Exhibit 99.1
Index | ||
2005/2004 Unaudited Pro Forma Condensed Combined Financial Information | 1 | |
2005 Unaudited Condensed Combined Balance Sheet | 2 | |
2005 Unaudited Condensed Combined Statements of Income | 3 | |
2004 Unaudited Condensed Combined Statements of Income | 7 | |
Note 1 - Basis of Pro Forma Presentation | 10 | |
Note 2 - Pro Forma Adjustments | 11 | |
Note 3 - Reclassification | 14 | |
Note 4 - Realignment of Bank of America Business Segments | 15 | |
Note 5 - Pro Forma Segment Financial Information | 36 | |
Pro Forma Consolidated Income Statement | 37 | |
Pro Forma Net Income by Segment and Sub Segments | 38 | |
Pro Forma Revenue by Segment and Sub Segments | 39 | |
Summary by Segment | 40 | |
Global Consumer and Small Business Banking | 41 | |
Global Corporate and Investment Banking | 50 | |
Global Wealth and Investment Management | 58 | |
Key Indicators - Overall | 65 | |
Global Consumer and Small Business Banking: Card Services (Held to Managed) | 66 |
UNAUDITED PRO FORMA CONDENSED
COMBINED FINANCIAL INFORMATION
The FleetBoston Financial Corporation (“FleetBoston”) Merger agreement (the “FleetBoston Merger”) was announced on October 27, 2003 and was effective April 1, 2004. Accordingly, the financial results of FleetBoston are included in the historical financial statements for Bank of America Corporation (the “Corporation”) beginning on April 1, 2004.
The MBNA Corporation (“MBNA”) Merger agreement (the “MBNA Merger”) was announced on June 30, 2005 and provided for each outstanding share of MBNA common stock to be converted into the right to receive 0.5009 shares of the Corporation’s common stock plus a cash component of $4.125 per share. The financial results of MBNA will be included in the financial statements for the Corporation beginning January 1, 2006.
The following Unaudited Pro Forma Condensed Combined Financial Information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the periods presented and had the impact of possible revenue enhancements, expense efficiencies, asset dispositions and share repurchases, among other factors, been considered. The Unaudited Pro Forma Condensed Combined Financial Information is not defined by accounting principles generally accepted in the United States (GAAP). However, as a result of the Mergers, we believe that the Unaudited Pro Forma Condensed Combined Financial Information will provide a more useful year-to-year comparison in future periods versus comparing to the Corporation’s historical financial information.
For 2004, the Unaudited Pro Forma Condensed Combined Financial Information and explanatory notes present how the merger of the Corporation, FleetBoston, and MBNA, herein referred to collectively as “the Mergers,” may have appeared had the businesses actually been combined at the beginning of 2004 under the purchase method of accounting with the Corporation treated as the acquirer. The Unaudited Pro Forma Condensed Combined Statement of Income for the year ended December 31, 2004 was prepared assuming the Mergers were completed on January 1, 2004.
For 2005, the Unaudited Pro Forma Condensed Combined Financial Information and explanatory notes present how the merger of the Corporation and MBNA may have appeared had the businesses actually been combined at the beginning of 2005 under the purchase method of accounting with the Corporation treated as the acquirer. The Unaudited Pro Forma Condensed Combined Balance Sheet as of December 31, 2005 includes the assets and liabilities of MBNA at their estimated fair values. The Unaudited Pro Forma Condensed Combined Statement of Income for the year ended December 31, 2005 gives effect to the MBNA Merger as if the MBNA Merger had been completed on January 1, 2005.
The Unaudited Pro Forma Condensed Combined Financial Information has been derived from and should be read in conjunction with the historical consolidated financial statements and the related notes of the Corporation, FleetBoston and MBNA.
1
Bank of America/MBNA
Pro Forma Condensed Combined Balance Sheet
(Unaudited)
The following unaudited pro forma condensed combined balance sheet combines the historical balance sheets of Bank of America and MBNA assuming the companies had been combined on December 31, 2005, on a purchase accounting basis.
December 31, 2005 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Assets | ||||||||||||||||
Cash and cash equivalents | $ | 36,999 | $ | 1,710 | $ | (5,198 | )(A) | $ | 33,511 | |||||||
Time deposits placed and other short-term investments | 12,800 | 1,028 | — | 13,828 | ||||||||||||
Federal funds sold and securities purchased under agreements to resell | 149,785 | — | — | �� | 149,785 | |||||||||||
Trading account assets | 131,707 | — | — | 131,707 | ||||||||||||
Derivative assets | 23,712 | 238 | — | 23,950 | ||||||||||||
Securities | 221,603 | 5,790 | (10 | )(B) | 227,383 | |||||||||||
Loans and leases | 573,791 | 37,507 | (529 | )(C) | 610,769 | |||||||||||
Allowance for loan and lease losses | (8,045 | ) | (837 | ) | 259 | (C) | (8,623 | ) | ||||||||
Loans and leases, net of allowance | 565,746 | 36,670 | (270 | ) | 602,146 | |||||||||||
Premises and equipment, net | 7,786 | 2,448 | (588 | )(D) | 9,646 | |||||||||||
Mortgage servicing rights | 2,806 | 9 | — | 2,815 | ||||||||||||
Goodwill | 45,354 | 440 | 20,293 | (E) | 66,087 | |||||||||||
Core deposit intangibles and other intangibles | 3,194 | 3,124 | 4,917 | (F) | 11,235 | |||||||||||
Other assets | 90,311 | 10,405 | (816 | )(G) | 99,900 | |||||||||||
Total assets | $ | 1,291,803 | $ | 61,862 | $ | 18,328 | $ | 1,371,993 | ||||||||
Liabilities | ||||||||||||||||
Deposits in domestic offices: | ||||||||||||||||
Noninterest-bearing | $ | 179,571 | $ | 2,840 | $ | — | $ | 182,411 | ||||||||
Interest-bearing | 384,155 | 24,245 | 100 | (H) | 408,500 | |||||||||||
Deposits in foreign offices: | — | |||||||||||||||
Noninterest-bearing | 7,165 | 423 | — | 7,588 | ||||||||||||
Interest-bearing | 63,779 | 1,153 | — | 64,932 | ||||||||||||
Total deposits | 634,670 | 28,661 | 100 | 663,431 | ||||||||||||
Federal funds purchased and securities sold under agreements to repurchase | 240,655 | 785 | — | 241,440 | ||||||||||||
Trading account liabilities | 50,890 | — | — | 50,890 | ||||||||||||
Derivative liabilities | 15,000 | 324 | — | 15,324 | ||||||||||||
Commercial paper and other short-term borrowings | 116,269 | 1,945 | 3 | (I) | 118,217 | |||||||||||
Accrued expenses and other liabilities | 31,938 | 3,039 | 1,854 | (J) (K) | 36,831 | |||||||||||
Long-term debt | 100,848 | 13,698 | 404 | (L) | 114,950 | |||||||||||
Total liabilities | 1,190,270 | 48,452 | 2,361 | 1,241,083 | ||||||||||||
Shareholders’ equity | ||||||||||||||||
Preferred stock | 271 | — | — | 271 | ||||||||||||
Common stock and additional paid-in capital | 41,693 | 1,473 | 27,904 | (M) | 71,070 | |||||||||||
Retained earnings | 67,552 | 11,665 | (11,665 | )(M) | 67,552 | |||||||||||
Accumulated other comprehensive income (loss) | (7,556 | ) | 272 | (272 | )(M) | (7,556 | ) | |||||||||
Other | (427 | ) | — | — | (427 | ) | ||||||||||
Total shareholders’ equity | 101,533 | 13,410 | 15,967 | 130,910 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 1,291,803 | $ | 61,862 | $ | 18,328 | $ | 1,371,993 | ||||||||
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Information.
2
Bank of America/MBNA
Pro Forma Condensed Combined Statement of Income
Total Corporation
(unaudited)
The following pro forma combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the year ended December 31, 2005 | ||||||||||||||
($ in millions, except per share information) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||
Net interest income | $ | 30,737 | $ | 2,785 | $ | 507 | (C) (H) (I) (L) (N) | $ | 34,029 | |||||
Noninterest income | ||||||||||||||
Service charges | 7,704 | 1 | — | 7,705 | ||||||||||
Investment and brokerage services | 4,184 | — | — | 4,184 | ||||||||||
Mortgage banking income | 805 | 36 | — | 841 | ||||||||||
Investment banking income | 1,856 | — | — | 1,856 | ||||||||||
Equity investment gains | 2,040 | — | — | 2,040 | ||||||||||
Card income | 5,753 | 7,096 | (72 | )(N) (O) | 12,777 | |||||||||
Trading account profits | 1,763 | (25 | ) | — | 1,738 | |||||||||
Other income | 1,249 | 257 | — | 1,506 | ||||||||||
Total noninterest income | 25,354 | 7,365 | (72 | ) | 32,647 | |||||||||
Total revenue | 56,091 | 10,150 | 435 | 66,676 | ||||||||||
Provision for credit losses | 4,014 | 1,001 | 67 | (P) | 5,082 | |||||||||
Gains on sales of debt securities | 1,084 | — | — | 1,084 | ||||||||||
Noninterest expense | ||||||||||||||
Personnel | 15,054 | 2,255 | — | 17,309 | ||||||||||
Occupancy | 2,588 | 174 | (14 | )(D) | 2,748 | |||||||||
Equipment | 1,199 | 203 | 50 | (Q) | 1,452 | |||||||||
Marketing | 1,255 | 986 | 206 | (R) | 2,447 | |||||||||
Professional fees | 930 | 195 | — | 1,125 | ||||||||||
Amortization of intangibles | 809 | 465 | 538 | (F) | 1,812 | |||||||||
Data processing | 1,487 | 298 | — | 1,785 | ||||||||||
Telecommunications | 827 | 78 | — | 905 | ||||||||||
Other general operating | 4,120 | 995 | (287 | )(P) (R) | 4,828 | |||||||||
Merger and restructuring charges | 412 | 767 | — | 1,179 | ||||||||||
Total noninterest expense | 28,681 | 6,416 | 493 | 35,590 | ||||||||||
Income before income taxes | 24,480 | 2,733 | (125 | ) | 27,088 | |||||||||
Income tax expense | 8,015 | 962 | (46 | )(S) | 8,931 | |||||||||
Net income | $ | 16,465 | $ | 1,771 | $ | (79 | ) | 18,157 | ||||||
Net income available to common shareholders | 16,447 | 1,752 | (79 | ) | 18,120 | |||||||||
Earnings per share | 4.10 | 1.39 | 3.90 | |||||||||||
Diluted earnings per share | 4.04 | 1.37 | 3.86 | |||||||||||
Merger and restructuring charges, net of tax benefit | 275 | 496 | — | 771 | ||||||||||
Operating earnings | 16,740 | 2,267 | (79 | ) | 18,928 | |||||||||
Operating earnings available to common shareholders | 16,722 | 2,248 | (79 | ) | 18,891 | |||||||||
Operating diluted earnings per share | 4.11 | 1.76 | 4.01 | |||||||||||
Impact of merger and restructuring charges, net of tax benefit | $ | 0.07 | $ | 0.39 | $ | — | $ | 0.15 | ||||||
Average common shares issued and outstanding (in thousands) | 4,008,688 | 1,263,875 | (630,800 | )(T) | 4,641,763 | |||||||||
Average diluted common shares issued and outstanding (in thousands) | 4,068,140 | 1,275,396 | (636,550 | )(T) | 4,706,986 |
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Information.
3
Bank of America/MBNA
Pro Forma Condensed Combined Statement of Income
Total Corporation
(unaudited)
The following pro forma combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended March 31, 2005 | ||||||||||||||
($ in millions, except per share information) | Bank of America (restated) | MBNA | MBNA Pro Forma | Combined | ||||||||||
Net interest income | $ | 7,506 | $ | 671 | $ | 164 | (C) (H) (I) (L) (N) | $ | 8,341 | |||||
Noninterest income | ||||||||||||||
Service charges | 1,777 | — | — | 1,777 | ||||||||||
Investment and brokerage services | 1,013 | — | — | 1,013 | ||||||||||
Mortgage banking income | 221 | 8 | — | 229 | ||||||||||
Investment banking income | 366 | — | — | 366 | ||||||||||
Equity investment gains | 399 | — | — | 399 | ||||||||||
Card income | 1,289 | 1,716 | (7 | )(N) (O) | 2,998 | |||||||||
Trading account profits | 685 | (16 | ) | — | 669 | |||||||||
Other income | 282 | 42 | — | 324 | ||||||||||
Total noninterest income | 6,032 | 1,750 | (7 | ) | 7,775 | |||||||||
Total revenue | 13,538 | 2,421 | 157 | 16,116 | ||||||||||
Provision for credit losses | 580 | 287 | 15 | (P) | 882 | |||||||||
Gains on sales of debt securities | 659 | — | — | 659 | ||||||||||
Noninterest expense | ||||||||||||||
Personnel | 3,701 | 519 | — | 4,220 | ||||||||||
Occupancy | 636 | 45 | (3 | )(D) | 678 | |||||||||
Equipment | 297 | 53 | 13 | (Q) | 363 | |||||||||
Marketing | 337 | 248 | 37 | (R) | 622 | |||||||||
Professional fees | 177 | 33 | — | 210 | ||||||||||
Amortization of intangibles | 208 | 115 | 133 | (F) | 456 | |||||||||
Data processing | 364 | 70 | — | 434 | ||||||||||
Telecommunications | 206 | 20 | — | 226 | ||||||||||
Other general operating | 1,019 | 228 | (57 | )(P) (R) | 1,190 | |||||||||
Merger and restructuring charges | 112 | 768 | — | 880 | ||||||||||
Total noninterest expense | 7,057 | 2,099 | 123 | 9,279 | ||||||||||
Income before income taxes | 6,560 | 35 | 19 | 6,614 | ||||||||||
Income tax expense | 2,167 | 3 | 7 | (S) | 2,177 | |||||||||
Net income | $ | 4,393 | $ | 32 | $ | 12 | $ | 4,437 | ||||||
Net income available to common shareholders | 4,388 | 28 | 12 | 4,428 | ||||||||||
Earnings per share | 1.09 | 0.02 | 0.95 | |||||||||||
Diluted earnings per share | 1.07 | 0.02 | 0.94 | |||||||||||
Merger and restructuring charges, net of tax benefit | 75 | 482 | — | 557 | ||||||||||
Operating earnings | 4,468 | 514 | 12 | 4,994 | ||||||||||
Operating earnings available to common shareholders | 4,463 | 510 | 12 | 4,985 | ||||||||||
Operating diluted earnings per share | 1.09 | 0.40 | 1.05 | |||||||||||
Impact of merger and restructuring charges, net of tax benefit | $ | 0.02 | $ | 0.38 | $ | — | $ | 0.11 | ||||||
Average common shares issued and outstanding (in thousands) | 4,032,550 | 1,276,443 | (639,370 | )(T) | 4,669,623 | |||||||||
Average diluted common shares issued and outstanding (in thousands) | 4,099,062 | 1,292,143 | (647,234 | )(T) | 4,743,971 |
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Information.
4
Bank of America/MBNA
Pro Forma Condensed Combined Statement of Income
Total Corporation
(unaudited)
The following pro forma combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended June 30, 2005 | ||||||||||||||
($ in millions, except per share information) | Bank of America (restated) | MBNA | MBNA Pro Forma | Combined | ||||||||||
Net interest income | $ | 7,637 | $ | 659 | $ | 141 | (C) (H) (I) (L) (N) | $ | 8,437 | |||||
Noninterest income | ||||||||||||||
Service charges | 1,920 | — | — | 1,920 | ||||||||||
Investment and brokerage services | 1,049 | — | — | 1,049 | ||||||||||
Mortgage banking income | 189 | 13 | — | 202 | ||||||||||
Investment banking income | 431 | — | — | 431 | ||||||||||
Equity investment gains | 492 | — | — | 492 | ||||||||||
Card income | 1,437 | 1,856 | (16 | ) (N) (O) | 3,277 | |||||||||
Trading account profits | 222 | (10 | ) | — | 212 | |||||||||
Other income | 1,215 | 36 | — | 1,251 | ||||||||||
Total noninterest income | 6,955 | 1,895 | (16 | ) | 8,834 | |||||||||
Total revenue | 14,592 | 2,554 | 125 | 17,271 | ||||||||||
Provision for credit losses | 875 | 173 | 16 | (P) | 1,064 | |||||||||
Gains on sales of debt securities | 325 | — | — | 325 | ||||||||||
Noninterest expense | ||||||||||||||
Personnel | 3,671 | 539 | — | 4,210 | ||||||||||
Occupancy | 615 | 42 | (3 | )(D) | 654 | |||||||||
Equipment | 297 | 50 | 13 | (Q) | 360 | |||||||||
Marketing | 346 | 227 | 64 | (R) | 637 | |||||||||
Professional fees | 216 | 43 | — | 259 | ||||||||||
Amortization of intangibles | 204 | 116 | 134 | (F) | 454 | |||||||||
Data processing | 368 | 72 | — | 440 | ||||||||||
Telecommunications | 196 | 19 | — | 215 | ||||||||||
Other general operating | 985 | 259 | (85 | ) (P) (R) | 1,159 | |||||||||
Merger and restructuring charges | 121 | 15 | — | 136 | ||||||||||
Total noninterest expense | 7,019 | 1,382 | 123 | 8,524 | ||||||||||
Income before income taxes | 7,023 | 999 | (14 | ) | 8,008 | |||||||||
Income tax expense | 2,366 | 367 | (5 | )(S) | 2,728 | |||||||||
Net income | $ | 4,657 | $ | 632 | $ | (9 | ) | $ | 5,280 | |||||
Net income available to common shareholders | 4,653 | 629 | (9 | ) | 5,273 | |||||||||
Earnings per share | 1.16 | 0.50 | 1.14 | |||||||||||
Diluted earnings per share | 1.14 | 0.50 | 1.12 | |||||||||||
Merger and restructuring charges, net of tax benefit | 81 | 15 | — | 96 | ||||||||||
Operating earnings | 4,738 | 647 | (9 | ) | 5,376 | |||||||||
Operating earnings available to common shareholders | 4,734 | 644 | (9 | ) | 5,369 | |||||||||
Operating diluted earnings per share | 1.16 | 0.51 | 1.14 | |||||||||||
Impact of merger and restructuring charges, net of tax benefit | $ | 0.02 | $ | 0.01 | $ | — | $ | 0.03 | ||||||
Average common shares issued and outstanding (in thousands) | 4,005,356 | 1,260,485 | (629,108 | )(T) | 4,636,733 | |||||||||
Average diluted common shares issued and outstanding (in thousands) | 4,065,355 | 1,268,034 | (632,876 | )(T) | 4,700,513 |
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Information.
5
Bank of America/MBNA
Pro Forma Condensed Combined Statement of Income
Total Corporation
(unaudited)
The following pro forma combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended September 30, 2005 | ||||||||||||||||
($ in millions, except per share information) | Bank of America (restated) | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income | $ | 7,735 | $ | 735 | $ | 115 | (C) (H) (I) (L) (N) | $ | 8,585 | |||||||
Noninterest income | ||||||||||||||||
Service charges | 2,080 | — | — | 2,080 | ||||||||||||
Investment and brokerage services | 1,060 | — | — | 1,060 | ||||||||||||
Mortgage banking income | 180 | 11 | — | 191 | ||||||||||||
Investment banking income | 522 | — | — | 522 | ||||||||||||
Equity investment gains | 668 | — | — | 668 | ||||||||||||
Card income | 1,520 | 1,890 | (22 | )(N) (O) | 3,388 | |||||||||||
Trading account profits | 557 | (7 | ) | — | 550 | |||||||||||
Other income | (171 | ) | 76 | — | (95 | ) | ||||||||||
Total noninterest income | 6,416 | 1,970 | (22 | ) | 8,364 | |||||||||||
Total revenue | 14,151 | 2,705 | 93 | 16,949 | ||||||||||||
Provision for credit losses | 1,159 | 262 | 18 | (P) | 1,439 | |||||||||||
Gains on sales of debt securities | 29 | — | — | 29 | ||||||||||||
Noninterest expense | ||||||||||||||||
Personnel | 3,837 | 503 | — | 4,340 | ||||||||||||
Occupancy | 638 | 43 | (3 | )(D) | 678 | |||||||||||
Equipment | 300 | 51 | 13 | (Q) | 364 | |||||||||||
Marketing | 307 | 231 | 64 | (R) | 602 | |||||||||||
Professional fees | 254 | 31 | — | 285 | ||||||||||||
Amortization of intangibles | 201 | 117 | 135 | (F) | 453 | |||||||||||
Data processing | 361 | 76 | — | 437 | ||||||||||||
Telecommunications | 206 | 20 | — | 226 | ||||||||||||
Other general operating | 1,061 | 262 | (86 | )(P)(R) | 1,237 | |||||||||||
Merger and restructuring charges | 120 | (18 | ) | — | 102 | |||||||||||
Total noninterest expense | 7,285 | 1,316 | 123 | 8,724 | ||||||||||||
Income before income taxes | 5,736 | 1,127 | (48 | ) | 6,815 | |||||||||||
Income tax expense | 1,895 | 409 | (18 | )(S) | 2,286 | |||||||||||
Net income | $ | 3,841 | $ | 718 | $ | (30 | ) | $ | 4,529 | |||||||
Net income available to common shareholders | 3,836 | 714 | (30 | ) | 4,520 | |||||||||||
Earnings per share | 0.96 | 0.57 | 0.98 | |||||||||||||
Diluted earnings per share | 0.95 | 0.56 | 0.97 | |||||||||||||
Merger and restructuring charges, net of tax benefit | 80 | (8 | ) | — | 72 | |||||||||||
Operating earnings | 3,921 | 710 | (30 | ) | 4,601 | |||||||||||
Operating earnings available to common shareholders | 3,916 | 706 | (30 | ) | 4,592 | |||||||||||
Operating diluted earnings per share | 0.97 | 0.56 | 0.98 | |||||||||||||
Impact of merger and restructuring charges, net of tax benefit | $ | 0.02 | $ | — | $ | — | $ | 0.01 | ||||||||
Average common shares issued and outstanding (in thousands) | 4,000,573 | 1,259,027 | (628,380 | )(T) | 4,631,220 | |||||||||||
Average diluted common shares issued and outstanding (in thousands) | 4,054,659 | 1,270,792 | (634,252 | )(T) | 4,691,199 |
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Information.
6
Bank of America/FleetBoston/MBNA
Pro Forma Condensed Combined Statement of Income
Total Corporation
(unaudited)
The following pro forma combined financial information and explanatory notes present how the combined financial statements of Bank of America, FleetBoston and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the year ended December 31, 2004 | |||||||||||||||||||||
($ in millions, except per share information) | Bank of America (restated) | FleetBoston | FleetBoston Pro Forma Adjustments | MBNA | MBNA Pro Forma | Combined | |||||||||||||||
Net interest income | $ | 27,960 | $ | 1,726 | $ | 82 | $ | 2,556 | $ | 507 | (C) (H) (I) (L) (N) | $ | 32,831 | ||||||||
Noninterest income | |||||||||||||||||||||
Service charges | 6,989 | 368 | (38 | ) | 1 | — | 7,320 | ||||||||||||||
Investment and brokerage services | 3,614 | 431 | — | — | — | 4,045 | |||||||||||||||
Mortgage banking income | 414 | 11 | — | 39 | — | 464 | |||||||||||||||
Investment banking income | 1,886 | 30 | — | — | — | 1,916 | |||||||||||||||
Equity investment gains | 863 | 87 | — | — | — | 950 | |||||||||||||||
Card income | 4,592 | 128 | 148 | 8,019 | (72 | ) (N) (O) | 12,815 | ||||||||||||||
Trading account profits | 1,013 | 101 | — | (65 | ) | — | 1,049 | ||||||||||||||
Other income | 1,634 | 230 | — | 100 | — | 1,964 | |||||||||||||||
Total noninterest income | 21,005 | 1,386 | 110 | 8,094 | (72 | ) | 30,523 | ||||||||||||||
Total revenue | 48,965 | 3,112 | 192 | 10,650 | 435 | 63,354 | |||||||||||||||
Provision for credit losses | 2,769 | — �� | — | 1,147 | 67 | (P) | 3,983 | ||||||||||||||
Gains on sales of debt securities | 1,724 | 50 | — | 1 | — | 1,775 | |||||||||||||||
Noninterest expense | |||||||||||||||||||||
Personnel | 13,435 | 901 | (5 | ) | 2,186 | — | 16,517 | ||||||||||||||
Occupancy | 2,379 | 144 | (14 | ) | 185 | (14 | )(D) | 2,680 | |||||||||||||
Equipment | 1,214 | 100 | (5 | ) | 226 | 50 | (Q) | 1,585 | |||||||||||||
Marketing | 1,349 | 91 | 53 | 911 | 206 | (R) | 2,610 | ||||||||||||||
Professional fees | 836 | 89 | — | 108 | — | 1,033 | |||||||||||||||
Amortization of intangibles | 664 | 20 | 120 | 454 | 538 | (F) | 1,796 | ||||||||||||||
Data processing | 1,330 | 103 | — | 210 | — | 1,643 | |||||||||||||||
Telecommunications | 730 | 20 | — | 89 | — | 839 | |||||||||||||||
Other general operating | 4,457 | 496 | — | 1,004 | (287 | )(P) (R) | 5,670 | ||||||||||||||
Merger and restructuring charges | 618 | 6 | — | — | — | 624 | |||||||||||||||
Total noninterest expense | 27,012 | 1,970 | 149 | 5,373 | 493 | 34,997 | |||||||||||||||
Income before income taxes | 20,908 | 1,192 | 43 | 4,131 | (125 | ) | 26,149 | ||||||||||||||
Income tax expense | 6,961 | 424 | 56 | 1,454 | (46 | )(S) | 8,849 | ||||||||||||||
Net income | $ | 13,947 | $ | 768 | $ | (13 | ) | $ | 2,677 | $ | (79 | ) | $ | 17,300 | |||||||
Net income available to common shareholders | 13,931 | 768 | (13 | ) | 2,663 | (79 | ) | 17,270 | |||||||||||||
Earnings per share | 3.71 | 0.72 | — | 2.08 | 3.68 | ||||||||||||||||
Diluted earnings per share | 3.64 | 0.71 | — | 2.05 | 3.62 | ||||||||||||||||
Merger and restructuring charges, net of tax benefit | 412 | — | — | — | 416 | ||||||||||||||||
Operating earnings | 14,359 | 773 | (13 | ) | 2,677 | (79 | ) | 17,717 | |||||||||||||
Operating earnings available to common shareholders | 14,343 | 768 | (13 | ) | 2,663 | (79 | ) | 17,682 | |||||||||||||
Operating diluted earnings per share | 3.75 | 0.71 | — | 2.06 | 3.70 | ||||||||||||||||
Impact of merger and restructuring charges, net of tax benefit | $ | 0.11 | $ | — | $ | — | $ | — | $ | — | $ | 0.11 | |||||||||
Average common shares issued and outstanding (in thousands) | 3,758,507 | 1,071,104 | (775,289 | ) | 1,277,833 | (637,766 | )(T) | 4,694,389 | |||||||||||||
Average diluted common shares issued and outstanding (in thousands) | 3,823,943 | 1,086,636 | (785,908 | ) | 1,297,178 | (647,422 | )(T) | 4,774,427 |
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Information.
7
Bank of America/FleetBoston/MBNA
Pro Forma Condensed Combined Statement of Income
Total Corporation
(unaudited)
The following pro forma combined financial information and explanatory notes present how the combined financial statements of Bank of America, FleetBoston and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended March 31, 2004 | |||||||||||||||||||||
($ in millions, except per share information) | Bank of America (restated) | FleetBoston | FleetBoston Pro Forma Adjustments | MBNA | MBNA Pro Forma | Combined | |||||||||||||||
Net interest income | $ | 5,529 | $ | 1,726 | $ | 82 | $ | 672 | $ | 164 | (C) (H) (I) (L) (N) | $ | 8,173 | ||||||||
Noninterest income | |||||||||||||||||||||
Service charges | 1,416 | 368 | (38 | ) | — | — | 1,746 | ||||||||||||||
Investment and brokerage services | 635 | 431 | — | — | — | 1,066 | |||||||||||||||
Mortgage banking income | 209 | 11 | — | 8 | — | 228 | |||||||||||||||
Investment banking income | 404 | 30 | — | — | — | 434 | |||||||||||||||
Equity investment gains | 133 | 87 | — | — | — | 220 | |||||||||||||||
Card income | 795 | 129 | 148 | 1,881 | (7 | )(N) (O) | 2,946 | ||||||||||||||
Trading account profits | 17 | 101 | — | (15 | ) | — | 103 | ||||||||||||||
Other income | 340 | 230 | — | 26 | — | 596 | |||||||||||||||
Total noninterest income | 3,949 | 1,387 | 110 | 1,900 | (7 | ) | 7,339 | ||||||||||||||
Total revenue | 9,478 | 3,113 | 192 | 2,572 | 157 | 15,512 | |||||||||||||||
Provision for credit losses | 624 | — | — | 365 | 15 | (P) | 1,004 | ||||||||||||||
Gains on sales of debt securities | 495 | 49 | — | — | — | 544 | |||||||||||||||
Noninterest expense | — | ||||||||||||||||||||
Personnel | 2,752 | 901 | (5 | ) | 560 | — | 4,208 | ||||||||||||||
Occupancy | 488 | 144 | (14 | ) | 44 | (3 | )(D) | 659 | |||||||||||||
Equipment | 261 | 100 | (5 | ) | 56 | 13 | (Q) | 425 | |||||||||||||
Marketing | 281 | 127 | 53 | 281 | 37 | (R) | 779 | ||||||||||||||
Professional fees | 160 | 90 | — | 22 | — | 272 | |||||||||||||||
Amortization of intangibles | 54 | 21 | 120 | 107 | 133 | (F) | 435 | ||||||||||||||
Data processing | 284 | 103 | — | 44 | — | 431 | |||||||||||||||
Telecommunications | 151 | 20 | — | 22 | — | 193 | |||||||||||||||
Other general operating | 999 | 457 | — | 268 | (57 | )(P) (R) | 1,667 | ||||||||||||||
Merger and restructuring charges | — | 6 | — | — | — | 6 | |||||||||||||||
Total noninterest expense | 5,430 | 1,969 | 149 | 1,404 | 123 | 9,075 | |||||||||||||||
Income before income taxes | 3,919 | 1,193 | 43 | 803 | 19 | 5,977 | |||||||||||||||
Income tax expense | 1,271 | 425 | 56 | 283 | 7 | (S) | 2,042 | ||||||||||||||
Net income | $ | 2,648 | $ | 768 | $ | (13 | ) | $ | 520 | $ | 12 | $ | 3,935 | ||||||||
Net income available to common shareholders | 2,647 | 768 | (13 | ) | 516 | 12 | 3,930 | ||||||||||||||
Earnings per share | 0.92 | 0.72 | — | 0.40 | 0.83 | ||||||||||||||||
Diluted earnings per share | 0.90 | 0.71 | — | 0.40 | 0.82 | ||||||||||||||||
Merger and restructuring charges, net of tax benefit | — | — | — | — | — | — | |||||||||||||||
Operating earnings | 2,648 | 773 | (13 | ) | 520 | 12 | 3,935 | ||||||||||||||
Operating earnings available to common shareholders | 2,647 | 768 | (13 | ) | 516 | 12 | 3,930 | ||||||||||||||
Operating diluted earnings per share | 0.90 | 0.71 | — | 0.40 | 0.82 | ||||||||||||||||
Impact of merger and restructuring charges, net of tax benefit | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||
Average common shares issued and outstanding (in thousands) | 2,880,306 | 1,071,104 | 118,464 | 1,277,953 | (637,826 | )(T) | 4,710,001 | ||||||||||||||
Average diluted common shares issued and outstanding (in thousands) | 2,933,402 | 1,086,636 | 120,182 | 1,301,071 | (649,365 | )(T) | 4,791,926 |
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Information.
8
Bank of America/MBNA
Pro Forma Condensed Combined Statement of Income
Total Corporation
(unaudited)
The following pro forma combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended June 30, 2004 | ||||||||||||||||
($ in millions, except per share information) | Bank of America (restated) | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income | $ | 7,366 | $ | 599 | $ | 141 | (C) (H) (I) (L) (N) | $ | 8,106 | |||||||
Noninterest income | ||||||||||||||||
Service charges | 1,783 | — | — | 1,783 | ||||||||||||
Investment and brokerage services | 999 | — | — | 999 | ||||||||||||
Mortgage banking income | 299 | 10 | — | 309 | ||||||||||||
Investment banking income | 547 | — | — | 547 | ||||||||||||
Equity investment gains | 84 | — | — | 84 | ||||||||||||
Card income | 1,159 | 1,941 | (16 | )(N) (O) | 3,084 | |||||||||||
Trading account profits | 422 | (15 | ) | — | 407 | |||||||||||
Other income | (423 | ) | 28 | — | (395 | ) | ||||||||||
Total noninterest income | 4,870 | 1,964 | (16 | ) | 6,818 | |||||||||||
Total revenue | 12,236 | 2,563 | 125 | 14,924 | ||||||||||||
Provision for credit losses | 789 | 252 | 16 | (P) | 1,057 | |||||||||||
Gains on sales of debt securities | 795 | — | — | 795 | ||||||||||||
Noninterest expense | ||||||||||||||||
Personnel | 3,629 | 549 | — | 4,178 | ||||||||||||
Occupancy | 621 | 46 | (3 | )(D) | 664 | |||||||||||
Equipment | 318 | 56 | 13 | (Q) | 387 | |||||||||||
Marketing | 367 | 220 | 64 | (R) | 651 | |||||||||||
Professional fees | 194 | 31 | — | 225 | ||||||||||||
Amortization of intangibles | 201 | 113 | 134 | (F) | 448 | |||||||||||
Data processing | 333 | 48 | — | 381 | ||||||||||||
Telecommunications | 183 | 22 | — | 205 | ||||||||||||
Other general operating | 1,257 | 256 | (85 | )(P) (R) | 1,428 | |||||||||||
Merger and restructuring charges | 125 | — | — | 125 | ||||||||||||
Total noninterest expense | 7,228 | 1,341 | 123 | 8,692 | ||||||||||||
Income before income taxes | 5,014 | 970 | (14 | ) | 5,970 | |||||||||||
Income tax expense | 1,673 | 310 | (5 | )(S) | 1,978 | |||||||||||
Net income | $ | 3,341 | $ | 660 | $ | (9 | ) | $ | 3,992 | |||||||
Net income available to common shareholders | 3,336 | 657 | (9 | ) | 3,984 | |||||||||||
Earnings per share | 0.82 | 0.51 | 0.85 | |||||||||||||
Diluted earnings per share | 0.81 | 0.51 | 0.83 | |||||||||||||
Merger and restructuring charges, net of tax benefit | 83 | — | — | 83 | ||||||||||||
Operating earnings | 3,424 | 660 | (9 | ) | 4,075 | |||||||||||
Operating earnings available to common shareholders | 3,419 | 657 | (9 | ) | 4,067 | |||||||||||
Operating diluted earnings per share | 0.83 | 0.51 | 0.85 | |||||||||||||
Impact of merger and restructuring charges, net of tax benefit | $ | 0.02 | $ | — | $ | — | $ | 0.02 | ||||||||
Average common shares issued and outstanding (in thousands) | 4,062,384 | 1,277,726 | (637,713 | )(T) | 4,702,397 | |||||||||||
Average diluted common shares issued and outstanding (in thousands) | 4,131,290 | 1,297,054 | (647,360 | )(T) | 4,780,984 |
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Information.
9
Bank of America/MBNA
Pro Forma Condensed Combined Statement of Income
Total Corporation
(unaudited)
The following pro forma combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended September 30, 2004 | ||||||||||||||||
($ in millions, except per share information) | Bank of America (restated) | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income | $ | 7,515 | $ | 617 | $ | 115 | (C) (H) (I) (L) (N) | $ | 8,247 | |||||||
Noninterest income | ||||||||||||||||
Service charges | 1,899 | — | — | 1,899 | ||||||||||||
Investment and brokerage services | 972 | — | — | 972 | ||||||||||||
Mortgage banking income | (250 | ) | 11 | — | (239 | ) | ||||||||||
Investment banking income | 438 | — | — | 438 | ||||||||||||
Equity investment gains | 220 | — | — | 220 | ||||||||||||
Card income | 1,258 | 2,099 | (22 | )(N) (O) | 3,335 | |||||||||||
Trading account profits | 238 | (14 | ) | — | 224 | |||||||||||
Other income | 1,237 | 25 | — | 1,262 | ||||||||||||
Total noninterest income | 6,012 | 2,121 | (22 | ) | 8,111 | |||||||||||
Total revenue | 13,527 | 2,738 | 93 | 16,358 | ||||||||||||
Provision for credit losses | 650 | 273 | 18 | (P) | 941 | |||||||||||
Gains on sales of debt securities | 333 | — | — | 333 | ||||||||||||
Noninterest expense | ||||||||||||||||
Personnel | 3,534 | 536 | — | 4,070 | ||||||||||||
Occupancy | 622 | 47 | (3 | )(D) | 666 | |||||||||||
Equipment | 309 | 57 | 13 | (Q) | 379 | |||||||||||
Marketing | 364 | 204 | 64 | (R) | 632 | |||||||||||
Professional fees | 207 | 25 | — | 232 | ||||||||||||
Amortization of intangibles | 200 | 115 | 135 | (F) | 450 | |||||||||||
Data processing | 341 | 57 | — | 398 | ||||||||||||
Telecommunications | 180 | 23 | — | 203 | ||||||||||||
Other general operating | 1,043 | 252 | (86 | )(P) (R) | 1,209 | |||||||||||
Merger and restructuring charges | 221 | — | — | 221 | ||||||||||||
Total noninterest expense | 7,021 | 1,316 | 123 | 8,460 | ||||||||||||
Income before income taxes | 6,189 | 1,149 | (48 | ) | 7,290 | |||||||||||
Income tax expense | 2,086 | 421 | (18 | )(S) | 2,489 | |||||||||||
Net income | $ | 4,103 | $ | 728 | $ | (30 | ) | $ | 4,801 | |||||||
Net income available to common shareholders | 4,098 | 725 | (30 | ) | 4,793 | |||||||||||
Earnings per share | 1.01 | 0.57 | 1.02 | |||||||||||||
Diluted earnings per share | 0.99 | 0.56 | 1.01 | |||||||||||||
Merger and restructuring charges, net of tax benefit | 148 | — | — | 148 | ||||||||||||
Operating earnings | 4,251 | 728 | (30 | ) | 4,949 | |||||||||||
Operating earnings available to common shareholders | 4,246 | 725 | (30 | ) | 4,941 | |||||||||||
Operating diluted earnings per share | 1.03 | 0.56 | 1.04 | |||||||||||||
Impact of merger and restructuring charges, net of tax benefit | $ | 0.04 | $ | — | $ | — | $ | 0.03 | ||||||||
Average common shares issued and outstanding (in thousands) | 4,052,304 | 1,277,665 | (637,683 | )(T) | 4,692,286 | |||||||||||
Average diluted common shares issued and outstanding (in thousands) | 4,121,375 | 1,294,107 | (645,889 | )(T) | 4,769,593 |
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Information.
Note 1- Basis of Pro Forma Presentation
The Unaudited Pro Forma Condensed Combined Financial Information related to the Mergers is included as of December 31, 2005 and for the years ended December 31, 2004 and 2005. The Mergers were accounted for using the purchase method of accounting. Accordingly, the Corporation’s cost to acquire FleetBoston and MBNA was allocated to the assets (including identifiable intangible assets) and liabilities (including executory contracts and other commitments) of FleetBoston and MBNA at their respective fair values on the dates the Mergers were completed.
Certain amounts in the historical consolidated financial statements of FleetBoston and MBNA have been reclassified to conform to the Corporation’s financial information presentation. In addition, certain historical Bank of America prior period amounts have been reclassified to conform to current period presentation.
10
The Unaudited Pro Forma Condensed Combined Financial Information presented in this document does not necessarily indicate the results of operations or the combined financial position that would have resulted had the Mergers been completed at the beginning of the applicable period presented, nor is it indicative of the results of operations in future periods or the future financial position of the combined company.
The MBNA Merger agreement is effective January 1, 2006 and is being accounted for under the purchase method of accounting in accordance with SFAS No. 141, “Business Combinations” (SFAS 141). The financial results of MBNA will be included in the Corporation’s financial statements beginning January 1, 2006. See Note 2 for the preliminary allocation of the purchase price.
The FleetBoston Merger agreement was effective April 1, 2004 and was accounted for under the purchase method of accounting in accordance with SFAS 141. Accordingly, the financial results of FleetBoston are included in the historical financial statements for Bank of America beginning on April 1, 2004.
On October 14, 2004, the Corporation acquired all outstanding shares of National Processing, Inc. (“NPC”) for $1.4 billion in cash. The Unaudited Pro Forma Condensed Combined Statements of Income for 2004 do not include pro forma adjustments for the acquisition of NPC. For the years ended December 31, 2005 and 2004, total revenues generated from the NPC business acquired were approximately $395 million and $76 million and total expenses incurred from the NPC business acquired were approximately $308 million and $52 million.
Note 2- Pro Forma Adjustments
The Corporation provided Unaudited Pro Forma Condensed Combined Financial Information relating to the FleetBoston Merger in its current report on Form 8-K filed on January 23, 2006, which should be read in conjunction with the Unaudited Pro Forma Condensed Combined Financial Information presented herein. There have been no changes to the pro forma adjustments indicated in that Form 8-K.
The Unaudited Pro Forma Condensed Combined Financial Information for the Mergers includes the Pro Forma Condensed Combined Balance Sheet as of December 31, 2005 assuming the MBNA Merger was completed on December 31, 2005. The Unaudited Pro Forma Condensed Combined Statement of Income for the year ended December 31, 2004 was prepared assuming the Mergers were completed on January 1, 2004. The Unaudited Pro Forma Condensed Combined Statement of Income for the year ended December 31, 2005 was prepared assuming the MBNA Merger was completed on January 1, 2005.
The MBNA purchase price has been allocated to the assets acquired and the liabilities assumed based on their estimated fair values at the MBNA Merger date. This allocation is based on management’s current estimation and could change as the fair value calculations are finalized and more information becomes available.
11
(Unaudited) | |||||||
(In millions, except per share amounts) | |||||||
Purchase price | |||||||
Purchase price per share of the Corporation’s common stock | $ | 45.856 | |||||
Exchange ratio | 0.5009 | ||||||
Purchase price per share of the Corporation’s common stock exchanged | $ | 22.969 | |||||
Cash portion of the MBNA Merger consideration | 4.125 | ||||||
Implied value of one share of MBNA common stock | 27.094 | ||||||
MBNA common stock exchanged | 1,260 | ||||||
Total value of the Corporation’s common stock and cash exchanged | $ | 34,139 | |||||
Fair value of outstanding stock options and direct acquisition costs | 440 | ||||||
Total purchase price | $ | 34,579 | |||||
Allocation of the purchase price | |||||||
MBNA stockholders’ equity | $ | 13,410 | |||||
MBNA goodwill and other intangible assets | (3,564 | ) | |||||
Adjustments to reflect assets acquired and liabilities assumed at fair value: | |||||||
Loans and leases, net of allowance | (270 | ) | |||||
Premises and equipment | (588 | ) | |||||
Identified intangibles | 8,042 | ||||||
Other assets | (826 | ) | |||||
Deposits | (100 | ) | |||||
Exit and termination liabilities | (1,185 | ) | |||||
Other liabilities and deferred income taxes | (669 | ) | |||||
Long-term debt | (404 | ) | |||||
Estimated fair value of net assets acquired | 13,846 | ||||||
Estimated goodwill resulting from the MBNA Merger | $ | 20,733 | |||||
For comparative and illustrative purposes only, the Unaudited Pro Forma Condensed Combined Statements of Income for the years ended December 31, 2004 and 2005 assume that the MBNA purchase accounting adjustments remain the same for each year presented. The MBNA pro forma adjustments included in the Unaudited Pro Forma Condensed Combined Financial Information are as follows:
(A) | Cash consideration paid to MBNA shareholders for each share of MBNA common stock. |
(B) | Adjustment to fair-value the securities portfolio. |
(C) | Adjustment to fair-value the fixed rate loan and lease portfolio based on current interest rates for similar instruments. The fair-value adjustment will be recognized over the estimated remaining life of the loan and lease portfolio. The impact of the adjustment was to increase interest income by approximately $187 million for the twelve months ended December 31, 2004 and 2005 and by approximately $78 million, $57 million, and $36 million for the three months ended March 31, June 30 and September 30, 2004 and 2005, respectively. Additionally, includes an adjustment of $325 million to record impaired loans to the present value of expected cash flows in accordance with Statement of Position 03-3 “Accounting for Certain Loans or Debt Securities Acquired in a Transfer” and a reclass of reserves for accrued interest and fees from Loans and Leases. |
(D) | Adjustment to fair-value owned real estate and computer equipment. The effect of these adjustments is to reduce occupancy costs by $14 million for the twelve months ended December 31, 2004 and 2005 and by approximately $3.4 million for the three months ended March 31, June 30 and September 30, 2004 and 2005, respectively. |
12
(E) | Adjustment to write off historical MBNA goodwill and record goodwill as a result of the MBNA Merger. |
(F) | Adjustment to write off historical MBNA intangible assets of $3,124 million (other than goodwill) and to record intangible assets (other than goodwill) resulting from the MBNA Merger based on estimated fair values. The nature, amount and amortization method of various possible identified intangibles are being studied by management. The adjustments reflected herein are based on current assumptions and valuations, which are subject to change. For purposes of the pro forma adjustments shown here, we have estimated a core deposit intangible of $204 million, a purchased credit card relationship intangible of $5,468 million, an affinity relationship intangible of $2,018 million and other intangibles of $352 million. We estimate these intangibles will be amortized over a period not to exceed 15 years, on an accelerated basis for the core deposit intangible, purchased credit card relationship intangible and affinity relationship intangible and a straight-line basis for the other intangibles. The value of the intangibles represents the estimated future economic benefit resulting from the acquired customer balances and relationships. This value was estimated by considering cash flows from the current balances of accounts, expected growth or attrition in balances, and the estimated life of the relationship. The impact of these adjustments is to increase Amortization of Intangibles by $538 million for the twelve months ended December 31, 2004 and 2005 and by approximately $133 million, $134 million and $135 million for the three months ended March 31, June 30 and September 30, 2004 and 2005, respectively. Changes to these intangible estimates are possible when our analysis is completed. |
(G) | Adjustment to fair-value other assets including residual interests in securitizations, prepaid pension asset, deferred costs, computer software, and other miscellaneous items. |
(H) | Adjustment to fair-value fixed-rate deposit liabilities based on current interest rates for similar instruments. The adjustment will be recognized over the estimated remaining term of the related deposit liability. The impact of the adjustment was to decrease interest expense by approximately $67 million for the twelve months ended December 31, 2004 and 2005 and approximately $27 million, $20 million and $13 million for the three months ended March 31, June 30 and September 30, 2004 and 2005, respectively. |
(I) | Adjustment to fair-value short-term borrowings. The adjustment will be recognized over the estimated remaining life of the related instruments. The impact of the adjustment was to decrease interest expense by $3 million for the twelve months ended December 31, 2004 and 2005 and $1.2 million, $.9 million and $.6 million for the three months ended March 31, June 30 and September 30, 2004 and 2005, respectively. |
(J) | Adjustment to Accrued Expenses and Other liabilities consist of $737 that mainly reflects the fair value of pension liabilities, change in control liabilities, write-off of deferred revenue, and $516 million of net deferred tax liabilities resulting from the pro forma adjustments. Deferred taxes were recorded using Bank of America’s expected statutory rates ranging from 30% to 37%, depending on the tax jurisdiction. |
(K) | For purposes of the pro forma adjustments shown here, we have estimated the MBNA exit and termination liability to be $601 million. Included in the $601 million are estimated severance and relocation costs of $429 million and estimated contract termination costs of $172 million. |
13
(L) | Adjustment to fair-value outstanding long-term debt instruments. The adjustment will be recognized over the remaining life of the long-term debt instruments. The impact of the adjustment was to decrease interest expense by approximately $112 million for the twelve months ended December 31, 2004 and 2005 and approximately $28 million for the three months ended March 31, June 30 and September 30, 2004 and 2005. |
(M) | Adjustment to eliminate MBNA’s historical stockholders’ equity. Additionally, the adjustment reflects the issuance of Bank of America common stock and the conversion of MBNA stock options into Bank of America stock options. |
(N) | Adjustment to reclassify MBNA’s compensation paid to Affinity relationships from Net Interest Income to Card Income to conform to Bank of America’s classification. The impact of this reclassification adjustment is $110 million for the twelve months ended December 31, 2004 and 2005, and $23 million, $27 million and $30 million for the three months ended March 31, June 30, and September 30, 2004 and 2005, respectively. |
(O) | Adjustment of $44 million to reflect the net write-off of deferred fees and costs classified in Other Assets and Accrued Expenses and Other Liabilities as part of purchase accounting. The impact of this adjustment is to increase Card Income by $44 million for the twelve months ended December 31, 2004 and 2005 and $18 million, $13 million, $9 million for the three months ended March 31, June 30, and September 30, 2004 and 2005, respectively. |
(P) | Adjustment to reclassify MBNA’s agency fees from Other General Operating Expense to Provision for Credit Losses as a contra to recoveries to conform to Bank of America’s classification. The impact of this reclassification adjustment is $67 million for the twelve months ended December 31, 2004 and 2005, and $15 million, $16 million and $18 million for the three months ended March 31, June 30, and September 30, 2004 and 2005, respectively. |
(Q) | Adjustment of $50 million to reflect amortization of acquired computer software for the twelve months ended December 31, 2004 and 2005 and $13 million for the three months ended March 31, June 30 and September 30, 2004 and 2005. |
(R) | Adjustment to reclassify MBNA’s direct mail postage expense from Other General Operating Expense to Marketing Expense to confirm with Bank of America’s classification. The impact of this reclassification adjustment is $206 million for the twelve months ended December 31, 2004 and 2005, and $37 million, $64 million and $64 million for the three months ended March 31, June 30, and September 30, 2004 and 2005, respectively. |
(S) | Adjustment to record the tax effect of the pro forma adjustments using Bank of America’s expected statutory rates ranging from 30% to 37% depending on the tax jurisdiction. |
(T) | Weighted average shares were calculated using the historical weighted average shares outstanding for Bank of America and MBNA, adjusted using the exchange ratio, to the equivalent shares of Bank of America common stock, for the year ended December 31, 2004 and 2005. Earnings per share data has been computed based on the combined historical income of Bank of America, income from MBNA and the impact of purchase accounting adjustments. |
Note 3 - Reclassification
As part of its credit portfolio management, the Corporation purchases credit protection through credit derivatives. Effective January 1, 2006, the Corporation classifies the impact of these credit derivatives that economically hedge the portfolio in Other Income. Prior to January 1, 2006, the impact was classified in Trading Account Profits. The Unaudited Pro Forma Condensed Combined Statements of Income reflect this reclassification.
14
Note 4 – Realignment of Bank of America Business Segments
Prior to January 1, 2006, the Corporation reported its results of operations through four business segments:Global Consumer and Small Business Banking (“GCSBB”), Global Business and Financial Services (“GBFS”), Global Capital Markets and Investment Bankingand Global Wealth and Investment Management (“GWIM”).All Other consists primarily of Equity Investments, the residual impact of the allowance for credit losses process, Merger and Restructuring Charges, intersegment eliminations, and the results of certain consumer finance and commercial lending businesses that are being liquidated.All Otheralso includes certain amounts associated with the Asset and Liability Management (ALM) process, including the impact of funds transfer pricing allocation methodologies, amounts associated with the change in the value of derivatives used as economic hedges of interest rate and foreign exchange rate fluctuations that do not qualify for FASB Statement No. 133, “Accounting for Derivative Instruments and Hedging Activities, as amended,” (SFAS 133) hedge accounting treatment, gains or losses on sales of whole mortgage loans, and Gains on Sales of Debt Securities.
Effective January 1, 2006,GBFS was combined withGlobal Capital Markets and Investment Banking. The new combined segment is calledGlobal Corporate and Investment Banking (“GCIB”). This new segment enables us to more effectively leverage the full breadth of the Corporation to better service our business clients. With this combination, teams of consumer, commercial and investment bankers work together to provide all clients, regardless of size, the right combination of products and services to meet their needs.
As part of the business segment realignment, certain equity investment gains recorded inGWIM were reclassified toAll Other. All references to Net Income and Total Revenue amounts in theEquity Investments business withinAll Other primarily represent Principal Investing in addition to the Equity Investment Gains impact of the other portfolios withinAll Other.
The business segment information presented below presents Net Interest Income on a fully taxable-equivalent (FTE) basis. The adjustment of Net Interest Income to a FTE basis results in a corresponding increase in Income Tax Expense. The Net Interest Income of the business segments includes the results of a funds transfer pricing process that matches assets and liabilities with similar interest rate sensitivity and maturity characteristics. Net Interest Income of the business segments also includes an allocation of Net Interest Income generated by the Corporation’s ALM process.
For illustrative purposes only, the following business segment information presents the effect of the MBNA pro forma adjustments on the realigned business segments.
15
Bank of America
Pro Forma Condensed Combined Statement of Income
(unaudited)
The following 2005 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of 2005. The following 2004 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America, FleetBoston and MBNA may have appeared had the businesses actually been combined at the beginning of 2004. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
($ in millions) | For the year ended December 31, 2005 | ||||||||||||||||||
Global Consumer and Small Business Banking | Global Corporate and Investment Banking | Global Wealth and Investment Management | All Other | Total Corporation Combined | |||||||||||||||
Net interest income(1) | $ | 20,183 | $ | 11,182 | $ | 3,868 | $ | (1,204 | ) | $ | 34,029 | ||||||||
Noninterest income | |||||||||||||||||||
Service charges | 4,997 | 2,618 | 89 | 1 | 7,705 | ||||||||||||||
Investment and brokerage services | — | 1,046 | 3,140 | (2 | ) | 4,184 | |||||||||||||
Mortgage banking income | 1,048 | 10 | 43 | (260 | ) | 841 | |||||||||||||
Investment banking income | — | 1,892 | 5 | (41 | ) | 1,856 | |||||||||||||
Equity investment gains | — | 247 | — | 1,793 | 2,040 | ||||||||||||||
Card income | 12,128 | 685 | — | (36 | ) | 12,777 | |||||||||||||
Trading account profits | (33 | ) | 1,770 | 96 | (95 | ) | 1,738 | ||||||||||||
Other income | 593 | 1,263 | 123 | (473 | ) | 1,506 | |||||||||||||
Total noninterest income | 18,733 | 9,531 | 3,496 | 887 | 32,647 | ||||||||||||||
Total revenue(1) | 38,916 | 20,713 | 7,364 | (317 | ) | 66,676 | |||||||||||||
Provision for credit losses | 5,338 | (289 | ) | (7 | ) | 40 | 5,082 | ||||||||||||
Gains on sales of debt securities | (2 | ) | 263 | — | 823 | 1,084 | |||||||||||||
Total noninterest expense | 19,914 | 11,141 | 3,704 | 831 | 35,590 | ||||||||||||||
Income before income taxes | 13,662 | 10,124 | 3,667 | (365 | ) | 27,088 | |||||||||||||
Income tax expense | 4,903 | 3,675 | 1,318 | (965 | ) | 8,931 | |||||||||||||
Net income | $ | 8,759 | $ | 6,449 | $ | 2,349 | $ | 600 | $ | 18,157 | |||||||||
($ in millions) | For the year ended December 31, 2004 | ||||||||||||||||||
Global Consumer and Small Business Banking | Global Corporate and Investment Banking | Global Wealth and Investment Management | All Other (restated) | Total Corporation Combined | |||||||||||||||
Net interest income(1) | $ | 19,553 | $ | 11,629 | $ | 3,216 | $ | (1,567 | ) | $ | 32,831 | ||||||||
Noninterest income | |||||||||||||||||||
Service charges | 4,485 | 2,752 | 84 | (1 | ) | 7,320 | |||||||||||||
Investment and brokerage services | — | 918 | 3,128 | (1 | ) | 4,045 | |||||||||||||
Mortgage banking income | 633 | 20 | 58 | (247 | ) | 464 | |||||||||||||
Investment banking income | — | 1,942 | 22 | (48 | ) | 1,916 | |||||||||||||
Equity investment gains | — | 112 | 6 | 832 | 950 | ||||||||||||||
Card income | 12,315 | 541 | — | (41 | ) | 12,815 | |||||||||||||
Trading account profits | (426 | ) | 1,345 | 128 | 2 | 1,049 | |||||||||||||
Other income | 575 | 1,000 | 100 | 289 | 1,964 | ||||||||||||||
Total noninterest income | 17,582 | 8,630 | 3,526 | 785 | 30,523 | ||||||||||||||
Total revenue(1) | 37,135 | 20,259 | 6,742 | (782 | ) | 63,354 | |||||||||||||
Provision for credit losses | 4,688 | (791 | ) | (19 | ) | 105 | 3,983 | ||||||||||||
Gains on sales of debt securities | 118 | (10 | ) | — | 1,667 | 1,775 | |||||||||||||
Total noninterest expense | 19,531 | 11,007 | 4,028 | 431 | 34,997 | ||||||||||||||
Income before income taxes | 13,034 | 10,033 | 2,733 | 349 | 26,149 | ||||||||||||||
Income tax expense | 4,749 | 3,598 | 1,030 | (528 | ) | 8,849 | |||||||||||||
Net income | $ | 8,285 | $ | 6,435 | $ | 1,703 | $ | 877 | $ | 17,300 | |||||||||
(1) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Information.
16
Bank of America
Pro Forma Condensed Combined Statement of Income
Global Consumer and Small Business Banking
(unaudited)
The following 2005 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of 2005. The following 2004 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America, FleetBoston and MBNA may have appeared had the businesses actually been combined at the beginning of 2004. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the year ended December 31, 2005 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 16,853 | $ | 2,887 | $ | 443 | $ | 20,183 | ||||||||
Noninterest income | ||||||||||||||||
Service charges | 4,996 | 1 | — | 4,997 | ||||||||||||
Investment and brokerage services | — | — | — | — | ||||||||||||
Mortgage banking income | 1,012 | 36 | — | 1,048 | ||||||||||||
Investment banking income | — | — | — | — | ||||||||||||
Equity investment gains | — | — | — | — | ||||||||||||
Card income | 5,084 | 7,110 | (66 | ) | 12,128 | |||||||||||
Trading account profits | (13 | ) | (20 | ) | — | (33 | ) | |||||||||
Other income | 353 | 240 | — | 593 | ||||||||||||
Total noninterest income | 11,432 | 7,367 | (66 | ) | 18,733 | |||||||||||
Total revenue (FTE basis)(2) | 28,285 | 10,254 | 377 | 38,916 | ||||||||||||
Provision for credit losses | 4,271 | 1,000 | 67 | 5,338 | ||||||||||||
Gains on sales of debt securities | (2 | ) | — | — | (2 | ) | ||||||||||
Total noninterest expense | 13,179 | 6,269 | 466 | 19,914 | ||||||||||||
Income before income taxes | 10,833 | 2,985 | (156 | ) | 13,662 | |||||||||||
Income tax expense | 3,888 | 1,073 | (58 | ) | 4,903 | |||||||||||
Net Income | $ | 6,945 | $ | 1,912 | $ | (98 | ) | $ | 8,759 | |||||||
For the year ended December 31, 2004 | |||||||||||||||||||||||
($ in millions) | Bank of America | FleetBoston | FleetBoston Pro Forma Adjustments | MBNA | MBNA Pro Forma | Combined | |||||||||||||||||
Net interest income (FTE basis)(2) | $ | 15,721 | $ | 986 | $ | (10 | ) | $ | 2,413 | $ | 443 | $ | 19,553 | ||||||||||
Noninterest income | |||||||||||||||||||||||
Service charges | 4,330 | 192 | (38 | ) | 1 | — | 4,485 | ||||||||||||||||
Investment and brokerage services | — | — | — | — | — | — | |||||||||||||||||
Mortgage banking income | 589 | 5 | — | 39 | — | 633 | |||||||||||||||||
Investment banking income | — | — | — | — | — | — | |||||||||||||||||
Equity investment gains | — | — | — | — | — | — | |||||||||||||||||
Card income | 4,082 | 120 | 148 | 8,031 | (66 | ) | 12,315 | ||||||||||||||||
Trading account profits | (367 | ) | 6 | — | (65 | ) | — | (426 | ) | ||||||||||||||
Other income | 329 | 21 | — | 225 | — | 575 | |||||||||||||||||
Total noninterest income | 8,963 | 344 | 110 | 8,231 | (66 | ) | 17,582 | ||||||||||||||||
Total revenue (FTE basis)(2) | 24,684 | 1,330 | 100 | 10,644 | 377 | 37,135 | |||||||||||||||||
Provision for credit losses | 3,331 | 143 | — | 1,147 | 67 | 4,688 | |||||||||||||||||
Gains on sales of debt securities | 117 | — | — | 1 | — | 118 | |||||||||||||||||
Total noninterest expense | 12,353 | 632 | 133 | 5,947 | 466 | 19,531 | |||||||||||||||||
Income before income taxes | 9,117 | 555 | (33 | ) | 3,551 | (156 | ) | 13,034 | |||||||||||||||
Income tax expense | 3,316 | 257 | (43 | ) | 1,277 | (58 | ) | 4,749 | |||||||||||||||
Net Income | $ | 5,801 | $ | 298 | $ | 10 | $ | 2,274 | $ | (98 | ) | $ | 8,285 | ||||||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
17
Bank of America
Pro Forma Condensed Combined Statement of Income
Global Corporate and Investment Banking
(unaudited)
The following 2005 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of 2005. The following 2004 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America, FleetBoston and MBNA may have appeared had the businesses actually been combined at the beginning of 2004. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the year ended December 31, 2005 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 11,157 | $ | (124 | ) | $ | 149 | $ | 11,182 | |||||||
Noninterest income | ||||||||||||||||
Service charges | 2,618 | — | — | 2,618 | ||||||||||||
Investment and brokerage services | 1,046 | — | — | 1,046 | ||||||||||||
Mortgage banking income | 10 | — | — | 10 | ||||||||||||
Investment banking income | 1,892 | — | — | 1,892 | ||||||||||||
Equity investment gains | 247 | — | — | 247 | ||||||||||||
Card income | 668 | 23 | (6 | ) | 685 | |||||||||||
Trading account profits | 1,770 | — | — | 1,770 | ||||||||||||
Other income | 1,192 | 72 | (1 | ) | 1,263 | |||||||||||
Total noninterest income | 9,443 | 95 | (7 | ) | 9,531 | |||||||||||
Total revenue (FTE basis)(2) | 20,600 | (29 | ) | 142 | 20,713 | |||||||||||
Provision for credit losses | (290 | ) | 1 | — | (289 | ) | ||||||||||
Gains on sales of debt securities | 263 | — | — | 263 | ||||||||||||
Total noninterest expense | 11,111 | 29 | 1 | 11,141 | ||||||||||||
Income before income taxes | 10,042 | (59 | ) | 141 | 10,124 | |||||||||||
Income tax expense | 3,644 | (21 | ) | 52 | 3,675 | |||||||||||
Net Income | $ | 6,398 | $ | (38 | ) | $ | 89 | $ | 6,449 | |||||||
For the year ended December 31, 2004 | ||||||||||||||||||||||
($ in millions) | Bank of America | FleetBoston | FleetBoston Pro Forma Adjustments | MBNA | MBNA Pro Forma | Combined | ||||||||||||||||
Net interest income (FTE basis)(2) | $ | 10,671 | $ | 736 | $ | 21 | $ | 52 | $ | 149 | $ | 11,629 | ||||||||||
Noninterest income | ||||||||||||||||||||||
Service charges | 2,577 | 175 | — | — | — | 2,752 | ||||||||||||||||
Investment and brokerage services | 872 | 46 | — | — | — | 918 | ||||||||||||||||
Mortgage banking income | 14 | 6 | — | — | — | 20 | ||||||||||||||||
Investment banking income | 1,915 | 27 | — | — | — | 1,942 | ||||||||||||||||
Equity investment gains | 110 | 2 | — | — | — | 112 | ||||||||||||||||
Card income | 511 | 9 | — | 27 | (6 | ) | 541 | |||||||||||||||
Trading account profits | 1,284 | 61 | — | — | — | 1,345 | ||||||||||||||||
Other income | 699 | 237 | — | 65 | (1 | ) | 1,000 | |||||||||||||||
Total noninterest income | 7,982 | 563 | — | 92 | (7 | ) | 8,630 | |||||||||||||||
Total revenue (FTE basis)(2) | 18,653 | 1,299 | 21 | 144 | 142 | 20,259 | ||||||||||||||||
Provision for credit losses | (886 | ) | 95 | — | — | — | (791 | ) | ||||||||||||||
Gains on sales of debt securities | (10 | ) | — | — | — | — | (10 | ) | ||||||||||||||
Total noninterest expense | 10,286 | 659 | 25 | 36 | 1 | 11,007 | ||||||||||||||||
Income before income taxes | 9,243 | 545 | (4 | ) | 108 | 141 | 10,033 | |||||||||||||||
Income tax expense | 3,317 | 196 | (6 | ) | 39 | 52 | 3,598 | |||||||||||||||
Net Income | $ | 5,926 | $ | 349 | $ | 2 | $ | 69 | $ | 89 | $ | 6,435 | ||||||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
18
Bank of America
Pro Forma Condensed Combined Statement of Income
Global Wealth and Investment Management
(unaudited)
The following 2005 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of 2005. The following 2004 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America, FleetBoston and MBNA may have appeared had the businesses actually been combined at the beginning of 2004. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the year ended December 31, 2005 | |||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | |||||||||||
Net interest income (FTE basis)(2) | $ | 3,815 | $ | (77 | ) | $ | 130 | $ | 3,868 | ||||||
Noninterest income | |||||||||||||||
Service charges | 89 | — | — | 89 | |||||||||||
Investment and brokerage services | 3,140 | — | — | 3,140 | |||||||||||
Mortgage banking income | 43 | — | — | 43 | |||||||||||
Investment banking income | 5 | — | — | 5 | |||||||||||
Equity investment gains | — | — | — | — | |||||||||||
Card income | — | — | — | — | |||||||||||
Trading account profits | 96 | — | — | 96 | |||||||||||
Other income | 123 | — | — | 123 | |||||||||||
Total noninterest income | 3,496 | — | — | 3,496 | |||||||||||
Total revenue (FTE basis)(2) | 7,311 | (77 | ) | 130 | 7,364 | ||||||||||
Provision for credit losses | (7 | ) | — | — | (7 | ) | |||||||||
Gains on sales of debt securities | — | — | — | — | |||||||||||
Total noninterest expense | 3,704 | — | — | 3,704 | |||||||||||
Income before income taxes | 3,614 | (77 | ) | 130 | 3,667 | ||||||||||
Income tax expense | 1,298 | (28 | ) | 48 | 1,318 | ||||||||||
Net Income | $ | 2,316 | $ | (49 | ) | $ | 82 | $ | 2,349 | ||||||
For the year ended December 31, 2004 | ||||||||||||||||||||||
($ in millions) | Bank of America | FleetBoston | FleetBoston Pro Forma Adjustments | MBNA | MBNA Pro Forma | Combined | ||||||||||||||||
Net interest income (FTE basis)(2) | $ | 2,921 | $ | 114 | $ | — | $ | 51 | $ | 130 | $ | 3,216 | ||||||||||
Noninterest income | ||||||||||||||||||||||
Service charges | 82 | 2 | — | — | — | 84 | ||||||||||||||||
Investment and brokerage services | 2,743 | 385 | — | — | — | 3,128 | ||||||||||||||||
Mortgage banking income | 58 | — | — | — | — | 58 | ||||||||||||||||
Investment banking income | 19 | 3 | — | — | — | 22 | ||||||||||||||||
Equity investment gains | 3 | 3 | — | — | — | 6 | ||||||||||||||||
Card income | — | — | — | — | — | — | ||||||||||||||||
Trading account profits | 86 | 42 | — | — | — | 128 | ||||||||||||||||
Other income | 88 | 12 | — | — | — | 100 | ||||||||||||||||
Total noninterest income | 3,079 | 447 | — | — | — | 3,526 | ||||||||||||||||
Total revenue (FTE basis)(2) | 6,000 | 561 | — | 51 | 130 | 6,742 | ||||||||||||||||
Provision for credit losses | (22 | ) | 3 | — | — | — | (19 | ) | ||||||||||||||
Gains on sales of debt securities | — | — | — | — | — | — | ||||||||||||||||
Total noninterest expense | 3,460 | 555 | 12 | 1 | — | 4,028 | ||||||||||||||||
Income before income taxes | 2,562 | 3 | (12 | ) | 50 | 130 | 2,733 | |||||||||||||||
Income tax expense | 931 | 49 | (16 | ) | 18 | 48 | 1,030 | |||||||||||||||
Net Income | $ | 1,631 | $ | (46 | ) | $ | 4 | $ | 32 | $ | 82 | $ | 1,703 | |||||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
19
Bank of America
Pro Forma Condensed Combined Statement of Income
All Other
(unaudited)
The following 2005 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of 2005. The following 2004 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America, FleetBoston and MBNA may have appeared had the businesses actually been combined at the beginning of 2004. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the year ended December 31, 2005 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income(2) | $ | (1,088 | ) | $ | 99 | $ | (215 | ) | $ | (1,204 | ) | |||||
Noninterest income | ||||||||||||||||
Service charges | 1 | — | — | 1 | ||||||||||||
Investment and brokerage services | (2 | ) | — | — | (2 | ) | ||||||||||
Mortgage banking income | (260 | ) | — | — | (260 | ) | ||||||||||
Investment banking income | (41 | ) | — | — | (41 | ) | ||||||||||
Equity investment gains | 1,793 | — | — | 1,793 | ||||||||||||
Card income | 1 | (37 | ) | — | (36 | ) | ||||||||||
Trading account profits | (90 | ) | (5 | ) | — | (95 | ) | |||||||||
Other income | (419 | ) | (55 | ) | 1 | (473 | ) | |||||||||
Total noninterest income | 983 | (97 | ) | 1 | 887 | |||||||||||
Total revenue(2) | (105 | ) | 2 | (214 | ) | (317 | ) | |||||||||
Provision for credit losses | 40 | — | — | 40 | ||||||||||||
Gains on sales of debt securities | 823 | — | — | 823 | ||||||||||||
Total noninterest expense | 687 | 118 | 26 | 831 | ||||||||||||
Income before income taxes | (9 | ) | (116 | ) | (240 | ) | (365 | ) | ||||||||
Income tax expense | (815 | ) | (62 | ) | (88 | ) | (965 | ) | ||||||||
Net Income | $ | 806 | $ | (54 | ) | $ | (152 | ) | $ | 600 | ||||||
For the year ended December 31, 2004 | ||||||||||||||||||||||||
($ in millions) | Bank of America (restated) | FleetBoston | FleetBoston Pro Forma Adjustments | MBNA | MBNA Pro Forma | Combined | ||||||||||||||||||
Net interest income(2) | $ | (1,353 | ) | $ | (110 | ) | $ | 71 | $ | 40 | $ | (215 | ) | $ | (1,567 | ) | ||||||||
Noninterest income | ||||||||||||||||||||||||
Service charges | — | (1 | ) | — | — | — | (1 | ) | ||||||||||||||||
Investment and brokerage services | (1 | ) | — | — | — | — | (1 | ) | ||||||||||||||||
Mortgage banking income | (247 | ) | — | — | — | — | (247 | ) | ||||||||||||||||
Investment banking income | (48 | ) | — | — | — | — | (48 | ) | ||||||||||||||||
Equity investment gains | 750 | 82 | — | — | — | 832 | ||||||||||||||||||
Card income | (1 | ) | (1 | ) | — | (39 | ) | — | (41 | ) | ||||||||||||||
Trading account profits | 10 | (8 | ) | — | — | — | 2 | |||||||||||||||||
Other income | 518 | (40 | ) | — | (190 | ) | 1 | 289 | ||||||||||||||||
Total noninterest income | 981 | 32 | — | (229 | ) | 1 | 785 | |||||||||||||||||
Total revenue(2) | (372 | ) | (78 | ) | 71 | (189 | ) | (214 | ) | (782 | ) | |||||||||||||
Provision for credit losses | 346 | (241 | ) | — | — | — | 105 | |||||||||||||||||
Gains on sales of debt securities | 1,617 | 50 | — | — | — | 1,667 | ||||||||||||||||||
Total noninterest expense | 913 | 124 | (21 | ) | (611 | ) | 26 | 431 | ||||||||||||||||
Income before income taxes | (14 | ) | 89 | 92 | 422 | (240 | ) | 349 | ||||||||||||||||
Income tax expense | (603 | ) | (78 | ) | 121 | 120 | (88 | ) | (528 | ) | ||||||||||||||
Net Income | $ | 589 | $ | 167 | $ | (29 | ) | $ | 302 | $ | (152 | ) | $ | 877 | ||||||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
20
Bank of America
Pro Forma Condensed Combined Statement of Income
(unaudited)
The following 2005 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of 2005. The following 2004 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America, FleetBoston and MBNA may have appeared had the businesses actually been combined at the beginning of 2004. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended March 31, 2005 | |||||||||||||||||||
($ in millions) | Global Consumer and Small Business Banking | Global Corporate and Investment Banking | Global Wealth and Investment Management | All Other (restated) | Total Corporation Combined | ||||||||||||||
Net interest income(1) | $ | 5,029 | $ | 2,877 | $ | 979 | $ | (544 | ) | $ | 8,341 | ||||||||
Noninterest income | |||||||||||||||||||
Service charges | 1,104 | 650 | 21 | 2 | 1,777 | ||||||||||||||
Investment and brokerage services | — | 246 | 767 | — | 1,013 | ||||||||||||||
Mortgage banking income | 282 | — | 10 | (63 | ) | 229 | |||||||||||||
Investment banking income | 1 | 372 | 1 | (8 | ) | 366 | |||||||||||||
Equity investment gains | — | 135 | — | 264 | 399 | ||||||||||||||
Card income | 2,857 | 150 | — | (9 | ) | 2,998 | |||||||||||||
Trading account profits | (13 | ) | 661 | 32 | (11 | ) | 669 | ||||||||||||
Other income | 149 | 399 | 27 | (251 | ) | 324 | |||||||||||||
Total noninterest income | 4,380 | 2,613 | 858 | (76 | ) | 7,775 | |||||||||||||
Total revenue(1) | 9,409 | 5,490 | 1,837 | (620 | ) | 16,116 | |||||||||||||
Provision for credit losses | 1,012 | (151 | ) | 2 | 19 | 882 | |||||||||||||
Gains on sales of debt securities | (1 | ) | 30 | — | 630 | 659 | |||||||||||||
Total noninterest expense | 4,838 | 2,713 | 909 | 819 | 9,279 | ||||||||||||||
Income before income taxes | 3,558 | 2,958 | 926 | (828 | ) | 6,614 | |||||||||||||
Income tax expense | 1,261 | 1,085 | 327 | (496 | ) | 2,177 | |||||||||||||
Net income | $ | 2,297 | $ | 1,873 | $ | 599 | $ | (332 | ) | $ | 4,437 | ||||||||
For the quarter ended March 31, 2004 | |||||||||||||||||||
($ in millions) | Global Consumer and Small Business Banking | Global Corporate and Investment Banking | Global Wealth and Investment Management | All Other (restated) | Total Corporation Combined | ||||||||||||||
Net interest income(1) | $ | 4,792 | $ | 3,015 | $ | 773 | $ | (407 | ) | $ | 8,173 | ||||||||
Noninterest income | |||||||||||||||||||
Service charges | 1,026 | 699 | 21 | — | 1,746 | ||||||||||||||
Investment and brokerage services | — | 246 | 820 | — | 1,066 | ||||||||||||||
Mortgage banking income | 251 | 9 | 19 | (51 | ) | 228 | |||||||||||||
Investment banking income | — | 436 | 7 | (9 | ) | 434 | |||||||||||||
Equity investment gains | — | 37 | 3 | 180 | 220 | ||||||||||||||
Card income | 2,849 | 110 | — | (13 | ) | 2,946 | |||||||||||||
Trading account profits | (305 | ) | 349 | 47 | 12 | 103 | |||||||||||||
Other income | 151 | 328 | 31 | 86 | 596 | ||||||||||||||
Total noninterest income | 3,972 | 2,214 | 948 | 205 | 7,339 | ||||||||||||||
Total revenue(1) | 8,764 | 5,229 | 1,721 | (202 | ) | 15,512 | |||||||||||||
Provision for credit losses | 951 | 88 | (6 | ) | (29 | ) | 1,004 | ||||||||||||
Gains on sales of debt securities | 1 | (7 | ) | — | 550 | 544 | |||||||||||||
Total noninterest expense | 4,932 | 2,840 | 1,287 | 16 | 9,075 | ||||||||||||||
Income before income taxes | 2,882 | 2,294 | 440 | 361 | 5,977 | ||||||||||||||
Income tax expense | 1,078 | 819 | 198 | (53 | ) | 2,042 | |||||||||||||
Net income | $ | 1,804 | $ | 1,475 | $ | 242 | $ | 414 | $ | 3,935 | |||||||||
(1) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Information.
21
Bank of America
Pro Forma Condensed Combined Statement of Income
Global Consumer and Small Business Banking
(unaudited)
The following 2005 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of 2005. The following 2004 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America, FleetBoston and MBNA may have appeared had the businesses actually been combined at the beginning of 2004. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended March 31, 2005 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 4,215 | $ | 668 | $ | 146 | $ | 5,029 | ||||||||
Noninterest income | ||||||||||||||||
Service charges | 1,104 | — | — | 1,104 | ||||||||||||
Investment and brokerage services | — | — | — | — | ||||||||||||
Mortgage banking income | 274 | 8 | — | 282 | ||||||||||||
Investment banking income | 1 | — | — | 1 | ||||||||||||
Equity investment gains | — | — | — | — | ||||||||||||
Card income | 1,144 | 1,718 | (5 | ) | 2,857 | |||||||||||
Trading account profits | 3 | (16 | ) | — | (13 | ) | ||||||||||
Other income | 112 | 38 | (1 | ) | 149 | |||||||||||
Total noninterest income | 2,638 | 1,748 | (6 | ) | 4,380 | |||||||||||
Total revenue (FTE basis)(2) | 6,853 | 2,416 | 140 | 9,409 | ||||||||||||
Provision for credit losses | 710 | 287 | 15 | 1,012 | ||||||||||||
Gains on sales of debt securities | (1 | ) | — | — | (1 | ) | ||||||||||
Total noninterest expense | 3,238 | 1,484 | 116 | 4,838 | ||||||||||||
Income before income taxes | 2,904 | 645 | 9 | 3,558 | ||||||||||||
Income tax expense | 1,026 | 232 | 3 | 1,261 | ||||||||||||
Net Income | $ | 1,878 | $ | 413 | $ | 6 | $ | 2,297 | ||||||||
For the quarter ended March 31, 2004 | |||||||||||||||||||||||
($ in millions) | Bank of America | FleetBoston | FleetBoston Pro Forma Adjustments | MBNA | MBNA Pro Forma | Combined | |||||||||||||||||
Net interest income (FTE basis)(2) | $ | 3,052 | $ | 986 | $ | (10 | ) | $ | 618 | $ | 146 | $ | 4,792 | ||||||||||
Noninterest income | |||||||||||||||||||||||
Service charges | 872 | 192 | (38 | ) | — | — | 1,026 | ||||||||||||||||
Investment and brokerage services | — | — | — | — | — | — | |||||||||||||||||
Mortgage banking income | 238 | 5 | — | 8 | — | 251 | |||||||||||||||||
Investment banking income | — | — | — | — | — | — | |||||||||||||||||
Equity investment gains | — | — | — | — | — | — | |||||||||||||||||
Card income | 698 | 120 | 148 | 1,888 | (5 | ) | 2,849 | ||||||||||||||||
Trading account profits | (296 | ) | 6 | — | (15 | ) | — | (305 | ) | ||||||||||||||
Other income | 65 | 21 | — | 66 | (1 | ) | 151 | ||||||||||||||||
Total noninterest income | 1,577 | 344 | 110 | 1,947 | (6 | ) | 3,972 | ||||||||||||||||
Total revenue (FTE basis)(2) | 4,629 | 1,330 | 100 | 2,565 | 140 | 8,764 | |||||||||||||||||
Provision for credit losses | 428 | 143 | — | 365 | 15 | 951 | |||||||||||||||||
Gains on sales of debt securities | 1 | — | — | — | — | 1 | |||||||||||||||||
Total noninterest expense | 2,522 | 632 | 133 | 1,529 | 116 | 4,932 | |||||||||||||||||
Income before income taxes | 1,680 | 555 | (33 | ) | 671 | 9 | 2,882 | ||||||||||||||||
Income tax expense | 620 | 257 | (43 | ) | 241 | 3 | 1,078 | ||||||||||||||||
Net Income | $ | 1,060 | $ | 298 | $ | 10 | $ | 430 | $ | 6 | $ | 1,804 | |||||||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
22
Bank of America
Pro Forma Condensed Combined Statement of Income
Global Corporate and Investment Banking
(unaudited)
The following 2005 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of 2005. The following 2004 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America, FleetBoston and MBNA may have appeared had the businesses actually been combined at the beginning of 2004. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended March 31, 2005 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 2,856 | $ | (15 | ) | $ | 36 | $ | 2,877 | |||||||
Noninterest income | ||||||||||||||||
Service charges | 650 | — | — | 650 | ||||||||||||
Investment and brokerage services | 246 | — | — | 246 | ||||||||||||
Mortgage banking income | — | — | — | — | ||||||||||||
Investment banking income | 372 | — | — | 372 | ||||||||||||
Equity investment gains | 135 | — | — | 135 | ||||||||||||
Card income | 146 | 6 | (2 | ) | 150 | |||||||||||
Trading account profits | 661 | — | — | 661 | ||||||||||||
Other income | 381 | 18 | — | 399 | ||||||||||||
Total noninterest income | 2,591 | 24 | (2 | ) | 2,613 | |||||||||||
Total revenue (FTE basis)(2) | 5,447 | 9 | 34 | 5,490 | ||||||||||||
Provision for credit losses | (151 | ) | — | — | (151 | ) | ||||||||||
Gains on sales of debt securities | 30 | — | — | 30 | ||||||||||||
Total noninterest expense | 2,705 | 8 | — | 2,713 | ||||||||||||
Income before income taxes | 2,923 | 1 | 34 | 2,958 | ||||||||||||
Income tax expense | 1,072 | — | 13 | 1,085 | ||||||||||||
Net Income | $ | 1,851 | $ | 1 | $ | 21 | $ | 1,873 | ||||||||
For the quarter ended March 31, 2004 | ||||||||||||||||||||||
($ in millions) | Bank of America | FleetBoston | FleetBoston Pro Forma Adjustments | MBNA | MBNA Pro Forma | Combined | ||||||||||||||||
Net interest income (FTE basis)(2) | $ | 2,195 | $ | 736 | $ | 21 | $ | 27 | $ | 36 | $ | 3,015 | ||||||||||
Noninterest income | ||||||||||||||||||||||
Service charges | 524 | 175 | — | — | — | 699 | ||||||||||||||||
Investment and brokerage services | 200 | 46 | — | — | — | 246 | ||||||||||||||||
Mortgage banking income | 3 | 6 | — | — | — | 9 | ||||||||||||||||
Investment banking income | 409 | 27 | — | — | — | 436 | ||||||||||||||||
Equity investment gains | 35 | 2 | — | — | — | 37 | ||||||||||||||||
Card income | 97 | 9 | — | 6 | (2 | ) | 110 | |||||||||||||||
Trading account profits | 288 | 61 | — | — | — | 349 | ||||||||||||||||
Other income | 75 | 237 | — | 16 | — | 328 | ||||||||||||||||
Total noninterest income | 1,631 | 563 | — | 22 | (2 | ) | 2,214 | |||||||||||||||
Total revenue (FTE basis)(2) | 3,826 | 1,299 | 21 | 49 | 34 | 5,229 | ||||||||||||||||
Provision for credit losses | (7 | ) | 95 | — | — | — | 88 | |||||||||||||||
Gains on sales of debt securities | (7 | ) | — | — | — | — | (7 | ) | ||||||||||||||
Total noninterest expense | 2,149 | 659 | 25 | 7 | — | 2,840 | ||||||||||||||||
Income before income taxes | 1,677 | 545 | (4 | ) | 42 | 34 | 2,294 | |||||||||||||||
Income tax expense | 601 | 196 | (6 | ) | 15 | 13 | 819 | |||||||||||||||
Net Income | $ | 1,076 | $ | 349 | $ | 2 | $ | 27 | $ | 21 | $ | 1,475 | ||||||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
23
Bank of America
Pro Forma Condensed Combined Statement of Income
Global Wealth and Investment Management
(unaudited)
The following 2005 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of 2005. The following 2004 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America, FleetBoston and MBNA may have appeared had the businesses actually been combined at the beginning of 2004. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended March 31, 2005 | |||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | |||||||||
Net interest income (FTE basis)(2) | $ | 955 | $ | (6 | ) | $ | 30 | $ | 979 | ||||
Noninterest income | |||||||||||||
Service charges | 21 | — | — | 21 | |||||||||
Investment and brokerage services | 767 | — | — | 767 | |||||||||
Mortgage banking income | 10 | — | — | 10 | |||||||||
Investment banking income | 1 | — | — | 1 | |||||||||
Equity investment gains | — | — | — | — | |||||||||
Card income | — | — | — | — | |||||||||
Trading account profits | 32 | — | — | 32 | |||||||||
Other income | 27 | — | — | 27 | |||||||||
Total noninterest income | 858 | — | — | 858 | |||||||||
Total revenue (FTE basis)(2) | 1,813 | (6 | ) | 30 | 1,837 | ||||||||
Provision for credit losses | 2 | — | — | 2 | |||||||||
Gains on sales of debt securities | — | — | — | — | |||||||||
Total noninterest expense | 909 | — | — | 909 | |||||||||
Income before income taxes | 902 | (6 | ) | 30 | 926 | ||||||||
Income tax expense | 318 | (2 | ) | 11 | 327 | ||||||||
Net Income | $ | 584 | $ | (4 | ) | $ | 19 | $ | 599 | ||||
For the quarter ended March 31, 2004 | ||||||||||||||||||||||
($ in millions) | Bank of America | FleetBoston | FleetBoston Pro Forma Adjustments | MBNA | MBNA Pro Forma | Combined | ||||||||||||||||
Net interest income (FTE basis)(2) | $ | 609 | $ | 114 | $ | — | $ | 20 | $ | 30 | $ | 773 | ||||||||||
Noninterest income | ||||||||||||||||||||||
Service charges | 19 | 2 | — | — | — | 21 | ||||||||||||||||
Investment and brokerage services | 435 | 385 | — | — | — | 820 | ||||||||||||||||
Mortgage banking income | 19 | — | — | — | — | 19 | ||||||||||||||||
Investment banking income | 4 | 3 | — | — | — | 7 | ||||||||||||||||
Equity investment gains | — | 3 | — | — | — | 3 | ||||||||||||||||
Card income | — | — | — | — | — | — | ||||||||||||||||
Trading account profits | 5 | 42 | — | — | — | 47 | ||||||||||||||||
Other income | 19 | 12 | — | — | — | 31 | ||||||||||||||||
Total noninterest income | 501 | 447 | — | — | — | 948 | ||||||||||||||||
Total revenue (FTE basis)(2) | 1,110 | 561 | — | 20 | 30 | 1,721 | ||||||||||||||||
Provision for credit losses | (9 | ) | 3 | — | — | — | (6 | ) | ||||||||||||||
Gains on sales of debt securities | — | — | — | — | — | — | ||||||||||||||||
Total noninterest expense | 720 | 555 | 12 | — | — | 1,287 | ||||||||||||||||
Income before income taxes | 399 | 3 | (12 | ) | 20 | 30 | 440 | |||||||||||||||
Income tax expense | 147 | 49 | (16 | ) | 7 | 11 | 198 | |||||||||||||||
Net Income | $ | 252 | $ | (46 | ) | $ | 4 | $ | 13 | $ | 19 | $ | 242 | |||||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
24
Bank of America
Pro Forma Condensed Combined Statement of Income
All Other
(unaudited)
The following 2005 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of 2005. The following 2004 pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America, FleetBoston and MBNA may have appeared had the businesses actually been combined at the beginning of 2004. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended March 31, 2005 | ||||||||||||||||
($ in millions) | Bank of America (restated) | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income(2) | $ | (520 | ) | $ | 24 | $ | (48 | ) | $ | (544 | ) | |||||
Noninterest income | ||||||||||||||||
Service charges | 2 | — | — | 2 | ||||||||||||
Investment and brokerage services | — | — | — | — | ||||||||||||
Mortgage banking income | (63 | ) | — | — | (63 | ) | ||||||||||
Investment banking income | (8 | ) | — | — | (8 | ) | ||||||||||
Equity investment gains | 264 | — | — | 264 | ||||||||||||
Card income | (1 | ) | (8 | ) | — | (9 | ) | |||||||||
Trading account profits | (11 | ) | — | — | (11 | ) | ||||||||||
Other income | (238 | ) | (14 | ) | 1 | (251 | ) | |||||||||
Total noninterest income | (55 | ) | (22 | ) | 1 | (76 | ) | |||||||||
Total revenue(2) | (575 | ) | 2 | (47 | ) | (620 | ) | |||||||||
Provision for credit losses | 19 | — | — | 19 | ||||||||||||
Gains on sales of debt securities | 630 | — | — | 630 | ||||||||||||
Total noninterest expense | 205 | 607 | 7 | 819 | ||||||||||||
Income before income taxes | (169 | ) | (605 | ) | (54 | ) | (828 | ) | ||||||||
Income tax expense | (249 | ) | (227 | ) | (20 | ) | (496 | ) | ||||||||
Net Income | $ | 80 | $ | (378 | ) | $ | (34 | ) | $ | (332 | ) | |||||
For the quarter ended March 31, 2004 | ||||||||||||||||||||||||
($ in millions) | Bank of America (restated) | FleetBoston | FleetBoston Pro Forma Adjustments | MBNA | MBNA Pro Forma | Combined | ||||||||||||||||||
Net interest income(2) | $ | (327 | ) | $ | (110 | ) | $ | 71 | $ | 7 | $ | (48 | ) | $ | (407 | ) | ||||||||
Noninterest income | ||||||||||||||||||||||||
Service charges | 1 | (1 | ) | — | — | — | — | |||||||||||||||||
Investment and brokerage services | — | — | — | — | — | — | ||||||||||||||||||
Mortgage banking income | (51 | ) | — | — | — | — | (51 | ) | ||||||||||||||||
Investment banking income | (9 | ) | — | — | — | — | (9 | ) | ||||||||||||||||
Equity investment gains | 98 | 82 | — | — | — | 180 | ||||||||||||||||||
Card income | — | — | — | (13 | ) | — | (13 | ) | ||||||||||||||||
Trading account profits | 20 | (8 | ) | — | — | — | 12 | |||||||||||||||||
Other income | 181 | (40 | ) | — | (56 | ) | 1 | 86 | ||||||||||||||||
Total noninterest income | 240 | 33 | — | (69 | ) | 1 | 205 | |||||||||||||||||
Total revenue(2) | (87 | ) | (77 | ) | 71 | (62 | ) | (47 | ) | (202 | ) | |||||||||||||
Provision for credit losses | 212 | (241 | ) | — | — | — | (29 | ) | ||||||||||||||||
Gains on sales of debt securities | 501 | 49 | — | — | — | 550 | ||||||||||||||||||
Total noninterest expense | 39 | 123 | (21 | ) | (132 | ) | 7 | 16 | ||||||||||||||||
Income before income taxes | 163 | 90 | 92 | 70 | (54 | ) | 361 | |||||||||||||||||
Income tax expense | (97 | ) | (77 | ) | 121 | 20 | (20 | ) | (53 | ) | ||||||||||||||
Net Income | $ | 260 | $ | 167 | $ | (29 | ) | $ | 50 | $ | (34 | ) | $ | 414 | ||||||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
25
Bank of America
Pro Forma Condensed Combined Statement of Income
(unaudited)
The following pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended June 30, 2005 | ||||||||||||||||||||
($ in millions) | Global Consumer and Small Business Banking | Global Corporate and Investment Banking | Global Wealth and Investment Management | All Other (restated) | Total Corporation Combined | |||||||||||||||
Net interest income(1) | $ | 4,889 | $ | 2,793 | $ | 938 | $ | (183 | ) | $ | 8,437 | |||||||||
Noninterest income | ||||||||||||||||||||
Service charges | 1,244 | 655 | 21 | — | 1,920 | |||||||||||||||
Investment and brokerage services | — | 262 | 788 | (1 | ) | 1,049 | ||||||||||||||
Mortgage banking income | 250 | 4 | 13 | (65 | ) | 202 | ||||||||||||||
Investment banking income | (1 | ) | 441 | 1 | (10 | ) | 431 | |||||||||||||
Equity investment gains | — | 13 | — | 479 | 492 | |||||||||||||||
Card income | 3,118 | 170 | — | (11 | ) | 3,277 | ||||||||||||||
Trading account profits | (15 | ) | 232 | 19 | (24 | ) | 212 | |||||||||||||
Other income | 98 | 371 | 24 | 758 | 1,251 | |||||||||||||||
Total noninterest income | 4,694 | 2,148 | 866 | 1,126 | 8,834 | |||||||||||||||
Total revenue(1) | 9,583 | 4,941 | 1,804 | 943 | 17,271 | |||||||||||||||
Provision for credit losses | 1,344 | (249 | ) | (9 | ) | (22 | ) | 1,064 | ||||||||||||
Gains on sales of debt securities | — | 121 | — | 204 | 325 | |||||||||||||||
Total noninterest expense | 4,984 | 2,612 | 925 | 3 | 8,524 | |||||||||||||||
Income before income taxes | 3,255 | 2,699 | 888 | 1,166 | 8,008 | |||||||||||||||
Income tax expense | 1,174 | 979 | 321 | 254 | 2,728 | |||||||||||||||
Net income | $ | 2,081 | $ | 1,720 | $ | 567 | $ | 912 | $ | 5,280 | ||||||||||
For the quarter ended June 30, 2004 | ||||||||||||||||||||
($ in millions) | Global Consumer and Small Business Banking | Global Corporate and Investment Banking | Global Wealth and Investment Management | All Other (restated) | Total Corporation Combined | |||||||||||||||
Net interest income(1) | $ | 4,802 | $ | 2,951 | $ | 739 | $ | (386 | ) | $ | 8,106 | |||||||||
Noninterest income | ||||||||||||||||||||
Service charges | 1,106 | 653 | 21 | 3 | 1,783 | |||||||||||||||
Investment and brokerage services | — | 228 | 771 | — | 999 | |||||||||||||||
Mortgage banking income | 355 | 5 | 18 | (69 | ) | 309 | ||||||||||||||
Investment banking income | — | 562 | 5 | (20 | ) | 547 | ||||||||||||||
Equity investment gains | — | 14 | 1 | 69 | 84 | |||||||||||||||
Card income | 2,966 | 127 | — | (9 | ) | 3,084 | ||||||||||||||
Trading account profits | (75 | ) | 431 | 34 | 17 | 407 | ||||||||||||||
Other income | 140 | 241 | 23 | (799 | ) | (395 | ) | |||||||||||||
Total noninterest income | 4,492 | 2,261 | 873 | (808 | ) | 6,818 | ||||||||||||||
Total revenue(1) | 9,294 | 5,212 | 1,612 | (1,194 | ) | 14,924 | ||||||||||||||
Provision for credit losses | 916 | (6 | ) | 8 | 139 | �� | 1,057 | |||||||||||||
Gains on sales of debt securities | (2 | ) | (4 | ) | — | 801 | 795 | |||||||||||||
Total noninterest expense | 4,840 | 3,121 | 916 | (185 | ) | 8,692 | ||||||||||||||
Income before income taxes | 3,536 | 2,093 | 688 | (347 | ) | 5,970 | ||||||||||||||
Income tax expense | 1,289 | 755 | 250 | (316 | ) | 1,978 | ||||||||||||||
Net income | $ | 2,247 | $ | 1,338 | $ | 438 | $ | (31 | ) | $ | 3,992 | |||||||||
(1) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Information.
26
Bank of America
Pro Forma Condensed Combined Statement of Income
Global Consumer and Small Business Banking
(unaudited)
The following pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended June 30, 2005 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 4,089 | $ | 677 | $ | 123 | $ | 4,889 | ||||||||
Noninterest income | ||||||||||||||||
Service charges | 1,244 | — | — | 1,244 | ||||||||||||
Investment and brokerage services | — | — | — | — | ||||||||||||
Mortgage banking income | 237 | 13 | — | 250 | ||||||||||||
Investment banking income | (1 | ) | — | — | (1 | ) | ||||||||||
Equity investment gains | — | — | — | — | ||||||||||||
Card income | 1,272 | 1,859 | (13 | ) | 3,118 | |||||||||||
Trading account profits | (9 | ) | (6 | ) | — | (15 | ) | |||||||||
Other income | 67 | 31 | — | 98 | ||||||||||||
Total noninterest income | 2,810 | 1,897 | (13 | ) | 4,694 | |||||||||||
Total revenue (FTE basis)(2) | 6,899 | 2,574 | 110 | 9,583 | ||||||||||||
Provision for credit losses | 1,155 | 173 | 16 | 1,344 | ||||||||||||
Gains on sales of debt securities | — | — | — | — | ||||||||||||
Total noninterest expense | 3,346 | 1,522 | 116 | 4,984 | ||||||||||||
Income before income taxes | 2,398 | 879 | (22 | ) | 3,255 | |||||||||||
Income tax expense | 866 | 316 | (8 | ) | 1,174 | |||||||||||
Net Income | $ | 1,532 | $ | 563 | $ | (14 | ) | $ | 2,081 | |||||||
For the quarter ended June 30, 2004 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 4,122 | $ | 557 | $ | 123 | $ | 4,802 | ||||||||
Noninterest income | ||||||||||||||||
Service charges | 1,106 | — | — | 1,106 | ||||||||||||
Investment and brokerage services | — | — | — | — | ||||||||||||
Mortgage banking income | 345 | 10 | — | 355 | ||||||||||||
Investment banking income | — | — | — | — | ||||||||||||
Equity investment gains | — | — | — | — | ||||||||||||
Card income | 1,038 | 1,941 | (13 | ) | 2,966 | |||||||||||
Trading account profits | (60 | ) | (15 | ) | — | (75 | ) | |||||||||
Other income | 74 | 66 | — | 140 | ||||||||||||
Total noninterest income | 2,503 | 2,002 | (13 | ) | 4,492 | |||||||||||
Total revenue (FTE basis)(2) | 6,625 | 2,559 | 110 | 9,294 | ||||||||||||
Provision for credit losses | 648 | 252 | 16 | 916 | ||||||||||||
Gains on sales of debt securities | (2 | ) | — | — | (2 | ) | ||||||||||
Total noninterest expense | 3,245 | 1,479 | 116 | 4,840 | ||||||||||||
Income before income taxes | 2,730 | 828 | (22 | ) | 3,536 | |||||||||||
Income tax expense | 999 | 298 | (8 | ) | 1,289 | |||||||||||
Net Income | $ | 1,731 | $ | 530 | $ | (14 | ) | $ | 2,247 | |||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
27
Bank of America
Pro Forma Condensed Combined Statement of Income
Global Corporate and Investment Banking
(unaudited)
The following pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended June 30, 2005 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 2,783 | $ | (27 | ) | $ | 37 | $ | 2,793 | |||||||
Noninterest income | ||||||||||||||||
Service charges | 655 | — | — | 655 | ||||||||||||
Investment and brokerage services | 262 | — | — | 262 | ||||||||||||
Mortgage banking income | 4 | — | — | 4 | ||||||||||||
Investment banking income | 441 | — | — | 441 | ||||||||||||
Equity investment gains | 13 | — | — | 13 | ||||||||||||
Card income | 165 | 7 | (2 | ) | 170 | |||||||||||
Trading account profits | 232 | — | — | 232 | ||||||||||||
Other income | 353 | 18 | — | 371 | ||||||||||||
Total noninterest income | 2,125 | 25 | (2 | ) | 2,148 | |||||||||||
Total revenue (FTE basis)(2) | 4,908 | (2 | ) | 35 | 4,941 | |||||||||||
Provision for credit losses | (249 | ) | — | — | (249 | ) | ||||||||||
Gains on sales of debt securities | 121 | — | — | 121 | ||||||||||||
Total noninterest expense | 2,603 | 9 | — | 2,612 | ||||||||||||
Income before income taxes | 2,675 | (11 | ) | 35 | 2,699 | |||||||||||
Income tax expense | 970 | (4 | ) | 13 | 979 | |||||||||||
Net Income | $ | 1,705 | $ | (7 | ) | $ | 22 | $ | 1,720 | |||||||
For the quarter ended June 30, 2004 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 2,894 | $ | 20 | $ | 37 | $ | 2,951 | ||||||||
Noninterest income | ||||||||||||||||
Service charges | 653 | — | — | 653 | ||||||||||||
Investment and brokerage services | 228 | — | — | 228 | ||||||||||||
Mortgage banking income | 5 | — | — | 5 | ||||||||||||
Investment banking income | 562 | — | — | 562 | ||||||||||||
Equity investment gains | 14 | — | — | 14 | ||||||||||||
Card income | 121 | 8 | (2 | ) | 127 | |||||||||||
Trading account profits | 431 | — | — | 431 | ||||||||||||
Other income | 225 | 16 | — | 241 | ||||||||||||
Total noninterest income | 2,239 | 24 | (2 | ) | 2,261 | |||||||||||
Total revenue (FTE basis)(2) | 5,133 | 44 | 35 | 5,212 | ||||||||||||
Provision for credit losses | (6 | ) | — | — | (6 | ) | ||||||||||
Gains on sales of debt securities | (4 | ) | — | — | (4 | ) | ||||||||||
Total noninterest expense | 3,113 | 8 | — | 3,121 | ||||||||||||
Income before income taxes | 2,022 | 36 | 35 | 2,093 | ||||||||||||
Income tax expense | 729 | 13 | 13 | 755 | ||||||||||||
Net Income | $ | 1,293 | $ | 23 | $ | 22 | $ | 1,338 | ||||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
28
Bank of America
Pro Forma Condensed Combined Statement of Income
Global Wealth and Investment Management
(unaudited)
The following pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended June 30, 2005 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 923 | $ | (16 | ) | $ | 31 | $ | 938 | |||||||
Noninterest income | ||||||||||||||||
Service charges | 21 | — | — | 21 | ||||||||||||
Investment and brokerage services | 788 | — | — | 788 | ||||||||||||
Mortgage banking income | 13 | — | — | 13 | ||||||||||||
Investment banking income | 1 | — | — | 1 | ||||||||||||
Equity investment gains | — | — | — | — | ||||||||||||
Card income | — | — | — | — | ||||||||||||
Trading account profits | 19 | — | — | 19 | ||||||||||||
Other income | 24 | — | — | 24 | ||||||||||||
Total noninterest income | 866 | — | — | 866 | ||||||||||||
Total revenue (FTE basis)(2) | 1,789 | (16 | ) | 31 | 1,804 | |||||||||||
Provision for credit losses | (9 | ) | — | — | (9 | ) | ||||||||||
Gains on sales of debt securities | — | — | — | — | ||||||||||||
Total noninterest expense | 926 | — | (1 | ) | 925 | |||||||||||
Income before income taxes | 872 | (16 | ) | 32 | 888 | |||||||||||
Income tax expense | 315 | (6 | ) | 12 | 321 | |||||||||||
Net Income | $ | 557 | $ | (10 | ) | $ | 20 | $ | 567 | |||||||
For the quarter ended June 30, 2004 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 691 | $ | 17 | $ | 31 | $ | 739 | ||||||||
Noninterest income | ||||||||||||||||
Service charges | 21 | — | — | 21 | ||||||||||||
Investment and brokerage services | 771 | — | — | 771 | ||||||||||||
Mortgage banking income | 18 | — | — | 18 | ||||||||||||
Investment banking income | 5 | — | — | 5 | ||||||||||||
Equity investment gains | 1 | — | — | 1 | ||||||||||||
Card income | — | — | — | — | ||||||||||||
Trading account profits | 34 | — | — | 34 | ||||||||||||
Other income | 23 | — | — | 23 | ||||||||||||
Total noninterest income | 873 | — | — | 873 | ||||||||||||
Total revenue (FTE basis)(2) | 1,564 | 17 | 31 | 1,612 | ||||||||||||
Provision for credit losses | 8 | — | — | 8 | ||||||||||||
Gains on sales of debt securities | — | — | — | — | ||||||||||||
Total noninterest expense | 917 | — | (1 | ) | 916 | |||||||||||
Income before income taxes | 639 | 17 | 32 | 688 | ||||||||||||
Income tax expense | 232 | 6 | 12 | 250 | ||||||||||||
Net Income | $ | 407 | $ | 11 | $ | 20 | $ | 438 | ||||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
29
Bank of America
Pro Forma Condensed Combined Statement of Income
All Other
(unaudited)
The following pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended June 30, 2005 | ||||||||||||||||
($ in millions) | Bank of America (restated) | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income(2) | $ | (158 | ) | $ | 25 | $ | (50 | ) | $ | (183 | ) | |||||
Noninterest income | ||||||||||||||||
Service charges | — | — | — | — | ||||||||||||
Investment and brokerage services | (1 | ) | — | — | (1 | ) | ||||||||||
Mortgage banking income | (65 | ) | — | — | (65 | ) | ||||||||||
Investment banking income | (10 | ) | — | — | (10 | ) | ||||||||||
Equity investment gains | 479 | — | — | 479 | ||||||||||||
Card income | — | (10 | ) | (1 | ) | (11 | ) | |||||||||
Trading account profits | (20 | ) | (4 | ) | — | (24 | ) | |||||||||
Other income | 771 | (13 | ) | — | 758 | |||||||||||
Total noninterest income | 1,154 | (27 | ) | (1 | ) | 1,126 | ||||||||||
Total revenue(2) | 996 | (2 | ) | (51 | ) | 943 | ||||||||||
Provision for credit losses | (22 | ) | — | — | (22 | ) | ||||||||||
Gains on sales of debt securities | 204 | — | — | 204 | ||||||||||||
Total noninterest expense | 144 | (149 | ) | 8 | 3 | |||||||||||
Income before income taxes | 1,078 | 147 | (59 | ) | 1,166 | |||||||||||
Income tax expense | 215 | 61 | (22 | ) | 254 | |||||||||||
Net Income | $ | 863 | $ | 86 | $ | (37 | ) | $ | 912 | |||||||
For the quarter ended June 30, 2004 | ||||||||||||||||
($ in millions) | Bank of America (restated) | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income(2) | $ | (341 | ) | $ | 5 | $ | (50 | ) | $ | (386 | ) | |||||
Noninterest income | ||||||||||||||||
Service charges | 3 | — | — | 3 | ||||||||||||
Investment and brokerage services | — | — | — | — | ||||||||||||
Mortgage banking income | (69 | ) | — | — | (69 | ) | ||||||||||
Investment banking income | (20 | ) | — | — | (20 | ) | ||||||||||
Equity investment gains | 69 | — | — | 69 | ||||||||||||
Card income | — | (8 | ) | (1 | ) | (9 | ) | |||||||||
Trading account profits | 17 | — | — | 17 | ||||||||||||
Other income | (745 | ) | (54 | ) | — | (799 | ) | |||||||||
Total noninterest income | (745 | ) | (62 | ) | (1 | ) | (808 | ) | ||||||||
Total revenue(2) | (1,086 | ) | (57 | ) | (51 | ) | (1,194 | ) | ||||||||
Provision for credit losses | 139 | — | — | 139 | ||||||||||||
Gains on sales of debt securities | 801 | — | — | 801 | ||||||||||||
Total noninterest expense | (47 | ) | (146 | ) | 8 | (185 | ) | |||||||||
Income before income taxes | (377 | ) | 89 | (59 | ) | (347 | ) | |||||||||
Income tax expense | (287 | ) | (7 | ) | (22 | ) | (316 | ) | ||||||||
Net Income | $ | (90 | ) | $ | 96 | $ | (37 | ) | $ | (31 | ) | |||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
30
Bank of America
Pro Forma Condensed Combined Statement of Income
(unaudited)
The following pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended September 30, 2005 | ||||||||||||||||||||
($ in millions) | Global Consumer and Small Business Banking | Global Corporate and Investment Banking | Global Wealth and Investment Management | All Other (restated) | Total Corporation Combined | |||||||||||||||
Net interest income(1) | $ | 5,096 | $ | 2,748 | $ | 947 | $ | (206 | ) | $ | 8,585 | |||||||||
Noninterest income | ||||||||||||||||||||
Service charges | 1,386 | 671 | 23 | — | 2,080 | |||||||||||||||
Investment and brokerage services | — | 267 | 793 | — | 1,060 | |||||||||||||||
Mortgage banking income | 241 | 3 | 14 | (67 | ) | 191 | ||||||||||||||
Investment banking income | — | 532 | 1 | (11 | ) | 522 | ||||||||||||||
Equity investment gains | — | 72 | — | 596 | 668 | |||||||||||||||
Card income | 3,218 | 180 | — | (10 | ) | 3,388 | ||||||||||||||
Trading account profits | (12 | ) | 571 | 20 | (29 | ) | 550 | |||||||||||||
Other income | 148 | 265 | 30 | (538 | ) | (95 | ) | |||||||||||||
Total noninterest income | 4,981 | 2,561 | 881 | (59 | ) | 8,364 | ||||||||||||||
Total revenue(1) | 10,077 | 5,309 | 1,828 | (265 | ) | 16,949 | ||||||||||||||
Provision for credit losses | 1,387 | 12 | (1 | ) | 41 | 1,439 | ||||||||||||||
Gains on sales of debt securities | (1 | ) | 17 | — | 13 | 29 | ||||||||||||||
Total noninterest expense | 4,881 | 2,853 | 923 | 67 | 8,724 | |||||||||||||||
Income before income taxes | 3,808 | 2,461 | 906 | (360 | ) | 6,815 | ||||||||||||||
Income tax expense | 1,386 | 897 | 331 | (328 | ) | 2,286 | ||||||||||||||
Net income | $ | 2,422 | $ | 1,564 | $ | 575 | $ | (32 | ) | $ | 4,529 | |||||||||
For the quarter ended September 30, 2004 | ||||||||||||||||||||
($ in millions) | Global Consumer and Small Business Banking | Global Corporate and Investment Banking | Global Wealth and Investment Management | All Other (restated) | Total Corporation Combined | |||||||||||||||
Net interest income(1) | $ | 4,980 | $ | 2,798 | $ | 818 | $ | (349 | ) | $ | 8,247 | |||||||||
Noninterest income | ||||||||||||||||||||
Service charges | 1,159 | 717 | 21 | 2 | 1,899 | |||||||||||||||
Investment and brokerage services | — | 207 | 765 | — | 972 | |||||||||||||||
Mortgage banking income | (188 | ) | 1 | 10 | (62 | ) | (239 | ) | ||||||||||||
Investment banking income | — | 445 | 7 | (14 | ) | 438 | ||||||||||||||
Equity investment gains | — | 37 | 1 | 182 | 220 | |||||||||||||||
Card income | 3,212 | 132 | — | (9 | ) | 3,335 | ||||||||||||||
Trading account profits | (17 | ) | 232 | 23 | (14 | ) | 224 | |||||||||||||
Other income | 143 | 161 | 27 | 931 | 1,262 | |||||||||||||||
Total noninterest income | 4,309 | 1,932 | 854 | 1,016 | 8,111 | |||||||||||||||
Total revenue(1) | 9,289 | 4,730 | 1,672 | 667 | 16,358 | |||||||||||||||
Provision for credit losses | 1,304 | (389 | ) | (17 | ) | 43 | 941 | |||||||||||||
Gains on sales of debt securities | 117 | 1 | — | 215 | 333 | |||||||||||||||
Total noninterest expense | 4,847 | 2,439 | 888 | 286 | 8,460 | |||||||||||||||
Income before income taxes | 3,255 | 2,681 | 801 | 553 | 7,290 | |||||||||||||||
Income tax expense | 1,181 | 934 | 292 | 82 | 2,489 | |||||||||||||||
Net income | $ | 2,074 | $ | 1,747 | $ | 509 | $ | 471 | $ | 4,801 | ||||||||||
(1) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Information.
31
Bank of America
Pro Forma Condensed Combined Statement of Income
Global Consumer and Small Business Banking
(unaudited)
The following pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended September 30, 2005 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma Adjustments (1) | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 4,224 | $ | 772 | $ | 100 | $ | 5,096 | ||||||||
Noninterest income | ||||||||||||||||
Service charges | 1,386 | — | — | 1,386 | ||||||||||||
Investment and brokerage services | — | — | — | — | ||||||||||||
Mortgage banking income | 230 | 11 | — | 241 | ||||||||||||
Investment banking income | — | — | — | — | ||||||||||||
Equity investment gains | — | — | — | — | ||||||||||||
Card income | 1,344 | 1,894 | (20 | ) | 3,218 | |||||||||||
Trading account profits | (6 | ) | (6 | ) | — | (12 | ) | |||||||||
Other income | 76 | 73 | (1 | ) | 148 | |||||||||||
Total noninterest income | 3,030 | 1,972 | (21 | ) | 4,981 | |||||||||||
Total revenue (FTE basis)(2) | 7,254 | 2,744 | 79 | 10,077 | ||||||||||||
Provision for credit losses | 1,107 | 262 | 18 | 1,387 | ||||||||||||
Gains on sales of debt securities | (1 | ) | — | — | (1 | ) | ||||||||||
Total noninterest expense | 3,271 | 1,495 | 115 | 4,881 | ||||||||||||
Income before income taxes | 2,875 | 987 | (54 | ) | 3,808 | |||||||||||
Income tax expense | 1,051 | 355 | (20 | ) | 1,386 | |||||||||||
Net Income | $ | 1,824 | $ | 632 | $ | (34 | ) | $ | 2,422 | |||||||
For the quarter ended September 30, 2004 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma Adjustments(1) | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 4,296 | $ | 584 | $ | 100 | $ | 4,980 | ||||||||
Noninterest income | ||||||||||||||||
Service charges | 1,159 | — | — | 1,159 | ||||||||||||
Investment and brokerage services | — | — | — | — | ||||||||||||
Mortgage banking income | (199 | ) | 11 | — | (188 | ) | ||||||||||
Investment banking income | — | — | — | — | ||||||||||||
Equity investment gains | — | — | — | — | ||||||||||||
Card income | 1,131 | 2,101 | (20 | ) | 3,212 | |||||||||||
Trading account profits | (3 | ) | (14 | ) | — | (17 | ) | |||||||||
Other income | 82 | 62 | (1 | ) | 143 | |||||||||||
Total noninterest income | 2,170 | 2,160 | (21 | ) | 4,309 | |||||||||||
Total revenue (FTE basis)(2) | 6,466 | 2,744 | 79 | 9,289 | ||||||||||||
Provision for credit losses | 1,013 | 273 | 18 | 1,304 | ||||||||||||
Gains on sales of debt securities | 117 | — | — | 117 | ||||||||||||
Total noninterest expense | 3,265 | 1,467 | 115 | 4,847 | ||||||||||||
Income before income taxes | 2,305 | 1,004 | (54 | ) | 3,255 | |||||||||||
Income tax expense | 840 | 361 | (20 | ) | 1,181 | |||||||||||
Net Income | $ | 1,465 | $ | 643 | $ | (34 | ) | $ | 2,074 | |||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
32
Bank of America
Pro Forma Condensed Combined Statement of Income
Global Corporate and Investment Banking
(unaudited)
The following pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended September 30, 2005 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma Adjustments (1) | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 2,747 | $ | (36 | ) | $ | 37 | $ | 2,748 | |||||||
Noninterest income | ||||||||||||||||
Service charges | 671 | — | — | 671 | ||||||||||||
Investment and brokerage services | 267 | — | — | 267 | ||||||||||||
Mortgage banking income | 3 | — | — | 3 | ||||||||||||
Investment banking income | 532 | — | — | 532 | ||||||||||||
Equity investment gains | 72 | — | — | 72 | ||||||||||||
Card income | 176 | 6 | (2 | ) | 180 | |||||||||||
Trading account profits | 571 | — | — | 571 | ||||||||||||
Other income | 248 | 17 | — | 265 | ||||||||||||
Total noninterest income | 2,540 | 23 | (2 | ) | 2,561 | |||||||||||
Total revenue (FTE basis)(2) | 5,287 | (13 | ) | 35 | 5,309 | |||||||||||
Provision for credit losses | 12 | — | — | 12 | ||||||||||||
Gains on sales of debt securities | 17 | — | — | 17 | ||||||||||||
Total noninterest expense | 2,849 | 4 | — | 2,853 | ||||||||||||
Income before income taxes | 2,443 | (17 | ) | 35 | 2,461 | |||||||||||
Income tax expense | 890 | (6 | ) | 13 | 897 | |||||||||||
Net Income | $ | 1,553 | $ | (11 | ) | $ | 22 | $ | 1,564 | |||||||
For the quarter ended September 30, 2004 | ||||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income (FTE basis)(2) | $ | 2,749 | $ | 12 | $ | 37 | $ | 2,798 | ||||||||
Noninterest income | ||||||||||||||||
Service charges | 717 | — | — | 717 | ||||||||||||
Investment and brokerage services | 207 | — | — | 207 | ||||||||||||
Mortgage banking income | 1 | — | — | 1 | ||||||||||||
Investment banking income | 445 | — | — | 445 | ||||||||||||
Equity investment gains | 37 | — | — | 37 | ||||||||||||
Card income | 127 | 7 | (2 | ) | 132 | |||||||||||
Trading account profits | 232 | — | — | 232 | ||||||||||||
Other income | 145 | 16 | — | 161 | ||||||||||||
Total noninterest income | 1,911 | 23 | (2 | ) | 1,932 | |||||||||||
Total revenue (FTE basis)(2) | 4,660 | 35 | 35 | 4,730 | ||||||||||||
Provision for credit losses | (389 | ) | — | — | (389 | ) | ||||||||||
Gains on sales of debt securities | 1 | — | — | 1 | ||||||||||||
Total noninterest expense | 2,430 | 9 | — | 2,439 | ||||||||||||
Income before income taxes | 2,620 | 26 | 35 | 2,681 | ||||||||||||
Income tax expense | 911 | 10 | 13 | 934 | ||||||||||||
Net Income | $ | 1,709 | $ | 16 | $ | 22 | $ | 1,747 | ||||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
33
Bank of America
Pro Forma Condensed Combined Statement of Income
Global Wealth and Investment Management
(unaudited)
The following pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended September 30, 2005 | |||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma Adjustments (1) | Combined | |||||||||||
Net interest income (FTE basis)(2) | $ | 937 | $ | (24 | ) | $ | 34 | $ | 947 | ||||||
Noninterest income | |||||||||||||||
Service charges | 23 | — | — | 23 | |||||||||||
Investment and brokerage services | 793 | — | — | 793 | |||||||||||
Mortgage banking income | 14 | — | — | 14 | |||||||||||
Investment banking income | 1 | — | — | 1 | |||||||||||
Equity investment gains | — | — | — | — | |||||||||||
Card income | — | — | — | — | |||||||||||
Trading account profits | 20 | — | — | 20 | |||||||||||
Other income | 30 | — | — | 30 | |||||||||||
Total noninterest income | 881 | — | — | 881 | |||||||||||
Total revenue (FTE basis)(2) | 1,818 | (24 | ) | 34 | 1,828 | ||||||||||
Provision for credit losses | (1 | ) | — | — | (1 | ) | |||||||||
Gains on sales of debt securities | — | — | — | — | |||||||||||
Total noninterest expense | 922 | — | 1 | 923 | |||||||||||
Income before income taxes | 897 | (24 | ) | 33 | 906 | ||||||||||
Income tax expense | 328 | (9 | ) | 12 | 331 | ||||||||||
Net Income | $ | 569 | $ | (15 | ) | $ | 21 | $ | 575 | ||||||
For the quarter ended September 30, 2004 | |||||||||||||||
($ in millions) | Bank of America | MBNA | MBNA Pro Forma | Combined | |||||||||||
Net interest income (FTE basis)(2) | $ | 771 | $ | 13 | $ | 34 | $ | 818 | |||||||
Noninterest income | |||||||||||||||
Service charges | 21 | — | — | 21 | |||||||||||
Investment and brokerage services | 765 | — | — | 765 | |||||||||||
Mortgage banking income | 10 | — | — | 10 | |||||||||||
Investment banking income | 7 | — | — | 7 | |||||||||||
Equity investment gains | 1 | — | — | 1 | |||||||||||
Card income | — | — | — | — | |||||||||||
Trading account profits | 23 | — | — | 23 | |||||||||||
Other income | 27 | — | — | 27 | |||||||||||
Total noninterest income | 854 | — | — | 854 | |||||||||||
Total revenue (FTE basis)(2) | 1,625 | 13 | 34 | 1,672 | |||||||||||
Provision for credit losses | (17 | ) | — | — | (17 | ) | |||||||||
Gains on sales of debt securities | — | — | — | — | |||||||||||
Total noninterest expense | 887 | — | 1 | 888 | |||||||||||
Income before income taxes | 755 | 13 | 33 | 801 | |||||||||||
Income tax expense | 275 | 5 | 12 | 292 | |||||||||||
Net Income | $ | 480 | $ | 8 | $ | 21 | $ | 509 | |||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
34
Bank of America
Pro Forma Condensed Combined Statement of Income
All Other
(unaudited)
The following pro forma condensed combined financial information and explanatory notes present how the combined financial statements of Bank of America and MBNA may have appeared had the businesses actually been combined at the beginning of the period presented. The pro forma combined financial information is presented for illustrative purposes only and does not indicate the financial results of the combined companies had the companies actually been combined at the beginning of the period presented and had the impact of possible revenue enhancements, expense efficiencies, hedging activities, asset dispositions, and share repurchases, among other factors, been considered.
For the quarter ended September 30, 2005 | ||||||||||||||||
($ in millions) | Bank of America (restated) | MBNA | MBNA Pro Forma Adjustments (1) | Combined | ||||||||||||
Net interest income(2) | $ | (173 | ) | $ | 23 | $ | (56 | ) | $ | (206 | ) | |||||
Noninterest income | ||||||||||||||||
Service charges | — | — | — | — | ||||||||||||
Investment and brokerage services | — | — | — | — | ||||||||||||
Mortgage banking income | (67 | ) | — | — | (67 | ) | ||||||||||
Investment banking income | (11 | ) | — | — | (11 | ) | ||||||||||
Equity investment gains | 596 | — | — | 596 | ||||||||||||
Card income | — | (10 | ) | — | (10 | ) | ||||||||||
Trading account profits | (28 | ) | (1 | ) | — | (29 | ) | |||||||||
Other income | (525 | ) | (14 | ) | 1 | (538 | ) | |||||||||
Total noninterest income | (35 | ) | (25 | ) | 1 | (59 | ) | |||||||||
Total revenue(2) | (208 | ) | (2 | ) | (55 | ) | (265 | ) | ||||||||
Provision for credit losses | 41 | — | — | 41 | ||||||||||||
Gains on sales of debt securities | 13 | — | — | 13 | ||||||||||||
Total noninterest expense | 243 | (183 | ) | 7 | 67 | |||||||||||
Income before income taxes | (479 | ) | 181 | (62 | ) | (360 | ) | |||||||||
Income tax expense | (374 | ) | 69 | (23 | ) | (328 | ) | |||||||||
Net Income | $ | (105 | ) | $ | 112 | $ | (39 | ) | $ | (32 | ) | |||||
For the quarter ended September 30, 2004 | ||||||||||||||||
($ in millions) | Bank of America (restated) | MBNA | MBNA Pro Forma | Combined | ||||||||||||
Net interest income(2) | $ | (301 | ) | $ | 8 | $ | (56 | ) | $ | (349 | ) | |||||
Noninterest income | ||||||||||||||||
Service charges | 2 | — | — | 2 | ||||||||||||
Investment and brokerage services | — | — | — | — | ||||||||||||
Mortgage banking income | (62 | ) | — | — | (62 | ) | ||||||||||
Investment banking income | (14 | ) | — | — | (14 | ) | ||||||||||
Equity investment gains | 182 | — | — | 182 | ||||||||||||
Card income | — | (9 | ) | — | (9 | ) | ||||||||||
Trading account profits | (14 | ) | — | — | (14 | ) | ||||||||||
Other income | 983 | (53 | ) | 1 | 931 | |||||||||||
Total noninterest income | 1,077 | (62 | ) | 1 | 1,016 | |||||||||||
Total revenue(2) | 776 | (54 | ) | (55 | ) | 667 | ||||||||||
Provision for credit losses | 43 | — | — | 43 | ||||||||||||
Gains on sales of debt securities | 215 | — | — | 215 | ||||||||||||
Total noninterest expense | 439 | (160 | ) | 7 | 286 | |||||||||||
Income before income taxes | 509 | 106 | (62 | ) | 553 | |||||||||||
Income tax expense | 60 | 45 | (23 | ) | 82 | |||||||||||
Net Income | $ | 449 | $ | 61 | $ | (39 | ) | $ | 471 | |||||||
(1) | Reflects purchase accounting adjustments which were allocated to the business segments andAll Other primarily based on how the assets acquired and liabilities assumed in the MBNA Merger were allocated to the respective business segments andAll Other. See also Notes to Unaudited Pro Forma Condensed Combined Financial Information. |
(2) | Net Interest Income and Total Revenue for the segments are on a FTE basis. For more information on a FTE basis, see Note 4 on page 15. |
35
Note 5 –Pro Forma Segment Financial Information
GCSBB reports product revenues for Deposits, Mortgage, Card Services, Home Equity Line of Credit (HELOC), and Other.GCIB reports revenues on Business Lending, Capital Markets and Advisory Services, Treasury Services, and Other.GWIM reports revenues on the Private Bank, Columbia Management, Premier Banking and Investments, and Other. For more information onAll Other, see Note 4.
The management accounting reporting process derives segment and sub-segment results by utilizing allocation methodologies for revenue, expense, and capital. The net income derived for sub-segments (i.e., Deposits, Mortgage, Card Services, etc) are dependent upon revenue and cost allocations using an activity based costing model, other methodologies, and assumptions management believes that are appropriate to reflect the results of the business. An example, specifically with regard to cost allocation, is where banking center costs are not only allocated to various consumer products (i.e., deposits, mortgage, card, etc) that utilize the banking center, but also are allocated to other sub-segments such as Treasury Services withinGCIB. A discussion of the Corporation’s allocation methodologies is presented as part ofBusiness Segment Operations on pages 26 and 27 of the Corporation’s 2005 Form 10-K filed on March 16, 2006.
The Corporation migrates qualifying affluent customers, deposits and net interest income related to those customers fromGCSBBtoGWIM’s Premier Banking and Investments. To provide a view of organic growth in Premier Banking and Investments, the Corporation allocates the original migrated deposit balances as well as corresponding net interest income at original spreads from Premier Banking and Investments toGWIM’sOther sub-segment. The Corporation believes that the resulting Premier Banking and Investments sub-segment approximates an organic, incremental view of the business.
The following tables present pro forma segment and sub segment financial information for illustrative purposes only.
36
Bank of America Corporation
Bank of America: Consolidated Income Statement
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | ||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | |||||||||||||||||||||||||||
Income Statement | ||||||||||||||||||||||||||||||||||||
Net interest income | $ | 8,666 | $ | 8,585 | $ | 8,437 | $ | 8,341 | $ | 34,029 | $ | 8,305 | $ | 8,247 | $ | 8,106 | $ | 8,173 | $ | 32,831 | 3.6 | % | ||||||||||||||
Service charges | 1,928 | 2,080 | 1,920 | 1,777 | 7,705 | 1,892 | 1,899 | 1,783 | 1,746 | 7,320 | 5.3 | |||||||||||||||||||||||||
Investment and brokerage services | 1,062 | 1,060 | 1,049 | 1,013 | 4,184 | 1,008 | 972 | 999 | 1,066 | 4,045 | 3.4 | |||||||||||||||||||||||||
Mortgage banking income | 219 | 191 | 202 | 229 | 841 | 166 | (239 | ) | 309 | 228 | 464 | 81.1 | ||||||||||||||||||||||||
Investment banking income | 537 | 522 | 431 | 366 | 1,856 | 497 | 438 | 547 | 434 | 1,916 | (3.1 | ) | ||||||||||||||||||||||||
Equity investment gains | 481 | 668 | 492 | 399 | 2,040 | 426 | 220 | 84 | 220 | 950 | 114.7 | |||||||||||||||||||||||||
Card income | 3,114 | 3,388 | 3,277 | 2,998 | 12,777 | 3,450 | 3,335 | 3,084 | 2,946 | 12,815 | (0.3 | ) | ||||||||||||||||||||||||
Trading account profits | 307 | 550 | 212 | 669 | 1,738 | 315 | 224 | 407 | 103 | 1,049 | 65.7 | |||||||||||||||||||||||||
Other income | 26 | (95 | ) | 1,251 | 324 | 1,506 | 501 | 1,262 | (395 | ) | 596 | 1,964 | (23.2 | ) | ||||||||||||||||||||||
Total noninterest income | 7,674 | 8,364 | 8,834 | 7,775 | 32,647 | 8,255 | 8,111 | 6,818 | 7,339 | 30,523 | 7.0 | |||||||||||||||||||||||||
Total revenue | 16,340 | 16,949 | 17,271 | 16,116 | 66,676 | 16,560 | 16,358 | 14,924 | 15,512 | 63,354 | 5.2 | |||||||||||||||||||||||||
Provision for credit losses | 1,697 | 1,439 | 1,064 | 882 | 5,082 | 981 | 941 | 1,057 | 1,004 | 3,983 | 27.6 | |||||||||||||||||||||||||
Gains (losses) on sales of debt securities | 71 | 29 | 325 | 659 | 1,084 | 103 | 333 | 795 | 544 | 1,775 | (38.9 | ) | ||||||||||||||||||||||||
Total noninterest expense | 9,063 | 8,724 | 8,524 | 9,279 | 35,590 | 8,770 | 8,460 | 8,692 | 9,075 | 34,997 | 1.7 | |||||||||||||||||||||||||
Income before income taxes | 5,651 | 6,815 | 8,008 | 6,614 | 27,088 | 6,912 | 7,290 | 5,970 | 5,977 | 26,149 | 3.6 | |||||||||||||||||||||||||
Income tax expense | 1,740 | 2,286 | 2,728 | 2,177 | 8,931 | 2,340 | 2,489 | 1,978 | 2,042 | 8,849 | 0.9 | |||||||||||||||||||||||||
Net income | $ | 3,911 | $ | 4,529 | $ | 5,280 | $ | 4,437 | $ | 18,157 | $ | 4,572 | $ | 4,801 | $ | 3,992 | $ | 3,935 | $ | 17,300 | 5.0 | % | ||||||||||||||
Average Balance Sheet | ||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 598,739 | $ | 573,715 | $ | 550,769 | $ | 555,953 | $ | 569,922 | $ | 546,218 | $ | 533,219 | $ | 525,963 | $ | 531,849 | $ | 534,342 | 6.7 | % | ||||||||||||||
Total Deposits | 657,668 | 663,406 | 671,681 | 658,638 | 662,847 | 641,838 | 620,099 | 614,243 | 593,465 | 617,485 | 7.3 | |||||||||||||||||||||||||
Trading Related Assets | 329,858 | 343,033 | 344,239 | 290,868 | 326,898 | 285,514 | 251,617 | 255,754 | 257,125 | 262,526 | 24.5 |
37
Bank of America Corporation
Net Income
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | |||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | |||||||||||||||||||||||||||||||
Global Consumer and Small Business Banking | $ | 1,959 | $ | 2,422 | $ | 2,081 | $ | 2,297 | $ | 8,759 | $ | 2,160 | $ | 2,074 | $ | 2,247 | $ | 1,804 | $ | 8,285 | ||||||||||||||||||||
Deposits | 1,256 | 1,238 | 1,054 | 995 | 4,543 | 1,068 | 902 | 800 | 611 | 3,381 | ||||||||||||||||||||||||||||||
Mortgage | 97 | 101 | 106 | 115 | 419 | 43 | (92 | ) | 132 | (24 | ) | 59 | ||||||||||||||||||||||||||||
Card Services (Held) | 421 | 855 | 620 | 702 | 2,598 | 610 | 746 | 811 | 604 | 2,771 | ||||||||||||||||||||||||||||||
Home Equity Line of Credit (HELOC) | 124 | 118 | 109 | 86 | 437 | 69 | 71 | 75 | 58 | 273 | ||||||||||||||||||||||||||||||
Global Consumer and Small Business ALM(1) | 75 | 140 | 210 | 398 | 823 | 383 | 491 | 472 | 536 | 1,882 | ||||||||||||||||||||||||||||||
Global Consumer and Small Business Other | (14 | ) | (30 | ) | (18 | ) | 1 | (61 | ) | (13 | ) | (44 | ) | (43 | ) | 19 | (81 | ) | ||||||||||||||||||||||
Global Corporate and Investment Banking | 1,292 | 1,564 | 1,720 | 1,873 | 6,449 | 1,875 | 1,747 | 1,338 | 1,475 | 6,435 | ||||||||||||||||||||||||||||||
Business Lending | 424 | 569 | 789 | 775 | 2,557 | 846 | 728 | 621 | 652 | 2,847 | ||||||||||||||||||||||||||||||
Capital Markets and Advisory Services | 189 | 440 | 330 | 455 | 1,414 | 427 | 311 | 595 | 426 | 1,759 | ||||||||||||||||||||||||||||||
Treasury Services | 532 | 479 | 441 | 413 | 1,865 | 407 | 392 | 288 | 290 | 1,377 | ||||||||||||||||||||||||||||||
Global Corporate and Investment Banking ALM(1) | 33 | 61 | 91 | 172 | 357 | 167 | 194 | 205 | 221 | 787 | ||||||||||||||||||||||||||||||
Global Corporate and Investment Banking Other | 114 | 15 | 69 | 58 | 256 | 28 | 122 | (371 | ) | (114 | ) | (335 | ) | |||||||||||||||||||||||||||
Global Wealth and Investment Management | 608 | 575 | 567 | 599 | 2,349 | 514 | 509 | 438 | 242 | 1,703 | ||||||||||||||||||||||||||||||
Private Bank | 138 | 142 | 161 | 135 | 576 | 102 | 134 | 91 | 104 | 431 | ||||||||||||||||||||||||||||||
Columbia Management | 72 | 74 | 65 | 72 | 283 | 64 | 73 | 60 | 89 | 286 | ||||||||||||||||||||||||||||||
Premier Banking and Investments | 255 | 206 | 192 | 170 | 823 | 160 | 125 | 136 | 139 | 560 | ||||||||||||||||||||||||||||||
Global Wealth and Investment Management | 29 | 53 | 79 | 145 | 306 | 128 | 136 | 123 | 152 | 539 | ||||||||||||||||||||||||||||||
Global Wealth and Investment Management Other | 114 | 100 | 70 | 77 | 361 | 60 | 41 | 28 | (242 | ) | (113 | ) | ||||||||||||||||||||||||||||
All Other | 52 | (32 | ) | 912 | (332 | ) | 600 | 23 | 471 | (31 | ) | 414 | 877 | |||||||||||||||||||||||||||
Equity Investments | 255 | 340 | 264 | 128 | 987 | 212 | 51 | (11 | ) | 23 | 275 | |||||||||||||||||||||||||||||
SFAS 133 Restatements | (195 | ) | (285 | ) | 361 | (302 | ) | (421 | ) | 6 | 339 | (508 | ) | (33 | ) | (196 | ) | |||||||||||||||||||||||
Merger & Restructuring | (42 | ) | (62 | ) | (96 | ) | (572 | ) | (772 | ) | (181 | ) | (148 | ) | (83 | ) | (6 | ) | (418 | ) | ||||||||||||||||||||
Other | 34 | (25 | ) | 383 | 414 | 806 | (14 | ) | 229 | 571 | 430 | 1,216 | ||||||||||||||||||||||||||||
Bank of America Consolidated | $ | 3,911 | $ | 4,529 | $ | 5,280 | $ | 4,437 | $ | 18,157 | $ | 4,572 | $ | 4,801 | $ | 3,992 | $ | 3,935 | $ | 17,300 | ||||||||||||||||||||
(1) | ALM represents the allocation of earnings from corporate activities related to interest rate risk and liquidity management |
38
Bank of America Corporation
Total Revenue(1)
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | |||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | |||||||||||||||||||||||||||||||
Global Consumer and Small Business Banking | $ | 9,847 | $ | 10,077 | $ | 9,583 | $ | 9,409 | $ | 38,916 | $ | 9,788 | $ | 9,289 | $ | 9,294 | $ | 8,764 | $ | 37,135 | ||||||||||||||||||||
Deposits | 4,068 | 4,016 | 3,736 | 3,467 | 15,287 | 3,520 | 3,400 | 3,258 | 3,039 | 13,217 | ||||||||||||||||||||||||||||||
Mortgage | 435 | 419 | 424 | 459 | 1,737 | 438 | 48 | 569 | 257 | 1,312 | ||||||||||||||||||||||||||||||
Card Services (Held) | 4,753 | 4,984 | 4,662 | 4,444 | 18,843 | 4,794 | 4,645 | 4,323 | 4,201 | 17,963 | ||||||||||||||||||||||||||||||
Home Equity Line of Credit (HELOC) | 350 | 354 | 341 | 323 | 1,368 | 327 | 323 | 325 | 266 | 1,241 | ||||||||||||||||||||||||||||||
Global Consumer and Small Business ALM(2) | 116 | 221 | 328 | 616 | 1,281 | 596 | 771 | 743 | 855 | 2,965 | ||||||||||||||||||||||||||||||
Global Consumer and Small Business Other | 125 | 83 | 92 | 100 | 400 | 113 | 102 | 76 | 146 | 437 | ||||||||||||||||||||||||||||||
Global Corporate and Investment Banking | 4,973 | 5,309 | 4,941 | 5,490 | 20,713 | 5,088 | 4,730 | 5,212 | 5,229 | 20,259 | ||||||||||||||||||||||||||||||
Business Lending | 1,405 | 1,496 | 1,493 | 1,637 | 6,031 | 1,468 | 1,419 | 1,451 | 1,661 | 5,999 | ||||||||||||||||||||||||||||||
Capital Markets and Advisory Services | 1,556 | 1,860 | 1,539 | 1,864 | 6,819 | 1,607 | 1,442 | 1,969 | 1,731 | 6,749 | ||||||||||||||||||||||||||||||
Treasury Services | 1,610 | 1,532 | 1,484 | 1,417 | 6,043 | 1,423 | 1,342 | 1,255 | 1,202 | 5,222 | ||||||||||||||||||||||||||||||
Global Corporate and Investment Banking ALM(2) | 52 | 95 | 142 | 269 | 558 | 259 | 303 | 321 | 346 | 1,229 | ||||||||||||||||||||||||||||||
Global Corporate and Investment Banking Other | 350 | 326 | 283 | 303 | 1,262 | 331 | 224 | 216 | 289 | 1,060 | ||||||||||||||||||||||||||||||
Global Wealth and Investment Management | 1,895 | 1,828 | 1,804 | 1,837 | 7,364 | 1,737 | 1,672 | 1,612 | 1,721 | 6,742 | ||||||||||||||||||||||||||||||
Private Bank | 527 | 514 | 538 | 513 | 2,092 | 500 | 504 | 489 | 499 | 1,992 | ||||||||||||||||||||||||||||||
Columbia Management | 346 | 339 | 328 | 332 | 1,345 | 330 | 321 | 310 | 383 | 1,344 | ||||||||||||||||||||||||||||||
Premier Banking and Investments | 706 | 659 | 611 | 575 | 2,551 | 548 | 516 | 524 | 525 | 2,113 | ||||||||||||||||||||||||||||||
Global Wealth and Investment Management ALM(2) | 47 | 84 | 125 | 230 | 486 | 204 | 216 | 194 | 241 | 855 | ||||||||||||||||||||||||||||||
Global Wealth and Investment Management Other | 269 | 232 | 202 | 187 | 890 | 155 | 115 | 95 | 73 | 438 | ||||||||||||||||||||||||||||||
All Other | (375 | ) | (265 | ) | 943 | (620 | ) | (317 | ) | (53 | ) | 667 | (1,194 | ) | (202 | ) | (782 | ) | ||||||||||||||||||||||
Equity Investments | 429 | 564 | 447 | 231 | 1,671 | 372 | 120 | 9 | 61 | 562 | ||||||||||||||||||||||||||||||
SFAS 133 Restatements | (312 | ) | (456 | ) | 577 | (484 | ) | (675 | ) | 11 | 940 | (812 | ) | (53 | ) | 86 | ||||||||||||||||||||||||
Fully Taxable-equivalent (FTE) | (243 | ) | (200 | ) | (191 | ) | (200 | ) | (834 | ) | (207 | ) | (171 | ) | (170 | ) | (142 | ) | (690 | ) | ||||||||||||||||||||
Other(3) | (249 | ) | (173 | ) | 110 | (167 | ) | (479 | ) | (229 | ) | (222 | ) | (221 | ) | (68 | ) | (740 | ) | |||||||||||||||||||||
Bank of America Consolidated | $ | 16,340 | $ | 16,949 | $ | 17,271 | $ | 16,116 | $ | 66,676 | $ | 16,560 | $ | 16,358 | $ | 14,924 | $ | 15,512 | $ | 63,354 | ||||||||||||||||||||
(1) | Segment results are presented on a fully taxable-equivalent (FTE) basis, with the offset inAll Other |
(2) | ALM represents the allocation of earnings from corporate activities related to interest rate risk and liquidity management |
(3) | Primarily represents offset of tax equivalent gross-up reflected in the segment revenue results and whole loan gains. Security gains while included in Net Income are excluded from Revenue. |
39
Bank of America Corporation
Summary
2005 Pro Forma | ||||||||||||
Revenue Growth (1) | Expense Growth (2) | Operating Leverage (1),(2) | Efficiency Ratio(1),(2) | |||||||||
Global Consumer and Small Business Banking | 4.8 | % | 2.0 | % | 2.8 | % | 51.17 | % | ||||
Deposits | 15.7 | 3.3 | 12.3 | 53.01 | ||||||||
Mortgage | 32.4 | (19.3 | ) | 51.7 | 61.16 | |||||||
Card Services (Held) | 4.9 | 5.7 | (0.8 | ) | 51.63 | |||||||
Home Equity Line of Credit (HELOC) | 10.2 | (16.7 | ) | 26.9 | 47.37 | |||||||
Global Consumer and Small Business Other | (8.3 | ) | (3.9 | ) | (4.5 | ) | nm | |||||
Global Corporate and Investment Banking | 2.2 | 1.2 | 1.0 | 53.79 | ||||||||
Business Lending | 0.5 | (2.1 | ) | 2.6 | 33.23 | |||||||
Capital Markets and Advisory Services | 1.0 | 14.1 | (13.0 | ) | 69.00 | |||||||
Treasury Services | 15.7 | 2.8 | 12.9 | 51.86 | ||||||||
Global Corporate and Investment Banking Other | 19.1 | (27.3 | ) | 46.4 | nm | |||||||
Global Wealth and Investment Management | 9.2 | (8.0 | ) | 17.3 | 50.30 | |||||||
Private Bank | 5.0 | (8.8 | ) | 13.8 | 58.11 | |||||||
Columbia Management | 0.1 | 2.9 | (2.8 | ) | 67.20 | |||||||
Premier Banking and Investments | 20.7 | 0.4 | 20.4 | 49.23 | ||||||||
Global Wealth and Investment Management Other | 103.0 | (41.9 | ) | 145.0 | nm | |||||||
Bank of America Consolidated | 5.2 | % | 0.1 | % | 5.1 | % | 50.97 | % |
(1) | Segment revenue is presented on a fully taxable-equivalent (FTE) basis |
(2) | Excludes merger & restructuring charges |
nm | indicates non-meaningful data |
40
Bank of America Corporation
Global Consumer and Small Business Banking
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | Deposits (1) | Mortgage | Card Services (2) | HELOC | ALM | Other | Total | Deposits (1) | Mortgage | Card Services (2) | HELOC | ALM | Other | ||||||||||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 20,183 | $ | 8,680 | $ | 745 | $ | 8,072 | $ | 1,291 | $ | 1,281 | $ | 114 | $ | 19,553 | $ | 7,481 | $ | 1,084 | $ | 6,651 | $ | 1,164 | $ | 2,965 | $ | 208 | |||||||||||||||||||||||||||
Service charges | 4,997 | 4,997 | — | — | — | — | — | 4,485 | 4,484 | — | — | — | — | 1 | |||||||||||||||||||||||||||||||||||||||||
Investment and brokerage services | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Mortgage banking income | 1,048 | — | 971 | — | 77 | — | — | 633 | — | 557 | — | 76 | — | — | |||||||||||||||||||||||||||||||||||||||||
Investment banking income | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Equity investment gains | — | — | — | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Card income | 12,128 | 1,610 | — | 10,518 | — | — | — | 12,315 | 1,252 | — | 11,063 | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Trading account profits(3) | (33 | ) | — | — | (36 | ) | — | — | 3 | (426 | ) | — | (349 | ) | (86 | ) | — | — | 9 | ||||||||||||||||||||||||||||||||||||
Other income | 593 | — | 21 | 289 | — | — | 283 | 575 | — | 20 | 335 | 1 | — | 219 | |||||||||||||||||||||||||||||||||||||||||
Total noninterest income | 18,733 | 6,607 | 992 | 10,771 | 77 | — | 286 | 17,582 | 5,736 | 228 | 11,312 | 77 | — | 229 | |||||||||||||||||||||||||||||||||||||||||
Total revenue | 38,916 | 15,287 | 1,737 | 18,843 | 1,368 | 1,281 | 400 | 37,135 | 13,217 | 1,312 | 17,963 | 1,241 | 2,965 | 437 | |||||||||||||||||||||||||||||||||||||||||
Provision for credit losses | 5,338 | 98 | 21 | 5,063 | 38 | — | 118 | 4,688 | 62 | 21 | 4,390 | 33 | — | 182 | |||||||||||||||||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | (2 | ) | — | — | — | — | — | (2 | ) | 118 | — | 117 | — | — | — | 1 | |||||||||||||||||||||||||||||||||||||||
Total noninterest expense | 19,914 | 8,103 | 1,062 | 9,728 | 648 | (1 | ) | 374 | 19,531 | 7,842 | 1,316 | 9,206 | 778 | — | 389 | ||||||||||||||||||||||||||||||||||||||||
Income before income taxes | 13,662 | 7,086 | 654 | 4,052 | 682 | 1,282 | (94 | ) | 13,034 | 5,313 | 92 | 4,367 | 430 | 2,965 | (133 | ) | |||||||||||||||||||||||||||||||||||||||
Income tax expense | 4,903 | 2,543 | 235 | 1,454 | 245 | 459 | (33 | ) | 4,749 | 1,932 | 33 | 1,596 | 157 | 1,083 | (52 | ) | |||||||||||||||||||||||||||||||||||||||
Net income(4) | $ | 8,759 | $ | 4,543 | $ | 419 | $ | 2,598 | $ | 437 | $ | 823 | $ | (61 | ) | $ | 8,285 | $ | 3,381 | $ | 59 | $ | 2,771 | $ | 273 | $ | 1,882 | $ | (81 | ) | |||||||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Growth | 4.8 | % | 15.7 | % | 32.4 | % | 4.9 | % | 10.2 | % | — | (8.3 | )% | ||||||||||||||||||||||||||||||||||||||||||
Expense Growth | 2.0 | 3.3 | (19.3 | ) | 5.7 | (16.7 | ) | — | (3.9 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Operating Leverage | 2.8 | 12.3 | 51.7 | (0.8 | ) | 26.9 | — | (4.5 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
Efficiency Ratio | 51.17 | 53.01 | 61.16 | 51.63 | 47.37 | — | nm | 52.59 | % | 59.33 | % | 100.37 | % | 51.25 | % | 62.73 | % | — | nm | ||||||||||||||||||||||||||||||||||||
Average Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 176,664 | $ | — | $ | 29,506 | $ | 87,120 | $ | 48,405 | $ | — | $ | 11,633 | $ | 163,505 | $ | — | $ | 35,049 | $ | 77,240 | $ | 40,794 | $ | — | $ | 10,422 | |||||||||||||||||||||||||||
Total Deposits | 332,899 | 332,899 | — | — | — | — | — | 329,857 | 329,857 | — | — | — | — | — |
(1) | Deposit balances reflect Premier migration impact of $11.2 billion and $39.3 billion for 2004 and 2005, respectively. Eliminating migration effect, average balance growth is 9.1% |
(2) | Card Services presented on a held view |
(3) | Trading balances are related to the impact of legacy MBNA foreign currency contracts and certain foreign denominated assets and liabilities |
(4) | Product operating net income includes the full allocation of distribution channel costs, including banking center channel |
nm | indicates non-meaningful data |
41 |
Bank of America Corporation
Global Consumer and Small Business Banking: Deposits
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 2,370 | $ | 2,213 | $ | 2,086 | $ | 2,011 | $ | 8,680 | $ | 1,978 | $ | 1,921 | $ | 1,840 | $ | 1,742 | $ | 7,481 | 16.0 | % | |||||||||||||||||||||
Service charges | 1,262 | 1,386 | 1,244 | 1,105 | 4,997 | 1,193 | 1,159 | 1,106 | 1,026 | 4,484 | 11.4 | ||||||||||||||||||||||||||||||||
Investment and brokerage services | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Mortgage banking income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Investment banking income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Equity investment gains | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Card income | 437 | 416 | 406 | 351 | 1,610 | 349 | 320 | 312 | 271 | 1,252 | 28.6 | ||||||||||||||||||||||||||||||||
Trading account profits | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Other income | (1 | ) | 1 | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
�� | |||||||||||||||||||||||||||||||||||||||||||
Total noninterest income | 1,698 | 1,803 | 1,650 | 1,456 | 6,607 | 1,542 | 1,479 | 1,418 | 1,297 | 5,736 | 15.2 | ||||||||||||||||||||||||||||||||
Total revenue | 4,068 | 4,016 | 3,736 | 3,467 | 15,287 | 3,520 | 3,400 | 3,258 | 3,039 | 13,217 | 15.7 | ||||||||||||||||||||||||||||||||
Provision for credit losses | 48 | 38 | 19 | (7 | ) | 98 | (63 | ) | 65 | 57 | 3 | 62 | 58.1 | ||||||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total noninterest expense | 2,070 | 2,033 | 2,069 | 1,931 | 8,103 | 1,920 | 1,919 | 1,942 | 2,061 | 7,842 | 3.3 | ||||||||||||||||||||||||||||||||
Income before income taxes | 1,950 | 1,945 | 1,648 | 1,543 | 7,086 | 1,663 | 1,416 | 1,259 | 975 | 5,313 | 33.4 | ||||||||||||||||||||||||||||||||
Income tax expense | 694 | 707 | 594 | 548 | 2,543 | 595 | 514 | 459 | 364 | 1,932 | 31.6 | ||||||||||||||||||||||||||||||||
Net income(1) | $ | 1,256 | $ | 1,238 | $ | 1,054 | $ | 995 | $ | 4,543 | $ | 1,068 | $ | 902 | $ | 800 | $ | 611 | $ | 3,381 | 34.4 | % | |||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | 15.7 | % | 15.7 | % | 14.4 | % | 14.1 | % | 15.7 | % | |||||||||||||||||||||||||||||||||
Expense Growth YTD | 3.3 | 1.9 | (0.1 | ) | (6.3 | ) | 3.3 | ||||||||||||||||||||||||||||||||||||
Operating Leverage YTD | 12.3 | 13.8 | 14.5 | 20.4 | 12.3 | ||||||||||||||||||||||||||||||||||||||
Efficiency Ratio | 50.88 | 50.63 | 55.37 | 55.70 | 53.01 | 54.55 | % | 56.44 | % | 59.60 | % | 67.83 | % | 59.33 | % | (632 | )bps | ||||||||||||||||||||||||||
Average Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||
Total Deposits (2) | $ | 332,715 | $ | 337,678 | $ | 333,510 | $ | 327,584 | $ | 332,899 | $ | 328,842 | $ | 333,042 | $ | 333,561 | $ | 323,959 | $ | 329,857 | 0.9 | % |
(1) | Product operating net income includes the full allocation of distribution channel costs, including banking center channel |
(2) | Deposit balances reflect Premier migration impact of $11.2 billion and $39.3 billion for 2004 and 2005, respectively. Eliminating migration effect, average balance growth is 9.1% |
42 |
Bank of America Corporation
Global Consumer and Small Business Banking: Mortgage (1)
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 171 | $ | 194 | $ | 188 | $ | 192 | $ | 745 | $ | 237 | $ | 250 | $ | 292 | $ | 305 | $ | 1,084 | (31.3 | )% | |||||||||||||||||||||
Service charges | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Investment and brokerage services | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Mortgage banking income | 257 | 220 | 231 | 263 | 971 | 195 | (207 | ) | 334 | 235 | 557 | 74.2 | |||||||||||||||||||||||||||||||
Investment banking income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Equity investment gains | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Card income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Trading account profits | — | — | — | — | — | — | — | (57 | ) | (292 | ) | (349 | ) | nm | |||||||||||||||||||||||||||||
Other income | 7 | 5 | 5 | 4 | 21 | 6 | 5 | — | 9 | 20 | 8.2 | ||||||||||||||||||||||||||||||||
Total noninterest income | 264 | 225 | 236 | 267 | 992 | 201 | (202 | ) | 277 | (48 | ) | 228 | 335.1 | ||||||||||||||||||||||||||||||
Total revenue | 435 | 419 | 424 | 459 | 1,737 | 438 | 48 | 569 | 257 | 1,312 | 32.4 | ||||||||||||||||||||||||||||||||
Provision for credit losses | 6 | 8 | 2 | 5 | 21 | 5 | 5 | 5 | 6 | 21 | (1.1 | ) | |||||||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | — | — | — | — | — | — | 117 | — | — | 117 | nm | ||||||||||||||||||||||||||||||||
Total noninterest expense | 277 | 253 | 256 | 276 | 1,062 | 366 | 304 | 356 | 290 | 1,316 | (19.3 | ) | |||||||||||||||||||||||||||||||
Income before income taxes | 152 | 158 | 166 | 178 | 654 | 67 | (144 | ) | 208 | (39 | ) | 92 | 610.9 | ||||||||||||||||||||||||||||||
Income tax expense | 55 | 57 | 60 | 63 | 235 | 24 | (52 | ) | 76 | (15 | ) | 33 | 616.6 | ||||||||||||||||||||||||||||||
Net income(2) | $ | 97 | $ | 101 | $ | 106 | $ | 115 | $ | 419 | $ | 43 | $ | (92 | ) | $ | 132 | $ | (24 | ) | $ | 59 | 615.1 | % | |||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | 32.4 | % | 48.9 | % | 6.9 | % | 78.5 | % | 32.4 | % | |||||||||||||||||||||||||||||||||
Expense Growth YTD | (19.3 | ) | (17.4 | ) | (17.7 | ) | (4.8 | ) | (19.3 | ) | |||||||||||||||||||||||||||||||||
Operating Leverage YTD | 51.7 | 66.3 | 24.6 | 83.3 | 51.7 | ||||||||||||||||||||||||||||||||||||||
Efficiency Ratio | 63.72 | 60.40 | 60.34 | 60.13 | 61.16 | 83.57 | % | 634.20 | % | 62.59 | % | 112.73 | % | 100.29 | % | nm | |||||||||||||||||||||||||||
Average Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases(3) | $ | 28,731 | $ | 28,815 | $ | 29,567 | $ | 30,943 | $ | 29,506 | $ | 32,684 | $ | 34,828 | $ | 36,128 | $ | 36,587 | $ | 35,049 | (15.8 | )% |
(1) | Majority of new mortgage originations are sold in the secondary market |
(2) | Product operating net income includes the full allocation of distribution channel costs, including banking center channel |
(3) | Loans and Leases primarily consists of a mortgage run-off portfolio |
nm | indicates non-meaningful data |
43
Bank of America Corporation
Global Consumer and Small Business Banking: Card Services (Held View)
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 2,148 | $ | 2,125 | $ | 1,936 | $ | 1,863 | $ | 8,072 | $ | 1,810 | $ | 1,686 | $ | 1,601 | $ | 1,554 | $ | 6,651 | 21.4 | % | |||||||||||||||||||||
Service charges | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Investment and brokerage services | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Mortgage banking income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Investment banking income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Equity investment gains | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Card income | 2,500 | 2,801 | 2,712 | 2,505 | 10,518 | 2,941 | 2,891 | 2,653 | 2,578 | 11,063 | (4.9 | ) | |||||||||||||||||||||||||||||||
Trading account profits(1) | 3 | (12 | ) | (14 | ) | (13 | ) | (36 | ) | (31 | ) | (18 | ) | (18 | ) | (19 | ) | (86 | ) | 58.2 | |||||||||||||||||||||||
Other income | 102 | 70 | 28 | 89 | 289 | 74 | 86 | 87 | 88 | 335 | (13.7 | ) | |||||||||||||||||||||||||||||||
Total noninterest income | 2,605 | 2,859 | 2,726 | 2,581 | 10,771 | 2,984 | 2,959 | 2,722 | 2,647 | 11,312 | (4.8 | ) | |||||||||||||||||||||||||||||||
Total revenue | 4,753 | 4,984 | 4,662 | 4,444 | 18,843 | 4,794 | 4,645 | 4,323 | 4,201 | 17,963 | 4.9 | ||||||||||||||||||||||||||||||||
Provision for credit losses | 1,485 | 1,290 | 1,288 | 1,000 | 5,063 | 1,525 | 1,156 | 802 | 907 | 4,390 | 15.3 | ||||||||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total noninterest expense | 2,616 | 2,349 | 2,405 | 2,358 | 9,728 | 2,321 | 2,317 | 2,243 | 2,325 | 9,206 | 5.7 | ||||||||||||||||||||||||||||||||
Income before income taxes | 652 | 1,345 | 969 | 1,086 | 4,052 | 948 | 1,172 | 1,278 | 969 | 4,367 | (7.2 | ) | |||||||||||||||||||||||||||||||
Income tax expense | 231 | 490 | 349 | 384 | 1,454 | 338 | 426 | 467 | 365 | 1,596 | (8.9 | ) | |||||||||||||||||||||||||||||||
Net income(2) | $ | 421 | $ | 855 | $ | 620 | $ | 702 | $ | 2,598 | $ | 610 | $ | 746 | $ | 811 | $ | 604 | $ | 2,771 | (6.3 | )% | |||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | 4.9 | % | 7.0 | % | 6.8 | % | 5.8 | % | 4.9 | % | |||||||||||||||||||||||||||||||||
Expense Growth YTD | 5.7 | 3.3 | 4.3 | 1.4 | 5.7 | ||||||||||||||||||||||||||||||||||||||
Operating Leverage YTD | (0.8 | ) | 3.7 | 2.6 | 4.4 | (0.8 | ) | ||||||||||||||||||||||||||||||||||||
Efficiency Ratio | 55.04 | 47.13 | 51.58 | 53.05 | 51.63 | 48.41 | % | 49.89 | % | 51.88 | % | 55.34 | % | 51.25 | % | 38 | bps | ||||||||||||||||||||||||||
Average Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 92,886 | $ | 89,757 | $ | 82,794 | $ | 82,903 | $ | 87,120 | $ | 81,704 | $ | 77,743 | $ | 73,362 | $ | 76,097 | $ | 77,240 | 12.8 | % |
(1) | Trading balances are related to the impact of legacy MBNA foreign currency contracts and certain foreign denominated assets and liabilities |
(2) | Product operating net income includes the full allocation of distribution channel costs, including banking center channel |
44
Bank of America Corporation
Global Consumer and Small Business Banking: Card Services (Managed View)(1)
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 3,897 | $ | 4,015 | $ | 4,023 | $ | 3,971 | $ | 15,906 | $ | 4,079 | $ | 3,969 | $ | 3,910 | $ | 3,846 | $ | 15,804 | 0.6 | % | |||||||||||||||||||||
Service charges | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Investment and brokerage services | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Mortgage banking income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Investment banking income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Equity investment gains | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Card income | 2,137 | 1,887 | 1,714 | 1,434 | 7,172 | 1,725 | 1,701 | 1,541 | 1,490 | 6,457 | 11.1 | ||||||||||||||||||||||||||||||||
Trading account profits(2) | 3 | (12 | ) | (14 | ) | (13 | ) | (36 | ) | (31 | ) | (18 | ) | (18 | ) | (19 | ) | (86 | ) | 58.2 | |||||||||||||||||||||||
Other income | 210 | 187 | 143 | 202 | 742 | 189 | 194 | 190 | 188 | 761 | (2.5 | ) | |||||||||||||||||||||||||||||||
Total noninterest income | 2,350 | 2,062 | 1,843 | 1,623 | 7,878 | 1,883 | 1,877 | 1,713 | 1,659 | 7,132 | 10.5 | ||||||||||||||||||||||||||||||||
Total revenue | 6,247 | 6,077 | 5,866 | 5,594 | 23,784 | 5,962 | 5,846 | 5,623 | 5,505 | 22,936 | 3.7 | ||||||||||||||||||||||||||||||||
Provision for credit losses | 2,979 | 2,383 | 2,492 | 2,150 | 10,004 | 2,693 | 2,357 | 2,102 | 2,211 | 9,363 | 6.8 | ||||||||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total noninterest expense | 2,616 | 2,349 | 2,405 | 2,358 | 9,728 | 2,321 | 2,317 | 2,243 | 2,325 | 9,206 | 5.7 | ||||||||||||||||||||||||||||||||
Income before income taxes | 652 | 1,345 | 969 | 1,086 | 4,052 | 948 | 1,172 | 1,278 | 969 | 4,367 | (7.2 | ) | |||||||||||||||||||||||||||||||
Income tax expense | 231 | 490 | 349 | 384 | 1,454 | 338 | 426 | 467 | 365 | 1,596 | (8.9 | ) | |||||||||||||||||||||||||||||||
Net income(3) | $ | 421 | $ | 855 | $ | 620 | $ | 702 | $ | 2,598 | $ | 610 | $ | 746 | $ | 811 | $ | 604 | $ | 2,771 | (6.3 | )% | |||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | 3.7 | % | 3.3 | % | 3.0 | % | 1.6 | % | 3.7 | % | |||||||||||||||||||||||||||||||||
Expense Growth YTD | 5.7 | 3.3 | 4.3 | 1.4 | 5.7 | ||||||||||||||||||||||||||||||||||||||
Operating Leverage YTD | (2.0 | ) | 0.0 | (1.3 | ) | 0.2 | (2.0 | ) | |||||||||||||||||||||||||||||||||||
Efficiency Ratio | 41.88 | 38.65 | 40.99 | 42.15 | 40.90 | 38.95 | % | 39.64 | % | 39.88 | % | 42.23 | % | 40.14 | % | 76 | bps | ||||||||||||||||||||||||||
Average Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 184,670 | $ | 179,275 | $ | 174,687 | $ | 176,305 | $ | 178,759 | $ | 176,548 | $ | 174,473 | $ | 170,998 | $ | 172,137 | $ | 173,549 | 3.0 | % |
(1) | See page 66 for reconciliation of Card Services (Held View) to Card Services (Managed View) |
(2) | Trading balances are related to the impact of legacy MBNA foreign currency contracts and certain foreign denominated assets and liabilities |
(3) | Product operating net income includes the full allocation of distribution channel costs, including banking center channel |
45
Bank of America Corporation
Global Consumer and Small Business Banking: Home Equity Line of Credit (HELOC)
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 333 | $ | 333 | $ | 321 | $ | 304 | $ | 1,291 | $ | 306 | $ | 304 | $ | 304 | $ | 250 | $ | 1,164 | 10.8 | % | |||||||||||||||||||||
Service charges | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Investment and brokerage services | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Mortgage banking income | 17 | 21 | 20 | 19 | 77 | 20 | 19 | 21 | 16 | 76 | 1.0 | ||||||||||||||||||||||||||||||||
Investment banking income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Equity investment gains | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Card income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Trading account profits | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Other income | — | — | — | — | — | 1 | — | — | — | 1 | nm | ||||||||||||||||||||||||||||||||
Total noninterest income | 17 | 21 | 20 | 19 | 77 | 21 | 19 | 21 | 16 | 77 | — | ||||||||||||||||||||||||||||||||
Total revenue | 350 | 354 | 341 | 323 | 1,368 | 327 | 323 | 325 | 266 | 1,241 | 10.2 | ||||||||||||||||||||||||||||||||
Provision for credit losses | 10 | 10 | 10 | 8 | 38 | 9 | 9 | 8 | 7 | 33 | 16.8 | ||||||||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total noninterest expense | 146 | 159 | 161 | 182 | 648 | 210 | 202 | 199 | 167 | 778 | (16.7 | ) | |||||||||||||||||||||||||||||||
Income before income taxes | 194 | 185 | 170 | 133 | 682 | 108 | 112 | 118 | 92 | 430 | 58.6 | ||||||||||||||||||||||||||||||||
Income tax expense | 70 | 67 | 61 | 47 | 245 | 39 | 41 | 43 | 34 | 157 | 56.2 | ||||||||||||||||||||||||||||||||
Net income(1) | $ | 124 | $ | 118 | $ | 109 | $ | 86 | $ | 437 | $ | 69 | $ | 71 | $ | 75 | $ | 58 | $ | 273 | 59.9 | % | |||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | 10.2 | % | 11.3 | % | 12.3 | % | 21.4 | % | 10.2 | % | |||||||||||||||||||||||||||||||||
Expense Growth YTD | (16.7 | ) | (11.7 | ) | (6.4 | ) | 8.8 | (16.7 | ) | ||||||||||||||||||||||||||||||||||
Operating Leverage YTD | 26.9 | 23.0 | 18.7 | 12.6 | 26.9 | ||||||||||||||||||||||||||||||||||||||
Efficiency Ratio | 41.69 | 44.96 | 47.27 | 56.38 | 47.37 | 64.34 | % | 62.61 | % | 61.24 | % | 62.93 | % | 62.73 | % | nm | |||||||||||||||||||||||||||
Average Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 51,166 | $ | 49,652 | $ | 47,507 | $ | 45,215 | $ | 48,405 | $ | 43,857 | $ | 41,942 | $ | 39,234 | $ | 38,094 | $ | 40,794 | 18.7 | % |
(1) | Product operating net income includes the full allocation of distribution channel costs, including banking center channel |
nm | indicates non-meaningful data |
46
Bank of America Corporation
Global Consumer and Small Business Banking: Other
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | ||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | |||||||||||||||||||||||||||||||||
Income Statement | ||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 32 | $ | 10 | $ | 31 | $ | 41 | $ | 114 | $ | 54 | $ | 47 | $ | 22 | $ | 85 | $ | 208 | (45.0 | )% | ||||||||||||||||||||
Service charges | — | — | — | — | — | 1 | — | — | — | 1 | nm | |||||||||||||||||||||||||||||||
Investment and brokerage services | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Mortgage banking income | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Investment banking income | — | — | (1 | ) | 1 | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Equity investment gains | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Card income | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Trading account profits(1) | 2 | — | — | 1 | 3 | 1 | 1 | 1 | 6 | 9 | (68.9 | ) | ||||||||||||||||||||||||||||||
Other income | 91 | 73 | 62 | 57 | 283 | 57 | 54 | 53 | 55 | 219 | 29.1 | |||||||||||||||||||||||||||||||
Total noninterest income | 93 | 73 | 61 | 59 | 286 | 59 | 55 | 54 | 61 | 229 | 24.9 | |||||||||||||||||||||||||||||||
Total revenue | 125 | 83 | 92 | 100 | 400 | 113 | 102 | 76 | 146 | 437 | (8.3 | ) | ||||||||||||||||||||||||||||||
Provision for credit losses | 46 | 41 | 26 | 5 | 118 | 42 | 68 | 44 | 28 | 182 | (35.1 | ) | ||||||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | — | (1 | ) | — | (1 | ) | (2 | ) | 2 | — | (2 | ) | 1 | 1 | nm | |||||||||||||||||||||||||||
Total noninterest expense | 102 | 87 | 93 | 92 | 374 | 97 | 104 | 99 | 89 | 389 | (3.9 | ) | ||||||||||||||||||||||||||||||
Income before income taxes | (23 | ) | (46 | ) | (27 | ) | 2 | (94 | ) | (24 | ) | (70 | ) | (69 | ) | 30 | (133 | ) | 29.3 | |||||||||||||||||||||||
Income tax expense | (9 | ) | (16 | ) | (9 | ) | 1 | (33 | ) | (11 | ) | (26 | ) | (26 | ) | 11 | (52 | ) | 36.8 | |||||||||||||||||||||||
Net income(2) | $ | (14 | ) | $ | (30 | ) | $ | (18 | ) | $ | 1 | $ | (61 | ) | $ | (13 | ) | $ | (44 | ) | $ | (43 | ) | $ | 19 | $ | (81 | ) | 24.7 | % | ||||||||||||
Financial Ratios | ||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | (8.3 | )% | (15.3 | )% | (13.7 | )% | (31.5 | )% | (8.3 | )% | ||||||||||||||||||||||||||||||||
Expense Growth YTD | (3.9 | ) | (6.9 | ) | (1.9 | ) | 3.2 | (3.9 | ) | |||||||||||||||||||||||||||||||||
Operating Leverage YTD | (4.5 | ) | (8.3 | ) | (11.8 | ) | (34.7 | ) | (4.5 | ) | ||||||||||||||||||||||||||||||||
Average Balance Sheet | ||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 11,548 | $ | 11,648 | $ | 11,778 | $ | 11,558 | $ | 11,633 | $ | 10,769 | $ | 10,418 | $ | 10,670 | $ | 9,827 | $ | 10,422 | 11.6 | % |
(1) | Trading balances are related to the impact of legacy MBNA foreign currency contracts and certain foreign denominated assets and liabilities |
(2) | Product operating net income includes the full allocation of distribution channel costs, including banking center channel |
nm | indicates non-meaningful data |
47
Bank of America Corporation
Global Consumer and Small Business Banking: Deposits Key Indicators
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Deposits(1) | |||||||||||||||||||||||||||||||||||||||||||
Average Deposit Balances | |||||||||||||||||||||||||||||||||||||||||||
Checking | $ | 125,828 | $ | 124,761 | $ | 123,377 | $ | 120,098 | $ | 123,535 | $ | 119,509 | $ | 119,296 | $ | 119,468 | $ | 114,853 | $ | 118,288 | 4.4 | % | |||||||||||||||||||||
Savings | 31,901 | 32,054 | 32,530 | 31,570 | 32,015 | 31,527 | 31,761 | 31,470 | 29,980 | 31,187 | 2.7 | ||||||||||||||||||||||||||||||||
MMS | 78,377 | 75,148 | 73,956 | 76,258 | 75,938 | 81,718 | 88,745 | 90,955 | 90,935 | 88,073 | (13.8 | ) | |||||||||||||||||||||||||||||||
CDs & IRA’s | 85,544 | 93,794 | 92,811 | 90,095 | 90,557 | 86,349 | 83,976 | 80,829 | 79,603 | 82,703 | 9.5 | ||||||||||||||||||||||||||||||||
Foreign & Other | 11,065 | 11,922 | 10,837 | 9,563 | 10,854 | 9,739 | 9,263 | 10,839 | 8,588 | 9,606 | 13.0 | ||||||||||||||||||||||||||||||||
Total | $ | 332,715 | $ | 337,679 | $ | 333,511 | $ | 327,584 | $ | 332,899 | $ | 328,842 | $ | 333,041 | $ | 333,561 | $ | 323,959 | $ | 329,857 | 0.9 | % | |||||||||||||||||||||
Average Cumulative Balances migrated to Premier Banking and Investments | $ | 44,692 | $ | 41,672 | $ | 38,257 | $ | 32,407 | $ | 39,304 | $ | 23,879 | $ | 12,426 | $ | 6,509 | $ | 1,860 | $ | 11,200 | |||||||||||||||||||||||
Deposit Spreads (excludes noninterest costs) | |||||||||||||||||||||||||||||||||||||||||||
Checking | 4.16 | % | 4.17 | % | 4.14 | % | 4.24 | % | 4.18 | % | 4.27 | % | 4.12 | % | 3.82 | % | 3.88 | % | 4.03 | % | 15 | bps | |||||||||||||||||||||
Savings | 3.52 | 3.78 | 4.01 | 4.37 | 3.92 | 4.55 | 4.69 | 4.80 | 4.66 | 4.67 | (76 | )bps | |||||||||||||||||||||||||||||||
MMS | 2.50 | 1.89 | 1.54 | 1.34 | 1.83 | 1.10 | 0.70 | 0.33 | 0.26 | 0.58 | 124 | bps | |||||||||||||||||||||||||||||||
CDs & IRA’s | 1.01 | 0.80 | 0.73 | 0.63 | 0.79 | 0.40 | 0.40 | 0.45 | 0.29 | 0.39 | 40 | bps | |||||||||||||||||||||||||||||||
Foreign & Other | 3.58 | 3.02 | 2.93 | 2.80 | 3.09 | 2.67 | 4.75 | 7.56 | 9.93 | 6.16 | (307 | )bps | |||||||||||||||||||||||||||||||
Total | 2.86 | % | 2.63 | % | 2.54 | % | 2.52 | % | 2.64 | % | 2.42 | % | 2.32 | % | 2.25 | % | 2.19 | % | 2.30 | % | 34 | bps | |||||||||||||||||||||
Net New Checking (units in 000’s)(2) | 426 | 635 | 629 | 611 | 2,301 | 601 | 529 | 518 | 415 | 2,063 | 11.5 | % | |||||||||||||||||||||||||||||||
Debit Purchase Volumes(2) | $ | 39,623 | $ | 36,008 | $ | 35,049 | $ | 31,230 | $ | 141,910 | $ | 31,930 | $ | 28,353 | $ | 27,675 | $ | 25,262 | $ | 113,220 | 25.3 | % | |||||||||||||||||||||
Online Banking (End of Period)(2) | |||||||||||||||||||||||||||||||||||||||||||
Active Accounts (units in 000’s) | 14,698 | 14,338 | 13,514 | 13,047 | 14,698 | 12,425 | 11,801 | 11,197 | 10,337 | 12,425 | 18.3 | % | |||||||||||||||||||||||||||||||
Active Billpay Accounts (units in 000’s) | 7,281 | 6,987 | 6,529 | 6,256 | 7,281 | 5,794 | 4,818 | 4,452 | 3,659 | 5,794 | 25.7 | % |
(1) | Deposit balances reflect Premier migration impact of $11.2 billion and $39.3 billion for 2004 and 2005, respectively. Eliminating migration effect, average balance growth is 9.1% |
(2) | Legacy Bank of America results only |
48 |
Bank of America Corporation
Global Consumer and Small Business Banking: Credit Key Indicators
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Managed Card - North American Only | |||||||||||||||||||||||||||||||||||||||||||
Gross Interest Yield | 11.66 | % | 11.93 | % | 12.02 | % | 11.71 | % | 11.83 | % | 11.09 | % | 10.64 | % | 10.65 | % | 10.06 | % | 10.61 | % | 122 | bps | |||||||||||||||||||||
Risk Adjusted Margin(1) | 5.63 | % | 9.03 | % | 8.60 | % | 8.28 | % | 7.86 | % | 9.45 | % | 8.85 | % | 8.45 | % | 8.01 | % | 8.67 | % | (81 | )bps | |||||||||||||||||||||
Loss Rates | 7.48 | % | 4.98 | % | 5.48 | % | 5.34 | % | 5.84 | % | 5.09 | % | 4.96 | % | 5.34 | % | 5.23 | % | 5.14 | % | 70 | bps | |||||||||||||||||||||
Average Outstandings (in millions) | $ | 144,839 | $ | 140,293 | $ | 136,433 | $ | 138,376 | $ | 140,004 | $ | 139,350 | $ | 139,520 | $ | 137,955 | $ | 140,257 | $ | 139,324 | 0.5 | % | |||||||||||||||||||||
New Account Growth (in thousands) | 2,256 | 2,852 | 2,646 | 2,220 | 9,974 | 2,630 | 2,983 | 3,258 | 3,113 | 11,984 | (16.8 | )% | |||||||||||||||||||||||||||||||
Purchase Volumes (in millions) | $ | 57,105 | $ | 53,590 | $ | 51,371 | $ | 45,754 | $ | 207,820 | $ | 52,574 | $ | 49,208 | $ | 47,026 | $ | 42,193 | $ | 191,001 | 8.8 | % | |||||||||||||||||||||
Delinquencies | |||||||||||||||||||||||||||||||||||||||||||
30 Day | 3.98 | % | 4.63 | % | 4.47 | % | 4.61 | % | n/a | 4.55 | % | 4.52 | % | 4.26 | % | 4.41 | % | n/a | |||||||||||||||||||||||||
60 Day | 2.71 | % | 3.14 | % | 3.03 | % | 3.25 | % | n/a | 3.14 | % | 3.10 | % | 2.89 | % | 3.09 | % | n/a | |||||||||||||||||||||||||
12 Month Lag Loss Rate | 7.77 | % | 5.01 | % | 5.44 | % | 5.28 | % | n/a | 5.43 | % | 5.49 | % | 5.98 | % | 5.90 | % | n/a | |||||||||||||||||||||||||
Mortgage(2) | |||||||||||||||||||||||||||||||||||||||||||
Mortgage Originations (in millions) | $ | 20,662 | $ | 27,511 | $ | 21,135 | $ | 17,471 | $ | 86,779 | $ | 18,333 | $ | 16,899 | $ | 28,466 | $ | 23,840 | $ | 87,538 | (0.9 | )% | |||||||||||||||||||||
Mortgage Servicing Rights | |||||||||||||||||||||||||||||||||||||||||||
Period End Balance (in millions) | $ | 2,658 | $ | 2,623 | $ | 2,233 | $ | 2,548 | n/a | $ | 2,358 | $ | 2,345 | $ | 2,905 | $ | 335 | n/a | |||||||||||||||||||||||||
Capitalized Mortgage Servicing Rights (bps) (% of loans serviced) | 122 | 124 | 108 | 128 | n/a | 119 | 122 | 154 | 114 | n/a | |||||||||||||||||||||||||||||||||
Mortgage Loans Serviced for Investors (in billions) | $ | 218 | $ | 212 | $ | 207 | $ | 199 | n/a | $ | 198 | $ | 193 | $ | 189 | $ | 184 | n/a | |||||||||||||||||||||||||
Home Equity Originations (in millions) | $ | 19,670 | $ | 17,897 | $ | 19,379 | $ | 15,033 | $ | 71,979 | $ | 16,171 | $ | 16,792 | $ | 17,262 | $ | 10,843 | $ | 61,068 | 17.9 | % |
(1) | Reflects margin and noninterest revenue, adjusted for loss rates |
(2) | Legacy Bank of America results only |
49
Bank of America Corporation
Global Corporate and Investment Banking
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | |||||||||||||||||||||||||||||||||||||||||||||
Total | Business Lending | Capital Markets and Advisory Services | Treasury Services | ALM | Other(1) | Total | Business Lending | Capital Markets and Advisory Services | Treasury Services | ALM | Other(1) | |||||||||||||||||||||||||||||||||||
Income Statement | ||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 11,182 | $ | 4,771 | $ | 1,934 | $ | 3,406 | $ | 558 | $ | 513 | $ | 11,629 | $ | 4,891 | $ | 2,620 | $ | 2,516 | $ | 1,229 | $ | 373 | ||||||||||||||||||||||
Service charges | 2,618 | 470 | 111 | 1,868 | — | 169 | 2,752 | 462 | 103 | 2,026 | — | 161 | ||||||||||||||||||||||||||||||||||
Investment and brokerage services | 1,046 | 17 | 875 | 27 | — | 127 | 918 | 20 | 765 | 37 | — | 96 | ||||||||||||||||||||||||||||||||||
Mortgage banking income | 10 | 1 | 9 | (1 | ) | — | 1 | 20 | 6 | 14 | (1 | ) | — | 1 | ||||||||||||||||||||||||||||||||
Investment banking income | 1,892 | — | 1,901 | — | — | (9 | ) | 1,942 | — | 1,949 | — | — | (7 | ) | ||||||||||||||||||||||||||||||||
Equity investment gains | 247 | 157 | 86 | — | — | 4 | 112 | 112 | — | — | — | — | ||||||||||||||||||||||||||||||||||
Card income | 685 | — | — | 625 | — | 60 | 541 | (2 | ) | — | 502 | — | 41 | |||||||||||||||||||||||||||||||||
Trading account profits | 1,770 | (28 | ) | 1,618 | 63 | — | 117 | 1,345 | 59 | 1,127 | 71 | — | 88 | |||||||||||||||||||||||||||||||||
Other income | 1,263 | 643 | 285 | 55 | — | 280 | 1,000 | 451 | 171 | 71 | — | 307 | ||||||||||||||||||||||||||||||||||
Total noninterest income | 9,531 | 1,260 | 4,885 | 2,637 | — | 749 | 8,630 | 1,108 | 4,129 | 2,706 | — | 687 | ||||||||||||||||||||||||||||||||||
Total revenue | 20,713 | 6,031 | 6,819 | 6,043 | 558 | 1,262 | 20,259 | 5,999 | 6,749 | 5,222 | 1,229 | 1,060 | ||||||||||||||||||||||||||||||||||
Provision for credit losses | (289 | ) | 105 | (30 | ) | (4 | ) | — | (360 | ) | (791 | ) | (597 | ) | (33 | ) | 9 | — | (170 | ) | ||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | 263 | 62 | 55 | — | — | 146 | (10 | ) | — | (10 | ) | — | — | — | ||||||||||||||||||||||||||||||||
Total noninterest expense | 11,141 | 2,004 | 4,705 | 3,134 | — | 1,298 | 11,007 | 2,047 | 4,125 | 3,049 | — | 1,786 | ||||||||||||||||||||||||||||||||||
Income before income taxes | 10,124 | 3,984 | 2,199 | 2,913 | 558 | 470 | 10,033 | 4,549 | 2,647 | 2,164 | 1,229 | (556 | ) | |||||||||||||||||||||||||||||||||
Income tax expense | 3,675 | 1,427 | 785 | 1,048 | 201 | 214 | 3,598 | 1,702 | 888 | 787 | 442 | (221 | ) | |||||||||||||||||||||||||||||||||
Net income | $ | 6,449 | $ | 2,557 | $ | 1,414 | $ | 1,865 | $ | 357 | $ | 256 | $ | 6,435 | $ | 2,847 | $ | 1,759 | $ | 1,377 | $ | 787 | $ | (335 | ) | |||||||||||||||||||||
Financial Ratios | ||||||||||||||||||||||||||||||||||||||||||||||
Revenue Growth | 2.2 | % | 0.5 | % | 1.0 | % | 15.7 | % | — | 19.1 | % | |||||||||||||||||||||||||||||||||||
Expense Growth | 1.2 | (2.1 | ) | 14.1 | 2.8 | — | (27.3 | ) | ||||||||||||||||||||||||||||||||||||||
Operating Leverage | 1.0 | 2.6 | (13.0 | ) | 12.9 | — | 46.4 | |||||||||||||||||||||||||||||||||||||||
Efficiency Ratio | 53.79 | 33.23 | 69.00 | 51.86 | — | nm | 54.33 | % | 34.12 | % | 61.12 | % | 58.39 | % | — | nm | ||||||||||||||||||||||||||||||
Average Balance Sheet | ||||||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 214,860 | $ | 192,712 | $ | 7,103 | $ | 2,976 | $ | — | $ | 12,069 | $ | 201,753 | $ | 179,394 | $ | 6,862 | $ | 2,768 | $ | — | $ | 12,729 | ||||||||||||||||||||||
Total Deposits | 189,904 | 352 | 26,735 | 149,997 | — | 12,820 | 177,555 | 286 | 21,355 | 144,129 | — | 11,786 | ||||||||||||||||||||||||||||||||||
Trading Related Assets | 314,569 | 970 | 310,513 | 298 | — | 2,788 | 245,024 | 662 | 241,362 | 212 | — | 2,788 |
(1) | Includes Latin America, Asia Commercial and Retail, Insurance Services, and segment level management accounting adjustments. It also includes certain non-recurring items |
nm | indicates non-meaningful data |
50
Bank of America Corporation
Global Corporate and Investment Banking: Business Lending
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 1,177 | $ | 1,183 | $ | 1,217 | $ | 1,194 | $ | 4,771 | $ | 1,211 | $ | 1,187 | $ | 1,224 | $ | 1,269 | $ | 4,891 | (2.5 | )% | |||||||||||||||||||||
Service charges | 119 | 123 | 117 | 111 | 470 | 124 | 131 | 78 | 129 | 462 | 1.7 | ||||||||||||||||||||||||||||||||
Investment and brokerage services | 4 | 5 | 4 | 4 | 17 | 6 | 4 | 5 | 5 | 20 | (15.0 | ) | |||||||||||||||||||||||||||||||
Mortgage banking income | — | — | 1 | — | 1 | (1 | ) | — | 2 | 5 | 6 | (83.3 | ) | ||||||||||||||||||||||||||||||
Investment banking income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Equity investment gains | 11 | 47 | 10 | 89 | 157 | 28 | 25 | 20 | 39 | 112 | 40.2 | ||||||||||||||||||||||||||||||||
Card income | — | — | — | — | — | — | (1 | ) | (1 | ) | — | (2 | ) | nm | |||||||||||||||||||||||||||||
Trading account profits | 8 | 6 | (43 | ) | 1 | (28 | ) | 6 | 7 | 5 | 41 | 59 | nm | ||||||||||||||||||||||||||||||
Other income | 86 | 132 | 187 | 238 | 643 | 94 | 66 | 118 | 173 | 451 | 42.6 | ||||||||||||||||||||||||||||||||
Total noninterest income | 228 | 313 | 276 | 443 | 1,260 | 257 | 232 | 227 | 392 | 1,108 | 13.7 | ||||||||||||||||||||||||||||||||
Total revenue | 1,405 | 1,496 | 1,493 | 1,637 | 6,031 | 1,468 | 1,419 | 1,451 | 1,661 | 5,999 | 0.5 | ||||||||||||||||||||||||||||||||
Provision for credit losses | 229 | 105 | (203 | ) | (26 | ) | 105 | (354 | ) | (180 | ) | (95 | ) | 32 | (597 | ) | nm | ||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | — | 2 | 39 | 21 | 62 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total noninterest expense | 516 | 496 | 496 | 496 | 2,004 | 473 | 483 | 543 | 548 | 2,047 | (2.1 | ) | |||||||||||||||||||||||||||||||
Income before income taxes | 660 | 897 | 1,239 | 1,188 | 3,984 | 1,349 | 1,116 | 1,003 | 1,081 | 4,549 | (12.4 | ) | |||||||||||||||||||||||||||||||
Income tax expense | 236 | 328 | 450 | 413 | 1,427 | 503 | 388 | 382 | 429 | 1,702 | (16.2 | ) | |||||||||||||||||||||||||||||||
Net income | $ | 424 | $ | 569 | $ | 789 | $ | 775 | $ | 2,557 | $ | 846 | $ | 728 | $ | 621 | $ | 652 | $ | 2,847 | (10.2 | )% | |||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | 0.5 | % | 2.1 | % | 0.6 | % | (1.4 | )% | 0.5 | % | |||||||||||||||||||||||||||||||||
Expense Growth YTD | (2.1 | ) | (5.5 | ) | (9.1 | ) | (9.5 | ) | (2.1 | ) | |||||||||||||||||||||||||||||||||
Operating Leverage YTD | 2.6 | 7.6 | 9.7 | 8.0 | 2.6 | ||||||||||||||||||||||||||||||||||||||
Efficiency Ratio | 36.72 | 33.16 | 33.22 | 30.30 | 33.23 | 32.22 | % | 34.04 | % | 37.42 | % | 32.99 | % | 34.12 | % | (89 | )bps | ||||||||||||||||||||||||||
Average Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 204,047 | $ | 195,654 | $ | 187,636 | $ | 183,249 | $ | 192,712 | $ | 179,847 | $ | 177,937 | $ | 178,756 | $ | 181,048 | $ | 179,394 | 7.4 | % | |||||||||||||||||||||
Total Deposits | 369 | 376 | 360 | 301 | 352 | 286 | 321 | 278 | 258 | 286 | 23.1 | ||||||||||||||||||||||||||||||||
Trading Related Assets | 1,234 | 1,081 | 883 | 676 | 970 | 583 | 688 | 649 | 727 | 662 | 46.5 |
nm | indicates non-meaningful data |
51
Bank of America Corporation
Global Corporate and Investment Banking: Capital Markets and Advisory Services
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 420 | $ | 449 | $ | 519 | $ | 546 | $ | 1,934 | $ | 546 | $ | 579 | $ | 751 | $ | 744 | $ | 2,620 | (26.2 | )% | |||||||||||||||||||||
Service charges | 30 | 34 | 25 | 22 | 111 | 24 | 27 | 27 | 25 | 103 | 7.8 | ||||||||||||||||||||||||||||||||
Investment and brokerage services | 223 | 217 | 226 | 209 | 875 | 199 | 170 | 189 | 207 | 765 | 14.4 | ||||||||||||||||||||||||||||||||
Mortgage banking income | 4 | 3 | 2 | — | 9 | 5 | 1 | 4 | 4 | 14 | (35.7 | ) | |||||||||||||||||||||||||||||||
Investment banking income | 547 | 537 | 442 | 375 | 1,901 | 499 | 447 | 565 | 438 | 1,949 | (2.5 | ) | |||||||||||||||||||||||||||||||
Equity investment gains | 16 | 24 | 2 | 44 | 86 | (6 | ) | 11 | (6 | ) | 1 | — | — | ||||||||||||||||||||||||||||||
Card income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Trading account profits | 256 | 517 | 229 | 616 | 1,618 | 284 | 175 | 383 | 285 | 1,127 | 43.6 | ||||||||||||||||||||||||||||||||
Other income | 60 | 79 | 94 | 52 | 285 | 56 | 32 | 56 | 27 | 171 | 66.7 | ||||||||||||||||||||||||||||||||
Total noninterest income | 1,136 | 1,411 | 1,020 | 1,318 | 4,885 | 1,061 | 863 | 1,218 | 987 | 4,129 | 18.3 | ||||||||||||||||||||||||||||||||
Total revenue | 1,556 | 1,860 | 1,539 | 1,864 | 6,819 | 1,607 | 1,442 | 1,969 | 1,731 | 6,749 | 1.0 | ||||||||||||||||||||||||||||||||
Provision for credit losses | (14 | ) | (15 | ) | 1 | (2 | ) | (30 | ) | (44 | ) | (34 | ) | 28 | 17 | (33 | ) | 9.1 | |||||||||||||||||||||||||
Gains (losses) on sales of debt securities | 32 | 3 | 12 | 8 | 55 | 1 | 1 | (4 | ) | (8 | ) | (10 | ) | nm | |||||||||||||||||||||||||||||
Total noninterest expense | 1,311 | 1,188 | 1,034 | 1,172 | 4,705 | 1,008 | 1,013 | 1,025 | 1,079 | 4,125 | 14.1 | ||||||||||||||||||||||||||||||||
Income before income taxes | 291 | 690 | 516 | 702 | 2,199 | 644 | 464 | 912 | 627 | 2,647 | (16.9 | ) | |||||||||||||||||||||||||||||||
Income tax expense | 102 | 250 | 186 | 247 | 785 | 217 | 153 | 317 | 201 | 888 | (11.6 | ) | |||||||||||||||||||||||||||||||
Net income | $ | 189 | $ | 440 | $ | 330 | $ | 455 | $ | 1,414 | $ | 427 | $ | 311 | $ | 595 | $ | 426 | $ | 1,759 | (19.6 | )% | |||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | 1.0 | % | 2.4 | % | (8.0 | )% | 7.7 | % | 1.0 | % | |||||||||||||||||||||||||||||||||
Expense Growth YTD | 14.1 | 8.9 | 4.8 | 8.6 | 14.1 | ||||||||||||||||||||||||||||||||||||||
Operating Leverage YTD | (13.0 | ) | (6.5 | ) | (12.9 | ) | (0.9 | ) | (13.0 | ) | |||||||||||||||||||||||||||||||||
Efficiency Ratio | 84.25 | 63.87 | 67.19 | 62.88 | 69.00 | 62.73 | % | 70.25 | % | 52.06 | % | 62.33 | % | 61.12 | % | 788 | bps | ||||||||||||||||||||||||||
Average Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 9,097 | $ | 5,303 | $ | 5,845 | $ | 8,175 | $ | 7,103 | $ | 6,374 | $ | 7,065 | $ | 7,543 | $ | 6,468 | $ | 6,862 | 3.5 | % | |||||||||||||||||||||
Total Deposits | 30,018 | 24,835 | 29,172 | 22,858 | 26,735 | 21,967 | 19,168 | 21,792 | 22,512 | 21,355 | 25.2 | ||||||||||||||||||||||||||||||||
Trading Related Assets | 313,198 | 324,607 | 328,611 | 275,063 | 310,513 | 264,664 | 233,265 | 239,372 | 227,979 | 241,362 | 28.7 |
nm | indicates non-meaningful data |
52
Bank of America Corporation
Global Corporate and Investment Banking: Treasury Services
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 972 | $ | 870 | $ | 797 | $ | 767 | $ | 3,406 | $ | 743 | $ | 637 | $ | 588 | $ | 548 | $ | 2,516 | 35.4 | % | |||||||||||||||||||||
Service charges | 448 | 471 | 473 | 476 | 1,868 | 490 | 519 | 511 | 506 | 2,026 | (7.8 | ) | |||||||||||||||||||||||||||||||
Investment and brokerage services | 7 | 6 | 7 | 7 | 27 | 9 | 10 | 9 | 9 | 37 | (27.0 | ) | |||||||||||||||||||||||||||||||
Mortgage banking income | (1 | ) | — | — | — | (1 | ) | — | — | — | (1 | ) | (1 | ) | — | ||||||||||||||||||||||||||||
Investment banking income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Equity investment gains | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Card income | 167 | 165 | 156 | 137 | 625 | 157 | 123 | 119 | 103 | 502 | 24.5 | ||||||||||||||||||||||||||||||||
Trading account profits | 10 | 12 | 20 | 21 | 63 | 19 | 19 | 15 | 18 | 71 | (11.3 | ) | |||||||||||||||||||||||||||||||
Other income | 7 | 8 | 31 | 9 | 55 | 5 | 34 | 13 | 19 | 71 | (22.5 | ) | |||||||||||||||||||||||||||||||
Total noninterest income | 638 | 662 | 687 | 650 | 2,637 | 680 | 705 | 667 | 654 | 2,706 | (2.5 | ) | |||||||||||||||||||||||||||||||
Total revenue | 1,610 | 1,532 | 1,484 | 1,417 | 6,043 | 1,423 | 1,342 | 1,255 | 1,202 | 5,222 | 15.7 | ||||||||||||||||||||||||||||||||
Provision for credit losses | 1 | 1 | — | (6 | ) | (4 | ) | 6 | (3 | ) | 6 | — | 9 | (144.4 | ) | ||||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total noninterest expense | 780 | 782 | 794 | 778 | 3,134 | 780 | 727 | 800 | 742 | 3,049 | 2.8 | ||||||||||||||||||||||||||||||||
Income before income taxes | 829 | 749 | 690 | 645 | 2,913 | 637 | 618 | 449 | 460 | 2,164 | 34.6 | ||||||||||||||||||||||||||||||||
Income tax expense | 297 | 270 | 249 | 232 | 1,048 | 230 | 226 | 161 | 170 | 787 | 33.2 | ||||||||||||||||||||||||||||||||
Net income | $ | 532 | $ | 479 | $ | 441 | $ | 413 | $ | 1,865 | $ | 407 | $ | 392 | $ | 288 | $ | 290 | $ | 1,377 | 35.4 | % | |||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | 15.7 | % | 16.7 | % | 18.1 | % | 17.9 | % | 15.7 | % | |||||||||||||||||||||||||||||||||
Expense Growth YTD | 2.8 | 3.7 | 1.9 | 4.9 | 2.8 | ||||||||||||||||||||||||||||||||||||||
Operating Leverage YTD | 12.9 | 12.9 | 16.1 | 13.0 | 12.9 | ||||||||||||||||||||||||||||||||||||||
Efficiency Ratio | 48.45 | 51.04 | 53.50 | 54.90 | 51.86 | 54.81 | % | 54.17 | % | 63.75 | % | 61.73 | % | 58.39 | % | (653 | )bps | ||||||||||||||||||||||||||
Average Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 2,835 | $ | 2,753 | $ | 2,990 | $ | 3,322 | $ | 2,976 | $ | 3,165 | $ | 2,804 | $ | 2,626 | $ | 2,475 | $ | 2,768 | 7.5 | % | |||||||||||||||||||||
Total Deposits | 149,211 | 150,966 | 149,361 | 150,455 | 149,997 | 150,252 | 141,394 | 145,390 | 139,439 | 144,129 | 4.1 | ||||||||||||||||||||||||||||||||
Trading Related Assets | 309 | 268 | 281 | 337 | 298 | 240 | 160 | 238 | 210 | 212 | 40.6 | ||||||||||||||||||||||||||||||||
Deposit Spread % | 2.64 | % | 2.37 | % | 2.24 | % | 2.10 | % | 2.34 | % | 2.00 | % | 1.81 | % | 1.65 | % | 1.58 | % | 1.76 | % |
53
Bank of America Corporation
Global Corporate and Investment Banking: Other(1)
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 143 | $ | 151 | $ | 118 | $ | 101 | $ | 513 | $ | 107 | $ | 92 | $ | 67 | $ | 107 | $ | 373 | 37.5 | % | |||||||||||||||||||||
Service charges | 46 | 42 | 41 | 40 | 169 | 45 | 40 | 38 | 38 | 161 | 5.0 | ||||||||||||||||||||||||||||||||
Investment and brokerage services | 37 | 38 | 26 | 26 | 127 | 23 | 23 | 25 | 25 | 96 | 32.3 | ||||||||||||||||||||||||||||||||
Mortgage banking income | — | — | — | 1 | 1 | — | — | — | 1 | 1 | — | ||||||||||||||||||||||||||||||||
Investment banking income | — | (5 | ) | (1 | ) | (3 | ) | (9 | ) | (1 | ) | (1 | ) | (3 | ) | (2 | ) | (7 | ) | (28.6 | ) | ||||||||||||||||||||||
Equity investment gains | 1 | 2 | — | 1 | 4 | 2 | 1 | (1 | ) | (2 | ) | — | nm | ||||||||||||||||||||||||||||||
Card income | 18 | 15 | 14 | 13 | 60 | 14 | 10 | 10 | 7 | 41 | 46.3 | ||||||||||||||||||||||||||||||||
Trading account profits | 32 | 37 | 26 | 22 | 117 | 24 | 32 | 28 | 4 | 88 | 33.0 | ||||||||||||||||||||||||||||||||
Other income | 73 | 46 | 59 | 102 | 280 | 117 | 27 | 52 | 111 | 307 | (8.8 | ) | |||||||||||||||||||||||||||||||
Total noninterest income | 207 | 175 | 165 | 202 | 749 | 224 | 132 | 149 | 182 | 687 | 9.0 | ||||||||||||||||||||||||||||||||
Total revenue | 350 | 326 | 283 | 303 | 1,262 | 331 | 224 | 216 | 289 | 1,060 | 19.1 | ||||||||||||||||||||||||||||||||
Provision for credit losses | (117 | ) | (79 | ) | (47 | ) | (117 | ) | (360 | ) | (94 | ) | (172 | ) | 56 | 40 | (170 | ) | (111.8 | ) | |||||||||||||||||||||||
Gains (losses) on sales of debt securities | 63 | 12 | 70 | 1 | 146 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total noninterest expense | 356 | 388 | 288 | 266 | 1,298 | 351 | 217 | 750 | 468 | 1,786 | (27.3 | ) | |||||||||||||||||||||||||||||||
Income before income taxes | 174 | 29 | 112 | 155 | 470 | 74 | 179 | (590 | ) | (219 | ) | (556 | ) | nm | |||||||||||||||||||||||||||||
Income tax expense | 60 | 14 | 43 | 97 | 214 | 46 | 57 | (219 | ) | (105 | ) | (221 | ) | nm | |||||||||||||||||||||||||||||
Net income | $ | 114 | $ | 15 | $ | 69 | $ | 58 | $ | 256 | $ | 28 | $ | 122 | $ | (371 | ) | $ | (114 | ) | $ | (335 | ) | nm | |||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | 19.1 | % | 25.1 | % | 16.0 | % | 4.8 | % | 19.1 | % | |||||||||||||||||||||||||||||||||
Expense Growth YTD | (27.3 | ) | (34.4 | ) | (54.5 | ) | (43.2 | ) | (27.3 | ) | |||||||||||||||||||||||||||||||||
Operating Leverage YTD | 46.4 | 59.5 | 70.6 | 48.0 | 46.4 | ||||||||||||||||||||||||||||||||||||||
Average Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 12,575 | $ | 12,219 | $ | 11,734 | $ | 11,736 | $ | 12,069 | $ | 12,210 | $ | 12,329 | $ | 12,804 | $ | 13,583 | $ | 12,729 | (5.2 | )% | |||||||||||||||||||||
Total Deposits | 13,209 | 12,768 | 12,627 | 12,671 | 12,820 | 12,349 | 11,615 | 11,593 | 11,582 | 11,786 | 8.8 | ||||||||||||||||||||||||||||||||
Trading Related Assets | 3,228 | 2,758 | 2,657 | 2,496 | 2,788 | 2,505 | 2,816 | 2,722 | 3,115 | 2,788 | — |
(1) | Includes Latin America, Asia Commercial and Retail, Insurance Services, and segment level management accounting adjustments. It also includes certain non-recurring items |
nm | indicates non-meaningful data |
54
Bank of America Corporation
Global Corporate and Investment Banking: Capital Markets and Advisory Services Key Indicators
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||
Investment Banking | |||||||||||||||||||||||||||||||||
Advisory Fees | $ | 73 | $ | 89 | $ | 74 | $ | 60 | $ | 296 | $ | 104 | $ | 78 | $ | 66 | $ | 91 | $ | 339 | (12.7 | )% | |||||||||||
Debt Underwriting | 390 | 354 | 311 | 277 | 1,332 | 312 | 315 | 406 | 274 | 1,307 | 1.9 | ||||||||||||||||||||||
Equity Underwriting | 84 | 94 | 57 | 38 | 273 | 83 | 54 | 93 | 73 | 303 | (9.9 | ) | |||||||||||||||||||||
Total Investment Banking | 547 | 537 | 442 | 375 | 1,901 | 499 | 447 | 565 | 438 | 1,949 | (2.5 | ) | |||||||||||||||||||||
Sales and Trading | |||||||||||||||||||||||||||||||||
Fixed Income | |||||||||||||||||||||||||||||||||
Liquid Products | 470 | 471 | 497 | 505 | 1,943 | 428 | 375 | 517 | 446 | 1,766 | 10.0 | ||||||||||||||||||||||
Credit Products | 71 | 226 | 81 | 256 | 634 | 97 | 130 | 259 | 289 | 775 | (18.2 | ) | |||||||||||||||||||||
Structured Products | 238 | 267 | 231 | 266 | 1,002 | 260 | 237 | 292 | 304 | 1,093 | (8.3 | ) | |||||||||||||||||||||
Total Fixed Income | 779 | 964 | 809 | 1,027 | 3,579 | 785 | 742 | 1,068 | 1,039 | 3,634 | (1.5 | ) | |||||||||||||||||||||
Equity Income | 262 | 362 | 300 | 470 | 1,394 | 324 | 254 | 332 | 246 | 1,156 | 20.6 | ||||||||||||||||||||||
Total Sales and Trading | 1,041 | 1,326 | 1,109 | 1,497 | 4,973 | 1,109 | 996 | 1,400 | 1,285 | 4,790 | 3.8 | ||||||||||||||||||||||
Total Capital Markets and Advisory Services Revenue(1) | $ | 1,588 | $ | 1,863 | $ | 1,551 | $ | 1,872 | $ | 6,874 | $ | 1,608 | $ | 1,443 | $ | 1,965 | $ | 1,723 | $ | 6,739 | 2.0 | % | |||||||||||
___________ | |||||||||||||||||||||||||||||||||
(1) Includes Gains (losses) on the Sales of Securities | |||||||||||||||||||||||||||||||||
Balance Sheet (Average) | |||||||||||||||||||||||||||||||||
Trading Account Securities | $ | 136,058 | $ | 138,874 | $ | 131,831 | $ | 115,103 | $ | 130,547 | $ | 108,110 | $ | 95,949 | $ | 101,593 | $ | 103,248 | $ | 102,224 | 27.7 | % | |||||||||||
Reverse Repurchases | 75,230 | 78,919 | 77,080 | 59,562 | 72,757 | 66,084 | 53,939 | 44,999 | 45,906 | 52,772 | 37.9 | ||||||||||||||||||||||
Securities Borrowed | 79,993 | 85,377 | 97,597 | 77,454 | 85,113 | 68,853 | 61,383 | 67,056 | 52,530 | 62,470 | 36.2 | ||||||||||||||||||||||
Derivative Assets | 21,917 | 21,437 | 22,103 | 22,944 | 22,096 | 21,617 | 21,994 | 25,724 | 26,295 | 23,896 | (7.5 | ) | |||||||||||||||||||||
Trading Related Assets | $ | 313,198 | $ | 324,607 | $ | 328,611 | $ | 275,063 | $ | 310,513 | $ | 264,664 | $ | 233,265 | $ | 239,372 | $ | 227,979 | $ | 241,362 | 28.7 | % | |||||||||||
Sales Credits from Secondary Trading | |||||||||||||||||||||||||||||||||
Liquid Products | 197 | 192 | 223 | 202 | 814 | 171 | 179 | 186 | 169 | 705 | 15.5 | % | |||||||||||||||||||||
Credit Products | 160 | 152 | 177 | 168 | 657 | 146 | 142 | 157 | 120 | 565 | 16.1 | ||||||||||||||||||||||
Structured Products | 128 | 167 | 139 | 131 | 565 | 110 | 99 | 83 | 67 | 359 | 57.3 | ||||||||||||||||||||||
Equities | 211 | 201 | 215 | 198 | 825 | 179 | 160 | 181 | 188 | 708 | 16.6 | ||||||||||||||||||||||
Total | 696 | 712 | 754 | 699 | 2,861 | 606 | 580 | 607 | 544 | 2,337 | 22.4 | % | |||||||||||||||||||||
Volatility of Product Revenues - 1 Std Dev | |||||||||||||||||||||||||||||||||
Liquid Products | $ | 7.0 | $ | 11.1 | $ | 8.7 | $ | 10.0 | $ | 9.4 | $ | 7.0 | $ | 8.3 | $ | 12.9 | $ | 8.1 | $ | 9.4 | 0.4 | % | |||||||||||
Credit Products | 4.1 | 3.7 | 13.2 | 4.3 | 7.8 | 4.5 | 4.4 | 4.7 | 9.5 | 6.3 | 23.9 | ||||||||||||||||||||||
Structured Products | 6.8 | 8.1 | 4.9 | 6.9 | 6.8 | 4.7 | 5.7 | 6.9 | 12.4 | 8.1 | (15.3 | ) | |||||||||||||||||||||
Equities | 1.3 | 6.0 | 2.4 | 2.0 | 3.5 | 1.6 | 3.7 | 5.1 | 11.0 | 6.4 | (45.3 | ) | |||||||||||||||||||||
Total | $ | 12.2 | $ | 16.0 | $ | 17.6 | $ | 15.6 | $ | 15.8 | $ | 10.7 | $ | 12.9 | $ | 17.6 | $ | 14.8 | $ | 14.4 | 9.9 | % | |||||||||||
55
Bank of America Corporation
Global Corporate and Investment Banking: Business Lending Key Indicators
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Business Lending Revenue:(1) | |||||||||||||||||||||||||||||||||||||||||||
Corporate Lending (2) | $ | 387 | $ | 486 | $ | 635 | $ | 615 | $ | 2,123 | $ | 539 | $ | 506 | $ | 540 | $ | 566 | $ | 2,151 | (1.3 | )% | |||||||||||||||||||||
Commercial Lending | 829 | 828 | 732 | 889 | 3,278 | 770 | 755 | 758 | 942 | 3,225 | 1.6 | ||||||||||||||||||||||||||||||||
Consumer Indirect Lending | 189 | 184 | 165 | 154 | 692 | 159 | 158 | 153 | 153 | 623 | 11.1 | ||||||||||||||||||||||||||||||||
Total Revenue | $ | 1,405 | $ | 1,498 | $ | 1,532 | $ | 1,658 | $ | 6,093 | $ | 1,468 | $ | 1,419 | $ | 1,451 | $ | 1,661 | $ | 5,999 | 1.6 | % | |||||||||||||||||||||
Business Lending Margin: | |||||||||||||||||||||||||||||||||||||||||||
Corporate Lending | 1.43 | % | 1.63 | % | 1.74 | % | 1.87 | % | 1.66 | % | 2.14 | % | 2.35 | % | 2.56 | % | 2.75 | % | 2.47 | % | (32.8 | )% | |||||||||||||||||||||
Commercial Lending | 1.71 | % | 1.74 | % | 1.87 | % | 1.84 | % | 1.79 | % | 1.80 | % | 1.77 | % | 1.88 | % | 1.75 | % | 1.80 | % | (0.6 | )% | |||||||||||||||||||||
Consumer Indirect Lending | 2.03 | % | 2.12 | % | 2.22 | % | 2.30 | % | 2.16 | % | 2.47 | % | 2.51 | % | 2.50 | % | 2.60 | % | 2.52 | % | (14.3 | )% | |||||||||||||||||||||
Provision: | |||||||||||||||||||||||||||||||||||||||||||
Corporate Lending | $ | 13 | $ | (50 | ) | $ | (58 | ) | $ | (123 | ) | $ | (218 | ) | $ | (169 | ) | $ | (136 | ) | $ | 60 | $ | (93 | ) | $ | (338 | ) | 35.5 | % | |||||||||||||
Commercial Lending | 128 | 79 | (182 | ) | 31 | 56 | (244 | ) | (95 | ) | (179 | ) | 88 | (430 | ) | 113.0 | |||||||||||||||||||||||||||
Consumer Indirect Lending | 88 | 76 | 37 | 66 | 267 | 59 | 51 | 24 | 37 | 171 | 56.1 | ||||||||||||||||||||||||||||||||
Total Provision | $ | 229 | $ | 105 | $ | (203 | ) | $ | (26 | ) | $ | 105 | $ | (354 | ) | $ | (180 | ) | $ | (95 | ) | $ | 32 | $ | (597 | ) | 117.6 | % | |||||||||||||||
Credit Quality (% vs loans): (3),(4) | |||||||||||||||||||||||||||||||||||||||||||
Criticized Assets | |||||||||||||||||||||||||||||||||||||||||||
Corporate Lending | $ | 1,620 2.03 | % | $ | 1,792 2.28 | % | $ | 2,003 2.53 | % | $ | 2,317 2.91 | % | $ | 1,620 2.03 | % | $ | 3,017 3.72 | % | $ | 3,793 4.94 | % | $ | 4,122 5.53 | % | $ | 5,784 6.83 | % | $ | 3,017 3.72 | % | (46.3 (45.4 | )% )% | |||||||||||
Commercial Lending | $ | 4,633 2.82 | % | $ | 4,647 2.92 | % | $ | 4,678 3.00 | % | $ | 5,102 3.37 | % | $ | 4,633 2.82 | % | $ | 5,548 3.72 | % | $ | 6,417 4.39 | % | $ | 7,158 4.92 | % | $ | 9,013 6.13 | % | $ | 5,548 3.72 | % | (16.5 (24.2 | ) ) | |||||||||||
Total | $ | 6,253 2.57 | % | $ | 6,439 2.71 | % | $ | 6,681 2.84 | % | $ | 7,419 3.21 | % | $ | 6,253 2.57 | % | $ | 8,565 3.72 | % | $ | 10,210 4.58 | % | $ | 11,280 5.13 | % | $ | 14,797 6.39 | % | $ | 8,565 3.72 | % | (27.0 (30.9 | )% )% | |||||||||||
Non Performing Assets | |||||||||||||||||||||||||||||||||||||||||||
Corporate Lending | $ | 183 0.10 | % | $ | 231 0.14 | % | $ | 284 0.18 | % | $ | 397 0.25 | % | $ | 183 0.10 | % | $ | 427 0.27 | % | $ | 560 0.35 | % | $ | 685 0.41 | % | $ | 845 0.47 | % | $ | 427 0.27 | % | (57.1 (63.0 | )% )% | |||||||||||
Commercial Lending | $ | 430 0.06 | % | $ | 470 0.07 | % | $ | 676 0.11 | % | $ | 694 0.11 | % | $ | 430 0.06 | % | $ | 709 0.12 | % | $ | 837 0.14 | % | $ | 905 0.15 | % | $ | 854 0.14 | % | $ | 709 0.12 | % | (39.4 (50.0 | ) ) | |||||||||||
Total | $ | 613 0.07 | % | $ | 701 0.09 | % | $ | 960 0.12 | % | $ | 1,091 0.14 | % | $ | 613 0.07 | % | $ | 1,136 0.15 | % | $ | 1,397 0.18 | % | $ | 1,590 0.21 | % | $ | 1,699 0.22 | % | $ | 1,136 0.15 | % | (46.0 (53.3 | )% )% | |||||||||||
Average Loans and Leases By Product: | |||||||||||||||||||||||||||||||||||||||||||
Commercial | $ | 104,890 | $ | 99,794 | $ | 97,275 | $ | 94,939 | $ | 99,253 | $ | 93,876 | $ | 93,626 | $ | 96,166 | $ | 97,523 | $ | 95,289 | 4.2 | % | |||||||||||||||||||||
Leases | 19,792 | 20,089 | 20,226 | 20,592 | 20,172 | 20,099 | 20,063 | 20,074 | 21,687 | 20,479 | (1.5 | ) | |||||||||||||||||||||||||||||||
Foreign | 10,473 | 9,384 | 9,023 | 8,680 | 9,395 | 9,264 | 8,705 | 8,085 | 8,985 | 8,761 | 7.2 | ||||||||||||||||||||||||||||||||
Real Estate | 34,209 | 32,883 | 31,944 | 31,415 | 32,621 | 29,735 | 29,450 | 29,054 | 28,330 | 29,145 | 11.9 | ||||||||||||||||||||||||||||||||
Consumer | 32,338 | 31,103 | 26,698 | 25,133 | 28,844 | 24,417 | 23,668 | 22,983 | 22,171 | 23,314 | 23.7 | ||||||||||||||||||||||||||||||||
Other | 2,345 | 2,401 | 2,470 | 2,490 | 2,427 | 2,456 | 2,425 | 2,394 | 2,352 | 2,406 | 0.9 | ||||||||||||||||||||||||||||||||
Total Average Loans and Leases | $ | 204,047 | $ | 195,654 | $ | 187,636 | $ | 183,249 | $ | 192,712 | $ | 179,847 | $ | 177,937 | $ | 178,756 | $ | 181,048 | $ | 179,394 | 7.4 | % | |||||||||||||||||||||
__________ | |||||||||||||||||||||||||||||||||||||||||||
(1) Includes Gains (losses) on the Sales of Securities. |
| ||||||||||||||||||||||||||||||||||||||||||
(2) Total Corporate Lending Revenue | $ | 387 | $ | 486 | $ | 635 | $ | 615 | $ | 2,123 | $ | 539 | $ | 506 | $ | 540 | $ | 566 | $ | 2,151 | |||||||||||||||||||||||
LESS: Impact of credit mitigation | (36 | ) | (18 | ) | 96 | 138 | 180 | (36 | ) | (65 | ) | (1 | ) | (18 | ) | (120 | ) | ||||||||||||||||||||||||||
Corporate Lending revenues excluding credit mitigation | $ | 423 | $ | 504 | $ | 539 | $ | 477 | $ | 1,943 | $ | 575 | $ | 571 | $ | 541 | $ | 584 | $ | 2,271 | |||||||||||||||||||||||
(3) | Criticized assets correspond to the Special Mention, Substandard and Doubtful asset categories defined by regulatory authorities. The criticized assets are on an end of period basis and are also shown as a percentage of total commercial utilized exposure, including loans and leases, SBLCs and financial guarantees, derivative assets, assets held-for-sale and commercial letters of credit. |
(4) | Nonperforming Assets are on an end of period basis and defined as nonperforming loans and leases PLUS foreclosed property. The Nonperforming ratio is nonperforming assets divided by commercial loans and leases plus commercial foreclosed property |
56
Bank of America Corporation
Global Corporate and Investment Banking: Client Relationship View
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | |||||||||||||||||||||||||||||||||||||||||||||
Total | Commercial Issuer | Corporate Issuer | Institutional Investor | ALM | Other | Total | Commercial Issuer | Corporate Issuer | Institutional Investor | ALM | Other | |||||||||||||||||||||||||||||||||||
Income Statement | ||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 11,182 | $ | 6,281 | $ | 1,917 | $ | 1,913 | $ | 558 | $ | 513 | $ | 11,629 | $ | 5,434 | $ | 2,002 | $ | 2,591 | $ | 1,229 | $ | 373 | ||||||||||||||||||||||
Service charges | 2,618 | 1,121 | 1,217 | 111 | — | 169 | 2,752 | 1,161 | 1,327 | 103 | — | 161 | ||||||||||||||||||||||||||||||||||
Investment and brokerage services | 1,046 | 32 | 11 | 876 | — | 127 | 918 | 45 | 22 | 755 | — | 96 | ||||||||||||||||||||||||||||||||||
Mortgage banking income | 10 | 2 | (2 | ) | 9 | — | 1 | 20 | 8 | 1 | 10 | — | 1 | |||||||||||||||||||||||||||||||||
Investment banking income | 1,892 | 45 | 329 | 1,527 | — | (9 | ) | 1,942 | 197 | 248 | 1,504 | — | (7 | ) | ||||||||||||||||||||||||||||||||
Equity investment gains | 247 | 65 | 105 | 73 | — | 4 | 112 | 51 | 55 | 6 | — | — | ||||||||||||||||||||||||||||||||||
Card income | 685 | 278 | 347 | — | — | 60 | 541 | 246 | 253 | 1 | — | 41 | ||||||||||||||||||||||||||||||||||
Trading account profits | 1,770 | 34 | 1 | 1,618 | — | 117 | 1,345 | 54 | 77 | 1,126 | — | 88 | ||||||||||||||||||||||||||||||||||
Other income | 1,263 | 894 | 704 | (623 | ) | — | 288 | 1,000 | 729 | 572 | (619 | ) | — | 318 | ||||||||||||||||||||||||||||||||
Total noninterest income | 9,531 | 2,471 | 2,712 | 3,591 | — | 757 | 8,630 | 2,491 | 2,555 | 2,886 | — | 698 | ||||||||||||||||||||||||||||||||||
Total revenue | 20,713 | 8,752 | 4,629 | 5,504 | 558 | 1,270 | 20,259 | 7,925 | 4,557 | 5,477 | 1,229 | 1,071 | ||||||||||||||||||||||||||||||||||
Provision for credit losses | (289 | ) | 323 | (223 | ) | (29 | ) | — | (360 | ) | (791 | ) | (259 | ) | (330 | ) | (32 | ) | — | (170 | ) | |||||||||||||||||||||||||
Gains (losses) on sales of debt securities | 263 | — | 62 | 55 | — | 146 | (10 | ) | — | — | (10 | ) | — | — | ||||||||||||||||||||||||||||||||
Total noninterest expense | 11,141 | 2,990 | 2,981 | 3,872 | — | 1,298 | 11,007 | 3,060 | 2,823 | 3,338 | — | 1,786 | ||||||||||||||||||||||||||||||||||
Income before income taxes | 10,124 | 5,439 | 1,933 | 1,716 | 558 | 478 | 10,033 | 5,124 | 2,064 | 2,161 | 1,229 | (545 | ) | |||||||||||||||||||||||||||||||||
Income tax expense | 3,675 | 1,958 | 696 | 618 | 201 | 202 | 3,598 | 1,845 | 743 | 778 | 442 | (210 | ) | |||||||||||||||||||||||||||||||||
Net income | $ | 6,449 | $ | 3,481 | $ | 1,237 | $ | 1,098 | $ | 357 | $ | 276 | $ | 6,435 | $ | 3,279 | $ | 1,321 | $ | 1,383 | $ | 787 | $ | (335 | ) | |||||||||||||||||||||
Financial Ratios | ||||||||||||||||||||||||||||||||||||||||||||||
Revenue Growth | 2.2 | % | 10.4 | % | 1.6 | % | 0.5 | % | — | 18.8 | % | |||||||||||||||||||||||||||||||||||
Expense Growth | 1.2 | (2.3 | ) | 5.6 | 16.0 | — | (27.2 | ) | ||||||||||||||||||||||||||||||||||||||
Operating Leverage | 1.0 | 12.7 | (4.0 | ) | (15.5 | ) | — | 46.0 | ||||||||||||||||||||||||||||||||||||||
Efficiency Ratio | 53.79 | 34.16 | 64.40 | 70.35 | — | nm | 54.32 | % | 38.61 | % | 61.95 | % | 60.95 | % | — | nm | ||||||||||||||||||||||||||||||
Average Balance Sheet | ||||||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 214,860 | $ | 160,038 | $ | 35,651 | $ | 7,102 | — | $ | 12,069 | $ | 201,753 | $ | 145,710 | $ | 36,456 | $ | 6,858 | — | $ | 12,729 | ||||||||||||||||||||||||
Total Deposits | 189,904 | 89,991 | 60,358 | 26,735 | — | 12,820 | 177,555 | 87,724 | 56,691 | 21,355 | — | 11,785 | ||||||||||||||||||||||||||||||||||
Trading Related Assets | 314,569 | 319 | 950 | 310,513 | — | 2,787 | 245,024 | 384 | 489 | 241,362 | — | 2,789 |
nm | indicates non-meaningful data |
57
Bank of America Corporation
Global Wealth and Investment Management
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | |||||||||||||||||||||||||||||||||||||||||||||
Total | Private Bank | Columbia Management | Premier Banking and Investments | ALM | Other(1) | Total | Private Bank | Columbia Management | Premier Banking and Investments | ALM | Other(1) | |||||||||||||||||||||||||||||||||||
Income Statement | ||||||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 3,868 | $ | 991 | $ | 12 | $ | 1,733 | $ | 486 | $ | 646 | $ | 3,216 | $ | 904 | $ | 67 | $ | 1,210 | $ | 855 | $ | 180 | ||||||||||||||||||||||
Service charges | 89 | 25 | — | 62 | — | 2 | 84 | 28 | — | 54 | — | 2 | ||||||||||||||||||||||||||||||||||
Investment and brokerage services | 3,140 | 1,033 | 1,301 | 670 | — | 136 | 3,128 | 1,020 | 1,264 | 713 | — | 131 | ||||||||||||||||||||||||||||||||||
Mortgage banking income | 43 | — | — | 43 | — | — | 58 | (3 | ) | — | 61 | — | — | |||||||||||||||||||||||||||||||||
Investment banking income | 5 | 5 | — | — | — | — | 22 | 10 | — | 8 | — | 4 | ||||||||||||||||||||||||||||||||||
Equity investment gains | — | — | — | — | — | — | 6 | 1 | 4 | — | — | 1 | ||||||||||||||||||||||||||||||||||
Card income | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Trading account profits | 96 | — | 4 | — | — | 92 | 128 | 2 | — | 29 | — | 97 | ||||||||||||||||||||||||||||||||||
Other income | 123 | 38 | 28 | 43 | — | 14 | 100 | 30 | 9 | 38 | — | 23 | ||||||||||||||||||||||||||||||||||
Total noninterest income | 3,496 | 1,101 | 1,333 | 818 | — | 244 | 3,526 | 1,088 | 1,277 | 903 | — | 258 | ||||||||||||||||||||||||||||||||||
Total revenue | 7,364 | 2,092 | 1,345 | 2,551 | 486 | 890 | 6,742 | 1,992 | 1,344 | 2,113 | 855 | 438 | ||||||||||||||||||||||||||||||||||
Provision for credit losses | (7 | ) | (23 | ) | — | 18 | — | (2 | ) | (19 | ) | �� | (7 | ) | — | (12 | ) | — | — | |||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Total noninterest expense | 3,704 | 1,216 | 904 | 1,256 | — | 328 | 4,028 | 1,334 | 878 | 1,251 | — | 565 | ||||||||||||||||||||||||||||||||||
Income before income taxes | 3,667 | 899 | 441 | 1,277 | 486 | 564 | 2,733 | 665 | 466 | 874 | 855 | (127 | ) | |||||||||||||||||||||||||||||||||
Income tax expense | 1,318 | 323 | 158 | 454 | 180 | 203 | 1,030 | 234 | 180 | 314 | 316 | (14 | ) | |||||||||||||||||||||||||||||||||
Net income | $ | 2,349 | $ | 576 | $ | 283 | $ | 823 | $ | 306 | $ | 361 | $ | 1,703 | $ | 431 | $ | 286 | $ | 560 | $ | 539 | $ | (113 | ) | |||||||||||||||||||||
Financial Ratios | ||||||||||||||||||||||||||||||||||||||||||||||
Revenue Growth | 9.2 | % | 5.0 | % | 0.1 | % | 20.7 | % | — | 103.0 | % | |||||||||||||||||||||||||||||||||||
Expense Growth | (8.0 | ) | (8.8 | ) | 2.9 | 0.4 | — | (41.9 | ) | |||||||||||||||||||||||||||||||||||||
Operating Leverage | 17.3 | 13.8 | (2.8 | ) | 20.4 | — | 145.0 | |||||||||||||||||||||||||||||||||||||||
Efficiency Ratio | 50.30 | 58.11 | 67.20 | 49.23 | — | nm | 59.75 | % | 66.96 | % | 65.35 | % | 59.22 | % | — | nm | ||||||||||||||||||||||||||||||
Average Balance Sheet | ||||||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 54,103 | $ | 29,918 | $ | — | $ | 24,072 | $ | — | $ | 113 | $ | 45,388 | $ | 28,829 | $ | — | $ | 15,366 | $ | — | $ | 1,193 | ||||||||||||||||||||||
Total Deposits | 117,338 | 22,888 | 100 | 52,681 | — | 41,669 | 86,244 | 23,023 | 110 | 49,246 | — | 13,865 |
(1) | Global Wealth and Investment Management Other balances reflect Premier migration impact of $11.2 billion and $39.3 billion for 2004 and 2005, respectively. |
nm | indicates non-meaningful data |
58
Bank of America Corporation
Global Wealth and Investment Management: Private Bank
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 254 | $ | 248 | $ | 247 | $ | 242 | $ | 991 | $ | 232 | $ | 235 | $ | 225 | $ | 212 | $ | 904 | 9.6 | % | |||||||||||||||||||||
Service charges | 6 | 6 | 6 | 7 | 25 | 6 | 7 | 7 | 8 | 28 | (11.0 | ) | |||||||||||||||||||||||||||||||
Investment and brokerage services | 252 | 252 | 273 | 256 | 1,033 | 256 | 255 | 243 | 266 | 1,020 | 1.3 | ||||||||||||||||||||||||||||||||
Mortgage banking income | 1 | — | 1 | (2 | ) | — | — | (1 | ) | (1 | ) | (1 | ) | (3 | ) | nm | |||||||||||||||||||||||||||
Investment banking income | 2 | 1 | 1 | 1 | 5 | 2 | 1 | 3 | 4 | 10 | (51.2 | ) | |||||||||||||||||||||||||||||||
Equity investment gains | — | — | — | — | — | — | — | 1 | — | 1 | nm | ||||||||||||||||||||||||||||||||
Card income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Trading account profits | — | (1 | ) | — | 1 | — | 1 | — | — | 1 | 2 | nm | |||||||||||||||||||||||||||||||
Other income | 12 | 8 | 10 | 8 | 38 | 3 | 7 | 11 | 9 | 30 | 27.7 | ||||||||||||||||||||||||||||||||
Total noninterest income | 273 | 266 | 291 | 271 | 1,101 | 268 | 269 | 264 | 287 | 1,088 | 1.2 | ||||||||||||||||||||||||||||||||
Total revenue | 527 | 514 | 538 | 513 | 2,092 | 500 | 504 | 489 | 499 | 1,992 | 5.0 | ||||||||||||||||||||||||||||||||
Provision for credit losses | (3 | ) | (5 | ) | (13 | ) | (2 | ) | (23 | ) | (9 | ) | (19 | ) | 12 | 9 | (7 | ) | (237.8 | ) | |||||||||||||||||||||||
Gains (losses) on sales of debt securities | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total noninterest expense | 315 | 296 | 300 | 305 | 1,216 | 357 | 313 | 338 | 326 | 1,334 | (8.8 | ) | |||||||||||||||||||||||||||||||
Income before income taxes | 215 | 223 | 251 | 210 | 899 | 152 | 210 | 139 | 164 | 665 | 35.2 | ||||||||||||||||||||||||||||||||
Income tax expense | 77 | 81 | 90 | 75 | 323 | 50 | 76 | 48 | 60 | 234 | 38.3 | ||||||||||||||||||||||||||||||||
Net income | $ | 138 | $ | 142 | $ | 161 | $ | 135 | $ | 576 | $ | 102 | $ | 134 | $ | 91 | $ | 104 | $ | 431 | 33.8 | % | |||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | 5.0 | % | 4.9 | % | 6.4 | % | 2.8 | % | 5.0 | % | |||||||||||||||||||||||||||||||||
Expense Growth YTD | (8.8 | ) | (7.8 | ) | (8.9 | ) | (6.6 | ) | (8.8 | ) | |||||||||||||||||||||||||||||||||
Operating Leverage YTD | 13.8 | 12.8 | 15.4 | 9.4 | 13.8 | ||||||||||||||||||||||||||||||||||||||
Efficiency Ratio | 59.77 | 57.53 | 55.71 | 59.41 | 58.11 | 71.44 | % | 62.07 | % | 69.08 | % | 65.38 | % | 66.96 | % | (883 | )bps | ||||||||||||||||||||||||||
Average Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 30,412 | $ | 30,091 | $ | 29,588 | $ | 29,572 | $ | 29,918 | $ | 29,505 | $ | 29,140 | $ | 28,538 | $ | 28,124 | $ | 28,829 | 3.8 | % | |||||||||||||||||||||
Total Deposits | 18,508 | 20,698 | 25,600 | 26,863 | 22,888 | 26,508 | 25,083 | 21,398 | 19,041 | 23,023 | (0.6 | )% |
nm | indicates non-meaningful data |
59
Bank of America Corporation
Global Wealth and Investment Management: Columbia Management
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | — | $ | (1 | ) | $ | 7 | $ | 6 | $ | 12 | $ | 9 | $ | 8 | $ | 6 | $ | 44 | (1) | $ | 67 | (81.8 | )% | |||||||||||||||||||
Service charges | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Investment and brokerage services | 335 | 330 | 321 | 315 | 1,301 | 319 | 311 | 302 | 332 | 1,264 | 3.0 | ||||||||||||||||||||||||||||||||
Mortgage banking income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Investment banking income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Equity investment gains | — | — | — | — | — | — | 1 | 3 | 4 | nm | |||||||||||||||||||||||||||||||||
Card income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Trading account profits | — | — | (1 | ) | 5 | 4 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Other income | 11 | 10 | 1 | 6 | 28 | 2 | 1 | 2 | 4 | 9 | 208.2 | ||||||||||||||||||||||||||||||||
Total noninterest income | 346 | 340 | 321 | 326 | 1,333 | 321 | 313 | 304 | 339 | 1,277 | 4.4 | ||||||||||||||||||||||||||||||||
Total revenue | 346 | 339 | 328 | 332 | 1,345 | 330 | 321 | 310 | 383 | 1,344 | 0.1 | ||||||||||||||||||||||||||||||||
Provision for credit losses | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total noninterest expense | 235 | 222 | 226 | 221 | 904 | 225 | 206 | 217 | 230 | 878 | 2.9 | ||||||||||||||||||||||||||||||||
Income before income taxes | 111 | 117 | 102 | 111 | 441 | 105 | 115 | 93 | 153 | 466 | (5.3 | ) | |||||||||||||||||||||||||||||||
Income tax expense | 39 | 43 | 37 | 39 | 158 | 41 | 42 | 33 | 64 | 180 | (12.1 | ) | |||||||||||||||||||||||||||||||
Net income | $ | 72 | $ | 74 | $ | 65 | $ | 72 | $ | 283 | $ | 64 | $ | 73 | $ | 60 | $ | 89 | $ | 286 | (0.9 | )% | |||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | 0.1 | % | (1.5 | )% | (4.7 | )% | (13.3 | )% | 0.1 | % | |||||||||||||||||||||||||||||||||
Expense Growth YTD | 2.9 | 2.4 | — | (4.1 | ) | 2.9 | |||||||||||||||||||||||||||||||||||||
Operating Leverage YTD | (2.8 | ) | (3.9 | ) | (4.7 | ) | (9.3 | ) | (2.8 | ) | |||||||||||||||||||||||||||||||||
Efficiency Ratio | 67.92 | 65.44 | 68.81 | 66.54 | 67.20 | 68.19 | % | 64.15 | % | 69.92 | % | 60.13 | % | 65.35 | % | 185 | bps | ||||||||||||||||||||||||||
Average Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||
Total Deposits | $ | 90 | $ | 109 | $ | 100 | $ | 100 | $ | 100 | $ | 106 | $ | 101 | $ | 120 | $ | 114 | $ | 110 | (9.1 | )% |
(1) | Net Interest Income in the first quarter 2004 includes one time interest recoveries and other adjustments of $36 million |
nm | indicates non-meaningful data |
60
Bank of America Corporation
Global Wealth and Investment Management: Premier Banking and Investments
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Income Statement | |||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 502 | $ | 443 | $ | 411 | $ | 377 | $ | 1,733 | $ | 342 | $ | 307 | $ | 287 | $ | 274 | $ | 1,210 | 43.3 | % | |||||||||||||||||||||
Service charges | 16 | 17 | 15 | 14 | 62 | 14 | 14 | 13 | 13 | 54 | 14.8 | ||||||||||||||||||||||||||||||||
Investment and brokerage services | 167 | 176 | 163 | 164 | 670 | 168 | 166 | 187 | 192 | 713 | (5.9 | ) | |||||||||||||||||||||||||||||||
Mortgage banking income | 6 | 14 | 12 | 11 | 43 | 12 | 11 | 18 | 20 | 61 | (29.3 | ) | |||||||||||||||||||||||||||||||
Investment banking income | — | — | — | — | — | — | 4 | 2 | 2 | 8 | nm | ||||||||||||||||||||||||||||||||
Equity investment gains | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Card income | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Trading account profits | — | — | — | — | — | 1 | 6 | 8 | 14 | 29 | nm | ||||||||||||||||||||||||||||||||
Other income | 15 | 9 | 10 | 9 | 43 | 11 | 8 | 9 | 10 | 38 | 13.2 | ||||||||||||||||||||||||||||||||
Total noninterest income | 204 | 216 | 200 | 198 | 818 | 206 | 209 | 237 | 251 | 903 | (9.4 | ) | |||||||||||||||||||||||||||||||
Total revenue | 706 | 659 | 611 | 575 | 2,551 | 548 | 516 | 524 | 525 | 2,113 | 20.7 | ||||||||||||||||||||||||||||||||
Provision for credit losses | 4 | 6 | 4 | 4 | 18 | 3 | 1 | (1 | ) | (15 | ) | (12 | ) | nm | |||||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Total noninterest expense | 307 | 328 | 307 | 314 | 1,256 | 299 | 316 | 309 | 327 | 1,251 | 0.4 | ||||||||||||||||||||||||||||||||
Income before income taxes | 395 | 325 | 300 | 257 | 1,277 | 246 | 199 | 216 | 213 | 874 | 46.1 | ||||||||||||||||||||||||||||||||
Income tax expense | 140 | 119 | 108 | 87 | 454 | 86 | 74 | 80 | 74 | 314 | 44.8 | ||||||||||||||||||||||||||||||||
Net income | $ | 255 | $ | 206 | $ | 192 | $ | 170 | $ | 823 | $ | 160 | $ | 125 | $ | 136 | $ | 139 | $ | 560 | 47.1 | % | |||||||||||||||||||||
Financial Ratios | |||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | 20.7 | % | 17.9 | % | 13.0 | % | 9.3 | % | 20.7 | % | |||||||||||||||||||||||||||||||||
Expense Growth YTD | 0.4 | (0.2 | ) | (2.3 | ) | (4.0 | ) | 0.4 | |||||||||||||||||||||||||||||||||||
Operating Leverage YTD | 20.4 | 18.1 | 15.3 | 13.3 | 20.4 | ||||||||||||||||||||||||||||||||||||||
Efficiency Ratio | 43.50 | 49.76 | 50.29 | 54.66 | 49.23 | 54.54 | % | 61.25 | % | 58.96 | % | 62.23 | % | 59.22 | % | (999 | )bps | ||||||||||||||||||||||||||
Average Balance Sheet | |||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 26,656 | $ | 25,056 | $ | 23,352 | $ | 21,154 | $ | 24,072 | $ | 18,028 | $ | 15,197 | $ | 14,200 | $ | 14,013 | $ | 15,366 | 56.7 | % | |||||||||||||||||||||
Total Deposits | 49,289 | 53,355 | 54,035 | 54,119 | 52,681 | 51,301 | 49,593 | 48,344 | 47,694 | 49,246 | 7.0 |
nm | indicates non-meaningful data |
61
Bank of America Corporation
Global Wealth and Investment Management: Other
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | ||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | |||||||||||||||||||||||||||||||||
Income Statement | ||||||||||||||||||||||||||||||||||||||||||
Net interest income | $ | 201 | $ | 172 | $ | 149 | $ | 124 | $ | 646 | $ | 100 | $ | 52 | $ | 26 | $ | 2 | $ | 180 | 258.9 | % | ||||||||||||||||||||
Service charges | 2 | — | — | — | 2 | 2 | — | — | — | 2 | — | |||||||||||||||||||||||||||||||
Investment and brokerage services | 37 | 35 | 31 | 33 | 136 | 30 | 33 | 39 | 29 | 131 | 3.7 | |||||||||||||||||||||||||||||||
Mortgage banking income | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Investment banking income | — | — | — | — | — | 2 | 1 | — | 1 | 4 | nm | |||||||||||||||||||||||||||||||
Equity investment gains | — | — | — | — | — | 1 | — | — | — | 1 | nm | |||||||||||||||||||||||||||||||
Card income | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Trading account profits | 25 | 21 | 20 | 26 | 92 | 23 | 17 | 26 | 31 | 97 | (5.2 | ) | ||||||||||||||||||||||||||||||
Other income | 4 | 4 | 2 | 4 | 14 | (3 | ) | 12 | 4 | 10 | 23 | (39.1 | ) | |||||||||||||||||||||||||||||
Total noninterest income | 68 | 60 | 53 | 63 | 244 | 55 | 63 | 69 | 71 | 258 | (5.3 | ) | ||||||||||||||||||||||||||||||
Total revenue | 269 | 232 | 202 | 187 | 890 | 155 | 115 | 95 | 73 | 438 | 103.0 | |||||||||||||||||||||||||||||||
Provision for credit losses | — | (2 | ) | — | — | (2 | ) | — | 2 | (2 | ) | — | — | nm | ||||||||||||||||||||||||||||
Gains (losses) on sales of debt securities | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Total noninterest expense | 91 | 76 | 93 | 68 | 328 | 56 | 52 | 53 | 404 | 565 | (41.9 | ) | ||||||||||||||||||||||||||||||
Income before income taxes | 178 | 158 | 109 | 119 | 564 | 99 | 61 | 44 | (331 | ) | (127 | ) | 544.1 | |||||||||||||||||||||||||||||
Income tax expense | 64 | 58 | 39 | 42 | 203 | 39 | 20 | 16 | (89 | ) | (14 | ) | nm | |||||||||||||||||||||||||||||
Net income | $ | 114 | $ | 100 | $ | 70 | $ | 77 | $ | 361 | $ | 60 | $ | 41 | $ | 28 | $ | (242 | ) | $ | (113 | ) | (419.5 | )% | ||||||||||||||||||
Financial Ratios | ||||||||||||||||||||||||||||||||||||||||||
Revenue Growth YTD | 103.0 | % | 119.1 | % | 131.0 | % | 156.0 | % | 103.0 | % | ||||||||||||||||||||||||||||||||
Expense Growth YTD | (41.9 | ) | (53.3 | ) | (64.7 | ) | (83.1 | ) | (41.9 | ) | ||||||||||||||||||||||||||||||||
Operating Leverage YTD | 145.0 | 172.4 | 195.7 | 239.2 | 145.0 | |||||||||||||||||||||||||||||||||||||
Average Balance Sheet | ||||||||||||||||||||||||||||||||||||||||||
Total Loans and Leases | $ | 120 | $ | 113 | $ | 110 | $ | 110 | $ | 113 | $ | 497 | $ | 1,396 | $ | 1,460 | $ | 1,424 | $ | 1,193 | (90.5 | )% | ||||||||||||||||||||
Total Deposits(1) | 46,972 | 43,974 | 40,520 | 35,026 | 41,669 | 26,544 | 15,119 | 9,227 | 4,446 | 13,865 | 200.5 |
(1) | Global Wealth and Investment Management Other balances reflect Premier migration impact of $11.2 billion and $39.3 billion for 2004 and 2005, respectively. |
nm | indicates non-meaningful data |
62
Bank of America Corporation
Global Wealth and Investment Management: Key Indicators
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | ||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | |||||||||||||||||||||||||||||
Private Bank | ||||||||||||||||||||||||||||||||||||||
Recurring Asset Management Fees | $ | 247 | $ | 247 | $ | 269 | $ | 250 | $ | 1,013 | $ | 249 | $ | 248 | $ | 234 | $ | 255 | $ | 986 | 2.6 | % | ||||||||||||||||
Brokerage Commissions | 5 | 5 | 4 | 6 | 20 | 7 | 7 | 9 | 11 | 34 | (37.2 | ) | ||||||||||||||||||||||||||
Total Investment and Brokerage Services Income | $ | 252 | $ | 252 | $ | 273 | $ | 256 | $ | 1,033 | $ | 256 | $ | 255 | $ | 243 | $ | 266 | $ | 1,020 | 1.3 | % | ||||||||||||||||
Assets Under Management | $ | 164,032 | $ | 165,058 | $ | 162,927 | $ | 164,586 | $ | 164,032 | ||||||||||||||||||||||||||||
Columbia Management | ||||||||||||||||||||||||||||||||||||||
Recurring Asset Management Fees | $ | 335 | $ | 330 | $ | 321 | $ | 315 | $ | 1,301 | $ | 319 | $ | 311 | $ | 302 | $ | 332 | $ | 1,264 | 3.0 | % | ||||||||||||||||
Brokerage Commissions | — | — | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||
Total Investment and Brokerage Services Income | $ | 335 | $ | 330 | $ | 321 | $ | 315 | $ | 1,301 | $ | 319 | $ | 311 | $ | 302 | $ | 332 | $ | 1,264 | 3.0 | % | ||||||||||||||||
Assets Under Management | $ | 361,179 | $ | 332,363 | $ | 320,474 | $ | 316,133 | $ | 361,179 | ||||||||||||||||||||||||||||
Premier Banking and Investments | ||||||||||||||||||||||||||||||||||||||
Recurring Asset Management Fees | $ | 37 | $ | 33 | $ | 30 | $ | 26 | $ | 126 | $ | 22 | $ | 18 | $ | 17 | $ | 13 | $ | 70 | 78.0 | % | ||||||||||||||||
Brokerage Commissions | 130 | 143 | 133 | 138 | 544 | 146 | 148 | 170 | 179 | 643 | (15.1 | ) | ||||||||||||||||||||||||||
Total Investment and Brokerage Services Income | $ | 167 | $ | 176 | $ | 163 | $ | 164 | $ | 670 | $ | 168 | $ | 166 | $ | 187 | $ | 192 | $ | 713 | (5.9 | )% | ||||||||||||||||
Assets Under Management | $ | 13,723 | $ | 12,554 | $ | 10,854 | $ | 9,735 | $ | 13,723 | ||||||||||||||||||||||||||||
Number of Client Managers | 2,104 | 2,032 | 1,968 | 1,906 | 2,104 | 1,809 | 1,695 | 1,306 | 1,236 | 1,809 | 16.3 | % | ||||||||||||||||||||||||||
Number of Financial Advisors | 1,895 | 1,925 | 1,969 | 2,072 | 1,895 | 2,134 | 2,171 | 2,180 | 2,139 | 2,134 | (11.2 | ) | ||||||||||||||||||||||||||
Total Premier Banking and Investment Client Advisors | 3,999 | 3,957 | 3,937 | 3,978 | 3,999 | 3,943 | 3,866 | 3,486 | 3,375 | 3,943 | 1.4 | % | ||||||||||||||||||||||||||
Brokerage Revenue per Financial Advisor (in thousands) | $ | 69 | $ | 75 | $ | 68 | $ | 67 | $ | 288 | $ | 68 | $ | 68 | $ | 78 | $ | 84 | $ | 301 | (4.4 | )% | ||||||||||||||||
All Other | ||||||||||||||||||||||||||||||||||||||
Recurring Asset Management Fees | 29 | 26 | 23 | 24 | 102 | 18 | 17 | 22 | 10 | 67 | 51.4 | |||||||||||||||||||||||||||
Brokerage Commissions | 8 | 9 | 8 | 9 | 34 | 12 | 16 | 17 | 19 | 64 | (47.2 | ) | ||||||||||||||||||||||||||
Total Investment and Brokerage Services Income | $ | 37 | $ | 35 | $ | 31 | $ | 33 | $ | 136 | $ | 30 | $ | 33 | $ | 39 | $ | 29 | $ | 131 | 3.2 | % | ||||||||||||||||
Assets Under Management Elimination | $ | (56,540 | ) | $ | (52,577 | ) | $ | (51,464 | ) | $ | (57,058 | ) | $ | (56,540 | ) | |||||||||||||||||||||||
Total Global Wealth and Investment Management | ||||||||||||||||||||||||||||||||||||||
Recurring Asset Management Fees | 648 | 636 | 643 | 615 | 2,542 | 608 | 594 | 575 | 610 | 2,387 | 6.4 | |||||||||||||||||||||||||||
Brokerage Commissions | 143 | 157 | 145 | 153 | 598 | 165 | 171 | 196 | 209 | 741 | (18.9 | ) | ||||||||||||||||||||||||||
Total Investment and Brokerage Services Income | $ | 791 | $ | 793 | $ | 788 | $ | 768 | $ | 3,140 | $ | 773 | $ | 765 | $ | 771 | $ | 819 | $ | 3,128 | 0.4 | % | ||||||||||||||||
Assets Under Management | $ | 482,394 | $ | 457,398 | $ | 442,791 | $ | 433,396 | $ | 482,394 | ||||||||||||||||||||||||||||
($ in Billions) | ||||||||||||||||||||||||||||||||||||||
Assets Under Management Rollforward | ||||||||||||||||||||||||||||||||||||||
Beginning Balance | $ | 457 | $ | 442 | $ | 433 | $ | 451 | $ | 451 | ||||||||||||||||||||||||||||
Net Flows | 23 | 8 | 1 | (8 | ) | 24 | ||||||||||||||||||||||||||||||||
Market Valuation / Other | 2 | 7 | 8 | (10 | ) | 7 | ||||||||||||||||||||||||||||||||
Ending Balance | $ | 482 | $ | 457 | $ | 442 | $ | 433 | $ | 482 | ||||||||||||||||||||||||||||
Assets Under Management Mix | ||||||||||||||||||||||||||||||||||||||
Money Market / Other | $ | 185 | $ | 162 | $ | 151 | $ | 154 | $ | 185 | ||||||||||||||||||||||||||||
Fixed Income | 83 | 85 | 92 | 89 | 83 | |||||||||||||||||||||||||||||||||
Equity | 214 | 210 | 199 | 190 | 214 | |||||||||||||||||||||||||||||||||
Total Assets Under Management | $ | 482 | $ | 457 | $ | 442 | $ | 433 | $ | 482 | ||||||||||||||||||||||||||||
% of Assets Under Management in 4 and 5 Star Funds(1) | 56 | % | 53 | % | 52 | % | 52 | % | ||||||||||||||||||||||||||||||
% of Assets Under Management in 1st and 2nd Quartiles(2) | 78 | % | 77 | % | 68 | % | 72 | % | ||||||||||||||||||||||||||||||
Client Brokerage Assets | ||||||||||||||||||||||||||||||||||||||
Total Brokerage Assets | $ | 162 | $ | 156 | $ | 151 | $ | 151 | $ | 162 |
63
Bank of America Corporation Global Wealth and Investment Management: Key Indicators | ||
(1) | Please consider the objectives, risks, charges and expenses of any Columbia fund carefully before investing. Contact your financial advisor for a prospectus, which contains this and other important information about the fund. You should read it carefully before investing. | |
©2006 by Morningstar, Inc. All rights reserved. The information contained herein is the proprietary information of Morningstar, Inc., may not be copied or redistributed for any purpose and may only be used for noncommercial, personal purposes. The information contained herein is not represented or warranted to be accurate, correct, complete or timely. Morningstar, Inc. shall not be responsible for investment decisions, damages or other losses resulting from the use of this information. Past performance is no guarantee of future performance. Morningstar, Inc. has not granted consent for it to be considered or deemed an “expert” under the Securities Act of 1933. | ||
(2) | Results shown are defined by Columbia Management’s calculation of its percentage of assets under management in the top two quartiles of categories based on Morningstar (Equity categories, Lipper ( Fixed Income categories) (iMoneyNet Money Market funds). The category percentile rank was calculated by ranking the three year gross return of share classes within the categories stated above . The assets of the number of funds within the top 2 quartile results include both were added and then divided by Columbia Managements total assets under management. Had fees been included, rankings would have been lower. Past performance is no guarantee of future results. |
64 |
Bank of America Corporation
Key Indicators
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | Growth 05 vs 04 | |||||||||||||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | Full Year | ||||||||||||||||||||||||||||||||||
Equity Balances | |||||||||||||||||||||||||||||||||||||||||||
Private Equity ( Ending Balance) | $ | 6,136 | $ | 6,076 | $ | 6,427 | $ | 6,571 | $ | 6,136 | $ | 6,959 | $ | 7,196 | $ | 7,434 | $ | 7,673 | $ | 6,959 | (11.8 | )% | |||||||||||||||||||||
Public Equity (Ending Balance) | 326 | 338 | 326 | 394 | 326 | 291 | 242 | 261 | 331 | 291 | 11.7 | % | |||||||||||||||||||||||||||||||
Total Equity | $ | 6,462 | $ | 6,414 | $ | 6,753 | $ | 6,965 | $ | 6,462 | $ | 7,250 | $ | 7,438 | $ | 7,695 | $ | 8,004 | $ | 7,250 | (10.9 | )% | |||||||||||||||||||||
Average Liquidity Balances(2) | |||||||||||||||||||||||||||||||||||||||||||
Net liquid assets - bank level ($ in billions)(3) | $ | 266 | $ | 262 | $ | 274 | $ | 273 | n/a | $ | 266 | $ | 267 | $ | 261 | $ | 219 | n/a | |||||||||||||||||||||||||
Time to Required funding - parent company (in months) | 29 | 31 | 26 | 26 | n/a | 29 | 28 | 28 | 30 | n/a | |||||||||||||||||||||||||||||||||
Share Data(2) | |||||||||||||||||||||||||||||||||||||||||||
Average Shares Outstanding | 4,012 | 4,016 | 4,021 | 4,046 | 4,024 | 4,044 | 4,063 | 4,073 | 2,889 | 3,768 | 6.8 | % | |||||||||||||||||||||||||||||||
Ending Shares Outstanding | 4,000 | 4,013 | 4,017 | 4,035 | 4,000 | 4,047 | 4,049 | 4,063 | 2,891 | 4,047 | (1.2 | )% | |||||||||||||||||||||||||||||||
Capital Ratios(2) | |||||||||||||||||||||||||||||||||||||||||||
Tier 1 Capital Ratio | 8.25 | % | 8.27 | % | 8.16 | % | 8.26 | % | 8.25 | % | 8.20 | % | 8.18 | % | 8.26 | % | 7.89 | % | 8.20 | % | 5 | bps | |||||||||||||||||||||
Total Capital Ratio | 11.08 | 11.19 | 11.23 | 11.52 | 11.08 | 11.73 | 11.81 | 12.02 | 11.62 | 11.73 | 65 | bps | |||||||||||||||||||||||||||||||
Global Consumer and Small Business Banking (Held) | |||||||||||||||||||||||||||||||||||||||||||
Allowance for Loan and Lease Loss (Ending Balance) | $ | 4,299 | $ | 4,684 | $ | 4,430 | $ | 4,235 | $ | 4,299 | $ | 4,678 | $ | 4,234 | $ | 3,891 | $ | 4,545 | $ | 4,678 | (8.1 | )% | |||||||||||||||||||||
Outstanding Loans and Leases (Ending Balance) | 188,293 | 182,426 | 174,627 | 169,974 | 188,293 | 172,547 | 169,072 | 162,217 | 160,124 | 172,547 | 9.1 | % | |||||||||||||||||||||||||||||||
Net Charge-offs | 1,948 | 1,174 | 1,129 | 1,134 | 5,385 | 1,064 | 985 | 829 | 937 | 4,347 | 23.9 | % | |||||||||||||||||||||||||||||||
Card 30 day delinquent | 3.98 | % | 4.63 | % | 4.47 | % | 4.61 | % | n/a | 4.55 | % | 4.52 | % | 4.26 | % | 4.41 | % | n/a | |||||||||||||||||||||||||
Card 60 day delinquent | 2.71 | 3.14 | 3.03 | 3.25 | n/a | 3.14 | 3.10 | 2.89 | 3.09 | n/a | |||||||||||||||||||||||||||||||||
Card 12 Month Lag Loss Rate | 7.77 | 5.01 | 5.44 | 5.28 | n/a | 5.43 | 5.49 | 5.98 | 5.90 | n/a | |||||||||||||||||||||||||||||||||
Global Corporate and Investment Banking | |||||||||||||||||||||||||||||||||||||||||||
Allowance for Loan and Lease Loss (Ending Balance) | $ | 3,587 | $ | 3,580 | $ | 3,875 | $ | 4,102 | $ | 3,587 | $ | 4,047 | $ | 4,615 | $ | 5,001 | $ | 4,693 | $ | 4,047 | (11.4 | )% | |||||||||||||||||||||
Outstanding Loans and Leases (Ending Balance) | 232,673 | 220,918 | 210,832 | 209,009 | 232,673 | 204,040 | 199,936 | 199,717 | 201,677 | 204,040 | 14.0 | % | |||||||||||||||||||||||||||||||
Net Charge-offs | 86 | 241 | (5 | ) | 39 | 361 | 47 | 28 | 149 | 275 | 499 | (27.8 | )% | ||||||||||||||||||||||||||||||
Criticized Assets | 7,208 | 7,253 | 7,247 | 8,238 | 7,208 | 9,570 | 11,239 | 12,642 | 16,660 | 9,570 | (24.7 | )% | |||||||||||||||||||||||||||||||
Non-Performing Assets | 665 | 785 | 1,091 | 1,481 | 665 | 1,550 | 1,928 | 2,221 | 2,614 | 1,550 | (57.1 | )% | |||||||||||||||||||||||||||||||
Global Wealth and Investment Management | |||||||||||||||||||||||||||||||||||||||||||
Allowance for Loan and Lease Loss (Ending Balance) | $ | 173 | $ | 171 | $ | 169 | $ | 184 | $ | 173 | $ | 92 | $ | 100 | $ | 139 | $ | 131 | $ | 92 | 88.0 | % | |||||||||||||||||||||
Outstanding Loans and Leases (Ending Balance) | 58,380 | 56,147 | 54,332 | 51,845 | 58,380 | 49,860 | 47,107 | 44,827 | 44,048 | 49,860 | 17.1 | % | |||||||||||||||||||||||||||||||
Net Charge-offs | (1 | ) | (1 | ) | 5 | — | 3 | 3 | 1 | 8 | 6 | 19 | (84.9 | )% |
1 | Balances reflect Principal Investing only |
2 | Numbers and ratios reflect legacy Bank of America data only |
3 | Gross liquid assets - short-term liabilities |
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Bank of America Corporation
Global Consumer and Small Business Banking: Card Services (Held to Managed)
($ in Millions)
2005 Pro Forma | 2004 Pro Forma | |||||||||||||||||||||||
Held Card Full Year | Securitized Full Year | Managed Card Full Year | Held Card Full Year | Securitized Full Year | Managed Card Full Year | |||||||||||||||||||
Income Statement | ||||||||||||||||||||||||
Net interest income | $ | 8,072 | $ | 7,834 | $ | 15,906 | $ | 6,651 | $ | 9,153 | $ | 15,804 | ||||||||||||
Service charges | — | — | — | — | ||||||||||||||||||||
Investment and brokerage services | — | — | — | — | — | — | ||||||||||||||||||
Mortgage banking income | — | — | — | — | — | — | ||||||||||||||||||
Investment banking income | — | — | — | — | — | — | ||||||||||||||||||
Equity investment gains | — | — | — | — | — | — | ||||||||||||||||||
Card income | 10,518 | (3,346 | ) | 7,172 | 11,063 | (4,606 | ) | 6,457 | ||||||||||||||||
Trading account profits | (36 | ) | — | (36 | ) | (86 | ) | — | (86 | ) | ||||||||||||||
Other income | 289 | 453 | 742 | 335 | 426 | 761 | ||||||||||||||||||
Total noninterest income | 10,771 | (2,893 | ) | 7,878 | 11,312 | (4,180 | ) | 7,132 | ||||||||||||||||
Total revenue | 18,843 | 4,941 | 23,784 | 17,963 | 4,973 | 22,936 | ||||||||||||||||||
Provision for credit losses | 5,063 | 4,941 | 10,004 | 4,390 | 4,973 | 9,363 | ||||||||||||||||||
Gains (losses) on sales of debt securities | — | — | — | — | — | — | ||||||||||||||||||
Total noninterest expense | 9,728 | — | 9,728 | 9,206 | — | 9,206 | ||||||||||||||||||
Income before income taxes | 4,052 | — | 4,052 | 4,367 | — | 4,367 | ||||||||||||||||||
Income tax expense | 1,454 | — | 1,454 | 1,596 | — | 1,596 | ||||||||||||||||||
Net income | $ | 2,598 | $ | — | $ | 2,598 | $ | 2,771 | $ | — | $ | 2,771 | ||||||||||||
The financial information above reconciles reported “Held Card” and the “Managed Card” to disclose the effect of securitizations. The differences between “Held Card” and “ Managed Card” are solely the result of card securitizations.
2005 Proforma | 2004 Proforma | |||||||||||||||||||||||||||||||
4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | 4th Qtr | 3rd Qtr | 2nd Qtr | 1st Qtr | |||||||||||||||||||||||||
Impacted Accounts | ||||||||||||||||||||||||||||||||
Net interest income | $ | (1,749 | ) | $ | (1,890 | ) | $ | (2,087 | ) | $ | (2,108 | ) | $ | (2,269 | ) | $ | (2,283 | ) | $ | (2,309 | ) | $ | (2,292 | ) | ||||||||
Card income | 363 | 914 | 998 | 1,071 | 1,216 | 1,190 | 1,112 | 1,088 | ||||||||||||||||||||||||
Other income | (108 | ) | (117 | ) | (115 | ) | (113 | ) | (115 | ) | (108 | ) | (103 | ) | (100 | ) | ||||||||||||||||
Provision for credit losses | (1,494 | ) | (1,093 | ) | (1,204 | ) | (1,150 | ) | (1,168 | ) | (1,201 | ) | (1,300 | ) | (1,304 | ) |
The above chart reconciles the difference between Managed Card and Held Card for the periods presented. The differences are solely the result of card securitizations.
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