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BANK OF AMERICA CORP /DE/ Annual Report, Year Ended Dec 31, 1993

Filing Date
Filed March 30, 1994
Period End
December 31, 1993
In the record · 2016–202610-K1110-Q328-K149

BAC filed 11 annual reports (10-K), 32 quarterly reports (10-Q) and 149 current reports (8-K) between 2016 and 2026.

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01—Abstract

Summary

Summary of the 10-K filed March 30, 1994. Cited figures are marked; the original filing is the authoritative source.

NationsBank Corporation, a North Carolina bank holding company headquartered in Charlotte, reported 1993 net income of $1.501 billiona, or $5.78 per common share, up from $1.145 billion, or $4.60 per share, in 1992.

Results include a $200 millionb cumulative tax benefit from adopting SFAS 109; excluding that benefit, net income was $1.3 billion, compared with $912 million in 1992 on the filing's own adjusted basis. Total assets reached $157.7 billion at year end, making the company the third largest banking company in the nation according to the filing. The growth was driven largely by acquisitions in 1993, including MNC Financial (completed October 1, 1993, with total assets of about $16.5 billion), Chicago Research & Trading Group, Chrysler First's finance receivables, and U S WEST Financial Services' receivables.

Credit quality improved during the year. The provision for credit losses fell to $430 millionc from $715 million, net charge-offs declined to $412 million from $866 million, and nonperforming assets dropped to $1.78 billion from $2.00 billion. The allowance for credit losses stood at $2.17 billion, or 2.36 percent of loans, leases and factored receivables.

Capital ratios were 7.41 percent Tier 1 and 11.73 percent total risk-based, with a 6.00 percent leverage ratio, all above regulatory minimums. Management expected continued downward pressure on the yield on earning assets during 1994, and the filing notes that pending interstate branching legislation could affect the company's expansion. The filing also reports pending transactions.

NationsBank agreed in February 1994 to buy 43 Florida branches and one Georgia branch from California Savings Bank for about $160 milliond, expected to close in the third quarter of 1994. It also completed the acquisition of Corpus Christi National Bank on February 28, 1994, in an exchange of 2.5 shares per CCNB share valued at about $62 million. Its banking operations span Texas, North Carolina, Florida, Maryland, Georgia, Virginia, South Carolina, Tennessee, and the District of Columbia.

02—Key points

Key Highlights

  1. Net income rose 31 percent to $1.501 billion in 1993, or $5.78 per common share, including a $200 million cumulative benefit from adopting SFAS 109.
  2. Total assets were $157.7 billion at December 31, 1993, versus $118.1 billion a year earlier; the filing describes the company as the third largest banking company in the nation.
  3. The MNC Financial acquisition, completed October 1, 1993, added about $16.5 billion in total assets and roughly 13.6 million common shares issued plus about $687 million in cash (purchase price about $1.39 billion).
  4. The provision for credit losses fell to $430 million from $715 million, and net charge-offs declined to $412 million from $866 million.
  5. Nonperforming assets declined to $1.78 billion from $2.00 billion, and the allowance for credit losses rose to $2.17 billion, or 2.36 percent of loans.
  6. Tier 1 risk-based capital ratio was 7.41 percent, total risk-based capital ratio was 11.73 percent, and leverage ratio was 6.00 percent at year end 1993.
  7. Pending acquisition of 43 Florida branches and one Georgia branch from California Savings Bank for about $160 million, expected to close in the third quarter of 1994.

03—Questions

Frequently Asked Questions

  1. How did NationsBank's earnings change in 1993?

    Net income was $1.501 billion, or $5.78 per common share, compared with $1.145 billion, or $4.60 per share, in 1992. The filing states that net income excluding the $200 million SFAS 109 tax benefit was $1.3 billion, compared with $912 million in 1992 on the same adjusted basis.

  2. What acquisitions drove the balance sheet growth in 1993?

    The main acquisitions were MNC Financial Inc., completed October 1, 1993, with about $16.5 billion in total assets; Chicago Research & Trading Group, acquired July 2, 1993, with about $12 billion in assets at purchase; the Chrysler First finance receivables of about $3.7 billion; and about $2.0 billion in receivables from U S WEST Financial Services.

  3. How did credit quality trend?

    Credit quality improved. The provision for credit losses fell to $430 million from $715 million, net charge-offs fell to $412 million from $866 million, and nonperforming assets declined to $1.78 billion from $2.00 billion. The allowance for credit losses covered 193.38 percent of nonperforming loans at year end.

  4. Is the company adequately capitalized?

    Yes, according to the filing. The Tier 1 risk-based ratio was 7.41 percent and the total risk-based ratio was 11.73 percent, both above the 4 percent and 8 percent regulatory minimums. The leverage ratio was 6.00 percent against a 3 percent minimum, and the filing states that each subsidiary bank is adequately or well capitalized.

  5. What did management say about the outlook for 1994?

    The filing says management expects continued downward pressure on the yield on earning assets during 1994, due to the full-year impact of CRT and continuing maturities of assets added in a higher interest rate environment. It also notes pending federal interstate branching legislation that, if enacted, would permit nationwide interstate branching.

04—Continue

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