Bank of America 2005 Annual Report Download - page 142

BANK OF AMERICA CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements—(Continued)
would have otherwise been issued on April 1, 2004. Holders of FleetBoston preferred stock received 1.1 million shares of
the Corporation’s preferred stock. The Corporation’s preferred stock that was exchanged was valued using the book
value of FleetBoston preferred stock. The depositary shares underlying the FleetBoston preferred stock, each
representing a one-fifth interest in the FleetBoston preferred stock prior to the FleetBoston Merger, represent a one-fifth
interest in a share of the Corporation’s preferred stock. The purchase price was adjusted to reflect the effect of the
15.7 million shares of FleetBoston common stock that the Corporation already owned.
The FleetBoston Merger was accounted for under the purchase method of accounting in accordance with SFAS
No. 141, “Business Combinations” (SFAS 141). Accordingly, the final purchase price was allocated to the assets acquired
and the liabilities assumed based on their estimated fair values at the FleetBoston Merger date as summarized below.
(In millions except per share amounts)
Purchase price
FleetBoston common stock exchanged (in thousands) .................................................... 1,068,635
Exchange ratio ..................................................................................... 1.1106
Total shares of the Corporation’s common stock exchanged (in thousands) .............................. 1,186,826
Purchase price per share of the Corporation’s common stock(1) ............................................ $ 38.44
Total value of the Corporation’s common stock exchanged ............................................ $45,622
FleetBoston preferred stock converted to the Corporation’s preferred stock ................................. 271
Fair value of outstanding stock options, direct acquisition costs and the effect of FleetBoston shares already
ownedbytheCorporation.......................................................................... 1,360
Total purchase price ...................................................................... $47,253
Allocation of the purchase price
FleetBoston stockholders’ equity ...................................................................... $19,329
FleetBoston goodwill and other intangible assets ........................................................ (4,709)
Adjustments to reflect assets acquired and liabilities assumed at fair value:
Securities ...................................................................................... (84)
Loans and leases ................................................................................ (776)
Premises and equipment ......................................................................... (766)
Identified intangibles ............................................................................ 3,243
Other assets and deferred income tax .............................................................. 312
Deposits ....................................................................................... (313)
Other liabilities ................................................................................. (313)
Exit and termination liabilities ................................................................... (641)
Long-term debt ................................................................................. (1,182)
Fair value of net assets acquired .............................................................. 14,100
Goodwill resulting from the FleetBoston Merger ....................................... $33,153
(1) The value of the shares of common stock exchanged with FleetBoston shareholders was based upon the average of the closing prices
of the Corporation’s common stock for the period commencing two trading days before, and ending two trading days after,
October 27, 2003, the date of the FleetBoston Merger Agreement.
Unaudited Pro Forma Condensed Combined Financial Information
The following unaudited pro forma condensed combined financial information presents the Corporation's results of
operations had the FleetBoston Merger taken place at the beginning of each year.
2004 2003
(Dollars in millions, except per common share information) (Restated) (Restated)
Netinterestincome.............................................................................. $ 29,747 $ 27,249
Noninterestincome.............................................................................. 22,523 22,756
Provision for credit losses ........................................................................ 2,769 3,864
Gains on sales of debt securities ................................................................... 1,773 1,069
Mergerandrestructuringcharges ................................................................. 618 —
Other noninterest expense ........................................................................ 28,507 27,319
Income before income taxes ....................................................................... 22,149 19,891
Netincome ..................................................................................... 14,707 13,250
Per common share information
Earnings ....................................................................................... $3.62$3.20
Dilutedearnings ................................................................................ $3.56$3.15
Average common shares issued and outstanding (in thousands) ....................................... 4,054,322 4,138,139
Average diluted common shares issued and outstanding (in thousands) ................................. 4,124,671 4,201,053
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