Bank of America 1999 Annual Report Download - page 29

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27
Operating earnings increase 27 percent to $8.2 billion in 1999
Operating earnings for Bank of America increased 27 percent in 1999 to
$8.2 billion from $6.5 billion in 1998. Earnings per common share (diluted)
rose 29 percent to $4.68 from $3.64 a year earlier.
The significant improvement was achieved through a 6 percent increase in
revenues to $32.5 billion, led by advances in the company’s fee-based businesses,
and a 4 percent reduction in expenses.
Net income
Including merger-related charges, net income was up 53 percent to $7.9 billion, or
$4.48 per common share (diluted), from $5.2 billion, or $2.90 per common share
(diluted), a year ago.
Revenues
Noninterest income rose 15 percent to $14.07 billion. Significant improvements
were recorded in trading, deposit services, investment banking, card services and
mortgage banking.
Taxable-equivalent net interest income was essentially unchanged at $18.5 billion.
A 9 percent increase in average managed loans as well as core deposit growth was
offset by securitizations, loan sales and spread compression. The net yield on
earning assets declined 22 basis points to 3.47 percent.
Expenses
Noninterest expense was reduced 4 percent, reflecting cost savings from recent
mergers. The efficiency ratio was 55 percent, a significant improvement from
61 percent a year earlier.
Credit Quality
The provision for credit losses totaled $1.82 billion in 1999, down from $2.92 billion
in 1998. Net charge-offs also fell to $2.00 billion from $2.47 billion a year earlier.
Nonperforming assets at the end of the year were $3.20 billion, up from
$2.76 billion a year ago.
Capital
Total shareholders’ equity was $44.4 billion at December 31, 1999, representing
7.02 percent of period-end assets. The Tier 1 capital ratio rose to 7.35 percent from
7.06 percent a year earlier.