10-QPeriod: Q1 FY2003

BANK OF AMERICA CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2003

Filed May 13, 2003For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

Bank of America Corporation (BAC) reported solid results for the first quarter of 2003, with net income increasing to $2.42 billion, or $1.59 per diluted share, up from $2.18 billion, or $1.38 per diluted share, in the same period of 2002. This represents a significant year-over-year improvement, driven by growth across its major business segments. The company saw revenue growth, fueled by increases in noninterest income, particularly from consumer services and mortgage banking. Net interest income also saw a modest increase, although net interest yield declined due to rate impacts and portfolio repositioning. Provision for credit losses remained stable, and net charge-offs decreased, indicating stable credit quality. The company also continues to manage its capital effectively, with strong risk-based capital ratios, while actively repurchasing shares.

Key Highlights

  • 1Net income increased to $2.42 billion in Q1 2003, up from $2.18 billion in Q1 2002.
  • 2Diluted earnings per share rose to $1.59 from $1.38 year-over-year.
  • 3Total revenue increased to $8.89 billion from $8.59 billion, driven by growth in noninterest income.
  • 4Provision for credit losses remained stable at $833 million.
  • 5Net charge-offs as a percentage of average loans and leases decreased to 0.98% from 1.04% year-over-year.
  • 6The company's Tier 1 capital ratio stood at 8.20%, well above regulatory minimums.
  • 7Total assets grew to $679.76 billion from $660.46 billion at year-end 2002.

Frequently Asked Questions

The increase in net income was primarily driven by improved performance across the company's major business segments, notably Consumer and Commercial Banking and Global Corporate and Investment Banking, along with a substantial increase in noninterest income, particularly from consumer services and mortgage banking activities.

Credit quality remained stable. The provision for credit losses was largely unchanged year-over-year, and net charge-offs as a percentage of average loans and leases decreased. Nonperforming assets also saw a slight decrease.

The company noted that the remainder of 2003 is anticipated to be challenging for the investment banking industry and that it will continue to monitor market developments. Regarding accounting, the company is evaluating the impact of FIN 46 ('Consolidation of Variable Interest Entities'), which will require consolidation of certain entities starting in the third quarter of 2003, with an expected impact on consolidated assets.

Bank of America maintained strong regulatory capital ratios, with its Tier 1 capital ratio at 8.20%. The company also continued its share repurchase program and declared a dividend of $0.64 per common share.