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 18, 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 Third Quarter Earnings. On October 18, 1999, Bank of America
Corporation, the registrant (the "Registrant"), announced financial results for
the third quarter of fiscal 1999, reporting earnings of $2.15 billion and
earnings per common share of $1.25 ($1.23 diluted). A copy of the press release
announcing the results of the Registrant's fiscal quarter ended September 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 exhibit is filed herewith:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
99.1 Press Release dated October 18, 1999 with respect
to the Registrant's financial results for the
fiscal quarter ended September 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: October 22, 1999
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
99.1 Press Release dated October 18, 1999 with respect
to the Registrant's financial results for the fiscal
quarter ended September 30, 1999.
<PAGE>
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
October 18, 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 REPORTS RECORD THIRD QUARTER EARNINGS
CHARLOTTE, NC, October 18, 1999 - Bank of America Corporation today reported
record third quarter earnings of $2.15 billion, or $1.25 per share
($1.23 diluted).
Results far surpassed the $374 million, or $.21 per share ($.21 diluted),
earnings of a year earlier that were impacted by global financial turbulence.
Excluding a $725 million pre-tax merger-related charge, operating earnings a
year ago were $893 million, or $.51 per share ($.50 diluted).
Diluted operating earnings per share were up 7 percent from the second quarter
of this year.
The company's return on equity rose to 18.40 percent in the third quarter, and
the return on assets increased to 1.40 percent.
Cash operating earnings - which exclude the amortization of intangibles and
merger-related charges - were $2.37 billion, or $1.38 per share ($1.35 diluted).
The return on tangible equity was 29.48 percent. A year earlier, cash operating
earnings were $1.12 billion, or $.64 per share ($.63 diluted).
more
<PAGE>
Page 2
"Bank of America made solid progress during the third quarter," said Hugh L.
McColl Jr., chairman and chief executive officer. "Our merger transition
continues to go smoothly and remains on schedule. We are successfully building
out our investment banking platform and delivering those services to our huge
middle market customer base. And we are refocusing a number of our businesses to
achieve greater value for customers and higher profitability for shareholders.
We are accomplishing all of these initiatives while increasing earnings and
improving returns."
For the first nine months of 1999, operating earnings were up 25 percent to
$6.13 billion, or $3.53 per share ($ 3.45 diluted) compared to $4.89 billion, or
$2.81 per share ($2.73 diluted) a year earlier. Net income was 49 percent higher
at $5.98 billion, or $3.45 per share ($3.37 diluted), compared to $4.00 billion,
or $2.30 per share ($2.24 diluted), a year earlier.
Third Quarter Earnings Highlights (compared to a year ago)
- -----------------------------------------------------------
o Revenue rose 21 percent, as noninterest income increased 55 percent and
fully-taxable equivalent net interest income was up 3 percent.
o Average managed consumer loans increased by 17 percent.
o Fee-based income recorded strong improvement in almost all areas and
rose to 45 percent of revenue.
o The efficiency ratio improved to 54 percent.
o Net charge-offs declined to .51 percent of loans.
Net Interest Income
- --------------------
Fully taxable-equivalent net interest income of $4.60 billion was 3 percent
higher than a year earlier due to solid loan growth, somewhat offset by the
impact of securitizations, loan sales and the funding cost of share repurchases.
The net interest yield on earning assets was 3.46 percent compared to 3.60
percent a year earlier.
Noninterest Income
- -------------------
Noninterest income increased 55 percent to $3.73 billion due to widespread gains
across the spectrum of Bank of America's fee-based businesses. The primary gains
were recorded in credit card, trading, investment banking, mortgage banking and
service charge income. Fee income rose to 45 percent of revenue.
Securities gains were $44 million compared to $280 million in the third quarter
of 1998.
more
<PAGE>
Page 3
Efficiency
- -----------
Noninterest expense declined 1 percent to $4.53 billion, reflecting cost savings
resulting from recent mergers offset by increased revenue-based incentives,
accelerated spending on merger transition projects and continued expansion of
the investment banking business. The efficiency ratio improved to 54 percent.
Credit Quality
- ---------------
The provision for credit losses in the third quarter was $450 million, compared
to $1.4 billion a year earlier. Net charge-offs were $460 million, well below
$902 million a year ago which included a $372 million charge-off related to the
D.E. Shaw relationship. Net charge-offs represented .51 percent of loans and
leases in the latest period.
Nonperforming assets were $3.04 billion, or .84 percent of loans, leases and
foreclosed properties on September 30, 1999, compared to $2.58 billion, or .73
percent a year earlier. The allowance for credit losses totaled $7.08 billion on
September 30, 1999, equal to 252 percent of nonperforming loans and 1.96 percent
of loans and leases. The allowance was $7.21 billion, or 315 percent of
nonperforming loans and 2.05 percent of loans and leases, a year earlier.
Capital Strength
- -----------------
Shareholders' equity stood at $45.9 billion at September 30, 1999. The Tier 1
capital ratio was 7.71 percent. The company's market capitalization was $95
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
18 months. Through September 30, the company had purchased 43 million shares.
Business Segment Results
- -------------------------
Consumer Banking, which serves individuals and small businesses, earned $1.10
billion, while Commercial Banking, which serves companies with from $10 million
to $500 million in revenue, earned $216 million. Together, they represented 61
percent of the company's operating income. Global Corporate and Investment
Banking, which serves large corporate customers, earned $530 million,
representing 25 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 $244 million,
representing 11 percent.
more
<PAGE>
Page 4
Bank of America, with $621 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 wide 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 Nine Months
Ended September 30 Ended September 30
------------------------------ ------------------------------
Financial Summary 1999 1998 1999 1998
- ----------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
(In millions, except per-share data)
Operating net income $ 2,151 $ 893 $ 6,125 $ 4,887
Operating earnings per common share 1.25 .51 3.53 2.81
Diluted operating earnings per common share 1.23 .50 3.45 2.73
Cash basis earnings (1) 2,373 1,117 6,794 5,566
Cash basis earnings per common share 1.38 .64 3.91 3.20
Cash basis diluted earnings per common share 1.35 .63 3.83 3.11
Dividends paid per common share .45 .38 1.35 1.14
Price per share of common stock at period end 55.69 53.50 55.69 53.50
Average common shares 1,722.307 1,740.092 1,734.401 1,732.297
Average diluted common shares 1,755.146 1,784.418 1,773.692 1,782.106
Summary Income Statement (Operating Basis)
- ------------------------------------------
(Taxable-equivalent basis in millions)
Net interest income $ 4,603 $ 4,484 $ 13,911 $ 13,811
Provision for credit losses (450) (1,405) (1,470) (2,410)
Gains on sales of securities 44 280 226 613
Noninterest income 3,728 2,405 10,473 9,534
Other noninterest expense (4,526) (4,583) (13,436) (14,054)
------------ ------------ ------------ ------------
Income before income taxes 3,399 1,181 9,704 7,494
Income taxes - including FTE adjustment 1,248 288 3,579 2,607
------------ ------------ ------------ ------------
Operating net income $ 2,151 $ 893 $ 6,125 $ 4,887
============ ============ ============ ============
Summary Balance Sheet
- ---------------------
(Average balances in billions)
Loans and leases $361.400 $ 348.785 $362.302 $ 344.539
Managed loans and leases (2) 387.580 356.396 387.305 353.394
Securities 80.261 65.536 77.998 64.791
Earning assets 528.564 495.911 527.450 493.900
Total assets 611.448 578.353 612.152 577.055
Deposits 336.998 347.783 341.693 343.369
Shareholders' equity 46.439 45.756 46.537 44.755
Common shareholders' equity 46.360 45.693 46.464 44.291
Performance Indices (Operating Basis)
- --------------------------------------
Return on average common shareholders' equity 18.40 % 7.73 % 17.61 % 14.68 %
Return on average tangible common shareholders' equity 29.48 14.51 28.48 25.69
Return on average assets 1.40 .61 1.34 1.13
Return on average tangible assets 1.58 .79 1.52 1.33
Net interest yield 3.46 3.60 3.52 3.74
Efficiency ratio 54.34 66.55 55.10 60.20
Cash basis efficiency ratio 51.67 63.28 52.36 57.29
Net charge-offs (in millions) $ 460 $ 902 $ 1,499 $ 1,923
% of average loans and leases .51 % 1.03 % .55 % .75 %
Managed bankcard net charge-offs as a % of average
managed bankcard receivables 4.83 5.99 5.66 6.42
Reported Results (Including Merger-Related Charges)
- ---------------------------------------------------
(In millions, except per-share data)
Net income $ 2,151 $ 374 $ 5,980 $ 4,003
Earnings per common share 1.25 .21 3.45 2.30
Diluted earnings per common share 1.23 .21 3.37 2.24
Return on average common shareholders' equity 18.40 3.23 17.19 12.01
(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).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation - Continued
September 30
-------------------------------
1999 1998
-------------------------------
Balance Sheet Highlights
- -------------------------
(In billions, except per-share data)
<S> <C> <C>
Loans and leases $ 360.236 $ 351.982
Securities 79.836 72.139
Earning assets 534.431 507.329
Total assets 620.652 594.673
Deposits 337.011 345.756
Shareholders' equity 45.889 47.307
Common shareholders' equity 45.811 47.245
Per share 26.79 27.12
Total equity to assets ratio (period-end) 7.39 % 7.96 %
Risk-based capital
Tier 1 capital ratio 7.71 7.29
Total capital ratio 11.39 11.25
Leverage ratio 6.59 6.64
Common shares issued and outstanding (in millions) 1,710.039 1,742.038
Allowance for credit losses $ 7.076 $ 7.215
Allowance for credit losses as a % of loans and leases 1.96 % 2.05 %
Allowance for credit losses as a % of nonperforming loans 251.85 314.55
Nonperforming loans $ 2.810 $ 2.294
Nonperforming assets 3.038 2.582
Nonperforming assets as a % of:
Total assets .49 % .43 %
Loans, leases and foreclosed properties .84 .73
Other Data
- ----------
Full-time equivalent headcount 158,886 174,844
Banking centers 4,535 4,870
ATMs 14,042 14,333
<CAPTION>
BUSINESS SEGMENT RESULTS - Three Months Ended September 30, 1999
(In millions)
Operating Average Loans Return on Average
Total Revenue Net Income and Leases Equity
-------------- ---------------- ---------------- ----------------
Consumer Banking $ 4,657 $ 1,097 $182,732 22%
Commercial Banking 780 216 56,653 20
Global Corporate and Investment Banking 1,989 530 103,318 16
Principal Investing and Asset Management 802 244 19,061 31
</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)
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
1999 1999 1999 1998 1998
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net income $ 2,151 $ 2,060 $ 1,914 $ 1,603 $ 893
Cash basis earnings 2,373 2,285 2,136 1,825 1,117
Earnings per common share 1.25 1.18 1.10 .92 .51
Diluted earnings per common share 1.23 1.15 1.08 .91 .50
Cash basis earnings per common share 1.38 1.31 1.23 1.05 .64
Cash basis diluted earnings per common share 1.35 1.28 1.20 1.04 .63
Dividends per common share .45 .45 .45 .45 .38
Average common shares issued and outstanding 1,722.307 1,743.503 1,737.562 1,731.314 1,740.092
Average diluted common shares issued and oustanding 1,755.146 1,786.844 1,779.708 1,763.055 1,784.418
Period-end common shares issued and outstanding 1,710.039 1,722.931 1,740.872 1,724.484 1,742.038
Period-end managed loans and leases* $ 387,001 $ 381,913 $ 376,529 $ 371,507 $ 361,158
Average managed loans and leases* 387,580 383,223 378,932 370,845 356,396
*Prior periods restated for comparison (e.g. acquisitions, divestitures and securitizations).
Performance ratios:
Return on average assets 1.40 % 1.34 % 1.27 % 1.05 % .61 %
Return on average tangible assets 1.58 1.53 1.46 1.22 .79
Return on average common shareholders' equity 18.40 17.64 16.78 14.12 7.73
Return on average tangible common shareholders' equity 29.48 28.49 27.44 23.97 14.51
Efficiency ratio 54.34 54.44 56.59 64.16 66.55
Cash basis efficiency ratio 51.67 51.70 53.76 61.12 63.28
Net interest yield 3.46 3.53 3.58 3.58 3.60
Book value per common share $ 26.79 $ 26.44 $ 26.86 $ 26.60 $ 27.12
Market price per share of common stock:
High for the period 76 3/8 76 1/8 74 1/2 66 5/8 88 7/16
Low for the period 53 1/4 61 1/2 59 1/2 44 47 7/8
Closing price 55 11/16 73 5/16 70 5/8 60 1/8 53 1/2
Other data:
Number of banking centers 4,535 4,531 4,676 4,708 4,870
Number of ATMs 14,042 14,051 14,229 14,327 14,333
Full-time equivalent employees 158,886 161,919 166,422 170,975 174,844
Business Segment Results - Third Quarter 1999
Average loans Return on
Total revenue Net income and leases average equity
----------------- ---------------- ---------------------- -----------------------
Consumer Banking $ 4,657 56% $ 1,097 51% $ 182,732 51% 22%
Commercial Banking 780 9 216 10 56,653 16 20
Global Corporate and Investment Banking 1,989 24 530 25 103,318 29 16
Principal Investing and Asset Management 802 10 244 11 19,061 5 31
</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)
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
1999 1999 1999 1998 1998
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income
Interest and fees on loans and leases $ 6,883 $ 6,853 $ 6,770 $ 7,030 $ 7,084
Interest and dividends on securities 1,208 1,143 1,175 1,191 1,105
Federal funds sold and securities
purchased under agreements to resell 440 387 381 486 492
Trading account assets 482 525 545 612 584
Other interest income 281 298 330 319 343
----------------------------------------------------------------
Total interest income 9,294 9,206 9,201 9,638 9,608
----------------------------------------------------------------
Interest expense
Deposits 2,198 2,168 2,312 2,598 2,830
Short-term borrowings 1,437 1,396 1,355 1,422 1,278
Trading account liabilities 189 150 129 165 194
Long-term debt 920 880 805 844 862
----------------------------------------------------------------
Total interest expense 4,744 4,594 4,601 5,029 5,164
----------------------------------------------------------------
Net interest income 4,550 4,612 4,600 4,609 4,444
Provision for credit losses 450 510 510 510 1,405
----------------------------------------------------------------
Net interest income after provision for credit losses 4,100 4,102 4,090 4,099 3,039
Gains on sales of securities 44 52 130 404 280
Noninterest income
Service charges on deposit accounts 942 900 855 881 855
Mortgage servicing income 206 125 132 103 (93)
Investment banking income 702 555 388 356 376
Trading account profits and fees 313 395 500 96 (529)
Brokerage income 168 192 184 162 198
Nondeposit-related service fees 136 123 136 150 163
Asset management and fiduciary service fees 250 274 243 229 238
Credit card income 496 448 360 398 379
Other income 515 510 425 280 818
----------------------------------------------------------------
Total noninterest income 3,728 3,522 3,223 2,655 2,405
----------------------------------------------------------------
Other noninterest expense
Personnel 2,336 2,261 2,333 2,301 2,246
Occupancy 417 395 396 413 427
Equipment 313 339 358 384 346
Marketing 145 147 147 135 143
Professional fees 160 166 126 233 206
Amortization of intangibles 222 225 222 223 224
Data processing 164 214 190 205 195
Telecommunications 131 140 136 152 142
Other general operating 498 446 420 493 510
General administrative and other 140 124 125 148 144
----------------------------------------------------------------
Total other noninterest expense 4,526 4,457 4,453 4,687 4,583
----------------------------------------------------------------
Income before income taxes 3,346 3,219 2,990 2,471 1,141
Income tax expense 1,195 1,159 1,076 868 248
----------------------------------------------------------------
Net income $ 2,151 $ 2,060 $ 1,914 $ 1,603 $ 893
----------------------------------------------------------------
Net income available to common shareholders $ 2,149 $ 2,059 $ 1,912 $ 1,602 $ 891
----------------------------------------------------------------
Per-share information
Earnings per common share $1.25 $1.18 $1.10 $ .92 $ .51
----------------------------------------------------------------
Diluted earnings per common share $1.23 $1.15 $1.08 $ .91 $ .50
----------------------------------------------------------------
Dividends per common share $ .45 $ .45 $ .45 $ .45 $ .38
----------------------------------------------------------------
Average common shares issued and outstanding (in thousands) 1,722,307 1,743,503 1,737,562 1,731,314 1,740,092
----------------------------------------------------------------
Average diluted common shares issued and outstanding (in thousands) 1,755,146 1,786,844 1,779,708 1,763,055 1,784,418
----------------------------------------------------------------
Certain prior period amounts have been reclassified to conform to current period classifications.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Consolidated Balance Sheet
- -----------------------------------------------------------------------------------------------------------------
September 30 June 30 September 30
(Dollars in Millions) 1999 1999 1998
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Cash and cash equivalents $25,414 $24,197 $24,715
Time deposits placed and other short-term investments 4,846 5,350 6,692
Federal funds sold and securities purchased under agreements to resell 40,369 35,907 30,725
Trading account assets 38,651 35,427 34,509
Securities:
Available for sale 78,353 75,012 67,959
Held for investment 1,483 1,499 4,180
- -----------------------------------------------------------------------------------------------------------------
Total securities 79,836 76,511 72,139
- -----------------------------------------------------------------------------------------------------------------
Loans and leases 360,236 363,581 351,982
Allowance for credit losses (7,076) (7,096) (7,215)
- -----------------------------------------------------------------------------------------------------------------
Loans and leases, net of allowance for credit losses 353,160 356,485 344,767
- -----------------------------------------------------------------------------------------------------------------
Premises and equipment, net 6,728 7,012 7,249
Customers' acceptance liability 2,066 1,908 3,917
Derivative-dealer assets 18,103 13,808 17,141
Interest receivable 3,838 3,478 3,838
Mortgage servicing rights 3,845 3,538 2,155
Goodwill 12,414 12,741 12,802
Core deposit and other intangibles 1,800 1,875 2,080
Other assets 29,582 35,865 31,944
- -----------------------------------------------------------------------------------------------------------------
Total assets $620,652 $614,102 $594,673
- -----------------------------------------------------------------------------------------------------------------
Liabilities
Deposits in domestic offices:
Noninterest-bearing $87,292 $88,611 $83,508
Interest-bearing 202,037 201,018 198,790
Deposits in foreign offices:
Noninterest-bearing 1,981 1,775 1,651
Interest-bearing 45,701 47,641 61,807
- -----------------------------------------------------------------------------------------------------------------
Total deposits 337,011 339,045 345,756
- -----------------------------------------------------------------------------------------------------------------
Federal funds purchased and securities sold under agreements to repurchase 79,739 78,317 65,625
Trading account liabilities 18,239 16,394 17,775
Derivative-dealer liabilities 18,689 13,506 16,024
Commercial paper 7,826 7,604 5,579
Other short-term borrowings 32,893 34,045 22,793
Acceptances outstanding 2,066 1,908 3,916
Accrued expenses and other liabilities 18,993 17,638 17,428
Long-term debt 54,352 55,059 47,552
Trust preferred securities 4,955 4,955 4,918
- -----------------------------------------------------------------------------------------------------------------
Total liabilities 574,763 568,471 547,366
- -----------------------------------------------------------------------------------------------------------------
Shareholders' equity
Preferred stock, $0.01 par value; authorized - 100,000,000 shares; issued and
outstanding 1,828,702; 1,871,753 and 1,967,245 shares 78 80 84
Common stock, $0.01 par value; authorized - 5,000,000,000 shares; issued and
outstanding 1,710,039,286; 1,722,930,646 and 1,742,037,974 shares 13,538 14,433 15,939
Retained earnings 34,631 33,256 30,615
Accumulated other comprehensive income (1,929) (1,595) 784
Other (429) (543) (115)
- -----------------------------------------------------------------------------------------------------------------
Total shareholders' equity 45,889 45,631 47,307
- -----------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity $620,652 $614,102 $594,673
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Quarterly Taxable-Equivalent Data
- --------------------------------------------------------------------------------------------------------------------
(Dollars in Millions)
Third Quarter 1999 Second Quarter 1999
-------------------------------------------------------
Interest Interest
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
-------- ------- ------- --------- --------- ------
<S> <C> <C> <C> <C> <C> <C>
Earning assets:
Time deposits placed and other short-term investments $ 5,018 $ 69 5.50 % $5,159 $65 5.03 %
Federal funds sold and securities purchased under
agreements to resell 33,074 440 5.30 29,521 387 5.25
Trading account assets 37,453 483 5.14 39,837 528 5.31
Securities:
Available for sale (1) 78,779 1,208 6.12 76,373 1,139 5.97
Held for investment 1,482 26 7.02 1,482 28 7.61
-------------------------------------------------------
Total securities 80,261 1,234 6.13 77,855 1,167 6.00
-------------------------------------------------------
Loans and leases (2):
Commercial - domestic 136,149 2,488 7.25 138,257 2,473 7.17
Commercial - foreign 28,348 494 6.93 30,209 456 6.05
Commercial real estate - domestic 25,056 517 8.19 25,938 533 8.25
Commercial real estate - foreign 295 7 8.80 289 6 8.48
-------------------------------------------------------
Total commercial 189,848 3,506 7.33 194,693 3,468 7.14
-------------------------------------------------------
Residential mortgage 80,015 1,431 7.14 80,151 1,430 7.14
Home equity lines 16,316 321 7.79 15,857 304 7.68
Direct/Indirect consumer 42,740 875 8.13 42,240 859 8.15
Consumer finance 19,923 433 8.62 17,794 424 9.56
Bankcard 8,923 256 11.38 10,365 306 11.83
Foreign consumer 3,635 86 9.36 3,653 87 9.55
-------------------------------------------------------
Total consumer 171,552 3,402 7.89 170,060 3,410 8.03
-------------------------------------------------------
Total loans and leases 361,400 6,908 7.59 364,753 6,878 7.56
-------------------------------------------------------
Other earning assets 11,358 213 7.40 12,924 232 7.23
-------------------------------------------------------
Total earning assets (3) 528,564 9,347 7.03 530,049 9,257 7.00
-------------------------------------------------------
Cash and cash equivalents 25,905 25,868
Other assets, less allowance for credit losses 56,979 59,447
-------------------------------------------------------
Total assets $611,448 $615,364
-------------------------------------------------------
Interest-bearing liabilities:
Domestic interest-bearing deposits:
Savings $ 26,037 82 1.25 $ 21,799 67 1.24
NOW and money market deposit accounts 96,402 579 2.38 100,897 581 2.31
Consumer CDs and IRAs 73,429 898 4.85 73,601 847 4.61
Negotiated CDs, public funds and other time deposits 6,609 94 5.66 6,238 80 5.14
-------------------------------------------------------
Total domestic interest-bearing deposits 202,477 1,653 3.24 202,535 1,575 3.12
-------------------------------------------------------
Foreign interest-bearing deposits (4):
Banks located in foreign countries 13,668 160 4.65 16,947 196 4.62
Governments and official institutions 7,185 90 4.99 8,089 98 4.81
Time, savings and other 25,500 295 4.57 26,354 299 4.56
-------------------------------------------------------
Total foreign interest-bearing deposits 46,353 545 4.66 51,390 593 4.62
-------------------------------------------------------
Total interest-bearing deposits 248,830 2,198 3.50 253,925 2,168 3.42
-------------------------------------------------------
Federal funds purchased, securities sold under agreements
to repurchase and other short-term borrowings 114,934 1,437 4.96 116,339 1,396 4.82
Trading account liabilities 15,677 189 4.78 14,178 150 4.25
Long-term debt (5) 59,283 920 6.21 58,302 880 6.03
-------------------------------------------------------
Total interest-bearing liabilities (6) 438,724 4,744 4.30 442,744 4,594 4.16
-------------------------------------------------------
Noninterest-bearing sources:
Noninterest-bearing deposits 88,168 88,324
Other liabilities 38,117 37,405
Shareholders' equity 46,439 46,891
-------------------------------------------------------
Total liabilities and shareholders' equity $611,448 $615,364
-------------------------------------------------------
Net interest spread 2.73 2.84
Impact of noninterest-bearing sources .73 .69
-------------------------------------------------------
Net interest income/yield on earning assets $4,603 3.46 % $4,663 3.53 %
-------------------------------------------------------
<PAGE>
(1) The average balance and yield on securities available for sale 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 adjustments of $53, $51 and $45 in the third, second and first quarters of 1999 and
$41 and $40 in the fourth and third 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 $103, $83 and $63 in the
third, second and first quarters of 1999 and $70 and $46 in the fourth and third 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 $6, $52 and $60 in the third, second and first quarters of 1999 and $27 and $9 in the fourth and
third quarters of 1998, respectively.
<PAGE>
<CAPTION>
First Quarter 1999 Fourth Quarter 1998 Third Quarter 1998
- -------------------------------------------------------------------------------------
Interest Interest Interest
Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate Balance Expense Rate
- ------------ --------- ------- ------------------ ------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 6,408 $ 88 5.58 % $ 6,702 $ 111 6.56 % $ 7,483 $ 138 7.31 %
26,561 381 5.80 29,564 486 6.53 27,646 492 7.06
41,129 547 5.36 39,391 613 6.19 35,487 587 6.59
73,925 1,161 6.31 69,354 1,162 6.68 61,250 1,046 6.82
1,905 33 6.84 2,948 44 6.09 4,286 76 6.99
- -------------------------------------------------------------------------------------
75,830 1,194 6.33 72,302 1,206 6.66 65,536 1,122 6.83
- -------------------------------------------------------------------------------------
138,272 2,444 7.16 136,629 2,542 7.39 132,537 2,538 7.59
31,568 494 6.35 32,893 569 6.86 31,245 578 7.35
26,827 559 8.45 28,427 601 8.38 28,027 610 8.64
286 6 8.79 319 8 9.39 338 8 10.51
- -------------------------------------------------------------------------------------
196,953 3,503 7.21 198,268 3,720 7.45 192,147 3,734 7.71
- -------------------------------------------------------------------------------------
75,789 1,356 7.18 73,033 1,336 7.30 70,619 1,155 6.53
15,537 298 7.79 15,781 326 8.17 16,024 485 12.03
41,652 847 8.24 40,557 876 8.57 39,582 854 8.56
15,880 373 9.53 14,368 338 9.33 14,197 385 10.76
11,287 327 11.76 12,078 366 12.01 12,751 399 12.43
3,648 89 9.90 3,551 94 10.47 3,465 93 10.57
- -------------------------------------------------------------------------------------
163,793 3,290 8.11 159,368 3,336 8.32 156,638 3,371 8.56
- -------------------------------------------------------------------------------------
360,746 6,793 7.62 357,636 7,056 7.84 348,785 7,105 8.09
- -------------------------------------------------------------------------------------
13,008 243 7.53 11,471 207 7.19 10,974 204 7.42
- -------------------------------------------------------------------------------------
523,682 9,246 7.13 517,066 9,679 7.44 495,911 9,648 7.73
- -------------------------------------------------------------------------------------
25,826 25,834 24,160
60,116 63,641 58,282
- -------------------------------------------------------------------------------------
$609,624 $606,541 $578,353
- -------------------------------------------------------------------------------------
$ 21,637 71 1.33 $ 21,702 91 1.67 $ 22,775 107 1.87
99,864 575 2.33 97,589 622 2.53 95,276 634 2.64
74,362 857 4.68 74,923 956 5.06 74,313 984 5.25
6,914 89 5.20 7,388 96 5.16 8,696 120 5.45
- -------------------------------------------------------------------------------------
202,777 1,592 3.18 201,602 1,765 3.47 201,060 1,845 3.64
- -------------------------------------------------------------------------------------
20,379 268 5.34 24,938 325 5.17 27,892 418 5.95
9,172 113 5.02 10,278 143 5.54 11,084 156 5.59
26,980 339 5.10 26,868 365 5.39 24,086 411 6.77
- -------------------------------------------------------------------------------------
56,531 720 5.17 62,084 833 5.32 63,062 985 6.20
- -------------------------------------------------------------------------------------
259,308 2,312 3.62 263,686 2,598 3.91 264,122 2,830 4.25
- -------------------------------------------------------------------------------------
112,384 1,355 4.88 104,416 1,422 5.40 84,283 1,278 6.02
12,679 129 4.13 14,194 165 4.62 15,454 194 4.97
52,642 805 6.12 51,779 844 6.52 51,365 862 6.71
- -------------------------------------------------------------------------------------
437,013 4,601 4.26 434,075 5,029 4.60 415,224 5,164 4.94
- -------------------------------------------------------------------------------------
86,623 88,080 83,661
39,709 39,335 33,712
46,279 45,051 45,756
- -------------------------------------------------------------------------------------
$609,624 $606,541 $578,353
- -------------------------------------------------------------------------------------
2.87 2.84 2.79
.71 .74 .81
- -------------------------------------------------------------------------------------
$4,645 3.58 % $4,650 3.58 % $4,484 3.60 %
- -------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Credit Quality - Nonperforming Assets
- ------------------------------------------------------------------------------------------------------------------------------------
(Dollars in Millions)
September 30, June 30, March 31, December 31, September 30,
1999 1999 1999 1998 1998
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonperforming loans:
Commercial - domestic $1,026 $1,085 $1,085 $ 812 $ 717
Commercial - foreign 477 492 434 314 288
Commercial real estate - domestic 174 203 272 299 303
Commercial real estate - foreign 3 3 3 4 3
Residential mortgage 542 565 634 722 690
Home equity lines 44 44 41 50 46
Direct/Indirect consumer 16 17 20 21 38
Consumer finance 519 382 332 246 209
Foreign consumer 9 21 17 14 -
---------------------------------------------------------------------------
Total nonperforming loans 2,810 2,812 2,838 2,482 2,294
Foreclosed properties 228 258 282 282 288
---------------------------------------------------------------------------
Total nonperforming assets $3,038 $3,070 $3,120 $2,764 $2,582
---------------------------------------------------------------------------
Loans past due 90 days or more and not classified as
nonperforming $ 466 $ 631 $ 571 $ 611 $ 540
Nonperforming assets as a percentage of:
Total assets .49 % .50 % .51 % .45 % .43 %
Loans, leases and foreclosed properties .84 .84 .86 .77 .73
- ------------------------------------------------------------------------------------------------------------------------------------
Total Nonperforming Assets by Business Segment:
Consumer Banking $1,399 $1,383 $1,347 $1,314 $1,262
Commercial Banking 510 580 605 469 464
Global Corporate Investment Banking 1,086 1,066 1,099 937 826
Principal Investing and Asset Management 42 39 66 40 28
Other 1 2 3 4 2
---------------------------------------------------------------------------
Total nonperforming assets $3,038 $3,070 $3,120 $2,764 $2,582
---------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Credit Quality - Loan Losses
- -----------------------------------------------------------------------------------------------------------------------
(Dollars in Millions)
Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter
1999 1999 1999 1998 1998
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gross charge-offs:
Commercial - domestic $ 213 $ 178 $ 206 $ 137 $ 450
Commercial - foreign 14 88 30 66 107
Commercial real estate - domestic 6 5 2 3 5
Commercial real estate - foreign - 1 - - -
Residential mortgage 11 8 7 9 8
Home equity lines 4 7 6 6 6
Bankcard 120 167 172 185 192
Direct/Indirect consumer 125 127 140 153 125
Consumer finance 101 84 98 116 147
Other consumer domestic (1) - - (1) 1
Foreign consumer 7 7 5 5 2
------------------------------------------------------------------------
Total $ 600 $ 672 $ 666 $ 679 $ 1,043
------------------------------------------------------------------------
Net charge-offs:
Commercial - domestic $ 192 $ 147 $ 181 $ 113 $ 427
Commercial - foreign 9 84 29 65 106
Commercial real estate - domestic 1 (6) (2) - (1)
Commercial real estate - foreign - 1 - - -
Residential mortgage 10 7 5 8 8
Home equity lines 1 3 4 3 3
Bankcard 93 153 155 164 170
Direct/Indirect consumer 82 83 95 113 87
Consumer finance 67 42 48 76 98
Other consumer domestic (1) - - (1) 1
Foreign consumer 6 6 4 3 3
------------------------------------------------------------------------
Total $ 460 $ 520 $ 519 $ 544 $ 902
------------------------------------------------------------------------
Loss ratios:
Commercial - domestic .56 % .43 % .53 % .33 % 1.27 %
Commercial - foreign .13 1.12 .37 .78 1.35
Commercial real estate - domestic .03 (.11) (.02) - (.02)
Commercial real estate - foreign .40 .10 - - -
Residential mortgage .05 .04 .03 .04 .04
Home equity lines .01 .09 .10 .07 .09
Bankcard** 4.11 5.94 5.63 5.49 5.42
Direct/Indirect consumer .77 .78 .93 1.09 .89
Consumer finance 1.35 .94 1.22 2.11 2.74
Other consumer domestic - - - - -
Foreign consumer .67 .65 .43 .42 .25
Total .51 .57 .58 .60 1.03
Loss Ratios by Business Segment:
Consumer Banking .64 % .70 % .76 % 1.01 % .92 %
Commercial Banking .29 .26 .17 .40 .07
Global Corporate and Investment Banking .32 .56 .55 .35 1.82
Principal Investing and Asset Management .89 .35 .24 .01 .02
Other .76 1.30 (1.51) 56.99 (13.19)
Allowance for credit losses $ (7,076) $ (7,096) $ (7,123) $ (7,122) $ (7,215)
Allowance for credit losses as a percentage
of loans and leases 1.96 % 1.95 % 1.96 % 1.99 % 2.05 %
- ------------------------------------------------------------------------------------------------------------------------
* Managed Bankcard receivable net charge-offs $ 233 $ 294 $ 294 $ 301 $ 312
** Managed Bankcard portfolio loss ratios 4.83 % 6.13 % 6.01 % 5.83 % 5.99 %
Average managed Bankcard receivables $19,162 $19,204 $19,814 $20,526 $20,657
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Bank of America Corporation
Capital
- ----------------------------------------------------------------------------------------------------------------------------
(Dollars in Millions)
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
1999 1999 1999 1998 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Beginning common equity $ 45,551 $ 46,761 $ 45,866 $ 47,245 $ 46,646
Net income 2,151 1,915 1,914 1,162 374
Dividends (776) (787) (784) (778) (606)
Common stock issued 329 330 350 19 407
Common stock repurchased (1,182) (1,722) - (1,151) -
Change in FAS 115 adjustment-net
unrealized gains (losses) (337) (1,007) (703) (625) 381
Foreign currency translation
adjustment and other 75 61 118 (6) 43
- ----------------------------------------------------------------------------------------------------------------------------
Ending common equity 45,811 45,551 46,761 45,866 47,245
- ----------------------------------------------------------------------------------------------------------------------------
Preferred equity 78 80 70 72 62
- ----------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity $ 45,889 $ 45,631 $ 46,831 $ 45,938 $ 47,307
- ----------------------------------------------------------------------------------------------------------------------------
FAS 115 adjustment - end of period $(1,744) $(1,407) $ (400) $ 303 $ 928
Total equity as a percentage of total assets 7.39 % 7.43 % 7.62 % 7.44 % 7.96 %
Common equity as a percentage of total assets 7.38 7.42 7.61 7.43 7.94
Risk-based capital ratios:
Tier 1 capital $39,380 $38,145 $38,522 $36,849 $37,456
Tier 1 capital ratio 7.71 % 7.38 % 7.40 % 7.06 % 7.29 %
Total capital $58,167 $57,365 $58,132 $57,055 $57,758
Total capital ratio 11.39 % 11.09 % 11.17 % 10.94 % 11.25 %
Leverage ratio 6.59 6.34 6.47 6.22 6.64
Risk-weighted assets, net $510,866 $517,130 $520,396 $521,637 $513,544
</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)
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
1999 1999 1999 1998 1998
--------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income
Interest and fees on loans and leases $ 6,883 $ 6,853 $ 6,770 $ 7,030 $ 7,084
Interest and dividends on securities 1,208 1,143 1,175 1,191 1,105
Federal funds sold and securities
purchased under agreements to resell 440 387 381 486 492
Trading account assets 482 525 545 612 584
Other interest income 281 298 330 319 343
--------------------------------------------------------------
Total interest income 9,294 9,206 9,201 9,638 9,608
--------------------------------------------------------------
Interest expense
Deposits 2,198 2,168 2,312 2,598 2,830
Short-term borrowings 1,437 1,396 1,355 1,422 1,278
Trading account liabilities 189 150 129 165 194
Long-term debt 920 880 805 844 862
--------------------------------------------------------------
Total interest expense 4,744 4,594 4,601 5,029 5,164
--------------------------------------------------------------
Net interest income 4,550 4,612 4,600 4,609 4,444
Provision for credit losses 450 510 510 510 1,405
--------------------------------------------------------------
Net interest income after provision for credit losses 4,100 4,102 4,090 4,099 3,039
Gains on sales of securities 44 52 130 404 280
Noninterest income
Service charges on deposit accounts 942 900 855 881 855
Mortgage servicing income 206 125 132 103 (93)
Investment banking income 702 555 388 356 376
Trading account profits and fees 313 395 500 96 (529)
Brokerage income 168 192 184 162 198
Nondeposit-related service fees 136 123 136 150 163
Asset management and fiduciary service fees 250 274 243 229 238
Credit card income 496 448 360 398 379
Other income 515 510 425 280 818
--------------------------------------------------------------
Total noninterest income 3,728 3,522 3,223 2,655 2,405
--------------------------------------------------------------
Merger-related charges - 200 - 600 725
Other noninterest expense
Personnel 2,336 2,261 2,333 2,301 2,246
Occupancy 417 395 396 413 427
Equipment 313 339 358 384 346
Marketing 145 147 147 135 143
Professional fees 160 166 126 233 206
Amortization of intangibles 222 225 222 223 224
Data processing 164 214 190 205 195
Telecommunications 131 140 136 152 142
Other general operating 498 446 420 493 510
General administrative and other 140 124 125 148 144
--------------------------------------------------------------
Total other noninterest expense 4,526 4,457 4,453 4,687 4,583
--------------------------------------------------------------
Income before income taxes 3,346 3,019 2,990 1,871 416
Income tax expense 1,195 1,104 1,076 709 42
--------------------------------------------------------------
Net income $ 2,151 $ 1,915 $ 1,914 $ 1,162 $ 374
--------------------------------------------------------------
Net income available to common shareholders $ 2,149 $ 1,914 $ 1,912 $ 1,161 $ 372
--------------------------------------------------------------
Per-share information
Earnings per common share $ 1.25 $ 1.10 $ 1.10 $ .67 $ .21
--------------------------------------------------------------
Diluted earnings per common share $ 1.23 $ 1.07 $ 1.08 $ .66 $ .21
--------------------------------------------------------------
Dividends per common share $ .45 $ .45 $ .45 $ .45 $ .38
--------------------------------------------------------------
Average common shares issued and outstanding (in thousands) 1,722,307 1,743,503 1,737,562 1,731,314 1,740,092
--------------------------------------------------------------
Average diluted common shares issued and outstanding (in thousands) 1,755,146 1,786,844 1,779,708 1,763,055 1,784,418
--------------------------------------------------------------
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 September 30, June 30, December 31,
Region/Country Finance (a) Financing (b) FX Products Investments 1999 1999 1997
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Asia
China $ 16 $ 250 $ 22 $ 58 $ 346 $ (3) $ (419)
Hong Kong 177 4,099 42 224 4,542 (384) (1,089)
India 50 1,821 35 336 2,242 (318) (257)
Indonesia 2 408 22 79 511 (67) (999)
Japan 52 1,268 405 1,700 3,425 (139) (3,545)
Korea (South) 579 910 30 343 1,862 29 (1,942)
Malaysia 11 575 1 45 632 (37) (622)
Pakistan 111 231 4 32 378 (18) (172)
Philippines 40 350 44 55 489 (10) (274)
Singapore 7 1,364 29 179 1,579 (167) (833)
Taiwan 13 1,731 9 37 1,790 (225) (648)
Thailand 8 511 127 79 725 (50) (1,232)
Other 25 134 - 5 164 4 (33)
- -----------------------------------------------------------------------------------------------------------------------------
Total 1,091 13,652 770 3,172 18,685 (1,385) (12,065)
- -----------------------------------------------------------------------------------------------------------------------------
Central and Eastern Europe
Russian Federation - 19 - 5 24 (9) (423)
Other 8 324 21 48 401 (164) (297)
- -----------------------------------------------------------------------------------------------------------------------------
Total 8 343 21 53 425 (173) (720)
- -----------------------------------------------------------------------------------------------------------------------------
Latin America
Argentina 5 698 1 344 1,048 (165) (595)
Brazil 667 1,154 1 789 2,611 (292) (1,019)
Chile 12 1,200 11 32 1,255 (29) (425)
Colombia 6 467 1 37 511 (29) (274)
Mexico 269 2,379 85 1,425 4,158 (17) (1,954)
Venezuela 70 210 - 187 467 (42) (156)
Other 81 213 4 89 387 (23) (56)
- -----------------------------------------------------------------------------------------------------------------------------
Total 1,110 6,321 103 2,903 10,437 (597) (4,479)
- -----------------------------------------------------------------------------------------------------------------------------
Total $2,209 $20,316 $894 $6,128 $29,547 $(2,155) $(17,264)
- -----------------------------------------------------------------------------------------------------------------------------
(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>
