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
THREE MONTHS TWELVE MONTHS ENDED DECEMBER 31 ENDED DECEMBER 31 ----------------- ------------------ 1998 1997 1998 1997 ------ ------ ------ ------ FINANCIAL SUMMARY ----------------- (In millions except per-share data) Operating net income $1,603 $1,679 $6,490 $6,806 Operating earnings per common share .92 .96 3.73 3.86 Diluted operating earnings per common share .91 .94 3.64 3.76 Cash basis earnings (1) 1,825 1,903 7,391 7,661 Cash basis earnings per common share 1.05 1.09 4.25 4.36 Cash basis diluted earnings per common share 1.04 1.06 4.15 4.24 Dividends paid per common share .45 .38 1.59 1.37 Price per share of common stock at period end 60.13 60.81 60.13 60.81 Average common shares 1,731.314 1,723.404 1,732.057 1,733.194 Average diluted common shares 1,763.055 1,774.572 1,775.760 1,782.172 SUMMARY INCOME STATEMENT (Operating Basis) ------------------------ (Taxable-equivalent in millions) Net interest income $4,650 $4,598 $18,461 $18,589 Provision for credit losses (510) (498) (2,920) (1,904) Gains on sales of securities 404 111 1,017 271 Noninterest income 2,655 3,225 12,189 11,756 Other noninterest expense (4,687) (4,736) (18,741) (17,625) Income before income taxes 2,512 2,700 10,006 11,087 Income taxes - including FTE adjustment 909 1,021 3,516 4,281 Operating net income $1,603 $1,679 $6,490 $6,806 SUMMARY BALANCE SHEET --------------------- (Average balances in billions) Loans and leases, net $357.636 $337.881 $347.840 $343.151 Managed loans and leases, net (2) 381.853 342.758 371.183 344.003 Securities 72.302 60.724 66.684 48.269 Earning assets 517.066 474.321 499.739 464.962 Total assets 606.541 556.595 584.487 543.796 Deposits 351.766 338.331 345.485 336.883 Shareholders' equity 45.051 43.807 44.829 43.610 Common shareholders' equity 44.989 42.947 44.467 42.151 PERFORMANCE INDICES (Operating Basis) ------------------- Return on average common shareholders' equity 14.12% 15.36% 14.54% 15.88% Return on average tangible common shareholders' equity 23.97 27.59 25.24 27.77 Return on average assets 1.05 1.20 1.11 1.25 Return on average tangible assets 1.22 1.40 1.30 1.45 Net interest yield 3.58 3.85 3.69 4.00 Efficiency ratio 64.16 60.55 61.15 58.08 Cash basis efficiency ratio 61.12 57.69 58.20 55.27 Net charge-offs (in millions) $544 $491 $2,467 $1,851 % of average loans and leases, net .60% .58% .71% .54% Managed credit card net charge-offs as a % of average managed credit card receivables 5.83 6.58 6.27 6.19 REPORTED RESULTS (Including Merger and Restructuring Items) ---------------- (In millions except per-share data) Net income $1,162 $1,459 $5,165 $6,542 Earnings per common share .67 .84 2.97 3.71 Diluted earnings per common share .66 .81 2.90 3.61 Return on average common shareholders' equity 10.23 13.33 11.56 15.26
(1) Cash basis earnings equal operating net income excluding amortization of intangibles. (2) Prior periods are restated for comparison (e.g. acquisitions, divestitures and securitizations). (3) Ratios and amounts for 1997 have not been restated to reflect the impact of the Barnett Banks, Inc. and BankAmerica mergers.
DECEMBER 31 1998 1997 ------ ------ BALANCE SHEET HIGHLIGHTS ------------------------ (In billions except per-share data) Loans and leases, net $357.328 $342.140 Securities 80.587 67.031 Earning assets 525.149 479.763 Total assets 617.679 570.983 Deposits 357.260 346.297 Shareholders' equity 45.938 44.584 Common shareholders' equity 45.866 43.907 Per share 26.60 25.49 Total equity to assets ratio (period-end) 7.44% 7.81% Risk-based capital(3) Tier 1 capital ratio 7.06 6.50 Total capital ratio 10.94 10.89 Leverage ratio(3) 6.22 5.57 Common shares issued (in millions) 1,724.484 1,722.538 Allowance for credit losses $7.122 $6.778 Allowance for credit losses as a % of net loans and leases 1.99% 1.98% Allowance for credit losses as a % of nonperforming loans 287.01 321.03 Nonperforming loans $2.482 $2.111 Nonperforming assets 2.764 2.420 Nonperforming assets as a % of: Total assets .45% .42% Net loans, leases and foreclosed properties .77 .71 OTHER DATA Full-time equivalent headcount 170,975 181,265 Banking centers 4,708 5,104 ATMs 14,327 14,867
BUSINESS SEGMENT RESULTS - Three months ended DECEMBER 31, 1998 ------------------------- (In millions)
OPERATING AVERAGE RETURN ON TOTAL NET LOANS RISK ADJUSTED REVENUE INCOME & LEASES, NET TANGIBLE EQUITY -------- --------- ------------- --------------- Consumer Banking $4,530 $926 $174,673 28% Commercial Banking 654 184 52,844 22 Global Corporate and Investment Banking 1,505 114 113,267 6 Wealth Management and Principal Investing Group 545 60 17,089 10
1998 Quarters ----------------------------------- Fourth Third Second First ------- ------ ------- ------ Net Income $1,162 $374 $2,298 $1,331 Net Income (excluding merger and restructuring items) 1,603 893 2,021 1,973 Earnings per common share .67 .21 1.32 .77 Earnings per common share (excluding merger and restructuring items) .92 .51 1.16 1.14 Diluted earnings per common share .66 .21 1.28 .75 Diluted earnings per common share (excluding merger and restructuring items) .91 .50 1.13 1.11
1997 Quarters ------------------------------------ Fourth Third Second First ------- ------ ------ ------ Net Income $1,459 $1,730 $1,718 $1,635 Net Income (excluding merger and restructuring items) 1,679 1,774 1,718 1,635 Earnings per common share .84 .99 .97 .91 Earnings per common share (excluding merger and restructuring items) .96 1.02 .97 .91 Diluted earnings per common share .81 .96 .94 .89 Diluted earnings per common share (excluding merger and restructuring items) .94 .99 .94 .89