Bank of America

Investor Relations

Bank of America Earnings Per Share Increase 23% to $1.33

First Quarter 2000 Financial Information for Investors

CHARLOTTE, N.C., April 17 /PRNewswire/ -- Paced by a 10 percent increase in revenue generated by widespread gains in most business lines, earnings at Bank of America Corporation (NYSE: BAC) increased 23 percent to $1.33 per share (diluted) in the first quarter from $1.08 a year earlier.

Net income increased 17 percent to $2.24 billion from $1.91 billion a year ago.

The return on common equity rose to 19.6 percent from 16.8 percent and the return on assets increased to 1.38 percent from 1.27 percent.

Cash-basis earnings - which exclude the amortization of intangibles - were $2.46 billion, or $1.46 per share, in the latest quarter. The return on average tangible common shareholders' equity was 30.8 percent.

"The growth in revenue and earnings this quarter demonstrates that our strategy to create more valuable customer relationships is beginning to show results," said Hugh L. McColl, Jr., Bank of America chairman and chief executive officer. "We are gaining market share in many investment banking products as we meet more of our business clients' financial needs. Our customer retention continues to improve, and we are having good success in rewarding customers who bring more of their business to our company.

"One of the company's most important strategic goals is to maintain our leadership in developing our Internet capabilities to improve the customer experience and participate in the New Economy," McColl said. Among the highlights in the first quarter:

  • The company expanded its technology leadership to meet two important objectives: provide better service to customers and connect those customers to the increasing number of e-commerce capabilities as they become available. Initiatives are underway in both areas to accomplish the company's strategy of creating more valuable customer relationships.

  • New online banking enrollments increased to 125,000 per month, from a pace of 80,000 per month a year earlier, as total online retail customers rose to more than 2.1 million. Penetration increased to 14 percent of customers holding Bank of America checking accounts. Visitors to increased by more than 70 percent, and consumer loan products sold over the Internet increased by 300 percent from a year earlier.

  • An alliance announced with Ariba intends to combine the Bank of America financial services engine with Ariba's leading business-to-business commerce platform resulting in a complete purchase-to-payment system for business-to-business commerce activities.

  • Use of Bank of America Direct, the company's web-based cash management system, grew more than 500 percent from a year earlier.

First Quarter Financial Highlights (compared to a year ago)

  • Total revenue climbed 10 percent, fueled by a 26 percent increase in noninterest income.

  • Noninterest income rose to 47 percent of revenue driven by higher equity investment gains along with significant improvement in trading, investment banking and card income.

  • The efficiency ratio improved more than 300 basis points to 53 percent. Noninterest expense, excluding incentive compensation, was flat.

  • Average managed consumer loans and leases increased 19 percent.

  • Net charge-offs declined to an annualized .45 percent of loans and leases - an improvement of 13 basis points.

Net Interest Income

Fully taxable-equivalent net interest income of $4.60 billion was 1 percent below a year earlier, but 1 percent above the fourth quarter of 1999. Loan growth and higher levels of core deposits and equity did not fully offset the impact of asset securitizations and loan sales during 1999, spread compression and share repurchases.

Average managed loans and leases grew 9 percent to $406 billion, primarily reflecting a 19 percent increase in consumer loans and leases. Average domestic deposits grew by 2 percent, or $5.8 billion, to $295 billion. The net interest yield declined 31 basis points to 3.27 percent due to a higher level of lower-yielding trading-related assets and investment securities as well as spread compression and the cost of share repurchases.

Noninterest Income

Noninterest income increased 26 percent to $4.05 billion, reflecting the company's strategy to expand customer relationships through both traditional banking and other financial service products. Noninterest income rose to 47 percent of revenue from 41 percent a year earlier.

Trading profits were up 45 percent from last year's strong first quarter. Led by a 149 percent increase in securities underwriting fees, investment banking results rose 70 percent, reflecting the continuing benefits of the expansion of that platform begun last year.

Equity investment gains improved by $408 million, which included $219 million realized through sales and $189 million due to appreciation in fair value. Investment and brokerage services, corporate service charges and card income also improved significantly, as the company successfully pursued its strategy to gain more business through such value packages as Money Manager.

Securities gains were $6 million compared to $130 million in the first quarter of 1999.


Noninterest expense increased 4 percent to $4.62 billion, reflecting higher incentives associated with increased results as well as spending on projects to improve sales and service. These were somewhat offset by cost reductions resulting from recent mergers. Of the $201 million increase in personnel expense, $189 million was due to higher incentives. The efficiency ratio improved to 53 percent from 57 percent a year earlier.

Credit Quality

The provision for credit losses in the first quarter was $420 million, down from $510 million a year earlier. Net charge-offs were $420 million, down from $519 million a year ago. Net charge-offs were equal to an annualized .45 percent of loans and leases, a 13-basis-point improvement from a year ago.

Nonperforming assets were $3.48 billion, or .91 percent of loans, leases and foreclosed properties on March 31, 2000, compared to $3.12 billion, or .86 percent a year earlier. The allowance for credit losses totaled $6.83 billion on March 31, 2000, equal to 1.79 percent of loans and leases. The allowance was $7.12 billion, or 1.96 percent of loans and leases, a year earlier.

Capital Strength

Total shareholders' equity was $45.3 billion at March 31, 2000. This represented 6.90 percent of period-end assets of $656 billion.

In June 1999, the company initiated a share buyback program of up to 130 million shares. Through March 2000, 98 million shares had been repurchased, representing an investment in Bank of America stock of almost $6 billion. Average (diluted) common shares outstanding were 1.69 billion in the first quarter compared to 1.78 billion a year earlier.

Business Segment Results

Consumer and Commercial Banking, which serves individuals and businesses with annual sales of up to $500 million, earned $1.06 billion. This segment represented 47 percent of the company's net income.

Asset Management, which encompasses the private bank, trust, investment management, mutual funds and retail brokerage, earned $154 million, representing 7 percent of total net income.

Global Corporate and Investment Banking, which serves large corporate, institutional and government customers, earned $960 million, representing 43 percent of the company's earnings.

Bank of America is the largest bank in the United States. It has full- service operations in 21 states and the District of Columbia and provides financial products and services to 30 million households and two million businesses, as well as providing international corporate financial services for business transactions in 190 countries. The company's stock is listed on the New York, Pacific and London stock exchanges and certain shares are listed on the Tokyo Stock Exchange.

Bank of America Corporation

                                                     Three Months
                                                     Ended MARCH 31
                                                  2000           1999
    Financial Summary
    (In millions, except per-share data)

    Net income                                   $2,240        $1,914
     Earnings per common share                     1.34          1.10
     Diluted earnings per common share             1.33          1.08
    Cash basis earnings (A)                       2,457         2,136
     Cash basis earnings per common share          1.47          1.23
     Cash basis diluted earnings
      per common share                             1.46          1.20
    Dividends paid per common share                 .50           .45
    Price per share of common stock
      at period-end                               52.44         70.63
    Average common shares                     1,669.311     1,737.562
    Average diluted common shares             1,688.318     1,779.708

    Summary Income Statement
    (Taxable-equivalent basis in millions)

    Net interest income                          $4,595        $4,645
    Provision for credit losses                    (420)         (510)
    Gains on sales of securities                      6           130
    Noninterest income                            4,046         3,223
    Other noninterest expense                    (4,623)       (4,453)

    Income before income taxes                    3,604         3,035
    Income taxes - including FTE adjustment       1,364         1,121
    Net income                                   $2,240        $1,914

    SUMMARY Balance Sheet
    (Average balances in billions)

    Loans and leases                           $376.584      $360.746
    Managed loans and leases(B)                 405.526       371.302
    Securities                                   88.211        75.830
    Earning assets                              563.170       523.682
    Total assets                                651.019       609.624
    Deposits                                    345.374       345.931
    Shareholders' equity                         46.030        46.279
    Common shareholders' equity                  45.953        46.208


    Return on average common
     shareholders' equity                         19.59%       16.78%
    Return on average tangible
     common shareholders' equity                  30.83        27.44
    Return on average assets                       1.38         1.27
    Return on average tangible assets              1.55         1.46
    Net interest yield                             3.27         3.58
    Efficiency ratio                              53.49        56.59
    Cash basis efficiency ratio                   50.98        53.76
    Net charge-offs (in millions)                  $420         $519
     % of average loans and leases                  .45%         .58%
    Managed bankcard net charge-offs
     as a % of average managed
     bankcard receivables                          5.43         6.01

(A) Cash basis earnings equals net income excluding amortization

of goodwill and other intangible assets.

(B) Prior periods are restated for comparison (e.g. acquisitions,

divestitures and securitizations).

                                                        MARCH 31
                                                    2000       1999
    Balance Sheet highlights
    (In billions, except per share data)

    Loans and leases                              $382.085   $363.102
    Securities                                      83.851     78.469
    Earning assets                                 564.356    529.980
    Total assets                                   656.113    614.245
    Deposits                                       351.626    343.317
    Shareholders' equity                            45.299     46.831
    Common shareholders' equity                     45.222     46.761
     Per share                                       27.28      26.86

    Total equity to assets ratio
     (period-end)                                    6.90%      7.62%

    Risk-based capital
     Tier 1 capital ratio                             7.42      7.40
     Total capital ratio                             11.00     11.17

    Leverage ratio                                    6.17      6.47

    Common shares issued and
     outstanding (in millions)                   1,657.754  1,740.872

    Allowance for credit losses                     $6.827     $7.123
    Allowance for credit losses
     as a % of loans and leases                      1.79%      1.96%
    Allowance for credit losses
     as a % of nonperforming loans                  206.79     250.99
    Nonperforming loans                             $3.302     $2.838
    Nonperforming assets                             3.481      3.120
    Nonperforming assets as a % of:
     Total assets                                      .53%       .51%
     Loans, leases and foreclosed properties           .91        .86


    Full-time equivalent headcount                 152,948    166,422
    Banking centers                                  4,502      4,676
    ATMs                                            13,954     14,229

BUSINESS SEGMENT RESULTS - Three months ended MARCH 31, 2000

(In millions)

                                                     AVERAGE      RETURN ON
                            TOTAL         NET         LOANS        AVERAGE
                           REVENUE       INCOME     AND LEASES      EQUITY
    Consumer and
      Commercial Banking   $5,018        $1,060     $248,480         17.8%
    Asset Management          565           154       20,724         35.6
    Global Corporate and
      Investment Banking    2,900           960      107,507         26.0
    Other                     158            66        n/m            n/m

n/m = not meaningful

CONTACT: investors, Susan Carr, 704-386-8059, or Kevin Stitt, 704-386-5667, or media, Bob Stickler or Sharon Tucker, 704-386-8465, all of Bank of America Corporation/

Bank of America

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