10-QPeriod: Q1 FY2004

BANK OF AMERICA CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2004

Filed May 7, 2004For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

Bank of America Corporation (BAC) reported strong performance for the first quarter of 2004, with net income rising 11% to $2.7 billion ($1.83 per diluted share) compared to the prior year period. This growth was driven by increases in net interest income, partially offset by lower mortgage banking income and higher noninterest expenses, including a significant mutual fund settlement. Significant strategic developments include the completion of the merger with FleetBoston Financial Corporation on April 1, 2004. This merger is expected to create a stronger, more diversified financial institution. The company also continues to actively manage its capital through share repurchases and dividends, while maintaining strong regulatory capital ratios, reinforcing its position as a well-capitalized institution.

Key Highlights

  • 1Net income increased by 11% to $2.7 billion ($1.83 per diluted share) for the quarter ended March 31, 2004, compared to the same period in 2003.
  • 2Total revenue grew by 6.9% to $9.5 billion, driven by increases in net interest income and noninterest income, though mortgage banking income saw a significant decrease.
  • 3The company completed its merger with FleetBoston Financial Corporation on April 1, 2004, significantly expanding its national reach and market presence.
  • 4Provision for credit losses decreased by 25% to $624 million, reflecting improved credit quality across various portfolios, particularly in the large corporate sector.
  • 5Noninterest expense increased by 14.6% to $5.4 billion, primarily due to higher personnel costs and a substantial $375 million mutual fund settlement impacting Asset Management and Global Corporate and Investment Banking segments.
  • 6Total assets grew to $816 billion as of March 31, 2004, from $736.4 billion at December 31, 2003, driven by increases in deposits and debt securities.
  • 7Shareholders' equity increased to $48.8 billion from $48.0 billion, reflecting net income and other comprehensive income, partially offset by dividends and share repurchases.

Frequently Asked Questions

The most significant event was the completion of the merger with FleetBoston Financial Corporation on April 1, 2004. This merger was accounted for as a business combination and is expected to significantly enhance Bank of America's national presence and service offerings.

Bank of America reported a net income of $2.7 billion for the quarter ended March 31, 2004, an 11% increase from $2.4 billion in the same quarter of 2003. Diluted earnings per share also increased by 15% to $1.83.

Noninterest expense increased by approximately $692 million to $5.4 billion. Key drivers included higher personnel costs ($303 million) and a significant mutual fund settlement charge of $375 million, which impacted the Asset Management and Global Corporate and Investment Banking segments.

The company is actively managing credit risk through improved credit quality indicators, a reduction in nonperforming assets, and a decrease in net charge-offs. The provision for credit losses decreased significantly, reflecting these positive trends, particularly in the commercial and consumer portfolios.