Bank Of America Corporation · NYSE:BAC
Bank Of America — Investor Presentation (December 2003)
39 slides from Bank Of America's investor presentation, Dec 2, 2003
Slide 1: Growing America's Premier Financial Services Company
Slide 2: Forward Looking Statements
of Bank of America The forward-looking statements involve certain Factors that may cause actual results or earnings to differ investments are lower than expected; 4) political conditions and related actions by the United States military abroad may adversely affect For further information regarding e
Slide 3: Successful Track Record: Diluted EPS
Versus First Call estimate in June ‘03 $6.30 $7.07 2003 Consensus Versus First Call estimate in June ‘02 $5.66 $5.91 2002 3 15% Compound Growth Versus First Call estimate in June ‘01 $5.25 $5.33 $4.18 2001 Successful Track Record Diluted EPS Business exit costs Goodwill amortization Reported EPS $4.
Slide 4: Increased Customer Focus Drives Revenue Success
Increased $ Revenue Success 4 to Key contact is Focus processes products customer convenience scale customer Improved Enhanced Increased Added Leveraged metrics Customer Improved
Slide 5: Achieving Success With Customers: Satisfaction Improvements
Delighted Dissatisfied Extremely/Highly Satisfied (9-10) Satisfied (6-8) Somewhat/Not At All Satisfied (1-5) 49.0% 10.2% 3Q 2003 5 42.5% 12.6% 4Q 2001 Achieving Success With Customers Customer Satisfaction Improvements 100% 80% 60% 40% 20% 0%
Slide 6: Growth in Net New Checking Accounts
1,000,030 2003 9 mo. YTD 527,789 2002 192,975 2001 6 2003 goal = 1,000,000 32,491 2000 (89,574) 1999 (77,013) 1998 Achieving Success With Customers Growth in net new checking accounts (200,500) 1997
Slide 7: Growing Share of Deposits
Growth 12% 19% 2003 7.5% 30, 389 5,166 June 7 2002 326 7.1% 30, 4,613 June FDIC domestic deposit data as of June 30, 2003 Total Market Bank of America Market Share Growing Share of Deposits ($ in billions) Source:
Slide 8: Deposit Growth Momentum Continues
Continues growth relationship 8 of driver Momentum distribution improvement Momentum key offering models a is Continuing product pricing cross-sell expanding satisfaction Growth account For Factors robust Competitive on Advertising branches More Focus New Customer Deposit Checking Key
Slide 9: Focused Client Strategy Producing Results
Overall Important Investment Bank Lead Investment Bank 78% 27% 2003 9 75% 26% 2002 60% 21% 2001 47% Focused Client Strategy Producing Results Lead and Important Investment Bank Relationships Strategic & Priority Clients 18% 2000 Source: 2003 Greenwich Associates U.S. Investment Banking Study
Slide 10: Gaining Market Share in Investment Banking
7.2% Half 2003 1st 6.7% 2002 of U.S. estimated IB fee pools for completed deals. Syndications. 10 5.9% 2001 market share analysis High Grade, ABS, and Loan Gaining Market Share Momentum BAS Share of U.S. Issuer Investment Banking Fees 4.7% 2000 Banc of America Securities (BAS) Fees include M&A, Equi
Slide 11: Improving Productivity and Customer Delight
have Productivity certified Belts” Customer Delight and 2,000 associates than “Black Quality more and 64,000 in Belts” than employ free More participated training Now “Green – 11 Error processing payments & time Credits Fulfillment Cycle Sales Six Customer Drives Processes Core Deposit Service Sigma
Slide 12: Expanding Loan Delivery Channels
environment need experience scalable approvals customer customer 2003 associates in to P-O-S support Sept. 12 Channels Enablement guides distribution with cross-selling end-to-end through process process by servicing consistent loans Delivery Web increases funded Through interview approval revenue f
Slide 13: Growing Importance of Payments Business
$39,857 2003 80% $12,683 3Q03 Credit Card 2Q03 10% growth 2002 % electronic 1Q03 $56,590 2003 YTD Card Purchasing Volumes Debit Card Bill Payment Volume 4Q02 $ volume 21% growth 2002 3Q02 75,000 60,000 45,000 30,000 15,000 0 $16,000 $12,000 $8,000 $4,000 $0 13 3Q03 $33,631 9 mo. YTD 2003 6,629 3,828
Slide 14: Competitive Advantage: National Scale
Advantage opportunities 14 Competitive convenience reinvestment a leverage marketing as Unparalleled Vendor National Business Scale
Slide 15: Success in the Face of Challenges
15 Investment banking Principal investing Trading Asset management Tough credit cycle Volatile interest rate environment Sub-prime business exits Corporate loan reductions Rationalization of international business Weak equity markets – – – – Success in the face of
Slide 16: Unlocking the Hidden Value of the FleetBoston Franchise
Franchise Unlocking the Hidden Value of the FleetBoston
Slide 17: Realistic Financial Assumptions
accretion 1% reflect 17 case base repurchases savings for improvement Assumptions share expense for projections months 18 Realistic Initial after Stepped-up Opportunities Financial
Slide 18: Expense Efficiencies of $1.1 Billion After-Tax
after-tax billion $1.1 infrastructure 18 Efficiencies business processes overhead leverage Overlapping Redundant Corporate Marketing Vendor Occupancy Expense
Slide 19: Impact of Expense Efficiencies
49% 49,453 24,564 50% = Combined Less Expense Efficiencies $ Projected Pre-tax Expense Efficiencies (1,600) 11,133 6,371 57% FleetBoston 19 $ 38,320 19,793 52% Bank of America $ Bank of America efficiency ratio excluding Global Corporate & Investment Banking Impact of Expense Efficiencies 2003 annua
Slide 20: Enterprise-Wide Opportunities
$195 million after-tax 20 Better customer identification Greater satisfaction Higher retention Better risk profile alignment Better collection process Asset / liability management Funding Consumer customer platform – – – – – Balance sheet management – – Enterprise-Wide Opportunities
Slide 21: Consumer Banking Opportunities
accounts) 21 Opportunities checking new services Bank banking (net initiatives impact banking card financial Mortgage card Hispanic Deposit On-line Bill-pay Credit Debit Dealer Consumer
Slide 22: Product Penetration Opportunities
Double 42% 17% 77% Double Double Double 22 Product Penetration Opportunities Penetration ratio comparisons Bank of America penetration greater than FleetBoston Mortgage Credit card Debit card Active on-line banking Bill pay FleetBoston penetration greater than Bank of America Home equity Brokerage P
Slide 23: Commercial Banking Opportunities
profitability services leasing Market) regional) client and and improve management lending 23 (Middle national to cash (#1 banking capabilities asset-based Banking upturn in bank coast-to-coast size for investment lead unique Positioned Cross-sell Provide Offer Competitive CommercialOpportunities
Slide 24: Investment Banking and Trading Opportunities
Opportunities 24 Banking overlap customer banking distribution major Investment Trading Corporate No
Slide 25: Wealth Management Opportunities
markets America styles and markets Opportunities of near-affluent 25 Bank brands wealth for in of Reilly set attractive & practice partnership product in Quick best Management of of presence banking Wealth Addition Selection Strengthened Major Premier
Slide 26: Covering the Wealth Markets
2 Other Fleet 2 1 #3 26 2 Deposit Market Share Rankings 3 #2 Bank of America 5 #1 Covering the Wealth Markets Bank of America and FleetBoston hold the #1,2 or 3 deposit market share position in 72% of the Top 25 MSAs by household income 5 2003 FDIC deposit market share information Source:
Slide 27: Customer Retention Priority
in results priority in evident brand highest and the be excellence will 27 Retention of technology products in retention disruption culture of investment & Customer service breadth service on branch Emerging Expanded Continued Customer No Convenience integration Focus
Slide 28: Growing Company Commitment
Services associates Financial and growth growth needs customers 28 Premier drive customer franchise returns long-term excellence to enabling to – capital for national service respond of and to innovation convenience technology America’s footprint investments to—- scale Products Channels and earnings
Slide 29: Bank of America Higher Standards
Zz Bank of America “ae Higher Standards
Slide 30: Appendix
APPENDIX J 2 “ ket tnd Piha Standards
Slide 31: BAC Segment Results: Revenue, Earnings, ROE
Other Up 16% to $760 mm Up 85% to $815 mm Equity Investments Up 42% to ($199 mm) Up 27% to ($182 mm) Asset Management Up .8% to $1.8 B Up 53% to $408 mm 20% 2003 YTD vs 2002 YTD 1-A Global Corporate & Investment Banking Up 4% to $6.9 B Up 6% to $1.4 B 19% Consumer & Commercial Banking Up 12% to $19.
Slide 32: Capital Returned to Shareholders
19,637 27,612 e vti $47,249 a l u m u C 1 3,116 5,565 1,489 Tier 8.25% 2003 Dividends Repurchases YTD 2002 1,501 2001 1,559 capital than 2-A in more 000 1,614 Shareholders billion 2 to ratio $47 99 1,677 capital 91 than 1 1,724 8 99 Tier 7.06% Returned more Tier points 1 Shares millions) 1998 basis
Slide 33: Dividend Growth
$2.88 1977 since h t w increases rate o r g ed aliz dividend growth 3-A u n of n a % years dividend 13 Record consecutive annualized 13% Dividend $0.13
Slide 34: Enhanced Geographic Footprint
#1 #2 #3 #1 #1 #1 #4 #10 #2 #5 #1 #3 4-A #2 #2 #1 #3 Enhanced Geographic Footprint #1
Slide 35: Acquisition Rationale
33 million 5-A largest bank-owned brokerage Superior product delivery including strong card and mortgage platforms rd Unparalleled retail distribution network Largest consumer customer base – #1 small business lender in U.S. with 2.5 million clients Largest middle market lender Business relationship
Slide 36: Financial Assumptions
of and 6% year 2004 or year per in after-tax, per after-tax million 2004 billion million after-tax 67 $330 million quarter $1.1 of million 6-A of $195 approximately $800 second of of in efficiencies base amortization approximately charge closes 2005 Assumptions expense expense intangible of repurcha
Slide 37: Financial Overview and Projection vs. Consensus
11,947 3,148 15,095 1,100 (330) 195 16,060 2,016 7.97 7.92 1% 2005 $ $ $ $ $ 2 10,961 1,487 12,448 250 (165) 110 12,643 1,781 7.10 7.27 -2% 2004 $ $ $ $ $ 1 7-A 1 1 Projected net income for new Bank of America Total Expense efficiencies Higher intangible amortization Synergies Average projected dilu
Slide 38: Summary of Transaction Multiples
million % x x x % 45.00 47,363 40.7 22.5 18.7 16.4 15.0 11.8 11.1 2.7 3.7 33.6 $ $ 2.00 2.41 2.75 3.00 3.80 4.05 16.46 12.13 $ $ $ 2004E EPS estimate of $2.75 grown at 9%. 8-A 7 2 : First Call Estimates: 6 3 3 4 5 5 Last Twelve Months (9/30/2003) 2003E 2004E 2005E With Fully Phased-In Synergies 2004
Slide 39: Talented and Experienced Management Team
Brad Warner President Small Business and Premier Banking Milton Jones Quality and Productivity Executive Gene Taylor President Commercial Banking Cathy Bessant Chief Marketing and Communications Officer Chad Gifford Chairman Gene McQuade President Brian Moynihan President Wealth Management Steele Al
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