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):
July 19, 1999
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)
(704) 386-5000
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS.
Release of Second Quarter Earnings. On July 19, 1999, Bank of America
Corporation, the registrant (the "Registrant"), announced financial results for
the second quarter of fiscal 1999, reporting earnings of $1.92 billion and
earnings per common share of $1.10 ($1.07 diluted). A copy of the press release
announcing the results of the Registrant's fiscal quarter ended June 30, 1999 is
filed as Exhibit 99.1 to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed herewith:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
99.1 Press Release dated July 19, 1999 with respect to
the Registrant's financial results for the fiscal
quarter ended June 30, 1999.
<PAGE>
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: July 23, 1999
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
99.1 Press Release dated July 19, 1999 with respect to
the Registrant's financial results for the fiscal
quarter ended June 30, 1999.
<PAGE>
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
July 19, 1999
Contact: Investors Susan Carr (704-386-8059) or Kevin Stitt (704-386-5667)
Media Bob Stickler or Rick Beebe (704-386-8465)
BANK OF AMERICA SECOND QUARTER OPERATING EARNINGS RISE
TO A RECORD $2.06 BILLION
CHARLOTTE, NC, July 19, 1999 - Bank of America Corporation today reported
operating earnings of $2.06 billion, or $1.18 per share ($1.15 diluted), for the
second quarter of 1999, up from $2.02 billion, or $1.16 per share ($1.13
diluted), a year earlier. The company's return on common equity was 17.64
percent and the return on average assets was 1.34 percent. Operating earnings
increased 8 percent from the first quarter of 1999.
After a merger-related charge of $145 million after taxes, net income in the
latest quarter was $1.92 billion, or $1.10 per share ($1.07 diluted). In the
second quarter of 1998, a $277 million after-tax gain on the sale of Florida
branches brought net income to $2.30 billion, or $1.32 per share ($1.28
diluted).
Cash operating earnings - which exclude the amortization of intangibles - were
$2.28 billion, or $1.31 per share ($1.28 diluted). The return on tangible equity
was 28.49 percent. A year earlier, cash operating earnings were $2.25 billion,
or $1.29 per share ($1.25 diluted).
"Bank of America continues to make significant progress toward our goals, as
reflected in our successful merger integration efforts, solid core operating
results and many new initiatives aimed at improving and expanding customer
relationships," said Hugh L. McColl Jr., chairman and chief executive officer.
more
<PAGE>
Page 2
For the first six months of 1999, operating earnings were $3.97 billion and net
income was $3.83 billion. Operating earnings per share were $2.28 ($2.23
diluted) and reported earnings per share were $2.20 per share ($2.15 diluted). A
year ago, operating income was $3.99 billion, or $2.30 per share ($2.23
diluted). For the first six months of 1998, net income was $3.63 billion, or
$2.09 per share ($2.03 diluted).
Second Quarter Earnings Highlights (compared to a year ago)
- -----------------------------------------------------------
o The efficiency ratio improved nearly 300 basis points to 54 percent, led by a
7 percent decline in expenses.
o Average managed loans increased 11 percent, driven by a 16 percent increase
in managed consumer loans and a 6 percent increase in managed commercial
loans.
o Fee-based revenue was generally strong. Credit card and deposit fee income
was up significantly while investment banking, although below last year's
record, also had a strong performance.
Net Interest Income
- -------------------
Fully taxable-equivalent net interest income of $4.66 billion was essentially
unchanged from a year earlier, as the impact of loan and deposit growth was
mostly offset by the effects of asset securitizations, divestitures, loan sales
and a higher level of lower-yielding securities. Average managed loans grew 11
percent to $389 billion, reflecting increases in both consumer and commercial
loans. The net yield on earning assets declined by 27 basis points to 3.53
percent.
Noninterest Income
- ------------------
Noninterest income declined 3 percent to $3.52 billion, as gains in trading,
credit card, brokerage, asset management and deposit fee revenues were offset by
lower mortgage banking income, investment banking revenue and other income. The
reduction in investment banking revenue resulted in part from the sale of one of
the company's investment banking units in the second half of 1998. A year ago,
other income included a gain on the sale of the Columbia Seafirst Center.
Securities gains were $52 million compared to $120 million in the second quarter
of 1998.
more
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Page 3
Efficiency
- ----------
Noninterest expense was reduced by 7 percent to $4.46 billion, reflecting cost
savings resulting from recent mergers somewhat offset by continued spending on
merger transition projects. Personnel expense dropped by 7 percent, and other
operating expenses were also reduced. The efficiency ratio was 54 percent, a
significant improvement from 57 percent a year earlier.
Credit Quality
- --------------
The provision for credit losses in the second quarter was $510 million, compared
to $495 million a year earlier. Net charge-offs were $520 million versus $505
million a year ago. Net charge-offs represented .57 percent of loans and leases,
a 2-basis-point improvement from a year ago.
Nonperforming assets were $3.07 billion, or .84 percent of loans, leases and
foreclosed properties on June 30, 1999, compared to $2.53 billion, or .73
percent a year earlier. The allowance for credit losses totaled $7.10 billion on
June 30, 1999, equal to 252 percent of nonperforming loans and 1.95 percent of
loans and leases. The allowance was $6.73 billion, or 300 percent of
nonperforming loans and 1.95 percent of loans and leases, a year earlier.
Capital Strength
- ----------------
Shareholders' equity stood at $45.6 billion at June 30, 1999. Total capital was
equal to 8.24 percent of assets. The company's market capitalization was
$126 billion. On June 23, the company authorized the repurchase of up to
130 million common shares over 24 months, with an expectation to complete the
program within 18months. Through June 30, the company had purchased 25 million
shares.
Business Segment Results
- ------------------------
Consumer Banking, which serves individuals and small businesses, earned $979
million, while Commercial Banking, which serves companies with from $10 million
to $500 million in revenue, earned $220 million. Together, they represented 58
percent of the company's operating income. Global Corporate and Investment
Banking, which serves large corporate customers, earned $581 million,
representing 28 percent of the company's earnings. Principal Investing and Asset
Management, which encompasses the private bank, trust, investment management,
mutual funds, retail brokerage and principal investing, earned $184 million,
representing 9 percent.
more
<PAGE>
Page 4
Bank of America, with $614 billion in assets, is the largest bank in the United
States. The company serves more than 30 million households and 2 million
businesses across the country, offering customers the largest and most
convenient delivery network from offices and ATMs to telephone and internet
access. It also provides comprehensive international corporate financial
services for clients doing business around the world. The company creates
financial relationships featuring a full array of financial services, from
traditional banking products to investments and capital raising within the
securities markets. Bank of America stock (ticker: BAC) is listed on the New
York, Pacific and London stock exchanges and certain shares are listed on the
Tokyo Stock Exchange. Further investor information can be found at
www.bankofamerica.com/investor.
www.bankofamerica.com
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Three Months Six Months
Ended June 30 Ended June 30
Financial Summary --------------------------------- ------------------------------
- ------------------ 1999 1998 1999 1998
<S> -------------- -------------- ------------- --------------
(In millions, except per-share data) <C> <C> <C> <C>
Operating net income $ 2,060 $ 2,021 $ 3,974 $ 3,994
Operating earnings per common share 1.18 1.16 2.28 2.30
Diluted operating earnings per common share 1.15 1.13 2.23 2.23
Cash basis earnings (1) 2,285 2,248 4,421 4,449
Cash basis earnings per common share 1.31 1.29 2.54 2.56
Cash basis diluted earnings per common share 1.28 1.25 2.48 2.49
Dividends paid per common share .45 .38 .90 .76
Price per share of common stock at period end 73.31 76.69 73.31 76.69
Average common shares 1,743.503 1,732.168 1,740.549 1,728.353
Average diluted common shares 1,786.844 1,784.712 1,783.316 1,778.947
Summary Income Statement (Operating Basis)
- -----------------------------------------
(Taxable-equivalent in millions)
Net interest income $ 4,663 $ 4,668 $ 9,308 $ 9,327
Provision for credit losses (510) (495) (1,020) (1,005)
Gains on sales of securities 52 120 182 333
Noninterest income 3,522 3,636 6,745 7,129
Other noninterest expense (4,457) (4,767) (8,910) (9,471)
--------------- ---------------- --------------- -------------
Income before income taxes 3,270 3,162 6,305 6,313
Income taxes - including FTE adjustment 1,210 1,141 2,331 2,319
--------------- ---------------- --------------- -------------
Operating net income $ 2,060 $ 2,021 $ 3,974 $ 3,994
=============== ================ =============== =============
Summary Balance Sheet
- ----------------------
(Average balances in billions)
Loans and leases $ 364.753 $ 342.787 $ 362.760 $ 342.381
Managed loans and leases (2) 389.373 351.321 387.164 349.297
Securities 77.855 63.052 76.848 64.412
Earning assets 530.049 491.945 526.884 492.878
Total assets 615.364 573.975 612.510 576.394
Deposits 342.249 342.369 344.080 341.125
Shareholders' equity 46.891 44.857 46.587 44.246
Common shareholders' equity 46.821 44.198 46.516 43.579
Performance Indices (Operating Basis)
- -------------------------------------
Return on average common shareholders' equity 17.64 % 18.24 % 17.22 % 18.38 %
Return on average tangible common shareholders' equity 28.49 31.23 27.97 31.88
Return on average assets 1.34 1.41 1.31 1.40
Return on average tangible assets 1.53 1.61 1.49 1.60
Net interest yield 3.53 3.80 3.55 3.81
Efficiency ratio 54.44 57.38 55.49 57.55
Cash basis efficiency ratio 51.70 54.65 52.71 54.79
Net charge-offs (in millions) $ 520 $ 505 $ 1,039 $ 1,021
% of average loans and leases .57 % .59 % .58 % .60 %
Managed bankcard net charge-offs as a % of average
managed bankcard receivables 6.13 6.52 6.07 6.65
Reported Results (Including Merger-Related Charges)
- ---------------------------------------------------
(In millions, except per-share data)
Net income $ 1,915 $ 2,298 $ 3,829 $ 3,629
Earnings per common share 1.10 1.32 2.20 2.09
Diluted earnings per common share 1.07 1.28 2.15 2.03
Return on average common shareholders' equity 16.40 20.76 16.59 16.69
(1) Cash basis earnings equal operating net income excluding amortization of intangibles.
(2) Prior periods are restated for comparison (e.g. acquisitions, divestitures and securitizations).
(3) Ratios and amounts for 1998 have not been restated to reflect the impact of the
BankAmerica merger.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation - Continued
June 30
----------------------------------
1999 1998
<S> ----------------------------------
Balance Sheet Highlights
- ------------------------
(In billions, except per-share data) <C> <C>
Loans and leases $ 363.581 $ 344.358
Securities 76.511 60.853
Earning assets 528.797 486.339
Total assets 614.102 571.890
Deposits 339.045 347.877
Shareholders' equity 45.631 46.709
Common shareholders' equity 45.551 46.646
Per share 26.44 26.88
Total equity to assets ratio (period-end) 7.43 % 8.17 %
Risk-based capital (3)
Tier 1 capital ratio 7.38 7.32
Total capital ratio 11.09 11.77
Leverage ratio (3) 6.34 6.21
Common shares issued and outstanding (in millions) 1,722.931 1,735.233
Allowance for credit losses $ 7.096 $ 6.731
Allowance for credit losses as a % of loans and leases 1.95 % 1.95 %
Allowance for credit losses as a % of nonperforming loans 252.38 299.98
Nonperforming loans $ 2.812 $ 2.244
Nonperforming assets 3.070 2.526
Nonperforming assets as a % of:
Total assets .50 % .44 %
Loans, leases and foreclosed properties .84 .73
Other Data
- ----------
Full-time equivalent headcount 161,919 178,729
Banking centers 4,531 4,866
ATMs 14,051 14,691
<CAPTION>
BUSINESS SEGMENT RESULTS - Three months ended June 30, 1999
(In millions)
Operating Average Loans Return on Average
Total Revenue Net Income and Leases Equity
-------------- --------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Consumer Banking $ 4,547 $ 979 $ 183,853 20%
Commercial Banking 766 220 55,350 19
Global Corporate and Investment Banking 2,133 581 107,278 19
Principal Investing and Asset Management 634 184 18,864 25
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Consolidated Financial Highlights
(Excludes Merger-Related Charges)
- -----------------------------------------------------------------------------------------------------------------------------
(Dollars in Millions Except Per-Share Information, Shares in Millions)
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
1999 1999 1998 1998 1998
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net income $ 2,060 $ 1,914 $ 1,603 $ 893 $ 2,021
Cash basis earnings 2,285 2,136 1,825 1,117 2,248
Earnings per common share 1.18 1.10 .92 .51 1.16
Diluted earnings per common share 1.15 1.08 .91 .50 1.13
Cash basis earnings per common share 1.31 1.23 1.05 .64 1.29
Cash basis diluted earnings per common share 1.28 1.20 1.04 .63 1.25
Dividends per common share .45 .45 .45 .38 .38
Average common shares issued and outstanding 1,743.503 1,737.562 1,731.314 1,740.092 1,732.168
Average diluted common shares issued and oustanding 1,786.844 1,779.708 1,763.055 1,784.418 1,784.712
Period-end common shares issued and outstanding 1,722.931 1,740.872 1,724.484 1,742.038 1,735.233
Period-end managed loans and leases* $ 388,754 $ 382,947 $ 377,704 $ 365,707 $ 352,516
Average managed loans and leases* 389,373 384,823 376,507 361,087 351,321
*Prior periods restated for comparison (e.g. acquisitions, divestitures and securitizations).
Performance ratios:
Return on average assets 1.34 % 1.27 % 1.05 % .61 % 1.41 %
Return on average tangible assets 1.53 1.46 1.22 .79 1.61
Return on average common shareholders' equity 17.64 16.78 14.12 7.73 18.24
Return on average tangible common shareholders' equity 28.49 27.44 23.97 14.51 31.23
Efficiency ratio 54.44 56.59 64.16 66.55 57.38
Cash basis efficiency ratio 51.70 53.76 61.12 63.28 54.65
Net interest yield 3.53 3.58 3.58 3.60 3.80
Book value per common share $ 26.44 $ 26.86 $ 26.60 $ 27.12 $ 26.88
Market price per share of common stock:
High for the period 75 74 1/2 66 5/8 88 7/16 85
Low for the period 62 1/2 59 1/2 44 47 7/8 72 1/16
Closing price 73 5/16 70 5/8 60 1/8 53 1/2 76 11/16
Other data:
Number of banking centers 4,531 4,676 4,708 4,870 4,866
Number of ATMs 14,051 14,229 14,327 14,333 14,691
Full-time equivalent employees 161,919 166,422 170,975 174,844 178,729
<CAPTION>
Business Segment Results - Second Quarter 1999
Average loans Return on
Total revenue Net income and leases average equity
---------------- ------------------------------------------ ----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Consumer Banking 4,547 56 979 48 183,853 50 20
Commercial Banking 766 9 220 11 55,350 15 19
Global Corporate and Investment Banking 2,133 26 581 28 107,278 29 19
Principal Investing and Asset Management 634 8 184 9 18,864 5 25
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Consolidated Statement of Income
(Operating Results excluding Merger-Related Charges)
- --------------------------------------------------------------------------------------------------------------------------------
(Dollars in Millions, Except Per-Share Information)
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
1999 1999 1998 1998 1998
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income
Interest and fees on loans and leases $ 6,853 $ 6,770 $ 7,030 $ 7,084 $ 7,105
Interest and dividends on securities 1,143 1,175 1,191 1,105 1,077
Federal funds sold and securities
purchased under agreements to resell 387 381 486 492 433
Trading account assets 525 545 612 584 692
Other interest income 298 330 319 343 330
----------------------------------------------------------
Total interest income 9,206 9,201 9,638 9,608 9,637
----------------------------------------------------------
Interest expense
Deposits 2,168 2,312 2,598 2,830 2,690
Short-term borrowings 1,396 1,355 1,422 1,278 1,229
Trading account liabilities 150 129 165 194 262
Long-term debt 880 805 844 862 830
----------------------------------------------------------
Total interest expense 4,594 4,601 5,029 5,164 5,011
----------------------------------------------------------
Net interest income 4,612 4,600 4,609 4,444 4,626
Provision for credit losses 510 510 510 1,405 495
----------------------------------------------------------
Net interest income after provision for credit losses 4,102 4,090 4,099 3,039 4,131
Gains on sales of securities 52 130 404 280 120
Noninterest income
Service charges on deposit accounts 900 855 881 855 844
Mortgage servicing income 125 132 103 (93) 207
Investment banking income 555 388 356 376 664
Trading account profits and fees 395 500 96 (529) 232
Brokerage income 192 184 162 198 188
Nondeposit-related service fees 123 136 150 163 164
Asset management and fiduciary service fees 274 243 229 238 261
Credit card income 448 360 398 379 352
Other income 510 425 280 818 724
----------------------------------------------------------
Total noninterest income 3,522 3,223 2,655 2,405 3,636
----------------------------------------------------------
Other noninterest expense
Personnel 2,261 2,333 2,301 2,246 2,425
Occupancy 395 396 413 427 421
Equipment 339 358 384 346 334
Marketing 147 147 135 143 145
Professional fees 166 126 233 206 209
Amortization of intangibles 225 222 223 224 227
Data processing 214 190 205 195 186
Telecommunications 140 136 152 142 138
Other general operating 446 420 493 510 528
General administrative and other 124 125 148 144 154
----------------------------------------------------------
Total other noninterest expense 4,457 4,453 4,687 4,583 4,767
----------------------------------------------------------
Income before income taxes 3,219 2,990 2,471 1,141 3,120
Income tax expense 1,159 1,076 868 248 1,099
----------------------------------------------------------
Net income $ 2,060 $ 1,914 $ 1,603 $ 893 $ 2,021
----------------------------------------------------------
Net income available to common shareholders $ 2,059 $ 1,912 $ 1,602 $ 891 $ 2,010
----------------------------------------------------------
Per-share information
Earnings per common share $ 1.18 $ 1.10 $ .92 $ .51 $ 1.16
----------------------------------------------------------
Diluted earnings per common share $ 1.15 $ 1.08 $ .91 $ .50 $ 1.13
----------------------------------------------------------
Dividends per common share $ .45 $ .45 $ .45 $ .38 $ .38
----------------------------------------------------------
Average common shares issued and outstanding (in thousands) 1,743,503 1,737,562 1,731,314 1,740,092 1,732,168
----------------------------------------------------------
Average diluted common shares issued and outstanding (in thousands) 1,786,844 1,779,708 1,763,055 1,784,418 1,784,712
----------------------------------------------------------
Certain prior period amounts have been reclassified to conform to current period classifications.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Consolidated Balance Sheet
- -----------------------------------------------------------------------------------------------------------
(Dollars in Millions)
June 30 March 31 June 30
1999 1999 1998
------------ ------------ ------------
<S> <C> <C> <C>
Assets
Cash and cash equivalents $ 24,197 $ 25,925 $ 27,112
Time deposits placed and
other short-term investments 5,350 5,615 7,246
Securities:
Held for investment 1,499 1,522 4,414
Available for sale 75,012 76,947 56,439
------------ ------------ ------------
Total securities 76,511 78,469 60,853
------------ ------------ ------------
Federal funds sold and securities
purchased under agreements to resell 35,907 26,751 25,098
Trading account assets 35,427 42,382 38,073
Derivative-dealer assets 13,808 13,585 13,676
Loans and leases 363,581 363,102 344,358
Allowance for credit losses (7,096) (7,123) (6,731)
------------ ------------ ------------
Loans and leases, net of allowance for credit losses 356,485 355,979 337,627
------------ ------------ ------------
Premises and equipment, net 7,012 7,129 7,248
Customers' acceptance liability 1,908 2,194 3,734
Interest receivable 3,478 3,620 3,567
Mortgage servicing rights 3,538 3,037 2,474
Goodwill 12,741 12,651 13,182
Core deposit and other intangibles 1,875 1,942 2,140
Other assets 35,865 34,966 29,860
------------ ------------ ------------
Total assets $ 614,102 $ 614,245 $ 571,890
============ ============ ============
Liabilities
Deposits in domestic offices:
Interest-bearing $ 201,018 $ 201,343 $ 200,217
Noninterest-bearing 88,611 87,769 87,175
Deposits in foreign offices:
Interest-bearing 47,641 52,457 58,677
Noninterest-bearing 1,775 1,748 1,808
------------ ------------ ------------
Total deposits 339,045 343,317 347,877
------------ ------------ ------------
Federal funds purchased and securities
sold under agreements to repurchase 78,317 74,767 56,464
Trading account liabilities 16,394 16,454 16,091
Derivative-dealer liabilities 13,506 14,372 12,395
Commercial paper 7,604 8,379 5,265
Other short-term borrowings 34,045 31,366 17,172
Acceptances outstanding 1,908 2,194 3,735
Accrued expenses and other liabilities 17,638 20,712 16,162
Trust preferred securities 4,955 4,954 4,918
Long-term debt 55,059 50,899 45,102
------------ ------------ ------------
Total liabilities 568,471 567,414 525,181
------------ ------------ ------------
Shareholders' equity
Preferred stock 80 81 85
Common stock: authorized - 5,000,000,000 shares;
issued and outstanding 1,722,930,646;
1,740,871,815 and 1,735,233,309 shares 14,433 15,828 15,535
Retained earnings 33,256 32,128 30,847
Accumulated other comprehensive income (1,595) (580) 371
Other (543) (626) (129)
------------ ------------ ------------
Total shareholders' equity 45,631 46,831 46,709
------------ ------------ ------------
Total liabilities and shareholders' equity $ 614,102 $ 614,245 $ 571,890
============ ============ ============
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Quarterly Taxable-Equivalent Data
----------------------------------------------------------------------------------------------------------------------------
(Dollars in Millions)
Second Quarter 1999 First Quarter 1999
-------------------------------------------------------------
Interest Interest
Income Income
Average or Yield/ Average or Yield/
Balance Expense Rate Balance Expense Rate
<S> ---------- -------- ------- ---------- --------- ------
Earning assets <C> <C> <C> <C> <C> <C>
Loans and leases (1)
Commercial - domestic $ 138,257 $2,473 7.17 % $ 138,272 $2,444 7.16 %
Commercial - foreign 30,209 456 6.05 31,568 494 6.35
Commercial real estate - domestic 25,938 533 8.25 26,827 559 8.45
Commercial real estate - foreign 289 6 8.48 286 6 8.79
-------------------------------------------------------------
Total commercial 194,693 3,468 7.14 196,953 3,503 7.21
-------------------------------------------------------------
Residential mortgage 80,151 1,430 7.14 75,789 1,356 7.18
Home equity lines 15,857 304 7.68 15,537 298 7.79
Direct/Indirect consumer 42,240 859 8.15 41,652 847 8.24
Consumer finance 17,794 424 9.56 15,880 373 9.53
Bankcard 10,365 306 11.83 11,287 327 11.76
Foreign consumer 3,653 87 9.55 3,648 89 9.90
-------------------------------------------------------------
Total consumer 170,060 3,410 8.03 163,793 3,290 8.11
-------------------------------------------------------------
Total loans and leases 364,753 6,878 7.56 360,746 6,793 7.62
-------------------------------------------------------------
Securities
Held for investment 1,482 28 7.61 1,905 33 6.84
Available for sale (2) 76,373 1,139 5.97 73,925 1,161 6.31
-------------------------------------------------------------
Total securities 77,855 1,167 6.00 75,830 1,194 6.33
-------------------------------------------------------------
Federal funds sold and securities purchased under
agreements to resell 29,521 387 5.25 26,561 381 5.80
Time deposits placed and other short-term investments 5,159 65 5.03 6,408 88 5.58
Trading account assets 39,837 528 5.31 41,129 547 5.36
Other earning assets 12,924 232 7.23 13,008 243 7.53
-------------------------------------------------------------
Total earning assets (3) 530,049 9,257 7.00 523,682 9,246 7.13
-------------------------------------------------------------
Cash and cash equivalents 25,868 25,826
Other assets, less allowance for credit losses 59,447 60,116
-------------------------------------------------------------
Total assets $ 615,364 $ 609,624
-------------------------------------------------------------
Interest-bearing liabilities
Domestic interest-bearing deposits:
Savings $ 21,799 67 1.24 $ 21,637 71 1.33
NOW and money market deposit accounts 100,897 581 2.31 99,864 575 2.33
Consumer CDs and IRAs 73,601 847 4.61 74,362 857 4.68
Negotiated CDs, public funds and other time deposits 6,238 80 5.14 6,914 89 5.20
-------------------------------------------------------------
Total domestic interest-bearing deposits 202,535 1,575 3.12 202,777 1,592 3.18
-------------------------------------------------------------
Foreign interest-bearing deposits (4):
Banks located in foreign countries 16,947 196 4.62 20,379 268 5.34
Governments and official institutions 8,089 98 4.81 9,172 113 5.02
Time, savings and other 26,354 299 4.56 26,980 339 5.10
-------------------------------------------------------------
Total foreign interest-bearing deposits 51,390 593 4.62 56,531 720 5.17
-------------------------------------------------------------
Total interest-bearing deposits 253,925 2,168 3.42 259,308 2,312 3.62
-------------------------------------------------------------
Federal funds purchased, securities sold under agreements
to repurchase and other short-term borrowings 116,339 1,396 4.82 112,384 1,355 4.88
Trading account liabilities 14,178 150 4.25 12,679 129 4.13
Long-term debt (5) 58,302 880 6.03 52,642 805 6.12
-------------------------------------------------------------
Total interest-bearing liabilities (6) 442,744 4,594 4.16 437,013 4,601 4.26
-------------------------------------------------------------
Noninterest-bearing sources:
Noninterest-bearing deposits 88,324 86,623
Other liabilities 37,405 39,709
Shareholders' equity 46,891 46,279
-------------------------------------------------------------
Total liabilities and shareholders' equity $ 615,364 $ 609,624
-------------------------------------------------------------
Net interest spread 2.84 2.87
Impact of noninterest-bearing sources .69 .71
------------------- ----------------------------------------
Net interest income/yield on earning assets $4,663 3.53 % $4,645 3.58 %
-------------------------------------------------------------
(1) Nonperforming loans are included in the respective average loan balances. Income on such nonperforming loans is
recognized on a cash basis.
(2) The average balance sheet amounts and yields on securities available for sale are based on the average of
historical amortized cost balances.
(3) Interest income includes taxable-equivalent adjustments of $51 and $45 in the second and first quarters of 1999
and $41, $40 and $42 in the fourth, third, and second quarters of 1998, respectively. Interest income also includes
the impact of risk management interest rate contracts, which increased interest income on the underlying linked assets
$83 and $63 in the second and first quarters of 1999 and $70, $46, and $29 in the fourth, third, and second quarters of
1998, 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 decreased interest expense on
the underlying linked liabilities $52 and $60 in the second and first quarters of 1999 and $27, $9, and $4 in the fourth,
third, and second quarters of 1998, respectively.
<PAGE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Fourth Quarter 1998 Third Quarter 1998 Second Quarter 1998
- ----------------------------------------------------------------------------------------
Interest Interest Interest
Income Income Income
Average or Yield/ Average or Yield/ Average or Yield/
Balance Expense Rate Balance Expense Rate Balance Expense Rate
- --------------------- ------ --------------------------- --------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 136,629 $2,542 7.39 % $ 132,537 $ 2,538 7.59 % $ 127,788 $ 2,496 7.84 %
32,893 569 6.86 31,245 578 7.35 30,046 556 7.41
28,427 601 8.38 28,027 610 8.64 28,228 644 9.15
319 8 9.39 338 8 10.51 334 9 9.82
- ----------------------------------------------------------------------------------------
198,268 3,720 7.45 192,147 3,734 7.71 186,396 3,705 7.97
- ----------------------------------------------------------------------------------------
73,033 1,336 7.30 70,619 1,155 6.53 69,337 1,171 6.76
15,781 326 8.17 16,024 485 12.03 16,271 473 11.64
40,557 876 8.57 39,582 854 8.56 40,404 895 8.90
14,368 338 9.33 14,197 385 10.76 14,249 387 10.88
12,078 366 12.01 12,751 399 12.43 12,780 409 12.83
3,551 94 10.47 3,465 93 10.57 3,350 87 10.53
- ----------------------------------------------------------------------------------------
159,368 3,336 8.32 156,638 3,371 8.56 156,391 3,422 8.77
- ----------------------------------------------------------------------------------------
357,636 7,056 7.84 348,785 7,105 8.09 342,787 7,127 8.34
- ----------------------------------------------------------------------------------------
2,948 44 6.09 4,286 76 6.99 4,525 79 7.03
69,354 1,162 6.68 61,250 1,046 6.82 58,527 1,017 6.95
- ----------------------------------------------------------------------------------------
72,302 1,206 6.66 65,536 1,122 6.83 63,052 1,096 6.96
- ----------------------------------------------------------------------------------------
29,564 486 6.53 27,646 492 7.06 25,275 433 6.86
6,702 111 6.56 7,483 138 7.31 7,916 129 6.54
39,391 613 6.19 35,487 587 6.59 42,421 693 6.56
11,471 207 7.19 10,974 204 7.42 10,494 201 7.68
- ----------------------------------------------------------------------------------------
517,066 9,679 7.44 495,911 9,648 7.73 491,945 9,679 7.89
- ----------------------------------------------------------------------------------------
25,834 24,160 25,071
63,641 58,282 56,959
- ----------------------------------------------------------------------------------------
$ 606,541 $ 578,353 $ 573,975
- ----------------------------------------------------------------------------------------
$ 21,702 91 1.67 $ 22,775 107 1.87 $ 23,208 112 1.93
97,589 622 2.53 95,276 634 2.64 96,605 638 2.65
74,923 956 5.06 74,313 984 5.25 74,002 983 5.29
7,388 96 5.16 8,696 120 5.45 8,388 117 5.63
- ----------------------------------------------------------------------------------------
201,602 1,765 3.47 201,060 1,845 3.64 202,203 1,850 3.66
- ----------------------------------------------------------------------------------------
24,938 325 5.17 27,892 418 5.95 22,393 326 5.84
10,278 143 5.54 11,084 156 5.59 10,629 150 5.64
26,868 365 5.39 24,086 411 6.77 22,592 364 6.49
- ----------------------------------------------------------------------------------------
62,084 833 5.32 63,062 985 6.20 55,614 840 6.07
- ----------------------------------------------------------------------------------------
263,686 2,598 3.91 264,122 2,830 4.25 257,817 2,690 4.18
- ----------------------------------------------------------------------------------------
104,416 1,422 5.40 84,283 1,278 6.02 82,385 1,229 5.98
14,194 165 4.62 15,454 194 4.97 19,817 262 5.30
51,779 844 6.52 51,365 862 6.71 49,254 830 6.74
- ----------------------------------------------------------------------------------------
434,075 5,029 4.60 415,224 5,164 4.94 409,273 5,011 4.90
- ----------------------------------------------------------------------------------------
88,080 83,661 84,552
39,335 33,712 35,293
45,051 45,756 44,857
- ----------------------------------------------------------------------------------------
$ 606,541 $ 578,353 $ 573,975
- ----------------------------------------------------------------------------------------
2.84 2.79 2.99
.74 .81 .81
- ----------------------------------------------------------------------------------------
$4,650 3.58 % $ 4,484 3.60 % $ 4,668 3.80 %
- ----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Credit Quality - Nonperforming Assets
- ---------------------------------------------------------------------------------------------------------------------------
(Dollars in Millions)
June 30, March 31, December 31, September 30, June 30,
1999 1999 1998 1998 1998
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonperforming loans:
Commercial - domestic $ 1,085 $ 1,085 $ 812 $ 717 $ 646
Commercial - foreign 492 434 314 288 347
Commercial real estate - domestic 203 272 299 303 306
Commercial real estate - foreign 3 3 4 3 3
Residential mortgage 565 634 722 690 669
Home equity lines 44 41 50 46 45
Direct/Indirect consumer 17 20 21 38 33
Consumer finance 382 332 246 209 187
Foreign consumer 21 17 14 - 8
---------------------------------------------------------------------------
Total nonperforming loans 2,812 2,838 2,482 2,294 2,244
Foreclosed properties 258 282 282 288 282
---------------------------------------------------------------------------
Total nonperforming assets $ 3,070 $ 3,120 $ 2,764 $ 2,582 $ 2,526
---------------------------------------------------------------------------
Loans past due 90 days or more and not classified as
nonperforming $ 631 $ 571 $ 611 $ 540 $ 539
Nonperforming assets as a percentage of:
Total assets .50 % .51 % .45 % .43 % .44 %
Loans, leases and foreclosed properties .84 .86 .77 .73 .73
- ---------------------------------------------------------------------------------------------------------------------------
Total Nonperforming Assets by Business Segment:
Consumer Banking $ 1,410 $ 1,381 $ 1,348 $ 1,298 $ 973
Commercial Banking 559 575 438 436 379
Global Corporate Investment Banking 1,061 1,096 934 818 901
Principal Investing and Asset Management 39 66 40 28 25
Other 1 2 4 2 248
---------------------------------------------------------------------------
Total nonperforming assets $ 3,070 $ 3,120 $ 2,764 $ 2,582 $ 2,526
---------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Credit Quality - Loan Losses
- ----------------------------------------------------------------------------------------------------------------
(Dollars in Millions)
Second First Fourth Third Second
Quater Quarter Quarter Quarter Quarter
1999 1999 1998 1998 1998
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gross charge-offs:
Commercial - domestic $ 178 $ 206 $ 137 $ 450 $ 74
Commercial - foreign 88 30 66 107 53
Commercial real estate - domestic 5 2 3 5 10
Commercial real estate - foreign 1 - - - -
Residential mortgage 8 7 9 8 6
Home equity lines 7 6 6 6 7
Bankcard 167 172 185 192 219
Direct/Indirect consumer 127 140 153 125 138
Consumer finance 84 98 116 147 139
Other consumer domestic - - (1) 1 -
Foreign consumer 7 5 5 2 3
------------------------------------------------------------------------
Total $ 672 $ 666 $ 679 $ 1,043 $ 649
------------------------------------------------------------------------
Net charge-offs:
Commercial - domestic $ 147 $ 181 $ 113 $ 427 $ 50
Commercial - foreign 84 29 65 106 51
Commercial real estate - domestic (6) (2) - (1) 6
Commercial real estate - foreign 1 - - - -
Residential mortgage 7 5 8 8 4
Home equity lines 3 4 3 3 5
Bankcard 153 155 164 170 197
Direct/Indirect consumer 83 95 113 87 98
Consumer finance 42 48 76 98 92
Other consumer domestic - - (1) 1 -
Foreign consumer 6 4 3 3 2
------------------------------------------------------------------------
Total $ 520 $ 519 $ 544 $ 902 $ 505
------------------------------------------------------------------------
Loss ratios:
Commercial - domestic .43 % .53 % .33 % 1.27 % .15 %
Commercial - foreign 1.12 .37 .78 1.35 .68
Commercial real estate - domestic (.11) (.02) - (.02) .09
Commercial real estate - foreign .10 - - - -
Residential mortgage .04 .03 .04 .04 .03
Home equity lines .09 .10 .07 .09 .11
Bankcard** 5.94 5.63 5.49 5.42 6.36
Direct/Indirect consumer .78 .93 1.09 .89 .96
Consumer finance .94 1.22 2.11 2.74 2.59
Other consumer domestic - - - - -
Foreign consumer .65 .43 .42 .25 .28
Total .57 .58 .60 1.03 .59
Loss Ratios by Business Segment:
Consumer Banking .70 % .75 % 1.00 % .92 % .98 %
Commercial Banking .27 .19 .40 .06 .11
Global Corporate and Investment Banking .56 .55 .35 1.82 .29
Principal Investing and Asset Management .35 .24 .01 .02 .01
Other 1.37 (1.55) 58.41 (13.98) 2.47
Allowance for credit losses $ (7,096) $ (7,123) $ (7,122) $ (7,215) $ (6,731)
Allowance for credit losses as a percentage
of loans and leases 1.95 % 1.96 % 1.99 % 2.05 % 1.95 %
- ----------------------------------------------------------------------------------------------------------------
* Managed Bankcard receivable net charge-off $ 294 $ 294 $ 301 $ 312 $ 331
** Managed Bankcard portfolio loss ratios 6.13 % 6.01 % 5.83 % 5.99 % 6.52 %
Average managed Bankcard receivables $ 19,204 $ 19,814 $ 20,526 $ 20,657 $ 20,350
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Capital
- ------------------------------------------------------------------------------------------------------------------------------------
(Dollars in Millions)
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
1999 1999 1998 1998 1998
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Beginning common equity $46,761 $45,866 $47,245 $46,646 $44,430
Net income 1,915 1,914 1,162 374 2,298
Dividends (787) (784) (778) (606) (611)
Common stock issued 330 350 19 407 441
Common stock repurchased (1,722) - (1,151) - -
Change in FAS 115 adjustment-net
unrealized gains (losses) (1,007) (703) (625) 381 104
Foreign currency translation
adjustment and other 61 118 (6) 43 (16)
-----------------------------------------------------------------------------------
Ending common equity 45,551 46,761 45,866 47,245 46,646
-----------------------------------------------------------------------------------
Preferred equity 80 70 72 62 63
-----------------------------------------------------------------------------------
Total shareholders' equity $45,631 $46,831 $45,938 $47,307 $46,709
-----------------------------------------------------------------------------------
FAS 115 adjustment - end of period (1,407) (400) 303 928 547
Total equity as a percentage of total assets 7.43 % 7.62 % 7.44 % 7.96 % 8.17 %
Common equity as a percentage of total assets 7.42 7.61 7.43 7.94 8.16
Risk-based capital ratios (1):
Tier 1 capital $ 38,145 $38,522 $36,849 $37,456 $18,764
Tier 1 capital ratio 7.38 % 7.40 % 7.06 % 7.29 % 7.32 %
Total capital $ 57,365 $58,132 $57,055 $57,758 $30,268
Total capital ratio 11.09 % 11.17 % 10.94 % 11.25 % 11.77 %
Leverage ratio (1) 6.34 6.47 6.22 6.64 6.21
Risk-weighted assets, net (1) $ 517,130 $520,396 $521,637 $513,544 $257,193
(1) Ratios and amounts for all periods prior to the third quarter of 1998 have not been restated to reflect the impact of
the BankAmerica merger.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Consolidated Statement of Income
(Operating Results including Merger-Related Charges)
- -------------------------------------------------------------------------------------------------------------------------------
(Dollars in Millions, Except Per-Share Information)
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
1999 1999 1998 1998 1998
---------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income
Interest and fees on loans and leases $ 6,853 $ 6,770 $ 7,030 $ 7,084 $ 7,105
Interest and dividends on securities 1,143 1,175 1,191 1,105 1,077
Federal funds sold and securities
purchased under agreements to resell 387 381 486 492 433
Trading account assets 525 545 612 584 692
Other interest income 298 330 319 343 330
---------------------------------------------------------
Total interest income 9,206 9,201 9,638 9,608 9,637
---------------------------------------------------------
Interest expense
Deposits 2,168 2,312 2,598 2,830 2,690
Short-term borrowings 1,396 1,355 1,422 1,278 1,229
Trading account liabilities 150 129 165 194 262
Long-term debt 880 805 844 862 830
---------------------------------------------------------
Total interest expense 4,594 4,601 5,029 5,164 5,011
---------------------------------------------------------
Net interest income 4,612 4,600 4,609 4,444 4,626
Provision for credit losses 510 510 510 1,405 495
---------------------------------------------------------
Net interest income after provision for credit losses 4,102 4,090 4,099 3,039 4,131
Gains on sales of securities 52 130 404 280 120
Noninterest income
Service charges on deposit accounts 900 855 881 855 844
Mortgage servicing income 125 132 103 (93) 207
Investment banking income 555 388 356 376 664
Trading account profits and fees 395 500 96 (529) 232
Brokerage income 192 184 162 198 188
Nondeposit-related service fees 123 136 150 163 164
Asset management and fiduciary service fees 274 243 229 238 261
Credit card income 448 360 398 379 352
Other income 510 425 280 818 724
---------------------------------------------------------
Total noninterest income 3,522 3,223 2,655 2,405 3,636
---------------------------------------------------------
Merger-related charges 200 - 600 725 (430)
Other noninterest expense
Personnel 2,261 2,333 2,301 2,246 2,425
Occupancy 395 396 413 427 421
Equipment 339 358 384 346 334
Marketing 147 147 135 143 145
Professional fees 166 126 233 206 209
Amortization of intangibles 225 222 223 224 227
Data processing 214 190 205 195 186
Telecommunications 140 136 152 142 138
Other general operating 446 420 493 510 528
General administrative and other 124 125 148 144 154
---------------------------------------------------------
Total other noninterest expense 4,457 4,453 4,687 4,583 4,767
---------------------------------------------------------
Income before income taxes 3,019 2,990 1,871 416 3,550
Income tax expense 1,104 1,076 709 42 1,252
---------------------------------------------------------
Net income $ 1,915 $ 1,914 $ 1,162 $ 374 $ 2,298
---------------------------------------------------------
Net income available to common shareholders $ 1,914 $ 1,912 $ 1,161 $ 372 $ 2,287
---------------------------------------------------------
Per-share information
Earnings per common share $ 1.10 $ 1.10 $ .67 $ .21 $ 1.32
---------------------------------------------------------
Diluted earnings per common share $ 1.07 $ 1.08 $ .66 $ .21 $ 1.28
---------------------------------------------------------
Dividends per common share $ .45 $ .45 $ .45 $ .38 $ .38
---------------------------------------------------------
Average common shares issued and outstanding (in thousands) 1,743,503 1,737,562 1,731,314 1,740,092 1,732,168
---------------------------------------------------------
Average diluted common shares issued and outstanding (in thousands) 1,786,844 1,779,708 1,763,055 1,784,418 1,784,712
---------------------------------------------------------
Certain prior period amounts have been reclassified to conform to current period classifications.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Country Risk Reporting
- --------------------------------------------------------------------------------------------------------------------------------
Binding Exposure by Region, Country of Risk and Category
(Dollars in Millions) Total Increase Increase
Net Revaluation Binding (Decrease) (Decrease)
Gains on Securities/ Exposure from from
Trade Other Derivatives and Other June 30, March 31, December 31,
Region/Country Finance(a) Financing(b) FX Products Investments 1999 1999 1998
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Asia
China $ 29 $ 247 $ 19 $ 54 $ 349 $ (94) $ (100)
Hong Kong 157 4,578 21 170 4,926 (7) (262)
India 51 2,094 54 361 2,560 116 42
Indonesia 3 487 22 66 578 (99) (145)
Japan 69 1,397 1,488 610 3,564 (454) (1,497)
Korea (South) 664 778 33 358 1,833 (19) (46)
Malaysia 27 574 9 59 669 (100) (59)
Pakistan 121 240 13 22 396 100 44
Philippines 79 354 5 61 499 55 (84)
Singapore 8 1,485 19 234 1,746 (10) (260)
Taiwan 15 1,878 13 109 2,015 (179) (275)
Thailand 9 565 90 111 775 (79) (175)
Other 21 134 - 5 160 2 7
----------- ------------ ------------ ----------- ------------ ------------ -----------
Total 1,253 14,811 1,786 2,220 20,070 (768) (2,810)
Central and Eastern Europe
Russian Federation - 27 - 6 33 (11) (27)
Other 32 386 20 127 565 (44) (139)
----------- ------------ ------------ ----------- ------------ ------------ -----------
Total 32 413 20 133 598 (55) (166)
Latin America
Argentina 15 830 5 363 1,213 (29) (54)
Brazil 836 1,138 1 928 2,903 (351) (515)
Chile 29 1,190 13 52 1,284 (134) (367)
Colombia 13 501 7 19 540 (39) (258)
Mexico 309 2,466 74 1,326 4,175 (402) (763)
Venezuela 71 207 - 231 509 (8) (48)
Other 211 94 6 99 410 16 (20)
----------- ------------ ------------ ----------- ------------ ------------ -----------
Total 1,484 6,426 106 3,018 11,034 (947) (2,025)
----------- ------------ ------------ ----------- ------------ ------------ -----------
Total $ 2,769 $ 21,650 $ 1,912 $ 5,371 $ 31,702 $ (1,770) $ (5,001)
----------- ------------ ------------ ----------- ------------ ------------ -----------
(a) Includes extensions of credit with maturities of one year or less that are directly related to imports or exports and will be
liquidated through the proceeds of international trade. Such extensions of credit may include acceptances, pre-export financing
where there is a firm export sales order, commercial letters of credit, as well as other loans and advances directly related
to international trade.
(b) This category includes time deposits placed and extensions of credit that do not meet the criteria for Trade Finance.
</TABLE>
