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 2014 Earnings Presentation
25 slides from Bank Of America's earnings presentation, Jul 16, 2014
Slide 1: Bank of America 2Q14 Financial Results
Bank of America 2Q14 Financial Results July 16, 2014
Slide 2: 2Q14 Results
2Q14 Results 2 ____________________ 1 Amounts may not total due to rounding. 2 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; pre-tax, pre-provision earnings; income before i
Slide 3: Balance Sheet Highlights
____________________ 1 Represents a non-GAAP financial measure. For reconciliations to GAAP financial measures, see the accompanying reconciliations in the earnings press release and other earnings-related information. n/m = not meaningful Balance Sheet Highlights 3 • Total assets increased $20.7B f
Slide 4: Regulatory Capital
Basel 3 Transition (under Standardized approach) 2 • Common equity tier 1 capital (CET1) ratio was 12.0% in 2Q14 Basel 3 Fully Phased-in 4 • CET1 capital increased $7.0B from 1Q14 on earnings, AOCI improvement and lower capital deductions • Under the fully phased-in Standardized approach, the estima
Slide 5: Funding and Liquidity
Funding and Liquidity 5 Global Excess Liquidity Sources ($B) 2 • Long-term debt increased $2.3B from 1Q14, which includes the $7.6B issuance that settled on April 1, 2014 – Long-term debt yields declined 12bps from 1Q14, primarily driven by lower new issuance spreads – Parent long-term debt issuance
Slide 6: Net Interest Income
Net Interest Income 6 • Reported NII of $10.2B, down $0.1B from 1Q14 • Excluding market-related adjustments, NII of $10.4B declined $0.2B from 1Q14, and the net interest yield declined 10bps to 2.26% Drivers included: – Lower consumer loan balances and lower loan yields – Seasonal decline in trading
Slide 7: Expense Highlights
13.2 13.6 13.1 1.0 2.3 1.6 1.4 0.5 6.0 4.0 $16.0 $22.2 $18.5 $0 $5 $10 $15 $20 $25 2Q13 1Q14 2Q14 All Other Retirement-eligible costs LAS (excl. litigation) Litigation Expense Highlights ____________________ 1 Represents a non-GAAP financial measure. LAS noninterest expense was $5.2B, $7.4B and $2.5
Slide 8: Credit Quality
$21.2 $19.4 $17.4 $16.6 $15.8 2.51x 2.90x 2.78x 2.95x 3.67x 0x 1x 2x 3x 4x 5x 6x $0 $5 $10 $15 $20 $25 2Q13 3Q13 4Q13 1Q14 2Q14 T h o u s a n d s Allowance for loans and leases Allowance/annualized net charge-offs $2.1 $1.7 $1.6 $1.4 $1.1 0.94% 0.73% 0.68% 0.62% 0.48% 0% 1% 2% 3% $0 $1 $2 $3 2Q13 3Q
Slide 9: Consumer & Business Banking (CBB)
Consumer & Business Banking (CBB) 9 ____________________ 1 FTE basis. 2 Represents a non-GAAP financial measure. For important presentation information, see slide 24, and for reconciliations to GAAP financial measures, see the accompanying reconciliations in the earnings press release and other earn
Slide 10: Consumer Real Estate Services (CRES)
Consumer Real Estate Services (CRES) 1 10 • 2Q14 net loss of $2.8B decreased $2.2B from 1Q14, driven primarily by lower litigation expense • Total first-lien retail mortgage originations 4 increased 25% from 1Q14 to $11.1B – Origination pipeline at the end of 2Q14 was up 15% vs. 1Q14 • Core producti
Slide 11: Global Wealth & Investment Management (GWIM)
1,121 1,144 1,181 1,190 1,229 744 780 821 842 879 235 242 245 244 237 115 117 119 120 123 $2,215 $2,283 $2,366 $2,396 $2,468 $500 $1,000 $1,500 $2,000 $2,500 2Q13 3Q13 4Q13 1Q14 2Q14 Other client balances Assets under management Client deposits Loans and leases Global Wealth & Investment Management
Slide 12: Global Banking
Global Banking 12 ____________________ 1 FTE basis. 2 Represents a non-GAAP financial measure. For important presentation information, see slide 24, and for reconciliations to GAAP financial measures, see the accompanying reconciliations in the earnings press release and other earnings-related infor
Slide 13: Global Markets
Global Markets 13 • [ Bullets to come ] ____________________ 1 FTE basis. 2 In addition to sales and trading revenue, Global Markets shares with Global Banking in certain deal economics from investment banking and loan origination activities. 3 Represents a non-GAAP financial measure. During 1Q14, t
Slide 14: All Other
• Net income improvement from 1Q14 driven by the absence of the 1Q14 annual retirement-eligible incentive compensation costs and improvement in provision for credit losses, partially offset by lower equity investment gains • Revenue was impacted by the following selected items: • Provision improved
Slide 15: Key Takeaways
Key Takeaways 15 • Business performance showed good progress – Solid client activity across all segments – Global Banking, Global Markets and Global Wealth & Investment Management grew revenue from 2Q13 – Consumer and Business Banking improved earnings 29% from 2Q13 – Legacy Assets and Servicing red
Slide 16: Appendix
Appendix
Slide 17: Results by Business Segment
____________________ 1 FTE basis. FTE basis for the total Corporation and pre-tax, pre-provision earnings are non-GAAP financial measures. 2 For reconciliations to GAAP financial measures, see the accompanying reconciliations in the earnings press release and other earnings-related information. Resu
Slide 18: Business Metrics Reflect Progress: Consumer Metrics
Business Metrics Reflect Progress Consumer Metrics 18 Avg. Consumer and Business Banking Deposits ($B) and Rate Paid (bps) Mobile Banking Active Accounts (units in MM) 1 Banking Centers 5,594 5,328 5,023 3,000 4,000 5,000 6,000 2Q12 2Q13 2Q14 $72.2 $84.2 $105.9 $0 $20 $40 $60 $80 $100 $120 2Q12 2Q13
Slide 19: Business Metrics Reflect Progress: Banking and Markets Metrics
Business Metrics Reflect Progress Banking and Markets Metrics 19 ____________________ 1 FTE basis. Represents a non-GAAP financial measure. 2 Represents a non-GAAP financial measure. During 1Q14, the management of structured liabilities and the associated DVA were moved into Global Markets from All
Slide 20: Representations and Warranties Exposure
Representations and Warranties Exposure 1 20 ____________________ 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; separate foreclosure costs
Slide 21: Home Loans Asset Quality Key Indicators
____________________ 1 Excludes FVO loans. 2 Excludes write-offs of PCI loans of $70MM and $281MM related to residential mortgage and $90MM and $110MM related to home equity for 2Q14 and 1Q14. Net charge-off ratios including the PCI write-offs for residential mortgage were 0.06% and 0.67%, and for h
Slide 22: Basel 3 Regulatory Capital Reconciliation
____________________ 1 Regulatory capital ratios are preliminary. For important presentation information, see slide 24. 2 On January 1, 2014, the Basel 3 rules became effective, subject to transition provisions primarily related to regulatory deductions and adjustments impacting CET1 capital and Tie
Slide 23: Forward-Looking Statements
Forward-Looking Statements 23 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 24: 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 25: Bank of America
Bankof America