Bank Of America Corporation · NYSE:BAC
Bank Of America — Q4 2023 Earnings Presentation
41 slides from Bank Of America's earnings presentation, Jan 12, 2024
Slide 1: Bank of America 4Q23 Financial Results
Bank of America 4Q23 Financial Results January 12, 2024
Slide 2: 2023 Financial Results
2023 Financial Results 2023 Inc / (Dec) 2023 2022 Inc / (Dec) ($B, except per share data) Adjusted1 Adjusted1 Total Revenue, net of interest expense $98.6 $100.2 $95.0 $3.6 4 % $5.2 5 % Provision for credit losses 4.4 4.4 2.5 1.9 73 1.9 73 Net charge-offs 3.8 3.8 2.2 1.6 75 1.6 75 Reserve build2 0.6
Slide 3: Continued Organic Growth in 2023
Continued Organic Growth in 2023 Consumer Banking Global Wealth & Investment Management Added over 600,000 net new checking accounts; Added record of over 40,000 net new relationships 20 consecutive quarters of growth across Merrill and Private Bank, up 47% YoY Added 4.6MM credit card accounts1 Asse
Slide 4: 4Q23 Financial Results
4Q23 Financial Results 4Q23 Inc / (Dec) 4Q23 4Q22 Inc / (Dec) ($B, except per share data) Adjusted1 Adjusted1 Total Revenue, net of interest expense $22.0 $23.5 $24.5 ($2.6) (10) % ($1.0) (4) % Provision for credit losses 1.1 1.1 1.1 — 1 — 1 Net charge-offs 1.2 1.2 0.7 0.5 73 0.5 73 Reserve build (r
Slide 5: 4Q23 Highlights
4Q23 Highlights (Comparisons to 4Q22, unless otherwise noted) • Net income of $3.1B; diluted earnings per share (EPS) of $0.35; ROE1 4.3%, ROTCE1,2 5.9% – Excluding FDIC special assessment and BSBY cessation impact, adj. net income $5.9B, adj. diluted EPS $0.70, adj. ROE 8.6%, adj. ROTCE 11.7%3 • Re
Slide 6: Balance Sheet, Liquidity, and Capital
Balance Sheet, Liquidity, and Capital (EOP1 basis unless noted) Balance Sheet Metrics 4Q23 3Q23 4Q22 Basel 3 Capital ($B)4 4Q23 3Q23 4Q22 Assets ($B) Common equity tier 1 capital $195 $194 $180 Total assets $3,180 $3,153 $3,051 Standardized approach Total loans and leases 1,054 1,049 1,046 Risk-weig
Slide 7: Average Loan and Lease Trends
Average Loan and Lease Trends Total Loans and Leases ($B) Total Loans and Leases by Portfolio ($B) $1,100 $750 YoY $1,039 $1,041 $1,047 $1,046 $1,051 +1% $587 $588 $593 $589 $592 $1,000 $500 $453 $453 $454 $457 $459 $900 $250 $800 $0 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 Consumer Commerc
Slide 8: Average Deposit Trends
Average Deposit Trends Bank of America Ranked #1 in U.S. Retail Deposit Market Share1 Total Corporation ($B) Consumer Banking ($B) $2,250 $1,250 QoQ vs. 4Q19 $1,926 $1,894 $1,875 $1,876 $1,905 2% +35% $1,047 $1,026 $1,006 $980 QoQ vs. 4Q19 $959 $1,000 (2%) +33% $1,410 681 630 597 565 543 (4%) +33% $
Slide 9: Managing Excess Deposits
Managing Excess Deposits Deposits in Excess of Loans (EOP, $B) Cash and Securities Portfolios ($B)1 $2.5T $1,331 $1,205 $1,065 348 $1,093 333 230 380 308 $1,085B $634 230 277 $870B $451B 162 247 256 675 633 595 438 216 $0.5T 4Q19 4Q20 4Q21 4Q22 4Q23 4Q19 4Q20 4Q21 4Q22 4Q23 HTM Valuation2 $4B Deposi
Slide 10: Net Interest Income
Net Interest Income Net Interest Income (FTE, $B)1 • Net interest income of $13.9B ($14.1B FTE)1 decreased $0.7B YoY, as higher deposit costs and lower deposit balances more than $14.8 $14.6 $14.3 $14.5 offset higher asset yields and higher NII related to Global Markets $15.0 $14.1 (GM) activity – D
Slide 11: Expense and Efficiency
Expense and Efficiency Total Noninterest Expense ($B) $20.0 $17.7 $15.5 $16.2 $16.0 $15.8 2.1 6.4 6.3 6.6 6.3 6.1 $10.0 $15.6B1 9.2 9.9 9.4 9.6 9.5 $0.0 4Q22 1Q23 2Q23 3Q23 4Q23 Compensation and benefits Other FDIC special assessment Efficiency Ratio 70% 66% 65% 63% 64% 63% 62% 60% 55% 4Q22 1Q23 2Q2
Slide 12: Asset Quality
Asset Quality Net Charge-offs ($MM)1 • Total net charge-offs of $1.2B1 increased $261MM $1,192 from 3Q23 $1,250 0.60% – Consumer net charge-offs of $913MM $931 increased $109MM, driven primarily by higher $1,000 $869 0.50% credit card losses $807 $750 $689 0.45% 0.40% – Credit card loss rate of 3.07
Slide 13: Asset Quality – Consumer and Commercial Portfolios
Asset Quality – Consumer and Commercial Portfolios Consumer Net Charge-offs ($MM) Consumer Metrics ($MM) 4Q23 3Q23 4Q22 Provision $1,264 $1,218 $902 $1,000 $913 1.00% $804 Nonperforming loans and leases 2,712 2,792 2,754 $750 $720 0.75% % of loans and leases1 0.59 % 0.61 % 0.60 % $653 0.79% $531 0.7
Slide 14: Consumer Banking
Consumer Banking Inc / (Dec) • Net income of $2.8B Summary Income Statement ($MM) 4Q23 3Q23 4Q22 • Revenue of $10.3B decreased 4% from 4Q22, driven Total revenue, net of interest expense $10,329 ($143) ($453) primarily by the impact of lower deposit balances Provision for credit losses 1,405 8 461 •
Slide 15: Global Wealth & Investment Management
Global Wealth & Investment Management Inc / (Dec) • Net income of $1.0B Summary Income Statement ($MM) 4Q23 3Q23 4Q22 • Revenue of $5.2B decreased 3% compared to 4Q22, Total revenue, net of interest expense $5,227 ($94) ($183) driven by lower NII, partially offset by higher asset Provision (benefit)
Slide 16: Global Banking
Global Banking Inc / (Dec) • Net income of $2.5B Summary Income Statement ($MM) 4Q23 3Q23 4Q22 • Revenue of $5.9B decreased 8% vs. 4Q22, driven by Total revenue, net of interest expense1 $5,928 ($275) ($510) lower NII and leasing revenue Provision (benefit) for credit losses (239) (120) (388) – Tota
Slide 17: Global Markets
Global Markets1 Inc / (Dec) • Net income of $0.6B Summary Income Statement ($MM) 4Q23 3Q23 4Q22 – Excluding net DVA, net income of $0.7B3 Total revenue, net of interest expense2 $4,088 ($854) $227 • Revenue of $4.1B increased 6% from 4Q22, driven Net DVA (132) (116) 61 primarily by higher sales and
Slide 18: All Other
All Other1 Inc/(Dec) • Revenue of ($3.5B) included a charge of $1.6B from Summary Income Statement ($MM) 4Q23 3Q23 4Q22 BSBY cessation impact Total revenue, net of interest expense ($3,468) ($1,850) ($1,632) • Noninterest expense of $2.6B included an accrual Provision (benefit) for credit losses 24
Slide 19: Supplemental Business Segment Trends
Supplemental Business Segment Trends
Slide 20: Consumer Banking Trends
Consumer Banking Trends Business Leadership1 Total Revenue ($B) Total Expense ($B) and Efficiency (A) • No. 1 in estimated U.S. Retail Deposits $12.0 $6.0 $5.5 $5.5 $5.3 70% • No. 1 Online Banking and Mobile Banking $10.8 $10.7 $10.5 $10.5 $5.2 $10.3 $5.1 Functionality(B) 2.3 2.1 2.1 2.1 2.1 • No. 1
Slide 21: Consumer Digital Update
Consumer1 Digital Update Digital Adoption Client Engagement Digital Users2 and Households3 Digital Channel Usage4,5 Digital Sales6 60 57 100% 3,500 3,339 1,500 2,000 100% 56 52 54 3,046 1,579 90% 3,000 2,740 1,250 1,461 1,397 50 46 1,500 75% 44 41 80% 2,500 2,355 1,000 998 39 40 1,000 50% 75% 70% 2,
Slide 22: Consumer Credit Update
Consumer Credit Update Consumer Credit Card1 Consumer Vehicle Lending3 New Accounts (K) New Originations ($B) 1,500 $7.5 $6.8 $7.0 $6.8 $6.8 1,187 1,137 $6.1 1,096 1,062 1,000 889 $5.0 500 $2.5 0 $0.0 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 Key Stats 4Q22 3Q23 4Q23 Key Stats 4Q22 3Q23 4Q23
Slide 23: Global Wealth & Investment Management Trends
Global Wealth & Investment Management Trends Business Leadership1 Average Deposits ($B) Average Loans and Leases ($B) • No. 1 on Forbes’ Best-in-State Wealth Advisors (2023), Top Women Wealth Advisors (2023), Top Women Wealth $350 $250 $225 Advisors Best-in-State (2023), Best-in-State Teams $318 $22
Slide 24: Global Wealth & Investment Management Digital Update
Global Wealth & Investment Management Digital Update Digital Adoption1,2 Client Engagement Digital Households / Relationships Digital Channel Adoption1,3 eDelivery4 750 728 100% 100% 100% 76% 75% 77% 79% 690 72% 72% 74% 70% 700 90% 75% 75% 674 60% 54% 57% 649 51% 650 84% 80% 50% 50% 82% 79% 77% 600
Slide 25: Global Banking Trends
Global Banking Trends Business Leadership1 Average Deposits ($B) Average Loans and Leases ($B) • World’s Most Innovative Bank – 2023, Most Innovative Bank in North America(N) $600 $400 $380 $381 $383 $376 $375 $528 13 13 13 12 12 • World’s Best Digital Bank, World’s Best Bank for $503 $493 $498 $504
Slide 26: Global Banking Digital Update
Global Banking Digital Update Digital Adoption1 Client Engagement CashPro® and BA360 Adoption % CashPro® App Sign-ins (K)2 CashPro® App Payments 80% 900 840 $300 6.0 75% 75% 75% $245 679 70% 600 $200 $181 4.0 454 $133 3.7 299 3.2 60% 300 $100 2.6 2.0 $54 1.0 50% 0 $0 0.0 4Q21 4Q22 4Q23 4Q20 4Q21 4Q2
Slide 27: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix Business Leadership1 2023 Global Markets Revenue Mix 2023 Total FICC S&T Revenue Mix 2 • World's Best Bank for Markets (O) (excl. net DVA) (excl. net DVA)2 • North America's Best Bank for Sustainable Finance(O) • Environmental Finance Impact Award for Renewables
Slide 28: Additional Presentation Information
Additional Presentation Information
Slide 29: 2023 Consumer Payment Spend of $4.1T was up 4% YoY
2023 Consumer Payment Spend of $4.1T was up 4% YoY Payment Spend1 ($ Volume) and YoY % Growth Payment Spend1 ($ and Transaction Volume) Quarterly YoY % Growth $4.1T $4.0T $ Volume Transaction # $3.6T 50% $3.0T 21% 25% 10% 4% 0% 4% 4% 2% (25%) 2020 2021 2022 2023 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4
Slide 30: Balance Sheet Transformation Highlights
Balance Sheet Transformation Highlights (EOP basis unless noted) Metric 4Q09 4Q19 4Q23 Transformation through Responsible Growth Total loans and leases1 $1,003B $983B $1,054B • Our loan portfolio is more balanced today and has less inherent risk % consumer 67% 47% 44% – Lower concentration in the co
Slide 31: Historical Consumer Net Charge-off Rates
Historical Consumer Net Charge-off Rates Consumer Net Charge-off Rate 7.5% Pre-crisis average Financial crisis average Pre-pandemic average Average since pandemic 1.3% 3.6% 0.8% 0.5% 5.0% 2.5% 0.8% 0.0% 1Q04 1Q08 4Q12 1Q20 4Q23 • Since the beginning of 2004, total Consumer net charge-off rate has av
Slide 32: Historical Commercial Net Charge-off Rates
Historical Commercial Net Charge-off Rates Commercial Net Charge-off Rate 4.00% Financial crisis average Pre-pandemic average Average since pandemic 1.28% 0.13% 0.13% 3.00% 2.00% 1.00% 0.19% 0.13% 0.00% 1Q07 1Q08 4Q12 1Q20 4Q23 Commercial excl. Small Business (SB) Total Commercial • Total Commercial
Slide 33: Commercial Real Estate Loans
Commercial Real Estate Loans Commercial Real Estate as a Percent of: Geographic Distribution ($B) $2.3 21.2% $2.1 3% $6.1 3% 8% $15.9 Northeast $2.8 4% 22% California 12.3% Southeast $6.5 Southwest 9% ~$73B Midwest 6.9% 6.9% Midsouth $14.6 $9.3 Northwest 20% 13% Other $13.4 Non-U.S. Total Commercial
Slide 34: Delivered for Our Communities
Delivered for Our Communities Helped more than 44,000 individuals and families with more than $10 billion in affordable lending to purchase a home through our Community Homeownership Commitment Program since 20191 Committed more than $500 million in equity investments to more than 150 funds led by d
Slide 35: Delivered for Our Teammates
Delivered for Our Teammates $23 Minimum Sabbatical Electric Vehicle Emotional Hourly Wage Program Reimbursement Wellness Expanded in-person 4-6 weeks additional paid time confidential counseling through Annualized salary for full-time away for employees’ 15+ year Reimbursements for purchase our Empl
Slide 36: Notes
Notes A In 4Q23, the FDIC imposed a special assessment to recover losses to the Deposit Insurance Fund arising from the protection of uninsured depositors of Silicon Valley Bank and Signature Bank associated with their closures. Accordingly, the Corporation recorded pretax noninterest expense of $2.
Slide 37: Notes
Notes B Reserve build (release) is calculated by subtracting net charge-offs for the period from the provision for credit losses recognized in that period. The period-end allowance, or reserve, for credit losses reflects the beginning of the period allowance adjusted for net charge-offs recorded in
Slide 38: Business Leadership Sources
Business Leadership Sources (A) Estimated U.S. retail deposits based on June 30, 2023 FDIC deposit data. (B) Javelin 2023 Online and Mobile Banking Scorecards. (C) FDIC, 3Q23. (D) Global Finance, March 2023. (E) Global Finance, August 2023. (F) Global Finance, October 2023. (G) J.D. Power 2023 Finan
Slide 39: 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 40: 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 41: Bank of America
BANK OF AMERICA