Jessica Schmidt

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Jessica Schmidt
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Presentation Outline

• Snapshot
• Past Positions
• Profile
• History
• Current News
• Financial Statements
• Industry Comparison
• Stock Comparison
• Trend Analysis
• Common Size Analysis
• Stock Valuation Model

• EVA MVA Model
• Free Cash Flow
• Summary of Valuations
• Analyst Recommendations
• Risk
• Effect on SMIP Portfolio
• Recommendation

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Snapshot

• Market Cap 179,544.50 MLN
• Industry Money Center Banks
• Sector Financial
• Recent Stock Price 43.98 (9-24-04)
• 52wk High and Low 44.99 - 36.225
• Beta 0.88
• Ticker Symbol BAC

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Past Positions in the Financial Industry

• Chase Manhattan
• Purchased 57 shares _at_ 86.01 4,902.81 Apr-99
• Sold 57 shares _at_ 82.54 4,705.09 Nov-99
• Loss Incurred 197.72
• Current Worth 85.5 shares JPM 3,398.63
• Fleet Boston
• Purchased 100 shares _at_ 41.30 4,129.50 Nov-99
• Sold 100 shares _at_ 37.39 3,739.12 Apr-00
• Loss Incurred 390.38
• Current Worth 111.06 shares of BAC 4,884.42
• Commerce Bank
• Purchased 130 shares _at_ 48.67 4,866.90 Apr-03
• Sold 130 shares _at_ 50.34 6,544.20
• Gain 1,677.30
• Current Worth 130 _at_ 55.73 7,244.90

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Profile

• Nations First coast-to-coast bank
• 1 in U.S. large corporate banking relationships
• 4 in lead investment banking relationships
• 1 in loan syndication
• One of the largest banks for assets in the US.
  behind C, JPM, and WB.
• 5,700 locations in 24 states, reaching
  internationally most notably Latin America
• Largest segment is the Consumer and Commercial
  Banking, offering deposit products, credit cards,
  insurance, loans, treasury services, and
  financing for cars, boats, and RV dealerships.
• Global Corporate and Investment Banking,
  including Banc of America Securities. This
  segment offers services (brokerage advisory, and
  capital markets services) to corporate and
  institutional clients.
• CA, FL, MD, Washington State ? Market share
  leadership
• Domestically targeting Hispanic customers
• Domestically targeting Chinese, Korean,
  Vietnamese in CA

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History

• 1957 - Commercial National Bank of Charlotte,
  N.C. merged with American Trust Co., forming
  American National Bank
• 1960 - merged with Security National, forming
  North Carolina National Bank
• 1968 - formed NCNB (holding company)
• 1988 - profited from SL crisis ? doubling its
  assets
• 1993 - Bought Chicago Research Trading
• 1997 - Purchased Boatmans Bancshares
  Montgomery Securities, creating Banc of America
  Securities
• 1998 - bought Barnett Banks merged with
  NationsBank
• 1999 - sold its European and Asian private
  banking operations to UBS. It also bought
  Associates First Capital, 50 of Marsico Capital
  Management.
• 2001 - Acquired BA Merchant Services became
  Bank of America
• 2004 - merged with Fleet Boston
• August 30th 2004 ? stock split 21

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Current News

• 9-22-04 Fed Moves Rekindle Interest in Saving
• 9-23-04 Bank of America to Move Wealth/Invest
  Mgmt Ops to Boston
• 9-28-04 Cisco Gets Internet-Phone Pact from Bank
  of America for U.S.
• 9-28-04 Banks Come Under Scrutiny for Role in
  Parmalat Scandal
• 9-29-04 Banc of America Securities Hires Liu,
  Month, Schloendorff and Rogers in the Technology
  Investment Banking Group

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Financial Statements

• Refer to handout

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Industry Comparison
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BAC and Competitors
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Stock Comparison 1 year
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Stock Comparison 3 years
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Trend Analysis
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Trend Analysis
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Product Segmentation
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Geographical Segmentation
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Common Size Analysis
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Stock Valuation
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EVA MVA Model
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Free Cash Flow
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Intrinsic Value
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Summary of Valuations

• Stock Evaluation Model
• Zero Growth Model 69.52
• Price/Earnings Model 124.17
• EVA MVA Model
• EVA Creating Shareholder Wealth
• MVA Creating Shareholder Wealth
• Free Cash Flow Model
• NPV of FCF 613,671
• Per Share Value 172.03
• Intrinsic Value Model
• Intrinsic Value 48.06/share

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Analyst Recommendations

• 21 Analysts Rate 12 Month Consensus
• Buys 61.90 (13 analysts)
• Holds 33.33 (7 analysts)
• Sells 4.76 (1 analyst)
• 12 Month Consensus Average
• BAC 3.762
• U.S. avg. 3.702
• SP 500 Div Bank 3.693
• SP 500 Index 3.562
• SP 100 Index 3.717

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Risk

• Risk Grade 68
• 6 Month Minimum 60
• 6 Month Maximum 79
• 6 Month Average 68

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Risk
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Why SMIP will Benefit from BAC

• Assist in the diversification
• High Dividends
• Settle Investigation of Mutual Fund Scandal with
  SEC
• 7 billion of Share Buyback
• Parmalat Headline risk built into stock
• Low P/E
• Benefit from Rate Hike
• High growth potential

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Recommendation

• Buy 130 shares of BAC _at_ current market price
• 6.50 of portfolio in Financial Sector
• Money Center Banks Industry weight in SP 500
  3.861