Bank Of America Corporation · NYSE:BAC
Bank Of America — Q2 2023 Earnings Presentation
37 slides from Bank Of America's earnings presentation, Jul 18, 2023
Slide 1: Bank of America 2Q23 Financial Results
Bank of America 2Q23 Financial Results July 18, 2023
Slide 2: 2Q23 Results Highlights
2Q23 Results Highlights EPS $0.88 Return on +21% YoY common equity Strong 11.2% Net income $7.4B balance sheet +19% YoY CET1 11.6%2 Return on tangible common equity4 Organic growth Robust 15.5% in all businesses liquidity GLS $867B3 Return on Operating leverage1 average assets 8th consecutive quarte
Slide 3: Continued Organic Growth in 2Q23
Continued Organic Growth in 2Q23 Consumer Banking Global Wealth & Investment Management Added ~157,000 net new checking accounts; Added over 12,000 net new relationships across Merrill 18th consecutive quarter of growth and Private Bank Added 1.2 million credit card accounts1 $83 billion total net c
Slide 4: Consumer Digital Update
Consumer1 Digital Update Digital Adoption Client Engagement Digital Users2 and Households3 Digital Channel Usage4,5 Digital Sales6 60 57 100% 3,500 1,500 2,000 100% 55 3,148 1,770 52 53 1,640 90% 3,000 2,845 1,250 50 46 1,500 1,368 75% 2,567 43 80% 2,500 2,346 1,000 1,089 39 41 40 1,000 50% 70% 2,00
Slide 5: Global Wealth & Investment Management Digital Update
Global Wealth & Investment Management Digital Update Digital Adoption1,2 Client Engagement Digital Households / Relationships Digital Channel Adoption1,3 eDelivery4 750 100% 100% 100% 718 690 76% 75% 76% 76% 75% 78% 700 681 73% 90% 75% 75% 66% 643 56% 59% 650 53% 49% 80% 50% 50% 82% 83% 600 80% 77%
Slide 6: Global Banking Digital Update
Global Banking Digital Update Digital Adoption1 Client Engagement Client Digital Adoption % CashPro® App Sign-ins (K) CashPro® App Payments 80% 900 250 5.0 76% 803 75% 75% $201 200 4.0 $167 70% 600 508 150 3.5 3.0 377 2.8 100 $84 2.0 60% 300 247 $48 1.6 50 1.0 0.9 50% 0 0 0.0 2Q21 2Q22 2Q23 2Q20 2Q2
Slide 7: Extended Quarterly Operating Leverage Streak
Extended Quarterly Operating Leverage1 Streak 29% 3Q19-2Q21 Break in operating 22% leverage streak 21% 12% 8% 8% 8% 7% 7% 7% 6% 6% 6% 6% 5% 5% 4% 4% 4% 4% 4% 3% 3% 2% 3% 2% 1Q- 2Q- 3Q- 4Q- 1Q- 2Q- 3Q- 4Q- 1Q- 2Q- 3Q- 4Q- 1Q- 2Q- 3Q- 4Q- 1Q- 2Q- 3Q- 4Q- 1Q- 2Q- 3Q- 4Q- 1Q- 2Q- 15 15 15 15 16 16 16 16
Slide 8: 2Q23 Highlights
2Q23 Highlights (Comparisons to 2Q22, unless otherwise noted) • Net income of $7.4B; diluted earnings per share of $0.88; ROE1 11.2%, ROTCE1,2 15.5% • Revenue, net of interest expense, of $25.2B increased $2.5B, or 11% – Net interest income (NII) of $14.2B ($14.3B FTE2) increased $1.7B, or 14%, driv
Slide 9: 2Q23 Financial Results
2Q23 Financial Results Summary Income Statement 2Q23 1Q23 Inc / (Dec) 2Q22 Inc / (Dec) ($B, except per share data) Total Revenue, net of interest expense $25.2 $26.3 ($1.1) (4) % $22.7 $2.5 11 % Provision for credit losses 1.1 0.9 0.2 21 0.5 0.6 115 Net charge-offs 0.9 0.8 0.1 8 0.6 0.3 52 Reserve b
Slide 10: Balance Sheet, Liquidity, and Capital
Balance Sheet, Liquidity, and Capital (EOP1 basis unless noted) Balance Sheet Metrics 2Q23 1Q23 2Q22 Basel 3 Capital ($B)4 2Q23 1Q23 2Q22 Assets ($B) Common equity tier 1 capital $190 $184 $172 Total assets $3,123 $3,195 $3,112 Standardized approach Total loans and leases 1,051 1,046 1,031 Risk-weig
Slide 11: Average Loan and Lease Trends
Average Loan and Lease Trends Total Loans and Leases ($B) Total Loans and Leases in All Other ($B) $1,250 $20 YoY $1,015 $1,034 $1,039 $1,041 $1,047 +3% $1,000 $14 $15 3 $11 $10 YoY $750 $10 $10 (32%) $10 3 2 2 2 $500 $5 12 $250 8 8 8 8 $0 $0 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 Residen
Slide 12: Weekly Ending Deposit Trends
Weekly Ending Deposit Trends Total Corporation ($B) Consumer Banking ($B) Total $1,877 $1,045 $1,004 $1,910 $1,500 $600 $547 $519 $1,275 $1,289 $400 $371 $400 $1,000 $200 $115 $636 $588 $97 $500 $0 03/31/23 06/30/23 03/31/23 06/30/23 Interest-bearing Noninterest-bearing Consumer investments & CDs Ot
Slide 13: Average Deposit Trends
Average Deposit Trends Bank of America Ranked #1 in U.S. Retail Deposit Market Share1 Total Corporation ($B) Consumer Banking ($B) $2,500 $1,250 $1,078 $1,069 $1,047 QoQ vs. 4Q19 $2,012 $1,963 $1,926 QoQ vs. 4Q19 $1,026 $1,006 (2%) +40% $2,000 $1,894 $1,875 (1%) +33% $1,000 $1,410 790 738 681 630 59
Slide 14: Managing Excess Deposits
Managing Excess Deposits Deposits in Excess of Loans (EOP, $B) Cash and Securities Portfolios ($B)1 $990 $954 $1,200 $826 $720 $1,131 $1,130 289 142 275 $761 260 198 374 $1,984 203 $1,909 $1,877 $1,719 289 $999 $919 $1,031 $1,051 651 658 614 269 2Q20 2Q21 2Q22 2Q23 2Q20 2Q21 2Q22 2Q23 HTM securities
Slide 15: Net Interest Income Increased $1.7B, or 14%, YoY
Net Interest Income Increased $1.7B, or 14%, YoY Net Interest Income (FTE, $B)1 • Net interest income of $14.2B ($14.3B FTE1) $14.8 $14.6 $14.3 $15.0 $13.9 – Increased $1.7B YoY, driven by benefits from $12.5 higher interest rates, including lower premium amortization expense, and loan growth, parti
Slide 16: Expense and Efficiency
Expense and Efficiency Total Noninterest Expense ($B) $20.0 $15.3 $15.3 $15.5 $16.2 $16.0 6.4 6.4 6.4 6.3 6.6 $10.0 8.9 8.9 9.2 9.9 9.4 $0.0 2Q22 3Q22 4Q22 1Q23 2Q23 Compensation and benefits Other Efficiency Ratio 70% 67% 63% 64% 62% 62% 60% 50% 2Q22 3Q22 4Q22 1Q23 2Q23 • Noninterest expense of $16
Slide 17: Asset Quality
Asset Quality Net Charge-offs ($MM)1 • Total net charge-offs of $869MM1 increased $62MM from 1Q23 $1,000 0.50% $869 – Consumer net charge-offs of $720MM $807 increased $67MM, driven primarily by higher $800 0.40% $689 credit card losses $600 $571 0.30% ◦ Credit card loss rate of 2.60% in 2Q23 vs. $5
Slide 18: Asset Quality – Consumer and Commercial Portfolios
Asset Quality – Consumer and Commercial Portfolios Consumer Net Charge-offs ($MM) Consumer Metrics ($MM) 2Q23 1Q23 2Q22 Provision $1,100 $945 $410 $800 1.00% $720 Nonperforming loans and leases 2,729 2,714 2,866 $653 $600 0.75% % of loans and leases1 0.60 % 0.60 % 0.64 % $525 $531 $459 Consumer 30+
Slide 19: Consumer Banking
Consumer Banking Inc / (Dec) • Net income of $2.9B decreased 1% from 2Q22, as strong Summary Income Statement ($MM) 2Q23 1Q23 2Q22 revenue growth was offset by increased provision and $10,524 noninterest expense Total revenue, net of interest expense ($182) $1,388 Provision (benefit) for credit loss
Slide 20: Global Wealth & Investment Management
Global Wealth & Investment Management Inc / (Dec) • Net income of $1.0B decreased 15% from 2Q22 Summary Income Statement ($MM) 2Q23 1Q23 2Q22 – Pretax margin of 25% Total revenue, net of interest expense $5,242 ($73) ($191) – Strong organic client activity Provision (benefit) for credit losses 13 (1
Slide 21: Global Banking
Global Banking Inc / (Dec) • Net income of $2.7B increased 76% from 2Q22 Summary Income Statement ($MM) 2Q23 1Q23 2Q22 – Pretax, pre-provision income2 of $3.6B increased Total revenue, net of interest expense1 $6,462 $259 $1,456 65% from 2Q22 Provision (benefit) for credit losses 9 246 (148) • Reven
Slide 22: Global Markets
Global Markets1 Inc / (Dec) • Net income of $1.1B increased 9% from 2Q22 Summary Income Statement ($MM) 2Q23 1Q23 2Q22 – Excluding net DVA, net income of $1.2B Total revenue, net of interest expense2 $4,871 ($755) $369 increased 32%3 Net DVA (102) (116) (260) • Revenue of $4.9B increased 8% from 2Q2
Slide 23: All Other
All Other1 Inc/(Dec) • Net loss of $182MM included a $197MM pretax loss Summary Income Statement ($MM) 2Q23 1Q23 2Q22 on sales of AFS debt securities Total revenue, net of interest expense ($1,767) ($309) ($481) • Total corporate effective tax rate (ETR) for the Provision (benefit) for credit losses
Slide 24: Supplemental Business Segment Trends
Supplemental Business Segment Trends
Slide 25: Consumer Banking Trends
Consumer Banking Trends Business Leadership1 Total Revenue ($B) Total Expense ($B) and Efficiency (A) • No. 1 in estimated U.S. Retail Deposits $12.0 $6.0 70% • No. 1 Online Banking and Mobile Banking $10.8 $10.7 $10.5 $5.5 $5.5 Functionality(B) $9.9 $5.0 $5.1 $5.1 $9.1 2.3 2.1 2.1 • No. 1 Small Bus
Slide 26: Consumer Credit Update
Consumer Credit Update Consumer Credit Card1 Consumer Vehicle Lending3 New Accounts (K) New Originations ($B) 1,500 1,255 $10.0 1,187 1,137 1,068 1,096 $7.1 $6.8 $7.0 $6.8 $7.5 $5.9 1,000 $5.0 500 $2.5 0 $0.0 2Q22 3Q22 4Q22 1Q23 2Q23 2Q22 3Q22 4Q22 1Q23 2Q23 Key Stats 2Q22 1Q23 2Q23 Key Stats 2Q22 1
Slide 27: Global Wealth & Investment Management Trends
Global Wealth & Investment Management Trends Business Leadership1 Average Deposits ($B) Average Loans and Leases ($B) • No. 1 on Forbes’ Best-in-State Wealth Advisors (2023), Top Women Wealth Advisors (2023), Top Women Wealth $400 $250 Advisors Best-in State (2023), Best-in-State Teams $364 $219 $22
Slide 28: Global Banking Trends
Global Banking Trends Business Leadership1 Average Deposits ($B) Average Loans and Leases ($B) • World’s Most Innovative Bank – 2023, Most Innovative Bank in North America(N) $600 $400 $377 $384 $380 $381 $383 $509 13 13 13 13 13 • World’s Best Digital Bank, World’s Best Bank for $495 $503 $493 $498
Slide 29: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix Business Leadership1 2023 YTD Global Markets Revenue Mix 2023 YTD Total FICC S&T3 Revenue Mix • World's Best Bank for Markets(M) (excl. net DVA)2 (excl. net DVA)2 • North America's Best Bank for Sustainable Finance(M) • Americas Derivatives House of the Year and
Slide 30: Additional Presentation Information
Additional Presentation Information
Slide 31: 2023 YTD Consumer Payment Spend of $2.1T is up 5% YoY
2023 YTD Consumer Payment Spend of $2.1T is up 5% YoY Payment Spend1 ($ Volume) and YoY % Growth Payment Spend1 ($ and Transaction Volume) Quarterly YoY % Growth $2.1T $ Volume Transaction # $2.0T 50% $1.8T $1.4T 25% 25% 13% 4% 0% 2% 5% (3%) (25)% 2020 YTD 2021 YTD 2022 YTD 2023 YTD 2Q 3Q 4Q 1Q 2Q 3
Slide 32: Commercial Real Estate Loans
Commercial Real Estate Loans Commercial Real Estate as a Percent of: Geographic Distribution ($B) $2.4 $2.0 3% $6.2 3% 21.2% $2.8 8% $16.6 4% 22% Northeast California Southeast 12.5% $7.0 Southwest 9% ~$74B Midwest 6.9% 7.1% Midsouth $14.2 Northwest $9.5 19% Other 13% Non-US $13.8 Total Commercial l
Slide 33: Notes
Notes A Global Liquidity Sources (GLS) include cash and high-quality, liquid, unencumbered securities, inclusive of 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 other investment-grade securities, and
Slide 34: Business Leadership Sources
Business Leadership Sources (A) Estimated U.S. retail deposits based on June 30, 2022 FDIC deposit data. (B) Javelin 2023 Online and Mobile Banking Scorecards. (C) FDIC, 1Q23. (D) Global Finance, March 2023. (E) Global Finance, August 2022. (F) Global Finance, December 2022. (G) J.D. Power 2023 Fina
Slide 35: Forward-Looking Statements
Forward-Looking Statements Bank of America Corporation (the Corporation) 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 do
Slide 36: Important Presentation Information
Important Presentation Information • The information contained herein is preliminary and based on Corporation 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 obligati
Slide 37: Bank of America
BANK OF AMERICA