Bank of America

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Bank of America
Kendra Emery BAC December 6th 2005
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History of the Company

• Amadeo Peter Giannini began banking in San
  Francisco with the Bank of Italy

• The Bank catered to small farmers mostly of
  Italian descent.

• Bank of America grew as California grew

• The Bank of America that exists today was the
  result of a merger with the Charlotte-based
  Nationsbank in 1998

• In 2004 FleetBoston Financial merged with Bank
  of America

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Other Facts

• Bank of America is an official sponsor of the
  U.S. Olympic

Teams through the 2008 Games in Beijing, China.

• Bank of America is the "Official Bank of Major
  League Baseball."

• Bank of America is very charitable.

-Has given 230 billion the past 5 years for
community development efforts nationwide
-Goal for the next 10 years is 750 billion
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What do
they do??

• Checking Savings 
• -Overview Checking
• -Accounts Savings
• -CDs

• Loans Home Buying 
• -Mortgages
• -Home Equity
• -Auto and Education Loans

• Cards 
• -Credit Cards
• -Check Cards
• -Gift Cards

• Investments Wealth Management 

• Specialized Banking Additional Services 

• Online Services 

• Financial Education Tools 

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Competitors
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Recent News
Bank of America to cut online stock trade fees
Bank of America retail brokerage unit said on
December 1st that it was cutting online
stock-trading fees for customers by up to 75
percent, to as low as 5 a trade
Cayman Island Firms Sue Bank of America
Don't be afraid of the big bad banks
Analysts research on Bank of Americas potential,
says there are plenty of reasons for the big
banking business, and their stock, to thrive.
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Strengths

• Fortune 500 company

-More than 175,000 associates providing financial
products,
services, ideas, and solutions to customers in
all 50 states

• Have 31 international offices serving clients in
  150 countries

-Have relationships with 97 of the fortune 500
companies in U.S.
-Relationships with 82 of the fortune 500
companies worldwide

• Merger with Fleetwood resulted in the 4th most
  profitable company in the world

-strengthened their diversity and ability to
cross sell

• Bank of America is the nation's No. 1 small
  business lender

• Online banking system is used more than any
  other banking website

• First Bank to span the nation with Automated
  Teller Machines

-largest proprietary ATM network in the nation

• Net income raised almost a third last year
  posted at 28.5

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Weaknesses

• Geographic size and spread of the company

• Global economies are slowing down and the equity
  market is falling

-Company has reported losses in the equity
investment department
-Must increase productivity in other areas

• Difficult to differentiate goods

• Recent job cuts from the purchase of MBNA may
  lower moral

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Opportunities

• Purchase of MBNA

-Will have 40 million active credit card accounts
-Becoming the Wal-Mart of banking with one stop
shopping

• Acquisition of Boston Fleet Bank helped gain
  considerable market share

-6 million new clients

• Company fully analyzes the fastest growing areas
  in the country

-In the 26 out of the 30 fastest growing metro
areas in the country, Bank of America has the
largest market share
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Threats

• Mergers and acquisitions may not go according to
  plan
• -Little or no cost savings
• -Loss of customers
• -Poor operational direction
• -Little synergy

• A lot of competition domestically and worldwide

• Threats and risk increases as a company does
  business worldwide

-Volatility of exchange rates, market rates, and
foreign economies
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1-Year Price Performance
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5-Year Price Performance
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Analyst recommendation

• Intrinsic Value 85.13

• Current Price 46.4

Buy 15 shares at 46.4 696.00
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Questions/ Comments???