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Bank of America in 2004 earned a record $14.1 billion, making the company the fifth most profitable in the world.
Earnings were up 31% from a year earlier, due to the addition of FleetBoston Financial Corporation, which was acquired on April 1, 2004, and the company’s continuing business momentum throughout the franchise. Under purchase accounting rules, Fleet’s impact prior to April 1, 2004, is not included in the financial results.
On a pro forma basis, if Fleet’s previous results were included, net income was up 12% for the year.
Diluted earnings per share of $3.69 were up from $3.57 in 2003. Return on equity in 2004 was 16.8%.
Revenue
Fully taxable-equivalent revenue grew 29% to $49.6 billion from $38.6 billion in 2003.
Fully taxable-equivalent net interest income rose 34% to $29.5 billion. In addition to the impact of Fleet, the increase was driven by the results of asset-liability management activities, higher consumer loan levels and higher core deposit levels, partially offset by reductions in large corporate and foreign loan portfolios as well as lower trading-related contributions and mortgage warehouse levels.
Noninterest income grew 22% to $20.1 billion, driven by the impact of Fleet and the growth of card income, service charges, investment and brokerage fees, equity investment gains, trading account profits and investment banking income. This was partially offset by lower mortgage banking income.
Securities gains were $2.12 billion, compared to $941 million a year ago.
Efficiency
Noninterest expense grew 34% to $27 billion, driven by the impact of Fleet, merger and restructuring costs, higher personnel costs, revenue-related incentive compensation and increased occupancy, marketing, and litigation-related expense. The efficiency ratio was 54.5%.
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