BankAmerica Earns $1.9 Billion, or $1.08 Per Diluted

BankAmerica Corporation (NYSE: BAC), whose stock is traded on the Tokyo Exchange, today reported net income of $1.91 billion, or $1.10 ($1.08 diluted) per share, for the first quarter of 1999, a 44 percent increase from net income of $1.33 billion, or $.77 ($.75 diluted) per share, a year earlier. The first quarter a year ago included a merger- related charge of $642 million after tax. Excluding that charge, operating income a year ago was $1.97 billion, or $1.14 ($1.11 diluted) per share. First quarter 1999 earnings grew significantly from fourth quarter 1998 operating earnings of $1.60 billion, or $.92 ($.91 diluted) per share. The return on common equity was 16.8 percent and the return on assets was 1.27 percent. Cash earnings -- which exclude the amortization of intangibles -- were $2.14 billion, or $1.23 ($1.20 diluted) per share in the latest quarter. Return on average tangible common shareholders' equity was 27.4 percent. "We are pleased with our first quarter results, which include continued strong performance in Consumer Banking and a significant improvement in Global Corporate and Investment Banking," said Hugh L. McColl, Jr., BankAmerica chairman and chief executive officer. "Our merger transition is on track, and we expect the benefits of lower costs and enhanced revenue opportunities to positively impact earnings in the coming quarters." First Quarter Earnings (compared to a year ago) Lower expenses - primarily due to merger-related savings - stronger trading results and continued solid loan growth were offset by lower other income, investment banking revenue and securities gains. Net Interest Income Fully taxable-equivalent net interest income of $4.65 billion was virtually unchanged from a year earlier, as loan and deposit growth and deposit pricing initiatives offset the impact of asset securitizations, loan sales and spread compression. Average managed loans grew 11 percent to $385 billion, reflecting increases in both consumer and business loans. The net yield on earning assets declined by 23 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 8 percent to $3.22 billion, reflecting lower other income and investment banking revenue. Trading results were up from last year's strong performance. Credit card income and deposit fees also rose. Investment banking results, despite continuing improvements over recent quarters, remained below last year's strong performance. Securities gains of $130 million were significantly below the $213 million recorded in the first quarter of 1998. Efficiency Noninterest expense decreased by more than 5 percent to $4.45 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 expense dropped by more than 4 percent, and other operating expenses were also reduced. The efficiency ratio was 57 percent, an improvement from 58 percent a year earlier. Credit Quality The provision for credit losses in the first quarter was $510 million, the same as a year earlier. Net charge-offs remained virtually flat from a year ago at $519 million, equal to .58 percent of loans and leases, a 3-basis-point improvement from a year ago. Nonperforming assets were $3.12 billion, or .86 percent of loans, leases and foreclosed properties on March 31, 1999, compared to $2.69 billion, or .79 percent a year earlier. The allowance for credit losses totaled $7.12 billion on March 31, 1999, equal to 251 percent of nonperforming loans and 1.96 percent of loans and leases. The allowance was $6.76 billion, or 1.98 percent of loans and leases, a year earlier. Capital Strength Total shareholders' equity rose 4 percent to $46.8 billion at March 31, 1999. This represented 7.62 percent of period-end assets, compared to 7.77 percent on March 31, 1998. Book value per common share rose 4 percent from a year earlier to $26.86 at March 31, 1999. Business Segment Results Consumer Banking, which serves individuals and small businesses, earned $873 million, while Commercial Banking, which serves companies with from $10 million to $500 million in revenue, earned $197 million. Together, they represented 56 percent of the company's net income. Global Corporate and Investment Banking, which serves large corporate customers, earned $492 million, representing 26 percent of the company's earnings. Principal Investing and Wealth Management, which encompasses the private bank, trust, investment management, mutual funds, retail brokerage and principal investing, earned $209 million, representing 11 percent. BankAmerica Corporation, with $614 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. ots Original Text Service: BankAmerica Corporation Internet: Contact: Investors, Susan Carr, (USA) 704-386-8059, or Kevin Stitt, (USA) 704-386-5667, or Media, Bob Stickler or Rick Beebe, (USA) 704- 386-8465, all of BankAmerica Corporation Web Site: Web Site: Web Site: Web Site:


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