Bank of America’s earnings rise 4 percent in fourth quarter

Thursday, Jan. 15, 2004 | 11:06 a.m.

SUN STAFF AND WIRE REPORTS

CHARLOTTE, N.C. -- Bank of America Corp. posted fourth-quarter earnings today that rose 4 percent to $2.73 billion, surpassing Wall Street's estimates, on across-the-board gains in everything from mortgages to investment banking.

The results, which came to $1.83 per share, compared with $2.61 billion, or $1.69 per share, in the fourth quarter of 2002 for the bank, which is in the process of buying FleetBoston Financial Corp. in a deal initially valued at $47 billion.

The consensus estimate of analysts polled by Thomson First Call was for a profit of $1.78 per share.

In Nevada, growth in commercial and retail banking operations saw growth that outpaced the company's expectations in the final months of the year, said George Smith, president of Bank of America's Nevada operations.

"Commercial and retail were 200 percent ahead of plan in deposits," Smith said.

He said the increase in commercial lending activity in the second half of 2004 was tied to improved economic conditions.

"Confidence in the national economy is very important," Smith said, pointing to the progress of construction projects on the Las Vegas Strip at Mandalay Bay, Bellagio, Caesars Palace, the Venetian and Wynn Las Vegas.

Bank of America has 45 Las Vegas-area branches and more than 1,700 local employees. Three of those branches were added in the fourth quarter as part of a plan to build 19 new local banking locations in the next two years.

Smith said five new branches are planned for the Las Vegas Valley in 2004. The new branches are being positioned in an effort to capture new business as opposed to dividing up the bank's existing customer base, he said.

"We are putting them in locations where the growth patterns are and in markets we see as underserved," Smith said. "That's really driving the (growth) numbers."

The Las Vegas expansion ties closely with Bank of America's national focus.

"Our emphasis this year was on improving the customer's banking experience and increasing their satisfaction level," Chairman and Chief Executive Ken Lewis said. "Process improvement and a focus on execution were the foundation of these efforts and the driver of why revenue and earnings have exceeded rising investor expectations for 12 straight quarters."

For the year, Bank of America reported net earnings of $10.81 billion, a 17 percent gain over last year's $9.25 billion profit. Full-year earnings per share rose to $7.13 from the $5.91 per share reported in 2002.

In October, Bank of America announced it planned to merge with Fleet, which then would have created the nation's second-largest bank behind Citigroup Inc. However, J.P. Morgan Chase & Co.'s proposed $58 billion purchase of Bank One Corp., announced Wednesday, would surpass the Bank of America-Fleet combination.

The Federal Reserve is holding hearings this week in Boston and San Francisco on the proposed Bank of America-Fleet merger.

Lewis said the bank's gains were across the board. Consumer and commercial banking profit rose 11 percent to $1.91 billion and corporate and investment banking profit rose to $576 million.