Bank Of America Corporation · NYSE:BAC
Bank Of America — Q1 2020 Earnings Presentation
33 slides from Bank Of America's earnings presentation, Apr 15, 2020
Slide 1: Bank of America 1Q20 Financial Results
Bank of America 1Q20 Financial Results April 15, 2020
Slide 2: 1Q20 Summary Income Statement
1Q20 Financial Results 1 $ Inc / Summary Income Statement 1Q20 1Q19 (Dec) % Inc / (Dec) ($B, except per share data) Total revenue, net of interest expense $22.8 $23.0 ($0.2) (1) % Provision for credit losses 4.8 1.0 3.7 N/M Net charge-offs 1.1 1.0 0.1 13 2 Reserve build 3.6 0.0 3.6 N/M Noninterest e
Slide 3: 1Q20 Highlights
1Q20 Highlights (Comparisons are to 1Q19 unless otherwise noted) • Diluted earnings per share of $0.40, down 43% • Net income of $4.0B declined $3.3B – Provision increased $3.7B to $4.8B and included $3.6B reserve build 1 – Pretax income declined $4.2B – Pretax, pre-provision income declined $0.5B,
Slide 4: Supporting Employees, Clients and Communities through COVID-19
Supporting Employees, Clients and Communities through COVID-19 Employees Individual and Family Clients • Committed to no COVID-19 related layoffs in 2020 • Clients can request refunds including overdraft fees, non-sufficient funds fees and monthly maintenance fees • Hired 2,000 new employees in Marc
Slide 5: Supporting Consumer Clients Through Payment Deferrals
Supporting Consumer Clients Through Payment Deferrals • Starting March 16th, enacted Client Assistance Program – offering assistance to 66MM Consumer and Small Business clients in response to the unprecedented challenges of COVID-19; allowing clients to defer payments • No negative credit bureau rep
Slide 6: Consumer Payments and Spending Trend
Consumer Payments and Spending Trend Year-over-Year - - % Cumulative Growth – 7 Day Moving Average Total Payments 1 12% Credit/Debit End of 1Q20 10% 8% 6% 4% 2% 0% 1/6/2020 1/13/2020 1/20/2020 1/27/2020 2/3/2020 2/10/2020 2/17/2020 2/24/2020 3/2/2020 3/9/2020 3/16/2020 3/23/2020 3/30/2020 4/6/2020 •
Slide 7: Record Breaking Customer Loan and Deposit Activity
Record Breaking Customer Loan and Deposit Activity Weekly Commercial Funding Activity Trend ($B) • Commercial loans increased $67B from 4Q19, driven primarily $34 by commitment funding activity • ~90% of commercial loan growth related to revolver draws on existing lines $21 ‒ ~90% of loan increase w
Slide 8: Balance Sheet, Liquidity and Capital
Balance Sheet, Liquidity and Capital (EOP basis unless noted) Balance Sheet ($B) 1Q20 4Q19 1Q19 Basel 3 Capital ($B) 4 1Q20 4Q19 1Q19 Total assets $2,620.0 $2,434.1 $2,377.2 Common equity tier 1 capital (CET1) $168.1 $166.8 $169.2 Total loans and leases 1,050.8 983.4 945.6 Standardized approach Tota
Slide 9: Average Deposits
Average Deposits Bank of America Ranked #1 in U.S. Deposit Market Share 1 Total Corporation ($B) Consumer Banking ($B) $1,439 YoY YoY $1,500 $1,297 $1,360 +6% $800 $737 +6% $1,198 $1,257 $674 $697 $636 419 +5% $578 401 $600 197 214 444 431 186 $1,000 429 172 +8% 157 $400 158 171 184 128 147 $500 959
Slide 10: Average Loans and Leases
Average Loans and Leases Total Loans and Leases ($B) Total Loans and Leases in All Other ($B) YoY $944 $990 +5% $1,000 $893 $914 $932 $150 $118 $750 10 $95 $100 21 9 $68 $500 17 13 $47 $50 $37 $250 87 8 69 5 55 39 32 $0 $0 1Q16 1Q17 1Q18 1Q19 1Q20 1Q16 1Q17 1Q18 1Q19 1Q20 Residential mortgage Home e
Slide 11: Net Interest Income
Net Interest Income Net Interest Income (FTE, $B) 1 • Net interest income of $12.1B ($12.3B FTE 1) $15 – Decreased $0.2B, or 2%, from 1Q19, driven primarily by $12.5 $12.3 $12.3 $12.3 $12.3 lower interest rates, partially offset by loan and deposit growth $10 – Stable from 4Q19, as lower asset yield
Slide 12: Expense and Efficiency
Expense and Efficiency Total Noninterest Expense ($B) $15.2 $15 $13.2 $13.8 $13.2 $13.0 $13.1 $13.2 $13.3 $13.2 $13.5 2.1 5.6 5.4 5.3 5.3 5.3 5.0 5.3 5.3 5.3 5.1 $10 $5 7.6 8.5 7.9 7.7 7.7 8.2 8.0 7.8 8.0 8.3 $0 1 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 Compensation and benefits Other JV i
Slide 13: Asset Quality
Asset Quality Net Charge-offs ($MM) 1 • Total net charge-offs of $1.1B increased $163MM from 4Q19, $1,200 $1,122 1.0% driven by an increase in commercial losses $991 $959 $887 • Net charge-off (NCO) ratio of 46 bps increased 7 bps from 4Q19 $811 $800 • Provision expense of $4.8B increased $3.8B from
Slide 14: Asset Quality – Consumer and Commercial Portfolios
Asset Quality – Consumer and Commercial Portfolios Consumer Net Charge-offs ($MM) Consumer Metrics ($MM) 1Q20 4Q19 1Q19 $1,000 $835 $838 $872 1.5% Provi s i on $2,093 $798 $830 $691 $622 1 2,204 2,053 3,578 $800 Nonperformi ng l oa ns a nd l ea s es 2 $600 1.0% % of l oa ns a nd l ea s es 0.47 % 0.4
Slide 15: Allocation of Allowance by Product Type
Allocation of Allowance by Product Type • Allowance for Credit Losses Increased $6.9B, or 67%, since 12/31/19, due to CECL implementation and reserve build driven by deteriorating economic outlook due to COVID-19 4Q19 Probable Incurred January 1, 2020 March 31, 2020 ($MM) Losses CECL Adoption CECL %
Slide 16: Consumer Banking
Consumer Banking Inc / (Dec) Summary Income Statement ($MM) 1Q20 4Q19 1Q19 • Net income of $1.8B decreased from 1Q19, as solid client activity Total revenue, net of interest expense $9,129 ($385) ($503) was partially offset by reserve build and the impact of lower Provision for credit losses 2,258 1
Slide 17: Consumer Banking Trends
Consumer Banking Trends Business Leadership 1 Total Revenue ($B) Total Expense ($B) and Efficiency • #1 Consumer Deposit Market Share A • #1 Small Business Lender B $12 $5 $4.4 $4.4 $4.4 $4.5 $4.5 55% • #1 Online Banking and Mobile Banking $9.6 $9.7 $9.7 $9.5 $9.1 $4 Functionality C $9 50% 2.5 2.6 2
Slide 18: Consumer Banking Digital Usage Trends
Consumer Banking Digital Usage Trends 1 Active Digital Banking Users (MM) Total Payments ($B) Person-to-Person Payments (Zelle) 4 YoY YoY 12.2MM Erica users +9% 10.4MM users $900 39.1 +6% $711 $775 102.3 40 35.5 37.0 $687 105 $60 33.7 $626 $600 312 +0% 30 29.8 +10% 318 311 24.8 27.1 70 58.2 $40 22.2
Slide 19: Global Wealth & Investment Management
Global Wealth & Investment Management Inc / (Dec) Summary Income Statement ($MM) 1Q20 4Q19 1Q19 • Net income of $0.9B decreased 17% from 1Q19; ROAAC of 23% Total revenue, net of interest expense $4,936 $23 $116 – Pretax margin of 23% Provision for credit losses 189 170 184 Net charge-offs 9 (8) (3)
Slide 20: Global Wealth & Investment Management Trends
Global Wealth & Investment Management Trends Business Leadership 1 Average Deposits ($B) Average Loans and Leases ($B) • #1 U.S. wealth management market position $300 $262 $254 $254 $256 $263 $200 $179 across client assets, deposits and loans I $166 $170 $174 $164 • #1 in personal trust assets unde
Slide 21: Global Banking
Global Banking Inc/(Dec) Summary Income Statement ($MM) 1Q20 4Q19 1Q19 • Net income of $0.1B decreased $1.9B from 1Q19; ROAAC of 1% Total revenue, net of interest expense 1 $4,600 ($541) ($555) • Revenue of $4.6B decreased 11% from 1Q19, as markdowns in Provision (benefit) for credit losses 2,093 2,
Slide 22: Global Banking Trends
Global Banking Trends Business Leadership 1 Average Deposits ($B) Average Loans and Leases ($B) • North America’s Best Bank for Small to $382 $386 $400 $363 $360 $379 $400 $370 $373 $377 $377 Medium-sized Enterprises G $349 15 15 15 15 15 • Best Overall Brand Middle Market Banking M • North America’
Slide 23: Global Banking Digital Update
Global Banking Digital Update 1 CashPro® Online Users CashPro® Mobile CashPro® Mobile across commercial, corporate and business App Logins Payment Approvals Value banking clients +107% $175B ~500K Rolling 12 mos. YoY up 67% Rolling 12 mos. YoY CashPro® Mobile Incoming receivables digitally matched w
Slide 24: Global Markets
Global Markets Inc/(Dec) Summary Income Statement ($MM) 1Q20 4Q19 1Q19 • Net income of $1.7B increased 65% from 1Q19; ROAAC of 19% Total revenue, net of interest expense 1 $5,225 $1,800 $1,044 • – [ Bullets to come ] Excluding net DVA, net income of $1.5B increased 34% 2 Net DVA 300 386 390 Total re
Slide 25: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix Business Leadership 1 1Q20 Global Markets Revenue Mix 1Q20 Total FICC S&T Revenue Mix • Derivatives House of the Year L, Q, R (excl. net DVA) 2 (excl. net DVA) 2 • Most Innovative Bank for Equity Derivatives K • #1 Global Research Firm P • #1 Global Fixed Income
Slide 26: All Other
All Other 1 Inc/(Dec) • Net loss of $492MM in 1Q20 compared to net loss of $36MM in Summary Income Statement ($MM) 1Q20 4Q19 1Q19 1Q19, driven by certain valuation adjustments and, to a lesser Total revenue, net of interest expense ($979) ($480) ($348) extent, increased provision expense related to
Slide 27: Appendix
Appendix
Slide 28: BAC's Transformation Over a Decade
BAC’s Transformation Over a Decade • Transformational changes allow us to be prepared to support our clients. Responsible growth has been embedded in how we run the company for years; we are focused on core, relationship customers and strong client selection • We have strengthened our capital level
Slide 29: Notes
Notes A Reserve Build (or Release) is a non-GAAP financial measure, calculated by subtracting net charge offs for the period from the provision for credit losses recognized in that period. For GAAP purposes, the period-end allowance, or reserve, for credit losses reflects the beginning of the period
Slide 30: Sources
Sources A Estimated retail consumer deposits based on June 30, 2019 FDIC deposit data. B FDIC, 4Q19. C Dynatrace 4Q19 Online Banker Scorecard and 1Q20 Mobile Banker Scorecard; Javelin 2019 Online and Mobile Banking Scorecards. D Inside Mortgage Finance, Home Equity new HELOC commitments, 4Q19. E Exp
Slide 31: Forward-Looking Statements
Forward-Looking Statements 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 do n
Slide 32: Important Presentation Information
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 t
Slide 33: Bank of America
BANK OF AMERICA