UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended March 31, 2004
or
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 1-6523
Exact name of registrant as specified in its charter:
Bank of America Corporation
State of incorporation:
Delaware
IRS Employer Identification Number: 56-0906609
Address of principal executive offices:
Bank of America Corporate Center
100 N. Tryon Street
Charlotte, North Carolina 28255
Registrant’s telephone number, including area code: (704) 386-8486
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes x No ¨
On April 30, 2004, there were 2,038,797,417 shares of Bank of America Corporation Common Stock outstanding.
Bank of America Corporation
March 31, 2004 Form 10-Q
| Page | ||||||
| Part I Financial Information |
Item 1. | Financial Statements: |
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| Consolidated Statement of Income for the Three Months Ended March 31, 2004 and 2003 |
2 | |||||
| Consolidated Balance Sheet at March 31, 2004 and December 31, 2003 |
3 | |||||
| 4 | ||||||
| Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2004 and 2003 |
5 | |||||
| 6 | ||||||
| Item 2. | Management’s Discussion and Analysis of Results of Operations and Financial Condition |
21 | ||||
| Item 3. | 59 | |||||
| Item 4. | 59 | |||||
| Part II Other Information | Item 1. | 59 | ||||
| Item 2. | 59 | |||||
| Item 4. | 59 | |||||
| Item 6. | 60 | |||||
| Signature | 62 | |||||
| Index to Exhibits | 63 | |||||
Part I. Financial Information
Item 1. Financial Statements
Bank of America Corporation and Subsidiaries
Consolidated Statement of Income
| Three Months Ended March 31 |
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| (Dollars in millions, except per share information) |
2004 |
2003 |
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| Interest income |
|||||||
| Interest and fees on loans and leases |
$ | 5,549 | $ | 5,348 | |||
| Interest on debt securities |
1,212 | 754 | |||||
| Federal funds sold and securities purchased under agreements to resell |
434 | 194 | |||||
| Trading account assets |
1,009 | 1,042 | |||||
| Other interest income |
368 | 387 | |||||
| Total interest income |
8,572 | 7,725 | |||||
| Interest expense |
|||||||
| Deposits |
1,206 | 1,183 | |||||
| Short-term borrowings |
740 | 453 | |||||
| Trading account liabilities |
334 | 308 | |||||
| Long-term debt |
491 | 572 | |||||
| Total interest expense |
2,771 | 2,516 | |||||
| Net interest income |
5,801 | 5,209 | |||||
| Noninterest income |
|||||||
| Consumer service charges |
821 | 777 | |||||
| Corporate service charges |
595 | 577 | |||||
| Total service charges |
1,416 | 1,354 | |||||
| Consumer investment and brokerage services |
417 | 383 | |||||
| Corporate investment and brokerage services |
205 | 165 | |||||
| Total investment and brokerage services |
622 | 548 | |||||
| Mortgage banking income |
209 | 405 | |||||
| Investment banking income |
404 | 378 | |||||
| Equity investment gains (losses) |
133 | (68 | ) | ||||
| Card income |
795 | 681 | |||||
| Trading account profits |
3 | 114 | |||||
| Other income |
135 | 281 | |||||
| Total noninterest income |
3,717 | 3,693 | |||||
| Total revenue |
9,518 | 8,902 | |||||
| Provision for credit losses |
624 | 833 | |||||
| Gains on sales of debt securities |
495 | 273 | |||||
| Noninterest expense |
|||||||
| Personnel |
2,762 | 2,459 | |||||
| Occupancy |
488 | 472 | |||||
| Equipment |
261 | 284 | |||||
| Marketing |
281 | 230 | |||||
| Professional fees |
147 | 125 | |||||
| Amortization of intangibles |
54 | 54 | |||||
| Data processing |
284 | 266 | |||||
| Telecommunications |
151 | 124 | |||||
| Other general operating |
989 | 711 | |||||
| Total noninterest expense |
5,417 | 4,725 | |||||
| Income before income taxes |
3,972 | 3,617 | |||||
| Income tax expense |
1,291 | 1,193 | |||||
| Net income |
$ | 2,681 | $ | 2,424 | |||
| Net income available to common shareholders |
$ | 2,680 | $ | 2,423 | |||
| Per common share information |
|||||||
| Earnings |
$ | 1.86 | $ | 1.62 | |||
| Diluted earnings |
$ | 1.83 | $ | 1.59 | |||
| Dividends paid |
$ | 0.80 | $ | 0.64 | |||
| Average common shares issued and outstanding (in thousands) |
1,440,153 | 1,499,405 | |||||
| Average diluted common shares issued and outstanding (in thousands) |
1,466,701 | 1,526,288 | |||||
See accompanying notes to consolidated financial statements.
2
Bank of America Corporation and Subsidiaries
Consolidated Balance Sheet
| (Dollars in millions) |
March 31, 2004 |
December 31, 2003 |
||||||
| Assets |
||||||||
| Cash and cash equivalents |
$ | 22,296 | $ | 27,084 | ||||
| Time deposits placed and other short-term investments |
8,561 | 8,051 | ||||||
| Federal funds sold and securities purchased under agreements to resell (includes $73,018 and $76,446 pledged as collateral) |
73,057 | 76,492 | ||||||
| Trading account assets (includes $39,522 and $18,722 pledged as collateral) |
75,004 | 68,547 | ||||||
| Derivative assets |
36,488 | 36,507 | ||||||
| Debt securities: |
||||||||
| Available-for-sale (includes $34,965 and $20,858 pledged as collateral) |
139,546 | 66,382 | ||||||
| Held-to-maturity, at cost (market value- $251 and $254) |
242 | 247 | ||||||
| Total debt securities |
139,788 | 66,629 | ||||||
| Loans and leases |
375,968 | 371,463 | ||||||
| Allowance for loan and lease losses |
(6,080 | ) | (6,163 | ) | ||||
| Loans and leases, net of allowance |
369,888 | 365,300 | ||||||
| Premises and equipment, net |
6,076 | 6,036 | ||||||
| Mortgage banking assets |
2,184 | 2,762 | ||||||
| Goodwill |
11,468 | 11,455 | ||||||
| Core deposit intangibles and other intangibles |
854 | 908 | ||||||
| Other assets |
70,348 | 66,674 | ||||||
| Total assets |
$ | 816,012 | $ | 736,445 | ||||
| Liabilities |
||||||||
| Deposits in domestic offices: |
||||||||
| Noninterest-bearing |
$ | 121,629 | $ | 118,495 | ||||
| Interest-bearing |
267,850 | 262,032 | ||||||
| Deposits in foreign offices: |
||||||||
| Noninterest-bearing |
2,805 | 3,035 | ||||||
| Interest-bearing |
43,308 | 30,551 | ||||||
| Total deposits |
435,592 | 414,113 | ||||||
| Federal funds purchased and securities sold under agreements to repurchase |
115,434 | 78,046 | ||||||
| Trading account liabilities |
27,402 | 26,844 | ||||||
| Derivative liabilities |
24,321 | 24,526 | ||||||
| Commercial paper and other short-term borrowings |
64,621 | 42,478 | ||||||
| Accrued expenses and other liabilities (includes $401 and $416 of Reserve for unfunded lending commitments) |
18,635 | 27,115 | ||||||
| Long-term debt |
81,231 | 75,343 | ||||||
| Total liabilities |
767,236 | 688,465 | ||||||
| Commitments and contingencies (Note 7) |
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| Shareholders’ equity |
||||||||
| Preferred stock, $0.01 par value; authorized - 100,000,000 shares; issued and outstanding - 1,239,563 and 1,269,600 shares |
53 | 54 | ||||||
| Common stock, $0.01 par value; authorized - 7,500,000,000 and 5,000,000,000 shares; issued and outstanding - 1,445,487,313 and 1,441,143,786 shares |
14 | 14 | ||||||
| Retained earnings |
51,823 | 50,213 | ||||||
| Accumulated other comprehensive loss |
(2,743 | ) | (2,148 | ) | ||||
| Other |
(371 | ) | (153 | ) | ||||
| Total shareholders’ equity |
48,776 | 47,980 | ||||||
| Total liabilities and shareholders’ equity |
$ | 816,012 | $ | 736,445 | ||||
See accompanying notes to consolidated financial statements.
3
Bank of America Corporation and Subsidiaries
Consolidated Statement of Changes in Shareholders’ Equity
| Preferred Stock |
Accumulated Other Comprehensive Income (Loss) (1) |
Other |
Total Share- holders’ Equity |
Comprehensive Income |
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| Common Stock |
Retained Earnings |
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| (Dollars in millions, shares in thousands) |
Shares |
Amount |
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| Balance, December 31, 2002 |
$ | 58 | 1,500,691 | $ | 496 | $ | 48,517 | $ | 1,232 | $ | 16 | $ | 50,319 | ||||||||||||||||||
| Net income |
2,424 | 2,424 | $ | 2,424 | |||||||||||||||||||||||||||
| Net unrealized losses on available-for-sale debt and marketable equity securities |
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