<PAGE>
BANKAMERICA CORPORATION ANALYTICAL REVIEW AND FORM 10-Q
[BANKAMERICA CORPORATION LOGO APPEARS HERE]
1995
2nd Quarter
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number: 1-7377
Exact name of registrant as specified in its charter:
BankAmerica Corporation
State or other jurisdiction of incorporation or organization:
Delaware
I.R.S. Employer Identification Number:
94-1681731
Address of principal executive offices:
Bank of America Center
San Francisco, California 94104
Registrant's telephone number, including area code:
415-622-3530
Former name, former address, and former fiscal year,
if changed since last report:
None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $1.5625 par value ------ 372,335,753 shares outstanding on
June 30, 1995.*
*In addition, 10,377,850 shares were held in treasury.
================================================================================
This document serves both as an analytical review for analysts, shareholders,
and other interested persons, and as the quarterly report on Form 10-Q of
BankAmerica Corporation to the Securities and Exchange Commission, which has
taken no action to approve or disapprove the report or to pass upon its accuracy
or adequacy. Additionally, this document is to be read in conjunction with the
consolidated financial statements and notes thereto included in BankAmerica
Corporation's Annual Report on Form 10-K for the year ended December 31, 1994.
<PAGE>
CONTENTS
<TABLE>
============================================================================================
<S> <C>
PART I Item 1.
FINANCIAL Financial Statements:
INFORMATION Consolidated Statement of Operations........................... 2
Consolidated Balance Sheet..................................... 3
Consolidated Statement of Cash Flows........................... 4
Consolidated Statement of Changes in Stockholders' Equity...... 5
Notes to Consolidated Financial Statements..................... 6
Item 2.
Management's Discussion and Analysis:
Highlights..................................................... 16
Business Sectors............................................... 18
Results of Operations:
Net Interest Income.......................................... 21
Noninterest Income........................................... 24
Noninterest Expense.......................................... 26
Income Taxes................................................. 26
Balance Sheet Review........................................... 27
Credit Risk Management:
Loan Portfolio Management.................................... 29
Domestic Consumer Loans.................................... 30
Domestic Commercial Loans.................................. 31
Foreign Loans.............................................. 31
Emerging Market Exposure..................................... 32
Allowance for Credit Losses.................................. 34
Nonperforming Assets......................................... 36
Foreign Exchange and Derivatives Contracts..................... 39
Interest Rate Risk Management.................................. 40
Funding and Capital:
Liquidity Review............................................. 42
Capital Management........................................... 42
--------------------------------------------------------------------------------------------
PART II Item 4.
OTHER INFORMATION Submission of Matters to a Vote of Security Holders.............. 44
Item 5.
Other Information................................................ 45
Item 6.
Exhibits and Reports on Form 8-K................................. 45
Signatures....................................................... 46
============================================================================================
</TABLE>
1
<PAGE>
FINANCIAL STATEMENTS
BANKAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
==============================================================================================================================
1995 1994 SIX MONTHS ENDED
----------------- --------------------------- JUNE 30
SECOND FIRST FOURTH THIRD SECOND ----------------
(DOLLAR AMOUNTS IN MILLIONS, EXCEPT PER SHARE DATA) QUARTER QUARTER QUARTER QUARTER QUARTER 1995 1994
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Loans, including fees $3,172 $3,004 $2,796 $2,510 $2,294 $6,176 $4,500
Interest-bearing deposits in banks 120 112 108 87 74 232 130
Federal funds sold 9 8 11 16 15 17 28
Securities purchased under resale agreements 176 135 106 84 89 311 161
Trading account assets 189 163 124 116 122 352 233
Available-for-sale and held-to-maturity securities 323 314 334 340 345 637 700
------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST INCOME 3,989 3,736 3,479 3,153 2,939 7,725 5,752
INTEREST EXPENSE
Deposits 1,240 1,114 1,019 868 753 2,354 1,450
Federal funds purchased 30 39 15 6 3 69 6
Securities sold under repurchase agreements 150 130 93 82 97 280 176
Other short-term borrowings 168 132 84 71 59 300 120
Long-term debt 266 264 245 211 185 530 354
Subordinated capital notes 12 11 11 11 10 23 20
------------------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST EXPENSE 1,866 1,690 1,467 1,249 1,107 3,556 2,126
------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 2,123 2,046 2,012 1,904 1,832 4,169 3,626
PROVISION FOR CREDIT LOSSES 100 100 100 110 125 200 250
------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 2,023 1,946 1,912 1,794 1,707 3,969 3,376
NONINTEREST INCOME
Deposit account fees 323 317 316 301 290 640 584
Credit card fees 74 75 87 83 82 149 161
Trust fees 78 78 83 69 66 156 133
Other fees and commissions 342 300 304 279 262 642 528
Trading income 151 129 54 120 109 280 183
Net gain (loss) on available-for-sale securities 9 1 (1) (2) 7 10 27
Net gain on sales of assets 14 1 28 33 20 15 65
Venture capital activities 103 87 40 33 32 190 63
Other income 44 105 137 156 147 149 271
------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST INCOME 1,138 1,093 1,048 1,072 1,015 2,231 2,015
NONINTEREST EXPENSE
Salaries 842 809 785 741 700 1,651 1,410
Employee benefits 183 193 179 186 180 376 338
Occupancy 182 173 187 171 167 355 332
Equipment 165 159 160 145 138 324 284
Amortization of intangibles 110 109 107 100 99 219 204
Communications 91 86 86 79 80 177 158
Regulatory fees and related expenses 74 72 76 72 72 146 142
Professional services 76 69 60 54 53 145 111
Other expense 330 319 326 387 329 649 620
------------------------------------------------------------------------------------------------------------------------------
TOTAL NONINTEREST EXPENSE 2,053 1,989 1,966 1,935 1,818 4,042 3,599
------------------------------------------------------------------------------------------------------------------------------
INCOME BEFORE INCOME TAXES 1,108 1,050 994 931 904 2,158 1,792
PROVISION FOR INCOME TAXES 463 439 403 384 379 902 754
------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 645 $ 611 $ 591 $ 547 $ 525 $1,256 $1,038
----------------------------------------------------------====================================================================
EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE $ 1.56 $ 1.46 $ 1.41 $ 1.36 $ 1.33 $ 3.03 $ 2.59
EARNINGS PER COMMON SHARE -- ASSUMING FULL DILUTION 1.55 1.45 1.40 1.35 1.32 3.00 2.58
DIVIDENDS DECLARED PER COMMON SHARE 0.46 0.46 0.40 0.40 0.40 0.92 0.80
==============================================================================================================================
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
BANKAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
============================================================================================================================
1995 1994
------------------------ ------------------------------------
(IN MILLIONS) JUNE 30 MARCH 31 DEC. 31 SEPT. 30 JUNE 30
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $ 12,656 $ 12,404 $ 13,578 $ 12,493 $ 10,137
Interest-bearing deposits in banks 5,620 6,122 6,371 4,884 4,707
Federal funds sold 467 793 640 570 2,758
Securities purchased under resale agreements 6,131 5,969 5,259 4,474 4,933
Trading account assets 8,133 7,941 6,941 7,103 5,714
Available-for-sale securities 9,868 9,268 9,849 11,166 8,938
Held-to-maturity securities 7,186 7,335 8,167 8,700 11,734
Loans 148,766 144,159 140,912 138,691 124,874
Less: Allowance for credit losses 3,695 3,725 3,690 3,625 3,414
----------------------------------------------------------------------------------------------------------------------------
Net loans 145,071 140,434 137,222 135,066 121,460
Customers' acceptance liability 2,076 1,977 1,069 833 935
Accrued interest receivable 1,335 1,371 1,449 1,221 1,097
Goodwill, net 4,303 4,323 4,296 4,394 3,886
Identifiable intangibles, net 2,172 2,176 2,149 2,213 2,078
Unrealized gains on off-balance-sheet instruments 9,323 11,577 6,267 7,783 8,650
Premises and equipment, net 4,009 3,973 3,955 3,935 3,705
Other assets 8,249 7,525 8,263 9,395 6,811
----------------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $226,599 $223,188 $215,475 $214,230 $197,543
-----------------------------------------------------=======================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits in domestic offices:
Interest-bearing $ 85,573 $ 87,140 $ 90,374 $ 91,872 $ 86,568
Noninterest-bearing 34,458 32,712 34,956 33,006 31,009
Deposits in foreign offices:
Interest-bearing 33,985 30,718 27,454 25,981 22,898
Noninterest-bearing 1,764 1,698 1,610 1,807 1,560
----------------------------------------------------------------------------------------------------------------------------
Total deposits 155,780 152,268 154,394 152,666 142,035
Federal funds purchased 2,274 2,174 3,283 1,690 223
Securities sold under repurchase agreements 5,833 6,570 5,505 5,278 6,332
Other short-term borrowings 9,730 8,500 5,053 5,796 3,537
Acceptances outstanding 2,076 1,977 1,069 833 935
Accrued interest payable 706 739 831 719 550
Unrealized losses on off-balance-sheet instruments 9,939 11,848 6,571 8,007 8,727
Other liabilities 4,563 4,435 4,450 5,202 3,894
Long-term debt 15,473 14,846 14,823 14,504 13,611
Subordinated capital notes 605 605 605 605 606
----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 206,979 203,962 196,584 195,300 180,450
STOCKHOLDERS' EQUITY
Preferred stock 2,723 3,068 3,068 3,368 2,979
Common stock 598 587 581 580 561
Additional paid-in capital 8,213 7,912 7,743 7,732 7,150
Retained earnings 8,663 8,230 7,854 7,480 7,131
Net unrealized loss on available-for-sale securities (69) (275) (326) (201) (210)
Common stock in treasury, at cost (508) (296) (29) (29) (518)
----------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 19,620 19,226 18,891 18,930 17,093
----------------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $226,599 $223,188 $215,475 $214,230 $197,543
============================================================================================================================
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
BANKAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
==================================================================================================================================
SIX MONTHS ENDED JUNE 30
---------------------------
(IN MILLIONS) 1995 1994
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,256 $ 1,038
Adjustments to net income to arrive at net cash provided by operating activities:
Provision for credit losses 200 250
Net gain on sales of assets (15) (65)
Net amortization of loan fees and discounts (53) (36)
Depreciation and amortization of premises and equipment 266 241
Amortization of intangibles 219 204
Provision for deferred income taxes 8 244
Change in assets and liabilities net of effects from acquisitions
and pending dispositions:
(Increase) decrease in accrued interest receivable 114 (115)
Increase (decrease) in accrued interest payable (125) 45
(Increase) decrease in trading account assets (1,192) 460
Increase in current income taxes payable 242 120
Deferred fees received from lending activities 70 56
Other, net (708) (727)
----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities 282 1,715
CASH FLOWS FROM INVESTING ACTIVITIES
Activity in available-for-sale securities:
Sales proceeds 1,462 1,144
Maturities, prepayments, and calls 2,530 2,858
Purchases (3,416) (3,084)
Activity in held-to-maturity securities:
Maturities, prepayments, and calls 1,392 1,378
Purchases (261) (1,018)
Proceeds from sales of loans 712 790
Purchases of loans (772) (444)
Purchases of premises and equipment (324) (305)
Proceeds from sales of other real estate owned 293 311
Net cash provided (used) by:
Loan originations and principal collections (7,591) (1,727)
Interest-bearing deposits in banks 612 (1,721)
Federal funds sold 173 (708)
Securities purchased under resale agreements (872) (1,384)
Proceeds from liquidations of assets identified for disposition 29 219
Other, net 98 13
----------------------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities (5,935) (3,678)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term debt 1,887 1,702
Principal payments and retirements of long-term debt and subordinated capital notes (1,228) (1,582)
Proceeds from issuance of common stock 75 27
Preferred stock repurchased (97) -
Treasury stock purchased (474) (503)
Common stock dividends (344) (282)
Preferred stock dividends (118) (121)
Net cash provided (used) by:
Deposits 1,385 414
Federal funds purchased (1,009) 3
Securities sold under repurchase agreements 328 2,103
Other short-term borrowings 4,385 14
Other, net (81) (166)
----------------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities 4,709 1,609
Effect of exchange rate changes on cash and due from banks 22 9
----------------------------------------------------------------------------------------------------------------------------------
Net decrease in cash and due from banks (922) (345)
Cash and due from banks at beginning of period 13,578 10,482
----------------------------------------------------------------------------------------------------------------------------------
CASH AND DUE FROM BANKS AT END OF PERIOD $12,656 $10,137
-------------------------------------------------------------------------------------------------------===========================
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
BANKAMERICA CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
===========================================================================================================================
1995 1994
--------------------- -----------------------------------
SECOND FIRST FOURTH THIRD SECOND
(IN MILLIONS) QUARTER QUARTER QUARTER QUARTER QUARTER
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PREFERRED STOCK
Balance, beginning of quarter $ 3,068 $ 3,068 $ 3,368 $ 2,979 $ 2,979
Preferred stock issued - - - 389 -
Preferred stock repurchased (97) - (300) - -
Convertible preferred stock converted to common stock (248) - - - -
---------------------------------------------------------------------------------------------------------------------------
Balance, end of quarter 2,723 3,068 3,068 3,368 2,979
COMMON STOCK
Balance, beginning of quarter 587 581 580 561 561
Common stock issued 11 6 1 19 -
---------------------------------------------------------------------------------------------------------------------------
Balance, end of quarter 598 587 581 580 561
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of quarter 7,912 7,743 7,732 7,150 7,130
Common stock issued 301 169 35 556 20
Preferred stock issued - - - 26 -
Preferred stock repurchased - - (24) - -
---------------------------------------------------------------------------------------------------------------------------
Balance, end of quarter 8,213 7,912 7,743 7,732 7,150
RETAINED EARNINGS
Balance, beginning of quarter 8,230 7,854 7,480 7,131 6,807
Net income 645 611 591 547 525
Common stock dividends (172) (172) (149) (140) (139)
Preferred stock dividends (56) (62) (67) (60) (61)
Foreign currency translation adjustments,
net of related income taxes 16 (1) (1) 2 (1)
---------------------------------------------------------------------------------------------------------------------------
Balance, end of quarter 8,663 8,230 7,854 7,480 7,131
NET UNREALIZED LOSS ON AVAILABLE-FOR-SALE SECURITIES
Balance, beginning of quarter (275) (326) (201) (210) (252)
Valuation adjustments, net of related income taxes 206 51 (125) 9 42
---------------------------------------------------------------------------------------------------------------------------
Balance, end of quarter (69) (275) (326) (201) (210)
COMMON STOCK IN TREASURY, AT COST
Balance, beginning of quarter (296) (29) (29) (518) (362)
Treasury stock purchased (210) (264) - - (156)
Treasury stock issued - - - 489 -
Other (2) (3) - - -
---------------------------------------------------------------------------------------------------------------------------
Balance, end of quarter (508) (296) (29) (29) (518)
---------------------------------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY $19,620 $19,226 $18,891 $18,930 $17,093
---------------------------------------------------------------------------------------------------------------------------
</TABLE>
See notes to consolidated financial statements.
5
<PAGE>
BANKAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
===============================================================================
NOTE 1. The unaudited consolidated financial statements of
FINANCIAL BankAmerica Corporation and subsidiaries (BAC) are prepared
STATEMENT in conformity with generally accepted accounting principles
PRESENTATION for interim financial information, the instructions to Form
10-Q, and Rule 10-01 of Regulation S-X. In the opinion of
management, all adjustments necessary for a fair presentation
of the financial position and results of operations for the
periods presented have been included. All such adjustments
are of a normal recurring nature. These unaudited
consolidated financial statements should be read in
conjunction with the audited consolidated financial
statements included in BankAmerica Corporation's (the
Parent) Annual Report on Form 10-K for the year ended
December 31, 1994.
The unaudited consolidated financial statements of BAC
include the accounts of the Parent and companies in which
more than 50 percent of the voting stock is owned directly or
indirectly by the Parent, including Bank of America NT&SA
(the Bank), Bank of America Illinois, Seafirst Corporation,
and other banking and nonbanking subsidiaries. The revenues,
expenses, assets, and liabilities of the subsidiaries are
included in the respective line items in the unaudited
consolidated financial statements after elimination of inter-
company accounts and transactions.
Effective January 1, 1995, BAC adopted Statement of Financial
Accounting Standards No. 114, "Accounting by Creditors for
Impairment of a Loan," as amended (SFAS No. 114). For
information on the adoption of this Statement, refer to Note
4 of the Notes to Consolidated Financial Statements on pages
7 and 8.
BAC's results of operations and financial position reflect
the effects of the merger with Continental Bank Corporation
subsequent to its consummation on August 31, 1994.
Certain amounts in prior periods have been reclassified to
conform to the current presentation.
-------------------------------------------------------------------------------
NOTE 2. During the six-month periods ended June 30, 1995 and 1994,
SUPPLEMENTAL BAC made interest payments on deposits and other interest-
DISCLOSURE OF bearing liabilities of $3,681 million and $2,082 million,
CASH FLOW respectively, and made net income tax payments of $624
INFORMATION million and $387 million, respectively.
During the six-month periods ended June 30, 1995 and 1994,
there were foreclosures of loans with carrying values of $235
million and $296 million, respectively.
-------------------------------------------------------------------------------
NOTE 3. During the six-month period ended June 30, 1995, BAC sold
AVAILABLE-FOR-SALE available-for-sale securities for aggregate proceeds of
AND HELD-TO- $1,462 million, resulting in gross realized gains of $88
MATURITY million and gross realized losses of $78 million. During the
SECURITIES six-month period ended June 30, 1994, BAC sold available-for-
sale securities for aggregate proceeds of $1,144 million,
resulting in gross realized gains of $48 million and gross
realized losses of $21 million.
At June 30, 1995 and 1994, nonaccrual debt-restructuring par
bonds and other instruments issued primarily by the
governments of Argentina, Brazil, Poland, and Ecuador with
aggregate face values of $526 million and $754 million,
respectively, were included in available-for-sale securities
at their fair values of $296 million and $367 million,
respectively, which include net unrealized gains of $126
million and $207 million.
6
<PAGE>
===============================================================================
The fair values and amortized costs of available-for-sale and
held-to-maturity securities were as follows:
<TABLE>
<CAPTION>
AVAILABLE-FOR-SALE HELD-TO-MATURITY
SECURITIES SECURITIES
--------------------- ---------------------
FAIR AMORTIZED FAIR AMORTIZED
(IN MILLIONS) VALUE COST VALUE COST
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
JUNE 30, 1995 $ 9,868 $ 9,983 $ 6,725 $ 7,186
March 31, 1995 9,268 9,726 6,552 7,335
December 31, 1994 9,849 10,393 7,292 8,167
September 30, 1994 11,166 11,505 8,018 8,700
June 30, 1994 8,938 9,288 11,544 11,734
</TABLE>
During the six-month period ended June 30, 1995, net trading
account related income included a net unrealized holding gain
on trading securities of $42 million. During the six-month
period ended June 30, 1994, net trading account related
income included a net unrealized holding loss on trading
securities of $64 million. These results exclude the net
unrealized trading results of the Parent's securities broker
and dealer subsidiaries.
In connection with the adoption of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," effective
January 1, 1994, $5.6 billion of held-to-maturity securities
with a fair value of $5.7 billion were transferred to
available-for-sale securities. In addition, debt-
restructuring par bonds and other instruments were
reclassified during the first quarter of 1994 from loans to
available-for-sale and held-to-maturity securities with
carrying values of $1.2 billion and $1.3 billion,
respectively, and fair values of $1.0 billion each
immediately prior to the transfer.
-------------------------------------------------------------------------------
NOTE 4. Effective January 1, 1995, BAC adopted SFAS No. 114, which
IMPAIRED LOANS requires loans to be measured for impairment using one of
three methods when it is probable that all amounts, including
principal and interest, will not be collected in accordance
with the contractual terms of the loan agreement. The amount
of impairment and any subsequent changes are recorded through
the provision for credit losses as an adjustment to the
allowance for credit losses. SFAS No. 114 applies to all
loans, whether collateralized or uncollateralized, except for
large groups of smaller-balance, homogeneous loans that are
collectively evaluated for impairment, loans that are
measured at fair value or at the lower of cost or fair value,
leases, and debt securities. In addition, it applies to
certain loans that are restructured in a troubled debt
restructuring. However, such loans restructured prior to the
effective date of SFAS No. 114 that are performing in
accordance with their restructured terms are accounted for in
accordance with Statement of Financial Accounting Standards
No. 15, "Accounting by Debtors and Creditors for Troubled
Debt Restructurings."
As required by SFAS No. 114, BAC generally measures
impairment based upon the present value of the loan's
expected future cash flows, except where foreclosure or
liquidation is probable or when the primary source of
repayment is provided by real estate collateral. In these
circumstances, impairment is measured based upon the fair
value of the collateral. In addition, in certain rare
circumstances, impairment may be based on the loan's
observable market value. Generally, BAC evaluates a loan for
impairment in accordance with SFAS No. 114 when it is placed
on nonaccrual status and a portion is internally risk rated
as substandard or doubtful. Substantially all of BAC's
impaired loans are on nonaccrual status.
7
<PAGE>
BANKAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
===============================================================================
The adoption of SFAS No. 114 did not have a material effect
on BAC's financial position or operating results. In
addition, adopting SFAS No. 114 had no impact on the overall
allowance for credit losses and did not affect BAC's charge-
off or income recognition policies.
The following is a summary of loans considered to be impaired
in accordance with SFAS No. 114 and the related interest
income:
<TABLE>
<CAPTION>
1995
---------------------
(IN MILLIONS) JUNE 30 MARCH 31
----------------------------------------------------------------------------------
<S> <C> <C>
Recorded investment in impaired loans not requiring
an allowance for credit losses as determined in
accordance with SFAS No. 114/a/ $ 975 $1,012
Recorded investment in impaired loans requiring
an allowance for credit losses as determined in
accordance with SFAS No. 114 578 508
----------------------------------------------------------------------------------
Total recorded investment in impaired loans $1,553/b/ $1,520/b/
----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1995
------------------------
SECOND FIRST SIX MONTHS ENDED
(IN MILLIONS) QUARTER QUARTER JUNE 30, 1995
-----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Average recorded investment in impaired loans $1,550 $1,612 $1,581
Interest income recognized/c/ 25 22 47
-----------------------------------------------------------------------------------------------
</TABLE>
/a/ These loans do not require an allowance for credit losses
as measured in accordance with SFAS No. 114 since the
values of the impaired loans equal or exceed the recorded
investments in the loans.
/b/ These amounts were evaluated for impairment using the
three measurement methods at June 30, 1995 and March 31,
1995, as follows: $692 million and $571 million were
evaluated using the present value of the loan's expected
future cash flows method, $854 million and $930 million
were evaluated using the fair value of the collateral,
and $7 million and $19 million were evaluated using the
loan's observable market value.
/c/ All interest income recognized was recorded using the
cash method of accounting.
-------------------------------------------------------------------------------
NOTE 5. The following is a summary of changes in BAC's total
ALLOWANCE FOR allowance for credit losses. This reconciliation reflects
CREDIT LOSSES activity related to all loans. The allowance for credit
losses on impaired loans as measured in accordance with SFAS
No. 114 was $237 million at June 30, 1995.
<TABLE>
<CAPTION>
1995
-------------------------
SECOND FIRST SIX MONTHS ENDED
(IN MILLIONS) QUARTER QUARTER JUNE 30, 1995
------------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance, beginning of period $3,725 $3,690 $3,690
Credit losses 213 212 425
Credit loss recoveries 83 135 218
------------------------------------------------------------------------------------
Net credit losses 130 77 207
Provision for credit losses 100 100 200
Other net additions - 12 12
------------------------------------------------------------------------------------
Balance, End of Period $3,695 $3,725 $3,695
-----------------------------------------===========================================
</TABLE>
-------------------------------------------------------------------------------
NOTE 6. During the first quarter of 1995, BAC's Board of Directors
STOCK REPURCHASE authorized a stock repurchase program. This program enables
PROGRAM the Parent to buy back approximately $1.9 billion of its
common stock and to buy back or redeem approximately $500
million of its preferred stock by the end of 1997. Under this
program, the Parent may purchase up to $800 million of its
common stock by the end of 1996. During each quarter of 1995,
1996, and 1997, the Parent may purchase additional amounts of
common stock up to the level of amortization of goodwill and
core deposit intangibles for that quarter.
8
<PAGE>
===============================================================================
During the six months ended June 30, 1995, the Parent
repurchased 9.6 million shares of its common stock in
connection with this plan at an average per-share price of
$49.45, which reduced stockholders' equity by $474 million.
In addition, approximately $95 million of preferred stock was
repurchased or redeemed.
-------------------------------------------------------------------------------
NOTE 7. On May 31, 1995, the Parent redeemed all 1,788,000 shares of
PREFERRED STOCK Adjustable Rate Preferred Stock, Series 1. The redemption
price was equal to the stated value of $50.00 per share, plus
accrued and unpaid dividends.
In addition, on April 28, 1995, the Parent announced its
intention to redeem on May 31, 1995 all of the then-
unconverted outstanding shares of 6 1/2% Cumulative
Convertible Preferred Stock, Series G. On or prior to that
date, 4,966,246 shares of the 4,998,357 shares that were
outstanding on the announcement date were converted to
5,445,439 shares of common stock at no additional cost to the
holders or to the Parent. The remaining 32,111 shares were
redeemed by the Parent on May 31, 1995 at the redemption
price of $51.95 per share, plus accrued and unpaid dividends.
-------------------------------------------------------------------------------
NOTE 8. The following is a summary of the components of income tax
INCOME TAXES expense:
<TABLE>
<CAPTION>
1995 1994 SIX MONTHS ENDED
----------------- --------------------------- JUNE 30
SECOND FIRST FOURTH THIRD SECOND ----------------
(IN MILLIONS) QUARTER QUARTER QUARTER QUARTER QUARTER 1995 1994
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PROVISION FOR INCOME TAXES
Federal $331 $319 $310 $269 $278 $650 $547
State and local 86 83 66 72 67 169 139
Foreign 46 37 27 43 34 83 68
--------------------------------------------------------------------------------------------------
$463 $439 $403 $384 $379 $902 $754
---------------------------------=================================================================
</TABLE>
The income tax provision for the second quarter of 1995
reflected BAC's estimated annual effective income tax rate of
41.8 percent, compared to the annual effective income tax
rate of 42.1 percent for the second quarter of 1994. These
annual effective income tax rates are higher than the federal
statutory tax rate of 35.0 percent principally due to state
income taxes and the amortization of non-deductible goodwill.
-------------------------------------------------------------------------------
NOTE 9. Earnings per common share have been computed based on the
EARNINGS PER following:
COMMON SHARE
<TABLE>
<CAPTION>
1995 1994 SIX MONTHS ENDED
------------------ --------------------------- JUNE 30
(DOLLAR AMOUNTS IN MILLIONS, SECOND FIRST FOURTH THIRD SECOND -------------------
SHARE AMOUNTS IN THOUSANDS) QUARTER QUARTER QUARTER QUARTER QUARTER 1995 1994
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net income applicable to
common stock $ 589 $ 549 $ 524 $ 487 $ 464 $ 1,138 $ 917
Average number of common
shares outstanding 371,992 371,764 370,698 355,012 347,791 371,878 351,770
Average number of common
and common equivalent
shares outstanding 376,213 375,084 373,922 357,962 349,721 375,649 353,645
Average number of common
shares outstanding --
assuming full dilution 379,182 381,141 379,402 363,442 355,201 380,162 359,125
</TABLE>
9
<PAGE>
BANKAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
===============================================================================
NOTE 10. In the ordinary course of business, BAC enters into various
OFF-BALANCE-SHEET types of transactions involving credit-related financial
TRANSACTIONS instruments and foreign exchange and derivatives contracts
that contain off-balance-sheet risk. Credit-related financial
instruments are typically customer-driven while foreign
exchange and derivatives contracts are entered into both on
behalf of customers and for BAC's own account for trading
purposes and in managing interest rate, foreign exchange, and
commodity risks.
CREDIT-RELATED FINANCIAL INSTRUMENTS
The following table is a summary of the contractual amounts
of each significant class of credit-related financial
instruments outstanding. These amounts represent the amounts
at risk should the contract be fully drawn upon, the client
default, and the value of any existing collateral become
worthless.
<TABLE>
<CAPTION>
1995 1994
-------------------- ---------------------------------
(IN MILLIONS) JUNE 30 MARCH 31 DEC. 31 SEPT. 30 JUNE 30
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commitments to extend credit:
Unutilized credit card lines $32,176 $30,026 $28,058 $26,141 $24,647
Other commitments to extend credit/a/ 92,896 85,112 82,929 85,688 60,368
Standby letters of credit and financial
guarantees/b/ 15,598 15,202 15,870 15,669 12,550
Commercial letters of credit 4,650 3,977 4,213 4,228 4,238
-----------------------------------------------------------------------------------------------------------
</TABLE>
/a/ Represents agreements to extend credit to customers for
which BAC may have received fees. These commitments have
specified interest rates and generally have fixed
expiration dates and may be terminated by BAC if certain
conditions of the contract are violated.
/b/ Net of participations sold of $2,238 million at June 30,
1995, $2,301 million at March 31, 1995, $2,402 million at
December 31, 1994, $2,483 million at September 30, 1994,
and $4,020 million at June 30, 1994.
FOREIGN EXCHANGE AND DERIVATIVES CONTRACTS
The tables on page 11 summarize the notional, credit risk,
and credit exposure amounts for each significant class of
foreign exchange and derivative contract outstanding in BAC's
trading portfolio and the notional and credit risk amounts
for each significant class of foreign exchange and derivative
contract outstanding in BAC's asset and liability management
portfolio. These tables should be read in conjunction with
the descriptions of such products and their risks included on
pages 28, 30, 39-43, and 71-80 of BAC's 1994 Annual Report to
Shareholders.
10
<PAGE>
<TABLE>
<CAPTION>
===============================================================================================================================
DERIVATIVE FINANCIAL INSTRUMENTS HELD OR ISSUED FOR TRADING
PURPOSES
------------------------------------------------------------
JUNE 30, 1995 DECEMBER 31, 1994
------------------------------- -------------------------------
NOTIONAL CREDIT CREDIT NOTIONAL CREDIT CREDIT
(IN MILLIONS) AMOUNT RISK/a/ EXPOSURE/b/ AMOUNT RISK/a/ EXPOSURE/b/
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTEREST RATE CONTRACTS
Interest rate swaps $ 423,050 $ 7,099 $2,714/c/ $ 348,515 $ 4,971 $1,960/c/
Futures and forward rate contracts:
Commitments to purchase 158,708 27 27 95,010 192 192
Commitments to sell 166,533 274 274 116,408 35 35
Written options 48,083 -/d/ -/d/ 35,909 -/d/ -/d/
Purchased options 57,321 412 300 44,779 441 279
------------------------------------------------------------------------------------------------------------
853,695 7,812 3,315 640,621 5,639 2,466
FOREIGN EXCHANGE CONTRACTS
Spot, forward, and futures contracts 837,362 11,486 3,609 630,867 6,623 2,234
Written options 27,023 -/d/ -/d/ 19,617 -/d/ -/d/
Purchased options 26,891 556 470 18,861 267 208
Currency swaps 23,380 2,319 1,915 21,943 1,595 1,353
------------------------------------------------------------------------------------------------------------
914,656 14,361 5,994 691,288 8,485 3,795
Stock index options and
commodity contracts 289 17 14 825 9 6
------------------------------------------------------------------------------------------------------------
$1,768,640/e/ $22,190 $9,323 $1,332,734/f/ $14,133 $6,267
-------------------------------------=======================================================================
</TABLE>
<TABLE>
<CAPTION>
DERIVATIVE FINANCIAL INSTRUMENTS HELD OR ISSUED FOR ASSET AND
LIABILITY MANAGEMENT PURPOSES
-------------------------------------------------------------
JUNE 30, 1995 DECEMBER 31, 1994
---------------------- -----------------------
NOTIONAL CREDIT NOTIONAL CREDIT
(IN MILLIONS) AMOUNT RISK/a/ AMOUNT RISK/a/
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST RATE CONTRACTS
Interest rate swaps $31,299 $ 7 $32,864 $120
Futures and forward rate contracts 35,249 - 28,773 -
Purchased options 8,200 62 4,510 43
---------------------------------------------------------------------------------------------
74,748 69 66,147 163
FOREIGN EXCHANGE CONTRACTS
Spot, forward, and futures contracts 1,510 - 1,383 -
Currency swaps 469 165 443 129
---------------------------------------------------------------------------------------------
1,979 165 1,826 129
---------------------------------------------------------------------------------------------
$76,727/e/ $234 $67,973/f/ $292
---------------------------------------======================================================
</TABLE>
/a/ Excluding the effects of legally enforceable master
netting agreements.
/b/ Including the effects of legally enforceable master
netting agreements.
/c/ Including the results of cross product netting of
certain interest rate derivatives and currency swaps.
/d/ Interest rate and foreign exchange options
written have no credit risk or credit exposure.
/e/ Interest rate swaps and interest rate options in both the
trading and asset and liability management portfolios
include $12.8 billion and $0.7 billion, respectively, of
intercompany hedging-related contracts. Foreign exchange
contracts in both the trading and asset and liability
management portfolios include $1.7 billion of
intercompany hedging-related contracts.
/f/ Interest rate swaps and interest rate options in both
the trading and asset and liability management portfolios
include $9.8 billion and $0.1 billion, respectively, of
intercompany hedging-related contracts. Foreign exchange
contracts in both the trading and asset and liability
management portfolios include $1.5 billion of
intercompany hedging-related contracts.
Notional amounts represent the principal value on which
calculations of amounts to be exchanged are based, and do not
represent the potential for gain or loss associated with such
transactions. Credit risk amounts represent BAC's gross
replacement value on contracts in a gain position if all
counterparties failed to perform according to the terms of
the contract and the value of any existing collateral became
worthless, based on then-current currency exchange and
interest rates at each respective date. Credit exposure
amounts represent BAC's net replacement values after taking
into consideration legally enforceable master netting
agreements.
11
<PAGE>
BANKAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
===============================================================================
The following tables summarize the period-end and average
fair values of each significant class of foreign exchange and
derivative contract outstanding in BAC's trading portfolio
and the period-end fair values for each significant class of
foreign exchange and derivative contract in BAC's asset and
liability management portfolio. Fair value amounts were
generally calculated using discounted cash flow models based
on current market yields for similar instruments and the
maturity of each instrument. These amounts include the
effects of master netting agreements.
<TABLE>
<CAPTION>
FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS HELD OR
ISSUED FOR TRADING PURPOSES
-------------------------------------------------------------
JUNE 30, 1995 DECEMBER 31, 1994
-------------------------- ---------------------------
AVERAGE AVERAGE
FAIR VALUE FAIR VALUE
PERIOD END FOR THE PERIOD END FOR THE
(IN MILLIONS) FAIR VALUE QUARTER ENDED/a/ FAIR VALUE YEAR ENDED/a/
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST RATE CONTRACTS
Interest rate swaps:
Assets $ 2,714 $ 2,374 $ 1,960 $ 2,230
Liabilities (2,314) (2,021) (1,588) (1,659)
Futures and forward rate contracts:
Assets 301 321 227 149
Liabilities (279) (300) (189) (133)
Written options (246) (230) (299) (292)
Purchased options 300 274 279 283
-----------------------------------------------------------------------------------------------------------
476 418 390 578
FOREIGN EXCHANGE CONTRACTS
Spot, forward, and futures contracts:
Assets 3,609 4,650 2,234 3,393
Liabilities (4,179) (4,695) (2,766) (3,744)
Written options (523) (569) (228) (238)
Purchased options 470 557 208 221
Currency swaps:
Assets 1,915 2,153 1,353 1,538
Liabilities (2,391) (2,604) (1,494) (1,729)
-----------------------------------------------------------------------------------------------------------
(1,099) (508) (693) (559)
Stock index options and commodity contracts:
Assets 14 16 6 9
Liabilities (7) (7) (7) (9)
-----------------------------------------------------------------------------------------------------------
7 9 (1) -
-----------------------------------------------------------------------------------------------------------
$ (616) $ (81) $ (304) $ 19
--------------------------------------------------=========================================================
</TABLE>
<TABLE>
<CAPTION>
FAIR VALUES OF DERIVATIVE FINANCIAL INSTRUMENTS HELD OR
ISSUED FOR ASSET AND LIABILITY MANAGEMENT PURPOSES
------------------------------------------------------------
(IN MILLIONS) JUNE 30, 1995 DECEMBER 31, 1994
-------------------------------------------------------------------------------
<S> <C> <C>
INTEREST RATE CONTRACTS
Interest rate swaps $(55) $(693)
Futures and forward rate contracts 10 (42)
Purchased options 90 39
-------------------------------------------------------------------------------
45 (696)
FOREIGN EXCHANGE CONTRACTS
Spot, forward, and futures contracts - -
Currency swaps 165 129
-------------------------------------------------------------------------------
165 129
-------------------------------------------------------------------------------
$210 $(567)
-----------------------------------------------------==========================
</TABLE>
/a/ Average fair value amounts are calculated based on
monthly balances.
12
<PAGE>
===============================================================================
TRADING ACTIVITIES
Trading income represents the net amount earned from BAC's
trading activities, which include entering into transactions
to meet customer demand and taking positions for BAC's own
account in a diverse range of financial instruments and
markets. The profitability of these trading activities
depends largely on the volume and diversity of the
transactions BAC executes, the level of risk it is willing to
assume, and the volatility of price and rate movements.
Trading income, as disclosed in BAC's consolidated statement
of operations, does not include the net interest income
derived from foreign exchange contracts and derivatives
associated with trading activities. However, the trading-
related net interest income amounts are presented in the
table below as they are considered in evaluating the overall
profitability of those activities.
<TABLE>
<CAPTION>
TRADING INCOME AND NET INTEREST INCOME BY FUNCTION
----------------------------------------------------------------------------------------
1995 1994 SIX MONTHS ENDED
---------------- ------------------------- JUNE 30
SECOND FIRST FOURTH THIRD SECOND ----------------
(IN MILLIONS) QUARTER QUARTER QUARTER QUARTER QUARTER 1995 1994
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
TRADING INCOME
Interest rate $ 9 $ 25 $14 $ 20 $ 15 $ 34 $ 29
Foreign exchange 80 83 43 63 73 163 131
Debt instruments 62 21 (3) 37 21 83 23
----------------------------------------------------------------------------------------
$151 $129 $54 $120 $109 $280 $183
--------------------------==============================================================
NET INTEREST INCOME
Interest rate $ 2 $ 3 $(2) $ 2 $ (3) $ 5 $ (3)
Foreign exchange 7 2 1 3 3 9 3
Debt instruments 49 28 21 25 23 77 39
----------------------------------------------------------------------------------------
$ 58 $ 33 $20 $ 30 $ 23 $ 91 $ 39
--------------------------==============================================================
</TABLE>
To reflect the business purpose and use of the financial
contracts into which BAC enters, trading income and the
related net interest revenue associated with such contracts
have been allocated into three broad functional categories:
interest rate trading, foreign exchange trading, and debt
instruments trading. Trading income from interest rate
instruments primarily includes income from interest rate and
currency swaps and from interest rate futures, option
contracts, and forward rate agreements, as well as debt
instruments used in the management of this function. Foreign
exchange trading-related income primarily includes amounts
generated from foreign exchange spot, forward, futures, and
option contracts. Trading income from debt instruments
primarily includes amounts from debt securities.
13
<PAGE>
BANKAMERICA CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
===============================================================================
ASSET AND LIABILITY MANAGEMENT ACTIVITIES
BAC uses foreign exchange contracts and derivative
instruments, primarily interest rate contracts, to manage
interest rate risk related to specific assets and
liabilities, including fixed rate and adjustable rate
residential mortgages, long-term debt, and deposits. Foreign
exchange contracts are used to hedge net capital exposure and
foreign currency exposures. For a detailed description of
BAC's asset and liability management objectives and
strategies used to achieve those objectives, refer to page 76
of BAC's 1994 Annual Report to Shareholders.
The expected maturities and weighted average interest rates
associated with BAC's asset and liability management interest
rate swap portfolio at June 30, 1995 were not significantly
different from those at year-end 1994.
SECURITIES LENDING
BAC conducts securities lending transactions for certain
customers and, at times, indemnifies these customers against
various losses. All securities lending transactions are
collateralized by U.S. government or federal agency
securities, cash, or letters of credit with total market
value equal to or in excess of the market value of the
securities lent. In the event of default by a customer
combined with a decline in the value of the associated
collateral, BAC may be exposed to risk of loss.
The following summarizes indemnified securities lending
transactions and the associated collateral:
<TABLE>
<CAPTION>
1995 1994
----------------- --------------------------
(IN MILLIONS) JUNE 30 MARCH 31 DEC. 31 SEPT. 30 JUNE 30
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Indemnified securities lent $4,220 $6,350 $5,910 $6,241 $5,185
Associated collateral 4,321 6,501 6,039 6,613 5,328
</TABLE>
14
<PAGE>
===============================================================================
[THIS PAGE INTENTIONALLY LEFT BLANK]
15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
HIGHLIGHTS
===============================================================================
The following is a summary of second-quarter 1995 financial
information for BankAmerica Corporation and subsidiaries
(BAC).
. BAC reported second-quarter 1995 earnings per share of
$1.56, an increase of 17 percent from $1.33 for the same
period a year ago. Net income for the second quarter of
1995 was $645 million, up 23 percent from $525 million for
the second quarter of 1994.
. The return on average common equity was 14.30 percent for
the second quarter of 1995, an increase of 98 basis points
from the same period in 1994. In addition, the return on
average total assets increased 5 basis points from a year
ago to 1.13 percent for the second quarter of 1995.
. BAC's net interest margin for the second quarter of 1995
was 4.54 percent, up 5 basis points from the same period a
year ago.
. Noninterest income for the second quarter of 1995
increased $123 million from the amount reported in the
same period last year as a result of higher fee and
commission income and improved results from venture
capital and trading activities.
. Noninterest expense for the second quarter of 1995
increased $64 million from the previous quarter primarily
due to growth in performance-based pay, advertising
expenses, occupancy expenses, and contributions made to
the BankAmerica Foundation. Noninterest expense for the
second quarter of 1995 increased $235 million from the
same period a year ago.
. BAC's expense to revenue ratio, a key indicator of BAC's
operating efficiency, decreased to 59.6 percent in the
second quarter of 1995 from 60.9 percent in the second
quarter of 1994.
. Average loan outstandings increased $4.8 billion, or 3.4
percent, from the previous quarter, reflecting broad-based
growth in several loan categories.
. In connection with its previously announced stock
repurchase program, BAC repurchased 4.0 million shares of
its common stock during the second quarter of 1995 at an
average per-share price of $52.41, bringing year-to-date
repurchases to 9.6 million shares at an average per-share
price of $49.45. In addition, during the second quarter of
1995, approximately 99 percent of BAC's 6 1/2% Cumulative
Preferred Stock, Series G were converted to common stock,
while the remaining preferred shares outstanding were
redeemed.
Note: The information contained in the Management's Discussion and Analysis
section reflects the effects of the merger with Continental Bank
Corporation (Continental) subsequent to its consummation on
August 31, 1994.
16
<PAGE>
<TABLE>
<CAPTION>
================================================================================================================================
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------------------------------------------------------
1995 1994 SIX MONTHS ENDED
--------------------- ----------------------------------- JUNE 30
(DOLLAR AMOUNTS IN MILLIONS, SECOND FIRST FOURTH THIRD SECOND ------------------------
EXCEPT PER SHARE DATA) QUARTER QUARTER QUARTER QUARTER QUARTER 1995 1994
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS
Interest income $ 3,989 $ 3,736 $ 3,479 $ 3,153 $ 2,939 $ 7,725 $ 5,752
Interest expense 1,866 1,690 1,467 1,249 1,107 3,556 2,126
--------------------------------------------------------------------------------------------------------------------------------
Net interest income 2,123 2,046 2,012 1,904 1,832 4,169 3,626
Provision for credit losses 100 100 100 110 125 200 250
Noninterest income 1,138 1,093 1,048 1,072 1,015 2,231 2,015
Noninterest expense 2,053 1,989 1,966 1,935 1,818 4,042 3,599
--------------------------------------------------------------------------------------------------------------------------------
Income before income taxes 1,108 1,050 994 931 904 2,158 1,792
Provision for income taxes 463 439 403 384 379 902 754
--------------------------------------------------------------------------------------------------------------------------------
NET INCOME $ 645 $ 611 $ 591 $ 547 $ 525 $ 1,256 $ 1,038
---------------------------------------=========================================================================================
PER SHARE DATA
Earnings per common and common
equivalent share $ 1.56 $ 1.46 $ 1.41 $ 1.36 $ 1.33 $ 3.03 $ 2.59
Earnings per common share -- assuming
full dilution 1.55 1.45 1.40 1.35 1.32 3.00 2.58
Dividends declared per common share 0.46 0.46 0.40 0.40 0.40 0.92 0.80
--------------------------------------------------------------------------------------------------------------------------------
STOCK DATA
Book value per common share at
period end $ 45.38 43.72 $ 42.63 $ 42.02 $ 40.69 $ 45.38 $ 40.69
Common stock price range:
High 55 1/4 49 5/8 46 1/4 49 5/8 50 1/4 55 1/4 50 1/4
Low 48 3/8 39 1/2 38 5/8 44 38 3/8 39 1/2 38 3/8
Closing common stock price 52 5/8 48 1/4 39 1/2 44 1/8 45 3/4 52 5/8 45 3/4
Average number of common and common
equivalent shares outstanding
(in thousands) 376,213 375,084 373,922 357,962 349,721 375,649 353,645
Average number of common shares
outstanding -- assuming full
dilution (in thousands) 379,182 381,141 379,402 363,442 355,201 380,162 359,125
Number of common shares outstanding
at period end (in thousands) 372,336 369,543 371,182 370,206 346,909 372,336 346,909
--------------------------------------------------------------------------------------------------------------------------------
FINANCIAL CONDITION AND
CAPITAL AT PERIOD END
Loans $148,766 $144,159 $140,912 $138,691 $124,874 $148,766 $124,874
Total assets 226,599 223,188 215,475 214,230 197,543 226,599 197,543
Deposits 155,780 152,268 154,394 152,666 142,035 155,780 142,035
Long-term debt and
subordinated capital notes 16,078 15,451 15,428 15,109 14,217 16,078 14,217
Common equity 16,897 16,158 15,823 15,562 14,114 16,897 14,114
Total equity 19,620 19,226 18,891 18,930 17,093 19,620 17,093
--------------------------------------------------------------------------------------------------------------------------------
SELECTED FINANCIAL RATIOS
Rate of return (based on
net income) on:
Average common equity 14.30% 13.86% 13.24% 13.12% 13.32% 14.09% 13.21%
Average total equity 13.29 12.95 12.35 12.17 12.41 13.12 12.33
Average total assets 1.13 1.14 1.09 1.07 1.08 1.13 1.07
Ratio of common equity to total assets 7.46 7.24 7.34 7.26 7.14 7.46 7.14
Ratio of total equity to total assets 8.66 8.61 8.77 8.83 8.65 8.66 8.65
Ratio of average total equity to
average total assets 8.51 8.79 8.84 8.77 8.67 8.65 8.70
================================================================================================================================
</TABLE>
17
<PAGE>
BUSINESS SECTORS
<TABLE>
<CAPTION>
============================================================================================================================
SELECTED BUSINESS SECTOR DATA
----------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30/a/
------------------------------------------------------------------------------------------
U.S. CORPORATE AND
TOTAL CONSUMER BANKING INTERNATIONAL BANKING COMMERCIAL REAL ESTATE
------------------- ------------------- --------------------- ----------------------
(DOLLAR AMOUNTS IN MILLIONS) 1995 1994 1995 1994 1995 1994 1995 1994
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS
Net interest income $ 4,169 $ 3,626 $ 2,252 $ 2,058 $ 682 $ 460 $ 227 $ 206
Provision for credit losses 200 250 315 431 - (31) (122) (140)
Noninterest income 2,231 2,015 848 791 942 749 16 41
Noninterest expense 4,042 3,599 1,884 1,801 903 660 52 48
----------------------------------------------------------------------------------------------------------------------------
Income (loss) before income
taxes 2,158 1,792 901 617 721 580 313 339
Provision for (benefit from)
income taxes 902 754 378 272 266 228 129 141
----------------------------------------------------------------------------------------------------------------------------
Net Income (Loss) 1,256 1,038 523 345 455 352 184 198
Preferred stock dividends 118 121 38 42 44 39 6 8
----------------------------------------------------------------------------------------------------------------------------
Net Income (Loss) Attributable
to Common Equity $ 1,138 $ 917 $ 485 $ 303 $ 411 $ 313 $ 178 $ 190
----------------------------------==========================================================================================
SELECTED AVERAGE
BALANCE SHEET COMPONENTS
Loans $143,460 $122,812 $62,719 $57,112 $38,728 $29,287 $9,464 $9,655
Earning assets 184,671 163,163 63,351 57,806 64,277 48,468 9,491 9,655
Total assets 223,258 195,195 69,420 64,171 84,346 63,027 9,258 9,484
Deposits 151,832 141,058 73,944 76,751 34,429 23,759 1,371 1,941
Common equity 16,296 14,000 5,272 4,882 6,054 4,546 841 894
SELECTED FINANCIAL RATIOS
Return on average common equity 14.1% 13.2% 18.5% 12.5% 13.7% 13.9% 42.7% 42.9%
Expense to revenue/c/ 59.7 60.1 57.4 59.5 54.3 53.6 19.8 19.0
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
BAC internally segregates its operations into business
sectors. However, since BAC's operations are highly
integrated, certain non-sector-specific income, expenses,
assets, and liabilities must be allocated to the appropriate
customer and market sectors. Domestic sources of funds,
overhead, and federal and state taxes are allocated in this
process. Furthermore, for internal business sector
monitoring, the unallocated allowance for credit losses and
related provision for credit losses are allocated to the
business sectors. Equity is assigned on a risk-adjusted
basis. The information set forth in the table on pages 18 and
19 reflects the condensed income statements and selected
average balance sheet components and financial ratios by
business sectors. The information presented does not
represent the business sectors' financial condition and
results of operations as if they were managed as independent
entities.
Consumer Banking -- Consumer Banking's net income for the
first half of 1995 was up $178 million, or 52 percent, from
the amount for the same period last year. This increase
largely reflected improved results in BAC's retail deposit,
consumer lending, and manufactured housing businesses,
partially offset by declines in residential lending and
credit card net income. Net interest income was up from the
first half of 1994 due to the widening of deposit spreads and
increased loan volumes, while noninterest income increased
due to growth in loan servicing fees and service charges on
deposit accounts. Noninterest expense increased due to higher
advertising expenses incurred to promote co-branding and
photocard products included in credit card operations. In
addition, noninterest expense levels grew in the residential
lending business due to BAC's expanded mortgage banking
operations. The credit card, residential, and consumer
lending businesses benefited from a lower provision for
credit losses. Average loan outstandings grew $5.6 billion,
18
<PAGE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30/a/
-------------------------------------------------------------------------------------------------
PRIVATE BANKING AND
MIDDLE MARKET BANKING INVESTMENT SERVICES NON-CALIFORNIA BANKS/b/ OTHER
--------------------- ------------------- -------------------- ---------------------
(DOLLAR AMOUNTS IN MILLIONS) 1995 1994 1995 1994 1995 1994 1995 1994
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING RESULTS
Net interest income $ 366 $ 262 $ 80 $ 59 $ 463 $ 417 $ 99 $ 164
Provision for credit losses (9) (24) 2 5 (10) 9 24 -
Noninterest income 91 72 155 142 165 157 14 63
Noninterest expense 215 179 187 217 547 540 254 154
----------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income
taxes 251 179 46 (21) 91 25 (165) 73
Provision for (benefit from)
income taxes 104 75 18 (10) 35 11 (28) 37
----------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss) 147 104 28 (11) 56 14 (137) 36
Preferred stock dividends 7 6 2 3 10 12 11 11
----------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss) Attributable to
Common Equity $ 140 $ 98 $ 26 $ (14) $ 46 $ 2 $ (148) $ 25
-----------------------------------===============================================================================================
SELECTED AVERAGE
BALANCE SHEET COMPONENTS
Loans $14,620 $11,526 $3,464 $2,570 $14,058 $12,068 $ 407 $ 594
Earning assets 14,633 11,549 3,506 2,628 20,611 20,760 8,802 12,297
Total assets 16,731 13,077 4,014 3,071 23,711 23,862 15,778 18,503
Deposits 6,836 6,588 5,583 4,838 22,873 23,719 6,796 3,462
Common equity 927 671 304 312 1,438 1,417 1,460 1,278
SELECTED FINANCIAL RATIOS
Return on average common equity 30.6% 29.4% 17.1% (9.1)% 6.4% 0.2% (20.5)% 4.0%
Expense to revenue/c/ 45.6 52.1 76.8 106.2 79.3 84.6 203.1 55.8
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/a/ For comparability purposes, both 1995 and 1994 amounts reflect BAC's
business-sector allocation methodologies at June 30, 1995.
/b/ Excludes Seafirst and Bank of America Illinois, which are reflected
within the applicable business sectors.
/c/ Excludes net other real estate owned expense and amortization of
intangibles.
or 10 percent, from the first half of 1994, reflecting
increases in credit card loans and other consumer loans.
Average deposits declined $2.8 billion, reflecting decreases
in most deposit categories.
U.S. Corporate and International Banking -- U.S. Corporate
and International Banking's net income for the first six
months of 1995 increased $103 million, or 29 percent, from
that of the same period a year ago. This increase reflected
expanded banking operations in the Midwest, as well as higher
revenues from venture capital, trading, and loan syndication
activities. The increase in net interest income resulted from
growth in average loans, which included the effects of the
addition of Continental Bank Corporation (Continental), as
well as core portfolio growth. Noninterest expense increased
$243 million due to expanded operations from mergers and
acquisitions, as well as continued growth of global capital
market operations. Average loan outstandings grew $9.4
billion, largely due to increases in commercial and
industrial and foreign loans. Average deposits increased
$10.7 billion, or 45 percent, reflecting higher foreign
interest-bearing deposits and the addition of Continental.
19
<PAGE>
===============================================================================
Commercial Real Estate -- Net income for Commercial Real
Estate decreased $14 million, or 7 percent, for the first
half of 1995 compared to the corresponding period of 1994.
Noninterest income declined primarily due to fewer asset
sales as a majority of the sector's bulk sales of problem
assets occurred prior to 1995. Average loan outstandings
declined $0.2 billion from the first half of 1994. This
decrease was due to lower volumes of loans to mortgage banks,
partially offset by an increase in commercial loans secured
by real estate.
Middle Market Banking -- Middle Market Banking's net income
for the first half of 1995 grew $43 million, or 41 percent,
from the first half of 1994. This growth was primarily due to
an increase in net interest income, resulting from the
addition of Continental, increased loan volumes, and improved
deposit spreads. Increases in noninterest revenue,
noninterest expense, and average loan outstandings were
largely due to BAC's expanded midwestern banking business.
Private Banking and Investment Services -- Net income for
Private Banking and Investment Services increased $39 million
in the first half of 1995 compared to the same period a year
ago. Year-to-date 1994 results included $68 million of
capital additions to the Pacific Horizon money market mutual
funds, as discussed on page 26. Net interest income increased
primarily due to Continental's contribution.
Non-California Banks -- Non-California Banks, which excludes
Seafirst Corporation and Bank of America Illinois, produced
year-to-date 1995 earnings of $56 million, up $42 million
from the same period a year earlier. Substantially all of the
non-California banks experienced improved financial results,
particularly Nevada, Oregon, Arizona, and Texas. Net interest
income increased due to increased loan volumes and widening
of deposit spreads. The provision for credit losses declined
to ($10) million in the first half of 1995 from $9 million in
the first half of 1994. Average loan outstandings increased
$2.0 billion, or 16 percent, from the first half of 1994,
reflecting growth in most loan categories.
Other -- Other amounts are primarily associated with BAC's
institutional trust and securities services, asset and
liability management activities, and various other services.
This sector had a net loss of $137 million in the first half
of 1995, compared with net income of $36 million in the first
half of 1994. This decrease was primarily attributable to an
increase in unallocated corporate expenses and a higher net
loss in the institutional trust and securities services
business.
20
<PAGE>
RESULTS OF OPERATIONS
===============================================================================
NET INTEREST Taxable-equivalent net interest income was $2,130 million for
INCOME the second quarter of 1995, up $293 million from the amount
reported for the second quarter of 1994. Taxable-equivalent
net interest income totaled $4,182 million and $3,637
million, respectively, for the first six months of 1995 and
1994. These increases resulted from growth in average loans,
which included the effects of mergers and acquisitions as
well as core portfolio growth, and from improvements in the
net interest margin. BAC's net interest margin was 4.54
percent for the quarter ended June 30, 1995, up 5 basis
points from the comparable period in 1994. The net interest
margin for the first half of 1995 was 4.54 percent, up from
4.47 for the same period in 1994.
BAC's net interest margin includes the results of hedging
with certain on- and off-balance-sheet financial instruments.
In the second quarter and first six months of 1995, BAC's net
interest income included approximately $20 million and $40
million, respectively, attributable to hedging with
derivative instruments, compared with approximately $110
million and $255 million, respectively, in the comparable
periods of 1994. The hedging amounts for both the second
quarter and first six months of 1995 accounted for
approximately 5 basis points of the net interest margin for
those periods, while the hedging amounts for the comparable
periods of 1994 accounted for 25 basis points and 30 basis
points, respectively.
21
<PAGE>
<TABLE>
<CAPTION>
===============================================================================================================================
AVERAGE BALANCES, INTEREST, AND AVERAGE RATES
-------------------------------------------------------------------------------------------------------------------------------
SECOND QUARTER 1995 SECOND QUARTER 1994
----------------------------- -----------------------------
(DOLLAR AMOUNTS IN MILLIONS) BALANCE/a/ INTEREST/b/ RATE/b/ BALANCE/a/ INTEREST/b/ RATE/b/
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest-bearing deposits in banks $ 5,915 $ 120 8.16% $ 4,774 $ 74 6.19%
Federal funds sold 592 9 6.11 1,427 15 3.99
Securities purchased under resale agreements 9,691 176 7.29 6,886 89 5.20
Trading account assets 9,226 189 8.23 6,402 122 7.67
Available-for-sale securities/cd/ 9,566 196 8.21 9,304 132 5.69
Held-to-maturity securities/c/ 7,186 131 7.26 11,816 216 7.33
Domestic loans:
Consumer-residential first mortgages 34,987 608 6.95 31,391 462 5.89
Consumer-residential junior mortgages 13,896 315 9.08 13,097 251 7.69
Consumer-credit card 7,964 305 15.31 7,092 281 15.86
Other consumer 13,596 337 9.95 11,515 290 10.08
Commercial and industrial 31,149 662 8.53 21,479 350 6.53
Commercial loans secured by real estate 10,575 240 9.06 9,051 177 7.81
Construction and development loans
secured by real estate 3,418 105 12.33/e/ 3,850 70 7.27/e/
Financial institutions 2,271 35 6.21 1,803 23 5.05
Agricultural 1,588 38 9.61 1,596 29 7.43
Lease financing 1,815 30 6.60 1,641 33 8.13
Loans for purchasing or carrying securities 1,348 23 6.98 1,711 20 4.80
Other 1,423 23 6.55 1,210 20 6.59
---------- ------ ---------- ------
Total domestic loans 124,030 2,721 8.79 105,436 2,006 7.62
Foreign loans 21,840 454 8.34 17,877 290 6.51
---------- ------ ---------- ------
Total loans/d/ 145,870 3,175 8.72 123,313 2,296 7.46
---------- ------ ---------- ------
Total earning assets 188,046 $3,996 8.52 163,922 $2,944 7.20
====== ======
Nonearning assets 44,445 35,122
Less: Allowance for credit losses 3,720 3,425
---------- ----------
TOTAL ASSETS $228,771 $ 195,619
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Domestic interest-bearing deposits:
Transaction $ 13,242 $ 40 1.19% $ 13,792 $ 40 1.16%
Savings 13,636 71 2.08 14,569 74 2.03
Money market 29,079 217 3.00 32,623 199 2.45
Time 30,098 367 4.89 26,547 166 2.50
---------- ------ ---------- ------
Total domestic interest-bearing deposits 86,055 695 3.24 87,531 479 2.19
Foreign interest-bearing deposits:
Banks located in foreign countries 10,671 183 6.88 6,125 96 6.29
Governments and official institutions 6,468 95 5.89 4,384 48 4.38
Time, savings, and other 16,143 267 6.64 11,000 130 4.75
---------- ------ ---------- ------
Total foreign interest-bearing deposits 33,282 545 6.57 21,509 274 5.11
---------- ------ ---------- ------
Total interest-bearing deposits 119,337 1,240 4.17 109,040 753 2.77
Federal funds purchased 2,136 30 5.53 335 3 3.71
Securities sold under repurchase agreements 9,127 150 6.61 6,852 97 5.64
Other short-term borrowings 9,864 168 6.81 3,785 59 6.26
Long-term debt 15,140 266 7.06 13,637 185 5.45
Subordinated capital notes 605 12 7.63 606 10 6.76
---------- ------ ---------- ------
Total interest-bearing liabilities 156,209 $1,866 4.79 134,255 $1,107 3.31
====== ======
Domestic noninterest-bearing deposits 32,675 31,001
Foreign noninterest-bearing deposits 1,749 1,437
Other noninterest-bearing liabilities 18,668 11,963
---------- ----------
Total liabilities 209,301 178,656
Stockholders' equity 19,470 16,963
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 228,771 $ 195,619
========== ==========
Interest income as a percentage of average earning assets 8.52% 7.20%
Interest expense as a percentage of average earning assets (3.98) (2.71)
---- ----
NET INTEREST MARGIN 4.54% 4.49%
==== ====
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/a/ Average balances are obtained from the best available daily, weekly, or
monthly data.
/b/ Interest income and average rates are presented on a taxable-equivalent
basis. The taxable-equivalent adjustments are based on a marginal tax rate
of 35 percent.
/c/ Refer to the table on page 28 of the Balance Sheet Review section for more
detail on available-for-sale and held-to-maturity securities.
/d/ Average balances include nonaccrual assets.
/e/ Rates reflect a higher level of interest recoveries on nonaccrual loans
during the second quarter of 1995 as compared to the second quarter of
1994.
22
<PAGE>
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED JUNE 30
---------------------------------------------------------------------------------------------------------------------------------
1995 1994
------------------------------- -------------------------------
(DOLLAR AMOUNTS IN MILLIONS) BALANCE/a/ INTEREST/b/ RATE/b/ BALANCE/a/ INTEREST/b/ RATE/b/
---------------------------------------------------------------------------------------------------------------------------------
<S> <S> <S> <S> <C> <C> <C>
ASSETS
Interest-bearing deposits in banks $ 5,781 $ 232 8.09% $ 4,251 $ 130 6.15%
Federal funds sold 569 17 6.04 1,527 28 3.63
Securities purchased under resale agreements 8,927 311 7.03 6,398 161 5.07
Trading account assets 8,802 354 8.12 6,836 233 6.89
Available-for-sale securities/cd/ 9,582 367 7.70 9,568 278 5.84
Held-to-maturity securities/c/ 7,550 276 7.33 11,771 430 7.30
Domestic loans:
Consumer-residential first mortgages 34,647 1,175 6.78 31,123 905 5.82
Consumer-residential junior mortgages 13,769 627 9.18 12,992 505 7.84
Consumer-credit card 7,886 600 15.21 7,148 568 15.88
Other consumer 13,285 643 9.76 11,485 560 9.84
Commercial and industrial 30,188 1,292 8.64 20,832 653 6.32
Commercial loans secured by real estate 10,467 471 8.99 9,087 348 7.67
Construction and development loans
secured by real estate 3,473 200 11.60/e/ 4,062 141 7.00/e/
Financial institutions 2,363 72 6.12 1,812 42 4.71
Agricultural 1,649 79 9.70 1,604 58 7.35
Lease financing 1,803 56 6.29 1,657 75 9.08
Loans for purchasing or carrying securities 1,372 48 7.02 2,095 45 4.36
Other 1,408 46 6.57 1,195 37 6.15
---------- ------- ---------- -------
Total domestic loans 122,310 5,309 8.72 105,092 3,937 7.53
Foreign loans 21,150 872 8.32 17,720 566 6.45
---------- ------- ---------- -------
Total loans/d/ 143,460 6,181 8.66 122,812 4,503 7.37
---------- ------- ---------- -------
Total earning assets 184,671 $ 7,738 8.43 163,163 $5,763 7.10
======= ======
Nonearning assets 42,295 35,495
Less: Allowance for credit losses 3,708 3,463
---------- ----------
Total Assets $ 223,258 $ 195,195
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Domestic interest-bearing deposits:
Transaction $ 13,367 $ 79 1.20% $ 13,797 $ 79 1.16%
Savings 13,714 141 2.08 14,418 145 2.03
Money market 29,718 431 2.92 33,148 396 2.41
Time 30,301 704 4.69 26,723 328 2.48
---------- ------- ---------- -------
Total domestic interest-bearing deposits 87,100 1,355 3.14 88,086 948 2.17
Foreign interest-bearing deposits:
Banks located in foreign countries 9,303 322 6.98 5,702 171 6.05
Governments and official institutions 6,259 184 5.92 4,098 86 4.20
Time, savings, and other 14,879 493 6.69 10,721 245 4.61
---------- ------- ---------- -------
Total foreign interest-bearing deposits 30,441 999 6.62 20,521 502 4.93
---------- ------- ---------- -------
Total interest-bearing deposits 117,541 2,354 4.04 108,607 1,450 2.69
Federal funds purchased 2,297 69 6.01 349 6 3.34
Securities sold under repurchase agreements 8,860 280 6.38 6,566 176 5.40
Other short-term borrowings 8,792 300 6.87 3,744 120 6.46
Long-term debt 15,031 530 7.12 13,460 354 5.31
Subordinated capital notes 605 23 7.65 606 20 6.73
---------- ------- ---------- -------
Total interest-bearing liabilities 153,126 $3,556 4.68 133,332 $2,126 3.22
======= =======
Domestic noninterest-bearing deposits 32,612 30,998
Foreign noninterest-bearing deposits 1,679 1,453
Other noninterest-bearing liabilities 16,537 12,434
---------- ----------
Total liabilities 203,954 178,217
Stockholders' equity 19,304 16,978
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 223,258 $ 195,195
========== ==========
Interest income as a percentage of average earning assets 8.43% 7.10%
Interest expense as a percentage of average earning assets (3.89) (2.63)
---- ----
NET INTEREST MARGIN 4.54% 4.47%
==== ====
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
23
<PAGE>
===============================================================================
NONINTEREST Noninterest income for the second quarter and the first six
INCOME months of 1995 increased $123 million and $216 million,
respectively, from the amounts reported in the corresponding
periods of 1994.
Total fees and commissions for the second quarter and first
half of 1995 increased $117 million and $181 million,
respectively, from the amounts reported in the corresponding
periods of 1994. Retail deposit account fees increased as a
result of higher revenues from service charges on certain
deposit accounts and transactions, while the growth in
commercial deposit account fees was largely due to an
increase in the number of commercial accounts. The increase
in syndication fees, which is included in other fees and
commissions, resulted from higher loan syndication volume.
Loan fees and charges increased due to higher revenues from
loan servicing fees as a result of expanded mortgage banking
activities. Personal and other trust fees and off-balance-
sheet credit-related instruments fees increased as a result
of BAC's expanded midwestern banking business. These
increases were partially offset by a decline in credit card
membership fees, which resulted from fee waivers granted to
various customers to retain and increase card membership in
response to a competitive marketplace.
Trading income for the second quarter and first half of 1995
increased $42 million and $97 million, respectively, from the
same periods a year ago. These increases were largely due to
improved performance in debt securities trading operations
and increased volume of foreign exchange products that
resulted from strong global customer demand. In particular,
BAC benefited from gains on Latin American debt securities.
For more information on the functional components of trading
income, refer to Note 10 of the Notes to Consolidated
Financial Statements on pages 10-14.
Other noninterest income for the second quarter and the first
half of 1995 decreased $36 million and $62 million,
respectively, from the amounts reported in the same period
last year, reflecting decreases in income from assets pending
disposition, net gain on sales of assets, and other income.
Income from assets pending disposition and net gain on sales
of assets decreased as a result of significant asset
dispositions and sales occurring in 1994, while there was no
such comparable activity during the first half of 1995. Other
income for the second quarter and first half of 1995
decreased $52 million and $21 million, respectively, from the
corresponding periods in 1994 primarily due to reduced income
from equity affiliates and joint ventures and a reduction of
BAC's investment in an equity affiliate. The decreases in
other noninterest income were largely offset by strong
results from venture capital activities, which were
attributable to higher realized capital gains and partnership
distributions.
24
<PAGE>
<TABLE>
<CAPTION>
======================================================================================================
NONINTEREST INCOME
------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED
SECOND QUARTER JUNE 30
------------------ ------------------
(IN MILLIONS) 1995 1994 1995 1994
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FEES AND COMMISSIONS
Deposit account fees:
Retail $ 228 $ 206 $ 449 $ 409
Commercial 95 84 191 175
Credit card fees:
Membership 12 21 27 44
Other 62 61 122 117
Trust fees:
Corporate and employee benefits 15 19 29 39
Personal and other 63 47 127 94
Other fees and commissions:
Loan fees and charges 86 64 168 136
Off-balance-sheet credit-related instrument fees 83 73 168 134
Mutual fund and annuity commissions 20 24 39 46
Other 153 101 267 212
------------------------------------------------------------------------------------------------------
817 700 1,587 1,406
------------------------------------------------------------------------------------------------------
TRADING INCOME 151 109 280 183
------------------------------------------------------------------------------------------------------
OTHER NONINTEREST INCOME
Income from assets pending disposition - 51 11 112
Net gain on sales of assets/a/ 14 20 15 65
Venture capital activities 103 32 190 63
Net gain on sales of available-for-sale securities 9 7 10 27
Other income 44 96 138 159
------------------------------------------------------------------------------------------------------
170 206 364 426
------------------------------------------------------------------------------------------------------
$1,138 $1,015 $2,231 $2,015
----------------------------------------------------------============================================
</TABLE>
/a/ Net gain on sales of assets includes gains and losses from the disposition
of loans, premises and equipment, and certain other assets.
25
<PAGE>
===============================================================================
NONINTEREST Noninterest expense for the second quarter of 1995 and the
EXPENSE first half of 1995 increased $235 million and $443 million,
respectively, from the amounts reported in the corresponding
periods in 1994. Noninterest expense for both the second
quarter and first six months of 1994 included $68 million of
capital additions to two of the Pacific Horizon money market
mutual funds, for which Bank of America NT&SA serves as an
investment advisor.
Personnel expense (salaries and employee benefits) for the
second quarter of 1995 and the first half of 1995 was up $145
million and $279 million, respectively, from the amounts
reported in the corresponding periods in 1994. This increase
was largely due to increases in incentive-based compensation
and base salaries expense. The increase in base salaries
expense was partially attributable to increased staff levels
resulting from mergers and acquisitions. BAC's staff level on
a full-time-equivalent (FTE) basis was approximately 80,300
at June 30, 1995, up from approximately 77,100 at June 30,
1994. FTE is a measurement equal to one full-time employee
working a standard day. BAC had approximately 95,800
employees at June 30, 1995, up from approximately 93,600 at
this same date a year earlier. These amounts include both
full-time and part-time employees.
Excluding the capital additions to the Pacific Horizon funds
discussed above, other expense for the second quarter and
first half of 1995 increased $56 million and $105 million,
respectively, largely as a result of increased advertising
and external data processing expenses, and contributions made
to the BankAmerica Foundation.
<TABLE>
<CAPTION>
===========================================================================
NONINTEREST EXPENSE
---------------------------------------------------------------------------
SIX MONTHS ENDED
SECOND QUARTER JUNE 30
----------------- ----------------
(IN MILLIONS) 1995 1994 1995 1994
---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Salaries $ 842 $ 700 $1,651 $1,410
Employee benefits 183 180 376 338
Occupancy 182 167 355 332
Equipment 165 138 324 284
Amortization of intangibles 110 99 219 204
Communications 91 80 177 158
Regulatory fees and
related expenses 74 72 146 142
Professional services 76 53 145 111
Net OREO expense (2) (15) (2) 6
Other expense 332 344 651 614
---------------------------------------------------------------------------
$2,053 $1,818 $4,042 $3,599
---------------------------------==========================================
</TABLE>
INCOME The provision for income taxes was $463 million and $379
TAXES million for the quarters ended June 30, 1995 and 1994,
reflecting forecasted annual effective income tax rates of
41.8 percent and 42.1 percent, respectively. For further
information concerning BAC's provision for federal, state,
and foreign income taxes for the most recent five quarters,
refer to Note 8 of the Notes to Consolidated Financial
Statements on Page 9.
26
<PAGE>
BALANCE SHEET REVIEW
===============================================================================
Earning assets totaled $186.2 billion at June 30, 1995, up
$8.1 billion from $178.1 billion at year-end 1994. This
increase was primarily attributable to growth in the loan
portfolio, which increased $7.9 billion between year-end 1994
and June 30, 1995. Growth in earning assets was largely
funded by increases in other short-term borrowings, which
primarily resulted from issuances of term federal funds,
commercial paper, and bank notes, and in foreign deposits.
During the first six months of 1995, interest-bearing
deposits in foreign offices increased $6.5 billion. This
increase was largely due to BAC's continued expansion into
certain global markets and a shift from domestic to foreign
funding sources. Average domestic interest-bearing deposits
declined $5.3 billion, or 6 percent, between the fourth
quarter of 1994 and the second quarter of 1995. This decrease
was largely reflected in money market and time deposits.
In March 1995, the Financial Accounting Standards Board
(FASB) issued Statement of Financial Accounting Standards No.
121, "Accounting for the Impairment of Long-Lived Assets and
for Long-Lived Assets to Be Disposed Of" (SFAS No. 121). In
May 1995, the FASB issued Statement of Financial Accounting
Standards No. 122, "Accounting for Mortgage Servicing Rights"
(SFAS No. 122). SFAS No. 121 and SFAS No. 122 are effective
for fiscal years beginning after December 15, 1995. BAC does
not expect that, at adoption, either SFAS No. 121 or SFAS No.
122 will have a material effect on its financial position or
results of operations.
27
<PAGE>
<TABLE>
<CAPTION>
===================================================================================================================================
AVAILABLE-FOR-SALE AND HELD-TO-MATURITY SECURITIES - AVERAGE BALANCES,
INTEREST, AND AVERAGE RATES
-----------------------------------------------------------------------------------------------------------------------------------
SECOND QUARTER 1995 SECOND QUARTER 1994
------------------------------------------------- -------------------------------------------------
RATE RATE
RATE BASED ON RATE BASED ON
BASED ON AMORTIZED BASED ON AMORTIZED
(DOLLAR AMOUNTS IN MILLIONS) BALANCE/a/ INTEREST/b/ FAIR VALUE/b/ COST/b/ BALANCE/a/ INTEREST/b/ FAIR VALUE/b/ COST/b/
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AVAILABLE-FOR-SALE SECURITIES
U.S. Treasury and other
government agency securities $1,465 $ 24 6.47% 6.41% $3,430 $ 45 5.31% 5.27%
Mortgage-backed securities 4,857 84 6.96 6.93 3,712 50 5.38 5.34
Other domestic securities 654 8 4.95 5.51 406 5 5.27 5.43
Foreign securities 2,590/c/ 80 12.37/d/ 11.15/d/ 1,756/c/ 32 7.18 6.25
-----------------------------------------------------------------------------------------------------------------------------------
$9,566 $196 8.21% 8.00% $9,304 $132 5.69% 5.51%
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SECOND QUARTER 1995 SECOND QUARTER 1994
------------------------------------ -----------------------------------
(DOLLAR AMOUNTS IN MILLIONS) BALANCE/a/ INTEREST/b/ RATE/b/ BALANCE/a/ INTEREST/b/ RATE/b/
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HELD-TO-MATURITY SECURITIES
U.S. Treasury and other government agency securities $ 442 $ 8 6.77% $ 740 $ 12 6.75%
Mortgage-backed securities 4,599 82 7.14 7,761 140 7.22
State, county, and municipal securities 439 9 8.18 485 10 8.32
Other domestic securities 182 4 8.50 236 4 6.52
Foreign securities 1,524 28 7.33 2,594 50 7.74
-----------------------------------------------------------------------------------------------------------------------------------
$7,186 $131 7.26% $11,816 $216 7.33%
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED JUNE 30
----------------------------------------------------------------------------------------------------
1995 1994
------------------------------------------------- -------------------------------------------------
RATE RATE
RATE BASED ON RATE BASED ON
BASED ON AMORTIZED BASED ON AMORTIZED
(DOLLAR AMOUNTS IN MILLIONS) BALANCE/a/ INTEREST/b/ FAIR VALUE/b/ COST/b/ BALANCE/a/ INTEREST/b/ FAIR VALUE/b/ COST/b/
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AVAILABLE-FOR-SALE SECURITIES
U.S. Treasury and other
government agency securities $1,664 $ 55 6.67% 6.58% $3,489 $ 94 5.43% 5.47%
Mortgage-backed securities 5,022 174 6.92 6.80 3,983 108 5.40 5.41
Other domestic securities 603 15 5.16 5.64 365 8 4.78 5.03
Foreign securities 2,293/c/ 123 10.81/d/ 9.51/d/ 1,731/c/ 68 7.90 6.81
-----------------------------------------------------------------------------------------------------------------------------------
$9,582 $367 7.70% 7.40% $9,568 $278 5.84% 5.71%
-----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED JUNE 30
----------------------------------------------------------------------------
(DOLLAR AMOUNTS IN MILLIONS) BALANCE/a/ INTEREST/b/ RATE/b/ BALANCE/a/ INTEREST/b/ RATE/b/
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
HELD-TO-MATURITY SECURITIES
U.S. Treasury and other government agency securities $ 441 $ 15 6.80% $ 781 $ 25 6.55%
Mortgage-backed securities 4,648 166 7.13 7,951 288 7.23
State, county, and municipal securities 444 18 8.16 493 20 8.15
Other domestic securities 185 7 7.84 244 9 7.15
Foreign securities 1,832 70 7.70 2,302 88 7.71
-----------------------------------------------------------------------------------------------------------------------------------
$7,550 $276 7.33% $11,771 $430 7.30%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/a/ Average balances are obtained from the best available daily, weekly, or
monthly data.
/b/ Interest income and average rates are presented on a taxable-equivalent
basis. The taxable-equivalent adjustments are based on a marginal tax rate
of 35 percent.
/c/ Average balances include nonaccrual assets.
/d/ Rates reflect interest received on nonaccrual debt-restructuring par bonds.
28
<PAGE>
CREDIT RISK MANAGEMENT
===============================================================================
LOAN PORTFOLIO Total loans at June 30, 1995 were up $7.9 billion, or 6
MANAGEMENT percent, from year-end 1994, reflecting continued growth in
both the domestic and foreign sectors.
<TABLE>
<CAPTION>
==============================================================================================================================
LOAN OUTSTANDINGS
------------------------------------------------------------------------------------------------------------------------------
1995 1994
------------------------ -----------------------------------------
(IN MILLIONS) JUNE 30 MARCH 31 DEC. 31 SEPT. 30 JUNE 30
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DOMESTIC
Consumer:
Residential first mortgages $ 35,564 $ 34,791 $ 33,818 $ 33,033 $ 31,784
Residential junior mortgages 14,072 13,808 13,589 13,658 13,280
Other installment 11,819 10,989 10,598 9,921 9,439
Credit card 8,237 7,757 8,020 7,420 7,169
Other individual lines of credit 1,811 1,691 1,736 1,747 1,806
Other 305 409 403 470 224
------------------------------------------------------------------------------------------------------------------------------
71,808 69,445 68,164 66,249 63,702
Commercial:
Commercial and industrial 31,436 30,481 28,814 29,021 21,815
Loans secured by real estate 10,717 10,504 10,277 9,823 9,131
Construction and development loans
secured by real estate 3,308 3,526 3,616 3,929 3,742
Financial institutions 2,520 2,211 2,872 2,601 1,340
Agricultural 1,607 1,658 1,840 1,721 1,605
Lease financing 1,840 1,786 1,814 1,694 1,678
Loans for purchasing or carrying securities 1,383 1,348 1,529 1,495 1,683
Other 1,569 1,639 1,623 1,642 1,465
------------------------------------------------------------------------------------------------------------------------------
54,380 53,153 52,385 51,926 42,459
------------------------------------------------------------------------------------------------------------------------------
126,188 122,598 120,549 118,175 106,161
FOREIGN
Commercial and industrial 14,948 14,417 13,496 13,331 12,388
Banks and other financial institutions 2,941 2,871 2,516 2,629 2,206
Governments and official institutions 1,131 866 896 1,220 862
Other 3,558 3,407 3,455 3,336 3,257
------------------------------------------------------------------------------------------------------------------------------
22,578 21,561 20,363 20,516 18,713
------------------------------------------------------------------------------------------------------------------------------
TOTAL LOANS 148,766 144,159 140,912 138,691 124,874
Less: Allowance for credit losses 3,695 3,725 3,690 3,625 3,414
------------------------------------------------------------------------------------------------------------------------------
$145,071 $140,434 $137,222 $135,066 $121,460
--------------------------------------------------============================================================================
</TABLE>
29
<PAGE>
===============================================================================
Domestic Consumer Loans -- The growth in domestic consumer
loans during the first six months of 1995 included increases
in residential first mortgages, other installment loans, and
residential junior mortgages of $1.7 billion, $1.2 billion,
and $0.5 billion, respectively. The increase in residential
first mortgages reflected BAC's continued efforts to
diversify its nationwide lending activities. In particular,
first residential mortgages increased in the Northeast,
Midwest, and Southwest regions of the country. The growth in
the Northeast and the Midwest resulted primarily from
expanded mortgage banking activities in these regions. The
increase in other installment loans was largely due to an
increase in manufactured housing loans nationwide. The
increase in residential junior mortgages was primarily
attributable to growth in the level of originations in the
Southwest and the Northwest, as well as in California. For
information regarding BAC's domestic residential first
mortgages by geographic area and domestic consumer loan
delinquencies, refer to the tables below.
<TABLE>
<CAPTION>
===============================================================================
DOMESTIC RESIDENTIAL FIRST MORTGAGES BY GEOGRAPHIC AREA
-------------------------------------------------------------------------------
1995
--------------------------
(IN MILLIONS) JUNE 30 MARCH 31
-------------------------------------------------------------------------------
<S> <C> <C>
California $27,302/a/ $27,150
Washington 1,546 1,459
Oregon 1,224 1,184
Arizona 1,059 983
Hawaii 1,016 1,027
Other/b/ 3,417 2,988
-------------------------------------------------------------------------------
$35,564 $34,791
-----------------------------------------------------==========================
</TABLE>
/a/ Approximately 50 percent of domestic residential first mortgages in
California at June 30, 1995 and March 31, 1995 were secured by properties in
the following Southern California counties: Los Angeles, Orange, Riverside,
San Bernardino, San Diego, and Ventura.
/b/ No other state individually exceeded 2 percent of total domestic
residential first mortgages.
<TABLE>
<CAPTION>
===============================================================================================================
DOMESTIC CONSUMER LOAN DELINQUENCY INFORMATION/a/
---------------------------------------------------------------------------------------------------------------
1995 1994
-------------------- ---------------------------------
(DOLLAR AMOUNT IN MILLIONS) JUNE 30 MARCH 31 DEC. 31 SEPT. 30 JUNE 30
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DELINQUENT CONSUMER LOANS
Residential first mortgages $616 $595 $566 $563 $596
Residential junior mortgages 95 95 92 85 85
Credit card 165 166 153 149 153
Other 65 72 69 64 61
---------------------------------------------------------------------------------------------------------------
$941 $928 $880 $861 $895
-----------------------------------------------================================================================
DELINQUENT CONSUMER LOAN RATIOS/b/
Residential first mortgages 1.73% 1.71% 1.68% 1.71% 1.88%
Residential junior mortgages 0.68 0.69 0.68 0.62 0.64
Credit card 2.00 2.14 1.91 2.01 2.14
Other 0.46 0.56 0.54 0.53 0.53
---------------------------------------------------------------------------------------------------------------
1.31% 1.34% 1.29% 1.30% 1.40%
-----------------------------------------------================================================================
</TABLE>
/a/ 60 days or more past due.
/b/ Ratios represent delinquency balances expressed as a percentage of total
loans for that loan category.
30
<PAGE>
===============================================================================
Domestic Commercial Loans -- Commercial and industrial loans,
the largest sector of BAC's domestic commercial loan
portfolio, grew $2.6 billion between December 31, 1994 and
June 30, 1995. This increase was primarily due to continued
loan demand from large corporate borrowers. Partially
offsetting this growth were declines in loans to financial
institutions and construction and development loans secured
by real estate of $0.4 billion and $0.3 billion,
respectively. The decline in loans to financial institutions
was primarily attributable to paydowns on unsecured loans to
US non-bank financial entities. The decline in construction
and development loans secured by real estate was primarily
attributable to paydowns and continued resolution of problem
loans.
<TABLE>
<CAPTION>
=====================================================================================================
DOMESTIC COMMERCIAL LOANS SECURED BY REAL ESTATE BY GEOGRAPHIC AREA AND
PROJECT TYPE AT JUNE 30, 1995
-----------------------------------------------------------------------------------------------------
MEDICAL &
LIGHT APARTMENT & DENTAL
(IN MILLIONS) RETAIL OFFICE INDUSTRY CONDOMINIUM HOTEL FACILITIES OTHER TOTAL
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
California $1,208 $ 806 $ 840 $ 538 $116 $ 24 $1,908 $ 5,440/a/
Washington 395 460 443 412 156 119 338 2,323
Nevada 247 82 39 120 113 10 165 776
Oregon 85 40 64 99 32 5 32 357
Arizona 196 24 22 36 2 8 57 345
Texas 33 33 26 66 - - 62 220
Other/b/ 176 357 42 74 243 8 356 1,256
-----------------------------------------------------------------------------------------------------
$2,340 $1,802 $1,476 $1,345 $662 $174 $2,918 $10,717
--------------------=================================================================================
</TABLE>
/a/ Approximately 55 percent of domestic commercial loans secured by real estate
in California at June 30, 1995 were secured by properties in the following
Southern California counties: Los Angeles, Orange, San Bernardino, San
Diego, Riverside, and Ventura.
/b/ No other state individually exceeded 2 percent of total domestic commercial
loans secured by real estate.
<TABLE>
<CAPTION>
=====================================================================================================
DOMESTIC CONSTRUCTION AND DEVELOPMENT LOANS BY GEOGRAPHIC AREA AND PROJECT
TYPE AT JUNE 30, 1995
-----------------------------------------------------------------------------------------------------
APARTMENT & LIGHT
(IN MILLIONS) OFFICE SUBDIVISION RETAIL CONDOMINIUM HOTEL INDUSTRY OTHER TOTAL
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
California $389 $418 $209 $180 $124 $ 90 $101 $1,511/a/
Washington 150 192 82 87 22 16 59 608
Pennsylvania 203 - - - - - - 203
Nevada 32 41 34 33 1 13 3 157
Arizona 3 61 35 39 2 5 5 150
Texas - 30 44 49 - - 6 129
Illinois 38 27 8 5 - - - 78
Florida - 13 52 12 - - - 77
Massachusetts 48 - 24 - - - - 72
Georgia - 2 47 3 - 14 - 66
Other/b/ 37 23 65 54 - 3 75 257
-----------------------------------------------------------------------------------------------------
$900 $807 $600 $462 $149 $141 $249 $3,308
---------------------================================================================================
</TABLE>
/a/ Approximately 70 percent of domestic construction and development loans
in California at June 30, 1995 were secured by properties in the following
Southern California counties: Los Angeles, Orange, San Bernardino, San
Diego, Riverside, and Ventura.
/b/ No other state individually exceeded 2 percent of total domestic
construction and development loans.
Foreign Loans -- Foreign loan outstandings increased $2.2
billion between December 31, 1994 and June 30, 1995. This
growth was primarily reflected in a $1.5 billion increase in
foreign commercial and industrial loans, largely resulting
from increased loan demand in Asia.
Although the rate of average loan growth has increased over
the past two quarters, there can be no assurance that such
loan growth will continue in the future.
31
<PAGE>
================================================================================
EMERGING MARKET In connection with its effort to maintain a diversified
EXPOSURE portfolio, BAC attempts to limit its exposure to any one
country. BAC also strives to ensure that its exposure to
groups of borrowers that may be similarly affected by events
is limited. One such group is emerging market countries. As
shown in the table below, at June 30, 1995, BAC's emerging
market exposure totaled $8,872 million, or 4 percent of total
assets. This exposure represents loans, restructured debt and
non-restructured debt, which are included in available-for-
sale and held-to-maturity securities, and other monetary
assets.
<TABLE>
<CAPTION>
===================================================================================================================================
EMERGING MARKET EXPOSURE
-----------------------------------------------------------------------------------------------------------------------------------
JUNE 30, 1995
----------------------------------------------------------------------------------------------------------------
AVAILABLE-FOR-SALE HELD-TO-MATURITY
LOANS SECURITIES SECURITIES/b/ SECURITIES/a/
----------------------- -------------------- -------------------- -----------------------
MEDIUM-AND COLLAT- UNCOLLAT- COLLAT- UNCOLLAT- MEDIUM-AND
(IN MILLIONS) TOTAL/c/ SHORT-TERM LONG-TERM ERALIZED ERALIZED ERALIZED ERALIZED SHORT-TERM LONG-TERM
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Mexico $2,769 $ 501 $ 577/d/ $285 $ 14 $ 856 $129 $ 391 $ 16
Brazil 1,017 468 8 60 155 - 47 267 12
Chile 859 183 116 - - - - 505 55
India 729 330 - - - - - 399 -
Venezuela 617 39 19/d/ 159 - 373 7 1 19
Greece 559 58 41 - - - - 458 2
Argentina 396 191 27 9 12 - 48 82 27
Colombia 338 88 172 - - - 12 66 -
Indonesia 338 271 - - - - - 67 -
China 306 224 25 - - - - 56 1
Philippines 202 22 44 18 29 - - 77 12
Pakistan 202 1 - - - - - 201 -
Other/e/ 540 40 87 120 40 - - 250 3
-----------------------------------------------------------------------------------------------------------------------------------
$8,872 $2,416/f/ $1,116/f/ $651/g/ $250/g/ $1,229/h/ $243/h/ $2,820 $147
-------------------================================================================================================================
</TABLE>
/a/ Represents medium- and long-term exposure.
/b/ Includes the following assets, primarily in U.S. dollars, with borrowers or
customers in a foreign country: accrued interest receivable, acceptances,
interest-bearing deposits with other banks, trading account assets, other
interest-earning investments, and other monetary assets.
/c/ Excludes local currency outstandings that were funded by local currency
borrowings as follows: $3 million for Mexico, $17 million for Brazil, $224
million for Chile, $242 million for India, $21 million for Venezuela, $119
million for Argentina, $53 million for Indonesia, $42 million for
Philippines, and $84 million for other emerging market countries.
/d/ Mexico and Venezuela include $30 million and $4 million, respectively, of
loans that are collateralized by zero-coupon U.S. Treasury securities.
/e/ No other country individually exceeded 2 percent of total emerging market
exposure.
/f/ Total loans include nonaccrual loans of $87 million.
/g/ Total available-for-securities include $296 million of nonaccrual debt-
restructuring bonds.
/h/ The fair value of total held-to-maturity securities was approximately
$995 million.
32
<PAGE>
<TABLE>
<CAPTION>
===============================================================================================================================
CROSS-BORDER OUTSTANDINGS EXCEEDING ONE PERCENT OF TOTAL ASSETS
-------------------------------------------------------------------------------------------------------------------------------
CROSS-BORDER
TOTAL OUTSTANDINGS
PUBLIC PRIVATE CROSS-BORDER AS A PERCENTAGE
(DOLLAR AMOUNTS IN MILLIONS)/abcd/ DATE REPORTED SECTOR/e/ BANKS/e/ SECTOR/e/ OUTSTANDINGS OF TOTAL ASSETS
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Japan JUNE 30, 1995 $ 10 $1,784 $2,004 $3,798 1.68%
March 31, 1995 9 1,667 2,558 4,234 1.90
December 31, 1994 17 1,248 2,292 3,557 1.65
September 30, 1994 18 1,339 2,131 3,488 1.63
June 30, 1994 17 1,529 2,049 3,595 1.82
Spain JUNE 30, 1995 $ 61 $ 132 $2,008 $2,201 0.97%
March 31, 1995 70 33 1,750 1,853 0.83
December 31, 1994 57 108 1,817 1,982 0.92
September 30, 1994 108 196 1,784 2,088 0.97
June 30, 1994 61 110 3,026 3,197 1.62
Hong Kong JUNE 30, 1995 $ - $ 104 $1,425 $1,529 0.67%
March 31, 1995 - 158 1,208 1,366 0.61
December 31, 1994 - 185 1,202 1,387 0.64
September 30, 1994 5 192 1,488 1,685 0.79
June 30, 1994 - 101 2,328 2,429 1.23
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/a/ Cross-border outstandings include the following assets, primarily in U.S.
dollars, with borrowers or customers in a foreign country: loans, accrued
interest, acceptances, interest-bearing deposits with other banks, trading
account assets, available-for-sale securities, held-to-maturity securities,
other interest-earning investments, and other monetary assets. Local
currency outstandings that are neither hedged nor funded by local currency
borrowings are included in cross-border outstandings. Guarantees of
outstandings of borrowers of other countries are considered outstandings of
the guarantor. Loans made to, or deposits placed with, a branch of a foreign
bank located outside the foreign bank's home country are considered loans or
deposits with the country in which the foreign bank is headquartered.
Outstandings of a country do not include amounts of principal or interest
that are supported by written, legally enforceable guarantees by guarantors
from other countries or the amount of outstandings to the extent that they
are secured by tangible, liquid collateral held and realizable by BAC
outside the country.
/b/ At June 30, 1995, total unfunded commitments of the countries listed above,
whose unfunded commitments exceeded 10 percent of their respective
cross-border outstandings, were as follows: Japan, $833 million and Hong
Kong, $396 million.
/c/ Included in the cross-border outstandings of the countries listed are loans
and other interest-bearing assets on nonaccrual status at June 30, 1995,
March 31, 1995, December 31, 1994, September 30, 1994, and June 30, 1994,
respectively, as follows: $21 million, $20 million, $18 million, $17
million, and $17 million for Japan; $3 million, $3 million, $3 million, $3
million, and $6 million for Spain; and $2 million, $1 million, $2 million,
$4 million, and $6 million for Hong Kong. Also included in cross-border
outstandings are loans past due 90 days or more and still accruing interest
at June 30, 1995 and June 30, 1994 of $1 million for Hong Kong.
/d/ Countries whose cross-border outstandings were between 0.75 percent and 1.00
percent of total assets were as follows: $2,051 million, $2,138 million,
$1,799 million, $1,690 million, and $1,522 million for South Korea at June
30, 1995, March 31, 1995, December 31, 1994, September 30, 1994, and June
30, 1994, respectively; and $1,874 million, $2,067 million, $1,816 million,
and $1,738 million for Italy at June 30, 1995, March 31, 1995, September 30,
1994, and June 30, 1994, respectively.
No other country excluded from this table had cross-border outstandings
between 0.75 percent and 1.00 percent of total assets for any of the periods
presented. However, not included in cross-border outstandings with Mexico
were par bonds issued by the government of Mexico with face values of $1,341
million at June 30, 1995, March 31, 1995, December 31, 1994, September 30,
1994, and June 30, 1994. The par bonds had a carrying value of $1,141
million at June 30, 1995, $1,077 million at March 31, 1995, $1,109 million
at December 31, 1994, $1,162 million at September 30, 1994, and $1,153
million at June 30, 1994. At June 30, 1995, the par bonds had a total fair
value of approximately $846 million. In accordance with Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities," certain of these par bonds were recorded in
available-for-sale securities and carried at their fair value of $285
million at June 30, 1995, while the remainder of these par bonds were
recorded in held-to-maturity securities at their amortized cost. Principal
repayment of these par bonds is collateralized by zero-coupon U.S. Treasury
securities that, at maturity in 2008 and 2019, will have a redemption value
equal to the face value of the par bonds. At June 30, 1995, this collateral
had a fair value of approximately $280 million. Future interest payments for
a rolling eighteen-month period are also collateralized by additional U.S.
dollar-denominated securities permitted by the agreement. The details of the
transaction in which the majority of these par bonds were acquired were
reported in the Parent's Annual Report on Form 10-K for the year ended
December 31, 1990. Mexico's cross-border outstandings also excluded
additional securities of $30 million at June 30, 1995, March 31, 1995,
December 31, 1994 and September 30, 1994, and $45 million at June 30, 1994,
which are fully collateralized at maturity by separate zero-coupon U.S.
Treasury securities. Had these par bonds and other instruments been
included, total cross-border outstandings with Mexico would have exceeded
1.00 percent of total assets for all periods presented.
/e/ Sector definitions are based on Federal Financial Institutions Examination
Council Instructions for preparing the Country Exposure Report.
33
<PAGE>
================================================================================
ALLOWANCE The allowance for credit losses at June 30, 1995 was $3,695
FOR CREDIT LOSSES million, or 2.48 percent of loan outstandings, compared with
$3,690 million, or 2.62 percent, at December 31, 1994.
Excluding outstandings in the residential first mortgage
portfolio and the portion of the allowance associated with
these outstandings, the ratios were 3.17 percent and 3.36
percent of loans at June 30, 1995 and December 31, 1994,
respectively. In addition, BAC's ratio of the allowance for
credit losses to total nonaccrual assets was 188 percent at
June 30, 1995, up from 177 percent at December 31, 1994.
Management develops the allowance using a "building block
approach" for various portfolio segments. While management
has allocated reserves to various portfolio segments, the
allowance is general in nature and is available for the loan
portfolio in its entirety.
The allowance is established by credit officers for each
portfolio segment. Significant loans are individually
analyzed, while other loans are analyzed by portfolio
segment. In establishing the allowance for the portfolio
segments, credit officers initially employ results from
statistical models using historical loan performance data.
<TABLE>
<CAPTION>
=======================================================================================================================
COMPOSITION OF ALLOWANCE FOR CREDIT LOSSES
-----------------------------------------------------------------------------------------------------------------------
1995 1994
----------------------- --------------------------------------
(IN MILLIONS) JUNE 30 MARCH 31 DEC. 31 SEPT. 30 JUNE 30
-----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Special mention and classified:
Historical loss experience component $ 472 $ 473 $ 516 $ 292 $ 311
Credit management allocated component 410 410 428 626 579
-----------------------------------------------------------------------------------------------------------------------
Total special mention and classified 882 883 944 918 890
Other:
Domestic consumer 1,143 1,081 1,059 1,048 1,042
Domestic commercial 219 224 223 225 166
Foreign 331 324 270 189 149
-----------------------------------------------------------------------------------------------------------------------
Total allocated 2,575 2,512 2,496 2,380 2,247
Unallocated 1,120 1,213 1,194 1,245 1,167
-----------------------------------------------------------------------------------------------------------------------
$3,695 $3,725 $3,690 $3,625 $3,414
---------------------------------------------------====================================================================
</TABLE>
Net credit losses for the second quarter and first six months
of 1995 declined $24 million and $121 million, respectively,
from the amounts reported in the same periods last year. Net
credit losses in the domestic consumer portfolio, the largest
component of BAC's net credit losses, decreased $6 million
and $32 million, from the second quarter and first six months
of 1994, respectively. Net credit recoveries in the foreign
portfolio amounted to $34 million and $86 million for the
second quarter and the first six months of 1995,
respectively, compared to no net credit losses for the second
quarter of 1994 and net credit losses of $16 million for the
first six months of 1994. These improvements were primarily
due to recoveries on loans to Brazil and Ecuador and from an
allocated transfer risk reserve adjustment.
34
<PAGE>
<TABLE>
<CAPTION>
=================================================================================================================================
QUARTERLY CREDIT LOSS EXPERIENCE
---------------------------------------------------------------------------------------------------------------------------------
1995 1994 SIX MONTHS ENDED
------------------ ----------------------------- JUNE 30
SECOND FIRST FOURTH THIRD SECOND ----------------------
(DOLLAR AMOUNTS IN MILLIONS) QUARTER QUARTER QUARTER QUARTER QUARTER 1995 1994
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ALLOWANCE FOR CREDIT LOSSES
Balance, beginning of period $3,725 $3,690 $3,625 $3,414 $3,445 $3,690 $3,508
CREDIT LOSSES
Domestic consumer:
Residential first mortgages 11 14 15 14 13 25 20
Residential junior mortgages 19 17 20 18 24 36 50
Credit card 99 86 91 93 96 185 198
Other consumer 54 54 55 55 57 108 121
Domestic commercial:
Commercial and industrial 20 18 9 9 18 38 29
Loans secured by real estate 24 9 7 9 21 33 36
Construction and development loans
secured by real estate 11 11 9 42 12 22 35
Financial institutions - - 1 - 1 - 1
Agricultural 1 2 6 - 1 3 2
Lease financing - - 1 - - - -
Foreign (26)/a/ 1 2 7 9 (25)/a/ 33
---------------------------------------------------------------------------------------------------------------------------------
Total credit losses 213 212 216 247 252 425 525
CREDIT LOSS RECOVERIES
Domestic consumer:
Residential first mortgages 1 - 3 1 - 1 -
Residential junior mortgages 5 4 4 4 6 9 10
Credit card 12 12 12 19 11 24 23
Other consumer 19 19 19 26 21 38 42
Domestic commercial:
Commercial and industrial 16 32 19 34 21 48 41
Loans secured by real estate 4 3 8 6 7 7 11
Construction and development loans
secured by real estate 14 8 18 22 18 22 42
Financial institutions 2 - 10 2 2 2 4
Agricultural 1 2 2 2 2 3 4
Lease financing 1 2 2 1 1 3 3
Foreign 8 53 83 24 9 61 17
---------------------------------------------------------------------------------------------------------------------------------
Total credit loss recoveries 83 135 180 141 98 218 197
---------------------------------------------------------------------------------------------------------------------------------
Total net credit losses 130 77 36 106 154 207 328
Provision for credit losses 100 100 100 110 125 200 250
Allowance related to mergers and acquisitions/b/ - 3 - 241 - 3 -
Other net additions (deductions) - 9 1 (34) (2) 9 (16)
---------------------------------------------------------------------------------------------------------------------------------
BALANCE, END OF PERIOD $3,695 $3,725 $3,690 $3,625 $3,414 $3,695 $3,414
--------------------------------------------------===============================================================================
ANNUALIZED RATIO OF NET CREDIT LOSSES (RECOVERIES)
TO AVERAGE LOAN OUTSTANDINGS
Domestic consumer:
Residential first mortgages 0.12% 0.16% 0.15% 0.16% 0.16% 0.14% 0.13%
Residential junior mortgages 0.42 0.38 0.46 0.41 0.56 0.40 0.63
Credit card 4.41 3.84 4.11 4.05 4.82 4.13 4.95
Other consumer 1.01 1.10 1.13 0.98 1.25 1.05 1.38
Domestic commercial:
Commercial and industrial 0.06 (0.20) (0.14) (0.40) (0.05) (0.06) (0.12)
Loans secured by real estate 0.74 0.24 (0.04) 0.11 0.63 0.49 0.57
Construction and development loans
secured by real estate (0.36) 0.33 (0.86) 2.07 (0.62) (0.01) (0.37)
Financial institutions (0.31) - (1.22) (0.26) (0.37) (0.17) (0.42)
Agricultural - - 0.79 (0.37) (0.14) (0.10) (0.24)
Lease financing (0.16) (0.36) (0.25) (0.31) (0.32) (0.26) (0.31)
Total domestic 0.53 0.43 0.39 0.44 0.59 0.48 0.60
Foreign (0.62) (1.03) (1.62) (0.37) - (0.82) 0.19
Total 0.36 0.22 0.10 0.32 0.50 0.29 0.54
RATIO OF ALLOWANCE TO LOANS AT QUARTER END 2.48 2.58 2.62 2.61 2.73 2.48 2.73
EARNINGS COVERAGE OF NET CREDIT LOSSES/c/ 9.25X 14.96X 31.00X 9.82X 6.66X 11.37X 6.22X
---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/a/ Represents an allocated transfer risk reserve adjustment.
/b/ Represents the addition of consummation date allowances for credit losses
of Arbor National Holdings, Inc. in the first quarter of 1995, and
Continental and Liberty Bank of $238 million and $3 million, respectively,
in the third quarter of 1994.
/c/ Earnings coverage of net credit losses is calculated as income before
income taxes plus the provision for credit losses as a multiple of net
credit losses.
35
<PAGE>
================================================================================
NONPERFORMING Total nonaccrual assets decreased $118 million, or 6 percent,
ASSETS between year-end 1994 and June 30, 1995. This decrease
reflected improvements in many segments of the credit
portfolio, particularly in construction and development loans
secured by real estate and foreign loans. These improvements
were primarily due to full or partial payments on nonaccrual
loans and the restoration of nonaccrual loans to accrual
status. Decreases due to improvements in credit quality were
partially offset by growth in nonaccrual domestic commercial
and industrial loans, which reflected the placement of
certain large corporate borrowers on nonaccrual status during
the second quarter of 1995.
The improvement in BAC's credit quality during the first six
months of 1995 was also reflected in BAC's nonperforming
assets ratios. At June 30, 1995, the ratio of nonaccrual
loans to total loans was 1.32 percent, down from 1.48 percent
at December 31, 1994. In addition, the ratio of nonperforming
assets (comprised of nonaccrual assets and other real estate
owned) to total assets declined 14 basis points from year-end
1994 to 1.08 percent at June 30, 1995. Management believes
that comparable rates of improvement in credit quality may
not continue in the future.
Other real estate owned (OREO) was $485 million at June 30,
1995, down $70 million, or 13 percent, from $555 million at
December 31, 1994. This decline was primarily attributable to
OREO sales and net writedowns, partially offset by additions
to OREO.
Effective January 1, 1995, BAC adopted SFAS No. 114. The
adoption of SFAS No. 114 did not have a material effect on
BAC's financial position or results of operations. Impaired
loans amounted to $1,553 million at June 30, 1995 and were
comprised of all nonaccrual loans except for domestic
consumer nonaccrual loans, nonaccrual loans to foreign
governments and official institutions, which were
collectively valued for impairment, and nonaccrual lease
financing loans, which were specifically excluded from the
scope of SFAS No. 114. For more information on the adoption
of this Statement, refer to Note 4 of the Notes to
Consolidated Financial Statements on pages 7 and 8.
For further information concerning nonaccrual assets, refer
to the tables below and on pages 37 and 38.
<TABLE>
<CAPTION>
===============================================================================================================
ANALYSIS OF CHANGE IN NONACCRUAL ASSETS
---------------------------------------------------------------------------------------------------------------
1995 1994
---------------------- ---------------------------------------
SECOND FIRST FOURTH THIRD SECOND
(IN MILLIONS) QUARTER QUARTER QUARTER QUARTER QUARTER
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, beginning of quarter $1,935 $2,080 $2,084 $2,222 $2,498
Additions:
Loans placed on nonaccrual status 333 175 362 200 269
Acquired in the Continental merger - - - 245 -
Deductions:
Sales (1) (5) (9) (167) (4)
Restored to accrual status (86) (92) (107) (145) (169)
Foreclosures (11) (15) (32) (19) (32)
Charge-offs (42) (19) (19) (47) (37)
Other, primarily payments (166) (189) (199) (205) (303)
----------------------------------------------------------------------------------------------------------------
BALANCE, END OF QUARTER $1,962 $1,935 $2,080 $2,084 $2,222
-------------------------------------------=====================================================================
</TABLE>
36
<PAGE>
<TABLE>
<CAPTION>
==============================================================================================================================
NONACCRUAL ASSETS, RESTRUCTURED LOANS, AND LOANS PAST DUE 90 DAYS OR MORE AND STILL ACCRUING INTEREST
------------------------------------------------------------------------------------------------------------------------------
1995 1994
--------------------------- --------------------------------------------
(IN MILLIONS) JUNE 30 MARCH 31 DEC. 31 SEPT. 30 JUNE 30
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NONACCRUAL ASSETS
Domestic consumer loans:
Residential first mortgages $ 310 $ 311 $ 319 $ 359 $ 383
Residential junior mortgages 67 65 56 44 39
Other consumer 4 10 7 5 2
Domestic commercial loans:
Commercial and industrial 609 429 453 352 236
Loans secured by real estate 336 341 347 412 588
Construction and development loans
secured by real estate 418 549 647 672 724
Financial institutions 3 4 3 12 18
Agricultural 32 36 31 45 44
Lease financing 1 1 1 13 13
------------------------------------------------------------------------------------------------------------------------------
1,780 1,746 1,864 1,914 2,047
Foreign loans:
Commercial and industrial 134 133 157 95 97
Banks and other financial institutions 11 19 22 10 8
Governments and official institutions 27 28 24 17 17
Other 10 9 12 30 46
------------------------------------------------------------------------------------------------------------------------------
182 189 215 152 168
Other interest-bearing assets - - 1 18 7
------------------------------------------------------------------------------------------------------------------------------
$1,962/a/ $1,935/a/ $2,080/a/ $2,084/a/ $2,222/a/
----------------------------------------------================================================================================
RESTRUCTURED LOANS
Domestic commercial:
Commercial and industrial $ 72 $ 73 $ 71 $ 79 $ 86
Loans secured by real estate 16 13 15 11 13
Construction and development loans
secured by real estate 1 9 2 2 2
Agricultural 9 13 7 1 1
Lease financing - - - 1 1
------------------------------------------------------------------------------------------------------------------------------
98 108 95 94 103
Foreign/b/ 1 1 2 36 36
------------------------------------------------------------------------------------------------------------------------------
$ 99 $ 109 $ 97 $ 130 $ 139
----------------------------------------------================================================================================
LOANS PAST DUE 90 DAYS OR MORE AND STILL
ACCRUING INTEREST
Domestic consumer:
Residential first mortgages $ 172 $ 142 $ 133 $ 91 $ 108
Residential junior mortgages 7 10 23 21 23
Other consumer 142 137 136 126 129
Domestic commercial:
Commercial and industrial 65 15 25 76 19
Loans secured by real estate 19 20 54 70 122
Construction and development loans
secured by real estate 33 35 38 34 96
Financial institutions 19 - 16 - -
Agricultural 1 - 8 - -
Lease financing - - 1 - -
------------------------------------------------------------------------------------------------------------------------------
458 359 434 418 497
Foreign 1 10 2 2 1
------------------------------------------------------------------------------------------------------------------------------
$ 459 $ 369 $ 436 $ 420 $ 498
----------------------------------------------================================================================================
</TABLE>
/a/ Excludes certain nonaccrual debt-restructuring par bonds and other
instruments that were included in available-for-sale and held-to-maturity
securities of $296 million at June 30, 1995, $367 million at March 31, 1995,
$441 million at December 31, 1994, $393 million at September 30, 1994, and
$367 million at June 30, 1994. Also excludes certain other nonaccrual loans
and other instruments issued by various governments of $3 million at June
30, 1995, $3 million at March 31, 1995, $8 million at December 31, 1994, and
$44 million at September 30, 1994 and June 30, 1994 that were included in
other assets at the lower of cost or fair value.
/b/ Excludes debt restructurings with countries that have experienced
liquidity problems of $2.1 billion at June 30, 1995, $1.8 billion at March
31, 1995 and December 31, 1994, and $1.9 billion at September 30, 1994 and
June 30, 1994. The majority of these instruments were classified as either
available-for-sale or held-to-maturity securities.
37
<PAGE>
<TABLE>
<CAPTION>
================================================================================
INTEREST INCOME FOREGONE ON NONACCRUAL ASSETS
--------------------------------------------------------------------------------
SIX MONTHS ENDED
(IN MILLIONS) JUNE 30, 1995
--------------------------------------------------------------------------------
<S> <C>
DOMESTIC
Interest income that would have been recognized had the assets
performed in accordance with their original terms $162
Less: Interest income included in the results of operations 45
--------------------------------------------------------------------------------
Domestic interest income foregone 117
FOREIGN
Interest income that would have been recognized had the assets
performed in accordance with their original terms 12
Less: Interest income included in the results of operations 9
--------------------------------------------------------------------------------
Foreign interest income foregone 3
--------------------------------------------------------------------------------
$120
----------------------------------------------------------------------------====
</TABLE>
<TABLE>
<CAPTION>
===================================================================================================================================
CASH INTEREST PAYMENTS ON NONACCRUAL ASSETS BY LOAN TYPE/a/
-----------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED
JUNE 30, 1995
------------------------------------
JUNE 30, 1995 CASH INTEREST
--------------------------------------------------------------- PAYMENTS APPLIED
CUMULATIVE BOOK AS A AVERAGE -------------------------
CONTRACTUAL INTEREST NONACCRUAL PERCENTAGE NONACCRUAL AS
PRINCIPAL CUMULATIVE APPLIED BOOK OF BOOK INTEREST
(DOLLAR AMOUNTS IN MILLIONS) BALANCE CHARGE-OFFS TO PRINCIPAL BALANCE CONTRACTUAL BALANCE INCOME OTHER/b/ TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DOMESTIC
Consumer:
Residential first mortgages $ 312 $ 1 $ 1 $ 310 99% $ 317 $ 4 $ - $ 4
Residential junior mortgages 70 3 - 67 96 62 2 - 2
Other consumer 21 13 4 4 19 6 - - -
Commercial:
Commercial and industrial 1,210 476 125 609 50 470 11 19 30
Loans secured by real estate 536 166 34 336 63 339 12 10 22
Construction and development
loans secured by real estate 812 346 48 418 51 567 14 9 23
Financial institutions 13 7 3 3 23 3 - - -
Agricultural 57 18 7 32 56 35 2 1 3
Lease financing 1 - - 1 100 1 - - -
-----------------------------------------------------------------------------------------------------------------------------------
3,032 1,030 222 1,780 59 1,800 45 39 84
FOREIGN
Commercial and industrial 260 104 22 134 52 140 8 4 12
Banks and other financial
institutions 21 6 4 11 52 17 - 1 1
Governments and official
institutions 58 30 1 27 47 27 1 - 1
Other 36 24 2 10 28 10 - - -
-----------------------------------------------------------------------------------------------------------------------------------
375 164 29 182 49 194 9 5 14
-----------------------------------------------------------------------------------------------------------------------------------
$3,407 $1,194 $251 $1,962 58% $1,994 $54 $44 $98
----------------------------------=================================================================================================
CASH YIELD ON AVERAGE TOTAL NONACCRUAL BOOK BALANCE 9.91%
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/a/ Includes information related to all nonaccrual loans including those that
are fully charged off or otherwise have a book balance of zero.
/b/ Primarily represents cash interest payments applied to principal. Also
includes cash interest payments accounted for as credit loss recoveries,
which are recorded as increases to the allowance for credit losses.
38
<PAGE>
FOREIGN EXCHANGE AND DERIVATIVES CONTRACTS
================================================================================
BAC uses foreign exchange and derivatives contracts in both
its trading and its asset and liability management
activities. Foreign exchange and derivatives contracts
include futures, forwards, swaps, and options contracts, all
of which derive their value from underlying interest rates,
foreign exchange rates, commodity values, or equity
instruments. Certain foreign exchange and derivatives
transactions involve standardized contracts executed on
organized exchanges, while other transactions are negotiated
over-the-counter, with the terms tailored to meet the needs
of BAC and its clients. Counterparties to BAC's foreign
exchange and derivatives transactions include U.S. and
foreign banks, nonbank financial institutions, corporations,
governments, and asset managers.
BAC earns trading revenue by executing transactions to
support customers' risk management needs and by making
markets in a wide variety of trading products. Using its
expertise and global presence, BAC executes foreign exchange
and derivatives transactions to aid its customers in managing
their risk exposures to interest and exchange rates, prices
of securities, and financial or commodity indices.
BAC also acts as an end-user by employing foreign exchange
and derivatives contracts in connection with its own asset
and liability management through hedging activities. More
specifically, BAC primarily uses interest rates derivatives
instruments to manage the interest rate risk associated with
its assets and liabilities, including residential loans,
long-term debt, and deposits.
Similar to on-balance-sheet financial instruments such as
loans and investment securities, off-balance-sheet financial
instruments are subject to various types of risks. These
risks include credit risk (the risk that a loss may occur
from the failure of a customer to perform according to the
terms of the contract), market risk (the sensitivity of
future earning to price or rate changes), liquidity risk (the
risk of BAC being unable to meet its funding requirements or
execute a transaction at a reasonable price), and operational
risk (the risk that inadequate internal controls, procedures,
human error, system failure, or fraud can result in
unexpected losses). For a detailed discussion of these risks
and how they are managed, refer to pages 28, 30, and 39-43 of
BAC's 1994 Annual Report to Shareholders.
For additional information concerning foreign exchange and
derivatives contracts, including their respective notional,
credit risk, credit exposure, and fair value amounts, refer
to Note 10 of the Notes to Consolidated Financial Statements
on pages 10-14.
39
<PAGE>
INTEREST RATE RISK MANAGEMENT
================================================================================
BAC's governing interest rate risk management objective is to
minimize the potential for significant loss. Risk is measured
in terms of potential impact on both its economic value and
reported earnings. Economic value calculations measure
changes in the present value of future net cash flows from
all assets and liabilities until maturity. Those changes can
result from interest rate movements or from altered
expectations of future market conditions. BAC measures
earnings variability by estimating the potential effect of
changes in interest rates on projected net income over a
three-year period.
BAC measures and manages interest rate risk by type of risk.
To minimize exposures to declines in economic value due to
gap risk, BAC's policy is that assets and liabilities must
have approximately equal total duration. An internally
developed methodology is used to translate each rate maturity
mismatch or gap into a one-year position that would have the
same estimated risk content. For example, a six-month
mismatch of $200 million is treated as having approximately
the same risk content as a $100 million one-year mismatch. As
shown in the following graph, BAC's net one-year position has
been essentially balanced throughout the last four years.
<TABLE>
<CAPTION>
Net Interest Rate Risk Position (plot point graph in non-EDGAR version)
(in billions of dollars) 12/31/91 12/31/92 12/31/93 12/31/94 6/30/95
<S> <C> <C> <C> <C> <C>
Net Interest Rate Risk Position $ (8.1) $ (6.9) $ 1.0 $ (2.8) $ (4.9)
</TABLE>
Graph indicates the composite long(+) or short(-) position
measured across the entire maturity mismatch profile and
expressed as one-year mismatch position bearing the same
aggregate level of risk.
Gap mismatches result from timing differences in the
repricing or maturing of assets, liabilities, and
off-balance-sheet financial instruments. Expected interest
rate sensitivity of individual categories of U.S.
dollar-denominated assets and liabilities as of June 30, 1995
is shown in the table on page 41.
40
<PAGE>
================================================================================
U.S. DOLLAR DENOMINATED INTEREST RATE SENSITIVITY BY REPRICING OR MATURITY DATES
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
JUNE 30, 1995
---------------------------------------------------------------------------------
OVER
(DOLLAR AMOUNTS IN MILLIONS) 0-6 MONTHS (LESS THAN)6-12 MONTHS (LESS THAN)1-5 YEARS 5 YEARS TOTAL
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DOMESTIC ASSETS
Interest-bearing deposits in banks $ 63 $ - $ - $ - $ 63
Federal funds sold and securities
purchased under resale agreements 2,495 - - - 2,495
Trading account securities 1,319 - - - 1,319
Loans:
Prime indexed 18,005 - - - 18,005
Adjustable rate residential first mortgages 10,844 6,603 5,938 6,486 29,871
Other loans, net 45,180 4,862 15,714 8,439 74,195
Other assets 13,550 841 11,833 9,045 35,269
-----------------------------------------------------------------------------------------------------------------------------------
Domestic Assets 91,456 12,306 33,485 23,970 161,217
-----------------------------------------------------------------------------------------------------------------------------------
DOMESTIC LIABILITIES AND STOCKHOLDERS' EQUITY
Domestic deposits (59,621) (16,042) (21,423) (18,608) (115,694)
Other short-term borrowings (7,375) (202) - - (7,577)
Long-term debt and subordinated capital notes (7,907) (693) (2,027) (5,406) (16,033)
Other liabilities and stockholders' equity (10,676) (584) (9,136) (14,475) (34,871)
-----------------------------------------------------------------------------------------------------------------------------------
Domestic Liabilities and Stockholders' Equity (85,579) (17,521) (32,586) (38,489) (174,175)
OFFSHORE FUNDING BOOKS, NET (2,209) 393 319 1,497 -
-----------------------------------------------------------------------------------------------------------------------------------
Core Gap Before Risk Management Positions 3,668 (4,822) 1,218 (13,022) (12,958)
-----------------------------------------------------------------------------------------------------------------------------------
INTEREST RATE RISK MANAGEMENT POSITIONS
-----------------------------------------------------------------------------------------------------------------------------------
Investment securities/a/ 1,661 1,027 5,167 5,103 12,958
Off-balance-sheet financial instruments/b/ (14,842) 8,396 (1,081) 7,527 -
-----------------------------------------------------------------------------------------------------------------------------------
Total Interest Rate Risk Management Positions (13,181) 9,423 4,086 12,630 12,958
-----------------------------------------------------------------------------------------------------------------------------------
Net Gap (9,513) 4,601 5,304 (392) -
-----------------------------------------------------------------------------------------------------------------------------------
Cumulative Gap $ (9,513) $ (4,912) $ 392 $ - $ -
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
/a/ Available-for-sale and held-to-maturity securities.
/b/ Represents the repricing effect of off-balance-sheet positions, which
include interest rate swaps, futures contracts, and similar agreements.
At June 30, 1995, BAC had a "core" imbalance before risk
management positions, as liabilities and equity exceeded
assets by $13 billion. BAC's risk management activities
eliminated this imbalance while reducing gaps in individual
repricing periods. Investment securities and "receive fixed"
swaps essentially neutralized core gaps beyond one year.
41
<PAGE>
FUNDING AND CAPITAL
================================================================================
LIQUIDITY Liquid assets consist of cash and due from banks, interest-
REVIEW bearing deposits in banks, federal funds sold, securities
purchased under resale agreements, trading account assets,
and available-for-sale securities. At June 30, 1995, liquid
assets totaled $42.9 billion, essentially unchanged from the
amount reported at year-end 1994.
--------------------------------------------------------------------------------
CAPITAL At June 30, 1995, total stockholders' equity was $19.6
MANAGEMENT billion, up from $18.9 billion at December 31, 1994. Of this
increase, $0.8 billion was due to year-to-date 1995 earnings
net of preferred and common stock dividends.
Common equity increased $0.5 billion primarily due to 2.9
million shares issued in connection with the acquisition of
Arbor National Holdings, Inc. (Arbor) during the first
quarter of 1995 and 5.4 million shares issued in connection
with the conversion of 99 percent of BAC's 6 1/2% Cumulative
Convertible Preferred Stock, Series G to common stock during
the second quarter of 1995. These increases in common equity
were partially offset by the common stock repurchases
discussed below.
In connection with its previously announced stock repurchase
program, BankAmerica Corporation repurchased 4.0 million
shares of its common stock during the second quarter of 1995
at an average per-share price of $52.41. These shares were
repurchased on the open market over 30 trading days and
represented approximately 11 percent of the total volume of
BAC common stock traded on those days. Year-to-date
repurchases in accordance with this plan totaled 9.6 million
shares at an average per-share price of $49.45. For
additional information regarding the stock repurchase plan,
refer to Note 6 of the Notes to Consolidated Financial
Statements on pages 8 and 9.
Preferred stock declined $345 million due to the conversion
and redemption of the Series G shares described above and the
redemption of BAC's Adjustable Rate Preferred Stock, Series
1. For additional information regarding these preferred stock
transactions, refer to Note 7 of the Notes to Consolidated
Financial Statements on page 9. Also, during the first six
months of 1995, net unrealized losses on available-for-sale
securities decreased $257 million, net of income taxes, due
to valuation adjustments.
42
<PAGE>
================================================================================
RISK-BASED CAPITAL, RISK WEIGHTED ASSETS, AND RISK-BASED CAPITAL RATIOS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1995 1994
---------------------- ------------------------------------
(DOLLAR AMOUNTS IN MILLIONS)/a/ JUNE 30 MARCH 31 DEC. 31 SEPT. 30 JUNE 30
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
RISK-BASED CAPITAL
Common stockholders' equity $ 16,966 $ 16,433 $ 16,149 $ 15,763 $ 14,324
Perpetual preferred stock 2,723 3,068 3,068 3,368 2,979
Less: Goodwill, nongrandfathered core deposit and
other identifiable intangibles, and other deductions/b/ (5,409) (5,550) (5,559) (5,701) (5,142)
----------------------------------------------------------------------------------------------------------------------------
Tier 1 capital 14,280 13,951 13,658 13,430 12,161
Eligible portion of the allowance for credit losses 2,506 2,399 2,366 2,355 2,046
Hybrid capital instruments 264 336 336 337 478
Subordinated notes and debentures 5,717 5,724 5,707 5,558 4,946
Less: Other deductions (142) (145) (114) (104) (91)
----------------------------------------------------------------------------------------------------------------------------
Tier 2 capital 8,345 8,314 8,295 8,146 7,379
----------------------------------------------------------------------------------------------------------------------------
TOTAL RISK-BASED CAPITAL $ 22,625 $ 22,265 $ 21,953 $ 21,576 $ 19,540
------------------------------------------------------------================================================================
RISK WEIGHTED ASSETS $199,049 $190,402 $187,810 $186,958 $162,216
------------------------------------------------------------================================================================
RISK-BASED CAPITAL RATIOS
Tier 1 capital 7.17% 7.33% 7.27% 7.18% 7.50%
Tier 2 capital 4.20 4.36 4.42 4.36 4.55
----------------------------------------------------------------------------------------------------------------------------
TOTAL RISK-BASED CAPITAL RATIO 11.37% 11.69% 11.69% 11.54% 12.05%
------------------------------------------------------------================================================================
TIER 1 LEVERAGE RATIO 6.68% 6.84% 6.74% 6.59%/c/ 6.50%
----------------------------------------------------------------------------------------------------------------------------
</TABLE>
/a/ The Federal Reserve has issued final capital regulations on the adoption of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes," which became effective April 1, 1995. All periods presented reflect
these new regulations.
/b/ Includes nongrandfathered CDI and other identifiable intangibles acquired
after February 19, 1992 of $897 million and $93 million, respectively, at
June 30, 1995, $915 million and $97 million, respectively, at March 31,
1995, $937 million and $100 million, respectively, at December 31, 1994,
$953 million and $110 million, respectively, at September 30, 1994, and $965
million and $63 million, respectively, at June 30, 1994. Also includes $24
million, $122 million, $111 million, $140 million, and $138 million at June
30, 1995, March 31, 1995, December 31, 1994, September 30, 1994, and June
30, 1994, respectively, of the excess of the net book value over 90 percent
of the fair value of purchased mortgage servicing rights and credit card
intangibles.
/c/ The leverage ratio is based on period-end total assets rather than average
total assets as this ratio is more indicative of future leverage ratios. The
ratio using Tier 1 capital based on average total assets was 6.96% at
September 30, 1994.
BAC's risk-based capital ratios continued to exceed the
regulatory guidelines for well-capitalized status. BAC's
total and Tier 1 risk-based capital ratios decreased 32 basis
points and 10 basis points, respectively, between December
31, 1994 and June 30, 1995. These declines primarily resulted
from growth in total risk weighted assets, in particular,
loans and off-balance-sheet credit-related commitments,
between year-end 1994 and June 30, 1995. BAC's Tier 1
leverage ratio was 6.68 percent at June 30, 1995, compared
with 6.74 percent at December 31, 1994.
43
<PAGE>
Other Information
================================================================================
ITEM 4. Set forth below is information concerning each matter
SUBMISSION OF submitted to a vote at the Parent's Annual Meeting of
MATTERS TO A Shareholders on May 25, 1995 ("Annual Meeting"):
VOTE OF SECURITY
HOLDERS Directors: Each of the following persons was elected as a
---------
director of the Parent, to hold office until the 1996 Annual
Meeting of Shareholders or until earlier retirement,
resignation or removal.
<TABLE>
<CAPTION>
Number of Votes
---------------
Director's Name For Against
--------------- ----------- ---------
<S> <C> <C>
Joseph F. Alibrandi 301,947,876 1,418,649
Jill E. Barad 301,947,157 1,419,368
Peter B. Bedford 301,963,121 1,403,404
Andrew F. Brimmer 301,728,360 1,638,165
Richard A. Clarke 301,011,029 2,355,496
Lewis W. Coleman 301,987,508 1,379,017
Timm F. Crull 301,922,368 1,444,157
Kathleen Feldstein 301,952,398 1,414,127
Donald E. Guinn 301,996,231 1,370,294
Philip M. Hawley 301,588,756 1,777,769
Frank L. Hope, Jr. 301,905,470 1,461,055
Ignacio E. Lozano, Jr. 301,771,768 1,594,757
Walter E. Massey 301,727,091 1,639,434
John M. Richman 301,919,838 1,446,687
Richard M. Rosenberg 301,925,608 1,440,917
A. Michael Spence 301,733,718 1,632,807
</TABLE>
Auditors: The shareholders ratified the appointment of Ernst
--------
& Young LLP as independent auditors.
<TABLE>
<CAPTION>
Number of Votes
---------------
Broker
For Against Abstentions Nonvotes
----------- ------- ----------- --------
<S> <C> <C> <C> <C>
Ernst & Young LLP as
Independent Auditors 301,675,436 866,322 824,767 -
</TABLE>
1992 Management Stock Plan: The shareholders of the Parent
--------------------------
approved two amendments to the 1992 Management Stock Plan to
increase the number of shares of BAC common stock available
for issuance under the plan and to limit the number of
options and stock appreciation rights awardable to any plan
participant.
<TABLE>
<CAPTION>
Number of Votes
---------------
Broker
For Against Abstentions Nonvotes
----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Amendments to the
1992 Management
Stock Plan 179,258,182 83,202,584 6,987,027 33,918,732
</TABLE>
44
<PAGE>
================================================================================
Shareholder Proposals: The shareholders of the Parent did not
---------------------
approve any of the three shareholder proposals presented at
the Annual Meeting.
<TABLE>
<CAPTION>
Number of Votes
---------------
Broker
Shareholder Proposals For Against Abstentions Nonvotes
--------------------- ----------- ---------- ----------- ----------
<S> <C> <C> <C> <C>
Director Compensation 19,824,092 243,450,756 6,172,945 33,918,732
Reincorporation of BAC
from Delaware to
California 45,554,346 218,069,279 5,824,168 33,918,732
Preferred Share
Purchase Rights Plan 130,690,373 133,265,533 5,491,887 33,918,732
</TABLE>
--------------------------------------------------------------------------------
ITEM 5. On August 7, 1995, the Board of Directors of BAC appointed
OTHER Vice Chairman David A. Coulter to succeed Richard M.
INFORMATION Rosenberg as President and Chief Executive Officer of BAC and
of its principal subsidiary, Bank of America National Trust
and Savings Association. Mr. Coulter's appointment as
President took effect immediately; his appointment as Chief
Executive Officer is effective January 1, 1996. Mr. Rosenberg
will continue to serve as Chairman of the Board into the
second quarter of 1996. Most recently, Mr. Coulter has been
the head of the U.S. Corporate and International Banking
Groups, which provide credit, trade finance, cash management,
investment banking and capital-raising services, capital
markets products, and financial advisory services to large
domestic and foreign institutions.
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ITEM 6. (a) Exhibits:
EXHIBITS AND
REPORTS ON Exhibit
FORM 8-K Number Exhibit
------- -------
<C> <S>
3.b. BankAmerica Corporation By-laws, as amended
10 1992 Management Stock Plan amendments to
increase the number of shares of BAC Common
Stock in the plan and to limit the number of
options and stock appreciation rights
awardable*
27 Financial Data Schedule
</TABLE>
-------------------------------------------------------------
*Management contract or compensatory plan, contract, or
arrangement.
(b) Reports on Form 8-K:
During the second quarter of 1995, the Parent filed a report
on Form 8-K dated April 19, 1995. The April 19, 1995 report
filed, pursuant to Items 5 and 7 of the report, a copy of the
Parent's press release titled "BankAmerica First Quarter
Earnings." After the second quarter of 1995, the Parent filed
a report on Form 8-K dated July 19, 1995. The July 19, 1995
report filed, pursuant to Items 5 and 7 of the report, a copy
of the Parent's press release titled "BankAmerica Second
Quarter Earnings."
45
<PAGE>
SIGNATURES
================================================================================
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly
authorized.
BANKAMERICA CORPORATION
Registrant
By Principal Financial Officer and
Duly Authorized Signatory:
/s/ LEWIS W. COLEMAN
-----------------------------------------
Lewis W. Coleman
Vice Chairman of the Board and
Chief Financial Officer
August 10, 1995
By Principal Accounting Officer and
Duly Authorized Signatory:
/s/ JAMES H. WILLIAMS
-----------------------------------------
James H. Williams
Executive Vice President and
Chief Accounting Officer
August 10, 1995
46
<PAGE>
[BANKAMERICA CORPORATION
LOGO APPEARS HERE]
BankAmerica
Other information about BankAmerica
Corporation may be found in its Annual
Report to Shareholders. This report, as
well as additional copies of this
Analytical Review and Form 10-Q,
may be obtained from:
Corporate Public Relations #3124
Bank of America
P.O. Box 37000
San Francisco, CA 94137
[Recycled Recycled
Paper Logo Paper
Appears Here]
NL-9 8/95
<PAGE>
GRAPHICS APPENDIX INDEX
<TABLE>
<CAPTION>
BankAmerica Corporation
Second Quarter 1995 10-Q
page reference Description of omitted graphic
------------------------ ------------------------------
<S> <C>
40 Net Interest Rate Risk
Position
(Plot point graph in non-EDGAR
version)
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Reference Description
--------- -----------
<C> <S>
3.b. BankAmerica Corporation By-laws, as amended
10 1992 Management Stock Plan amendments to increase the number
of shares of BAC Common Stock in the plan and to limit the
number of options and stock appreciation rights awardable*
27 Financial Data Schedule
--------------------------------------------------------------------------------
</TABLE>
*Management contract or compensatory plan, contract, or
arrangement.
<PAGE>
Exhibit 3.b
BANKAMERICA CORPORATION BYLAWS
Bylaws: Last Amended May 25, 1995
<PAGE>
INDEX
BANKAMERICA CORPORATION BY-LAWS
ARTICLE SECTION PAGE
Amendments....................................XI 3 20
Capital Stock-Certificates of Stock..........VII 15
Certificates...............................VII 1 15
Dividends..................................VII 6 16
Lost, Stolen, Mutilated or
Destroyed Certificates...................VII 2 15
Fixing Record Date.........................VII 4 15
Registered Shareholders....................VII 5 16
Transfers of Stock.........................VII 3 15
Committees.....................................V 6
Action By Written Consent....................V 8 12
Auditing and Examining Committee.............V 2 7
Executive Committee..........................V 1 6
Executive Personnel and
Compensation Committee.....................V 3 9
Meeting Requirements.........................V 7 11
Nominating Committee.........................V 4 10
Other Committees.............................V 6 11
Public Policy Committee......................V 5 11
Reports to the Board.........................V 11 12
Subcommittees................................V 10 12
Telephone Participation in Meetings..........V 9 12
Directors....................................III 4
Advisory...................................III 6 5
Compensation of Directors..................III 5 5
General Powers.............................III 4 5
Number, Election & Term....................III 1 4
Resignations...............................III 3 5
Vacancies & Newly Created Directorships....III 2 5
Emergency......................................X 18
Application..................................X 1 18
Authority....................................X 5 19
Conduct of Business..........................X 3 18
Effect on By-laws............................X 7 19
Meetings of Board or Committee...............X 2 18
No Liability.................................X 6 19
Succession...................................X 4 19
Termination of Emergency.....................X 8 19
Fiscal Year...................................XI 1 20
Indemnification.............................VIII 16
Insurance.................................VIII 4 17
Non-Exclusivity of Rights.................VIII 3 17
Right to Indemnification..................VIII 1 16
Right of Claimant to Bring Suit...........VIII 2 17
Meetings of the Board of Directors............IV 5
Action by Written Consent...................IV 6 6
<PAGE>
INDEX
BANKAMERICA CORPORATION BY-LAWS
ARTICLE SECTION PAGE
Meetings of the Board of Directors (Cont.)....IV
Emergency....................................X 8 19
Organizational Meeting......................IV 2 6
Place of Meetings...........................IV 1 5
Quorum......................................IV 5 6
Regular Meetings............................IV 3 6
Special Meetings............................IV 4 6
Telephone Participation in Meetings.........IV 7 6
Meetings of Shareholders......................II 1
Annual Meeting..............................II 2 1
Business....................................II 7 2
Judges of Election..........................II 11 3
Notice of Annual Meeting....................II 3 1
Notice of Shareholder Business at
Annual Meeting.............................II 12 3
Notice of Shareholder Nominees..............II 13 3
Notice of Special Meetings..................II 6 2
Organization................................II 9 2
Place of Meetings...........................II 1 1
Quorum & Adjournment........................II 8 2
Shareholders List...........................II 4 1
Special Meetings............................II 5 2
Voting of Shareholders......................II 10 2
Miscellaneous.................................XI 20
Amendments..................................XI 3 20
Fiscal Year.................................XI 1 20
Seal........................................XI 2 20
Notices.......................................IX 18
Form of Notices.............................IX 1 18
Waiver of Notice............................IX 2 18
Officers......................................VI 13
Appointment, Term of Office.................VI 2 13
Authority, Duties, Fidelity Bond............VI 4 13
Chairman of the Board.......................VI 5 13
Chief Executive Officer.....................VI 11 14
Chief Financial Officer.....................VI 13 14
Chief Operating Officer.....................VI 12 14
Compensation................................VI 3 13
Number & Titles.............................VI 1 13
President...................................VI 7 14
Secretary...................................VI 10 14
The Vice Chairmen...........................VI 8 14
Vice Chairmen of the Board..................VI 6 14
Vice Presidents.............................VI 9 14
Offices of Corporation.........................I 1
Other Offices................................I 2 1
Registered Office............................I 1 1
Seal..........................................XI 2 20
Shareholders..................................II 1
See: Meetings of Shareholders
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BANKAMERICA CORPORATION
BY-LAWS
ARTICLES I
OFFICES
Section 1. REGISTERED OFFICE. The registered office shall be in the
City of Wilmington, County of New Castle, State of Delaware.
Section 2. OTHER OFFICES. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE OF MEETINGS. All annual meetings of the
shareholders shall be held in the City and County of San Francisco, State of
California, at such place as may be fixed from time to time by the Board of
Directors, or at such other place either within or without the State of Delaware
as shall be designated from time to time by the Board of Directors and stated in
the notice of the meeting. Special meetings of shareholders may be held at such
time and place, within or without the State of Delaware, as shall be stated in
the notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. ANNUAL MEETING. Annual meetings of shareholders for the
election of Directors and the transaction of such other business as may be
properly brought before the meeting shall be held in March, April or May of each
year on such business day and at such time as shall be designated from time to
time by the Board of Directors and stated in the notice of the meeting.
Section 3. NOTICE OF ANNUAL MEETING. Written notice of the annual
meeting stating the place, date and hour of the meeting shall be given to each
shareholder entitled to vote at such meeting not less than ten nor more than
sixty days before the date of the meeting.
Section 4. SHAREHOLDERS LIST. The officer who has charge of the
stock ledger of the Corporation shall prepare and make, at least ten days before
every meeting of shareholders, a complete list of the shareholders entitled to
vote at the meeting, arranged in alphabetical order, and showing the address of
each shareholder and the number of shares registered in the name of each
shareholder. Such list shall be open to the examination of any shareholder, for
any purpose germane to the meeting, during ordinary business hours, for a period
of at least ten days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or if
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not so specified, at the place where the meeting is to be held. The list shall
also be produced and kept at the time and place of the meeting during the whole
time thereof, and may be inspected by any shareholder who is present.
Section 5. SPECIAL MEETINGS. Special meetings of the shareholders,
for any purpose or purposes, unless otherwise prescribed by statute or by the
Certificate of Incorporation, may be called by the Chairman of the Board or the
President and shall be called by the Chairman of the Board or the President or
Secretary at the request in writing of a majority of the Board of Directors, or
at the request in writing of shareholders owning a majority in amount of the
entire capital stock of the Corporation issued and outstanding and entitled to
vote. Such request shall state the purpose or purposes of the proposed meeting.
Section 6. NOTICE OF SPECIAL MEETINGS. Written notice of a special
meeting stating the place, date and hour of the meeting and the purpose or
purposes for which the meeting is called, shall be given not less than ten nor
more than fifty days before the date of the meeting, to each shareholder
entitled to vote at such meeting.
Section 7. BUSINESS. Business transacted at any special meeting of
shareholders shall be limited to the purposes stated in the notice.
Section 8. QUORUM AND ADJOURNMENT. The holders of a majority of the
stock issued and outstanding and entitled to vote thereat, present in person or
represented by proxy, shall constitute a quorum at all meetings of the
shareholders for the transaction of business except as otherwise provided by
statute or by the Certificate of Incorporation. If, however, such quorum shall
not be present or represented at any meeting of the shareholders, the
shareholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented any business may be transacted which might have been transacted at
the meeting as originally notified. If the adjournment is for more than thirty
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, a notice of the adjourned meeting shall be given to each shareholder of
record entitled to vote at the meeting.
Section 9. ORGANIZATION. At every meeting of the shareholders the
Chairman of the Board shall preside. In the absence of such officer, any other
officer of the rank of President, Vice Chairman of the Board, Vice Chairman,
Executive Vice President or Senior Vice President present shall call such
meeting to order and preside. The Secretary, or in his or her absence, the
appointee of the presiding officer of the meeting shall act as Secretary of the
meeting.
Section 10. VOTING OF SHAREHOLDERS. When a quorum is present or
represented at any meeting, the vote of the holders of a majority of the stock
having voting power present in person or represented by proxy shall decide any
question brought before such meeting, unless the question is one upon which by
express provision of statute or of the Certificate of
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Incorporation a different vote is required in which case such express provision
shall govern and control the decision of such question.
Each shareholder shall at every meeting of the shareholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such shareholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period.
Section 11. JUDGES OF ELECTION. The Board of Directors may at any
time appoint one or more persons to serve as judges of election at any meeting
of shareholders with respect to the votes of shareholders at such meeting. If
any judge appointed is absent or refuses to act, a majority of the judges, if
present, may act. If a majority of the judges is not present, the presiding
officer of the meeting may appoint one or more persons to serve as judges for
the meeting. The judges appointed to act at any meeting of the shareholders
shall perform their duties faithfully and impartially, and shall notify the
Secretary of the Corporation in writing of the votes cast at such meeting by the
shareholders.
Section 12. NOTICE OF SHAREHOLDER BUSINESS AT ANNUAL MEETING. At an
annual meeting of the shareholders only such business shall be conducted as
shall have been brought before the meeting (a) by or at the direction of the
Board of Directors or (b) by any shareholder of the Corporation entitled to vote
at the meeting who complies with the notice procedures set forth in this
Section. For business to be properly brought before an annual meeting by a
shareholder, the shareholder must have given timely notice thereof in writing to
the Secretary of the Corporation. To be timely, a shareholder's notice must be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than thirty days nor more than sixty days prior to the
meeting; provided, however, that if less than forty days' notice of the date of
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the meeting is given to shareholders, notice by the shareholder to be timely
must be received not later than the close of business on the tenth day following
the day on which such notice of the date of the annual meeting was mailed. A
shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (a) a brief description
of the business desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name and address, as
they appear on the Corporation's books, of the shareholder proposing such
business, (c) the class and number of shares of the Corporation's stock which
are owned by the shareholder and (d) any material interest of the shareholder in
such business. Notwithstanding anything in these By-laws to the contrary, no
business shall be conducted at an annual meeting except in accordance with the
procedures set forth in this Section. The Chairman of an annual meeting shall,
if the facts warrant, determine and declare to the meeting that any business
proposed at the meeting was not properly brought before the meeting in
accordance with the provisions of this Section, and if he or she should so
determine, he or she shall so declare to the meeting and any such business shall
not be transacted.
Section 13. NOTICE OF SHAREHOLDER NOMINEES. Only persons who are
nominated in accordance with the procedures set forth in this Section
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shall be eligible for election as Directors. Nominations of persons for
election to the Board of Directors of the Corporation may be made at a meeting
of shareholders (a) by or at the direction of the Board of Directors or (b) by
any shareholder of the Corporation entitled to vote for the election of
Directors at the meeting who has complied with the notice procedures set forth
in this Section. Such nominations, other than those made by or at the direction
of the Board of Directors, shall be made pursuant to timely notice in writing to
the Secretary of the Corporation. To be timely, a shareholder's notice shall be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than thirty days nor more than sixty days prior to the
meeting; provided, however, that if less than forty days' notice of the date of
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the meeting is given to shareholders, notice by the shareholder to be timely
must be so received not later than the close of business on the tenth day
following the day on which such notice of the date of the meeting was mailed. A
shareholder's notice shall set forth (a) as to each person whom the shareholder
proposes to nominate for election or re-election as a Director, all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors pursuant to Regulation 14A under the
Securities Exchange Act of 1934, as amended (including such person's written
consent to being named in the proxy statement as a nominee and to serving as a
Director if elected); and (b) as to the shareholder giving the notice (i) the
name and address, as they appear on the Corporation's books, of such shareholder
and (ii) the class and number of shares of the Corporation's stock which are
owned by such shareholder. At the request of the Board of Directors, any person
nominated by the Board of Directors for election as a Director shall furnish to
the Secretary of the Corporation that information required to be set forth in a
shareholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a Director of the Corporation unless nominated
in accordance with the procedures set forth in this Section. The Chairman of
the meeting shall, if the facts warrant, determine and declare to the meeting
that a nomination made at the meeting was not made in accordance with the
provisions of this Section, and if he or she should so determine, he or she
shall so declare to the meeting and the nomination shall be disregarded.
ARTICLE III
DIRECTORS
Section 1. NUMBER, ELECTION AND TERM. The number of Directors which
shall constitute the whole Board shall be not less than three or more than
thirty-five. The first Board shall consist of three Directors. Thereafter,
within the limits above specified, the number of Directors shall be determined
by resolution of the Board of Directors or by the shareholders at the annual
meeting. The Directors shall be elected at the annual meeting of the
shareholders, except as provided in Section 2 of this Article III, and each
Director elected shall hold office until his or her successor is elected and
qualified or until his or her earlier resignation or removal. Directors need
not be shareholders.
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Section 2. VACANCIES AND NEWLY CREATED DIRECTORSHIPS. Vacancies and
newly created directorships resulting from any increase in the authorized number
of Directors may be filled by a majority of the Directors then in office, though
less than a quorum, or by a sole remaining Director, and the Directors so chosen
shall hold office until the next annual election and until their successors are
duly elected and shall qualify or until their earlier resignations or removals.
If there are no Directors in office, then an election of Directors may be held
in the manner provided by statute.
Section 3. RESIGNATIONS. Any Director of the Corporation may resign
at any time by giving written notice to the Chairman of the Board or President
or to the Secretary of the Corporation. The resignation of any Director shall
take effect at the date of receipt of such notice or at any later date specified
therein; and unless otherwise specified therein the acceptance of such
resignation by the Board of Directors shall not be necessary to make it
effective.
Section 4. GENERAL POWERS. The business of the Corporation shall be
managed by or under the direction of its Board of Directors which may exercise
all such powers of the Corporation and do all such lawful acts and things as are
not by statute or by the Certificate of Incorporation or by these By-laws
directed or required to be exercised or done by the shareholders.
Section 5. COMPENSATION OF DIRECTORS. Fees and expenses payable to
Directors shall be in such amounts as shall be determined by the Board of
Directors, except that no Director of the Corporation who receives any salary as
an officer or employee thereof shall receive any per diem or other compensation
for attending any meeting of the Board of Directors or of the Executive
Committee or of any other committee.
Section 6. ADVISORY DIRECTORS. The Board of Directors may appoint
such number of Advisory Directors as shall be determined by the Board from time
to time. Such Advisory Directors shall serve at the pleasure of the Board of
Directors and shall have such rights and functions as the Board shall determine.
Advisory Directors shall receive such compensation for their services as may be
fixed by the Board. No Advisory Director who receives a salary as an officer or
employee of the Corporation or any of its subsidiaries shall receive
compensation for attending any meeting of the Board of Directors or of any
committee of the Board.
ARTICLE IV
MEETINGS OF THE BOARD OF DIRECTORS
Section 1. PLACE OF MEETINGS. The Board of Directors of the
Corporation may hold meetings, both regular and special, either within or
without the State of Delaware.
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Section 2. ORGANIZATIONAL MEETING. The Board of Directors shall meet
for the purpose of organization, the election of officers and the transaction of
other business, on the same day as each annual meeting of shareholders at such
place as may be designated by the presiding officer of such meeting, or as may
be otherwise provided by vote of the shareholders at such meeting. Notice of
such meeting shall not be necessary.
Section 3. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held without notice at such time and at such place as shall
from time to time be determined by the Board.
Section 4. SPECIAL MEETINGS. Special meetings of the Board may be
called by the Chairman of the Board or a Vice Chairman of the Board or the
President on two days' notice to each Director, either personally or by mail or
by telegram; special meetings shall be called by the Chairman of the Board or a
Vice Chairman of the Board or the President or the Secretary in like manner and
on like notice on the written request of any three Directors.
Section 5. QUORUM. At all meetings of the Board a majority of the
Directors shall constitute a quorum for the transaction of business and the act
of a majority of the Directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or by the Certificate of Incorporation. If a
quorum shall not be present at any meeting of the Board of Directors the
Directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 6. ACTION BY WRITTEN CONSENT. Unless otherwise restricted by
the Certificate of Incorporation or these By-laws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all members of the Board or
committee, as the case may be, consent thereto in writing. The written consents
shall be filed with the minutes of proceedings of the Board or committee.
Section 7. TELEPHONE PARTICIPATION IN MEETINGS. Members of the Board
of Directors or any committees thereof may participate in a meeting of the Board
of Directors or of such committees by means of conference telephone or other
communications equipment by means of which all persons participating can hear
each other, and such participation shall constitute presence in person at such
meeting.
ARTICLE V
COMMITTEES
Section 1. EXECUTIVE COMMITTEE. During the intervals between meetings
of the Board, all powers and authority of the Board regarding the management of
the business and affairs of the Corporation shall be exercised by the Executive
Committee of the Board; except that the committee shall have no power:
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(a) To act to amend the Certificate of Incorporation (except that the
committee may, to the extent authorized in a resolution adopted by
the Board providing for the issuance of shares of stock, fix the
designations and any of the preferences or rights of such shares
relating to dividends, redemption, dissolution, any distribution of
assets of the Corporation or the conversion into, or the exchange of
such shares for, shares of any other class or classes of stock of
the Corporation or fix the number of shares of any series of stock
or authorize the increase or decrease of the shares of any series)
or the By-laws of the Corporation.
(b) To recommend to the shareholders of the Corporation the sale, lease
or exchange of all or substantially all of the Corporation's
property and assets.
(c) To adopt an agreement of merger or consolidation.
(d) To recommend to the shareholders of the Corporation the dissolution
of the Corporation or a revocation of a dissolution.
(e) To declare a dividend.
(f) To authorize the issuance of stock, except, to the extent such
delegation of authority is authorized by the Delaware General
Corporation Law, pursuant to authority specifically delegated to the
committee by resolution of the Board.
(g) To appoint or remove the Chairman of the Board or the President of
the Corporation.
The committee shall consist of such Directors as the Board may from time
to time appoint by resolution passed by a majority of the whole Board.
Section 2. AUDITING AND EXAMINING COMMITTEE. The Auditing and Examining
Committee shall provide assistance to the Board in meeting its responsibilities
regarding the adequacy of internal controls, the quality and integrity of
regulatory and financial accounting and reporting and the effectiveness of the
internal and external auditing and examining functions of the Corporation and
its subsidiaries.
In carrying out its duties the committee shall:
. monitor areas of significant risk, including credit risk, market risk,
liquidity risk, cross border risk, operational risk, and compliance;
. monitor the adequacy of the Corporation's internal controls through
reviewing reports of regulatory examinations of the Corporation,
management letters, and other assessments of the adequacy of internal
controls from the independent accountants and internal auditors, together
with any proposed responses by management of the Corporation;
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. review the Corporation's annual report and such other principal periodic
financial reports to the public (including the adequacy of the reports'
supporting processes), and to regulatory agencies as deemed appropriate
by the committee;
. review significant accounting policy and reporting issues;
. recommend to the Board the firm to be employed by the Corporation as its
independent auditors, and review and make recommendations to the Board
regarding the terms and scope of such firm's engagement, and monitor its
performance and independence;
. annually review and approve the scope of the auditing and credit
examination functions of the Corporation and monitor their performance;
. review with Chief Executive Officer any performance reports and
compensation recommendations to be made to the Executive Personnel and
Compensation Committee for the General Auditor and the Director of Credit
Examination Services;
. review and take such other actions as may be appropriate with respect to
reports and other requirements under the Federal Deposit Insurance
Corporation Improvement Act of 1991;
. inquire into such matters and review such reports and other documents
regarding subsidiaries as it deems appropriate;
. take such action as the committee deems appropriate to encourage free
and open communication among the Board, the committee, the independent
auditors and the officers of the Corporation responsible for internal
audit, credit examination, regulatory/financial accounting and reporting,
and internal controls, including the scheduling of periodic executive
sessions with the independent auditors and members of management deemed
appropriate by the committee.
The committee shall also provide assistance to the Board with respect to
the fiduciary activities of subsidiaries. The committee shall:
. review reports of examination of the fiduciary activities of any
subsidiary which has been directed to the committee by the Board or by
regulatory authorities;
. monitor the internal fiduciary audit function and its findings for
subsidiaries;
. review reports from the Corporation's independent auditors with respect
to fiduciary activities of subsidiaries;
. have authority to make recommendations to the Board with respect to
fiduciary activities of subsidiaries as a result of audit and examination
reviews;
The committee shall also provide assistance to the Board in meeting
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its fiduciary responsibilities with respect to the employee benefit plans of the
Corporation subject to the Employee Retirement Income Security Act of 1974, as
amended (ERISA). In carrying out its duties the committee shall:
. review the performance of the Employee Benefits Administrative Committee
and the Employee Benefits Investment Committee and any other fiduciary
appointed by the Board for the Corporation's employee benefit plans
subject to ERISA and review audit reports on such plans;
The committee may employ, at the Corporation's expense, independent
accountants, outside counsel and other experts as it deems necessary, and shall
have all additional powers necessary to carry out the foregoing functions and
such other functions as may be assigned by the Board from time to time.
The committee shall consist of such members as the Board may from time to
time appoint by resolution passed by a majority of the whole Board. At least
two members of the committee shall have significant executive, professional,
educational, or regulatory experience in financial, auditing, accounting, or
banking matters as shall be determined by the Board.
No member of the committee shall be, or shall have been within one year
prior to serving as a member of the committee, an officer or employee of the
Corporation or any of its subsidiaries or affiliates, and no member shall have
any relationship that, in the opinion of the Board, would interfere with the
member's exercise of independent judgment as a member of the committee,
including any significant direct or indirect credit or other relationships with
the Corporation or its subsidiaries, the termination of which likely would
materially and adversely affect the Corporation's financial condition or results
of operations.
Section 3. EXECUTIVE PERSONNEL AND COMPENSATION COMMITTEE. The
Executive Personnel and Compensation Committee shall have responsibility for,
and shall review and approve, the compensation, including salary and
perquisites, of the Corporation's executive officers, as designated for Federal
securities law purposes by the Board from time to time, and such other members
of the senior management of the Corporation as determined by the committee from
time to time by resolution, The committee shall also make recommendations to
the Corporation's subsidiaries as to the compensation of such members of senior
management of the subsidiaries as determined by the committee from time to time
by resolution.
The committee shall also have responsibility for the administration of
the Corporation's short-term and long-term incentive plans and deferred
compensation programs established for the Executive Officers and other senior
management of the Corporation and its subsidiaries (incentive plans). The
Committee shall approve or review the designation of participants in incentive
plans, the principles and procedures used in determining grants and awards under
the plans, and with respect to grants or awards of the Company's equity
securities, the specific grants and awards within such categories of recipients
as designated by the committee from time to time by resolution. The committee
shall also recommend to the
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full Board such amendments or revisions to incentive plans, and shall take such
other actions with respect to incentive plans, as deemed appropriate by the
committee.
The committee shall also advise management regarding executive succession
planning and the selection, development and performance of the Executive
Officers and other senior management of the Corporation and its subsidiaries as
determined by the committee from time to time.
The committee shall have all additional powers necessary to carry out its
responsibilities and such other duties as may be assigned by the Board from time
to time.
The committee shall consist of such Directors as the Board may from time
to time appoint by resolution passed by a majority of the whole Board.
No member of the committee shall be an active officer of the Corporation
or any of its subsidiaries, and no member shall have any relationship that, in
the opinion of the Board, would interfere with the member's exercise of
independent judgment as a member of the committee.
Section 4. NOMINATING COMMITTEE. The Nominating Committee shall
recommend to the Board criteria for the selection of candidates to serve on the
Board; evaluate all proposed candidates; recommend to the Board nominees to fill
vacancies on the Board; and recommend to the Board prior to the annual meeting
of shareholders a slate of nominees for election to the Board by the
shareholders of the Corporation at the annual meeting.
The committee may also review and make recommendations to the Executive
Committee or the Board with respect to the Corporation's overall compensation
program for Directors, including salary, perquisites, deferred compensation
plans, stock or stock option plans or other incentive plans, and retirement
plans.
In carrying out its duties, the committee shall seek possible candidates
for the Board and otherwise aid in attracting qualified candidates to the Board.
The committee shall be available to the Chairman of the Board or President and
other members of the Board for consultation concerning candidates for the Board.
The committee shall periodically review, assess and make recommendations to the
Board with regard to the size and composition of the Board. The committee shall
have all additional powers necessary to carry out its responsibilities and such
other duties as may be assigned by the Board from time to time.
The committee shall consist of such Directors as the Board may from time
to time appoint by resolution passed by a majority of the whole Board.
No member of the committee shall be an active officer of the Corporation
or any of its subsidiaries and no member shall have any relationship that, in
the opinion of the Board, would interfere with the member's exercise of
independent judgment as a member of the committee.
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Section 5. PUBLIC POLICY COMMITTEE. The Public Policy committee shall
advise and make recommendations to the Board and management of the Corporation
and its subsidiaries concerning matters of public and social policy. The
committee shall identify and monitor the social, political and environmental
trends and issues that could affect the corporation's or its subsidiaries'
performance and the related interests of employees, shareholders, customers, and
the general public; evaluate and advise the Board and management on long range
plans and programs for adjusting operations to those trends and issues; provide
Community Reinvestment Act (CRA) oversight to ensure that the CRA activities of
all banking subsidiaries of the Corporation reflect the Corporation's commitment
to outstanding performance; and recommend to the Board and management, as
appropriate, action on specific public policy issues, and advise the Board and
management as to the committee's evaluation of related policies, practices and
procedures.
The committee shall have all additional powers necessary to carry out its
responsibilities and such other duties as may be assigned by the Board from time
to time.
The committee shall consist of such Directors as the Board may from time
to time appoint by resolution passed by a majority of the whole Board.
Section 6. OTHER COMMITTEES. The Board may, by resolution passed by a
majority of the whole Board, designate one or more other committees, each
committee to consist of such members as the Board determines. The Board may
designate one or more persons as alternate members of any such committee who may
replace any absent or disqualified member at any meeting of the committee. Any
such committee shall have and may exercise such powers as may be specified in
the resolution creating such committee, including, to the extent authorized in a
resolution adopted by the Board providing for the issuance of shares of stock,
the power to fix the designations and any of the preferences or rights of such
shares for, shares of any other class or classes of stock of the Corporation or
fix the number of shares of any series of stock or authorize the increase or
decrease of the shares of any series. Each committee shall have such name as
may be determined from time to time by the Board. The Board may change the
members of any committee, fill vacancies and discharge any committee, with or
without cause, at any time.
Section 7. MEETING REQUIREMENTS. The Board shall designate one member
of each committee to serve as chairman of the committee. Except as otherwise
stated in these By-laws or a resolution of the Board, a number equal to a
majority of the members of a committee shall be deemed to constitute a quorum
for actions of the committee. If a quorum is not present at any meeting of a
committee, the committee members present may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present. Except as otherwise stated in these By-laws or in a
resolution of the Board, the vote of a majority of the members of a committee
present at a meeting at which a quorum is present shall be necessary for action
to be taken by the committee, and each committee shall hold regular and special
meetings at times and places and upon notice as the committee may determine. In
the absence of any other notice requirements, meetings of a committee may be
called by the chairman of the committee or the Secretary, and must be
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called by the chairman of the committee or the Secretary upon the request of any
two members of the committee, on at least 24 hours' notice to each committee
member before the hour appointed for holding such meeting. Notice shall be
given personally, or by leaving the notice at the member's place of business or
residence, or by mailing the notice in San Francisco or Los Angeles, with the
postage thereon fully prepaid, addressed to the member at his or her last known
place of business or residence, or by telegraphing or telecopying the notice to
the member at his or her last known place of business or residence. The method
of notice of a special meeting shall be entered in the minutes of the special
meeting, and the approval of the minutes at any subsequent meeting of the
committee shall be conclusive upon the question of service. Personal notice
includes telephone notice to the individual.
Section 8. ACTION BY WRITTEN CONSENT. Unless otherwise restricted by
these By-laws, any action required or permitted to be taken at any meeting of
any committee may be taken without a meeting, if all members of the committee
consent to the action in writing. The written consents shall be filed in the
minute book of the committee.
Section 9. TELEPHONE PARTICIPATION IN MEETINGS. Members of a committee
may participate in a meeting of the committee by means of conference telephone
or other communications equipment by means of which all persons participating
can hear each other, and such participation shall constitute presence in person
at the meeting.
Section 10. SUBCOMMITTEES. Except as otherwise stated in these By-laws
or a resolution of the Board, each committee may appoint and discharge
subcommittees and may delegate to such subcommittees any of the power and
authority of the committee, subject to such restrictions as the committee may
determine. The committee may authorize such subcommittees to appoint their own
subcommittees and to delegate any of their power and authority. Each
subcommittee shall have such members as the committee shall appoint, provided
that at least one member of the committee shall be a member of the subcommittee.
The name of each subcommittee shall be determined by the committee or
subcommittee which appoints it. Each committee and subcommittee may designate
one of more Directors or officers as alternate members of any subcommittee, who
may replace any specified or unspecified member who is absent or disqualified at
any meeting of the subcommittee. Subcommittees shall be subject to the same
procedural requirements as the committee or subcommittee which appointed it,
including but not limited to the requirements set forth in this Article V for
notices, quorums, action by written consent, and telephone participation in
meetings. Each subcommittee shall report its actions at the next practicable
meeting of the committee or subcommittee for its review and any action it deems
appropriate.
Section 11. REPORTS TO THE BOARD. Except as otherwise stated in these
By-laws or a resolution of the Board, each committee shall keep minutes of its
proceedings and shall report its actions and, at least on a quarterly basis, the
actions of its subcommittees at the next practicable Board meeting for its
review and any action it deems appropriate. Any action of the Board with
respect to the report shall be recorded in the minutes of the meeting of the
Board, as well as in the minute book of the committee.
12
<PAGE>
ARTICLE VI
OFFICERS
Section 1. NUMBER AND TITLES. The officers of the Corporation may be,
and to the extent required by law shall be: a Chairman of the Board, a
President, one or more Vice Chairmen of the Board, one or more Vice Chairmen,
one or more Executive Vice Presidents, one or more Senior Vice Presidents, one
or more Vice Presidents, one or more Assistant Vice Presidents, a Secretary, one
or more Assistant Secretaries, a Treasurer, one or more Assistant Treasurers,
and such other officers as the Board may by resolution create, or as may be
appointed in accordance with Section 2 of this Article.
The Board of Directors shall designate one officer of the Corporation as
the Chief Executive Officer and may in its discretion confer additional
functional titles, including but not limited to Chief Operating Officer and
Chief Financial Officer.
Section 2. APPOINTMENT, TERM OF OFFICE. The officers shall be appointed
by the Board of Directors and shall serve at the pleasure of the Board, which
may demote, suspend, remove or dismiss any officer with or without cause or
notice at any time. However, any such action shall be without prejudice to any
rights of such officer under any written contract addressing employment issues
executed by an officer of the Corporation authorized to execute such a contract.
Each officer shall hold office until a successor is elected and qualified or
until the officer's earlier resignation or removal.
Section 3. COMPENSATION. The compensation of all officers and other
employees of the Corporation shall be fixed by the Board of Directors or by a
committee appointed or officers designated for that purpose or in accordance
with procedures established by the Corporation's human resources or personnel
function.
Section 4. AUTHORITY, DUTIES, FIDELITY BOND. One person may hold more
than one office, except that the offices of President and Secretary and of
Chairman of the Board and Secretary may not be held by the same person. When
the signature or approval of two officers is required, a person holding two
offices shall act only as one signer or approver. The duties and authority of
the officers of the Corporation, other than as set forth in these By-laws, may
be prescribed and established by the Board of Directors or by the Executive
Committee. Each officer shall perform the duties imposed upon the officer by
law, these By-laws, the Board of Directors or the Executive Committee. Except
as otherwise set forth in these By-laws or by the Board of Directors or the
Executive Committee, each officer shall have such authority and duties as
usually are incident to the title and office held. The Board of Directors may
provide for such bond and fidelity insurance covering the officers of the
Corporation and for the faithful and honest discharge of their duties as they
may determine.
Section 5. THE CHAIRMAN OF THE BOARD. The Chairman of the Board shall
preside at all meetings of the shareholders and the Board of
13
<PAGE>
Directors and shall have such other duties and authority as are set forth in
these By-laws or may be assigned by the Board of Directors.
Section 6. THE VICE CHAIRMEN OF THE BOARD. The Board of Directors may
appoint one or more Vice Chairmen of the Board. Each Vice Chairman of the Board
shall have such duties and authority as may be assigned by the Board of
Directors or by the officer to whom such Vice Chairman of the Board reports. If
more than one Vice Chairman of the Board is appointed, the Board may designate
one such Vice Chairman of the Board as Senior Vice Chairman of the Board.
Section 7. THE PRESIDENT. The President shall have such duties and
authority as are set forth in these By-laws or may be assigned by the Board of
Directors or by the Chairman of the Board.
Section 8. THE VICE CHAIRMEN. The Board of Directors may appoint one or
more Vice Chairmen. Each Vice Chairman shall have such duties and authority as
may be assigned by the Board of Directors or by the officer to whom such Vice
Chairman reports.
Section 9. THE VICE PRESIDENTS. The Board of Directors may appoint one
or more Vice Presidents. The Board may create categories of Vice Presidents,
including but not limited to Executive Vice Presidents, Senior Vice Presidents
and Assistant Vice Presidents. The Board of Directors, the Chairman of the Board
or the President may designate seniority of ranking among categories of Vice
Presidents. Each Vice President shall have such duties and authority as may be
assigned by the Board of Directors or by the officer to whom such Vice President
reports.
Section 10. THE SECRETARY. The Secretary shall have charge and custody
of the corporate seal, records and Minute Books of the Corporation, shall keep
correct written minutes of all meetings of shareholders and Directors, and shall
give or cause to be given notice of all meetings of the shareholders and of the
Board of Directors in accordance with these By-laws and as required by law. The
duties of the Secretary may be performed by any Assistant Secretary.
Section 11. THE CHIEF EXECUTIVE OFFICER. The Chief Executive Officer
shall have general executive supervision of the business and affairs of the
Corporation.
Section 12. THE CHIEF OPERATING OFFICER. The Chief Operating Officer
shall have such duties and authority as may be assigned by the Chief Executive
Officer to whom the Chief Operating Officer shall report.
Section 13. THE CHIEF FINANCIAL OFFICER. The Chief Financial Officer
shall be the principal financial officer of the Corporation.
14
<PAGE>
ARTICLE VII
CAPITAL STOCK--CERTIFICATES OF STOCK
Section 1. CERTIFICATES. The shares of the Corporation shall be
represented by certificates, provided that the Board of Directors of the
Corporation may provide by resolution or resolutions that some or all of any or
all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock represented
by certificates and upon request every holder of uncertificated shares shall be
entitled to have a certificate signed by, or in the name of the Corporation by
the Chairman of the Board of Directors, or the President or a Vice Chairman of
the Board of Directors, or a Vice Chairman, and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary of the Corporation,
representing the number of shares registered in certificate form. Any or all
the signatures on the certificate may be a facsimile. In case any officer,
transfer agent or registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer, transfer agent
or registrar before such certificate is issued, it may be issued by the
Corporation with the same effect as if he or she were such officer, transfer
agent or registrar at the date of issue.
Section 2. LOST, STOLEN, MUTILATED OR DESTROYED CERTIFICATES. The Board
of Directors, a committee of the Board or an officer of the Corporation may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost, stolen, mutilated or destroyed, upon the making of an affidavit
of that fact by the person claiming the certificate of stock to be lost, stolen,
mutilated or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors, a committee of the Board or an officer of
the Corporation may, as a matter of discretion and as a condition precedent to
the issuance thereof, require the owner of such lost, stolen, mutilated or
destroyed certificate or certificates, or such owner's legal representative, to
advertise the same in such manner as shall be required and give the Corporation
a bond in such sum as may be directed as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost, stolen, mutilated or destroyed.
Section 3. TRANSFERS OF STOCK. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
Section 4. FIXING RECORD DATE. In order that the Corporation may
determine the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or
15
<PAGE>
exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more than sixty
nor less than ten days before the date of such meeting, nor more than sixty days
prior to any other action. A determination of shareholders of record entitled
to notice of or to vote at a meeting of shareholders shall apply to any
adjournment of the meeting; provided, however, that the Board of Directors may
fix a new record date for the adjourned meeting.
Section 5. REGISTERED SHAREHOLDERS. The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares to receive dividends and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
Section 6. DIVIDENDS. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the Certificate of
Incorporation.
ARTICLE VIII
INDEMNIFICATION
Section 1. RIGHT TO INDEMNIFICATION. Each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that such person, or another
person of whom such person is the legal representative, is or was a Director,
officer, or employee of the Corporation or is or was serving at the request of
the Corporation as a director, officer, or employee of, or in some other
representative capacity for, another corporation or a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a Director, officer, or employee or in any other capacity
while serving as a Director, officer, or employee, shall be indemnified and held
harmless by the Corporation to the fullest extent authorized by the Delaware
General Corporation Law, as the same exists or may hereafter be amended, against
all expense, liability and loss (including attorneys' fees, judgments, fines,
ERISA excise taxes or penalties and amounts to be paid in settlement) reasonably
incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a Director,
officer, or employee and shall inure to the benefit of such person's heirs,
executors and administrators; provided, however, that except as provided in
-------- -------
Section 2 hereof with respect to proceedings seeking to enforce rights to
indemnification, the Corporation
16
<PAGE>
shall indemnify any such person seeking indemnification in connection with a
proceeding (or part thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the Board of Directors of the Corporation.
The right to indemnification conferred in this Article shall be a contract right
and shall include the right to be paid by the Corporation the expenses incurred
in defending any such proceeding in advance of its final disposition; provided,
--------
however, that, if the Delaware General Corporation Law so requires, the payment
-------
of such expenses incurred by a Director or officer in such person's capacity as
a Director or officer (and not in any other capacity in which service was or is
rendered by such person while a Director or officer, including, without
limitation, service to an employee benefit plan) in advance of the final
disposition of a proceeding, shall be made only upon delivery to the Corporation
of an undertaking, by or on behalf of such Director or officer, to repay all
amounts so advanced if it shall ultimately be determined that such Director or
officer is not entitled to be indemnified under this Article or otherwise.
Section 2. RIGHT OF CLAIMANT TO BRING SUIT. If a claim under Section 1
of this Article is not paid in full by the Corporation within ninety days after
a written claim has been received by the Corporation, the claimant may at any
time thereafter bring suit against the Corporation to recover the unpaid amount
of the claim and, if successful in whole or in part, the claimant shall be
entitled to be paid also the expense of prosecuting such claim. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is required, has been
tendered to the Corporation) that the claimant has not met the standards of
conduct which make it permissible under the Delaware General Corporation Law for
the Corporation to indemnify the claimant for the amount claimed, but the burden
of proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because the claimant has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
Section 3. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and
the payment of expenses incurred in defending a proceeding in advance of its
final disposition conferred in this Article shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the Certificate of Incorporation, By-law, agreement, vote of
stockholders or disinterested Directors or otherwise.
Section 4. INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any Director, officer, or employee of the
Corporation serving in any capacity on behalf of the Corporation or at its
request for any other entity to the fullest extent authorized by the
17
<PAGE>
Delaware General Corporation Law, as the same exists or may hereafter be
amended, whether or not the Corporation would have the power to indemnify such
person against such expense, liability or loss under the Delaware General
Corporation Law.
ARTICLE IX
NOTICES
Section 1. FORM OF NOTICES. Whenever, under the provisions of the
statutes or of the Certificate of Incorporation or of these By-laws, notice is
required to be given to any Director or shareholder, it shall not be construed
to mean personal notice, but such notice may be given in writing, by mail,
addressed to such Director or shareholder, at his or her address as it appears
on the records of the Corporation, with postage thereon prepaid, and such notice
shall be deemed to be given at the time when the same shall be deposited in the
United States mail. Notice to Directors may also be given by telegram.
Section 2. WAIVER OF NOTICE. Whenever any notice is required to be
given by law or by the Certificate of Incorporation or these By-laws, a waiver
thereof in writing, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent
thereto.
ARTICLE X
EMERGENCY
Section 1. APPLICATION. This Article shall operate during any emergency
resulting from any disaster or other emergency condition when a quorum of the
Board of Directors or a Board committee cannot readily be convened.
Section 2. MEETINGS OF BOARD OR COMMITTEE. A meeting of the Board of
Directors or Board committee may be called by any officer or Director by giving
notice to the Directors or committee members who can be reached by any means the
person calling the meeting deems feasible.
Section 3. CONDUCT OF BUSINESS. During any emergency, the quorum
requirements for all meetings of the Board of Directors and any Board committee
shall be one-fourth of the members.
(a) If no Board of Directors meeting can be held because a quorum cannot
be assembled, then those Directors who can assemble may, by majority vote,
reduce the Board of Directors to not less than five Directors and may elect
emergency Directors.
(b) If only one Director can be found, then that Director may appoint
emergency Directors.
(c) If no Director can be found, then the Chief Executive Officer
18
<PAGE>
or Acting Chief Executive Officer may appoint emergency Directors.
Section 4. SUCCESSION. During any emergency when the Chief Executive
Officer becomes incapacitated, cannot be located, or otherwise is unable to
perform his or her duties, succession to the powers of the Chief Executive
Officer as Acting Chief Executive Officer shall occur in the following order:
Chairman of the Board,
President,
Vice Chairman of the Board,
Vice Chairman,
any Executive Vice President.
Priority within rank shall be set by seniority in the ranking office. If
seniority in office dates from the same day, then seniority based on total
length of service shall be determinative.
Notwithstanding the foregoing, the Board of Directors during an emergency
may appoint or replace any Acting Chief Executive Officer, or may change the
priority of succession, as the Board determines.
Section 5. AUTHORITY. During any emergency the Chief Executive Officer
or Acting Chief Executive Officer shall have all authority that officer deems
necessary to protect the interests of the Corporation, may appoint emergency
officers, and may delegate authority to them.
Section 6. NO LIABILITY. No officer, Director or employee acting in
accordance with any emergency By-laws or resolutions shall be liable except for
willful misconduct.
Section 7. EFFECT ON BY-LAWS. To the extent not inconsistent with this
emergency By-law, the By-laws of the Corporation shall remain in effect during
any emergency. Upon termination of the emergency, this By-law shall cease to be
operative and authority to act as an officer or Director shall be determined by
the other By-laws, except that Directors and officers elected or appointed
pursuant to this By-law shall remain Directors or officers to the extent that
vacancies have been caused by death or incapacity of regular Directors or
officers until their successors are appointed or elected.
Section 8. TERMINATION OF EMERGENCY. Any emergency condition which
causes this By-law to become operative shall be deemed terminated whenever one
of the following conditions is met:
(a) The Directors and emergency Directors determine by majority vote at a
meeting that the emergency condition is over; or
(b) A majority of the Directors elected or appointed pursuant to the
regular By-laws holds a meeting and determines the emergency condition is
over.
19
<PAGE>
ARTICLE XI
MISCELLANEOUS
Section 1. FISCAL YEAR. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors.
Section 2. SEAL. In the execution on behalf of the Corporation of any
instrument, writing, notice or paper, it shall not be necessary to affix the
corporate seal of the Corporation thereon, and any such instrument, document,
writing, notice or paper when executed without said seal affixed thereon shall
be of the same force and effect and as binding in the Corporation as if said
corporate seal had been affixed thereon in the first instance.
Section 3. AMENDMENTS. These By-laws may be altered or repealed at any
regular meeting of the shareholders or of the Board of Directors or at any
special meeting of the shareholders or of the Board of Directors if notice of
such alteration or repeal be contained in the notice of such special meeting.
20
104467
<PAGE>
EXHIBIT 10
AMENDMENTS TO: BANKAMERICA CORPORATION 1992
MANAGEMENT STOCK PLAN (EFFECTIVE MAY 25, 1995)
1. The BankAmerica Corporation 1992 Management Stock Plan is amended to
limit eligibility for grants and awards under the Plan to employees of
BankAmerica Corporation and its Subsidiaries (as defined in the Plan). To effect
this amendment, (A) any references to individuals other than such employees
("Non-Employees"), and any language or provisions pertaining solely to Non-
Employees, shall be deleted from Sections 1.2, 1.3(b), 1.3(k), 1.3(o),
1.4(b)(i), 1.4(b)(ii), 1.4(b)(viii), 1.5, 2.1, 4.2, 4.3, 4.7 and 6.13 of the
Plan and (B) such grammatical changes shall be made to these sections as may be
necessary as a result of such deletions.
2. Section 1.7 of the BankAmerica Corporation 1992 Management Stock Plan
is amended to read in its entirety as follows:
"1.7 Limitation on Available Shares. For each calendar year from and
including 1992 a number of shares of Common Stock in an amount of up to one
and one-half percent (1.5%) of the number of shares of Common Stock
outstanding as reported in the annual report to shareholders of BankAmerica
for the preceding year shall become available for delivery with respect to
Awards under the Plan, provided, however, that as of the effective date of
-------- -------
any Major Combination (as defined in Section 1.3) the number of shares
available for delivery in that year with respect to Awards under the Plan
shall be increased to one and one-half percent (1.5%) of the number of
shares of Common Stock outstanding as of the close of business on the
effective date of that Major Combination. Shares of Common Stock delivered
under the Plan may be original issue shares, shares purchased in the open
market or otherwise or other treasury stock.
In addition, (a) any shares of Common Stock which as of the effective
date of the Plan are reserved for delivery under the 1987 Plan and which
are not thereafter delivered, and (b) any shares of Common Stock available
for delivery under the Plan in previous years but not actually delivered,
shall be added to the aggregate number of shares of Common Stock available
for delivery in that calendar year under the Plan; provided, however, that
-------- -------
no more than 30 percent (30%) of the shares of Common Stock available for
delivery under the Plan in any calendar year shall be delivered in respect
of Restricted Stock or Restricted Stock Units. Notwithstanding the
foregoing, but subject to
A-1
4110693
<PAGE>
adjustment as provided in Section 6.4, no more than 5,000,000 shares shall
be cumulatively available under the Plan for delivery upon the exercise of
ISOs. The Committee shall have no obligation to grant or award all or any
portion of the shares available for delivery in any year. The Board may,
by resolution, limit the number of shares that may be available for
delivery with respect to Awards under the Plan in any calendar year to a
number of shares lower than would otherwise be available for delivery
hereunder.
Shares of Common Stock subject to Awards under the Plan that for any
reason are cancelled or terminated, or expire, shall again be available for
delivery under the Plan.
Shares of Restricted Stock and Restricted Stock Units that for any
reason are reacquired by BankAmerica pursuant hereto shall again be
available for delivery under the Plan; provided, however, that shares of
-------- -------
Restricted Stock or Restricted Stock Units as to which dividends or
payments equivalent to dividends have been paid to or reinvested for the
account of the Restricted Stockholder prior to reacquisition by BankAmerica
shall not again be available for delivery under the Plan after such
reacquisition.
Notwithstanding the foregoing, neither (i) shares of Common Stock
transferred or relinquished to the Company upon the exercise of an Option
or in satisfaction of any withholding obligation, nor (ii) shares of Common
Stock subject to an Award denominated in shares of Common Stock but settled
by the payment of cash in accordance with the Plan, shall again be
available for delivery under the Plan."
3. The BankAmerica Corporation 1992 Management Stock Plan is amended by
adding the following new Section 1.9:
"1.9 Limitation on Options and SARs Awardable to Any Single
Participant. The maximum number of shares of Common Stock underlying
Options and SARs that may be awarded under the Plan to any single
Participant during the period from March 2, 1992, the effective date of the
Plan, through March 2, 2002, is 10,000,000. The minimum price at which
each Option is exercisable and the minimum grant price of each SAR are
specified in Sections 2.3 and 3.1, respectively, of the Plan."
A-2
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
THIS FINANCIAL DATA SCHEDULE ON FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30,
1995 CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED
BALANCE SHEET, CONSOLIDATED STATEMENT OF OPERATIONS, AVERAGE BALANCES,
INTEREST, AND AVERAGE RATES, NONPERFORMING ASSETS, QUARTERLY CREDIT LOSS
EXPERIENCE, AND COMPOSITION OF ALLOWANCE FOR CREDIT LOSSES, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-Q FILING.
Any item provided in the schedule, in accordance with the rules governing the
schedule, will not be subject to liability under the federal securities laws,
except to the extent that the financial statements and other information from
which the date were extracted violate the federal securities laws. Also,
pursuant to Item 601(c)(1)(iv) of Regulation S-K promulgated by the Securities
and Exchange Commission (SEC), the schedule shall not be deemed filed for
purposes of Section 11 of the Securities Act of 1933, Section 18 of the Exchange
Act of 1934 and Section 323 of the Trust Indenture Act, or otherwise be subject
to the liabilities of such sections, nor shall it be deemed a part of any
registration statement to which it relates.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 12,656
<INT-BEARING-DEPOSITS> 5,620
<FED-FUNDS-SOLD> 6,598
<TRADING-ASSETS> 8,133
<INVESTMENTS-HELD-FOR-SALE> 9,868
<INVESTMENTS-CARRYING> 7,186
<INVESTMENTS-MARKET> 6,725
<LOANS> 148,766
<ALLOWANCE> 3,695
<TOTAL-ASSETS> 226,599
<DEPOSITS> 155,780
<SHORT-TERM> 17,837
<LIABILITIES-OTHER> 17,284
<LONG-TERM> 16,078<F1>
<COMMON> 598
0
2,723
<OTHER-SE> 16,299
<TOTAL-LIABILITIES-AND-EQUITY> 226,599
<INTEREST-LOAN> 6,176
<INTEREST-INVEST> 637
<INTEREST-OTHER> 912<F2>
<INTEREST-TOTAL> 7,725
<INTEREST-DEPOSIT> 2,354
<INTEREST-EXPENSE> 3,556
<INTEREST-INCOME-NET> 4,169
<LOAN-LOSSES> 200
<SECURITIES-GAINS> 10
<EXPENSE-OTHER> 4,042
<INCOME-PRETAX> 2,158
<INCOME-PRE-EXTRAORDINARY> 2,158
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,256
<EPS-PRIMARY> 3.03
<EPS-DILUTED> 3.00
<YIELD-ACTUAL> 4.54
<LOANS-NON> 1,962
<LOANS-PAST> 459
<LOANS-TROUBLED> 99
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,690
<CHARGE-OFFS> 425
<RECOVERIES> 218
<ALLOWANCE-CLOSE> 3,695
<ALLOWANCE-DOMESTIC> 0<F3>
<ALLOWANCE-FOREIGN> 0<F3>
<ALLOWANCE-UNALLOCATED> 1,120
<FN>
<F1>Includes subordinated capital notes of $605 million.
<F2>Includes interest income on trading account assets of $352 million.
<F3>These amounts are not reported in our interim filing.
</FN>
</TABLE>
