BANK OF AMERİCA

Financial analysis

Students: Azər Əmiraslan, Məxmər Qədirli

Context

1. Introduction

2. Company overview
2.1 History
2.2 Business overview
2.3 Industy overview

3. Annual variations

4. Ratio analysis

5. Sector analysis

6. Valuation

6.1 FCF analysis

6.2 DCF analysis

7. References

Apendix
 1. Introduction

Financial analysis is the process of examining a company’s performance in the

context of its industry and economic environment in order to arrive at a decision or
recommendation. Overall, a central focus of financial analysis is evaluating the
company’s ability to earn a return on its capital that is at least equal to the cost of
that capital, to profitably grow its operations, and to generate enough cash to meet
obligations and pursue opportunities.

The main aim of this project is to implement financial analysis by using Bank of
America’s past data, define its relevant position in sector, interpreting its
performance with the help of appropriate ratios and predict future forecast.

The project includes 6 sections. The first section is introduction which consists of
explanation of financial analysis’s significance and general idea of content. The
second section is a company’s overview where we look briefly at the history,
business practices and industry of Bank of America.

The third section is the company’s annual variations for the last five years. The
fourth section is about productivity, profitability and efficiency ratios of the
company.

The sixth section is sector analysis. Here we took and calculated Bank of
America's financial analysis, and compared it with different financial analysis of 3
other banks and determined its position in sector.

Last but not least, the seventh section is valuation. In this section, we calculated
Bank of America's value over FCF and DCF and made predictions for the
upcoming 5 years.

To conclude, we also provided references and appendix at the end of our project,
with additional information and sources we used.
 2. Company overview

2.1 History

Bank of America, in full Bank of America Corporation, one of the largest

banking and financial services corporations in the United States. It was formed
through NationsBank’s acquisition of BankAmerica in 1998. Bank of America is
headquartered in Charlotte, North Carolina.

The bank’s history dates to 1904 when Amadeo Peter Giannini opened the Bank of
Italy in San Francisco. It eventually developed into the Bank of America and was
for a time owned by Giannini’s holding company, Transamerica Corporation.

Through a series of mergers and acquisitions, it built upon its commercial banking
business by establishing Merrill Lynch for wealth management and Bank of
America Merrill Lynch for investment banking in 2008 and 2009, respectively
(since renamed BofA Securities).
 2.2 Business overview

Bank of America generates 90% of its revenues in its domestic market. The core of
Bank of America's strategy is to be the number one bank in its domestic market. It
has achieved this through key acquisitions.

Consumer Banking, the largest division in the company, provides financial

services to consumers and small businesses including, banking, investments, and
lending products including business loans, mortgages, and credit cards.

The Global Banking division provides banking services, including investment

banking and lending products to businesses. It includes the businesses of Global
Corporate Banking, Global Commercial Banking, Business Banking, and Global
Investment Banking.

The Global Wealth and Investment Management (GWIM) division manages

investment assets of institutions and individuals. It includes the businesses of
Merrill Lynch Global Wealth Management and U.S.

The Global Markets division offers services to institutional clients, including

trading in financial securities. The division provides research and other services
such as market maker, and risk management using derivatives.
 2.3 Industry overview

Bank of America is one of the world’s leading financial institutions that is

the second largest banking institution in the United States, after JPMorgan Chase,
and the eighth largest bank in the world. Bank of America is one of the Big
Four banking institutions of the United States. It serves approximately 10.73% of
all American bank deposits, in direct competition with JPMorgan
Chase, Citigroup and Wells Fargo. Its primary financial services revolve
around commercial banking, wealth management, and investment banking.

The company provides unmatched convenience in the United States, serving

approximately 66 million consumer and small business clients with approximately
4,200 retail financial centers, approximately 17,000 ATMs, and award-winning
digital banking with approximately 41 million active users, including
approximately 32 million mobile users.

Bank of America is a global leader in wealth management, corporate and

investment banking and trading across a broad range of asset classes, serving
corporations, governments, institutions and individuals around the world. Bank of
America offers industry-leading support to approximately 3 million small business
households through a suite of innovative, easy-to-use online products and services.

The company serves clients through operations across the United States, its
territories and approximately 35 countries. Bank of America Corporation stock
(NYSE: BAC) is listed on the New York Stock Exchange.
 3. Annual valuations

Condensed Balance
2020 2019 2018 2017 2016
Sheet
ASSETS
Total Long Term
947 183 721 884 680 655 691 133 674 982
Assets:
PPE 11 000 10 561 9 906 9 247 9 139
Long Term
684 850 472 197 441 753 440 130 430 731
Investment
Goodwill and
68 951 68 951 68 951 68 951 71 891
Intangible Assets
Other Long-Term
182 382 170 175 160 045 172 805 163 221
Assets
Total Current
Assets/Cash and cash 1 872 444 1 712 195 1 673 852 1 590 101 1 512 720
equivalent
Total assets 2 819 627 2 434 079 2 354 507 2 281 234 2 187 702
LIABILITIES AND SHAREHOLDERS' EQUITY
Long Term Debt 262 934 240 856 229 340 227 402 216 823
Other Non-current
Liabilities/Derivative 45 526 38 229 37 891 34 300 39 480
Liabilities
Total Current
2 238 243 1 890 184 1 821 951 1 752 386 1 664 559
Liabilities
Total Liabilities 2 546 703 2 169 269 2 089 182 2 014 088 1 920 862
Stock 110 492 115 124 141 222 160 412 172 258
Retained earnings 164 088 156 319 136 314 113 816 101 870
Accumulated
comprehensive -1 656 -6 633 -12 211 -7 082 -7 288
income
Total Shareholders'
272 924 264 810 265 325 267 146 266 840
Equity
Total liabilities and
2 819 627 2 434 079 2 354 507 2 281 234 2 187 702
shareholders’ equity

Annual Variations 2020 2019 2018 2017

Total Long Term Assets 31,21% 6,06% -1,52% 2,39%
Total Current Assets/Cash and
9,36% 2,29% 5,27% 5,12%
cash equivalent
Long Term Debt 9,17% 5,02% 0,85% 4,88%
Total Current Liabilities 18,41% 3,75% 3,97% 5,28%
Stock -4,02% 18,48% -11,96% -6,88%
Retained earnings 4,97% 14,68% 19,77% 11,73%
 Condensend Income Statement 2020 2019 2018 2017 2016
Revenue 93 753 113 589 109 627 100 264 93 662
COGS 8 225 22 345 18 607 12 912 9 961
Gross Profit 85 528 91 244 91 020 87 352 83 701
Non-interest expense 66 533 58490 56436 58 139 58680
Operating income/Income before tax expense 18 995 32 754 34 584 29 213 25 021
Income tax 1 101 5 324 6 437 10 981 7 199
Income after tax/Consolidated net income 17 894 27 430 28 147 18 232 17 822
Preferred stock dividend 1 421 1 432 1 451 1 614 1 682
Net income applicable to common
16 473 25 998 26 696 16 618 16 140
shareholders
EPS 1,88 2,77 2,64 1,63 1,57
Diluted EPS 1,87 2,75 2,61 1,54 1,46
Average common shares issued and
8 753 9 391 10 097 10 196 10 284
outstanding
Average diluted shares issued and
8 797 9 443 10 237 10 778 11 047
outstanding

Net income 17 894 27 430 28 147 18 232 17 822

Other comprehensive income(loss) 4 977 5 578 -3 916 206 -1 930
Comprehensive income 22 871 33 008 24 231 18 438 15 892

Annual Variations 2020 2019 2018 2017

Revenue -17,46% 3,61% 9,34% 7,05%
COGS -63,19% 20,09% 44,11% 29,63%
Gross profit -6,26% 0,25% 4,20% 4,36%
Non-interest expense 13,75% 3,64% -2,93% -0,92%
Net income -34,76% -2,55% 54,38% 2,30%
-
Preferred dividend -0,77% -1,31% -4,04%
10,10%

Let’s take a look at annual valuations in both balance sheet and income statement.
As you see, there is sharp decrease in net income from 2019 to 2020 due to
decrease in income after tax in 2020. The decrease in net income was primarily
driven by lower interest rates, partially offset by reduced deposit and funding costs,
the deployment of excess deposits into securities and an additional day of interest
accrual. Long-term assets, current assets,total current liabilities increased from
2019 to 2020, therefore, we see gradually increasing trend between these years.
 Annual Variations
40,00%
30,00%

20,00%
10,00%
0,00%
-10,00%
-20,00% Total LongTotal CurrentLong TermTotal CurrentStockRetained
-30,00% Term Assets Assets/Cash Debt Liabilities earnings
and cash
equivalent

2020201920182017

Table 1.Annual valuations for Balance sheet

Annual Variation
80,00%

60,00%

40,00%

20,00%

0,00% Revenue COGS Gross profit Non-interest Net income Preferred

-20,00% expense dividend

-40,00%

-60,00%

-80,00%
2020201920182017

Table 1.Annual valuations for Income statement

 4. Ratio analysis

Because of the large number of ratios, it is helpful to think about ratios in terms of
broad categories based on what aspects of performance a ratio is intended to detect.
Financial analysts and data vendors use a variety of categories to classify ratios.
The category names and the ratios included in each category can differ. In this
project our common ratio categories include liquidity, solvency, profitability, and
efficiency ratios.

4.1 Liquidity ratios

Liquidity analysis, which focuses on cash flows, measures a company’s ability to

meet its short- term obligations. Liquidity measures how quickly assets are
converted into cash. Liquidity ratios also measure the ability to pay off short- term
obligations. In dayto- day operations, liquidity management is typically achieved
through efficient use of assets.

Liquidity ratios 2020 2019 2018

Current ratio 83,66% 90,58% 91,87%
Quick ratio 59,36% 60,90% 61,99%

4.2 Solvency ratios

Solvency refers to a company’s ability to fulfill its long- term debt obligations.
Assessment of a company’s ability to pay its long- term obligations (i.e., to make
interest and principal payments) generally includes an in-depth analysis of the
components of its financial structure. Debt to equity ratios, financial autonomy and
financial leverage ratios are examples of solvency ratios.

Solvency (Financial) Ratios 2020 2019 2018 2017 2016

Financial Autonomy 9,68% 10,88% 11,27% 11,71% 12,20%
Financial Leverage 90% 89% 89% 88% 88%
Debt to Equity Ratio 96,34% 90,95% 86,44% 85,12% 81,26%
The financial leverage ratio measures the amount of total assets supported for
each one money unit of equity. The higher the financial leverage ratio, the more
leveraged the company is in the sense of using debt and other liabilities to finance
assets.
The financial autonomy ratio tries to define the dependence that a company has
on its creditors, that is, to whom you owe money, the debt. This calculation
involves determining the equity that a company has in relation to its debt. In
consecuense, the ratio gives us a relationship with their ability to borrow. The
higher this ratio, the greater the company's ability to survive in the future,
especially taking into account that uncertainty scenarios may arise at some point.
Here, it declines from 12.20 % to 9.68% during 5 years.

The debt- to- equity ratio measures the amount of debt capital relative to equity
capital. From 2016 to 2020 this ratio have been increasing gradually. A ratio of 1.0
would indicate equal amounts of debt and equity, as we see in 2020 it’s already
approaching this amount (here we wrote it in percentages).

4.3 Profitability ratios

Profitability ratios measure the return earned by the company during a period. The
ability to generate profit on capital invested is a key determinant of a company’s
overall value and the value of the securities it issues.

Profitability Ratios 2020 2019 2018 2017 2016

Gross profit margin 91,23% 80,33% 83,03% 87,12% 89,36%
Net Profit Margin 19,09% 24,15% 25,68% 18,18% 19,03%
PBT Margin 20,26% 28,84% 31,55% 29,14% 26,71%
Return on Assets - ROA 0,6346% 1,1269% 1,1955% 0,7992% 0,8146%
Return on equity - ROE 6,56% 10,36% 10,61% 6,82% 6,68%

Gross profit margin indicates the percentage of revenue available to cover

operating and other expenses and to generate profit. Higher gross profit margin
indicates some combination of higher product pricing and lower product costs.

Net profit, or net income, is calculated as revenue minus all expenses. Net profit
margin shows every dollar in sales as in terms of net income.
Although gross profit margin of Bank of America increased from 2019 to 2020,
Net profit margin decreased approximately 5.24% which relates with deducted
expenses in the numerator.

Profit before tax margin is the ratio of pretax income to revenue. The pretax
margin reflects the effects on profitability of leverage and other (non- operating)
income and expenses. This ratio is used to evaluate company’s profit without
distortion due to tax. Lower ratio means weaker profitability for operations.

ROA measures the return earned by a company on its assets. The higher the ratio,
the more income is generated by a given level of assets. Increase in total
assets(from 2434079 to 2819627) and decrease in net income (from 27430 to
17894) from 2019 to 2020 lead decline in calculation of ROA.

ROE measures the return earned by a company on its equity capital, including
minority equity, preferred equity, and common equity. It increases from 2016 to
2018 and decreases from 2018 to 2020.

4.4 Efficiency(activity) ratios

Activity ratios are also known as asset utilization ratios or operating efficiency
ratios. This category is intended to measure how well a company manages various
activities, particularly how efficiently it manages its various assets. Activity ratios
are analyzed as indicators of ongoing operational performance—how effectively
assets are used by a company. These ratios reflect the efficient management of
both working capital and longer term assets.

Average holding period=Average inventory / COGS*365

Average collection period=Average receivables/Sales*365

Average payment period=Average payables/COGS*365

Average
Average Holding Period 9511,74 3627,74 4155,77 5506,19 5700,36
Average Collection Period 233,90 195,61 212,15 219,12 215,20
Average Payment Period 3430,11 1237,28 1465,40 2038,40 2042,80
Cash Flow Cycle 6315,53 2586,07 2902,51 3686,92
Net Working Capital -365799 -177989 -148099 -162285
 5. Sector analysis

There are approximately 25000 global banks in the world. Bank of America is the
second largest banking instution in the USA and the eighth largest bank in the
world. In this section, we will compare BofA with other 3 banks (JPM,
Citigroup,Wells Fargo).

Comparision for 2020 BofA Citigroup JPM Wells Fargo

Revenue 93 753 88839 129503 80303
COGS 8225 14541 9960 7963
Net income 17894 11107 29131 1710
Table 5.1 Comparison for 2020

If we look table above, JPM and BofA have higher and Wells Fargo has the lowest
indicators. In fact, coming to such a conclusion does not seem realistic while
evaluating companies.

Comparision for 2020 BofA Citigroup JPM Wells Fargo

Net profit margin 19.09% 12.50% 22.50% 2.13%
Financial leverage 90% 91% 92% 90%
Total asset turnover 3.33% 3.93% 3.82% 4.11%
ROE 6.56% 5.55% 10.43% 0.92%
Table 5.2 Comparison ratios for 2020

As we see in table 5.1 the largest net income and revenue are observed in
JPMorgan and net profit margin is also in line with it, therefore, the largest NPM
is 22.50%. The second largest net income and revenue are both examined in BofA
(NPM as well) following the JPMorgan. In our comparison, NPM is coherent with
indicators shown in table 5.1.

Financial leverage is the use of debt to buy more assets. The financial leverage
formula is measured as the ratio of total debt to total assets. As the proportion of
debt to assets increases, so too does the amount of financial leverage. Actually, it
might represent a bad indicator if a company has high financial leverage ratio.
Though, if you classify companies according to their industries different
consequences will be seen. Here, in our case as banks own much more liabilities as
a sector high financial leverage is not considered as a bad sign.
 6. Valuation

6.1 FCF analysis

Free cash flow (FCF) represents the cash a company generates after accounting
for cash outflows to support operations and maintain its capital assets.
Unlike earnings or net income, free cash flow is a measure of profitability that
excludes the non-cash expenses of the income statement and includes spending on
equipment and assets as well as changes in working capital from the balance
sheet. Formula used to determine FCFF:

FCFF=EBITDA-Trading accounts-Customer and other receivables+Trading

liabilities-CAPEX+Depreciation and amortisation

Free Cash Flow to the Firm 2017 2018 2019 2020

EBITDA 33567 38471 36 549 24 939

Depreciation and Amortizations 4354 3887 3795 5944
EBT 29213 34584 32754 18995
Change in Working Capital
Trading accounts 29 149 4 990 15 478 -30 972
Customer and other receivables 2 864 4 191 -9 877 8 284
Trading Liabilities 18 156 -12 967 15 050 -11 950
Total 13 857 22 148 -9 449 -10 738
CAPEX 8 174 6 169 34 894 219 036
Free Cash Flow to the Firm 15 890 14 041 14 899 -177 415

Table 6.1 FCFF (2017-2020)

We see at the graph below that company had quite close Free cash flows from
2017 to 2019. But in 2020, there was a sharp decrease in FCF if we look
mathematically this is due to the rise in CAPEX from 34894 to 219036 in 2020.In
fact, due to economic downturn related to COVID 19 bank decreased its interest
rate which in turn brought massive quantity of deposits that will reflect itself in
bank’s cash flow in near future as bank will have to pay depositholders.
 Free Cash Flow to the Firm
15 890 14 041 14 899

2017 2018 2019 2020

-177 415
Free Cash Flow to the Firm

Table 6.1.2 Graph of FCF

Now we will look through assumptions to estimate future free cash flows.

Let’s start with Revenues. Here we find changes in revenues between years and
find average rate for each company. The we determine average of sum of rates and
get estimated revenue growth rate.
Revenues Growth Rate
2016 2017 2018 2019 2020 Rate
BOA 93 662 100 264 109 627 113 589 93 753 0,63%
C 83309 88 962 97 120 103 449 88 839 2,09%
WFC 94176 97141 101 060 103 915 80 303 -3,18%
JPM 106387 114 579 129 824 142 194 129 503 5,40%
1,24%

We will use an average costs growth rate of 13.93% for the forecasting purposes.
Based on our assumption, there’ll be examining fixed 13.93% increase in Total
costs for each year of 2021- 2025 period.

Costs Growth Rate

2016 2017 2018 2019 2020 Rate
BOA 9 961 12 912 18 607 22 345 8 225 7,66%
C 12512 16 518 24 266 29 163 14 541 12,24%
WFC 5909 9 352 14 652 18 852 7 963 21,46%
JPM 9818 13 874 21 041 26 795 9 960 14,37%
13,93%
We will use the same method to find depreciation growth rate.

Depreciation & Amortization rate

2016 2017 2018 2019 2020 Average
5375 4354 3887 3795 5944 6,13%
Capital expenditures (CapEx) are funds used by a company to acquire, upgrade,
and maintain physical assets such as property, plants, buildings, technology, or
equipment. In essence, CAPEX reduces free cash flow, which is calculated as
operating cash flow, less CAPEX. However, CAPEX is seen as an investment,
used to purchase or improve an existing asset.

CAPEX= Closing fixed intangible assets-opening fixed intangible

assets+depreciation&amortisation
Forecasts
Free cash flow to the firm 2021 2022 2023 2024 2025
Revenue 94912 96086 97274 98476 99694
COGS 8327 8430 8534 8639 8746
Gross profit 86585 87656 88740 89837 90948
Non-interest expenses besides besides
Depr and Amort 66970 74022 81817 90433 99956
EBITDA 19616 13634 6923 -596 -9009
Depreciation and Amortizations 6309 6696 7106 7542 8005
EBT 13307 6938 -184 -8139 -17014
Working Capital
Trading accounts 238686 214932 217589 220279 223003
Change in Inventory 39832 -23754 2657 2690 2723
AHP 10463 9306 9306 9306 9306
Acc. Receivable 52784 61509 62270 63039 63819
Change in A.R -40969 8725 760 770 779
ACP 203 234 234 234 234
Acc.Payable 99053 138214 139923 141653 143404
Change in A.P. -82746 -44584 -25155 -10470 -2955
APP 4342 5985 5985 5985 5985
Change in Working Capital 192417 138226 139935 141665 143417
Fixed and Intangible Assets 853367 952189 1062455 1185490 1322773
CAPEX(Net of Depreciation) 779725 105518 117372 130577 145288
Taxes 4658 2428 -64 -2849 -5955
Free cash flow to the firm -950874 -225843 -243214 -262448 -283754

Changes in working in capital

BOA C WFC JPM Total

Average Average Average Average Average
AHP 9511,74 8173,27 8173,27 15992,81 ########
ACP 233,90 173,92 173,92 230,22 202,99
APP 3430,11 3613,62 3613,62 6710,58 4341,98
6.2 DCF analysis

Forecasts
Free cash flow to the firm 2021 2022 2023 2024 2025
Revenue 94912 96086 97274 98476 99694
COGS 8327 8430 8534 8639 8746
Gross profit 86585 87656 88740 89837 90948
Non-interest expenses besides besides
66970 74022 81817 90433 99956
Depr and Amort
EBITDA 19616 13634 6923 -596 -9009
Depreciation and Amortizations 6309 6696 7106 7542 8005
EBT 13307 6938 -184 -8139 -17014
Working Capital
Trading accounts 212307 214932 217589 220279 223003
Change in Inventory 13453 2625 2657 2690 2723
AHP 9306 9306 9306 9306 9306
Acc. Receivable 60758 61509 62270 63039 63819
Change in A.R -32995 751 760 770 779
ACP 234 234 234 234 234
Acc.Payable -84049 95176 96353 97544 98750
Change in A.P. -265848 -87622 -68725 -54579 -47609
APP 5985 5985 5985 5985 5985
Change in Working Capital 357113 181264 183505 185774 188071
106245 118549 132277
853367 952189
Fixed and Intangible Assets 5 0 3
CAPEX(Net of Depreciation) 779725 105518 117372 130577 145288
Taxes 4658 2428 -64 -2849 -5955
Free cash flow to the firm 1115571 -268881 -286784 -306557 -328408
Discounted cash flow analysis 1052425 239303 -240790 -242822 -245405
1 2 3 4 5

Discounted cash flow (DCF) is a method of valuation used to determine the value
of an investment based on its return in the future–called future cash flows. DCF
helps to calculate how much an investment is worth today based on the return in
the future. Formula used:

In this example, we were given 6% discount rate,we applied this percentage to

our free cash flow to the firm and observed that as there is an increase in FCF, our
DCF has a positive (rising) trend as well.
References

Bank of America’s annual reports from 2016 to 2020

https://investor.bankofamerica.com/annual-reports-and-proxy-statements

“Principles of Corporate Finance” by Brealey Myers Allen

https://en.wikipedia.org/wiki/Bank_of_America

https://www.macrotrends.net/stocks/charts/BAC/bank-of-america/dividend-yield-
history

https://www.cnbc.com/2020/06/21/banks-have-grown-by-2-trillion-in-deposits-since-coronavirus-first-
hit.html

https://www.accountingtools.com/articles/what-is-the-total-asset-turnover-
ratio.html
Apendix

Consolidated Balance sheet 2020 2019 2018 2017 2016

ASSETS
Cash and due from banks 36 430 30 152 29 063 29 480 30 719
Interest-bearing deposits with Fed.RS,
344 033 131 408 148 341 127 954 117 019
non-U.S. central bank and other
banks
Cash and cash equivalent 380 463 161 560 177 404 157 434 147 738
Time deposits placed and other short-
6 546 7 107 7 494 11 153 9 861
term investment
Fed.funds sold and securities bor. or
304 058 274 597 261 131 212 747 198 224
purch. under aggree. to resell
Trading account assets 198 854 229 826 214 348 209 358 180 209
Derivative assets 47 179 40 485 43 725 37 762 42 512
Debt securities:
Carried at fair value 246 601 256 467 238 101 315 117 313 660
Held-to-maturity, at cost 438 249 215 730 203 652 125 013 117 071
Total debt securities 684 850 472 197 441 753 440 130 430 731
Loans and leases 927 861 983 426 946 895 936 749 906 683
Allowance for loan and lease losses -18 802 -9 416 -9 601 -10 393 -11 237
Loans and leases, net of allowance 909 059 974 010 937 294 926 356 895 446
Premises and equipment, net 11 000 10 561 9 906 9 247 9 139
Motor servicing rights 0 0 0 0 2 747
Goodwill 68 951 68 951 68 951 68 951 68 969
Intangible assets 0 0 0 0 2 922
Loans held-for-sale 9 243 9 158 10 367 11 430 9 066
Customer and other receivables 64 221 55 937 65 814 61 623 58 759
Assets of business held for sale 0 0 0 0 10 670
Other assets 135 203 129 690 116 320 135 043 120 709
2 187
Total assets 2 819 627 2 434 079 2 354 507 2 281 234
702

LIABILITIES
Deposits in U.S. offices:
Non-interest bearing 650 674 403 305 412 587 430 650 438 125
Interest bearing 1 038 341 940 731 891 636 796 576 750 891
Deposits in non-U.S. offices:
Non-interest bearing 17 698 13 719 14 060 14 024 12 039
Interest bearing 88 767 77 048 63 193 68 295 59 879
1 260
Total deposits 1 795 480 1 434 803 1 381 476 1 309 545
934
Fed.funds purchased and securities
loaned or sold under aggree. to 170 323 165 109 186 988 176 865 170 291
repurch.
Trading account liabilities 71 320 83 270 68 220 81 187 63 031
Derivative liabilities 45 526 38 229 37 891 34 300 39 480
Short-term borrowings 19 321 24 204 20 189 32 666 23 944
Accrued expenses and other liabilities 181 799 182 798 165 078 152 123 146 359
 Long-term debt 262 934 240 856 229 340 227 402 216 823
1 920
Total Liabilities 2 546 703 2 169 269 2 089 182 2 014 088
862
Shareholders' equity
Preferred Stock 24 510 23 401 22 326 22 323 25 220
Common Stock 85 982 91 723 118 896 138 089 147 038
Retained Earnings 164 088 156 319 136 314 113 816 101 870
Accumulated other comprehensive
-1 656 -6 633 -12 211 -7 082 -7 288
income
Total Shareholders' Equity 272 924 264 810 265 325 267 146 266 840
Total liabilities and shareholders’ 2 187
2 819 627 2 434 079 2 354 507 2 281 234
equity 702

Consolidated Income Statement 2020 2019 2018 2017 2016

Net interest income:
Interest income 51 585 71 236 66 769 57 579 51 057
Interest Expense 8 225 22 345 18 607 12 912 9 961
Net interest income 43 360 48 891 48 162 44 667 41 096
Non-interest income:
Fees and commissions 34 551 33 015 33 078 33 567 31 475
Market making and similar activities 8 355 9 034 9 008 7 277 9 245
Other income -738 304 772 1 841 1 885
Total non-interest income 42 168 42 353 42 858 42 685 42 605
Total revenue, net of interest expense 85 528 91 244 91 020 87 352 83 701
Provision for credit loss 11 320 3 590 3 282 3 396 3 597
Non-interest expense
Compensation and benefits 32 725 31 977 31 880 31 931 32 018
Occupancy and equipment 7 141 6 588 6 380 5 701 5 842
Information processing and
5 222 4 646 4 555 3 838 3 753
communication
Product delivery and transaction related 3 433 2 762 2 857 0 0
Marketing 1 701 1 934 1 674 1 746 1 703
Professional fees 1 694 1 597 1 699 1 888 1 971
Other general operating 3 297 5 396 4 109 9 639 9 796
Total non-interest expense 55 213 54 900 53 154 54 743 55 083
Income before income taxes 18 995 32 754 34 584 29 213 25 021
Income tax expense 1 101 5 324 6 437 10 981 7 199
Consolidated Net income 17 894 27 430 28 147 18 232 17 822
Preferred stock dividends 1 421 1 432 1 451 1 614 1 682
Net income applicable to common
16 473 25 998 26 696 16 618 16 140
shareholders

Per common share information

 Earnings 1,88 2,77 2,64 1,63 1,57
Diluted earnings 1,87 2,75 2,61 1,54 1,46
Average common shares issued and
8 753,2 9 390,5 10 096,5 10195.6 10 284,1
outstanding
Average diluted shares issued and
8 796,9 9 442,9 10 236,9 10778.4 11 046,8
outstanding

Net income 17 894 27 430 28 147 18 232 17 822

Other comprehensive income(loss), net
of tax
Net change in debt securities 4 799 5 875 -3 953 61 -1 345
Net change in debit valuation adjustment -498 -963 749 -293 -156
Net change in derivatives 826 616 -53 64 182
Employee benefit plan adjustment -98 136 -405 288 -524
Net foreign currency translation
-52 -86 -254 86 -87
adjustment
Other comprehensive income(loss) 4 977 5 578 -3 916 206 -1 930
Comprehensive income 22 871 33 008 24 231 18 438 15 892
Statement of cash flow 2016 2017 2018 2019 2020
Operating activities
Net Income 17822 18232 28147 27430 17894
Adj to reconcile NI to NC prov. by OA:
Provision for credit losses 3597 3396 3282 3590 11320
Gains on sales of debt securities -490 -255 -154 -217 -411
Depreciation and amortization 1511 1482 2063 1729 1843
Net amortization of premium/discount on debt
securities 730 621 1824 2066 4101
Deferred income taxes 3134 2251 3041 2435 -1737
Stock-based compensation 5793 8175 1729 1974 2031
Impairment of equity method investment 1367 1649 0 2072 0
Loans held-for-sale:
Originations and purchases -33107 -43506 -28071 -28874 -19657
Proceeds from sales and paydowns of loans…. 31376 40059 28972 30191 19049
Net change in:
Trading and derivative assets/liabilities -866 -13939 -23673 7920 16942
Other assets -13802 -19859 11920 -11113 -12883
Accrued expenses and other liabilities -35 4673 13010 16363 -4385
Other operating activities, net 1331 7424 -2570 6211 3886
Net cash provided by operating activities 18361 10403 39520 61777 37993
Investing activities
Net change in:
Time deposits placed and other short-term
invetments -2117 -1292 3659 387 561
Federal funds sold and securities borrowed or
purchased under agreement to resell -5742 -14523 -48384 -13466 -29461
Debt securities carried at fair value: 71547 73353
Porceeds from sales 108592 93874 5117 52006 77524
- -
Proceeds from paydowns and maturities 189061 166975 78513 79114 91084
- -
Purchases -76640 152782 194877
Held-to-maturity debt securities:
Proceeds from paydowns and maturities 18677 16653 18789 34770 93835
-
Purchases -39899 -25088 -35980 -37115 257535
Loans and leases:
Proceeds from sales 18230 11761 21365 12201 13351
Purchases -12283 -6846 -4629 -5963 -5229
Other changes in loans and leases, net -31194 -41104 -31292 -46808 36571
Other investing activities,net 107 8180 -1986 -2974 -3489
-
Net cash used in investing activities -63143 -52007 -71468 -80630 177665
Financing activities
Net change in:
Deposits 63675 48611 71931 53327 360677
Federal funds purchased and securities loaned or
sold under agreements to repurchase -4000 7024 10070 -21879 5214
Short-term borrowings -4014 8538 -12478 4004 -4893
Long-term debt:
Proceeds from issuance 35537 53486 64278 52420 57013
Retirement of long term debt -51849 -49553 -53046 -50794 -47948
Preferred stock:
Proceeds from issuance 2947 0 4515 3643 2181
Redemption 0 0 -4512 -2568 -1072
Common stock repurchased -5112 -12814 -20094 -28144 -7025
Cash dividends paid -4194 -5700 -6895 -5934 -7727
Other financing activities,net -63 -397 -651 -698 -601
Net cash provided by financing activities 32927 49195 53118 3377 355819
Effect of exchange rate changes on cash and cash
equiavalents 240 2105 -1200 -368 2756
Net increase(decrease) in cash and cash equivalents -11615 9696 19970 -15844 218903
Cash and cash equivalents at January 1 159353 147738 157434 177404 161560
Cash and cash equivalents at December 31 147738 157434 177404 161560 380463
Supplemental cash flow disclosures
Interest paid 10510 12852 19087 22196 8662
Income taxes paid, net 1043 3235 2470 4359 2894