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 2016 Earnings Presentation
31 slides from Bank Of America's earnings presentation, Apr 14, 2016
Slide 1: Bank of America 1Q16 Financial Results
Bank of America 1Q16 Financial Results April 14, 2016
Slide 2: 1Q16 Highlights
1Q16 Highlights • Net income of $2.7B in 1Q16, or $0.21 per diluted common share – Includes negative market-related NII adjustments of $0.07 per share and annual retirement-eligible incentive costs of $0.05 per share 1 • Increased net interest income, excluding market-related adjustments • Loans in
Slide 3: Business Results
$1,461 $652 $1,367 $677 ($237) ($823) $1,785 $740 $1,066 $984 ($40) ($1,855) Consumer Banking GWIM Global Banking Global Markets Legacy Assets & Servicing (LAS) All Other 1Q15 1Q16 1 1Q16 ROAAC 2, 3 23% 12% 11% 24% Business Results Net Income (Loss) ($MM) ____________________ 1 Global Markets net in
Slide 4: Simpler Company
Simpler Company • Since 2010, sold non-core assets including: – Equity interests in other financial institutions – Non-core credit card portfolios – Ancillary mortgage businesses – International wealth management • Exited correspondent/wholesale lending and proprietary trading • Eliminated add-on pr
Slide 5: Strengthened Balance Sheet and Reduced Risk
$494 $408 $256 $42 $0 $100 $200 $300 $0 $200 $400 $600 4Q09 1Q16 Avg. trading-related assets Avg. VaR 5.0% 7.9% $11.31 $16.17 $0 $5 $10 $15 $20 0% 3% 6% 9% 4Q09 1Q16 Tangible common equity (TCE) ratio Tangible book value per share Strengthened Balance Sheet and Reduced Risk Strengthened Capital TCE
Slide 6: 1Q16 Results
1Q16 Results ____________________ Note: Amounts may not total due to rounding. 1 FTE basis. 2 Represents a non-GAAP financial measure. Reported total revenue, net of interest expense was $19.5B, $19.7B and $20.9B for 1Q16, 4Q15 and 1Q15, respectively. 3 Represents a non-GAAP financial measure. 4 See
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 $2,185.5 $2,144.3 $2,143.5 Total loans and leases 901.1 897.0 872.8 Total deposits 1,217.3 1,197.3 1,153.2 Funding & Liquidity Long-term debt $232.8 $236.8 $237.
Slide 8: Loans & Leases and Deposits
Loans & Leases and Deposits (EOP, $B) 8 ____________________ Note: Amounts may not total due to rounding. 1 Includes Consumer Banking, GWIM, Global Banking and Global Markets (GM). Total Loans & Leases LAS and All Other Loans & Leases $873 $881 $882 $897 $901 $0 $250 $500 $750 $1,000 1Q15 2Q15 3Q15
Slide 9: Asset Quality Trends
$1.2 $1.1 $0.9 $1.1 $1.1 $1.0 $0.9 $0.9 $1.0 $1.0 0.47% 0.43% 0.43% 0.45% 0.46% 0.56% 0.49% 0.43% 0.52% 0.48% 0.0% 0.5% 1.0% $0.0 $0.5 $1.0 $1.5 1Q15 2Q15 3Q15 4Q15 1Q16 Reported NCOs and ratio Adjusted NCOs and ratio ____________________ 1 Represents a non-GAAP financial measure. Adjusted net charg
Slide 10: Asset Quality – Consumer Portfolio
Asset Quality – Consumer Portfolio 10 Consumer Net Charge-offs ($MM) $1,117 $1,020 $821 $958 $917 0.95% 0.87% 0.71% 0.84% 0.82% 0.0% 0.5% 1.0% 1.5% $0 $500 $1,000 $1,500 1Q15 2Q15 3Q15 4Q15 1Q16 Credit Card Other Net charge-off ratio Consumer Asset Quality Metrics ($MM) 1Q16 4Q15 1Q15 Provis ion $40
Slide 11: Asset Quality – Commercial Portfolio
4.9 4.9 4.8 3.1 3.4 2.9 8.2 5.6 6.3 4.1 5.8 6.0 1.9 1.6 1.8 $22.2 $21.3 $21.8 $0 $5 $10 $15 $20 $25 1Q15 4Q15 1Q16 Exploration & Production (E&P) Oil Field Services (OFS) Refining & Marketing Vertically Integrated All Other Energy Asset Quality – Commercial Portfolio Commercial Net Charge-offs ($MM)
Slide 12: Net Interest Income
Net Interest Income 12 • Net interest income (NII) on an FTE basis of $9.4B, which included negative market-related NII adjustments of $1.2B – 1Q15 included negative market-related NII adjustments of $0.5B – 4Q15 included positive market-related adjustments of $0.1B as well as a negative adjustment
Slide 13: Expense Highlights
13.1 12.8 12.5 0.3 0.3 1.0 0.9 1.0 0.8 0.7 0.4 0.4 0.4 $15.8 $14.0 $14.8 $0 $6 $12 $18 1Q15 4Q15 1Q16 All other Seasonally elevated payroll tax Retirement-eligible costs LAS (excl. litigation) Litigation Expense Highlights ____________________ Note: Amounts may not total due to rounding. 1 Represent
Slide 14: Consumer Banking
Consumer Banking 14 ____________________ 1 FTE basis. 2 Cost of deposits calculated as annualized noninterest expense within the Deposits subsegment as a percentage of total average deposits within Consumer Banking. 3 Includes portfolios in Consumer Banking and GWIM. 4 Represents a non-GAAP financia
Slide 15: Consumer Banking Trends
Consumer Banking Trends 15 • #1 U.S. Retail Deposit Market Share 1 • #1 Home Equity Lender (Inside Mortgage Finance ‘15) • #2 bank in J.D. Power 2015 U.S. Primary Mortgage Origination Satisfaction Study • #3 in U.S. Credit Card Balances 2 • #1 in Online Banking Functionality (Keynote ’15) • #1 in Pr
Slide 16: Consumer Banking Trends
Consumer Banking Trends U.S. Consumer Credit Card ($B) 1,161 1,295 1,257 1,260 1,208 0 500 1,000 1,500 1Q15 2Q15 3Q15 4Q15 1Q16 Consumer Vehicle Lending ($B) Key Stats Average outstandings $38.9 $43.4 $45.2 NCO ratio 0.28 % 0.27 % 0.30 % Avg. booked FICO 777 781 778 1Q164Q151Q15 $5.7 $5.4 $7.0 $5.7
Slide 17: Global Wealth & Investment Management
Global Wealth & Investment Management 17 ____________________ 1 FTE basis. 2 Represents a non-GAAP financial measure. For important presentation information, see slide 30. 3 Includes financial advisors in Consumer Banking of 2,259 and 1,978 in 1Q16 and 1Q15. • Net income of $0.7B, generating a pre-t
Slide 18: Global Wealth & Investment Management Trends
Global Wealth & Investment Management Trends 18 Market Share Positioning Average Loans and Leases ($B) Total Client-Facing Professionals (000’s) 3 • #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
Slide 19: Global Banking
Global Banking 19 ____________________ 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. For important presentation information, see slide 30. • [ Bullets to come ] • Ne
Slide 20: Global Banking Trends
Global Banking Trends 20 ____________________ Note: Amounts may not total due to rounding. 1 Ranking per Dealogic for the first quarter as of April 1, 2016; excludes self-led deals. U.S. municipal bonds ranking per Thomson Reuters. 2 Global Banking and Global Markets share in certain deal economics
Slide 21: Global Markets
Global Markets 21 • [ 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 F on slide 28. 4 Represents a non-GAAP financial
Slide 22: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix 22 2.7 2.1 2.0 1.8 2.3 1.1 1.2 1.2 0.9 1.0 $3.9 $3.3 $3.1 $2.6 $3.3 $0 $1 $2 $3 $4 $5 1Q15 2Q15 3Q15 4Q15 1Q16 FICC Equities $444 $442 $431 $416 $408 $62 $55 $51 $44 $42 $0 $25 $50 $75 $100 $0 $100 $200 $300 $400 $500 1Q15 2Q15 3Q15 4Q15 1Q16 Avg. trading-relate
Slide 23: Legacy Assets & Servicing
Legacy Assets & Servicing 23 • Net loss of $40MM in 1Q16 • Total revenue declined from 1Q15, driven by a decrease in NII on lower loan balances, as well as a decline in noninterest income – Mortgage banking income decreased from 1Q15 as lower servicing fees and MSR net of hedge results were partiall
Slide 24: All Other
• Net loss of $1.9B in 1Q16 • Revenue decline from 1Q15, driven by larger negative market- related NII adjustments and, to a lesser extent, lower gains on the sale of consumer real estate loans • Provision benefit declined from 1Q15, driven by a slower pace of portfolio improvement, as well as the i
Slide 25: Key Takeaways
Key Takeaways 25 • Improved earnings in 4 of 5 business segments • Solid deposit and loan growth driven by good customer activity • Increased net interest income, excluding market-related adjustments • Managed costs while continuing to invest in the business • Asset quality remains strong – Continue
Slide 26: Appendix
Appendix
Slide 27: Regulatory Capital – Basel transition to fully phased-in
Regulatory Capital – Basel 3 transition to fully phased-in 1Q16 4Q15 1Q15 Common equity tier 1 capital (transition) $162,732 $163,026 $155,438 Deferred tax assets arising from net operating loss and tax credit carryforwards phased in during transition (3,764) (5,151) (6,031) Accumulated OCI phased i
Slide 28: Notes
Notes 28 A Market-related NII adjustments include retrospective changes to debt security premium or discount amortization resulting from changes in estimated prepayments, due primarily to changes in interest rates, and hedge ineffectiveness. Amortization of premiums and accretion of discounts are in
Slide 29: Forward-Looking Statements
Forward-Looking Statements 29 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 30: 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 31: Bank of America
Bankof America