Deposits
Deposits includes the results of consumer deposits activities which include
a comprehensive range of products to consumers and small businesses. In addition,
Deposits includes student lending and small business banking results, excluding
business card, and the net effect of our ALM activities. Deposits’ products
include traditional savings accounts, money market savings accounts, CDs and
IRAs, and noninterest- and interest-bearing checking accounts. These products
provide a relatively stable source of funding and liquidity. The Corporation
earns net interest spread revenues from investing this liquidity in earning
assets through client-facing lending and ALM activities. The revenue is allocated
to the deposit products using a funds transfer pricing process which takes into
account the interest rates and maturity characteristics of the deposits. Deposits
also generates fees such as account service fees, non-sufficient fund fees,
overdraft charges and ATM fees. In addition, Deposits includes the impact of
migrating customers, and their related deposit balances, between GWIM and Deposits.
Net interest income and service fees include the impact of migration.
Global Card Services
Global Card Services provides a broad offering of products including U.S. Consumer
and Business Card, Consumer Lending, International Card and Debit Card services.
The Corporation reports Global Card Services’ results on a managed basis.
Reporting on a managed basis is consistent with the way that management evaluates
the results of Global Card Services. Managed basis assumes that securitized
loans were not sold and presents earnings on these loans in a manner similar
to the way loans that have not been sold (i.e., held loans) are presented. Loan
securitization is an alternative funding process that is used by the Corporation
to diversify funding sources.
Home Loans & Insurance
Home Loans & Insurance provides an extensive line of consumer real estate
products and services to customers nationwide. Home Loans & Insurance products
include fixed and adjustable rate first-lien mortgage loans for home purchase
and refinancing needs, reverse mortgages, home equity lines of credit and home
equity loans. First mortgage products are either sold into the secondary mortgage
market to investors, while retaining MSRs and the Bank of America customer relationships,
or are held on the Corporation’s balance sheet for ALM purposes. Home
Loans & Insurance is not impacted by the Corporation’s mortgage production
retention decisions as Home Loans & Insurance is compensated for the decision
on a management accounting basis with a corresponding offset recorded in All
Other. In addition, Home Loans & Insurance offers property, casualty, life,
disability and credit insurance.
Global Consumer and Small Business Banking
Our strategy is to attract, retain and deepen customer relationships. A critical
component of that strategy includes continuously improving customer satisfaction.
We believe this focus will help us achieve our goal of being recognized as the
best retail bank in North America.
The major businesses within this segment are Consumer Banking, Consumer Products
and Small Business Banking.
Consumer Banking distributes a wide range of services to 33 million consumer
households in 29 states and the District of Columbia through its network of
5,885 banking centers, 16,791 domestic branded ATMs, and telephone and Internet
channels. Consumer Banking distributes a wide range of products and services,
including deposit products such as checking accounts, money market savings accounts,
time deposits and IRAs, debit card products and credit products such as credit
card, home equity products and residential mortgages.
Consumer Products provides and manages products and services including the
issuance and servicing of credit cards, origination, fulfillment and servicing
of residential mortgage loans, including home equity loan products, direct banking
via the Internet, deposit services, student lending and certain insurance services.
Global Banking
Global Banking provides a wide range of lending-related products and services,
integrated working capital management, treasury solutions and investment banking
services to clients worldwide. Lending products and services include commercial
and corporate bank loans and commitment facilities, real estate lending, leasing
and asset-based lending and indirect consumer loans. Capital management and
treasury solutions include treasury management, trade finance, foreign exchange,
short-term credit facilities and short-term investing options. Investment banking
services provide the Corporation’s commercial and corporate issuer clients
with debt and equity underwriting and distribution capabilities as well as merger-related
advisory services. Global Banking also contains the results for the economic
hedging of the risk to certain real estate-related commercial loans and commitments
utilizing various risk mitigation tools.
Global Markets
Global Markets provides financial products, advisory services, financing, securities
clearing and settlement and custody services globally to institutional investor
clients in support of their investing and trading activities. Global Markets
also works with commercial and corporate issuer clients to provide debt and
equity underwriting and distribution capabilities and risk management products
using interest rate, equity, credit, currency and commodity derivatives, foreign
exchange, fixed income and mortgage-related products. The business may take
positions in these products and participate in market-making activities dealing
in government securities, equity and equity-linked securities, high-grade and
high-yield corporate debt securities, commercial paper, mortgage-backed securities
and ABS. Product specialists within Global Markets work closely with Global
Banking on the underwriting and distribution of debt and equity securities and
certain other products.
Global Business and Financial Services
This segment provides financial solutions to our clients throughout all stages
of their financial cycles. Our strategy is to bring the capabilities of a global
financial services organization to the local level. We serve our clients through
a variety of businesses including Global Treasury Services, Middle Market Banking,
Commercial Real Estate Banking, Leasing, Business Capital and Dealer Financial
Services.
Global Treasury Services provides integrated working capital management and
treasury solutions to clients across the U.S. and 37 countries. Our clients
include multi-nationals, middle market companies, correspondent banks, commercial
real estate firms and governments. Our services include treasury management,
trade finance, foreign exchange, short-term credit facilities and short-term
investing. The revenues and operating results where customers and clients are
serviced are reflected in this segment, as well as Global Consumer and Small
Business Banking, and Global Capital Markets and Investment Banking.
Middle Market Banking provides commercial lending, treasury management products
and investment banking services to middle-market companies across the U.S.
Commercial Real Estate Banking, with offices in more than 60 cities across
the U.S., provides project financing and treasury management to private developers,
homebuilders and commercial real estate firms. Commercial Real Estate Banking
also includes community development banking, which provides lending and investing
services to low- and moderate-income communities.
Leasing provides leasing solutions to small business, middle-market and large
corporations in the U.S. and internationally, offering expertise in the municipal,
corporate aircraft, healthcare and vendor markets.
Business Capital provides asset-based lending financing solutions customized
to meet clients’ capital needs by leveraging their assets on a secured basis
in the U.S., Canada and European markets.
Dealer Financial Services provides lending and investing services, including
floor plan programs for marine, recreational vehicle and auto dealerships to
more than 10,000 dealer clients across the U.S.
Global Capital Markets and Investment Banking
Our strategy is to align our resources with sectors where we can deliver value-added
financial advisory solutions to our issuer and investor clients. This segment
provides a broad range of financial services to domestic and international corporations,
financial institutions, and government entities. Clients are supported through
offices in 35 countries that are divided into four distinct geographic regions:
U.S. and Canada; Asia; Europe, Middle East and Africa; and Mexico. Products
and services provided include loan originations, mergers and acquisitions advisory,
debt and equity underwriting and trading, cash management, derivatives, foreign
exchange, leveraged finance, structured finance and trade services.
This segment offers clients a comprehensive range of global capabilities through
the following three financial services: Global Investment Banking, Global Credit
Products and Global Treasury Services.
Global Investment Banking is comprised of Corporate and Investment Banking
and Global Capital Markets. Global Investment Banking underwrites and makes
markets in equity and equity-linked securities, high-grade and high-yield corporate
debt securities, commercial paper, and mortgage-backed and asset-backed securities.
We also provide debt and equity securities research, loan syndications, mergers
and acquisitions advisory services and private placements. Further, we provide
risk management solutions for customers using interest rate, equity, credit
and commodity derivatives, foreign exchange, fixed income and mortgage-related
products. In support of these activities, the businesses may take positions
in these products and participate in market-making activities. The Global Investment
Banking business is a primary dealer in the U.S. and in several international
locations.
Global Credit Products provides credit and lending services for our corporate
clients and institutional investors. Global Credit Products is also responsible
for actively managing loan and counterparty risk in our large corporate portfolio
using available risk mitigation techniques, including credit default swaps.
Global Wealth and Investment Management
This segment provides tailored investment services to individual and institutional
clients in various stages and economic cycles. Our clients are served through
five major businesses, Premier Banking, Banc of America Investments (BAI), The
Private Bank, Columbia Management Group (CMG) and Other Services, each offering
specific products and services based on clients’ needs.
Premier Banking joins with BAI, our full-service retail brokerage business,
to bring together personalized banking and investment expertise through priority
service with client-dedicated teams. These teams provide comprehensive advice,
cash management strategies, and customized investment and financial planning
solutions for mass affluent clients. Mass affluent clients have a personal wealth
profile that includes investable assets plus a mortgage that exceeds $250,000
or they have at least $100,000 of investable assets.
BAI serves 1.3 million accounts through a network of over 2,100 financial advisors
throughout the U.S.
The Private Bank provides integrated wealth management solutions to high-net-worth
individuals, mid-market institutions and charitable organizations with investable
assets greater than $3 million. Services include investment, trust, banking
and lending services.
During the third quarter of 2004, we announced a new business designed to serve
the needs of ultra high-net-worth individuals and families. The goal is for
this new business to provide a higher level of contact and tailored wealth management
solutions to clients with investable assets greater than $50 million.
CMG is an asset management organization primarily serving the needs of institutional
customers. CMG provides asset management services, liquidity strategies and
separate accounts. CMG also provides mutual funds offering a full range of investment
styles across an array of products including equities, fixed income (taxable
and nontaxable) and cash products. In addition to its service of institutional
clients, CMG distributes its products and services to individuals through The
Private Bank, BAI and nonproprietary channels including other brokerage firms.
Other Services include the Investment Services Group, which provides products
and services from traditional capital markets products to alternative investments
and Banc of America Specialist, a New York Stock Exchange market-maker. Other
Services also included U.S. Clearing which provides retail clearing services
to broker/dealers and other correspondent firms. U.S. Clearing was sold in the
fourth quarter of 2004.
All Other
Included in All Other are our Latin America and Equity Investments businesses,
and Other.
Latin America includes our full-service Latin American operations in Brazil,
Argentina and Chile. These businesses provide a wide array of products to indigenous
and multinational corporations, as well as consumers. These services include
lending, deposit-taking, asset management, private banking and treasury operations.
The consumer business focuses on the affluent and middle-market segments. Our
largest book of business is in Brazil, while Argentina has our largest branch
network, with 87 branches. Our Brazilian and Chilean operations have 65 branches
and 43 branches, respectively.