0001021408-01-508143.txt : 20011019 0001021408-01-508143.hdr.sgml : 20011019 ACCESSION NUMBER: 0001021408-01-508143 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20011015 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 20011015 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: 1934 Act SEC FILE NUMBER: 001-06523 FILM NUMBER: 1758804 BUSINESS ADDRESS: STREET 1: NATIONSBANK CORPORATE CENTER STREET 2: 100 N TRYON ST CITY: CHARLOTTE STATE: NC ZIP: 28255 BUSINESS PHONE: 8882793457 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 d8k.txt FORM 8-K FOR BANK OF AMERICA 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): October 15, 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 October 15, 2001, Bank of America Corporation (the "Registrant") announced financial results for the third quarter ended September 30, 2001, reporting operating earnings of $2.09 billion and diluted operating earnings per common share of $1.28. Net income for the third quarter ended September 30, 2001 was $841 million, or $0.51 per share (diluted). A copy of the press release announcing the Registrant's results for the third quarter ended September 30, 2001 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 October 15, 2001 with respect to the Registrant's financial results for the third quarter ended September 30, 2001 99.2 Supplemental Information prepared for use on October 15, 2001 in connection with financial results for the third quarter ended September 30, 2001 ITEM 9. REGULATION FD DISCLOSURE. On October 15, 2001, the Registrant held an investor conference and webcast to disclose financial results for the third quarter ended September 30, 2001. The Supplemental Information package for use at this conference is furnished herewith as Exhibit 99.2 and incorporated by reference in Item 9. All information in the Supplemental Information is presented as of October 15, 2001, and the Registrant does not assume any obligation to correct or 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: October 15, 2001 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION OF EXHIBIT 99.1 Press Release dated October 15, 2001 with respect to the Registrant's financial results for the third quarter ended September 30, 2001 99.2 Supplemental Information prepared for use on October 15, 2001 in connection with financial results for the third quarter ended September 30, 2001 EX-99.1 3 dex991.txt PRESS RELEASE EXHIBIT No. 99.1 October 15, 2001 Investors may contact: Susan Carr, Bank of America, 704.386.8059 Kevin Stitt, Bank of America, 704.386.5667 Media may contact: Eloise Hale, Bank of America, 704.387.0013 eloise.hale@bankofamerica.com Bank of America reports operating earnings of $2.09 billion, or $1.28 per share, in the third quarter CHARLOTTE - Bank of America Corporation today reported third quarter operating earnings of $2.09 billion, or $1.28 per share (diluted), compared to $2.18 billion, or $1.31 per share, a year ago. Operating earnings increased 3 percent from the second quarter of 2001. The return on common equity was 16.9 percent. Operating earnings excluded the previously announced $1.25 billion in after-tax costs to exit the auto leasing and subprime real estate lending businesses. Including exit charges, net income for the third quarter was $841 million, or $0.51 per share. For the first nine months of 2001, operating earnings were $5.98 billion, or $3.66 per share (diluted). This compared to operating earnings of $6.48 billion, or $3.87 per share, reported during the same period in 2000. "The strength and diversity of our business has enabled us to produce solid bottom line results even in the face of a rapidly declining economy," said Kenneth D. Lewis, chairman and chief executive officer. "Like many other companies who were affected by the tragic events of September 11, we focused on doing the right thing for our customers and associates. While we cannot predict the financial impact of these events on our company, we remain optimistic about the future and that our efforts to build our core businesses will create significant increases in shareholder value over time. "We continue to successfully execute our customer-focused strategy to attract new customers, and deepen existing customer relationships," continued Lewis. "We are implementing process improvements and reengineering businesses to make our customers' experience with us even better, while at the same time reducing costs. In addition, we are changing measurements and incentives for associates that reward them for building better customer relationships, not just selling products. And we are implementing new tools and technology that help associates manage customer information better to ensure that we continually increase relationship value for our customers." More Page 2 Third Quarter Operating Earnings Highlights (compared to a year ago) -------------------------------------------------------------------- . The company achieved solid results despite a $421 million increase in provision expense. . Net interest income increased 14 percent. The net interest yield increased 68 basis points to 3.78 percent. . Consumer-based fee income continued its momentum with growth of 5 percent led by services charges and card fee income due to higher business volumes and increased customer activity. . Trading account profits and investment and brokerage service fees showed strong results, up 8 percent and 12 percent, respectively. . Average customer deposits grew 5 percent to $307 billion, driven by a 22 percent balance increase in money-market savings. Revenue ------- Revenue grew 5 percent to $8.72 billion in the third quarter from the previous year, driven by a significant increase in net interest income. Fully taxable-equivalent net interest income rose 14 percent to $5.29 billion. The company continued to benefit from falling interest rates and a steepened yield curve, which again allowed it to shed lower yielding assets. Benefits also were achieved from trading activities and higher deposit and equity levels. These factors resulted in a 68 basis point improvement in the net yield to 3.78 percent. Noninterest income declined 7 percent to $3.43 billion. While the company experienced growth in card fee income and service charges, this growth was more than offset by lower market-related revenue across business lines. In particular, equity investment gains were down $400 million from a year ago. In connection with the repositioning of the investment portfolio, the company realized $97 million in securities gains. More Page 3 Efficiency ---------- Noninterest expense increased 4 percent from the prior year. Primary drivers of expenses were increases in marketing related to the company's national brand-building campaign, costs associated with various international activities and increases in professional fees. Direct losses associated with the events of September 11, such as property losses and costs to re-establish business operations, are expected to be substantially covered by insurance. The efficiency ratio was 52.82 percent on an operating basis, an improvement of 19 basis points over a year ago. Costs Associated With the Exit of Consumer Finance Businesses ------------------------------------------------------------- In August, the company announced that it was exiting both its auto leasing and subprime real estate lending businesses, because these businesses did not fit its strategic and profitability objectives. To cover the cost of exiting these businesses, the company incurred $1.7 billion in pre-tax ($1.25 billion after-tax) related charges during the third quarter. The components included: . Noninterest expense charges of $1.31 billion, representing goodwill write-offs, adjustments to auto lease residual and subprime real estate servicing asset values and miscellaneous expenses. . A one-time provision expense of $395 million, which combined with existing reserves of $240 million, was used to write the loan portfolio down to estimated market value. As a result, charge-offs of $635 million were recorded. In addition, $21 billion in loans, including $1.2 billion in nonperforming loans, were transferred to assets held for sale as part of the exit initiative, significantly reducing the company's loan portfolio. Credit Quality -------------- In line with the company's expectations, credit quality declined as the economy continued to slow. . Net charge-offs were $1.5 billion, or 1.65 percent of loans and leases, up from $435 million, or 0.43 percent, a year ago. The third quarter included $635 million in charge-offs resulting from the exit of the subprime business and $135 million from the sale of problem commercial and consumer loans. Excluding exit-related charge-offs, net charge-offs were $856 million, or 0.95 percent of loans and leases. Commercial charge-offs increased $267 million from a year ago, with growth largely concentrated in the commercial domestic portfolio. Excluding exit-related charge-offs, consumer charge-offs rose $154 million from a year earlier primarily due to an increase in consumer bankcard outstandings and personal bankruptcy filings. On a managed basis, consumer bankcard charge-offs remained consistent with second quarter levels. More Page 4 . The provision for credit losses in the third quarter was $1.3 billion compared to $435 million a year earlier. The provision for credit losses was equal to net charge-offs, excluding the $240 million allowance reduction associated with exiting the subprime lending business. Excluding the exit charge, provision was $856 million. . Nonperforming assets were $4.5 billion, or 1.33 percent of loans, leases and foreclosed properties at September 30, 2001, compared to $4.4 billion, or 1.09 percent, a year earlier. An increase in nonperforming assets in the domestic commercial loan portfolio was offset by the transfer of $1.2 billion of nonperforming loans to assets held for sale as part of the exit of the subprime real estate business. As a result of the loan transfer and the sale of nonperforming loans during the third quarter, nonperforming assets declined 27 percent, or $1.7 billion, from the second quarter. . At September 30, 2001, the allowance for credit losses totaled $6.7 billion, or 1.97 percent of loans and leases, up from 1.67 percent a year ago. The allowance for credit losses represented 162 percent of nonperforming loans, up from 118 percent at June 30, 2001. Capital Management ------------------ Total shareholders' equity was $50.2 billion at September 30, 2001, up 7 percent from 12 months earlier and representing 7.83 percent of period-end assets of $640 billion. The Tier 1 Capital Ratio rose 63 basis points from September 30, 2000 to 7.95 percent. During the quarter, Bank of America repurchased 24 million shares, as the company intensified its repurchase program following the events of September 11. Since June 1999, 199 million shares have been repurchased, representing an investment in Bank of America stock of $11.1 billion. As of September 30, 2001, the remaining buyback authority for common stock under the currently authorized program totaled 31 million shares. Average (diluted) common shares outstanding were 1.63 billion in the third quarter, down 2 percent from 1.66 billion a year earlier. Consumer and Commercial Banking ------------------------------- Consumer and Commercial Banking (CCB) earned $1.25 billion, essentially unchanged from a year ago, despite a $222 million increase in provision expense. Total revenues grew 6 percent while expenses increased 3 percent from a year ago. Return on equity was 25.7 percent and Shareholder Value Added (SVA) remained steady at $828 million. More Page 5 Net interest income increased 7 percent over a year ago, as loan and deposit growth was partially offset by the additional cost of the money market savings pricing initiative. Managed loans grew 5 percent, led by consumer loan growth of 16 percent, primarily in residential first mortgage, bankcard and home equity. Average customer deposits grew 4 percent, led by a 22 percent increase in money market savings account balances. This growth was partially offset by declining balances in time and savings accounts. Noninterest income was up 4 percent compared to a year ago. . Service charges grew 7 percent, reflecting higher business volumes. . Card fee income grew 4 percent, reflecting increased purchase volumes in credit and debit cards as well as new account growth. Global Corporate and Investment Banking --------------------------------------- Global Corporate and Investment Banking (GCIB) earned $476 million, 8 percent below last year's results. Revenue increased 12 percent to $2.21 billion, offset by a $167 million increase in credit costs and higher expenses. Return on equity was 16.6 percent for the quarter. SVA increased $18 million to $169 million. Net interest income was up 27 percent from a year ago, primarily driven by increased trading activity. Total trading-related revenue in GCIB was $795 million, up 34 percent, as the company adjusted for the rate environment during the quarter, particularly in interest rate and fixed-income products. Investment and brokerage fees were up 44 percent, as a result of higher equity and stock commissions from increased customer flow. Investment banking income decreased 19 percent to $305 million from last year. While fixed-income originations were strong compared to a year ago, the demand for synidications, equity products, and merger and acquisition services was weak. Asset Management ---------------- Asset Management earnings were down 5 percent to $148 million from a year ago. Revenue remained essentially unchanged, reduced by increased credit costs and increased expenses as the company continued investment in this business. Return on equity was 26.8 percent and SVA decreased $17 million to $96 million. Assets under management grew 2 percent, or $5 billion, over last year to $280 billion, despite the impact of lower stock valuations. This increase was driven by the growth in the Nations Funds family of mutual funds and the addition of Marsico Funds, which the company acquired in the first quarter. More Page 6 Equity Investments ------------------ Equity Investments reported a loss of $58 million, compared to earnings of $197 million a year earlier. Equity investment gains were $7 million, all in Principal Investing. One of the world's leading financial services companies, Bank of America is committed to making banking work for customers like it never has before. Through innovative technologies and the ingenuity of its people, Bank of America provides individuals, small businesses and commercial, corporate and institutional clients across the United States and around the world new and better ways to manage their financial lives. Bank of America stock (ticker: BAC) is listed on the New York, Pacific and London stock exchanges. The company's Web site is www.bankofamerica.com. News, speeches and other corporate information can be found at www.bankofamerica.com/newsroom. ------------------------------ Additional financial tables are available at www.bankofamerica.com/investor. NOTE: James H. Hance Jr., vice chairman and chief financial officer, will discuss third quarter results in a conference call at 9:30 a.m. (Eastern Time) today. The call can be accessed via a Webcast available on the Bank of America Web site at http://www.bankofamerica.com/investor. 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, including the impact of the events of September 11, 2001 and the energy crisis, 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; 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 the Bank of America reports filed with the SEC. Bank of America
Three months Nine months Ended September 30 Ended September 30 ----------------------------- ------------------------------ 2001 2000 2001 2000 ----------- ------------- ------------ ---------------- (Dollars in millions, except per share data; shares in thousands) Financial Summary - operating basis/(1)/ ----------------------------------------- Operating earnings.................................................. $ 2,091 $ 2,175 $ 5,984 $ 6,478 Operating earnings per common share............................... 1.31 1.33 3.73 3.91 Diluted operating earnings per common share....................... 1.28 1.31 3.66 3.87 Cash basis earnings/(2)/............................................ 2,310 2,390 6,649 7,128 Cash basis earnings per common share.............................. 1.44 1.46 4.14 4.31 Cash basis diluted earnings per common share...................... 1.41 1.44 4.07 4.26 Dividends per common share.......................................... 0.56 0.50 1.68 1.50 Closing market price per common share............................... 58.40 52.38 58.40 52.38 Average common shares issued and outstanding........................ 1,599,692 1,639,392 1,603,340 1,654,013 Average diluted common shares issued and outstanding................ 1,634,063 1,661,031 1,632,928 1,674,748 Summary Income Statement - operating basis/(1)/ ---------------------------------------------- (Taxable-equivalent basis) Net interest income................................................. $ 5,290 $ 4,642 $ 15,128 $ 13,913 Noninterest income.................................................. 3,429 3,675 10,950 11,254 ----------- ----------- ---------- ----------- Total revenue....................................................... 8,719 8,317 26,078 25,167 Provision for credit losses......................................... (856) (435) (2,491) (1,325) Gains on sales of securities........................................ 97 11 82 23 Other noninterest expense........................................... (4,606) (4,410) (14,081) (13,446) ----------- ----------- ---------- ----------- Operating income before income taxes................................ 3,354 3,483 9,588 10,419 Income taxes - including taxable-equivalent basis adjustment........ 1,263 1,308 3,604 3,941 ----------- ----------- ---------- ----------- Operating net income................................................ $ 2,091 $ 2,175 $ 5,984 $ 6,478 =========== =========== ========== =========== Summary Average Balance Sheet ----------------------------- Loans and leases.................................................... $ 357,726 $ 402,763 $ 376,261 $ 390,296 Managed loans and leases/(3)/....................................... 376,413 387,772 396,381 392,898 Securities.......................................................... 58,930 83,728 56,637 85,792 Earning assets...................................................... 557,108 597,248 562,038 581,029 Total assets........................................................ 642,184 685,017 648,789 669,598 Deposits............................................................ 363,328 356,734 360,793 351,863 Shareholders' equity................................................ 49,202 47,735 48,597 46,962 Common shareholders' equity......................................... 49,134 47,660 48,528 46,886 Performance Indices - operating basis /(1)/ ------------------------------------------ Return on average assets............................................ 1.29 % 1.26 % 1.23 % 1.29 % Return on average common shareholders' equity....................... 16.87 18.15 16.48 18.45 Efficiency ratio.................................................... 52.82 53.01 53.99 53.42 Cash basis return on average assets/(2)/............................ 1.43 1.39 1.37 1.42 Cash basis return on average shareholder's common equity/(2)/....... 18.64 19.94 18.31 20.30 Cash basis efficiency ratio/(2)/.................................... 50.32 50.43 51.44 50.84 Net interest yield.................................................. 3.78 3.10 3.59 3.20 Shareholder value added ............................................ $ 824 $ 953 $ 2,293 $ 2,916 Credit Quality -------------- Net charge-offs/(4)/................................................ $ 1,491 $ 435 $ 3,050 $ 1,325 % of average loans and leases..................................... 1.65 % 0.43 % 1.08 % 0.45 % Managed bankcard net charge-offs as a % of average managed bankcard receivables...................................... 4.81 4.16 4.71 4.79 As Reported ----------- Net Income.......................................................... $ 841 $ 1,829 $ 4,734 $ 6,132 Earnings per common share......................................... 0.52 1.11 2.95 3.70 Diluted earnings per common share................................. 0.51 1.10 2.90 3.66 Return on average shareholder's common equity....................... 6.78 % 15.25 % 13.03 % 17.46 %
(1) Operating basis excludes provision for credit losses of $395 million and noninterest expense of $1.3 billion related to the exit of certain consumer finance businesses in the third quarter of 2001 and restructuring charges of $550 million in the third quarter of 2000. (2) Cash basis calculations exclude goodwill and other intangible amortization expense. (3) Prior periods have been restated for comparability (e.g. acquisitions, divestitures, sales and securitizations). (4) Net charge-offs includes $635 million related to the exit of certain consumer finance businesses in the third quarter of 2001. Excluding these charge-offs, the net charge-off ratio for the third quarter of 2001 would be 0.95%. Bank of America - Continued (Dollars in millions, except per share data; shares in thousands)
September 30 --------------------------- 2001 2000 ---------------------------- Balance Sheet Highlights ------------------------ Loans and leases.................................................. $ 339,018 $ 402,592 Securities........................................................ 75,964 81,103 Earning assets.................................................... 539,249 584,352 Total assets...................................................... 640,105 671,725 Deposits.......................................................... 359,870 353,988 Shareholders' equity.............................................. 50,151 46,859 Common shareholders' equity....................................... 50,084 46,785 Per share..................................................... 31.66 28.69 Total equity to assets ratio (period end)......................... 7.83 % 6.98 % Risk-based capital ratios: Tier 1....................................................... 7.95 7.32 Total........................................................ 12.12 10.80 Leverage ratio.................................................... 6.59 6.06 Period-end common shares issued and outstanding 1,582,129 1,630,824 Allowance for credit losses....................................... $ 6,665 $ 6,739 Allowance for credit losses as a % of loans and leases............ 1.97 % 1.67 % Allowance for credit losses as a % of nonperforming loans......... 162 161 Nonperforming loans............................................... $ 4,119 $ 4,177 Nonperforming assets /(5)/....................................... 4,523 4,403 Nonperforming assets as a % of: Total assets................................................. .71 % .65 % Loans, leases and foreclosed properties...................... 1.33 1.09 Other Data ---------- Full-time equivalent employees.................................... 143,824 146,346 Number of banking centers......................................... 4,274 4,419 Number of ATM's................................................... 13,009 12,840 BUSINESS SEGMENT RESULTS - operating basis /(1)/ Three months Ended September 30, 2001 Operating Avg Loans Return on Total Revenue Earnings and Leases Equity ------------- -------------- ---------- --------- Consumer and Commercial Banking................................... $ 5,369 $ 1,253 $ 182,792 25.7 % Asset Management.................................................. 609 148 24,631 26.8 Global Corporate and Investment Banking........................... 2,208 476 76,643 16.6 Equity Investments................................................ (54) (58) 468 (9.4) Corporate Other................................................... 587 272 73,192 n/m
n/m = not meaningful (5) In the third quarter of 2001, $1.2 billion of nonperforming subprime real estate loans were transferred to loans held for sale as a result of the exit of certain consumer finance businesses. EX-99.2 4 dex992.txt SUPPLEMENTAL INFORMATION Exhibit No. 99.2 Bank Of America Supplemental Information Third Quarter 2001 October 15, 2001 This information is preliminary and based on company data available at the time of the presentation. It speaks only as of the particular date or dates included in the accompanying pages. Bank of America does not undertake an obligation to, and disclaims any duty to, correct or update any of the information provided. Any forward-looking statements in this information are subject to the forward-looking language contained in Bank of America's reports filed with the SEC pursuant to the Securities Exchange Act of 1934, which are available at the SEC's website (www.sec.gov) or at Bank of America's website (www.bankofamerica.com). Bank of America's future financial performance is subject to risks and uncertainties as described in its SEC filings.
Bank of America Consolidated Financial Highlights ------------------------------------------------------------------------------------------------------------------------------------ (Dollars in millions, except per share information; shares in thousands) Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter 2001 2001 2001 2000 2000 ----------------------------------------------------------------------- Operating Basis/(1)/ Income statement (taxable-equivalent basis) Total revenue $ 8,719 $ 8,858 $ 8,501 $ 8,086 $ 8,317 Provision for credit losses 856 800 835 1,210 435 Gains (losses) on sales of securities 97 (7) (8) 2 11 Other noninterest expense 4,606 4,821 4,654 4,637 4,410 Income tax expense 1,263 1,207 1,134 856 1,308 Net income 2,091 2,023 1,870 1,385 2,175 Average diluted common shares issued and outstanding 1,634,063 1,632,964 1,631,099 1,638,863 1,661,031 Diluted earnings per common share $ 1.28 $ 1.24 $ 1.15 $ 0.85 $ 1.31 Performance ratios Return on average assets 1.29 % 1.24 % 1.17 % 0.81 % 1.26 % Return on average common shareholders' equity 16.87 16.67 15.86 11.57 18.15 Efficiency ratio 52.82 54.44 54.73 57.35 53.01 Shareholder value added $ 824 $ 791 $ 679 $ 164 $ 953 Cash basis financial data/(2)/ Earnings 2,310 2,246 2,093 1,599 2,390 Diluted earnings per common share 1.41 1.38 1.28 0.98 1.44 Return on average assets 1.43 % 1.37 % 1.31 % 0.94 % 1.39 % Return on average common shareholders' equity 18.64 18.52 17.75 13.36 19.94 Efficiency ratio 50.32 51.92 52.11 54.70 50.43 ================================================================================================================================== As Reported Income statement (taxable-equivalent basis) Total revenue $ 8,719 $ 8,858 $ 8,501 $ 8,086 $ 8,317 Provision for credit losses 1,251 800 835 1,210 435 Gains (losses) on sales of securities 97 (7) (8) 2 11 Business exit costs 1,305 - - - - Restructuring charges - - - - 550 Other noninterest expense 4,606 4,821 4,654 4,637 4,410 Income tax expense 813 1,207 1,134 856 1,104 Net income 841 2,023 1,870 1,385 1,829 Diluted earnings per common share 0.51 1.24 1.15 0.85 1.10 Cash dividends paid per common share 0.56 0.56 0.56 0.56 0.50 Performance ratios Return on average assets 0.52 % 1.24 % 1.17 % 0.81 % 1.06 % Return on average common shareholders' equity 6.78 16.67 15.86 11.57 15.25 Net interest yield 3.78 3.61 3.39 3.21 3.10 Book value per share $ 31.66 $ 30.75 $ 30.47 $ 29.47 $ 28.69 Cash basis financial data/(2)/ Earnings 1,060 2,246 2,093 1,599 2,044 Diluted earnings per common share 0.65 1.38 1.28 0.98 1.23 Return on average assets 0.65 % 1.37 % 1.31 % 0.94 % 1.18 % Return on average common shareholders' equity 8.55 18.52 17.75 13.36 17.01 ================================================================================================================================== Market price per share of common stock: High for the period $ 65.54 $ 62.18 $ 55.94 $ 54.75 $ 57.63 Low for the period 50.25 48.65 45.00 36.31 43.63 Closing price 58.40 60.03 54.75 45.88 52.38 Market capitalization 92,396 96,116 87,709 74,033 85,423 Number of banking centers 4,274 4,275 4,339 4,390 4,419 Number of ATM's 13,009 12,883 12,866 12,921 12,840 Full-time equivalent employees 143,824 144,287 143,584 142,724 146,346
(1) Operating basis excludes the following: provision for credit losses of $395 million and noninterest expense of $1.3 billion related to the exit of certain consumer finance businesses in the third quarter of 2001 and restructuring charges of $550 million in the third quarter of 2000. (2) Cash basis calculations exclude goodwill and other intangible amortization expense. Certain prior period amounts have been reclassified to conform to current period classifications. 1 [GRAPHIC] Business Segment Cash Basis Operating Earnings /(1)/ Third Quarter 2001 (Dollars in millions)
Business Segment ---------------------------------------------------------------------- Consumer & Commercial Banking $1,414 61 % Asset Management $ 163 7 % Global Corporate & Investment Banking $ 512 22 % Equity Investments $ (56) (2)% Corporate Other $ 277 12 % -------------------------------- Total Corporation $2,310 100 % ================================ Consumer & Commercial Banking ---------------------------------------------------------------------- Banking Regions $ 827 59 % Consumer Products $ 344 24 % Commercial Banking $ 243 17 % -------------------------------- Total CCB $1,414 100 % ================================ Global Corporate & Investment Banking ---------------------------------------------------------------------- Global Investment Banking $ 209 41 % Global Credit Products $ 208 41 % Global Treasury Services $ 95 18 % -------------------------------- Total GCIB $ 512 100 % ================================
(1) Operating basis excludes the following: provision for credit losses of $395 million and noninterest expense of $1.3 billion related to the exit of certain consumer finance businesses. 2 Consumer and Commercial Banking Segment
Consumer and Commercial Banking Segment Results ----------------------------------------------------------------------------------------------------------------------------------- (Dollars in millions) Quarterly Year-to-Date ------------------------------------------ ------------------------------- Key Measures /(1)/ 3 Qtr 01 2 Qtr 01 3 Qtr 00 2001 2000 ------------ ------------- ------------- ----------- ------------ --------------- Total Revenue $ 5,369 $ 5,242 $ 5,078 $ 15,675 $ 14,716 Provision for Credit Losses 433 388 211 1,230 786 Net Income 1,253 1,216 1,261 3,601 3,394 Cash Basis Earnings 1,414 1,377 1,422 4,084 3,882 Shareholder Value Added 828 802 831 2,348 2,099 Return on Average Equity 25.7% 25.4% 25.6% 24.9% 22.8% Cash Basis Return on Average Equity 29.0 28.7 28.9 28.2 26.1 Efficiency Ratio 53.8 54.5 55.0 54.5 56.7 Cash Basis Efficiency Ratio 50.8 51.5 51.8 51.4 53.4 Selected Average Balance Sheet Components ---------------- Total Loans and Leases $ 182,792 $ 182,414 $ 175,608 $ 181,567 $ 172,737 Total Deposits 266,351 264,674 256,725 263,618 256,456 Total Earning Assets 265,508 263,609 255,849 262,116 256,144 Consumer and Commercial Banking Sub-Segment Results ----------------------------------------------------------------------------------------------------------------------------------- Quarterly Year-to-Date ------------------------------------------ ------------------------------- Key Measures /(1)/ 3 Qtr 01 2 Qtr 01 3 Qtr 00 2001 2000 ------------ ------------- ------------- ----------- ------------ --------------- Banking Regions --------------- Total Revenue $ 3,158 $ 3,059 $ 3,053 $ 9,174 $ 8,912 Shareholder Value Added 489 445 472 1,333 1,225 Cash Basis Earnings 827 779 811 2,338 2,251 Cash Basis Efficiency Ratio 56.9% 58.1% 56.3% 58.0% 58.3% Consumer Products ----------------- Total Revenue $ 1,318 $ 1,282 $ 1,121 $ 3,823 $ 3,078 Shareholder Value Added 234 244 222 712 457 Cash Basis Earnings 344 352 328 1,036 780 Cash Basis Efficiency Ratio 40.1% 41.0% 43.4% 40.9% 47.1% Commercial Banking ------------------ Total Revenue $ 893 $ 901 $ 904 $ 2,678 $ 2,726 Shareholder Value Added 105 113 137 303 417 Cash Basis Earnings 243 246 283 710 851 Cash Basis Efficiency Ratio 44.9% 43.7% 47.0% 43.7% 44.4% -----------------------------------------------------------------------------------------------------------------------------------
(1) Cash basis calculations exclude goodwill and other intangible amortization expense. Certain prior period amounts have been reclassified between segments to conform to the current period presentation. 3 Asset Management Segment
Asset Management Segment Results ------------------------------------------------------------------------------------------------------------------------------------ (Dollars in millions) Quarterly Year-to-Date ----------------------------------------------- --------------------------- Key Measures/(1)/ 3 Qtr 01 2 Qtr 01 3 Qtr 00 2001 2000 ------------- ---------- ---------- ---------- ---------- ---------- Total Revenue $ 609 $ 625 $ 603 $ 1,842 $ 1,832 Provision for Credit Losses 16 63 - 87 9 Net Income 148 113 155 389 467 Cash Basis Earnings 163 127 163 432 490 Shareholder Value Added 96 61 113 234 341 Return on Average Equity 26.8 % 20.4 % 37.4 % 23.5 % 37.7 % Cash Basis Return on Average Equity 29.4 23.0 39.2 26.1 39.6 Efficiency Ratio 59.5 62.1 58.2 62.1 58.2 Cash Basis Efficiency Ratio 57.2 59.8 57.0 59.8 57.0 Selected Average Balance Sheet Components ---------------- Total Loans and Leases $ 24,631 $ 24,352 $ 23,221 $ 24,328 $ 22,302 Total Deposits 11,837 11,999 11,444 11,883 11,343 Total Earning Assets 25,820 25,563 24,300 25,515 23,361 Assets under Management (period end) 280,429 289,529 275,123 280,429 275,123 ------------------------------------------------------------------------------------------------------------------------------------
(1) Cash basis calculations exclude goodwill and other intangible amortization expense. Certain prior period amounts have been reclassified between segments to conform to the current period presentation. 4 Global Corporate and Investment Banking Segment
Global Corporate and Investment Banking Segment Results ------------------------------------------------------------------------------------------------------------------------------------ (Dollars in millions) Quarterly Year-to-Date ---------------------------------------------- --------------------------- Key Measures/(1)/ 3 Qtr 01 2 Qtr 01 3 Qtr 00 2001 2000 ------------ ---------- ---------- ---------- ---------- ---------- Total Revenue $ 2,208 $ 2,334 $ 1,975 $ 6,916 $ 6,287 Provision for Credit Losses 284 252 118 780 270 Net Income 476 454 516 1,467 1,670 Cash Basis Earnings 512 491 550 1,576 1,774 Shareholder Value Added 169 139 151 521 595 Return on Average Equity 16.6 % 15.5 % 15.5 % 16.7 % 17.0 % Cash Basis Return on Average Equity 17.9 16.8 16.5 17.9 18.1 Efficiency Ratio 53.7 58.4 55.4 55.5 55.5 Cash Basis Efficiency Ratio 52.0 56.8 53.7 53.9 53.9 Selected Average Balance Sheet Components ---------------- Total Loans and Leases $ 76,643 $ 84,958 $ 97,298 $ 84,336 $ 94,260 Total Deposits 68,472 67,439 71,861 67,288 68,390 Total Earning Assets 190,149 195,698 196,338 193,790 188,089 Global Corporate and Investment Banking Sub-Segment Results ------------------------------------------------------------------------------------------------------------------------------------ Quarterly Year-to-Date ---------------------------------------------- --------------------------- Key Measures/(1)/ 3 Qtr 01 2 Qtr 01 3 Qtr 00 2001 2000 ------------ ---------- ---------- ---------- ---------- ---------- Global Investment Banking ------------------------- Total Revenue $ 1,062 $ 1,275 $ 975 $ 3,710 $ 3,259 Shareholder Value Added 98 122 110 450 424 Cash Basis Earnings 209 227 215 766 731 Cash Basis Efficiency Ratio 69.7 % 72.0 % 67.8 % 67.8 % 66.7 % Global Credit Products ---------------------- Total Revenue $ 746 $ 687 $ 657 $ 2,085 $ 2,014 Shareholder Value Added (8) (39) (11) (109) 29 Cash Basis Earnings 208 192 268 580 855 Cash Basis Efficiency Ratio 20.6 % 22.4 % 21.2 % 21.5 % 22.1 % Global Treasury Services ------------------------ Total Revenue $ 400 $ 372 $ 343 $ 1,121 $ 1,014 Shareholder Value Added 79 56 52 180 142 Cash Basis Earnings 95 72 67 230 188 Cash Basis Efficiency Ratio 63.8 % 68.6 % 75.8 % 68.2 % 76.0 % ------------------------------------------------------------------------------------------------------------------------------------
(1) Cash basis calculations exclude goodwill and other intangible amortization expense. Certain prior period amounts have been reclassified between segments to conform to the current period presentation. 5 Equity Investments Segment
Equity Investments Segment Results ------------------------------------------------------------------------------------------------------------------------------------ (Dollars in millions) Quarterly Year-to-Date -------------------------------------------------- ----------------------------------- Key Measures/(1)/ 3 Qtr 01 2 Qtr 01 3 Qtr 00 2001 2000 ------------- -------------- ------------- ---------------- -------------- ----------------- Total Revenue ($54) $ 76 $ 346 $ 127 $ 955 Provision for Credit Losses - - - - 3 Net Income (58) 19 197 (2) 534 Cash Basis Earnings (56) 22 200 6 542 Shareholder Value Added (128) (51) 141 (206) 377 Return on Average Equity (9.4) % 3.1 % 40.1 % (0.1) % 38.8 % Cash Basis Return on Average Equity (8.9) 3.5 40.6 0.4 39.4 Efficiency Ratio n/m 63.8 7.0 106.7 8.5 Cash Basis Efficiency Ratio n/m 60.4 6.3 100.5 7.7 Selected Average Balance Sheet Components ---------------- Total Loans and Leases $ 468 $ 491 $ 450 $ 487 $ 428 Total Deposits - 15 18 17 13 Total Earning Assets 489 513 469 502 450 ------------------------------------------------------------------------------------------------------------------------------------
(1) Cash basis calculations exclude goodwill and other intangible amortization expense. Certain prior period amounts have been reclassified between segments to conform to the current period presentation. 6 Corporate Other /(1)/
Corporate Other Segment Results - Operating Basis /(2)/ ------------------------------------------------------------------------------------------------- (Dollars in millions) Quarterly Year-to-Date ----------------------------------- ------------------------ Key Measures /(3)/ 3 Qtr 01 2 Qtr 01 3 Qtr 00 2001 2000 ------------- ------------ ---------- ---------- -------- ---------- Total Revenue $ 587 $ 581 $ 315 $ 1,518 $ 1,378 Provision for Credit Losses 123 97 106 394 257 Operating net Income 272 221 46 529 413 Cash Basis Earnings 277 229 55 551 440 Shareholder Value Added (141) (160) (283) (604) (496) Selected Average Balance Sheet Components ---------------- Total Loans and Leases $73,192 $91,286 $106,186 $85,543 $100,569 Total Deposits 16,669 19,221 16,686 17,987 15,661 Total Earning Assets 75,142 82,245 120,292 80,115 112,985 -------------------------------------------------------------------------------------------------
(1) Corporate Other consists primarily of the functions associated with managing the interest rate risk of the Corporation and the consumer finance businesses exited in the third quarter of 2001. (2) Operating basis excludes the following: provision for credit losses of $395 million and noninterest expense of $1.3 billion related to the exit of certain consumer finance businesses in the third quarter of 2001 and restructuring charges of $550 million in the third quarter of 2000. (3) Cash basis calculations exclude goodwill and other intangible amortization expense. Certain prior period amounts have been reclassified between segments to conform to the current period presentation. 7
Bank of America Corporation Consolidated Statement of Income - Operating Basis/(1)/ ---------------------------------------------------------------------------------------------------------------------------------- (Dollars in millions, except per share information; shares in thousands) Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter 2001 2001 2001 2000 2000 ----------------------------------------------------------------------- Interest Income Interest and fees on loan and leases $ 6,511 $ 7,201 $ 7,659 $ 8,224 $ 8,283 Interest and dividends on securities 891 894 846 1,177 1,251 Federal funds sold and securities purchased under agreements to resell 321 405 435 551 633 Trading account assets 930 936 846 751 744 Other interest income 669 489 455 434 324 ----------------------------------------------------------------------- Total interest income 9,322 9,925 10,241 11,137 11,235 ----------------------------------------------------------------------- Interest expense Deposits 2,097 2,363 2,713 2,924 2,868 Short-term borrowings 869 1,221 1,377 1,942 2,223 Trading account liabilities 285 312 290 285 237 Long-term debt 867 999 1,222 1,322 1,344 ----------------------------------------------------------------------- Total interest expense 4,118 4,895 5,602 6,473 6,672 ----------------------------------------------------------------------- Net interest income 5,204 5,030 4,639 4,664 4,563 Noninterest income Consumer service charges 712 714 694 706 684 Corporate service charges 528 511 499 475 474 ----------------------------------------------------------------------- Total service charges 1,240 1,225 1,193 1,181 1,158 ----------------------------------------------------------------------- Consumer investment and brokerage services 386 399 379 358 357 Corporate investment and brokerage services 142 137 136 123 114 ----------------------------------------------------------------------- Total investment and brokerage services 528 536 515 481 471 ----------------------------------------------------------------------- Mortgage banking income 109 196 121 146 121 Investment banking income 305 455 346 366 376 Equity investment gains 22 171 147 (65) 422 Card income 618 601 573 595 594 Trading account profits/(2)/ 433 376 699 293 402 Other income 174 181 186 331 131 ----------------------------------------------------------------------- Total noninterest income 3,429 3,741 3,780 3,328 3,675 ----------------------------------------------------------------------- Total revenue 8,633 8,771 8,419 7,992 8,238 Provision for credit losses 856 800 835 1,210 435 Gains/(losses) on sales of securities 97 (7) (8) 2 11 Other noninterest expense Personnel 2,304 2,534 2,401 2,257 2,298 Occupancy 448 428 433 434 419 Equipment 273 271 291 291 285 Marketing 165 174 177 223 147 Professional fees 144 141 126 154 100 Amortization of intangibles 219 223 223 214 215 Data processing 175 187 190 172 167 Telecommunications 121 128 119 136 127 Other general operating 613 574 545 585 509 General administrative 144 161 149 171 143 ----------------------------------------------------------------------- Total other noninterest expense 4,606 4,821 4,654 4,637 4,410 ----------------------------------------------------------------------- Operating income before income taxes 3,268 3,143 2,922 2,147 3,404 Income tax expense 1,177 1,120 1,052 762 1,229 ----------------------------------------------------------------------- Operating net income $ 2,091 $ 2,023 $ 1,870 $ 1,385 $ 2,175 ----------------------------------------------------------------------- Operating income available to common shareholders 2,089 2,022 1,869 1,383 2,174 ----------------------------------------------------------------------- Per share information Operating earnings per common share 1.31 1.26 1.16 0.85 1.33 ----------------------------------------------------------------------- Diluted operating earnings per common share 1.28 1.24 1.15 0.85 1.31 ----------------------------------------------------------------------- Dividends per common share 0.56 0.56 0.56 0.56 0.50 ----------------------------------------------------------------------- Average common shares issued and outstanding 1,599,692 1,601,537 1,608,890 1,623,721 1,639,392 ----------------------------------------------------------------------- Average diluted common shares issued and outstanding 1,634,063 1,632,964 1,631,099 1,638,863 1,661,031 ----------------------------------------------------------------------- As reported Net income $ 841 $ 2,023 $ 1,870 $ 1,385 $ 1,829 Net income available to common shareholders 839 2,022 1,869 1,383 1,828 Earnings per common share 0.52 1.26 1.16 0.85 1.11 Diluted earnings per common share 0.51 1.24 1.15 0.85 1.10
(1) Operating basis excludes the following: provision for credit losses of $395 million and noninterest expense of $1.3 billion related to the exit of certain consumer finance businesses in the third quarter of 2001 and restructuring charges of $550 million in the third quarter of 2000. (2) Trading account profits for the first quarter of 2001 included the $83 million transition adjustment loss resulting from adoption of Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," on January 1, 2001. Certain prior period amounts have been reclassified to conform to current period classifications. 8 Bank of America Corporation Consolidated Balance Sheet
--------------------------------------------------------------------------------------------------------------------------------- (Dollars in millions) September 30 June 30 September 30 2001 2001 2000 --------------------------------------------------------------------------------------------------------------------------------- Assets Cash and cash equivalents $ 23,280 $ 25,405 $ 24,395 Time deposits placed and other short-term investments 4,629 4,452 5,467 Federal funds sold and securities purchased under agreements to resell 26,450 28,317 33,408 Trading account assets 53,471 50,740 47,198 Derivative assets 23,816 16,881 15,398 Securities: Available-for-sale 74,815 53,410 79,747 Held-to-maturity 1,149 1,167 1,356 --------------------------------------------------------------------------------------------------------------------------------- Total securities 75,964 54,577 81,103 --------------------------------------------------------------------------------------------------------------------------------- Loans and leases 339,018 380,425 402,592 Allowance for credit losses (6,665) (6,911) (6,739) --------------------------------------------------------------------------------------------------------------------------------- Loans and leases, net of allowance for credit losses 332,353 373,514 395,853 --------------------------------------------------------------------------------------------------------------------------------- Premises and equipment, net 6,372 6,371 6,450 Interest receivable 3,355 3,593 4,620 Mortgage banking assets 3,477 4,337 4,029 Goodwill 11,028 11,864 11,803 Core deposits and other intangibles 1,330 1,392 1,554 Other assets 74,580 44,082 40,447 --------------------------------------------------------------------------------------------------------------------------------- Total assets $ 640,105 $ 625,525 $ 671,725 --------------------------------------------------------------------------------------------------------------------------------- Liabilities Deposits in domestic offices: Noninterest-bearing $ 98,881 $ 100,199 $ 92,050 Interest-bearing 215,569 213,036 207,801 Deposits in foreign offices: Noninterest-bearing 1,854 1,490 1,515 Interest-bearing 43,566 48,761 52,622 --------------------------------------------------------------------------------------------------------------------------------- Total deposits 359,870 363,486 353,988 --------------------------------------------------------------------------------------------------------------------------------- Federal funds purchased and securities sold under agreements to repurchase 59,839 52,189 72,896 Trading account liabilities 22,575 20,866 25,354 Derivative liabilities 18,193 13,078 18,877 Commercial paper 2,544 3,156 10,330 Other short-term borrowings 20,396 32,348 45,271 Accrued expenses and other liabilities 40,369 22,902 23,783 Long-term debt 61,213 63,243 69,412 Trust preferred securities 4,955 4,955 4,955 --------------------------------------------------------------------------------------------------------------------------------- Total liabilities 589,954 576,223 624,866 --------------------------------------------------------------------------------------------------------------------------------- Shareholders' equity Preferred stock, $0.01 par value; authorized - 100,000,000 shares; issued and outstanding 1,556,979; 1,587,066 and 1,732,349 shares 67 68 74 Common stock, $0.01 par value; authorized - 5,000,000,000 shares; issued and outstanding 1,582,129,416; 1,601,126,336 and 1,630,823,577 shares 6,491 7,629 9,397 Retained earnings 41,857 41,912 39,338 Accumulated other comprehensive income/(loss) 1,731 (262) (1,808) Other 5 (45) (142) --------------------------------------------------------------------------------------------------------------------------------- Total shareholders' equity 50,151 49,302 46,859 --------------------------------------------------------------------------------------------------------------------------------- Total liabilities and shareholders' equity $ 640,105 $ 625,525 $ 671,725 ---------------------------------------------------------------------------------------------------------------------------------
9
Bank of America Corporation Quarterly Average Balances and Interest Rates - Taxable-Equivalent Basis ==================================================================================================================================== (Dollars in millions) Third Quarter 2001 Second Quarter 2001 ----------------------------------- -------------------------------- Interest Interest Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate ------------- --------- --------- ---------- --------- -------- Earning assets Time deposits placed and other short-term investments $ 5,881 $ 71 4.84 % $ 7,085 $ 81 4.58 % Federal funds sold and securities purchased under agreements to resell 36,133 321 3.54 33,859 405 4.79 Trading account assets 68,258 937 5.46 67,311 944 5.62 Total securities/(1)/ 58,930 902 6.12 55,719 909 6.53 Loans and leases/(2)/ Commercial - domestic 129,673 2,343 7.17 139,096 2,585 7.45 Commercial - foreign 25,267 353 5.54 27,449 421 6.14 Commercial real estate - domestic 24,132 395 6.50 25,293 459 7.28 Commercial real estate - foreign 366 5 5.78 352 5 6.64 ----------------------------- ------------------------------ Total commercial 179,438 3,096 6.85 $ 192,190 3,470 7.24 ----------------------------- ------------------------------ Residential mortgage 80,526 1,457 7.22 84,346 1,546 7.34 Home equity lines 22,115 394 7.06 21,958 424 7.75 Direct/Indirect consumer 39,481 753 7.56 40,117 736 7.35 Consumer finance 16,358 359 8.77 26,843 608 9.06 Bankcard 17,632 493 11.11 15,755 445 11.32 Foreign consumer 2,176 28 5.28 2,291 35 6.20 ----------------------------- ------------------------------ Total consumer 178,288 3,484 7.78 191,310 3,794 7.94 ----------------------------- ------------------------------ Total loans and leases 357,726 6,580 7.31 383,500 7,264 7.59 ----------------------------- ------------------------------ Other earning assets 30,180 597 7.89 20,154 409 8.11 ----------------------------- ------------------------------ Total earning assets/(3)/ 557,108 9,408 6.72 567,628 10,012 7.07 ----------------------------- ------------------------------ Cash and cash equivalents 20,753 23,232 Other assets, less allowance for credit losses 64,323 64,697 ----------------------------- ------------------------------ Total assets $ 642,184 $ 655,557 ============================= ============================== Interest-bearing liabilities Domestic interest-bearing deposits: Savings $ 20,076 53 1.04 $ 20,222 57 1.14 NOW and money market deposit accounts 116,638 588 2.00 113,031 676 2.40 Consumer CDs and IRAs 73,465 918 4.95 74,777 969 5.20 Negotiable CDs, public funds and other time deposits 5,085 57 4.44 6,005 81 5.37 ----------------------------- ------------------------------ Total domestic interest-bearing deposits 215,264 1,616 2.98 214,035 1,783 3.34 ----------------------------- ------------------------------ Foreign interest-bearing deposits/(4)/ Banks located in foreign countries 24,097 257 4.22 24,395 294 4.82 Governments and official institutions 3,533 35 3.90 3,983 45 4.53 Time, savings, and other 23,847 189 3.16 23,545 241 4.13 ----------------------------- ------------------------------ Total foreign interest-bearing deposits 51,477 481 3.71 51,923 580 4.49 ----------------------------- ------------------------------ Total interest-bearing deposits 266,741 2,097 3.12 265,958 2,363 3.57 ----------------------------- ------------------------------ Federal funds purchased, securities sold under agreements to repurchase and other short-term borrowings 89,042 869 3.87 98,898 1,221 4.95 Trading account liabilities 30,913 285 3.66 30,710 312 4.07 Long-term debt/(5)/ 67,267 867 5.15 69,416 999 5.76 ----------------------------- ------------------------------ Total interest-bearing liabilities/(6)/ 453,963 4,118 3.61 464,982 4,895 4.22 ----------------------------- ------------------------------ Noninterest-bearing sources: Noninterest-bearing deposits 96,587 97,390 Other liabilities 42,432 44,476 Shareholders' equity 49,202 48,709 ----------------------------- ------------------------------ Total liabilities and shareholders' equity $ 642,184 $ 655,557 ============================= ============================== Net interest spread 3.11 2.85 Impact of noninterest-bearing sources .67 .76 ----------------------------- ------------------------------ Net interest income/yield on earning assets $ 5,290 3.78 % $ 5,117 3.61 % ============================= ==============================
(1) The average balance and yield on securities are based on the average of historical amortized cost balances. (2) Nonperforming loans are included in the respective average loan balances. Income on such nonperforming loans is recognized on a cash basis. (3) Interest income includes taxable-equivalent basis adjustments of $86, $87 and $82 in the third, second and first quarters of 2001 and $94, and $79 in the fourth, and third quarters of 2000, respectively. Interest income also includes the impact of risk management interest rate contracts, which increased (decreased) interest income on the underlying assets $284, $194 and $27 in the third, second and first quarters of 2001 and $(31), and $(13) in the fourth and third quarters of 2000, 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 $31, $49 and $23 in the third, second and first quarters of 2001 and $(7), and $(16) in the fourth and third quarters of 2000, respectively. 10
----------------------------------------- ------------------------------------------------------------------------------------ First Quarter 2001 Fourth Quarter 2000 Third Quarter 2000 ----------------------------------------- ---------------------------------------- -------------------------------------- Interest Interest Interest Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/ Balance Expense Rate Balance Expense Rate Balance Expense Rate --------------- ------------- -------- --------------- -------------- -------- --------------- ------------ -------- $ 6,675 $ 102 6.17 % $ 5,663 $ 99 6.96 % $ 4,700 $ 83 6.97 % 31,903 435 5.48 37,936 551 5.79 40,763 633 6.20 62,491 852 5.49 53,251 758 5.68 53,793 749 5.55 55,221 860 6.26 79,501 1,205 6.05 83,728 1,276 6.08 144,404 2,813 7.90 147,336 3,034 8.19 151,903 3,151 8.26 29,540 515 7.06 30,408 560 7.32 29,845 555 7.39 25,989 530 8.27 27,220 622 9.09 26,113 597 9.09 300 6 7.82 264 6 8.44 235 5 8.30 -------------------------------------- ------------------------------------- ----------------------------------- 200,233 3,864 7.82 205,228 4,222 8.18 208,096 4,308 8.24 -------------------------------------- ------------------------------------- ----------------------------------- 82,710 1,532 7.43 92,679 1,733 7.47 94,380 1,759 7.45 21,744 467 8.71 21,117 483 9.11 20,185 466 9.18 40,461 784 7.86 40,390 843 8.30 41,905 848 8.06 25,947 589 9.08 25,592 570 8.91 25,049 559 8.93 14,464 443 12.41 12,295 384 12.43 10,958 344 12.49 2,330 43 7.54 2,248 48 8.49 2,190 48 8.79 -------------------------------------- ------------------------------------- ----------------------------------- 187,656 3,858 8.29 194,321 4,061 8.34 194,667 4,024 8.25 -------------------------------------- ------------------------------------- ----------------------------------- 387,889 7,722 8.05 399,549 8,283 8.26 402,763 8,332 8.24 -------------------------------------- ------------------------------------- ----------------------------------- 17,248 352 8.28 14,828 335 9.00 11,501 241 8.39 -------------------------------------- ------------------------------------- ----------------------------------- 561,427 10,323 7.42 590,728 11,231 7.58 597,248 11,314 7.55 -------------------------------------- ------------------------------------- ----------------------------------- 23,020 23,458 24,191 64,251 63,272 63,578 -------------------------------------- ------------------------------------- ----------------------------------- $648,698 $677,458 $685,017 ====================================== ===================================== =================================== $ 20,406 61 1.21 $ 22,454 80 1.42 $ 23,195 78 1.33 107,015 808 3.06 101,376 788 3.09 99,710 740 2.96 77,772 1,068 5.57 78,298 1,105 5.62 77,864 1,083 5.53 7,137 108 6.16 7,570 127 6.68 8,598 140 6.46 -------------------------------------- ------------------------------------- ----------------------------------- 212,330 2,045 3.91 209,698 2,100 3.98 209,367 2,041 3.88 -------------------------------------- ------------------------------------- ----------------------------------- 24,358 332 5.53 26,223 424 6.43 18,845 286 6.03 3,993 52 5.27 5,884 61 4.14 11,182 177 6.30 22,506 284 5.11 24,064 339 5.62 25,972 364 5.58 -------------------------------------- ------------------------------------- ----------------------------------- 50,857 668 5.32 56,171 824 5.84 55,999 827 5.87 -------------------------------------- ------------------------------------- ----------------------------------- 263,187 2,713 4.18 265,869 2,924 4.38 265,366 2,868 4.30 -------------------------------------- ------------------------------------- ----------------------------------- 94,792 1,377 5.89 122,680 1,942 6.30 136,007 2,223 6.51 28,407 290 4.14 27,548 285 4.13 24,233 237 3.88 73,752 1,222 6.63 73,041 1,322 7.24 74,022 1,344 7.26 -------------------------------------- ------------------------------------- ----------------------------------- 460,138 5,602 4.92 489,138 6,473 5.27 499,628 6,672 5.32 -------------------------------------- ------------------------------------- ----------------------------------- 92,431 91,685 91,368 48,263 48,996 46,286 47,866 47,639 47,735 -------------------------------------- ------------------------------------- ----------------------------------- $648,698 $677,458 $685,017 ====================================== ===================================== =================================== 2.50 2.31 2.23 .89 .90 .87 -------------------------------------- ------------------------------------- ----------------------------------- $ 4,721 3.39 % $ 4,758 3.21 % $ 4,642 3.10 % ====================================== ===================================== ===================================
11 [GRAPHIC] Loan Portfolio Diversity September 30, 2001 $339 Billion Total Loan Portfolio Commercial: Real Estate 8% Transportation 3% Business services 2% Media 2% Equipment and General Manufacturing 2% Agribusiness 2% Health Care & Pharmaceuticals 2% Telecom 2% Autos 2% Other Commercial less than 2% 27% ---------- Total commercial loans 52% Consumer: Residential Real Estate Secured 31% Bank Card 5% Other Consumer 12% ---------- Total consumer loans 48% ---------- 100% ========== . On balance sheet loan portfolio equally balanced between consumer and commercial . 65% of consumer portfolio is secured by residential real estate . Largest concentration, at 31% of total portfolio, is residential real estate secured loans . Extremely diverse commercial portfolio, spread across many industry sectors with the largest segment being commercial real estate at 8% of total loans. . No other commercial industry concentration is greater than 3% of total loans 12 Average Managed Loans & Leases (Dollars in million)
3Q00 4Q00 1Q01 2Q01 3Q01 ------------- ------------ ------------ ----------- ----------- Commercial - Domestic $150,155 $146,444 $144,217 $140,589 $131,871 Commercial - Foreign 29,373 29,936 29,128 27,184 25,267 Commercial Real Estate - Domestic 25,748 26,326 25,989 25,293 24,132 Commercial Real Estate - Foreign 235 264 300 352 366 ------------- ------------ ------------ ----------- ----------- Total Commercial 205,511 202,970 199,634 193,418 181,636 ------------- ------------ ------------ ----------- ----------- Residential Mortgage 77,539 76,830 76,296 80,702 82,904 Home Equity Lines 20,185 21,117 21,744 21,958 22,115 Direct/Indirect Consumer 39,797 39,895 40,202 40,248 39,963 Consumer Finance 21,869 22,000 21,979 22,410 22,309 Bankcard 20,681 21,461 23,038 24,121 25,310 Consumer Foreign 2,190 2,248 2,330 2,291 2,176 ------------- ------------ ------------ ----------- ----------- Total Consumer 182,261 183,551 185,589 191,730 194,777 ------------- ------------ ------------ ----------- ----------- Total Managed Loans & Leases $387,772 $386,521 $385,223 $385,148 $376,413 ============= ============ ============ =========== =========== Annualized Growth Rate from previous quarter by loan type: Total Commercial 11% (5)% (7)% (12)% (24) Total Consumer (34) 3 5 13 6% Total Managed Loans & Leases (11) (1) (1) 0 (9) by Business Segment: Consumer & Commercial Banking 0% Asset Management 5 Global Corporate & Investment Banking (34) Equity Investments (19) Corporate Other (8) Loans are classified as domestic or foreign based upon the domicile of the borrower. Prior periods are restated for comparison (e.g. acquisitions, divestitures, sales and securitizations). Managed Loans and Leases [GRAPHIC] 3Q00 4Q00 1Q01 2Q01 3Q01 ------------- ------------ ------------ ----------- ----------- Commercial and commercial real estate - domestic 45% 44% 44% 43% 41% Commercial and commercial real estate - foreign 8% 8% 8% 7% 7% Residential first mortgage 20% 20% 20% 21% 22% Credit card 5% 6% 6% 6% 7% Other consumer, home equity lines and consumer finance 22% 22% 22% 23% 23%
Net Charge-offs and Net Charge-off Ratios (Dollars in millions)
3Q00 4Q00 1Q01 2Q01 3Q01 ----------------- -------------------- ------------------ ---------------- --------------- Amt Ratio Amt. Ratio Amt. Ratio Amt. Ratio Amt. Ratio -------- ------- --------- -------- ------- ------ ------- ------- ------- ------- Commercial - domestic $ 185 0.48% $ 704 1.90% $ 415 1.17% $ 408 1.18% $ 412 1.26% Commercial - foreign 23 0.30% 34 0.45% 34 0.46% 57 0.84% 57 0.89% Commercial real estate - domestic (2) - 3 - 6 - 12 0.18% 4 0.07% Commercial real estate - foreign -- - -- - -- - - - - - -------- ------- ------- ------- ------- Total Commercial 206 0.39% 741 1.44% 455 0.92% 477 1.00% 473 1.05% ======== ======= ======= ======= ======= Residential mortgage 6 0.03% 13 0.05% 6 0.03% 7 0.03% 7 0.04% Home equity lines 2 0.04% 12 0.24% 6 0.11% 4 0.07% 4 0.07% Direct/indirect consumer 61 0.57% 111 1.10% 75 0.76% 65 0.65% 94 0.94% Consumer finance/(1)/ 68 1.08% 82 1.27% 93 1.45% 67 1.00% 720 17.47% Bankcard 79 2.89% 101 3.25% 125 3.51% 158 4.01% 181 4.08% Other consumer domestic 12 n/m 14 n/m 11 n/m 8 n/m 11 n/m Foreign consumer 1 0.20% 1 0.18% 1 0.19% 1 0.24% 1 0.21% -------- ------- ------- ------- ------- Total Consumer/(1)/ 229 0.47% 334 0.69% 317 0.68% 310 0.65% 1,018 2.27% -------- ------- ------- ------- ------- Total Net Charge-offs/(1)/ $ 435 0.43% $ 1,075 1.07% $ 772 0.81% $ 787 0.82% $ 1,491 1.65% ======== ======= ======= ======= ======= Managed bankcard information: End of period receivables $ 21,024 $23,009 $23,185 $24,871 $25,501 Average receivables 20,681 21,461 23,038 24,121 25,310 Charge-offs 216 233 248 297 307 Charge-off ratio 4.16% 4.32% 4.37% 4.94% 4.81% By Business Segment: Consumer & Commercial Banking $ 211 0.48% $ 424 0.95% $ 409 0.92% $ 388 0.85%$ 433 0.94% Global Corporate & Investment Banking 143 0.59% 505 2.12% 244 1.08% 252 1.19% 285 1.47% Asset Management - - 38 0.62% 8 0.14% 63 1.03% 16 0.26% Equity Investments - - 1 1.14% - - - - - - Corporate Other/(1)/ 81 0.30% 107 0.41% 111 0.49% 84 0.38% 757 4.11% -------- ------- ------- ------- ------- Total Net Charge-offs $ 435 0.43% $ 1,075 1.07% $ 772 0.81% $ 787 0.82% $ 1,491 1.65% ======== ======= ======= ======= =======
Loans are classified as domestic or foreign based upon the domicile of the borrower. /(1)/ Third quarter 2001 includes $635 million related to the exit of certain consumer finance businesses. Excluding these net charge-offs, the ratios would be 2.07% for Consumer Finance, 0.85% for Total Consumer, and 0.95% for Total Net Charge-offs. Net Charge-offs [GRAPHIC]
3Q00 4Q00 1Q01 2Q01 3Q01 ---------------------------------------------------- Total Net Charge-offs, incl. exited cons. fin. businesses $ 435 $1,075 $ 772 $ 787 $ 1,491 Charge-offs - exited consumer finance businesses $ 635 Total Net Charge-offs, excl. exited cons. fin. businesses $ 435 $1,075 $ 772 $ 787 $ 856 Net Charge-off Ratio, incl. exited cons. fin. businesses 0.43% 1.07% 0.81% 0.82% 1.65% Net Charge-off Ratio, excl. exited cons. fin. businesses 0.43% 1.07% 0.81% 0.82% 0.95%
14 Nonperforming Assets (Dollars in millions)
3Q00 4Q00 1Q01 2Q01 3Q01 ---------- ---------- --------- --------- --------- Commercial - domestic $1,950 $2,777 $3,110 $3,209 $2,705 Commercial - foreign 564 486 529 562 566 Commercial real estate - domestic 136 236 206 201 257 Commercial real estate - foreign 1 3 3 3 2 ---------- ---------- --------- --------- --------- Total Commercial 2,651 3,502 3,848 3,975 3,530 ---------- ---------- --------- --------- --------- Residential mortgage 502 551 553 573 491 Home equity lines 47 32 36 42 61 Direct/Indirect consumer 19 19 19 17 20 Consumer finance 951 1,095 1,153 1,234 9 Foreign consumer 7 9 11 8 8 ---------- ---------- --------- --------- --------- Total Consumer 1,526 1,706 1,772 1,874 589 ---------- ---------- --------- --------- --------- Total Nonperforming Loans 4,177 5,208 5,620 5,849 4,119 Foreclosed properties 226 249 277 346 404 ---------- ---------- --------- --------- --------- Total Nonperforming Assets/(1)/ $4,403 $5,457 $5,897 $6,195 $4,523 ========== ========== ========= ========= ========= Loans past due 90 days or more and still accruing $ 503 $ 495 $ 527 $ 608 $ 691 Nonperforming Assets/Total Assets 0.65% 0.85% 0.97% 0.99% 0.71% Nonperforming Assets/Total Loans, Leases and Forclosed Properties 1.09 1.39 1.54 1.63 1.33 Nonperforming Loans/Total Loans and Leases 1.04 1.33 1.47 1.54 1.22 Allowance for Loan Losses $6,739 $6,838 $6,900 $6,911 $6,665 Allowance/Total Loans 1.67% 1.74% 1.80% 1.82% 1.97% Allowance/Total Nonperforming Loans 161 131 123 118 162 By Business Segment: Consumer & Commercial Banking $1,058 $1,223 $1,446 $1,723 $1,846 Global Corporate & Investment Banking 1,839 2,376 2,433 2,325 1,806 Asset Management 36 166 235 228 210 Equity Investments 12 20 20 43 58 Corporate Other 1,458 1,672 1,763 1,876 603 ---------- ---------- --------- --------- -------- Total Nonperforming Assets $4,403 $5,457 $5,897 $6,195 $4,523 ========== ========== ========= ========= ========
Loans are classified as domestic or foreign based upon the domicile of the borrower. (1) Balances do not include $1.3 billion, $120 million, $144 million, $124 million and $95 million of loans held for sale, included in other assets at September 30, 2001, June 30, 2001, March 31, 2001, December 31, 2000, and September 30, 2000, respectively, which would have been classified as nonperforming had they been included in loans. In the third quarter of 2001, $1.2 billion of nonperforming subprime real estate loans were transferred to loans held for sale as a result of the exit of certain consumer finance businesses. Total Allowance to Total Loans [GRAPHIC] Total Allowance to Total Loans 3Q00 4Q00 1Q01 2Q01 3Q01 ------------------------------------------------------------ 1.67% 1.74% 1.80% 1.82% 1.97% Total Allowance to Total Nonperforming Loans [GRAPHIC] 3Q00 4Q00 1Q01 2Q01 3Q01 ------------------------------------------------------------ Total Allowance to Total Nonperforming Loans 161% 131% 123% 118% 162%
15 Additional Asset Quality Information Third Quarter 2001 (Dollars in millions)
Net Charge-offs Provision --------------- ----------------- Reported third quarter 2001 $ 1,491 $ 1,251 Impact of Consumer Finance business exits/(1)/ 635 395 --------------- ---------------- Adjusted for business exits $ 856/(2)/ $ 856 Allowance for loan losses --------------- Balance as of June 30, 2001 $ 6,911 Impact of Consumer Finance business exits/(1)/ 240 Other activity 6 --------------- Balance as of September 30, 2001 $ 6,665
(1) $240 million of reserve utilized as a result of exiting consumer real estate subprime lending business as announced August 15, 2001. (2) Includes $135 million in charge-offs related to loan sales. 16 Capital Management (Dollars in millions)
3Q00 4Q00 1Q01 2Q01 3Q01 ---------- ---------- ---------- ---------- ---------- Tier 1 capital $ 40,696 $ 40,667 $ 40,769 $ 41,794 $ 41,517 Total capital 60,063 59,826 63,102 63,967 63,311 Net risk-weighted assets 556,146 542,169 532,824 529,201 522,291 Tier 1 capital ratio 7.32 % 7.50 % 7.65 % 7.90 % 7.95 % Total capital ratio 10.80 11.04 11.84 12.09 12.12 Ending equity / ending assets 6.98 7.42 8.02 7.88 7.83 Ending capital / ending assets 7.71 8.19 8.83 8.67 8.61 Average equity / average assets 6.97 7.03 7.38 7.43 7.66
Share Repurchase Program ------------------------------------------------------------------------- 24 million common shares were repurchased during the third quarter of 2001 as a part of ongoing share repurchase programs. In total, 199 million common shares have been repurchased since June 1999- returning $11.1 billion of capital to shareholders. 31 million shares remain outstanding under current authorized programs. Capital Management (Shares in Million) [GRAPHIC]
3Q00 4Q00 1Q01 2Q01 3Q01 ---------------------------------------------------------------------------------------------- Shares outstanding at period end 1,630.8 1,613.6 1,602.0 1,601.1 1,582.1 Tier 1 capital ratio 7.32% 7.50% 7.65% 7.90% 7.95%
17 Balance Sheet Trends (Dollars in billions) Ending Total Assets [GRAPHIC]
3Q00 4Q00 1Q01 2Q01 3Q01 ------------- ------------- ------------- ------------- ------------ Ending Total Assets $ 672 $ 642 $ 610 $ 626 $ 640 ---------------------------------------------------------------------------------------------------------------------- Ending Balances --------------- 3Q00 4Q00 1Q01 2Q01 3Q01 ------------- ------------- ------------- ------------- ------------ Investment Securities $ 81 $ 66 $ 50 $ 55 $ 76 Trading Assets and Resales 81 71 66 79 80 Loans and Leases 403 392 383 380 339 Total Assets 672 642 610 626 640 ----------------------------------------------------------------------------------------------------------------------
Average Total Assets [GRAPHIC]
3Q00 4Q00 1Q01 2Q01 3Q01 ------------- ------------- ------------- ------------- ------------ Average Total Assets $ 685 $ 677 $ 649 $ 656 $ 642 ---------------------------------------------------------------------------------------------------------------------- Average Balances ---------------- 3Q00 4Q00 1Q01 2Q01 3Q01 ------------- ------------- ------------- ------------- ------------ Investment Securities $ 84 $ 80 $ 55 $ 56 $ 59 Trading Assets and Resales 95 91 94 101 104 Loans and Leases 403 400 388 384 358 Total Assets 685 677 649 656 642
E-Commerce & BankofAmerica.com [GRAPHIC] Active On-line Banking Subscribers (in thousands) Bill-pay On-line Only Total Sep-00 537 1,061 1,598 Dec-00 574 1,212 1,786 Mar-01 672 1,415 2,087 Jun-01 762 1,546 2,308 Sep-01 844 1,695 2,539 Online Banking Active Penetration of Total DDA Households 3Q00 12% 4Q00 14% 1Q01 16% 2Q01 17% 3Q01 18% Bill Payment Volume (in millions) $ Volume % Electronic 3Q00 2,776 73% 4Q00 2,934 73% 1Q01 3,326 73% 2Q01 3,614 73% 3Q01 E 4,169 74% September 01 = Estimate % Reduction in Attrition Rates On-line vs. Off line customers On-line Only Customers 48% On-line & Bill-pay Customers 75% Bank of America Direct Clients at period end Companies Users 3Q00 3,215 17,461 4Q00 3,764 21,831 1Q01 4,312 26,679 2Q01 4,950 32,134 3Q01 5,770 38,614 Bank of America has the largest online banking customer base with over 4 million subscribers Even more important is being the bank with the largest active subscriber base with nearly a 20% customer penetration rate Nearly 1 million active bill pay users pay over $4 billion worth of bills quarterly Currently, over 130 bill payers are presenting nearly 400,000 e-bills per quarter 19 Banc of America Securities League Table Rankings (Percent share of volume) [GRAPHIC] High Yield (Full Credit to Book - equal if joint) YTD00 6% #8 YTD01 10% #5 High Grade (Full Credit to Book) YTD00 9% #5 YTD01 11% #4 Equity Underwriting (Apportioned Credit to Book) YTD00 3% #9 YTD01 4% #8 Loan Syndications (Lead Arranger) YTD00 23% #2 YTD01 18% #2 20