Bank Of America Reports Record Third Quarter Earnings

Charlotte, N.C. (PROTEXT) - Bank of America Corporation (NYSE: BAC), whose stock is traded on the Tokyo Exchange, today reported record third quarter earnings of $2.15 billion, or $1.25 per share ($1.23 diluted). Results far surpassed the $374 million, or $.21 per share ($.21 diluted), earnings of a year earlier that were impacted by global financial turbulence. Excluding a $725 million pre-tax merger-related charge, operating earnings a year ago were $893 million, or $.51 per share ($.50 diluted). Diluted operating earnings per share were up 7 percent from the second quarter of this year. The company's return on equity rose to 18.40 percent in the third quarter, and the return on assets increased to 1.40 percent. Cash operating earnings - which exclude the amortization of intangibles and merger-related charges - were $2.37 billion, or $1.38 per share ($1.35 diluted). The return on tangible equity was 29.48 percent. A year earlier, cash operating earnings were $1.12 billion, or $.64 per share ($.63 diluted). "Bank of America made solid progress during the third quarter," said Hugh L. McColl Jr., chairman and chief executive officer. "Our merger transition continues to go smoothly and remains on schedule. We are successfully building out our investment banking platform and delivering those services to our huge middle market customer base. And we are refocusing a number of our businesses to achieve greater value for customers and higher profitability for shareholders. We are accomplishing all of these initiatives while increasing earnings and improving returns." For the first nine months of 1999, operating earnings were up 25 percent to $6.13 billion, or $3.53 per share ($ 3.45 diluted) compared to $4.89 billion, or $2.81 per share ($2.73 diluted) a year earlier. Net income was 49 percent higher at $5.98 billion, or $3.45 per share ($3.37 diluted), compared to $4.00 billion, or $2.30 per share ($2.24 diluted), a year earlier. Third Quarter Earnings Highlights (compared to a year ago) * Revenue rose 21 percent, as noninterest income increased 55 percent and fully-taxable equivalent net interest income was up 3 percent. * Average managed consumer loans increased by 17 percent. * Fee-based income recorded strong improvement in almost all areas and rose to 45 percent of revenue. * The efficiency ratio improved to 54 percent. * Net charge-offs declined to .51 percent of loans. Net Interest Income Fully taxable-equivalent net interest income of $4.60 billion was 3 percent higher than a year earlier due to solid loan growth, somewhat offset by the impact of securitizations, loan sales and the funding cost of share repurchases. The net interest yield on earning assets was 3.46 percent compared to 3.60 percent a year earlier. Noninterest Income Noninterest income increased 55 percent to $3.73 billion due to widespread gains across the spectrum of Bank of America's fee- based businesses. The primary gains were recorded in credit card, trading, investment banking, mortgage banking and service charge income. Fee income rose to 45 percent of revenue. Securities gains were $44 million compared to $280 million in the third quarter of 1998. Efficiency Noninterest expense declined 1 percent to $4.53 billion, reflecting cost savings resulting from recent mergers offset by increased revenue-based incentives, accelerated spending on merger transition projects and continued expansion of the investment banking business. The efficiency ratio improved to 54 percent. Credit Quality The provision for credit losses in the third quarter was $450 million, compared to $1.4 billion a year earlier. Net charge-offs were $460 million, well below $902 million a year ago which included a $372 million charge-off related to the D.E. Shaw relationship. Net charge-offs represented .51 percent of loans and leases in the latest period. Nonperforming assets were $3.04 billion, or .84 percent of loans, leases and foreclosed properties on September 30, 1999, compared to $2.58 billion, or .73 percent a year earlier. The allowance for credit losses totaled $7.08 billion on September 30, 1999, equal to 252 percent of nonperforming loans and 1.96 percent of loans and leases. The allowance was $7.21 billion, or 315 percent of nonperforming loans and 2.05 percent of loans and leases, a year earlier. Capital Strength Shareholders' equity stood at $45.9 billion at September 30, 1999. The Tier 1 capital ratio was 7.71 percent. The company's market capitalization was $95 billion. On June 23, the company authorized the repurchase of up to 130 million common shares over 24 months, with an expectation to complete the program within 18 months. Through September 30, the company had purchased 43 million shares. Business Segment Results Consumer Banking, which serves individuals and small businesses, earned $1.10 billion, while Commercial Banking, which serves companies with from $10 million to $500 million in revenue, earned $216 million. Together, they represented 61 percent of the company's operating income. Global Corporate and Investment Banking, which serves large corporate customers, earned $530 million, representing 25 percent of the company's earnings. Principal Investing and Asset Management, which encompasses the private bank, trust, investment management, mutual funds, retail brokerage and principal investing, earned $244 million, representing 11 percent. Bank of America, with $621 billion in assets, is the largest bank in the United States. The company serves more than 30 million households and 2 million businesses across the country, offering customers the largest and most convenient delivery network from offices and ATMs to telephone and internet access. It also provides comprehensive international corporate financial services for clients doing business around the world. The company creates financial relationships featuring a wide array of financial services, from traditional banking products to investments and capital raising within the securities markets. Bank of America stock (ticker: BAC) is listed on the New York, Pacific and London stock exchanges and certain shares are listed on the Tokyo Stock Exchange. Further investor information can be found at www.bankofamerica.com/investor . www.bankofamerica.com Bank of America Corporation Three Months Nine Months Ended September 30 Ended September 30 1999 1998 1999 1998 Financial Summary (In millions, except per-share data) Operating net income $2,151 $893 $6,125 $4,887 Operating earnings per common share 1.25 .51 3.53 2.81 Diluted operating earnings per common share 1.23 .50 3.45 2.73 Cash basis earnings (A) 2,373 1,117 6,794 5,566 Cash basis earnings per common share 1.38 .64 3.91 3.20 Cash basis diluted earnings per common share 1.35 .63 3.83 3.11 Dividends paid per common share .45 .38 1.35 1.14 Price per share of common stock at period end 55.69 53.50 55.69 53.50 Average common shares 1,722.307 1,740.092 1,734.401 1,732.297 Average diluted common shares 1,755.146 1,784.418 1,773.692 1,782.106 Summary Income Statement (Operating Basis) (Taxable-equivalent basis in millions) Net interest income $4,603 $4,484 $13,911 $13,811 Provision for credit losses (450) (1,405) (1,470) (2,410) Gains on sales of securities 44 280 226 613 Noninterest income 3,728 2,405 10,473 9,534 Other noninterest expense (4,526) (4,583) (13,436)(14,054) Income before income taxes 3,399 1,181 9,704 7,494 Income taxes - including FTE adjustment 1,248 288 3,579 2,607 Operating net income $2,151 $893 $6,125 $4,887 SUMMARY Balance Sheet (Average balances in billions) Loans and leases $361.400 $348.785 $362.302 $344.539 Managed loans and leases(B) 387.580 356.396 387.305 353.394 Securities 80.261 65.536 77.998 64.791 Earning assets 528.564 495.911 527.450 493.900 Total assets 611.448 578.353 612.152 577.055 Deposits 336.998 347.783 341.693 343.369 Shareholders' equity 46.439 45.756 46.537 44.755 Common shareholders' equity 46.360 45.693 46.464 44.291 PERFORMANCE INDICES (Operating Basis) Return on average common shareholders' equity 18.40% 7.73% 17.61% 14.68% Return on average tangible common shareholders' equity 29.48 14.51 28.48 25.69 Return on average assets 1.40 .61 1.34 1.13 Return on average tangible assets 1.58 .79 1.52 1.33 Net interest yield 3.46 3.60 3.52 3.74 Efficiency ratio 54.34 66.55 55.10 60.20 Cash basis efficiency ratio 51.67 63.28 52.36 57.29 Net charge-offs (in millions) $460 $902 $1,499 $1,923 % of average loans and leases .51% 1.03% .55% .75% Managed bankcard net charge-offs as a % of average managed bankcard receivables 4.83 5.99 5.66 6.42 REPORTED RESULTS (Including Merger-Related Charges) (In millions, except per-share data) Net income $2,151 $374 $5,980 $4,003 Earnings per common share 1.25 .21 3.45 2.30 Diluted earnings per common share 1.23 .21 3.37 2.24 Return on average common shareholders' equity 18.40 3.23 17.19 12.01 (A) Cash basis earnings equal operating net income excluding amortization of intangibles. (B) Prior periods are restated for comparison (e.g. acquisitions, divestitures and securitizations). September 30 1999 1998 Balance Sheet highlights (In billions, except per-share data) Loans and leases $360.236 $351.982 Securities 79.836 72.139 Earning assets 534.431 507.329 Total assets 620.652 594.673 Deposits 337.011 345.756 Shareholders' equity 45.889 47.307 Common shareholders' equity 45.811 47.245 Per share 26.79 27.12 Total equity to assets ratio (period-end) 7.39% 7.96% Risk-based capital Tier 1 capital ratio 7.71 7.29 Total capital ratio 11.39 11.25 Leverage ratio 6.59 6.64 Common shares issued and outstanding (in millions) 1,710.039 1,742.038 Allowance for credit losses $7.076 $7.215 Allowance for credit losses as a % of loans and leases 1.96% 2.05% Allowance for credit losses as a % of nonperforming loans 251.85 314.55 Nonperforming loans $2.810 $2.294 Nonperforming assets 3.038 2.582 Nonperforming assets as a % of: Total assets .49% .43% Loans, leases and foreclosed properties .84 .73 OTHER DATA Full-time equivalent headcount 158,886 174,844 Banking centers 4,535 4,870 ATMs 14,042 14,333 BUSINESS SEGMENT RESULTS - Three months ended September 30, 1999 (In millions) OPERATING AVERAGE RETURN ON TOTAL NET LOANS AVERAGE REVENUE INCOME AND LEASES EQUITY Consumer Banking $4,657 $1,097 $182,732 22% Commercial Banking 780 216 56,653 20 Global Corporate and Investment Banking 1,989 530 103,318 16 Principal Investing and Asset Management 802 244 19,061 31 Additional financial information for investors can be found at http://www.bankofamerica.com/newsroom/press/images/3q99fact.pd f ots Original Text Service: Bank of America Corporation Internet: http://www.newsaktuell.de 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 Bank of America Corporation Web Site: http://www.bankofamerica.com/investor Web Site: http://www.bankofamerica.com Subscribers please note that material bearing the slug "PROTEXT" is not part of CTK's news service and is not to be published under the "CTK" slug. 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