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 2013 Earnings Presentation
24 slides from Bank Of America's earnings presentation, Jul 17, 2013
Slide 1: Bank of America 2Q13 Financial Results
Bank of America 2Q13 Financial Results July 17, 2013
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 Bank of America 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 not relate strictly to hist
Slide 3: 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 4: Solid Progress on Core Strategy
Solid Progress on Core Strategy 4 • Financial foundation remains strong: – Continued to optimize the balance sheet, reduce debt and maintain significant liquidity – Further improved Basel 1 and Basel 3 Tier 1 common capital ratios – Redeemed $5.5B of preferred stock and repurchased $1.0B of common s
Slide 5: 2Q13 Results: Summary Income Statement
2Q13 Results 5 ____________________ 1 Amounts may not total due to rounding. 2 Fully taxable-equivalent (FTE) basis. Represents a non-GAAP financial measure. 3 Represents a non-GAAP financial measure. On a GAAP basis, net interest income; total revenue, net of interest expense; and income tax expens
Slide 6: Summary Balance Sheet and Key Metrics
Total assets $2,123.3 ($51.5) ($37.5) Total loans and leases 921.6 10.0 29.3 Total deposits 1,080.8 (14.4) 45.6 Preferred stock 14.2 (4.5) (4.5) Tangible common shareholders' equity 1 143.1 (1.5) 0.6 Tangible common equity ratio 1 6.98 % 10 bps 15 bps Common shareholders' equity $216.8 ($1.7) ($0.4)
Slide 7: Regulatory Capital
Basel 1 1 • Continued to grow Tier 1 common capital ratio to 10.83%, up 34bps from 1Q13 and 45bps from pro-forma 4Q12 Basel 3 3 • Estimated Tier 1 common capital ratio of 9.60%, up 8bps from 1Q13 • $43B RWA reduction driven by overall improvement in credit quality Proposed Supplementary Leverage Rat
Slide 8: Funding and Liquidity
Funding and Liquidity 8 $378 $380 $372 $372 $342 37 35 33 29 32 20 25 30 35 40 45 $0 $100 $200 $300 $400 2Q12 3Q12 4Q12 1Q13 2Q13 Parent company Bank subsidiaries Broker/dealers Time to Required Funding 225 211 206 209 200 77 76 70 71 62 $302 $287 $276 $280 $262 $0 $100 $200 $300 $400 2Q12 3Q12 4Q12
Slide 9: Net Interest Income
Net Interest Income 9 • 2Q13 reported NII decreased modestly to $10.8B, while the net interest yield improved slightly from 1Q13 due to: Benefits from: – Reduction in long-term debt – Higher commercial loan balances – Positive impacts from market-related premium amortization expense – One additional
Slide 10: Expense Highlights
13.4 13.8 13.2 0.9 2.6 2.6 2.3 1.0 2.2 0.5 $17.0 $19.5 $16.0 $0 $5 $10 $15 $20 2Q12 1Q13 2Q13 All Other Retirement-eligible costs LAS (excl. litigation) Litigation Expense Highlights ____________________ 1 Represents a non-GAAP financial measure. Excludes mortgage-related litigation expense of $215M
Slide 11: Asset Quality Trends Continued to Improve
Asset Quality Trends Continued to Improve 11 • Net charge-off and delinquency trends continue to be positive • Improvement in our consumer real estate portfolio drove a 16% decline in net charge-offs from 1Q13, to $2.1B at 2Q13 • Residential mortgage and home equity losses improved 29% from 1Q13 and
Slide 12: Consumer & Business Banking (CBB)
Consumer & Business Banking (CBB) 1 12 ____________________ 1 During 2Q13, consumer Dealer Financial Services results were moved to CBB from Global Banking and prior periods were reclassified to conform to current period presentation. 2 FTE basis. 3 Represents a non-GAAP financial measure. For impor
Slide 13: Consumer Real Estate Services (CRES): Home Loans
$ in millions Net interest income 2 $344 ($3) 14$ Noninterest income 660 27 (135) Total revenue, net of interest expense 2 1,004 24 (121) Provision for credit losses 64 (28) 99 Noninterest expense 863 50 72 Income tax expense 2 30 2 (106) Net income $47 $- ($186) Key Indicators ($ in billions) Avera
Slide 14: CRES: Legacy Assets & Servicing
$ in millions Net interest income 2 $355 ($41) ($28) Noninterest income 756 (180) (265) Total revenue, net of interest expense 2 1,111 (221) (293) Provision for credit losses 227 (16) 5 Noninterest expense 2,531 (2,062) (202) Income tax benefit 2 (663) 637 (89) Net loss ($984) $1,220 ($7) Key Indica
Slide 15: Global Wealth & Investment Management (GWIM)
Global Wealth & Investment Management (GWIM) 15 ____________________ 1 FTE basis. 2 Includes Financial Advisors in the Consumer & Business Banking segment of 1,587, 1,591 and 1,383 at 2Q13, 1Q13 and 2Q12, respectively. 3 Represents a non-GAAP financial measure. For important presentation information
Slide 16: Global Banking
Global Banking 1 16 ____________________ 1 During 2Q13, consumer Dealer Financial Services results were moved from Global Banking to CBB and prior periods were reclassified to conform to current period presentation. 2 FTE basis. 3 Represents a non-GAAP financial measure. For important presentation i
Slide 17: Global Markets
Global Markets 17 • [ Bullets to come ] ____________________ 1 FTE basis. 2 Represents a non-GAAP financial measure. Net DVA results were gains of $38MM, and losses of $55MM and $156MM in 2Q13, 1Q13 and 2Q13, respectively. 3 In addition to sales and trading revenue, Global Markets shares with Global
Slide 18: All Other
• Net income of $864MM increased $2.4B from 3Q12 driven by the tax benefit from recognition of foreign tax credits, and $0.8B lower negative FVO adjustments on structured liabilities related to improvements in our own credit spreads • Results were impacted by the following selected items ___________
Slide 19: Appendix
Appendix
Slide 20: Results by Business Segment
____________________ 1 FTE basis. FTE basis for the Total Corporation and pre-tax, pre-provision earnings are non-GAAP financial measures. 2 For reconciliations to GAAP financial measures, see the accompanying reconciliations in the earnings press release and other earnings-related information. Resu
Slide 21: Representations and Warranties Exposure (2004-2008 vintages)
Representations and Warranties Exposure 1 (2004-2008 vintages) 21 ____________________ 1 Exposures identified above relate only to repurchase claims associated with purported representations and warranties breaches. They do not include any exposures associated with related litigation matters; separa
Slide 22: Home Loans Asset Quality Key Indicators
____________________ 1 Excludes FVO loans. 2 2Q13 and 1Q13 exclude write-offs of consumer PCI loans of $203MM and $94MM related to residential mortgage and $110MM and $745MM related to home equity. 2Q13 and 1Q13 net charge-off ratios including the PCI write-offs for residential mortgage were 0.74% a
Slide 23: Basel 1 to Basel 3 (Fully Phased-in)
Basel 1 to Basel 3 (Fully Phased-in) 1, 2, 3 23 ____________________ 1 Regulatory capital ratios are preliminary until filed with the Federal Reserve on Form Y-9C. For important presentation information, see slide 3. 2 Basel 1 includes the Market Risk Final Rule at June 30, 2013 and March 31, 2013.
Slide 24: Bank of America
Bankof America