EXHIBIT 99.1 FOR IMMEDIATE RELEASE January 19, 1999 Contact: Investors Susan Carr (704-386-8059) or Kevin Stitt (704-386-5667) Media Bob Stickler (704-386-8465) BANKAMERICA REPORTS FOURTH QUARTER OPERATING EARNINGS OF $1.6 BILLION; EARNS $6.5 BILLION FOR 1998 CHARLOTTE, NC, January 19, 1999 - BankAmerica Corporation today reported operating earnings of $1.60 billion, or $.92 ($.91 diluted) per share, for the fourth quarter of 1998. That compared to $1.68 billion, or $.96 ($.94 diluted) per share, a year earlier. Historical results reflect both the former BankAmerica and NationsBank corporations, which merged on September 30, 1998. The company recorded a $441 million after-tax charge to cover costs associated with the merger of NationsBank and BankAmerica. As a result, net income for the fourth quarter of 1998 was $1.16 billion, or $.67 ($.66 diluted) per share, compared to $1.46 billion, or $.84 ($.81 diluted) per share, a year earlier, when the company took an after-tax charge related to its merger with Barnett Banks of $220 million. "We enter 1999 with renewed momentum, having rebounded from the third quarter," said Hugh L. McColl, Jr., BankAmerica chairman and chief executive officer. "The major components of our business are reporting solid results. Our challenge now is to unlock the huge potential of the unmatched growth franchise we have built." more Page 2 For all of 1998, BankAmerica's operating earnings totaled $6.49 billion, or $3.73 per share ($3.64 diluted), compared to $6.81 billion, or $3.86 per share ($3.76 diluted), in 1997. Net income in 1998 was $5.17 billion, or $2.97 per share ($2.90 diluted), compared to $6.54 billion, or $3.71 per share ($3.61 diluted) a year earlier. Fourth Quarter Earnings (compared to a year ago) - ----------------------------------------------- While the company benefited from strong performance in its core consumer and commercial banking franchise, reduced revenues primarily from investment banking, trading and other market-related sources caused income to fall below the level of a year earlier. Operating earnings represented a 14.12 percent return on equity. Net Interest Income - ------------------- Taxable-equivalent net interest income increased 1 percent from a year earlier to $4.65 billion, as loan and deposit growth offset the impact of asset securitizations and loan sales and continued pressure on the company's margin. Average managed loans grew 11 percent to $382 billion, reflecting increases in both consumer and commercial loans. The net yield on earning assets declined by 27 basis points to 3.58 percent due to a higher level of investment securities and lower loan and deposit spreads. Noninterest Income - ------------------ Noninterest income declined 18 percent to $2.66 billion, as turbulence in the financial markets affected the company's capital markets businesses. The primary factors were a $286 million reduction in investment banking fees and a $255 million decline in other income from a year earlier. Credit card and brokerage registered healthy gains. At the same time, strong investor demand for U.S. Treasury securities led to a significant increase in the value of the company's securities portfolio. The company recorded realized securities gains of $404 million in the fourth quarter, up from $111 million a year earlier. more Page 3 D.E. Shaw - --------- The company significantly reduced its exposure to D.E. Shaw, a New York trading and investment company, during the fourth quarter and sharply reduced its losses derived from that relationship below third quarter levels. The company acquired a $20 billion fixed-income portfolio and related hedge positions from Shaw, effective October 7, 1998. More than $13 billion of that portfolio was liquidated. Another $6 billion was absorbed into the company's trading portfolio because the securities were attractive and met the company's portfolio strategies and risk parameters. The company now considers those positions as part of its operations and does not anticipate reporting on them separately in the future. Trading losses incurred from the fixed-income portfolio and related hedge positions acquired from Shaw totaled $43 million during the fourth quarter. As previously reported, the company is carrying the original loan to Shaw as an investment on its books and marking it to market value each quarter. During the fourth quarter, the company marked down the investment by $158 million, mainly as a result of trading losses early in the quarter and, to a lesser extent, expenses connected with the restructuring of the strategic alliance. In addition, Shaw made a regularly scheduled $100 million repayment. As a result of the revaluation and repayment, the investment was valued at $770 million on December 31, 1998, down from approximately $1 billion on September 30. The $43 million in trading losses and $158 million markdown in the company's investment meant the total impact on the company from the Shaw relationship in the fourth quarter was a pre-tax loss of $201 million, equal to $.07 per diluted share. Efficiency - ---------- Noninterest expense decreased 1 percent to $4.69 billion, reflecting cost reductions resulting from recent mergers somewhat offset by continued spending on transition projects associated with the merger of NationsBank and BankAmerica. Personnel expenses dropped by more than 2 percent, and other operating expenses were generally flat. more Page 4 Credit Quality - -------------- Nonperforming assets were $2.76 billion, or .77 percent of net loans, leases and foreclosed properties on December 31, 1998, up from $2.42 billion, or .71 percent a year earlier. The allowance for credit losses totaled $7.12 billion on December 31, 1998, equal to 287 percent of nonperforming loans and 1.99 percent of net loans and leases. The allowance was $6.78 billion, or 1.98 percent of net loans and leases, a year earlier. The provision for credit losses in the fourth quarter was $510 million, up from $498 million a year earlier. Net charge-offs rose to $544 million, equal to an annualized .60 percent of average net loans and leases, from $491 million, or .58 percent, a year earlier. Full-Year Earnings - ------------------ Results for the year also reflected solid gains in the company's core consumer and commercial banking businesses offset by the impact of volatile financial markets on the corporate banking and capital markets businesses as well as higher credit costs. Taxable-equivalent net interest income declined less than 1 percent to $18.46 billion, as an 8 percent increase in average managed loans was offset by a 31 basis point reduction in the company's net yield on earning assets. Noninterest income rose 4 percent to $12.19 billion. Investment banking, which included results from investment banking units acquired late in 1997, credit card and brokerage registered significant year-over-year gains which were somewhat offset by lower trading results. Noninterest expense increased 6 percent, reflecting the addition of NationsBanc Montgomery Securities which was acquired on October 1, 1997 and Robertson Stephens, acquired in the fourth quarter of 1997, and spending on transition projects. more Page 5 The provision for credit losses was $2.92 billion, up from $1.90 billion a year earlier. Net charge-offs rose to $2.47 billion, equal to an annualized .71 percent of average net loans and leases, from $1.85 billion, or .54 percent, a year earlier. Capital Strength - ---------------- Total shareholders' equity was $45.9 billion at December 31, 1998. This represented 7.44 percent of period-end assets, compared to 7.81 percent on December 31, 1997. Book value per common share rose 4 percent to $26.60 at December 31, 1998, from a year earlier. BankAmerica Corporation, with $618 billion in total assets, is the largest bank in the United States. It has full-service operations in 22 states and the District of Columbia and provides financial products and services to 30 million households and 2 million businesses, as well as providing international corporate financial services for business transactions in 190 countries. BankAmerica Corporation stock (ticker: BAC) is listed on the New York, Pacific and London stock exchanges and certain shares are listed on the Tokyo Stock Exchange. www.nationsbank.com www.bankamerica.com BANKAMERICA CORPORATION