Bank Of America Corporation · NYSE:BAC
Bank Of America — Q3 2020 Earnings Presentation
33 slides from Bank Of America's earnings presentation, Oct 14, 2020
Slide 1: Bank of America 3Q20 Financial Results
Bank of America 3Q20 Financial Results October 14, 2020
Slide 2: 3Q Earnings Themes
3Q Earnings Themes • Solid, diverse earnings of $4.9B, or $0.51 per diluted share — Revenue pressured by low interest rates — Expense elevated from COVID-related costs and litigation — Credit costs improved • Strong balance sheet and capital positions • Digital Banking adoption by customers across t
Slide 3: Credit Quality Trends
Credit Quality Trends Provision Expense ($MM) Active Consumer Deferrals $5,117 $4,761 1.7 1.7 1.5 1,146 1,122 1.1 3,971 $1,389 $35 $39 $37 $941 3,639 0.5 0.2 $779 0.1 972 $20 811 959 417 $9 $13 $9 (32) (18) March April May June July August September 3Q19 4Q19 1Q20 2Q20 3Q20 Balances on Deferral ($B)
Slide 4: Digital Engagement
Digital Engagement (Data is for 3Q20 and comparisons are YoY unless otherwise noted) • 2.3B digital banking logins • Average logins per user up 5% • Erica users rose to ~15.9MM • Zelle users rose to ~12.2MM • 2.3MM Spanish mobile users, up 12% • Record high of 688K digitally scheduled appointments •
Slide 5: 3Q20 Financial Results
3Q20 Financial Results 1 Summary Income Statement $ Inc / $ Inc / 3Q20 2Q20 3Q19 ($B, except per share data) (Dec) (Dec) Total revenue, net of interest expense $20.3 $22.3 ($2.0) $22.8 ($2.5) Provision for credit losses 1.4 5.1 (3.7) 0.8 0.6 Net charge-offs 1.0 1.1 (0.2) 0.8 0.2 Reserve build 2 0.4
Slide 6: 3Q20 Highlights
3Q20 Highlights (Comparisons are to 2Q20 unless otherwise noted) • Diluted earnings per share of $0.51, up 38% • Net income of $4.9B increased $1.3B, or 38% — Revenue of $20.3B declined 9%, driven by lower net interest income and noninterest income Net interest income of $10.1B ($10.2B FTE 1), dow
Slide 7: Balance Sheet, Liquidity and Capital
Balance Sheet, Liquidity and Capital (EOP basis unless noted) Standardized became binding constraint; advanced benefited from lower operational risk RWA Balance Sheet ($B) 3Q20 2Q20 3Q19 Basel 3 Capital ($B) 4 3Q20 2Q20 3Q19 Total assets $2,738.5 $2,741.7 $2,426.3 Common equity tier 1 capital (CET1)
Slide 8: Average Loans and Leases
Average Loans and Leases 1 Total Loans and Leases ($B) Total Loans and Leases in All Other ($B) $1,250 YoY $125 $105 YoY $965 $974 +1% (42%) $1,000 $901 $918 $931 $100 9 19 $77 $750 $75 0 $60 15 12 $42 $500 $50 77 6 $24 $250 $25 62 48 4 36 20 $0 $0 3Q16 3Q17 3Q18 3Q19 3Q20 3Q16 3Q17 3Q18 3Q19 3Q20 R
Slide 9: Average Deposits
Average Deposits Bank of America Ranked #1 in U.S. Deposit Market Share 1 Total Corporation ($B) Consumer Banking ($B) $1,695 YoY YoY $1,750 +23% $861 +21% $900 $1,316 $1,375 $709 $1,400 $1,227 $1,272 $659 $688 612 +55% $606 276 423 396 $600 194 206 +27% $1,050 439 437 181 166 207 151 163 174 $700 1
Slide 10: Net Interest Income
Net Interest Income Net Interest Income (FTE, $B) 1 • Net interest income of $10.13B ($10.24B FTE 1) $15 – Decreased $0.7B from 2Q20, driven by lower interest rates $12.34 $12.29 $12.27 and lower loan levels, partially offset by lower deposit rate $10.98 $10.24 paid and one additional interest accru
Slide 11: Expense and Efficiency
Expense and Efficiency Total Noninterest Expense ($B) $15.2 $14.4 $15 $13.8 $13.2 $13.0 $13.1 $13.2 $13.3 $13.2 $13.5 $13.4 2.1 Includes $0.6B 5.4 5.3 5.0 5.3 5.3 5.1 5.4 6.2 in litigation $10 5.3 5.3 5.3 expense $5 8.5 7.9 7.7 7.7 8.2 8.0 7.8 8.0 8.3 8.0 8.2 $0 1 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19
Slide 12: Asset Quality
Asset Quality Net Charge-offs ($MM) 1 • Total net charge-offs of $972MM decreased $174MM from $1,200 $1,122 $1,146 1.0% 2Q20 $959 $972 — Consumer net charge-offs of $564MM decreased $811 $170MM aided by the benefits of deferrals and $800 government stimulus 0.5% 0.46% 0.39% 0.45% 0.40% — Commercial
Slide 13: Asset Quality – Consumer and Commercial Portfolios
Asset Quality – Consumer and Commercial Portfolios Consumer Net Charge-offs ($MM) Consumer Metrics ($MM) 3Q20 2Q20 3Q19 $1,000 $838 $872 1.3% Provi s i on $295 $2,614 $564 $800 $622 $734 Nonperformi ng l o a ns a nd l e a s es 2,357 2,191 2,189 $564 $600 0.72% 0.75% 0.7% % of l oa ns a nd l ea s es
Slide 14: Consumer Banking
Consumer Banking Inc / (Dec) Summary Income Statement ($MM) 3Q20 2Q20 3Q19 • Net income of $2.1B declined from 3Q19 as lower interest rates drove NII down and also reflected lower service charges due to higher client Total revenue, net of interest expense $8,039 $187 ($1,685) deposits as well as inc
Slide 15: Consumer Banking Trends
Consumer Banking Trends Business Leadership 1 Total Revenue ($B) Total Expense ($B) and Efficiency • #1 Consumer Deposit Market Share A $9.7 $9.5 $4.7 $4.8 • #1 Small Business Lender B $10 $9.1 $5 $4.4 $4.5 $4.5 65% • #1 Online Banking and Mobile Banking $7.9 $8.0 60% $8 2.7 2.6 $4 60% 2.3 Functiona
Slide 16: Consumer Banking Digital Usage Trends
Consumer Banking Digital Usage Trends 1 (13% ) Active Digital Banking Users (MM) Total Payments ($B) Person-to-Person Payments (Zelle) 4 YoY YoY 3.7 6.1 8.9 12.2 15.9MM Erica users $900 $817 users (MM) 50 $760 39.3 +3% $704 +8% 175 $60 36.2 38.0 $646 139.9 40 34.5 324 140 $600 340 334 (5%) 30 28.7 3
Slide 17: Global Wealth & Investment Management
Global Wealth & Investment Management Inc / (Dec) Summary Income Statement ($MM) 3Q20 2Q20 3Q19 • Net income of $0.7B decreased 32% from 3Q19 Total revenue, net of interest expense $4,546 $121 ($358) — Pretax margin of 22% in 3Q20 Provision for credit losses 24 (112) (13) — Net income increased 20%
Slide 18: Global Wealth & Investment Management Trends
Global Wealth & Investment Management Trends Business Leadership 1 Average Deposits ($B) Average Loans and Leases ($B) • #1 U.S. wealth management market position $350 $186 across client assets, deposits and loans H $287 $292 $200 $174 $179 $182 $170 • #1 in personal trust assets under management I
Slide 19: Global Banking
Global Banking Inc/(Dec) Summary Income Statement ($MM) 3Q20 2Q20 3Q19 • Net income of $0.9B decreased $1.2B from 3Q19 due to higher provision expense as well as lower revenue Total revenue, net of interest expense 1 $4,517 ($574) ($695) Provision for credit losses 883 (990) 763 • Revenue of $4.5B d
Slide 20: Global Banking Trends
Global Banking Trends 2 Business Leadership 1 Average Deposits ($B) Average Loans and Leases ($B) • North America’s Best Bank for Small to $494 $471 Medium-sized Enterprises K $500 $500 $424 • Best Overall Brand Middle Market Banking L $360 $379 $382 $377 $377 $386 $373 $400 $400 15 • North America
Slide 21: 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 +54% $187B ~500K Rolling 12 mos. YoY up 30% Rolling 12 mos. YoY CashPro® Mobile Incoming receivables digitally matched wi
Slide 22: Global Markets
Global Markets Inc/(Dec) Summary Income Statement ($MM) 3Q20 2Q20 3Q19 • Net income of $0.9B increased 1% from 3Q19 Total revenue, net of interest expense 1 $4,283 ($1,067) $420 • [ Bullets to come ] — Excluding net DVA, net income of $0.9B increased 10% 2 Net DVA (116) 145 (101) Total revenue (excl
Slide 23: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix Business Leadership 1 2020 YTD Global Markets Revenue Mix 2020 YTD Total FICC S&T Revenue Mix • CMBS Bank of the Year M (excl. net DVA) 2 (excl. net DVA) 2 • Derivatives House of the Year O • Equity Derivative House of the Year N • Derivatives and Interest Rate
Slide 24: All Other
All Other 1 Inc/(Dec) Summary Income Statement ($MM) 3Q20 2Q20 3Q19 • Net income of $297MM in 3Q20 Total revenue, net of interest expense ($935) ($671) ($187) • 3Q20 total corporation litigation expense of $0.6B Provision (benefit) for credit losses (18) 3 277 Net charge-offs (25) 11 224 • 3Q20 tota
Slide 25: Appendix
Appendix
Slide 26: Consumer and Small Business Payments Trend
Consumer and Small Business Payments Trend Credit/Debit Combined Spend Year-over-year Payment Dollar Volumes – Year-over-year Percentage Percentage by Category 30% 30% 20% 20% 10% 10% 0% 0% -10% -20% -10% -30% -20% -40% -30% -50% -60% -40% -70% Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20
Slide 27: End of Period Loans and Leases
End of Period Loans and Leases 1 Total Corporation ($B) Consumer Banking ($B) YoY $1,200 $1,051 $350 $308 $317 $318 $325 $312 $999 YoY +1% $973 $983 $955 $1,000 (2%) $300 $250 $800 $200 $600 $150 $400 $100 $200 $50 $0 $0 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 GWIM ($B) Global Banking ($B)
Slide 28: End of Period Deposits
End of Period Deposits Bank of America Ranked #1 in U.S. Deposit Market Share 1 Total Corporation ($B) Consumer Banking ($B) YoY YoY $2,000 $1,000 $872 $1,719 $1,703 +22% $854 +22% $1,583 $762 $1,393 $1,435 $800 $716 $731 $1,500 $600 $1,000 $400 $500 $200 $0 $0 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q2
Slide 29: Notes
Notes A Reserve Build (or 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
Slide 30: Sources
Sources A Estimated retail consumer deposits based on June 30, 2020 FDIC deposit data. B FDIC, 2Q20. C Keynova 2Q20 Online Banker Scorecard; Javelin 2020 Online and Mobile Banking Scorecards. D Experian Autocount; Franchised Dealers; Largest percentage of 680+ Vantage 3.0 loan originations among key
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