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) — Q2 2019 Earnings Presentation

29 slides from Bank Of America's earnings presentation, Jul 17, 2019

  1. Slide 1: Bank of America 2Q19 Financial Results

    Bank of America 2Q19 Financial Results July 17, 2019

  2. Slide 2: 2Q19 Financial Results Summary

    2Q19 Financial Results Summary Income Statement 2Q19 2Q18 % Inc / (Dec) ($B, except per share data) Total revenue, net of interest expense $23.1 $22.5 2 % Noninterest expense 13.3 13.2 0 Provision for credit losses 0.9 0.8 4 Pretax income 9.0 8.5 5 Income tax expense 1.6 1.7 (6) Net income $7.3 $6.8

  3. Slide 3: 2Q19 Highlights

    2Q19 Highlights (Comparisons are to 2Q18) Earnings Returns and Efficiency • Diluted earnings per share of $0.74, up 17% • Return on average assets of 1.23% improved 6 bps • Record net income of $7.3B, up 8% • Return on average common shareholders’ equity of 11.62% increased 87 bps • Operating levera

  4. Slide 4: Record First Half Net Income

    Record First Half Net Income Diluted Earnings per Share Net Income ($B) $1.6 +22% $1.45 $18 +17% CAGR $14.7 $1.25 CAGR $13.7 $1.2 $12 $0.89 $10.4 $8.5 $0.8 $0.66 $0.71 $7.9 +16% +7% $6 $0.4 $0.0 $0 1H15 1H16 1H17 1H18 1H19 1H15 1H16 1H17 1H18 1H19 Average Diluted Shares Outstanding (B) Operating Lev

  5. Slide 5: Delivered Positive Operating Leverage for Consecutive Quarters

    Delivered Positive Operating Leverage for 18 Consecutive Quarters Operating Leverage Trend 1 +22% +21% +29% +3% +8% +3% +5% +6% +8% +6% +4% +8% 2 +5% +4% +7% +7% 2 +4% +2% 7% 7% 7% 6% 4% 4% 3% 2% 2% 1% 1% 1% 1% 0% (1%) (0%) (2%) (1%) (1%) (1%) (1%) (1%) (2%) (2%) (2%) (3%) (3%) (4%) (5%) (5%) (4%) (

  6. Slide 6: 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 7.6MM Erica users 8.0MM users $800 $738 $786 +7% $678 37.3 +4% $637 75 69.0 $50 40 34.0 35.7 32.2 $600 354 +1% 351 $40 30 344 27.8 +10% 338 50 25.3 22.9 $400 $30

  7. Slide 7: Global Banking Digital Update

    Global Banking Digital Update CashPro® Digital Banking Platform Leveraging same underlying technology as the retail bank to enable Anywhere, Anytime Execution CashPro® Online Users CashPro® Mobile CashPro® Mobile CashPro® Assistant across commercial, corporate app logins Payment Approvals and busine

  8. Slide 8: Balance Sheet, Liquidity and Capital

    Balance Sheet, Liquidity and Capital (EOP basis unless noted) 4 Balance Sheet ($B) 2Q19 1Q19 2Q18 Basel 3 Capital ($B) 2Q19 1Q19 2Q18 Total assets $2,395.9 $2,377.2 $2,291.7 Common equity tier 1 capital (CET1) $171.5 $169.2 $164.9 Total loans and leases 963.8 945.6 935.8 Standardized approach Total

  9. Slide 9: Average Deposits

    Average Deposits Bank of America Ranked #1 in U.S. Deposit Market Share 1 Total Corporation ($B) Consumer Banking ($B) YoY YoY $1,500 $1,375 $1,257 $1,301 +6% $800 $707 +3% $1,213 $653 $688 $596 399 (7%) $600 203 437 428 178 192 $1,000 432 163 +6% $400 162 174 133 150 $500 976 +12% 781 820 873 $200

  10. Slide 10: Average Loans and Leases

    Average Loans and Leases Total Loans and Leases ($B) Total Loans and Leases in All Other ($B) YoY $951 +2% $1,000 $900 $915 $935 $150 $112 $750 $100 10 $88 20 7 $63 $500 16 $45 $50 12 82 7 $250 65 51 38 $0 $0 2Q16 2Q17 2Q18 2Q19 2Q16 2Q17 2Q18 2Q19 Residential mortgage Home equity Other Loans and Le

  11. Slide 11: Net Interest Income

    Net Interest Income 1 Net Interest Income (FTE, $B) • Net interest income of $12.2B ($12.3B FTE 1) $15 – Increased $0.4B from 2Q18, or 3%, reflecting the benefits $12.7 $12.5 $12.3 $12.0 $12.2 from higher short-term interest rates, as well as loan and deposit growth $10 – Decreased $0.2B from 1Q19 $

  12. Slide 12: Expense and Efficiency

    Expense and Efficiency Total Noninterest Expense ($B) • Noninterest expense of $13.3B increased modestly vs. 2Q18 $15 $13.2 $13.0 $13.1 $13.2 $13.3 – Reflects investments across the franchise, including higher marketing expense $10 5.3 5.3 5.3 5.0 5.3 – Partially offset by efficiency savings through

  13. Slide 13: Asset Quality

    Asset Quality 2Q19 included $118MM of recoveries from sales of 1 previously charged-off Net Charge-offs ($MM) non-core home equity loans • Total net charge-offs of $0.9B decreased $104MM from 1Q19 $1,200 1.0% $996 $991 – Consumer net charge-offs of $0.7B decreased $0.1B from $932 $924 $887 1Q19, dri

  14. Slide 14: Asset Quality – Consumer and Commercial Portfolios

    Asset Quality – Consumer and Commercial Portfolios Consumer Net Charge-offs ($MM) Consumer Metrics ($MM) 2Q19 1Q19 2Q18 2.0% Provision $640 $830 $757 $900 $830 $804 $835 $776 $691 Nonperforming loans and leases 3,027 3,578 4,639 1.5% $700 % of loans and leases 1 0.67 % 0.81 % 1.03 % $500 Consumer 30

  15. Slide 15: Consumer Banking

    Consumer Banking Inc / (Dec) Net income of $3.3B increased 13% from 2Q18; ROAAC of 36% Summary Income Statement ($MM) 2Q19 1Q19 2Q18 • Total revenue, net of interest expense $9,717 $85 $484 – 4% operating leverage and steady credit costs drove results Provision for credit losses 947 (27) 3 • Revenue

  16. Slide 16: 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 $4.3 $4.4 $4.4 $4.4 50% $10.0 $9.7 C $9.2 $9.4 $9.6 • Named North America's Best Digital Bank $4 $9 • 2019 J.D. Power Certi

  17. Slide 17: Global Wealth & Investment Management

    Global Wealth & Investment Management Inc / (Dec) Net income of $1.1B increased 11% from 2Q18; ROAAC of 30% Summary Income Statement ($MM) 2Q19 1Q19 2Q18 • Total revenue, net of interest expense $4,900 $80 $158 – Record pretax margin of 29% Provision for credit losses 21 16 9 • Revenue of $4.9B incr

  18. Slide 18: 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 across client assets, deposits and loans I $247 $262 $254 $200 $236 $238 $162 $164 $164 $166 • #1 in personal trust assets under man

  19. Slide 19: Global Banking

    Global Banking Inc/(Dec) Summary Income Statement ($MM) 2Q19 1Q19 2Q18 • Net income of $1.9B decreased 9% from 2Q18, largely due to the absence of prior year’s energy reserve releases; ROAAC of 19% Total revenue, net of interest expense 1 $4,975 ($180) ($39) Provision (benefit) for credit losses 125

  20. Slide 20: 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 C $373 Medium-sized Enterprises $400 $360 $349 $363 $400 $355 $353 $357 $370 $323 $338 15 • Most Innovative Investment Bank of the Year 17 16 16 15 from North Amer

  21. Slide 21: Global Markets

    Global Markets Inc/(Dec) Net income of $1.0B decreased 7% from 2Q18; ROAAC of 12% Summary Income Statement ($MM) 2Q19 1Q19 2Q18 • • [ Bullets to come ] 2 Total revenue, net of interest expense 1 $4,145 ($36) ($106) – Excluding net DVA, net income of $1.1B decreased 15% Net DVA (31) 59 148 • Revenue

  22. Slide 22: Global Markets Trends and Revenue Mix

    Global Markets Trends and Revenue Mix Business Leadership 1 2019 YTD Global Markets Revenue Mix 2019 YTD Total FICC S&T Revenue Mix • #1 Equity Portfolio Trading Share – North (excl. net DVA) 2 (excl. net DVA) 2 American Institutions L • #1 for U.S. FICC Overall Trading Quality and #1 for U.S. FICC

  23. Slide 23: All Other

    All Other 1 Inc/(Dec) Summary Income Statement ($MM) 2Q19 1Q19 2Q18 • Net income of $9MM compared to net loss of $349MM in 2Q18 Total revenue, net of interest expense ($504) $127 $33 – Provision benefit increased $136MM from 2Q18, driven by Provision (benefit) for credit losses (241) (187) (136) rec

  24. Slide 24: Appendix

    Appendix

  25. Slide 25: Notes

    Notes 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 req

  26. Slide 26: Sources

    Sources A Estimated retail consumer deposits based on June 30, 2018 FDIC deposit data. B FDIC, 1Q19. C Euromoney, July 2019. D Dynatrace 2Q19 Online Banker Scorecard and 1Q19 Mobile Banker Scorecard; Javelin 2019 Online and Mobile Banking Scorecards. E Forrester 2018 Banking Sales Wave: U.S. Mobile

  27. Slide 27: 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

  28. Slide 28: 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

  29. Slide 29: Bank of America

    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) — Q2 2019 Earnings Presentation on 6ix