Bank Of America Corporation · NYSE:BAC
Bank Of America — Q4 2005 Earnings Presentation
33 slides from Bank Of America's earnings presentation, Jan 23, 2006
Slide 1: Bank of America Fourth Quarter 2005 Results
Exhibit 99.3 * * Bank of America * Fourth Quarter 2005 Results * * Ken Lewis * President, Chairman and Chief Executive Officer * Al de Molina * Chief Financial Officer * January 23, 2006 *
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements, including statements about the financial conditions, results of operations and earnings outlook of Bank of America Corporation. The forward-looking statements involve certain risks and uncertainties. Factors that may c
Slide 3: Summary Earnings Statement
Summary Earnings Statement $ in millions Proforma ¹ 2005 2004 2004 % Change Core net interest income (FTE) $ 30,545 $ 27,472 $ 29,272 4% Trading-related net interest income 1,444 2,039 2,039 Net interest income (FTE) 31,989 29,511 31,311 2% Noninterest income 25,610 20,085 21,603 19 % Total revenue
Slide 4: Earnings Highlights – 2005
Earnings Highlights – 2005 • Record earnings of $16.9 billion grew 19% over 2004. Excluding $275 million merger charges earnings grew 18%. – On a proforma basis, including Fleet 1Q04 earnings grew 13%, 12% excluding merger charges. • 2005 highlighted by strong consumer growth while completing Fleet
Slide 5: Summary Earnings Statement
Summary Earnings Statement $ in millions 4Q05 3Q05 4Q04 Vs. 3Q05 Core net interest income (FTE) $ 7,803 $ 7,657 $ 7,537 2% Trading-related net interest income 300 316 417 Net interest income (FTE) 8,103 7,973 7,954 2% Noninterest income 6,262 6,834 5,966 ( 8 %) Total revenue (FTE) 14,365 14,807 13,9
Slide 6: Net Interest Income
Net Interest Income $ in millions Linked Quarter Net Interest Income & Yield 4Q05 3Q05 Change % Change Reported net interest income (FTE) $ 8,103 $ 7,973 $ 130 2% Trading related NII 300 316 (16) ( 5 %) Core net interest Income (FTE) 7,803 7,657 146 2% Avg. earning assets $ 1,145,541 $ 1,137,619 $ 7
Slide 7: Global Consumer & Small Business Banking (GCSB)
Global Consumer & Small Business Banking (GCSB) ($ in millions) Proforma ¹ vs. 4Q04 vs. 3Q05 2005 2004 2004 % chg 4Q05 % chg % chg Net interest income $ 17,053 $ 15,911 $16,868 1% $ 4,373 2% 2% Noninterest income 11,823 9,245 9,698 21 % 3,056 8% ( 2 %) Total revenue 28,876 25,156 26,566 9% 7,429 4%
Slide 8: Consumer Sales Activity
Consumer Sales Activity ($ in millions) Unit Sales by Product Product Sales Mix by Channel 2004¹ 2005 Change % All Other 9.6% 12.6% Checking 5.8 6.5 11% 14.3% 8.9% Direct Mail Savings 7.4 7.8 6% 7.7% 11.9% Credit card 6.2 5.6 (10%) E-commerce Debit card 4.1 4.8 18% Banking Stores Online banking 3.8
Slide 9: Global Consumer & Small Business Banking (GCSB)
Global Consumer & Small Business Banking (GCSB) ($ in billions) Production Statistics Proforma ¹ vs. 4Q04 vs. 3Q05 2005 2004 % chg 4Q05 % chg % chg Consumer R/E Originations ² Mortgage $ 86.8 $ 87.5 (1 %) $ 20.7 13 % ( 25 %) Home Equity $ 72.0 61.1 18 % 19.7 22 % 10 % Avg. managed card bal. $ 59.0 $
Slide 10: Bringing Together Superior Distribution And Products
Bringing Together Superior Distribution And Products • Distribution capabilities • Attractive customer base – 5,873 banking centers • Best-in-class credit quality – 16,785 ATMs • Proven profitability – 14.7 million online customers • International presence • Customer base – Leading market positions
Slide 11: Global Business & Financial Services (GBFS)
Global Business & Financial Services (GBFS) ($ in millions) Proforma ¹ vs. 4Q04 vs. 3Q05 2005 2004 2004 % chg 4Q05 % chg % chg Net interest income $ 7,788 $ 6,534 $ 7,113 9% $ 2,027 9% 3% Noninterest income 3,372 2,717 3,128 8% 872 2% ( 3 %) Total revenue 11,160 9,251 10,241 9% 2,899 7% 2% Securitie
Slide 12: Global Business & Financial Services
Global Business & Financial Services ($ in billions) Loan Mix 4Q05 Annualized Dealer Avg. Loans Growth vs. 3Q05 Finance Real 20% Middle Market $57.0 16 % Estate 16% Leasing Dealer Finance 38.3 18 10% Commercial R/E 31.3 12 Leasing 19.8 9 Business Middle Capital Business Banking 18.1 8 Mkt 5% 30% Bus
Slide 13: Global Wealth & Investment Management (GWIM)
Global Wealth & Investment Management (GWIM) ($ in millions) Proforma ¹ vs. 4Q04 vs. 3Q05 2005 2004 2004 % chg 4Q05 % chg % chg Net interest income $ 3,770 $ 2,869 $ 2,952 28 % $ 993 19 % 7% Noninterest income 3,623 3,064 3,506 3% 936 11 % 3% Total revenue 7,393 5,933 6,458 14 % 1,929 15 % 5% Provis
Slide 14: Global Wealth & Investment Management
Global Wealth & Investment Management AUM Mix - $482 Billion • AUM increased $25 billion or 5% over 3Q - Up approximately $23 billion from net inflows Short-term (cash) up $22 billion Long-term assets up $1 billion - Up approximately $2 billion from market action and other adjustments • 82% of the a
Slide 15: Global Corporate & Investment Banking (GCIB)
Global Corporate & Investment Banking (GCIB) ($ in millions) Proforma ¹ vs. 4Q04 vs. 3Q05 2005 2004 2004 % chg 4Q05 % chg % chg Net interest income $ 3,298 $ 4,058 $ 4,210 (22 %) $ 727 (24 %) ( 6 %) Noninterest income 5,711 4,988 5,144 11 % 1,219 (1 %) ( 21 %) Total revenue 9,009 9,046 9,354 ( 4 %)
Slide 16: Investment Banking Domestic Market Share and Rankings
Investment Banking Domestic Market Share and Rankings 18.30% Syndicated loans #2 20.30% 15.60% Leveraged loans #2 17.70% 12.00% High-yield debt #2 10.70% 11.90% Mergers & acquisitions #10 8.30% 7.60% Convertible debt #8 9.30% 7.40% Investment grade debt #5 5.20% 6.50% Mortgage-backed securities #6 9
Slide 17: All Other
All Other • The corporation’s total equity investment gains were $481 million versus $668 million in 3Q05 and $426 million in 4Q04. The majority of these gains are reported in this segment. • Debt securities gains recorded were $71 million, an increase from $29 million in 3Q05 and a decline from $10
Slide 18: Capital Strength
Capital Strength $ in millions 4Q05 3Q05 4Q04 Tier 1 Capital $ 74,027 $ 73,030 $ 64,281 Risk Weighted Assets 901,693 889,979 793,523 Tier 1 Capital Ratio 8.21% 8.21% 8.10% Total Capital Ratio 11.04% 11.12% 11.63% Leverage Ratio 5.89% 5.85% 5.82% Tangible Equity $ 52,676 $ 52,604 $ 50,496 Tangible Eq
Slide 19: 2006 Outlook
2006 Outlook • Expect GDP growth of 3 – 3.5% • Core net interest income growth of 3 - 4% • Total revenue growth expected at low end of 6-9% long-term target range • Minimal securities gains planned in 2006 vs. $1.1 bb in 2005 • Consumer credit stable • Commercial credit moving toward normalcy • Posi
Slide 20: Line of Business View – On a Diluted Per Share Basis
Line of Business View – On a Diluted Per Share Basis 20
Slide 21: Line of Business View – Outlook
Line of Business View – Outlook 21
Slide 22: APPENDIX
22 APPENDIX — Bankof America CH vii cher Standards
Slide 23: Earnings Highlights – Fourth Quarter
Earnings Highlights – Fourth Quarter • Earnings of $3.8 billion, 2% below prior year quarter and 9% lower than 3Q05. • Strong earning asset generation across all segments – Consumer loans grew 13% annualized over 3Q05 – Commercial loans grew $6.5 billion in large corporate space and $6.4 billion in
Slide 24: Business Segment Performance - 2005
Business Segment Performance - 2005 $ in billions Revenue Net Income before merger charges Proforma ¹ Proforma ¹ 2004 2004 2004 2004 Global Consumer and 2005 % chg % chg Global Consumer and 2005 % chg % chg Small Business ……........ $28.9 15% 9% Small Business ……........ $ 7.2 20% 14% Global Busines
Slide 25: Business Segment Performance – 4Q05 vs. 4Q04
Business Segment Performance – 4Q05 vs. 4Q04 $ in billions Revenue Net Income before merger charges Global Consumer and 4Q05 % chg Global Consumer and 4Q05 % chg Small Business ……............ $ 7.4 4% Small Business ……............ $ 1.8 10% Global Business and Global Business and Financial Services…
Slide 26: Core Net Interest Income and Yield Trends
Core Net Interest Income and Yield Trends $ in millions $10,000 6.00% 5.00% $9,000 BAC Core Net Interest Yield 4.03% 3.95% 3.71% 3.71% 3.70% 4.00% $8,000 $7,803 3.00% $7,658 $7,657 $7,537 $7,427 $7,000 2.00% 1.59% $6,000 1.44% 1.00% 1.02% 0.69% 0.54% $5,000 0.00% 4Q04 1Q05 2Q05 3Q05 4Q05 Core net in
Slide 27: Net Interest Income Sensitivity
Net Interest Income Sensitivity Net interest income sensitivity – First 12 months as of 12/31/05
Slide 28: Net Interest Income Sensitivity
Net Interest Income Sensitivity 28
Slide 29: Nonperforming Assets and Allowance for Credit Losses
Nonperforming Assets and Allowance for Credit Losses $ in millions $3,000 1.0% Nonperforming $2,455 $2,500 Assets $2,000 $1,603 $1,500 0.5% Nonperforming $1,000 0.47% 0.44% Assets / Loans, 0.36% Leases & $500 0.29% 0.28% Foreclosed $0 0.0% Properties 4Q04 1Q05 2Q05 3Q05 4Q05 4Q04 1Q05 2Q05 3Q05 4Q05
Slide 30: Consumer Credit Quality
Consumer Credit Quality Excl. BK reform $ in millions impact 4Q04 1Q05 2Q05 3Q05 4Q05 4Q05 Consumer Consumer charge-offs 938 1,018 1,039 1,072 1,749 Consumer recoveries 137 151 156 166 172 Net consumer charge-offs 801 867 883 906 1,577 1,069 Net consumer c/o ratio .98% 1.07% 1.09% 1.06% 1.79% 1.21%
Slide 31: Commercial Credit Quality
Commercial Credit Quality $ in millions 4Q04 1Q05 2Q05 3Q05 4Q05 Commercial Commercial charge-offs 186 140 183 367 226 Commercial recoveries 142 118 186 128 155 Net commercial charge-offs 44 22 (3) 239 71 Net commercial c/o ratio .09% .05% (.01%) .47% .13% Allowance for credit losses 4,248 4,034 3,7
Slide 32: MBNA Results
MBNA Results • Net income of $1,771 million in 2005 and $389 million in 4Q05 • Managed revenue of $3,939 million reflects growth of 6% from 3Q05 and 3% from 4Q04 • Average managed receivables of $124.9 billion – Growth of 4% vs. 3Q05 – Growth of 5% vs. 4Q04 • Managed net charge-offs of $1,849 millio
Slide 33: Bank of America Higher Standards
> ty Bank of America A Higher Standards