Bank of America 2001 Annual Report Download

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Bank of America Corporation
2001
annual report >

Table of contents

  • Page 1
    Bank of America Corporation 2001 annual report >

  • Page 2
    ...5.24 1.30% 18.54 51.78 $1,879 $4,842 At Year End Total assets Total loans and leases Total deposits Total shareholders' equity Common shareholders' equity Book value per common share Market price per share of common stock Common shares issued and outstanding (in millions) $ 621,764 329,153 373,495...

  • Page 3
    ... in net interest income, enhances our ability to control funding costs in the future. service charges, card services and mortgage banking. We also continued to return capital to shareholders in 2001, Global Corporate and Investment Banking earnings rose nearly exhausting the stock repurchase program...

  • Page 4

  • Page 5
    .... The board in October also approved a 7% increase This new way of looking at our business is changing in the quarterly dividend per common share to $.60, or the way associates interact with customers, design business $2.40 annually, representing a 3.8% dividend yield based on processes and think...

  • Page 6
    ...resulting stock price performance, and will help us do a better job of in a number of key hires in business-critical positions. managing the company for the benefit of our owners. While some of these new teammates came from financial Finally, a word about the Bank of America brand. We services firms...

  • Page 7
    ... Diego and from Miami to Seattle. I also am pleased that the Bank of America Foundation, long one of the most generous corporate foundations in the country, has adopted new guidelines for its programs that will focus resources in the coming years on a single issue: helping children succeed in life...

  • Page 8
    convenient 6

  • Page 9
    ... As customers seek more convenient ways to manage their finances, Bank of America continuously refines the channels through which we deliver our products and services. Our nationwide bankingcenter and ATM network, the first to span coast to coast, is now the largest in the U.S. Our telephone banking...

  • Page 10
    ... the first branch banking system, or being the first to issue a nationally accepted credit card, automate its transaction processing and tap the capital markets for professional sports leagues. Today we are leading the way once again, analyzing our businesses from the customer's viewpoint, applying...

  • Page 11
    innovative 9

  • Page 12
    responsive 10

  • Page 13
    ... start a small business from his home. Loan papers needed to be signed while the trucker was driving across the country, so our bankers prepared the paperwork, tracked his route, then arranged to meet him at a truck stop where the transaction was completed. Whether it's going the extra mile to meet...

  • Page 14
    ...financial and economic education, and teacher development. We are working with experts to create environmentally sound economic development programs. And we have designed an innovative, flexible mortgage product that helps teachers lower the cost of home ownership so they can live in the communities...

  • Page 15
    thoughtful 13

  • Page 16
    ...customer relationships: > Grow the number of households we serve > Build relationship net income > Increase market share of deposits and investments > Capture multicultural growth > Improve customer satisfaction > Help customers find the right service levels > Recent Achievements > Increased levels...

  • Page 17
    ...financial needs. engine of relationship growth for several reasons. Dec Dec Dec 1999 2000 2001 Customers will be more highly satisfied with The first is customer interaction. Opening a new Source: Model Banking Center Gallup Results us, and therefore more likely to retain and deepen checking account...

  • Page 18
    ... attract customers in areas like credit card and online banking. In 2001, the company added 3 million credit card accounts and 1.1 million net new active online banking customers. We plan to continue to retain and expand these relationships. Furthermore, population demographics are changing rapidly...

  • Page 19
    ... customers during those key â- First Mortgage the Prime to Plus service level, for example, they windows of opportunity gives us a significant â- Card $770 â- Insurance become three times more profitable and are 10% competitive advantage. â- Checking â- Home Equity $980 Line of Credit more...

  • Page 20
    ...contact points, including 4,251 banking centers, more than 800 client managers and sales associates, and almost 200 Merchant Card and Treasury Management sales officers for Small Business, plus business lending centers and call centers. In short, we can provide the easy, flexible access to financial...

  • Page 21
    ...-business clients who pay their bills online, those and services that are right for them - like online banking, card effects are heightened (see graph, this page). As our clients services, treasury management and insurance. At the same access a growing array of Web-enabled financial products time...

  • Page 22
    ... net income. Loans totaled $69 billion and deposits totaled $24 billion. advisory capabilities > Ability to leverage our client base to build investment banking business > Ability to grow personal and institutional investment services and asset management > Strategies > Acquire new relationships...

  • Page 23
    ...our real estate clients through sales of is to increase our market share in Commercial treasury management, investment banking and Banking and Business Credit. We're developing $3.2 other financial solutions. targeted client acquisition criteria and focusing â- Commercial Banking Business Credit is...

  • Page 24
    ... care services in diagnostic and therapeutic centers. Until 2001, our relationship with MedCath included revolving lines of credit, syndications, deposits, investments, treasury management and personal wealth management. Last year, we helped MedCath devise a new capital structure that involved new...

  • Page 25
    ...-class banking of America Directâ„¢, our Web-based transaction and informaexperience and to grow their businesses, as well as our own, tion network. It allows clients to create and send payment to their full potential. files to the bank for direct deposit of payroll, pre-authorized debits, corporate...

  • Page 26
    ... growing network of investment professionals offering services through locations nationwide > A full suite of scalable, highly competitive wealth-management capabilities, including investment management, financial planning, trust and estate planning and securities services The Bank of America Asset...

  • Page 27
    ... MONEY MARKET GROWTH The Bank of America customer base is a rich important. Our clients have full access to the pow$123 $120 resource for referrals and client relationships. erful distribution capability of our banking centers, For example, we have the opportunity to increase $90 ATMs and telephone...

  • Page 28
    .... Broker-dealers will have access to fee-based products through our Selects program, which offers a highly selective, carefully monitored number of specialized managers. The Banc of America Capital Management Multi-Strategy Hedge Fund, our fund-of-funds account, offers high-net-worth clients the...

  • Page 29
    ... financial solutions for high-net-worth clients. the mutual funds offered by Marsico Capital Management, While Bank of America offers deposits, investments which became a wholly owned subsidiary of Bank SCOPE OF THE PRIVATE BANK and credit products to all customer segments, the of America in 2001...

  • Page 30
    ...raising transaction. GCIB is a full-service corporate and investment bank that provides creative, value-added capital-raising solutions, advisory services, derivatives capabilities, equity and debt sales and trading, as well as traditional bank deposit and loan products, cash management and payments...

  • Page 31
    ... our problem loan portfolio through both collections and sales. Deploying our credit capital resources to our most profitable relationships while maintaining lower loan asset levels will lead to higher returns on credit capital and less risk exposure, driving growth in shareholder value added. 29

  • Page 32
    ... in high-yield, No. 6 in asset-backed and No. 7 in mortgage-backed securities. For the past three years, investment banking fees from debt capital products have grown at a compound annual rate exceeding 10%. Global Risk Management provides both corporate clients and investors with sales, trading and...

  • Page 33
    ...net worth may be narrowly conin our e-commerce platforms and selected areas centrated in a few stocks. that support our business objectives and enhance Global Treasury Services and syndicated client service. Aug 2000 Dec 2001 Total Loans Outstanding finance are also highly profitable core businesses...

  • Page 34
    ... Condition Report of Management Report of Independent Accountants Consolidated Statement of Income Consolidated Balance Sheet Consolidated Statement of Changes in Shareholders' Equity Consolidated Statement of Cash Flows Notes to Consolidated Financial Statements Executive Officers and Board of...

  • Page 35
    ...has offices located in 34 countries. The Corporation provides a diversified range of banking and certain nonbanking financial services and products both domestically and internationally through four business segments: Consumer and Commercial Banking, Asset Management, Global Corporate and Investment...

  • Page 36
    ... due to both new account growth in both credit and debit card and increased purchase volume on existing accounts. Revenue in the mortgage banking business increased 48 percent primarily reflecting higher origination activity, increased gains from higher loan sales to the secondary market and the...

  • Page 37
    ...balance sheet Total loans and leases Total assets Total deposits Long-term debt Trust preferred securities Common shareholders' equity Total shareholders' equity Risk-based capital ratios (at year end)(3) Tier 1 capital Total capital Leverage ratio Market price per share of common stock Closing High...

  • Page 38
    ... of 2001, certain consumer finance businesses being liquidated were transferred from Consumer and Commercial Banking to Corporate Other. A customer-centered strategic focus is changing the way the Corporation is managing its business. In addition to existing financial reporting, the Corporation has...

  • Page 39
    ... the money market deposit pricing initiative as the Corporation offered more competitive money market savings rates. > Noninterest income increased $652 million, or nine percent, driven by nine percent increases in card income and service charges and strong mortgage banking revenue. BANK OF AMERICA...

  • Page 40
    ... as checking, money market savings accounts, time deposits and IRAs, debit card products and credit products such as home equity, mortgage and personal auto loans. Banking Regions also includes small business banking providing treasury management, credit services, community investment, check card...

  • Page 41
    ... an asset-gathering and asset management organization serving the needs of institutional clients, high-net-worth individuals and retail customers. Banc of America Capital Management manages money and distribution channels, manufactures investment products, offers institutional separate accounts and...

  • Page 42
    ...include loan origination, merger and acquisition advisory, debt and equity underwriting and trading, cash management, derivatives, foreign exchange, leasing, leveraged finance, project finance, structured finance and trade services. Global Corporate and Investment Banking (Dollars in millions) 2001...

  • Page 43
    ... and brokerage services, corporate service charges, trading account profits and investment banking income were partially offset by a decline in other income. > Cash basis earnings increased $125 million, or seven percent, in 2001 as revenue growth was partially offset by higher credit-related costs...

  • Page 44
    ... to an increase in corporate service charges as customers chose to pay service charges rather than maintain excess deposit balances in the lower rate environment. > Cash basis earnings increased $92 million, or 40 percent, in 2001 driven primarily by the growth in revenue. Equity Investments Equity...

  • Page 45
    ... efforts to reduce corporate loan levels and exit less profitable relationships. Loan growth is dependent on economic conditions and the management of borrower, industry, product and geographic concentrations. The core net interest yield increased 61 basis points to 4.36 percent in 2001 compared to...

  • Page 46
    ... Yield/ Rate (Dollars in millions) Earning assets Time deposits placed and other short-term investments Federal funds sold and securities purchased under agreements to resell Trading account assets Securities(1) Loans and leases(2): Commercial - domestic Commercial - foreign Commercial real estate...

  • Page 47
    ... 442,276 88,654 39,307 46,601 $ 616,838 300 2,374 3,534 361 6,569 802 400 1,231 2,433 9,002 5,826 658 3,600 19,086 1.27 2.41 4.78 5.44 3.24 4.92 5.08 4.74 4.85 3.56 5.02 4.26 6.25 4.32 2.36 .84 $ 18,671 3.20% $ 18,342 2.72 .73 3.45% BANK OF AMERICA 2 0 0 1 ANNUAL REPORT 45

  • Page 48
    ...Net Change Volume Rate Increase (decrease) in interest income Time deposits placed and other short-term investments Federal funds sold and securities purchased under agreements to resell Trading account assets Securities Loans and leases: Commercial - domestic Commercial - foreign Commercial real...

  • Page 49
    ... amount recorded in trading account profits represents the net mark-to-market adjustments on certain mortgage banking assets and the related derivative instruments. The increase in mortgage banking revenue in 2001 primarily reflected higher origination activity, increased gains on loan sales to the...

  • Page 50
    ...764 Trading account profits Net interest income Total trading-related revenue Trading-related revenue by product Foreign exchange contracts Interest rate contracts Fixed income Equities and equity derivatives Commodities Total trading-related revenue > $ 3,384 Investment banking income increased...

  • Page 51
    ... higher card marketing in Consumer and Commercial Banking. > Professional fees increased $112 million to $564 million for 2001, primarily reflecting higher consulting and other professional fees due to an increase in initiatives related to the Corporation's strategy to improve customer satisfaction...

  • Page 52
    ...of goodwill write-offs of $685 million, auto lease residual charges of $400 million, real estate servicing asset charges of $145 million and other transaction costs of $75 million. > As part of its productivity and investment initiatives announced on July 28, 2000, the Corporation recorded a pre-tax...

  • Page 53
    ... accounts was driven by the Corporation's deposit pricing initiative to offer more competitive money market savings rates. As a percentage of total sources of funds, average core deposits increased by four percent to 47 percent in 2001. At December 31, 2001, core deposits exceeded loans and leases...

  • Page 54
    ... date of March 15, 2002. Subsequent to December 31, 2001, BAC Capital Trust II, a wholly-owned grantor trust of Bank of America Corporation, issued $900 million in capital securities. The annual dividend rate is 7 percent and is paid quarterly on February 1, May 1, August 1 and November 1 of each...

  • Page 55
    ... in turn issues high-grade short-term commercial paper that is collateralized by such assets. The Corporation facilitates these transactions and bills and collects fees from the financing entity for the services it provides including administration, trust services and marketing the commercial paper...

  • Page 56
    ..., including trading positions, recommends balance sheet capital allocations and recommends changes in the market risk profile. The Credit Risk Committee reviews business asset quality, portfolio management results and industry concentrations and limits. The Board of Directors addresses risk in...

  • Page 57
    ... or counterparty. Credit limits are subject to varying levels of approval by senior line personnel and credit risk management. The approving credit officer assigns borrowers or counterparties an initial risk rating which is based primarily on an analysis of each borrower's financial capacity in...

  • Page 58
    ... to loans held for sale as a result of the exit of the subprime real estate lending business in the third quarter of 2001. The Corporation had consumer finance net charge-offs of $929 million for 2001 compared to $266 million for 2000. The increase in net charge-offs primarily reflected exit-related...

  • Page 59
    ... subprime real estate loans from the loans and leases portfolio to loans held for sale included in other assets related to the decision to exit the subprime real estate lending business in 2001 and due to sales of nonperforming commercial - domestic and residential mortgage loans in 2001. These...

  • Page 60
    ...the subprime real estate lending business in the third quarter of 2001. In order to respond when deterioration of a credit occurs, internal loan workout units are devoted to providing specialized expertise and full-time management and/or collection of certain nonperforming assets as well as certain...

  • Page 61
    ...to growth in the portfolio, an increase in personal bankruptcy filings and a weaker economic environment. An exit-related provision for credit losses of $395 million, combined with an existing allowance for credit losses of $240 million, was used to write down the subprime real estate loan portfolio...

  • Page 62
    ... for credit losses at December 31 to net charge-offs (1) Includes $635 million related to the exit of the subprime real estate lending business in 2001. (2) Includes $395 million related to the exit of the subprime real estate lending business in 2001. BANK OF AMERICA 2 0 0 1 ANNUAL REPORT 60

  • Page 63
    ... of the credit is not dependent on the sale, lease, rental or refinancing of the real estate. Accordingly, the exposures presented do not include commercial loans secured by owner-occupied real estate, except where the borrower is a real estate developer. BANK OF AMERICA 2 0 0 1 ANNUAL REPORT 61

  • Page 64
    ... only non-real estate commercial loans and leases. (2) During 2001, the Corporation revised its healthcare industry definition to include pharmaceuticals. The December 31, 2000 outstanding balance and percentage have been restated to reflect this change. BANK OF AMERICA 2 0 0 1 ANNUAL REPORT 62

  • Page 65
    ... amounts payable to the Corporation by residents of countries in which the credit is booked, regardless of the currency in which the claim is denominated. Management does not net local funding or liabilities against local exposures as allowed by the FFIEC. BANK OF AMERICA 2 0 0 1 ANNUAL REPORT 63

  • Page 66
    ... asset/liability management in interest rate, foreign exchange, equity, commodity and credit markets, along with any associated derivative products. Market risk is the potential of loss arising from adverse changes in market rates, prices and liquidity. Financial products that expose the Corporation...

  • Page 67
    ... highs or lows of the individual portfolios may have occurred on different trading days. (3) The real estate/mortgage business is included in the fixed income category in the Trading-Related Revenue table in Note Four of the consolidated financial statements. BANK OF AMERICA 2 0 0 1 ANNUAL REPORT...

  • Page 68
    ... occurred on different trading days. (3) The real estate/mortgage business is included in the fixed income category in the Trading-Related Revenue table in Note Four of the consolidated financial statements. Stress Testing In order to determine the sensitivity of the Corporation's capital to the...

  • Page 69
    ...average effective yields and rates associated with certain of the Corporation's significant non-trading financial instruments. Cash and cash equivalents, time deposits placed and other short-term investments, federal funds sold and purchased, resale and repurchase agreements, commercial paper, other...

  • Page 70
    ... gain or loss. (6) Excludes foreign time deposits. (7) Expected maturities of long-term debt and trust preferred securities reflect the Corporation's ability to redeem such debt prior to contractual maturities. (8) Excludes obligations under capital leases. BANK OF AMERICA 2 0 0 1 ANNUAL REPORT 68

  • Page 71
    ...uses foreign currency contracts to manage the foreign exchange risk associated with foreign-denominated assets and liabilities, as well as the Corporation's equity investments in foreign subsidiaries. Table Twenty-Four reflects the notional amounts, fair value, weighted average receive and pay rates...

  • Page 72
    ... of less than 90 days. The Corporation manages risk associated with the impact of changes in prepayment rates on certain mortgage banking assets using various financial instruments including purchased options and swaps. The notional amounts of such contracts at December 31, 2001 and 2000 were $65...

  • Page 73
    ... Efficiency ratio Average balance sheet Total loans and leases Total assets Total deposits Common shareholders' equity Total shareholders' equity Risk-based capital ratios (period-end) Tier 1 capital Total capital Leverage ratio Market price per share of common stock Closing High Low $ 1.25% 16...

  • Page 74
    ... Yield/ Rate (Dollars in millions) Earning assets Time deposits placed and other short-term investments Federal funds sold and securities purchased under agreements to resell Trading account assets Securities(1) Loans and leases(2): Commercial - domestic Commercial - foreign Commercial real estate...

  • Page 75
    ... Quarter 2001 Average Balance Interest Income/ Expense Yield/ Rate Second Quarter 2001 Average Balance Interest Income/ Expense Yield/ Rate Average Balance First Quarter 2001 Interest Income/ Expense Yield/ Rate Average Balance Fourth Quarter 2000 Interest Income/ Expense Yield/ Rate $ 5,881...

  • Page 76
    ...to $18.7 billion. Managed loan growth, particularly in consumer products, and higher levels of customer-based deposits and equity were partially offset by spread compression, the cost of share repurchases and a decrease in auto lease financing contributions. The net interest yield decreased 25 basis...

  • Page 77
    ... 15, 2001. The standard addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Corporation does not expect the adoption of this pronouncement to have a material impact on its results of operations or financial condition. BANK OF AMERICA 2 0 0 1 ANNUAL...

  • Page 78
    ... the scope and results of their work, the adequacy of internal accounting controls and the quality of financial reporting. Kenneth D. Lewis Chairman of the Board and Chief Executive Officer James H. Hance, Jr. Vice Chairman and Chief Financial Officer BANK OF AMERICA 2 0 0 1 ANNUAL REPORT 76

  • Page 79
    Report of Independent Accountants To the Board of Directors and Shareholders of Bank of America Corporation: In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of income, of changes in shareholders' equity and of cash flows present fairly, in all ...

  • Page 80
    ... Total investment and brokerage services Mortgage banking income Investment banking income Equity investment gains Card income Trading account profits(1) Other income Total noninterest income Total revenue Provision for credit losses Gains on sales of securities Noninterest expense Personnel...

  • Page 81
    ...,643 1,499 43,638 $ 642,191 Assets Cash and cash equivalents Time deposits placed and other short-term investments Federal funds sold and securities purchased under agreements to resell (includes $27,910 and $24,622 pledged as collateral) Trading account assets (includes $22,550 and $21,216 pledged...

  • Page 82
    ...respectively; foreign currency translation adjustments of $(171), $(186) and $(188) at December 31, 2001, 2000, and 1999, respectively; and net gains on derivatives of $1,088 at December 31, 2001. See accompanying notes to consolidated financial statements. BANK OF AMERICA 2 0 0 1 ANNUAL REPORT 80

  • Page 83
    ... Other changes in loans and leases, net Purchases and originations of mortgage banking assets Net purchases of premises and equipment Proceeds from sales of foreclosed properties (Acquisition) and divestiture of business activities, net Net cash provided by (used in) investing activities Financing...

  • Page 84
    ... range of financial services and products throughout the U.S. and in selected international markets. At December 31, 2001, the Corporation operated its banking activities primarily under two charters: Bank of America, N.A. and Bank of America, N.A. (USA). Note 1 Significant Accounting Policies...

  • Page 85
    ... in trading account profits. The Corporation uses its derivatives designated for hedging activities as either fair value hedges, cash flow hedges, or hedges of net investments in foreign operations. The Corporation primarily manages interest rate and foreign currency exchange rate sensitivity...

  • Page 86
    ... not active market quotes are initially valued at cost. Subsequently, these investments are adjusted to reflect changes in valuation as a result of initial public offerings or other-than-temporary declines in value. Loans and Leases Loans are reported at their outstanding principal balances net of...

  • Page 87
    ... value with the corresponding adjustment reported in trading account profits. The Corporation seeks to manage changes in value of the Certificates due to changes in prepayment rates by entering into derivative financial instruments such as purchased options and interest rate swaps. The derivative...

  • Page 88
    ...2000. Mortgage banking income includes servicing fees, gains from selling originated mortgages, ancillary servicing income, mortgage production fees, gains and losses on sales to the secondary market, and income on the Certificates. Goodwill and Other Intangibles Net assets of companies acquired in...

  • Page 89
    ... healthcare and life insurance benefit plans. Other Comprehensive Income The Corporation records unrealized gains and losses on available-for-sale debt securities and marketable equity securities, foreign currency translation adjustments, related hedges of net investments in foreign operations and...

  • Page 90
    ... consisted of the write-off of goodwill of $685 million, auto lease residual charges of $400 million, real estate servicing asset charges of $145 million and other transaction costs of $75 million. See Note Six for additional information on the exit-related provision for credit losses. During the...

  • Page 91
    ... securities Other taxable securities Total taxable Tax-exempt securities Total 1999 U.S. Treasury securities and agency debentures Mortgage-backed securities Foreign sovereign securities Other taxable securities Total taxable Tax-exempt securities Total BANK OF AMERICA 2 0 0 1 ANNUAL REPORT 89

  • Page 92
    ...Activities Trading-Related Revenue Trading account profits represent the net amount earned from the Corporation's trading positions, which include trading account assets and liabilities as well as derivative positions and mortgage banking assets. These transactions include positions to meet customer...

  • Page 93
    ... in millions) 2001 $1,842 1,566 $3,408 $ 541 2000 $1,923 1,023 $2,946 $ 536 1999 $1,605 662 $2,267 $ 549 Trading account profits - as reported Net interest income Total trading-related revenue Trading-related revenue by product Foreign exchange contracts Interest rate contracts Fixed income...

  • Page 94
    ... 2001 and 2000 was $17.4 billion and $19.8 billion, respectively. Asset and Liability Management (ALM) Activities Risk management interest rate contracts and foreign exchange contracts are utilized in the Corporation's ALM process. The Corporation maintains an overall interest rate risk management...

  • Page 95
    ... types of interest rate and foreign currency exchange rate derivative contracts to protect against changes in cash flows of its variable rate assets and liabilities and anticipated transactions. In 2001, the Corporation recognized in the Consolidated Statement of Income a net gain of $0.2 million...

  • Page 96
    ... entire subprime real estate loan portfolio of approximately $21.4 billion, which was included in consumer finance loans, was transferred from the loans and leases portfolio to loans held for sale included in other assets. The following table presents the recorded investment in specific loans that...

  • Page 97
    ... $395 million related to the exit of the subprime real estate lending business in 2001. Note 8 Securitizations The Corporation securitizes, sells and services interests in consumer finance, commercial and bankcard loans and residential mortgage loans. When the Corporation securitizes assets, it may...

  • Page 98
    ... the Corporation's 1997 securitization of commercial loans. (2) Consumer finance includes subprime real estate loan and manufactured housing loan securitizations. (3) Balances represent securitized loans that were off-balance sheet at December 31, 2001 and 2000. (4) Annual rates of expected credit...

  • Page 99
    The Corporation reviews its loan and lease portfolio on a managed basis. Managed loans and leases include on-balance sheet loans and leases as well as securitized loans originated by the Corporation for which the possibility exists that the loans will return to the Corporation at the end of the ...

  • Page 100
    ... 2001 and 2000, respectively. At December 31, 2001, the scheduled maturities for time deposits were as follows: (Dollars in millions) Due in 2002 Due in 2003 Due in 2004 Due in 2005 Due in 2006 Thereafter $ 101,679 5,634 1,639 2,214 1,089 585 $ 112,840 Total BANK OF AMERICA 2 0 0 1 ANNUAL REPORT...

  • Page 101
    ... denominated primarily in U.S. dollars. The interest rates on fixed-rate long-term debt ranged from 2.13 percent to 10.88 percent and 5.16 percent to 12.50 percent at December 31, 2001 and 2000, respectively. Bank of America Corporation had the authority to issue approximately $11.0 billion and $13...

  • Page 102
    ...offer up to $25.0 billion of senior, or in the case of Bank of America Corporation, subordinated notes exclusively to non-United States residents. The notes bear interest at fixed or floating rates and may be denominated in U.S. dollars or foreign currencies. Bank of America Corporation uses foreign...

  • Page 103
    ... price equal to their liquidation amount plus accrued distributions to the date fixed for redemption and the premium, if any, paid by the Corporation upon concurrent repayment of the related Notes. Periodic cash payments and payments upon liquidation or redemption with respect to trust preferred...

  • Page 104
    ... trust or the Notes or relating to capital treatment of the trust preferred securities or relating to a change in the treatment of the related trust under the Investment Company Act of 1940, as amended, at a redemption price at least equal to the principal amount of the Notes. (3) The Corporation...

  • Page 105
    ... to lend. Credit card lines are unsecured commitments, which are reviewed at least annually by management. Upon evaluation of the customers' creditworthiness, the Corporation has the right to terminate or change the terms of the credit card lines. SBLC and financial guarantees are issued to support...

  • Page 106
    ... in open market repurchases at an average per-share price of $48.17, which reduced shareholders' equity by $3.3 billion. Management anticipates it will continue to repurchase shares at least equal to shares issued under its various stock option plans. Other shareholders' equity at December 31, 2001...

  • Page 107
    ... employee compensation plans which are discussed in Note Sixteen of the consolidated financial statements. During 2001 and 2000, approximately 27 million and 4 million shares were issued under these plans primarily due to stock option exercises and restricted stock activity, increasing shareholders...

  • Page 108
    ...or events since December 31, 2001 that management believes have changed either the Corporation's or Bank of America, N.A.'s capital classifications. The regulatory capital guidelines measure capital in relation to the credit and market risks of both on- and off-balance sheet items using various risk...

  • Page 109
    ... continue participation as retirees in health care and/or life insurance plans sponsored by the Corporation. Based on the other provisions of the individual plans, certain retirees may also have the cost of these benefits partially paid by the Corporation. BANK OF AMERICA 2 0 0 1 ANNUAL REPORT 107

  • Page 110
    ... Health and Life Plans 2001 2000 2001 2000 2001 2000 Change in fair value of plan assets (Primarily listed stocks, fixed income and real estate) Fair value at January 1 Actual return on plan assets Company contributions Plan participant contributions Acquisition/transfer Benefits paid...

  • Page 111
    ... care plans was 8.0 percent for 2002, reducing in steps to 4.5 percent in 2006 and later years. A one percentage point increase in assumed health care cost trend rates would have increased the service and interest costs and the benefit obligation by $6 million and $52 million, respectively, in 2001...

  • Page 112
    ... level. Under the plan, eligible employees received a one-time award of a predetermined number of options entitling them to purchase shares of the Corporation's common stock. Approximately 54 million options were granted subsequent to December 31, 2001 at the closing price of $61.36. The options...

  • Page 113
    ... status of all plans at December 31, 2001, 2000 and 1999, and changes during the years then ended: 2001 WeightedAverage Exercise (Option) Price 2000 WeightedAverage Exercise (Option) Price 1999 WeightedAverage Exercise (Option) Price Employee Stock Options Shares Shares Shares Outstanding at...

  • Page 114
    ..., net of federal benefit Goodwill amortization(1) Basis difference in subsidiary stock Low income housing credits Foreign tax differential Other Total income tax expense (1) Goodwill amortization included in business exit costs was $164 million in 2001. BANK OF AMERICA 2 0 0 1 ANNUAL REPORT 112

  • Page 115
    ... Investments State taxes Deferred gains and losses Securities valuation Depreciation Other Gross deferred tax liabilities Deferred tax assets: Allowance for credit losses Employee benefits Accrued expenses Basis difference in subsidiary stock Available-for-sale securities Loan fees and expenses Net...

  • Page 116
    ... the Corporation to limited credit risk and have no stated maturities or have an average maturity of less than 30 days and carry interest rates which approximate market. Financial Instruments Traded in the Secondary Market Held-to-maturity securities, available-for-sale securities, trading account...

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    ... financial planning services to affluent and high-net-worth individuals. Global Corporate and Investment Banking provides capital raising solutions, advisory services, derivatives capabilities, equity and debt sales and trading, as well as traditional bank deposit and loan products, cash management...

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    ... SFAS 133 transition adjustment net loss which was recorded in trading account profits in 2001. The components of the transition adjustment by segment were a gain of $4 million for Consumer and Commercial Banking, a gain of $19 million for Global Corporate and Investment Banking and a loss of $106...

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    ... unassigned capital Consumer Special Assets activity SFAS 133 transition adjustment net loss Gain on sale of a business Provision for credit losses in excess of net charge-offs Gains on sales of securities Severance charge Litigation expense Exit charges Merger and restructuring charges Tax benefit...

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    ... Net payments from (to) subsidiaries Net cash provided by (used in) investing activities Financing Activities Net increase (decrease) in commercial paper and other notes payable Proceeds from issuance of long-term debt Retirement of long-term debt Proceeds from issuance of common stock Common stock...

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    ...amounts must be allocated to arrive at total assets, total revenue, income (loss) before income taxes and net income (loss) by geographic area. The Corporation identifies its geographic performance based upon the business unit structure used to manage the capital or expense deployed in the region as...

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    ... and Chief Financial Officer Amy Woods Brinkley Chairman, Credit Policy and Deputy Corporate Risk Management Executive Edward J. Brown III President, Global Corporate and Investment Banking Richard M. DeMartini President, Asset Management Barbara J. Desoer President, Consumer Products R. Eugene...

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    ... addressed to: Bank of America Corporation Shareholder Relations Department NC1-007-23-02 100 North Tryon Street Charlotte, NC 28255 Customers For assistance with Bank of America products and services, call 1.800.900.9000 or visit the Bank of America Web site at www.bankofamerica.com. News Media...

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