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 2017 Earnings Presentation
28 slides from Bank Of America's earnings presentation, Jul 18, 2017
Slide 1: Bank of America 2Q17 Financial Results
Bank of America 2Q17 Financial Results July 18, 2017
Slide 2: 2Q17 Highlights
2Q17 Highlights • Generated net income of $5.3B, up 10% from 2Q16 and earnings per diluted common share of $0.46, up 12% from 2Q16 – Net interest income increased 9%, or $0.9B, to $11.0B ($11.2B FTE 1) – Investment banking fees rose 9% to $1.5B • Solid expense management; efficiency ratio improved t
Slide 3: Year-to-Date Business Results
$3.4 $1.4 $2.6 $2.1 ($1.3) $3.9 $1.6 $3.5 $2.1 ($1.0) Consumer Banking GWIM Global Banking Global Markets All Other 2016 YTD 2017 YTD Year-to-Date Business Results 3 Net Income (Loss) ($B) ____________________ Note: GWIM defined as Global Wealth & Investment Management. 1 ROAAC defined as return on
Slide 4: Consumer Banking – Driving Responsible Growth
Consumer Banking – Driving Responsible Growth 4 Net Income ($B) $1.6 $1.6 $1.7 $2.0 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 2Q14 2Q15 2Q16 2Q17 $8.0 $7.7 $7.8 $8.5 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 2Q14 2Q15 2Q16 2Q17 $0.9 $0.7 $0.7 $0.8 1.50% 1.28% 1.18% 1.21% 0% 1% 2% 3% $0.0 $0.5 $1.0 2Q14 2Q15 2Q16 2Q17 Net
Slide 5: Consumer Banking – Driving Responsible Growth
Consumer Banking – Driving Responsible Growth 5 30.0 30.8 32.2 34.0 15.5 17.6 20.2 22.9 0 10 20 30 40 2Q14 2Q15 2Q16 2Q17 Digital banking users Mobile banking users 10% 13% 17% 21% 0% 5% 10% 15% 20% 25% 2Q14 2Q15 2Q16 2Q17 14% 16% 18% 22% 0% 5% 10% 15% 20% 25% 2Q14 2Q15 2Q16 2Q17 516 621 942 1,061 0
Slide 6: 2Q17 Results
2Q17 Results 6 ____________________ Note: Amounts may not total due to rounding. 1 Reported on a GAAP basis. On an FTE basis, revenue of $23.1B, $22.4B and $21.5B in 2Q17, 1Q17 and 2Q16, respectively, and efficiency ratio of 60%, 66% and 63% in 2Q17, 1Q17 and 2Q16, respectively. For important presen
Slide 7: Balance Sheet, Liquidity and Capital Highlights
Balance Sheet, Liquidity and Capital Highlights 7 $ in billions, except per share data Balance Sheet (end of period balances) Total assets $2,254.5 $2,247.7 $2,187.0 Total loans and leases 1 916.7 906.2 903.2 Total loans and leases in business segments 2 837.8 823.0 795.4 Total deposits 1,263.0 1,27
Slide 8: Loans & Leases and Deposits
Loans & Leases and Deposits ____________________ Note: Amounts may not total due to rounding. 1 Includes $6.5B, $9.4B, $9.1B, $9.3B and $10.0B of average non-U.S. consumer credit card loans in 2Q17, 1Q17, 4Q16, 3Q16 and 2Q16, respectively. On June 1, 2017, the Corporation completed the sale of its n
Slide 9: Asset Quality
$985 $888 $880 $934 $908 0.44% 0.40% 0.39% 0.42% 0.40% 0.0% 0.5% 1.0% $0 $300 $600 $900 $1,200 2Q16 3Q16 4Q16 1Q17 2Q17 Net charge-offs Net charge-off ratio ____________________ 1 Excludes loans measured at fair value. Asset Quality 9 Net Charge-offs ($MM) Provision for Credit Losses ($MM) $976 $850
Slide 10: Asset Quality – Consumer and Commercial Portfolios
Asset Quality – Consumer and Commercial Portfolios 10 Consumer Net Charge-offs ($MM) $849 $778 $775 $827 $751 0.76% 0.69% 0.68% 0.74% 0.67% 0.0% 0.5% 1.0% 1.5% 2.0% $0 $300 $600 $900 $1,200 2Q16 3Q16 4Q16 1Q17 2Q17 Credit card Other Net charge-off ratio ____________________ 1 Excludes loans measured
Slide 11: Net Interest Income
Net Interest Income 11 • Net interest income of $11.0B ($11.2B FTE 1) increased $0.9B from 2Q16 – Increase primarily reflects the benefits from higher interest rates and loan growth – Net interest yield increased to 2.34% • NII was relatively flat from 1Q17, reflecting the benefits from higher short
Slide 12: Expense Highlights
Expense Highlights ____________________ Note: Amounts may not total due to rounding. • Total noninterest expense of $13.7B increased $0.2B from 2Q16 – 2Q17 included $0.4B of expense for the combined impact of impairment charges related to certain data centers in process of being sold and increased s
Slide 13: Consumer Banking
Consumer Banking 13 ____________________ 1 FTE basis. 2 Cost of deposits calculated as annualized noninterest expense as a percentage of total average deposits within the Deposits subsegment. 3 Includes portfolios in Consumer Banking and GWIM. 4 Represents a non-GAAP financial measure and is calcula
Slide 14: Consumer Banking Trends
Consumer Banking Trends 14 • #1 U.S. Retail Deposit Market Share 1 • #1 Home Equity Lender 2 • #2 bank for Retail Purchase Mortgage Origination Volume 2 • #1 in Prime Auto Credit distribution of new originations among peers 3 • #3 in U.S. Credit Card Balances 4 • #2 Small Business Lender (FDIC 1Q17)
Slide 15: Global Wealth & Investment Management
Global Wealth & Investment Management 15 ____________________ 1 FTE basis. 2 2Q16 includes $4.2 billion of net outflows for the BofA Global Capital Management business, whose AUM were sold during the three months ended June 30, 2016. 3 Includes financial advisors in Consumer Banking of 2,206 and 2,2
Slide 16: Global Wealth & Investment Management Trends
Global Wealth & Investment Management Trends 16 Market Share Positioning Average Loans and Leases ($B) Average Deposits ($B) • #1 U.S. wealth management market position across client assets, deposits and loans 1 • #1 in personal trust assets under management 2 • #1 in Barron’s U.S. high net worth cl
Slide 17: Global Banking
Global Banking 17 ____________________ 1 FTE basis. 2 Global Banking and Global Markets share in certain deal economics from investment banking and loan origination activities. • [ Bullets to come ] • Net income of $1.8B increased 19% from 2Q16; ROAAC of 18% • Revenue increased 7% from 2Q16 to a rec
Slide 18: Global Banking Trends
Global Banking Trends 18 ____________________ Note: Amounts may not total due to rounding. 1 Global Banking and Global Markets share in certain deal economics from investment banking and loan origination activities. 2 FTE basis. 3 Advisory includes fees on debt and equity advisory and mergers and ac
Slide 19: Global Markets
Global Markets 19 • [ Bullets to come ] ____________________ 1 FTE basis. 2 Global Banking and Global Markets share in certain deal economics from investment banking and loan origination activities. 3 Represents a non-GAAP financial measure; see note D on slide 25. 4 See note E on slide 25 for defin
Slide 20: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix 20 2.6 2.9 2.3 1.1 1.1 1.1 $3.7 $4.0 $3.4 $0 $1 $2 $3 $4 $5 2Q16 1Q17 2Q17 FICC Equities $411 $422 $453 $46 $38 $43 $0 $25 $50 $75 $100 $0 $100 $200 $300 $400 $500 2Q16 1Q17 2Q17 Avg. trading-related assets Avg. VaR • #1 Global Research Firm for 6th consecutive
Slide 21: All Other
• Net loss of $0.2B in 2Q17 – Includes a pre-tax gain of $0.8B from the sale of the non-U.S. consumer credit card business, which was mostly offset by $0.7B related tax expense • Provision improved $0.2B from 2Q16, driven by continued improvement in non-core consumer real estate loans as well as por
Slide 22: Key Takeaways
Key Takeaways 22 • Delivering responsible growth • Strong operating leverage drove improved earnings • Efficiency ratio of 60%, while continuing to invest in the franchise • Solid client balance growth and good customer activity • Asset quality remains strong • Positioned to benefit from higher inte
Slide 23: Appendix
Appendix
Slide 24: Regulatory Capital – Basel transition to fully phased-in
Regulatory Capital – Basel 3 transition to fully phased-in 2Q17 1Q17 2Q16 Common equity tier 1 capital (transition) $171,431 $167,351 $166,173 Deferred tax assets arising from net operating loss and tax credit carryforwards phased in during transition (1,457) (1,594) (3,496) Accumulated OCI phased i
Slide 25: Notes
Notes 25 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
Slide 26: Forward-Looking Statements
Forward-Looking Statements 26 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 d
Slide 27: 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 28: Bank of America
Bank of America Ge