Bank of America

ByBobby Baysden

Agenda

• History

Agenda

• Overview• Performance

Agenda

• Overview• Performance• Competition

Agenda

• Overview• Performance• Competition• Products/Services

Agenda

• Overview• Performance• Competition• Products/Services• SWOT Analysis

Agenda

• Overview• Performance• Competition• Products/Services• SWOT Analysis• Summary

History• Bank of America’s history dates back to 1904 and was founded by

Amadeo Giannini• However it wasn’t until 1930 that he named the bank, Bank of America• In 1958 Bank of America introduced BankAmericard, which in 1976

became known as the Visa Card• In the past 30 years Bank of America has increased in size by or

acquiring or merging with many smaller banks and businesses• In 1974 Tom Storrs becomes the CEO• In 1983 Hugh McColl takes over as CEO • In 1994 they established their first online website• In 2001 Ken Lewis takes over as CEO• They became the largest credit card issuer in the industry in 2006

History (continued)

• In 2009 they acquired Merrill Lynch• In 2010 Brian Moynihan became the CEO

Performance

• In 2012 they suffered 63% drop in 4th quarter profits, because of mortgage settlements with the government.

• Even with this Bank of America is improving, they increased profits from 1.4 billion in 2011 to 4.2 billion in 2012. Also, they had the best performing stock on the Dow Jones

• They have made more not only by doing better business but also by cutting cost with there new program called Project New BAC.

• One way they have cut cost is by reducing the amount of employees, in 2011 they had 281,791 employees and by the end of 2012 they had 267,190 employees. With this new project they plan to have cut 30,000 jobs by the end of 2013

Berkshire & Hathaway Investment

• In August of 2011 Warren Buffett’s company Berkshire & Hathaway invested 5 billion in Bank of America

• In this deal Berkshire & Hathaway are getting 50,000 preferred shares that pay 6% in dividends annually

• They also get warrants to buy 700 million common shares at 7.14 per share

Top 5 Shareholders• Top Holders• • Shares Held• % O/S• Share Change• Filing Date• The Vanguard Group, Inc.• 463,816,602• 4.3• 12,653,244• 12/31/12• State Street Global Advisors (US)• 450,353,705• 4.2• 17,339,729• 12/31/12• BlackRock Institutional Trust Company, N.A.• 374,424,656• 3.5• 3,893,703• 12/31/12• Citi Investment Research (US)• 226,042,014• 2.1• -4,228,810• 12/31/12• JP Morgan Asset Management• 180,393,672• 1.7• 16,654,549• 12/31/12

Top Holders Shares Held % O/S Share Change Filing DateThe Vanguard Group, Inc.

463,816,602 4.3 12,653,244 12/31/12

State Street Global Advisors (US)

450,353,705 4.2 17,339,729 12/31/12

BlackRock Institutional Trust Company, N.A.

374,424,656 3.5 3,893,703 12/31/12

Citi Investment Research (US)

226,042,014 2.1 -4,228,810 12/31/12

JP Morgan Asset Management

180,393,672 1.7 16,654,549 12/31/12

Performance

Performance 2008-2012

Services

• Bank of America offers a wide variety of services. • They offer services to corporations and institutions in the

global markets a couple examples of these global markets are the commodity markets and currency markets.

• Some services they offer to corporations and institutions are investment advise, investment banking advise, and corporate banking advise

Small Business Services/Products

• Bank of America also provides services for small businesses including:

• Cash management tools • Pay roll services• Remote deposits• Account permission• Bill payment • Invoicing• Tax services• Online banking• Investing

Products/Services for Individuals

• Checking• Savings• CDs• Credit cards(#3 in the U.S.)• Student banking• Mobile and text banking• Online banking

Industry

• Bank of America is in the banking industry, and the financial sector

Competitors

• Bank of America’s main competitors are:• BB&T• U.S. Bancorp• Wells Fargo & Company• PNC Financial Service Group• Sun Trust Banks

Competitors

• One thing that sets Bank of America apart from its competitor’s is its Client Management Process

• This is where the client deals with the client manager, and the client manager manages a team. Which is a team made up of people who know about each of BOA’s services and products

SWOT Analysis

• Strengths• Bank of America is very large corporation, they serve 57

million people in America alone. They have 5,700 banking centers and 17,750 ATMs through out the U.S. Also, they are the primary dealer in 16 countries

• The company has a wide range of revenue sources from global banking in global markets, card services, and global wealth and investment management

• They also have good distribution between their assets and liabilities, which helps it avoid liquidity problems

SWOT Analysis

• Weaknesses• The class action law suits they are having to pay are in the

billions • Also they have really bad PR right now. For 4th year in a row

they were voted as the least popular bank. One of the major reasons for this was the many fees they charge. They even tried to charge a five dollar fee every month if you own one of there debit cards

SWOT Analysis

• Opportuites• The bank sector is expected to grow here in the U.S., and

because Bank of America has so many customers in the U.S. they are expected to grow

• They are going to try to keep improving their mobile banking so it will be easier for customers to pay bills, deposit checks, etc.

• They are expecting to keep creating new products and services, which should bring in more revenue

SWOT Analysis

• Threats• Regulatory changes such as the Dodd Frank that was put into

effect in 2010, is going cost them more money to follow the new regulations

• Because of the recession there have been a lot more uncertainties, which decreases the demand for their sevices

Summary

• I believe that with the new programs in place, and if the economy continues to come out of the recession Bank of America will contniue to grow and become a stronger company.

Work Cited• Bank of America. (2013). Retrieved April 15, 2013, from Bank of America:

http://about.bankofamerica.com/en-us/global-impact/environmental-sustainability.html#fbid=I55G0ZS-bI6

• Admin. (2012, June 20). SWOT Analysis for Bank of America. Retrieved April 11, 2013, from Marketing Mix Heaven for Business News:

http://marketingmix.org/swot-analysis-of-bank-of-america-corporation/• Schaefer, S. (2012, March 16). Buffet $5 Billion Bank of America Bet Keeps Looking

Better. Retrieved April 11, 2013, from Forbes: http://www.forbes.com/sites/steveschaefer/2012/03/16/buffetts-5-billion-bank-of-america-bet-keeps-looking-better

/• BofA Speeds up plans to cut 16,000 jobs:WSJ. (2012, September 20).

Retrieved April 11, 2013, from Reuters: http://www.reuters.com/article/2012/09/20/us-bankofamerica-jobs-idUSBRE88J11G20120920

Work Cited

• Bank of America Corporation. (2013, April 12). Retrieved April 12, 2013, from Morning Star: http://quotes.morningstar.com/stock/bac/s?t=bac

Questions?