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 2015 Earnings Presentation
29 slides from Bank Of America's earnings presentation, Jul 15, 2015
Slide 1: Bank of America 2Q15 Financial Results
Bank of America 2Q15 Financial Results July 15, 2015
Slide 2: 2Q15 Highlights
2Q15 Highlights 2 • Net income of $5.3B in 2Q15, up versus $3.4B in 1Q15 and $2.3B in 2Q14 • Managing expenses well, while continuing to invest in the franchise • Solid loan growth in primary lending segments • Record capital and liquidity levels • Repurchased $775MM of common stock • Continued prog
Slide 3: 2Q15 Results
2Q15 Results 3 ____________________ 1 FTE basis. Represents a non-GAAP financial measure; see note A on slide 26. 2 See note I on slide 26 for definition of market-related NII adjustments. Summary Income Statement $ in billions, except per share data 2Q15 Net interest income 1 $10.7 Noninterest inco
Slide 4: Balance Sheet Highlights
____________________ 1 Represents a non-GAAP financial measure. For important presentation information, see slide 28. Balance Sheet Highlights 4 • Total assets of $2.15T increased $5.5B from 1Q15 • Total loans and leases grew $8.5B from 1Q15, driven by solid growth across our primary lending segment
Slide 5: Loans & Leases
Loans & Leases (EOP, $B) 5 ____________________ Note: Amounts may not total due to rounding. 1 Represents a non-GAAP financial measure. 2 Beginning with new originations in 2014, we retain certain residential mortgages in Consumer Banking, consistent with where the overall relationship is managed; p
Slide 6: Capital Management
Basel 3 Transition (under Standardized approach) • Common equity tier 1 capital (CET1) ratio of 11.2% in 2Q15 Basel 3 Fully Phased-in 2 • CET1 capital of $148.3B grew $1.1B from 1Q15, driven by net income, partially offset by an AOCI decline as well as dividends and share repurchases • Under the ful
Slide 7: Funding and Liquidity
• Long-term debt increased $6B from 1Q15 – Issued $10B of parent long-term debt in 2Q15, including $3B of subordinated debt – Expect to remain opportunistic to meet future funding needs • Global Excess Liquidity Sources 3 grew to a record $484B – Parent company liquidity increased to $96B – Time to
Slide 8: Net Interest Income
Net Interest Income 8 • Reported net interest income (NII) 1 of $10.7B • Positive market-related NII adjustments of $669MM in 2Q15 versus negative $484MM adjustments in 1Q15 • Excluding market-related adjustments, NII 1 of $10.0B declined from 1Q15, driven by lower discretionary loan balances and co
Slide 9: Expense Highlights
13.1 13.3 12.7 1.0 1.4 1.0 0.9 4.0 0.4 0.2 $18.5 $15.7 $13.8 $0 $5 $10 $15 $20 2Q14 1Q15 2Q15 All other Retirement-eligible costs LAS (excl. litigation) Litigation Expense Highlights ____________________ Note: Amounts may not total due to rounding. 1 Represents a non-GAAP financial measure; see note
Slide 10: Asset Quality Trends
$1.1 $1.0 $0.9 $1.2 $1.1 $1.3 $1.2 $1.0 $1.0 $0.9 0.56% 0.52% 0.47% 0.47% 0.43% 0.48% 0.46% 0.40% 0.56% 0.49% 0.0% 0.5% 1.0% $0.0 $0.5 $1.0 $1.5 2Q14 3Q14 4Q14 1Q15 2Q15 Reported net charge-offs and ratio Adjusted net charge-offs and ratio ____________________ 1 See note D on slide 26. 2 Represents
Slide 11: Consumer Banking
Consumer Banking 11 ____________________ 1 FTE basis. 2 Cost of deposits calculated as annualized noninterest expense within the Deposits subsegment as a percentage of total average deposits within Consumer Banking. 3 Beginning in 1Q15, includes approximately 150,000 Merrill Edge and MyMerrill users
Slide 12: Consumer Banking Trends
Consumer Banking Trends 12 • #1 Retail Deposit Market Share 1 • #3 in U.S. Credit Card 2 • #1 Home Equity Lender 2 • #2 in J.D. Power Primary Mortgage Origination Satisfaction Study • #1 in Mobile Banking 3 • #2 Small Business Lender 4 • #1 in Prime Auto Credit distribution among peers 5 Leading Con
Slide 13: Global Wealth & Investment Management
Global Wealth & Investment Management 13 ____________________ 1 FTE basis. 2 Represents a non-GAAP financial measure. For important presentation information, see slide 28. 3 Includes financial advisors in Consumer Banking of 2,049 and 1,716 in 2Q15 and 2Q14. • Net income of $0.7B, generating a pre-t
Slide 14: GWIM Trends
GWIM Trends 14 Market Share Positioning Average Loans and Leases ($B) Total Client-Facing Professionals 3 15,560 15,867 16,035 16,175 16,419 19,416 19,727 19,750 20,018 20,286 0 5,000 10,000 15,000 20,000 25,000 2Q14 3Q14 4Q14 1Q15 2Q15 Other client-facing professionals Other wealth advisors Financi
Slide 15: Global Banking
Global Banking 15 ____________________ 1 FTE basis. 2 Global Banking shares with Global Markets in certain deal economics from investment banking and loan origination activities. 3 Represents a non-GAAP financial measure. For important presentation information, see slide 28. 4 Ranking per Dealogic f
Slide 16: Global Banking Trends
Global Banking Trends 16 ____________________ Note: Amounts may not total due to rounding. 1 Ranking per Dealogic for the second quarter as of July 6, 2015. 2 Source: Global Finance magazine (2015). 3 Global Banking shares with Global Markets in certain deal economics from investment banking and loa
Slide 17: Global Markets
Global Markets 17 • [ Bullets to come ] ____________________ 1 FTE basis. 2 Represents a non-GAAP financial measure; see note G on slide 26. 3 In addition to sales and trading revenue, Global Markets shares with Global Banking in certain deal economics from investment banking and loan origination ac
Slide 18: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix 18 2.4 2.2 1.5 2.7 2.1 1.0 1.0 0.9 1.2 1.2 $3.4 $3.3 $2.4 $3.9 $3.3 $0 $1 $2 $3 $4 $5 2Q14 3Q14 4Q14 1Q15 2Q15 FICC Equities $460 $446 $456 $444 $443 $51 $50 $51 $62 $55 $0 $25 $50 $75 $100 $125 $150 $0 $100 $200 $300 $400 $500 $600 2Q14 3Q14 4Q14 1Q15 2Q15 Trad
Slide 19: Legacy Assets & Servicing
Legacy Assets & Servicing 19 • Net income of $45MM in 2Q15 • Total revenue of $1.1B increased $0.3B from 2Q14, due primarily to a $0.2B benefit in representation and warranties (R&W) provision in 2Q15 – Excluding R&W impacts 2, revenue down modestly as lower servicing fees on a smaller servicing por
Slide 20: Representations and Warranties Exposure
Representations and Warranties Exposure 1 20 ____________________ 1 Representations and warranties exposures do not consider exposures related to servicing (except as such losses are included as potential costs of the BNY Mellon Settlement), including foreclosure and related costs, fraud, indemnity,
Slide 21: All Other
• Net income of $0.6B in 2Q15 • NII improved $0.9B from 2Q14, driven primarily by positive market-related adjustments due to higher rates • Noninterest income was relatively flat vs. 2Q14 as lower debt securities gains and equity investment income were offset by higher gains on the sale of consumer
Slide 22: Key Takeaways
Key Takeaways 22 • Earnings reflect progress toward achieving long-term targets • Relatively stable revenue • Managed expenses well • Solid loan growth across primary lending segments • Asset quality remains strong • Strong capital and liquidity levels • Increased capital distributions • Positioned
Slide 23: Appendix
Appendix
Slide 24: Consumer Real Estate Asset Quality Key Indicators
____________________ 1 Excludes FVO loans. 2 Excludes write-offs of PCI loans of $264MM and $188MM related to residential mortgage and $26MM and $100MM related to home equity for 2Q15 and 1Q15. Net charge-off ratios including the PCI write-offs for residential mortgage were 0.86% and 0.73%, and for
Slide 25: Regulatory Capital
____________________ 1 Regulatory capital ratios are preliminary. For important presentation information, see slide 28. 2 Basel 3 Advanced approaches estimates assume approval by U.S. banking regulators of our internal analytical models, including approval of the internal models methodology, but do
Slide 26: Notes
Notes 26 Non-GAAP Financial Measures For reconciliations to GAAP financial measures, see the accompanying reconciliations in the earnings press release and other earnings-related information. A On a GAAP basis, net interest income (NII) was $10.5B; total revenue, net of interest expense was $22.1B;
Slide 27: Forward-Looking Statements
Forward-Looking Statements 27 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 his
Slide 28: 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 29: Bank of America
Bankof America