Bank Of America Corporation · NYSE:BAC
Bank Of America — Q1 2023 Earnings Presentation
39 slides from Bank Of America's earnings presentation, Apr 18, 2023
Slide 1: Bank of America 1Q23 Financial Results
Bank of America 1Q23 Financial Results April 18, 2023
Slide 2: 1Q23 Results Highlights
1Q23 Results Highlights Diluted Revenue1 EPS Generated strong earnings $26.3B $0.94 +13% YoY +18% YoY ~130K ~14.5K net new net new Grew clients and accounts organically Consumer GWIM2 checking relation- accounts ships Seventh consecutive quarter of operating leverage2 CET14 Deposits5 capital Strengt
Slide 3: 1Q23 Highlights
1Q23 Highlights (Comparisons to 1Q22, unless otherwise noted) • Net income of $8.2B; diluted earnings per share of $0.94; ROE 12.5%, ROTCE 17.4%1 • Revenue, net of interest expense, of $26.3B increased $3.0B, or 13% – Net interest income (NII) of $14.4B ($14.6B FTE1) increased $2.9B, or 25%, driven
Slide 4: 1Q23 Financial Results
1Q23 Financial Results Summary Income Statement 1Q23 4Q22 Inc / (Dec) 1Q22 Inc / (Dec) ($B, except per share data) Total Revenue, net of interest expense $26.3 $24.5 $1.7 7 % $23.2 $3.0 13 % Provision for credit losses 0.9 1.1 (0.2) (15) — 0.9 N/M Net charge-offs 0.8 0.7 0.1 17 0.4 0.4 106 Reserve b
Slide 5: Balance Sheet, Liquidity and Capital
Balance Sheet, Liquidity and Capital (EOP1 basis unless noted) Balance Sheet Metrics 1Q23 4Q22 1Q22 Basel 3 Capital ($B)4 1Q23 4Q22 1Q22 Assets ($B) Common equity tier 1 capital $184 $180 $170 Total assets $3,195 $3,051 $3,238 Standardized approach Total loans and leases 1,046 1,046 993 Risk-weighte
Slide 6: Average Loan and Lease Trends
Average Loan and Lease Trends Total Loans and Leases ($B) Total Loans and Leases in All Other ($B) $1,250 $20 YoY $1,015 $1,034 $1,039 $1,041 +7% $15 $978 $14 $1,000 $15 3 3 $11 $10 YoY $750 $10 (35%) $10 3 2 2 $500 12 12 $5 $250 8 8 8 $0 $0 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 Resident
Slide 7: Average Deposit Trends
Average Deposit Trends Bank of America Ranked #1 in U.S. Retail Deposit Market Share1 Total Corporation ($B) Consumer Banking ($B) $2,500 $1,250 $2,046 $2,012 $1,963 $1,056 $1,078 $1,069 $1,047 $1,026 QoQ (2%) vs. 4Q19 +43% $1,926 $1,894 QoQ vs. 4Q19 $2,000 (2%) +34% $1,000 $1,500 $1,410 799 790 738
Slide 8: Weekly Ending Deposit Trends
Weekly Ending Deposit Trends Total Deposits of $1,910B Declined $20B in 1Q23 Consumer Banking Declined $4B to $1,045B in 1Q23 $1,938 $1,930 $1,910 $2,000 5.00% $575 3/10 $555 $547 $550 $543 $1,500 $1,269 $1,275 $1,219 4.00% $525 $518 $506 $1,000 $497 $719 $500 $661 $636 $500 3.00% $475 09/30/22 12/3
Slide 9: $1.9T Deposits in Our Diversified and Engaged Deposit Franchise
$1.9T Deposits in Our Diversified and Engaged Deposit Franchise Consumer & Small Business1 Global Banking • Balances from very engaged clients • Long-tenured, multi-product relationships – 85% from clients with more than one product – 80% of US balances are held by clients with an account tenure – 8
Slide 10: Strong Excess Deposits Drove Need to Invest
Strong Excess Deposits Drove Need to Invest (EOP, $T) $2.1 2.1 $2.1 2.1 $2.0 $2.0 $1.9 $1.9 2.0 $1.9 $1.9 2.0 $1.9 1.9 1.9 1.9 1.9 1.9 $1.8 1.8 $1.7 1.7 $1.7 1.7 $1.6 1.6 $1.4 1.1 1.1 1.0 1.4 0.9 0.9 0.9 1.0 1.0 0.7 0.9 1.0 0.5 0.7 0.5 1.0 1.1 1.0 1.0 1.0 1.0 1.0 1.0 1.0 0.9 0.9 0.9 0.9 1.0 4Q19 1Q2
Slide 11: Investments Made to Extract the Value of Deposits
Investments Made to Extract the Value of Deposits $1,500 $1,331 $1,248 $1,244 $1,183 $1,200 $1,131 $1,085 $1,093 $1,173 $1,065 $1,000 $885 675 $726 $761 438 624 633 $634 $500 216 247 308 173 230 256 380 348 376 162 230 $0 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 1 Cash a
Slide 12: Net Interest Income Increased $2.9B, or 25% YoY
Net Interest Income Increased $2.9B, or 25% YoY Net Interest Income (FTE, $B)1 • Net interest income of $14.4B ($14.6B FTE1) increased $2.9B YoY, $14.8 driven by benefits from higher interest rates and loan growth $15.0 $14.6 $13.9 – Decreased $0.2B from 4Q22, as the benefit from higher interest $12
Slide 13: Expense and Efficiency
Expense and Efficiency Total Noninterest Expense ($B) $20.0 $15.3 $15.3 $15.3 $15.5 $16.2 5.8 6.4 6.4 6.3 6.4 $10.0 9.5 8.9 8.9 9.2 9.9 $0.0 1Q22 2Q22 3Q22 4Q22 1Q23 Compensation and benefits Other Efficiency Ratio 70% 67% 66% 62% 63% 62% 60% 50% 1Q22 2Q22 3Q22 4Q22 1Q23 • Noninterest expense of $16
Slide 14: Asset Quality
Asset Quality Net Charge-offs ($MM)1 • Total net charge-offs of $807MM1 increased $118MM from 4Q22 $1,000 0.50% – Consumer net charge-offs of $653MM $807 increased $122MM, driven primarily by higher $800 0.40% credit card losses $689 $571 ◦ Credit card loss rate of 2.21% in 1Q23, $600 $520 0.30% 0.3
Slide 15: Asset Quality – Consumer and Commercial Portfolios
Asset Quality – Consumer and Commercial Portfolios Consumer Net Charge-offs ($MM) Consumer Metrics ($MM) 1Q23 4Q22 1Q22 Provision $945 $902 $14 $800 1.00% Nonperforming loans and leases 2,714 2,754 3,104 $653 $600 0.75% % of loans and leases1 0.60 % 0.60 % 0.71 % $525 $531 $459 Consumer 30+ days per
Slide 16: Continued Organic Growth in 1Q23
Continued Organic Growth in 1Q23 Consumer Banking Global Wealth & Investment Management Added ~130,000 net new checking accounts; Added record ~14,500 net new relationships across 17th consecutive quarter of growth Merrill and Private Bank Added 1.3 million credit card accounts1 $80 billion total ne
Slide 17: Extended Quarterly Operating Leverage Streak
Extended Quarterly Operating Leverage1 Streak 3Q19-2Q21 Break in operating leverage streak Revenue (7%) (5%) (2%) 1% (3%) 1% 3% 2% 7% 7% 1% 7% 4% (1%) 4% 6% —% 2% 12% 10% 2% 6% 8% 11% 13% Expense (29%) (25%) (31%) (2%) (10%) (2%) (1%) (4%) (1%) 1% (3%) (1%) (1%) (5%) (2%) (1%) (4%) —% —% 6% (1%) 2%
Slide 18: Consumer Banking
Consumer Banking Inc / (Dec) • Net income of $3.1B increased 4% from 1Q22, driven by Summary Income Statement ($MM) 1Q23 4Q22 1Q22 strong revenue growth and continued investments in the business Total revenue, net of interest expense $10,706 ($76) $1,893 – Pretax, pre-provision income1 of $5.2B incr
Slide 19: Consumer Digital Update
Consumer1 Digital Update Digital Adoption Client Engagement Digital Users2 and Households3 Digital Channel Usage4,5 Digital Sales6 60 56 100% 3,500 1,250 2,000 100% 52 54 3,115 1,721 1,784 50 90% 3,000 50 2,748 1,000 1,500 1,360 75% 45 2,579 42 80% 2,500 1,081 39 40 2,166 40 892 750 1,000 50% 786 81
Slide 20: Global Wealth & Investment Management
Global Wealth & Investment Management Inc / (Dec) • Net income of $0.9B decreased 19% from 1Q22 Summary Income Statement ($MM) 1Q23 4Q22 1Q22 – Pretax, pre-provision income1 of $1.2B decreased Total revenue, net of interest expense $5,315 ($95) ($161) 15% from 1Q22 Provision (benefit) for credit los
Slide 21: Global Wealth & Investment Management Digital Update
Global Wealth & Investment Management Digital Update Digital Adoption1,2 Client Engagement Digital Households / Relationships Digital Channel Adoption1,3 eDelivery4 750 100% 100% 100% 717 700 688 74% 75% 77% 74% 77% 667 90% 75% 71% 75% 71% 63% 56% 58% 650 630 53% 80% 50% 46% 50% 84% 600 81% 79% 75%
Slide 22: Global Banking
Global Banking Inc / (Dec) • Net income of $2.6B increased 48% from 1Q22 Summary Income Statement ($MM) 1Q23 4Q22 1Q22 – Pretax, pre-provision income2 of $3.3B increased Total revenue, net of interest expense1 $6,203 ($235) $1,009 30% from 1Q22 Provision (benefit) for credit losses (237) (386) (402)
Slide 23: Global Banking Digital Update
Global Banking Digital Update Digital Adoption1 Client Engagement Client Digital Adoption % CashPro® App Sign-ins (K) CashPro® App Payments 80% 750 720 200 4.0 76% $179 74% 74% 150 $136 3.3 3.0 70% 500 474 336 100 2.4 2.0 60% 250 $62 50 $44 1.0 1.3 0.8 50% 0 0 0.0 1Q21 1Q22 1Q23 1Q21 1Q22 1Q23 1Q20
Slide 24: Global Markets
Global Markets1 Inc / (Dec) • Net income of $1.7B increased 6% from 1Q22 Summary Income Statement ($MM) 1Q23 4Q22 1Q22 – Excluding net DVA, net income of $1.7B Total revenue, net of interest expense2 $5,626 $1,765 $334 increased 9%3 Net DVA 14 207 (55) • Revenue of $5.6B increased 6% from 1Q22, driv
Slide 25: All Other
All Other1 Inc/(Dec) • Net loss of $107MM included a $220MM pretax loss Summary Income Statement ($MM) 1Q23 4Q22 1Q22 on sale of AFS debt securities Total revenue, net of interest expense ($1,458) $378 ($17) • Total corporate effective tax rate (ETR) for the Provision (benefit) for credit losses 107
Slide 26: Supplemental Business Segment Trends
Supplemental Business Segment Trends
Slide 27: Consumer Banking Trends
Consumer Banking Trends Business Leadership1 Total Revenue ($B) Total Expense ($B) and Efficiency (A) • No. 1 in estimated U.S. Retail Deposits $12.0 $6.0 $5.5 70% • No. 1 Online Banking and Mobile Banking $10.8 $10.7 Functionality(B) $9.9 $4.9 $5.0 $5.1 $5.1 $8.8 $9.1 2.3 2.1 • No. 1 Small Business
Slide 28: Consumer Creditworthiness Remains Strong
Consumer Creditworthiness Remains Strong Consumer Credit Card1 Consumer Vehicle Lending3 New Accounts (K) New Originations ($B) 1,500 1,255 $10.0 1,187 1,068 1,096 $7.1 $7.1 $6.8 $7.0 977 $7.5 $5.9 1,000 $5.0 500 $2.5 0 $0.0 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 Key Stats 1Q22 4Q22 1Q23
Slide 29: Global Wealth & Investment Management Trends
Global Wealth & Investment Management Trends Business Leadership1 Average Deposits ($B) Average Loans and Leases ($B) • No. 1 on Forbes’ Best-in-State Wealth Advisors (2023), Top Women Wealth Advisors (2022), Top Women Wealth $400 $385 $250 Advisors Best-in State (2022), and Top Next Generation $364
Slide 30: Global Banking Trends
Global Banking Trends Business Leadership1 Average Deposits ($B) Average Loans and Leases ($B) (M) • Global Most Innovative Financial Institution – 2022 • World's Best Bank, North America’s Best Bank for $600 $400 $377 $384 $380 $381 $540 $359 13 13 13 Small to Medium-sized Enterprises, and Best Ban
Slide 31: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix Business Leadership1 1Q23 Global Markets Revenue Mix 1Q23 Total FICC Sales and Trading • Americas Derivatives House of the Year and (excl. net DVA)2 Revenue Mix (excl. net DVA)2 Americas House of the Year for Equity Derivatives, FX Derivatives, Interest Rate Der
Slide 32: Additional Presentation Information
Additional Presentation Information
Slide 33: Consumer Spend Remained Strong; 1Q23 up 9% YoY to $1.1T
Consumer Spend Remained Strong; 1Q23 up 9% YoY to $1.1T Payment Spend1 ($ Volume) and YoY % Growth Payment Spend1 ($ and Transaction Volume) Quarterly YoY % Growth $1.1T $ Volume Transaction # $1.0T 50% $0.9T $0.8T 25% 14% 9% 6% 9% 10% 9% 0% (25)% 1Q20 1Q21 1Q22 1Q23 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q
Slide 34: Commercial Real Estate Loans
Commercial Real Estate Loans Commercial Real Estate as a Percent of: Geographic Distribution ($B) $2.6 $2.0 3% $5.8 3% 21.2% $2.8 8% $16.3 4% 22% Northeast California Southeast 12.3% $7.0 Southwest 10% ~$73B Midwest 6.9% 7.0% Midsouth $13.8 Northwest $9.1 19% Other 12% Non-US $13.8 Total Commercial
Slide 35: Notes
Notes A Global Liquidity Sources (GLS) include cash and high-quality, liquid, unencumbered securities, inclusive of 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 other investment-grade securities, and
Slide 36: Business Leadership Sources
Business Leadership Sources (A) Estimated U.S. retail deposits based on June 30, 2022 FDIC deposit data. (B) Javelin 2022 Online and Mobile Banking Scorecards. (C) FDIC, 4Q22. (D) Global Finance, May 2022. (E) Global Finance, August 2022. (F) Global Finance, December 2022. (G) J.D. Power 2023 Financ
Slide 37: Forward-Looking Statements
Forward-Looking Statements Bank of America Corporation (the Corporation) 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
Slide 38: Important Presentation Information
Important Presentation Information • The information contained herein is preliminary and based on Corporation 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 obligati
Slide 39: Bank of America
BANK OF AMERICA