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) — Q1 2015 Earnings Presentation
32 slides from Bank Of America's earnings presentation, Apr 15, 2015
Slide 1: Bank of America 1Q15 Financial Results
Bank of America 1Q15 Financial Results April 15, 2015
Slide 2: 1Q15 Highlights
1Q15 Highlights 2 • Net income of $3.4B in 1Q15, up versus $3.1B in 4Q14 and ($0.3B) in 1Q14 • Increased capital and liquidity measures • Authorized a $4B common stock repurchase program • Managed expenses well • Generated modest growth in core loans • Continued progress on key metrics in several bu
Slide 3: Business Results: Net Income and ROAAC
$1,468 $729 $1,291 $1,243 ($4,880) ($197) $1,475 $651 $1,365 $933 ($238) ($841) Consumer Banking Global Wealth & Investment Management Global Banking Global Markets (excl. net DVA / FVA) Legacy Assets & Servicing (LAS) All Other 1Q14 1Q15 1Q15 ROAAC 1 22% 16% 11% 21% Business Results Net Income (Los
Slide 4: 2015 Comprehensive Capital Analysis and Review (CCAR)
2015 Comprehensive Capital Analysis and Review (CCAR) 4 • The Federal Reserve Board (Fed) released the 2015 CCAR results on March 11, 2015; Bank of America performed well on the quantitative results, exceeding all stressed capital ratio minimum requirements in the severely adverse scenario with more
Slide 5: 1Q15 Results
1Q15 Results 5 ____________________ Note: Amounts may not total due to rounding. 1 FTE basis. Represents a non-GAAP financial measure; see note B on slide 29. 2 See note J on slide 29 for definition of market-related NII adjustments. 3 See note A on slide 29. 4 Represents a non-GAAP financial measur
Slide 6: Balance Sheet Highlights
____________________ 1 Represents a non-GAAP financial measure. For important presentation information, see slide 31. n/m = not meaningful Balance Sheet Highlights 6 • Total assets of $2.14T, up $39B from 4Q14, due primarily to higher cash levels • Total loans and leases declined $3.4B from 4Q14, dr
Slide 7: Loans & Leases
Loans & Leases (EOP, $B) 7 ____________________ Note: Amounts may not total due to rounding. 1 Represents a non-GAAP financial measure. GWIM Consumer Banking Global Banking 85 86 86 89 84 38 38 38 38 39 47 46 46 46 45 5 7 8 10 12 20 20 20 19 20 $195 $197 $198 $202 $200 $0 $50 $100 $150 $200 $250 1Q1
Slide 8: Basel Transition (under Standardized approach)
Basel 3 Transition (under Standardized approach) • 1Q15 included the migration of the risk-weighted asset calculation from the general risk-based approach to the Basel 3 Standardized approach and the 2015 phase-in of regulatory capital transition provisions • Common equity tier 1 capital (CET1) rati
Slide 9: Funding and Liquidity
• Long-term debt decreased $5B from 4Q14 as maturities outpaced new issuances – Issued $4B of parent long-term debt in 1Q15, including $2.5B of subordinated debt that benefits Tier 2 regulatory capital – Expect to remain opportunistic to meet future funding needs • Global Excess Liquidity Sources 3
Slide 10: Net Interest Income
Net Interest Income 10 • Reported net interest income (NII) 1 of $9.7B, down $0.2B from 4Q14 • Negative market-related NII adjustments of $484MM in 1Q15 versus $578MM negative adjustments in 4Q14 • Excluding market-related adjustments, NII 1 of $10.2B declined from 4Q14, driven by two fewer interest
Slide 11: Expense Highlights
13.6 12.7 13.3 1.0 1.0 1.6 1.1 1.0 6.0 0.4 0.4 $22.2 $14.2 $15.7 $0 $5 $10 $15 $20 $25 1Q14 4Q14 1Q15 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;
Slide 12: Asset Quality Trends
$16.6 $15.8 $15.1 $14.4 $13.7 2.95x 3.67x 3.65x 4.14x 2.82x 0x 1x 2x 3x 4x 5x 6x 7x $0 $5 $10 $15 $20 1Q14 2Q14 3Q14 4Q14 1Q15 T h o u s a n d s Allowance for loans and leases Allowance/annualized net charge-offs $1.4 $1.1 $1.0 $0.9 $1.2 $1.4 $1.3 $1.2 $1.0 $1.0 0.56% 0.52% 0.47% 0.47% 0.62% 0.48% 0
Slide 13: Consumer Banking
Consumer Banking 13 ____________________ 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 Represents a non-GAAP financial measure. For important presentation information, s
Slide 14: Consumer Banking Trends
Consumer Banking Trends 14 • #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 15: Global Wealth & Investment Management
Global Wealth & Investment Management 15 ____________________ 1 FTE basis. 2 Represents a non-GAAP financial measure. For important presentation information, see slide 31. 3 Includes financial advisors in Consumer Banking of 1,992 and 1,598 in 1Q15 and 1Q14. • Net income of $0.7B, generating a pre-t
Slide 16: GWIM Trends
GWIM Trends 16 Market Share Positioning Average Loans and Leases ($B) Total Client-Facing Professionals 4 15,323 15,560 15,867 16,035 16,175 19,199 19,416 19,727 19,750 20,018 0 5,000 10,000 15,000 20,000 25,000 1Q14 2Q14 3Q14 4Q14 1Q15 Other client-facing professionals Other Wealth Advisors Financi
Slide 17: Global Banking
Global Banking 17 ____________________ 1 FTE basis. 2 Represents a non-GAAP financial measure. For important presentation information, see slide 31. 3 Ranking per Dealogic for the first quarter as of April 1, 2015. • [ Bullets to come ] • Net income of $1.4B, up 6% from 1Q14, as lower credit costs a
Slide 18: Global Banking Trends
Global Banking Trends 18 ____________________ Note: Amounts may not total due to rounding. 1 Source: Dealogic as of April 1, 2015. 2 Source: Global Finance magazine (2015). 3 Global Banking shares with Global Markets in certain deal economics from investment banking and loan origination activities.
Slide 19: Global Markets
Global Markets 19 • [ Bullets to come ] ____________________ 1 FTE basis. 2 Represents a non-GAAP financial measure; see note A on slide 29. 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 20: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix 20 2.9 2.4 2.2 1.5 2.7 1.2 1.0 1.0 0.9 1.2 $4.1 $3.4 $3.3 $2.4 $3.9 $0 $1 $2 $3 $4 $5 1Q14 2Q14 3Q14 4Q14 1Q15 FICC Equities $437 $460 $446 $456 $444 $71 $51 $50 $51 $62 $0 $25 $50 $75 $100 $125 $150 $0 $100 $200 $300 $400 $500 $600 1Q14 2Q14 3Q14 4Q14 1Q15 Trad
Slide 21: Legacy Assets & Servicing
Legacy Assets & Servicing 21 • 1Q15 net loss of $0.2B improved from 1Q14, primarily due to lower litigation expense • Total revenue of $0.9B increased $0.2B from 1Q14, driven by favorable MSR net hedge results and lower representations and warranties provision • LAS expenses, excluding litigation 2,
Slide 22: All Other
• Total revenue declined $0.7B from 1Q14 – Net interest income decline of $0.1B was due primarily to lower NII from liquidating businesses – Noninterest income decline of $0.6B was driven by lower equity investment income ($0.7B) • Provision benefit increased $47MM from 1Q14, driven primarily by rec
Slide 23: Key Takeaways
Key Takeaways 23 • Strong capital and liquidity measures • Focused on CCAR resubmission • Authorized to begin common share repurchases in 2Q15 • Managed expenses well • Improved core loan activity • Asset quality remains strong • Positioned to benefit from rising rate environment
Slide 24: Appendix
Appendix
Slide 25: Line of Business Allocated Capital
Line of Business Allocated Capital 2015 Allocated Capital ($B) - $152B 1, 2 2014 Allocated Capital ($B) - $146B 1, 2 • The capital allocated to the Corporation's business segments is referred to as allocated capital, a non-GAAP financial measure, and is subject to change over time • Capital allocati
Slide 26: Representations and Warranties Exposure
Representations and Warranties Exposure 1 26 ____________________ 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 27: Consumer Real Estate Asset Quality Key Indicators
____________________ 1 Excludes FVO loans. 2 Excludes write-offs of PCI loans of $188MM and $0 related to residential mortgage and $100MM and $13MM related to home equity for 1Q15 and 4Q14. Net charge-off ratios including the PCI write-offs for residential mortgage were 0.73% and (0.46)%, and for ho
Slide 28: Regulatory capital ratios
____________________ 1 Regulatory capital ratios are preliminary. For important presentation information, see slide 31. 2 The Basel 3 Standardized approach Common equity tier 1 (transition) ratio at March 31, 2015 reflects the migration of the risk-weighted assets calculation from the general risk-b
Slide 29: Notes: Non-GAAP Financial Measures
Notes 29 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 In 4Q14, a funding valuation adjustment (FVA) on uncollateralized derivative transactions was implemented,
Slide 30: Forward-Looking Statements
Forward-Looking Statements 30 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 31: 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 32: Bank of America
Bankof America