposits 19 18 14 9 Total Earning Assets 473 469 456 370
(1) Cash basis calculations exclude goodwill and other intangible assets and their related amortization expense. EX-99.2 3 0003.txt TX 4th QUARTER 2000 EARNINGS REVIEW EXHIBIT 99.2 FINAL DRAFT JANUARY 16, 2001 NEW YORK CITY I. Thanks Susan. Good morning everyone and welcome to our review of fourth quarter earnings A. As always, I appreciate your presence given the number of earnings announcements today B. My remarks will be brief and cover three areas: 1. A review of fourth quarter results 2. Some comments about full year results with attention to momentum we are seeing in our various business segments as we enter the new year 3. And, finally, our outlook for 2001 II. Before I begin, let me say that we have grown earnings per share each year over the past couple of years A. And, economy willing, earnings in 2001 will be higher than in 2000 B. While the level of earnings may not quite be to your liking or ours, we still have a powerful income stream C. These earnings have allowed us to increase the dividend by more than 10 percent each year, buy back 146 million shares in a year and a half, and increase capital levels by 7 percent versus last year D. We do have issues - the slowing economy is taking its toll on credit quality and a few of our businesses are sluggish because of the tight markets E. But we are dealing with these issues and will manage each of the problems through the cycle III. In the fourth quarter, operating earnings were $1.4 billion or $.85 per share on a diluted basis compared with $1.23 per share a year ago and $1.31 per share in the third quarter of this year A. Results were in line with our comments in early December B. These results reflected a much higher provision for loan losses, lower revenue from market sensitive areas and higher expenses compared to earlier expectations C. However, we did see increases in net interest income and continued fee momentum in both consumer and commercial 1 banking and asset management compared to third quarter results 1. The 2.5 percent increase in net interest income and 11 basis point increase in margin were the result of a higher yielding loan mix, increased trading related activities, deposit growth and a decline in auto lease residual losses a. The balance sheet this quarter reflected our successful efforts in reducing asset growth as average earning assets dropped for the first time in several quarters, including decreases in securities, loans and trading related assets b. Managed loan levels were flat with third quarter levels as strong growth in home equity and credit card loans were offset by a decrease in commercial loans reflecting customer balance pay-downs and the concerted efforts to reduce loan levels c. As we mentioned last October, we are selling the bulk of our mortgage company originations and exiting low margin commercial relationships whenever possible d. As investment securities mature, we will be replacing them with off-balance sheet positions e. Sharp declines in rates late last year allowed us to accelerate sales of securities and mortgage loans with the subsequent favorable impact on margins and convexity risk f. As a result, our period-end assets declined $30 billion 2. On the fee side, service charges, investment and brokerage, mortgage servicing and card income were all up from the third quarter in line with the positive momentum we have been experiencing in these areas all year 3. 'Other income' increased more than $200 million due to the gain of $187 million from the sale of our factoring operation in late December and from lower lease residual charges a. Factoring was one of the businesses that we had identified early last year as a candidate for divestiture 2 i. While returns were attractive, the business did not meet our growth targets b. 'Other income' this quarter included $73 million of lease residual charges, down from $186 million in the third quarter i. Total residual charges this quarter, including the impact on net interest income, were $113 million versus $257 million last quarter 4. Fourth quarter results reflected weakness in the capital markets area a. Investment banking fees were down slightly as increases in syndications and advisory services were offset by lower equity and high yield activity b. Equity investment losses of $65 million reflected cash gains of $143 million offset by a negative impact from fair value adjustments c. The fair market adjustment in the third quarter was a positive $44 million d. Trading fees were down almost 30 percent as improvements in foreign exchange, interest rate contracts and commodities were more than offset by declines in fixed income i. Within fixed income, High Yield was once again the primary culprit as the market declined due to widening credit spreads, weak equity markets and lack of liquidity 5. Noninterest expenses for the corporation were up 5 percent from third quarter levels reflecting increases in all categories except personnel a. Decreases in personnel expense of 2 percent were more than offset by investments in our growth initiatives, including a new corporate brand campaign; additional marketing support for card, asset management and investment banking; and investments in bankofamerica.com b. Unusual items included in expenses this quarter were $30 million to rationalize our operations in Colombia and Venezuela and $25 million of additional legal expense 3 6. Turning to credit quality, net charge-offs on loans increased $640 million from third quarter results driven by a sizeable writedown of a large credit discussed in our third quarter 10-Q and the one-time $104 million charge for conforming to FFIEC regulatory guidelines on consumer loans a. The bulk of the remaining charge-offs were attributable to companies across a handful of industries as we continued our practice of writing nonperforming assets down to our current expectation of value b. Provision exceeded charge-offs by $135 million 7. Nonperforming assets increased approximately 24 percent or $1.1 billion dollars over third quarter levels a. Commercial credits represented more than 80 percent of the increase, which was driven by two large credits - the one with the sizeable writedown in the consumer products industry and one in the financial services industry b. The remaining increase centered in the US Commercial and Corporate portfolios as companies with higher leverage were impacted by the slowing US economy, higher interest rates and the overall competitive environment 8. As you can see, we had several unusual items that impacted results this quarter a. The factoring gain was, obviously, positive to earnings b. Negatives included higher legal expense, expenses associated with closing overseas offices, fair market writedowns and higher provision versus charge-offs IV. I realize most of you are focused on the quarter but let me spend a few moments highlighting the 12-month results, as certain aspects of our business segments get lost in the quarterly comparisons V. Operating earnings for the corporation were $4.72 per share on a diluted basis, up from $4.68 per share in 1999 A. ROE for the year was 16.7 percent versus 17.7 percent in 1999 B. Cash earnings on a diluted basis were $5.24, which is 11 percent higher than operating earnings 4 C. For the year, increases in net interest income of 2 percent and in noninterest income before `other income' of 9 percent were offset by higher provision for loan losses, lower security gains and the absence of several one time gains that existed in 1999 D. Expense growth was held to less than 1 percent VI. The results of our four business segments for the year were quite varied: A. Consumer and Commercial Banking, earned $4.6 billion or 59 percent of the corporation's total operating earnings during the past year with an ROE of 19 percent 1. Fee revenue growth in our branches, credit card and mortgage operations were outweighed by lease residual charges and fewer one time gains than the year before 2. Expenses were down 4 percent from 1999 levels due to productivity initiatives even as we stepped up investments in card services, e-commerce and marketing 3. Average managed loans grew 12 percent driven by residential real estate lending and credit card a. Managed commercial loan growth was 6 percent driven by domestic non-real estate lending 4. Fee growth was strongest in our card businesses a. Card fee income grew 11 percent due to growth in customers and purchasing volume i. Our card businesses include consumer, commercial and government cards along with debit cards and merchant processing ii. For the year, these combined businesses showed increases in receivables of 8 percent, increases in purchase volume of 17 percent and increases in processing volume of 18 percent B. Turning to Global Corporate and Investment Banking, earnings in 2000 were $2.1 billion with an ROE of 15 percent, versus $2.3 billion in 1999 reflecting 9 percent revenue growth offset by higher expenses and higher credit costs 1. Average managed loan growth was less than 3 percent 2. Much of the growth in both net interest income and fee revenue was driven by the buildout of the investment banking and trading platforms 5 3. Investment banking fees rose 10 percent due to higher securities underwriting fees (up 34 percent) and higher fees from advisory services (up 13 percent) while syndication fees were essentially flat 4. Trading revenue rose 33 percent for the year primarily due to a doubling of revenue from equities (which includes equity derivatives) and a 23 percent increase in revenue from interest rate protection contracts 5. This growth has allowed us to show an increase in our market shares and rankings a. For full year 2000, we rank in the top ten in all key product areas 6. Revenue growth translated into profitable growth for the year a. For full year 2000, our Global Capital Raising unit, which includes fixed income and equity underwriting, equity derivatives, M&A, and global investment banking, achieved 38 percent revenue growth, while cash earnings doubled to $412 million, representing almost 19 percent of the total cash earnings of GCIB 7. Offsetting much of the higher earnings of Global Capital Raising are the higher costs related to credit quality issues in the large corporate loan book a. Driven by the issues in the fourth quarter that I discussed earlier, provision in GCIB in 2000 was substantially higher than the level in 1999 C. A third business segment and another one of our key strategic growth areas is Asset Management 1. Net income in 2000 was $601 million, up 18 percent from 1999, with an ROE improving from 30 to 34 percent 2. The combination of 7 percent revenue growth and 2 percent expense growth provided us great operating leverage a. Revenue growth was led by a 30 percent increase in mutual fund fees 3. Total assets under management rose to $277 billion, or 12 percent, over the past year led by growth in mutual funds of 35 percent 6 4. We have seen clear evidence that more of our customers and clients are coming to Bank of America to buy investment products D. Our fourth and final business segment is Equity Investments 1. Principal Investing is the biggest piece of Equity Investments and as you know, represents predominately our venture capital operations with about $5 billion invested 2. Equity Investments also includes our strategic technologies area as well as other parent company investments 3. Earnings for Equity Investments in 2000 were up 39 percent from 1999 to $460 million a. Equity Investment cash gains increased approximately 41 percent b. This performance was driven by certain e-commerce investments, as well as improvement in principal investing VII. Moving to the balance sheet, capital levels are stronger now than at the end of last year A. We have $54 billion of equity and reserves, up from $51 billion at the end of 1999 B. Our Tier One capital ratio rose to 7.50 percent at the end of the year, up from 7.35 percent the end of 1999 as our earnings stream compensated for a higher dividend, share repurchase activity and higher levels of risk-weighted assets C. The leverage ratio was 6.12 percent D. Last year at this time, the mark-to-market depreciation in the securities and swaps portfolio was in excess of $5 billion and reached as high as $6.5 billion during the year 1. However, at year end that depreciation is essentially gone ($600 million) without any impact on future revenue expectations VIII. Common shares outstanding at the end of the year were 1.61 billion, down 4 percent from a year ago, reflecting share repurchases of 68 million during the year IX. Let me spend the rest of my time today discussing our outlook for this year A. When we did our plan in the fourth quarter we used the following assumptions: 7 1. Economic growth will be between 2 percent and 3 percent for the year with the growth being slower early in the year and picking up as the year progresses 2. We expect industrial production to be sluggish and exports to slow 3. We expected the Fed to cut interest rates in the first half of the year and expect, perhaps, another 50 to 100 basis points 4. As the Fed lowers rates, the treasury and swap curves should become steeper as we have experienced over the past couple weeks 5. Clearly, we are anticipating a less robust economy on all fronts in 2001 but, at this time, we do not anticipate a recession B. We are looking for modest loan growth in 2001, due in part to the slowing economy 1. In addition, we would expect large corporate loan levels to be flat to down as the addition of corporate loans originated in 2001 would be more than offset by decreases as we exit low-margin, credit-only corporate relationships 2. In addition, given our decision to sell the bulk of our mortgage company originations, we expect to see residential mortgages decline in 2001 3. However, consumer and commercial loans overall should continue to grow as we stay focused on credit cards, branch-based mortgages, home equity loans and small business and commercial credits 4. Year over year we are looking for managed loan growth of around 2 percent C. Other earning assets should see modest decreases as we continue to move investment securities into off-balance sheet swaps D. With a steeper yield curve, additional rate cuts and a loan portfolio with a greater mix of higher yielding loans, we are looking for net interest income to grow 2 percent or so E. On the fee side, we are looking for continued positive trends in our consumer and commercial business in the areas of service charges, mortgage servicing and card income 8 1. Other fee income will show improvement as we have reduced impact from lease residual charges F. Asset management is expected to show strong, double digit increases in fee revenue given the closing of the Marsico acquisition earlier this month and the fact that we have been making investments to support additional growth G. In Global Corporate and Investment Banking we are looking for an improving business environment as the year progresses 1. Over the past six quarters we have expanded both our investment banking and trading platforms 2. This expansion plus the stimulus to investment banking and trading from lower rates should allow us to increase fee revenue in the low double digits H. Equity investment gains overall should see little if any growth versus last year's performance as increasing fees in principal investing should offset the absence of gains from strategic investments in 2000 I. To sum up, fee revenue growth in total is expected to be in the higher single digits for 2001 J. Total revenue including net interest income and fee income is expected to be up 4 to 5 percent in 2001 K. On the expense front, we will continue to invest incremental resources in those businesses that will produce long-term and profitable revenue growth even as we experience a slowing in current economic growth 1. But having said that, expense growth should still remain below revenue growth although the leverage will not be huge 2. Both Ken and I, as the year progresses, will scrutinize spending levels in the various businesses to ensure that the intended revenue growth occurs 3. Should we not achieve the expected growth because of execution, interest rate environment or market conditions, we will take quick action to constrain expenditures L. Turning to credit quality, our outlook remains essentially the same as we outlined for you in early December 1. We are projecting higher loan losses than the $2.4 billion in 2000 and these losses could go as high as 75 basis points or approximately $3 billion at current loan levels 9 2. As you would expect, higher commercial charge-offs would represent much of the increase 3. However, we also have assumed higher charge-offs in credit card and consumer finance as a result of the slowing economy as well as higher levels of outstandings 4. Provision expense should track net charge-offs for the most part so that our loan loss allowance should stay fairly flat with our year-end coverage of approximately 1.75 percent given our minimal loan growth assumptions 5. Nonperforming assets are expected to rise for the foreseeable future driven by increases in the commercial portfolio and in consumer finance M. Turning to capital trends, we expect to keep our Tier 1 ratio above 7.0 percent which should give us plenty of room to pay an attractive dividend and still buy back shares N. So, when you take all these comments into consideration, you should arrive at an earnings number that should exceed earnings per share in 2000 and be within the guidance we gave you in December which was north of $5.00 O. We realize that predicting economic growth at this time is extremely difficult so we tried to build in some conservative assumptions as far as revenue growth and charge-offs P. If the economy comes in for a soft landing, I feel comfortable that our guidance is adequate but if we get a hard landing, then we will have to monitor the situation and update you as we go along. X. With that, let me now open the floor up for questions - I appreciate your attention 10 -----END PRIVACY-ENHANCED MESSAGE-----