Bank Of America Corporation · NYSE:BAC
Bank Of America — Bank of America Corp /De/ (Bac, Bac-Pb, Bac-Pe, Bac-Pk, Bac-Pl, Bac-Pm, Bac-Pn, Bac-Po, Bac-Pp, Bml-Pg, Bml-Ph, Bml-Pj, Bml-Pl) — Q1 2018 Earnings Presentation
26 slides from Bank Of America's earnings presentation, Apr 16, 2018
Slide 1: Bank of America 1Q18 Financial Results
Bank of America 1Q18 Financial Results April 16, 2018
Slide 2: First Quarter 2018 Highlights
(Comparisons to 1Q17) • Earnings – Record net income of $6.9B and diluted earnings per share of $0.62, up 30% and 38%, respectively Effective tax rate benefited by 9 percentage points due to the Tax Act 1 – Pretax income of $8.4B, up 15% – Total revenue of $23.1B grew 4% (net interest income +5% a
Slide 3: Operating Leverage Trend
(7%) (5%) (2%) 1% (3%) 1% 3% 2% 7% 7% 1% 7% 4% (29%) (25%) (31%) (2%) (10%) (2%) (1%) (4%) (1%) 2% (2%) (1%) (1%) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 YoY revenue growth (decline) YoY expense growth (decline) Operating leverage Operating Leverage Trend 3 _________________
Slide 4: Financial Results
Financial Results 4 ____________________ Note: Amounts may not total due to rounding. 1 Represents a non-GAAP financial measure. For important presentation information, see slide 25. Total revenue, net of interest expense $23.1 $22.2 4 % Noninterest expense 13.9 14.1 (1) Provision for credit losses
Slide 5: Balance Sheet, Liquidity and Capital
Balance Sheet, Liquidity and Capital 5 $ in billions, except per share data Balance Sheet (end of period balances) Total assets $2,328.5 $2,281.2 $2,247.8 Total loans and leases 934.1 936.7 906.2 Total loans and leases in business segments 1 869.5 867.3 823.0 Total deposits 1,328.7 1,309.5 1,272.1 F
Slide 6: Average Loans and Deposits
Average Loans and Deposits ____________________ Notes: Amounts may not total due to rounding. GWIM defined as Global Wealth & Investment Management and GM defined as Global Markets. 1 Includes $6B and $9B of average non-U.S. consumer credit card loans in 2Q17 and 1Q17, respectively. During 2Q17, the
Slide 7: Asset Quality
$934 $908 $900 $1,237 $911 0.42% 0.40% 0.39% 0.53% 0.40% 0.0% 0.5% 1.0% $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 1Q17 2Q17 3Q17 4Q17 1Q18 Net charge-offs Net charge-off ratio ____________________ 1 Excludes loans measured at fair value. Asset Quality 7 Net Charge-offs ($MM) Provision for Credit L
Slide 8: Asset Quality – Consumer and Commercial Portfolios
$107 $157 $169 $468 $81 0.10% 0.14% 0.14% 0.39% 0.07% 0.0% 0.5% 1.0% 1.5% 2.0% $0 $250 $500 $750 $1,000 1Q17 2Q17 3Q17 4Q17 1Q18 C&I Small business and other Commercial NCO ratio Asset Quality – Consumer and Commercial Portfolios 8 Consumer Net Charge-offs ($MM) $827 $751 $731 $769 $830 0.74% 0.67%
Slide 9: Net Interest Income
Net Interest Income 9 • Net interest income of $11.6B ($11.8B FTE 1) – Increased $0.6B from 1Q17, reflecting the benefits from higher interest rates and loan and deposit growth, partially offset by a decline resulting from the sale of the non-U.S. consumer credit card business in 2Q17 and higher fun
Slide 10: Expense and Efficiency
63% 61% 61% 65% 60% 30% 40% 50% 60% 70% 1Q17 2Q17 3Q17 4Q17 1Q18 Expense and Efficiency ____________________ Note: Amounts may not total due to rounding. Certain amounts have been reclassified to reflect new accounting pronouncements. See slide 25 for important presentation information. • Total noni
Slide 11: Consumer Banking
Consumer Banking 11 ____________________ Note: ROAAC defined as return on average allocated capital 1 FTE basis. 2 Cost of deposits calculated as annualized noninterest expense as a percentage of total average deposits within the Deposits subsegment. 3 Includes portfolios in Consumer Banking and GWI
Slide 12: Consumer Banking Trends
Consumer Banking Trends 12 • #1 Consumer Deposit Market Share 1 • 2018 JD Power Certified Mobile App • #1 Online Banking and Mobile Banking Functionality 2 • #1 Digital U.S. Credit Card Sales Functionality 3 • #1 Online Broker 4 • #1 Home Equity Lender and #2 bank for Retail Mortgage Originations 5
Slide 13: Consumer Banking Digital Trends
4.9 7.6 12.4 28.6 $1 $2 $4 $9 $0 $2 $4 $6 $8 $10 0 5 10 15 20 25 30 1Q15 1Q16 1Q17 1Q18 Transactions (MM) Volume ($B) Zelle integrated into BAC mobile app in 2017 267 286 314 365 305 307 308 316 $572 $592 $622 $682 $0 $200 $400 $600 $800 1Q15 1Q16 1Q17 1Q18 Digital Non-Digital Consumer Banking Digit
Slide 14: Global Wealth & Investment Management
Global Wealth & Investment Management 14 ____________________ 1 FTE basis. 2 Includes financial advisors in Consumer Banking of 2,538 and 2,121 in 1Q18 and 1Q17. • Net income of $1.0B and ROAAC of 29% – Record pretax income of $1.4B, up 12% from 1Q17, and pretax margin of 29% • Revenue increased to
Slide 15: Global Wealth & Investment Management Trends
Global Wealth & Investment Management Trends 15 Business Leadership Average Loans and Leases ($B) Average Deposits ($B) • #1 U.S. wealth management market position across client assets, deposits and loans 1 • #1 in personal trust assets under management 2 • #1 in Barron’s U.S. high net worth client
Slide 16: Global Banking
Global Banking 16 ____________________ 1 FTE basis. 2 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities and sales and trading activities. • [ Bullets to come ] • Net income of $2.0B and ROAAC of 20% – Pretax income of $2.7B, down 2
Slide 17: Global Banking Trends
Global Banking Trends 17 ____________________ Note: Amounts may not total due to rounding. 1 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities and sales and trading activities. 2 FTE basis. 3 Advisory includes fees on debt and equi
Slide 18: Global Markets
Global Markets 18 • [ Bullets to come ] ____________________ 1 FTE basis. 2 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities and sales and trading activities. 3 Represents a non-GAAP financial measure; see note E on slide 23. 4 Se
Slide 19: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix 19 2.3 2.9 2.5 1.0 1.1 1.5 $3.3 $4.0 $4.1 $0 $1 $2 $3 $4 $5 1Q16 1Q17 1Q18 FICC Equities $408 $422 $463 $42 $38 $40 $0 $25 $50 $75 $100 $0 $100 $200 $300 $400 $500 1Q16 1Q17 1Q18 Avg. trading-related assets Avg. VaR • Best Bank for Markets in Asia (Euromoney, 20
Slide 20: All Other
• Net loss of $0.3B in 1Q18 • Revenue declined $0.2B from 1Q17, primarily due to the absence of the non-U.S. consumer credit card business sold in 2Q17 – Improvement from 4Q17, driven largely by the absence of a $0.9B charge related to the Tax Act • Provision improved from 1Q17, primarily driven by
Slide 21: First Quarter 2018 Key Takeaways
First Quarter 2018 Key Takeaways 21 • Produced solid returns • Delivered responsible growth • Solid client activity with good deposit, loan and AUM growth • Maintained positive operating leverage • Asset quality remained strong • Increased capital returned to shareholders; repurchased $4.9B of commo
Slide 22: Appendix
Appendix
Slide 23: Notes
Notes 23 A Global Liquidity Sources (GLS) include cash and high-quality, liquid, unencumbered securities, limited to U.S. government securities, U.S. agency securities, U.S. agency MBS, and a select group of non-U.S. government and supranational securities, and are readily available to meet funding
Slide 24: Forward-Looking Statements
Forward-Looking Statements 24 Bank of America Corporation (the “Company”) and its management may make certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they d
Slide 25: Important Presentation Information
• The information contained herein is preliminary and based on Company data available at the time of the earnings presentation. It speaks only as of the particular date or dates included in the accompanying slides. Bank of America does not undertake an obligation to, and disclaims any duty to, updat
Slide 26: Bank of America
Bank of America