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Bank of America

Bank of America Kendra Emery BAC December 6 th 2005 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

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Bank of America

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  1. Bank of America Kendra Emery BAC December 6th 2005

  2. 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

  3. 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

  4. 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

  5. Competitors

  6. Three Cayman Islands companies that invested in the Italian dairy and juice conglomerate Parmalat SpA have sued Bank of America claiming the bank was involved in a fraud that resulted in losses of nearly $1 billion. 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 America’s potential, says there are plenty of reasons for the big banking business, and their stock, to thrive.

  7. 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%

  8. 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

  9. 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

  10. 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

  11. 1-Year Price Performance

  12. 5-Year Price Performance

  13. Analyst recommendation • Intrinsic Value = $85.13 • Current Price = $46.4 Buy 15 shares at $46.4= $696.00

  14. Questions/ Comments???

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