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) — Q3 2017 Earnings Presentation
28 slides from Bank Of America's earnings presentation, Oct 13, 2017
Slide 1: Bank of America 3Q17 Financial Results
Bank of America 3Q17 Financial Results October 13, 2017
Slide 2: 3Q17 Highlights
3Q17 Highlights • Generated net income of $5.6B, up 13% from 3Q16, and earnings per diluted common share of $0.48, up 17% from 3Q16 – Year-to-date net income of $15.7B, up 19% from 2016 • Reduced noninterest expense to $13.1B, down 3% from 3Q16; efficiency ratio improved to 60% • Good client balance
Slide 3: Operating Leverage Trend
(7%) (5%) (2%) 1% (3%) 1% 3% 2% 7% 7% 1% (29%) (25%) (31%) (2%) (6%) (3%) (3%) (6%) 0% 2% (3%) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 YoY revenue growth (decline) YoY expense growth (decline) Operating leverage Operating Leverage Trend 3 ____________________ Note: Amounts may not tot
Slide 4: Year-to-Date Business Results
$5.3 $2.1 $4.1 $3.2 ($1.5) $6.0 $2.3 $5.3 $2.9 ($0.8) Consumer Banking GWIM Global Banking Global Markets All Other 2016 YTD 2017 YTD Year-to-Date Business Results 4 Net Income (Loss) ($B) ____________________ Note: GWIM defined as Global Wealth & Investment Management. 1 Excluding net debit valuati
Slide 5: 3Q17 Summary Results
3Q17 Summary Results 5 ____________________ Note: Amounts may not total due to rounding. 1 2Q17 included an after-tax gain of $0.1B for the sale of the non-U.S. consumer credit card business of which a $0.8B pre-tax gain was recorded in other income mostly offset by a $0.7B tax expense. 2 Reported o
Slide 6: Balance Sheet, Liquidity and Capital Highlights
Balance Sheet, Liquidity and Capital Highlights 6 $ in billions, except per share data Balance Sheet (end of period balances) Total assets $2,283.9 $2,254.5 $2,195.3 Total loans and leases 1 927.1 916.7 905.0 Total loans and leases in business segments 2 854.3 837.8 802.4 Total deposits 1,284.4 1,26
Slide 7: Loans & Leases and Deposits
Loans & Leases and Deposits ____________________ Note: Amounts may not total due to rounding. 1 Includes $6.5B, $9.4B, $9.1B and $9.3B of average non-U.S. consumer credit card loans in 2Q17, 1Q17, 4Q16 and 3Q16, respectively. On June 1, 2017, the Company completed the sale of its non-U.S. consumer c
Slide 8: Asset Quality
$888 $880 $934 $908 $900 0.40% 0.39% 0.42% 0.40% 0.39% 0.0% 0.5% 1.0% $0 $300 $600 $900 $1,200 3Q16 4Q16 1Q17 2Q17 3Q17 Net charge-offs Net charge-off ratio ____________________ 1 Excludes loans measured at fair value. Asset Quality 8 Net Charge-offs ($MM) Provision for Credit Losses ($MM) $850 $774
Slide 9: Asset Quality – Consumer and Commercial Portfolios
Asset Quality – Consumer and Commercial Portfolios 9 Consumer Net Charge-offs ($MM) $778 $775 $827 $751 $731 0.69% 0.68% 0.74% 0.67% 0.65% 0.0% 0.5% 1.0% 1.5% 2.0% $0 $300 $600 $900 $1,200 3Q16 4Q16 1Q17 2Q17 3Q17 Credit card Other Net charge-off ratio ____________________ 1 Excludes loans measured
Slide 10: Net Interest Income
Net Interest Income 10 • Net interest income of $11.2B ($11.4B FTE 1) increased $1.0B from 3Q16, driven by the benefits from higher interest rates and loan and deposit growth, partially offset by a decline resulting from the sale of the non-U.S. consumer credit card business – Increased $0.2B compar
Slide 11: Expense Highlights
211.9 210.7 210.5 210.9 209.8 42.6 43.0 43.1 44.1 44.8 30 35 40 45 50 55 60 0 50 100 150 200 250 3Q16 4Q16 1Q17 2Q17 3Q17 Total headcount Primary sales headcount Expense Highlights ____________________ Note: Amounts may not total due to rounding. • Total noninterest expense of $13.1B declined $0.3B,
Slide 12: Consumer Banking
Consumer Banking 12 ____________________ 1 FTE basis. 2 Cost of deposits calculated as annualized noninterest expense as a percentage of total average deposits within the Deposits subsegment. 3 Includes portfolios in Consumer Banking and GWIM. 4 Represents a non-GAAP financial measure. Calculated as
Slide 13: Consumer Banking Trends
Consumer Banking Trends 13 • #1 Consumer Deposit Market Share 1 • #1 Online Broker 2 • #1 Home Equity Lender 3 • #2 bank for Retail Mortgage Originations 3 • #1 in Prime Auto Credit distribution of new originations among peers 4 • #3 in U.S. Credit Card Balances 5 • #2 Small Business Lender 6 • #1 i
Slide 14: Consumer Banking Digital Trends
3.4 5.4 8.1 13.6 $0.9 $1.4 $2.4 $4.0 $0.0 $2.0 $4.0 $6.0 0 5 10 15 3Q14 3Q15 3Q16 3Q17 Transactions (MM) Volume ($B) 317 315 312 315 250 276 297 324 $568 $591 $609 $639 $0 $200 $400 $600 $800 3Q14 3Q15 3Q16 3Q17 Non-Digital Digital Consumer Banking Digital Trends 14 4 4,947 4,741 4,629 4,511 3,000 4
Slide 15: Global Wealth & Investment Management
Global Wealth & Investment Management 15 ____________________ 1 FTE basis. 2 Includes financial advisors in Consumer Banking of 2,267 and 2,171 in 3Q17 and 3Q16. • Net income of $0.8B, up 10% from 3Q16; ROAAC of 22% and pretax margin of 27% • Revenue of $4.6B improved 6% from 3Q16, due to higher NII
Slide 16: Global Wealth & Investment Management Trends
Global Wealth & Investment Management Trends 16 Business Leadership Average Loans and Leases ($B) Average Deposits ($B) • #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 U.S. high net worth client
Slide 17: Global Banking
Global Banking 17 ____________________ 1 FTE basis. 2 Global Banking and Global Markets share in certain deal economics from investment banking and loan origination activities. 3 Ranking per Dealogic as of October 2, 2017 for the quarter ended September 30, 2017; excludes self-led deals. • [ Bullets
Slide 18: Global Banking Trends
Global Banking Trends 18 ____________________ Note: Amounts may not total due to rounding. 1 Global Banking and Global Markets share in certain deal economics from investment banking and loan origination activities. 2 FTE basis. 3 Advisory includes fees on debt and equity advisory and mergers and ac
Slide 19: Global Markets
Global Markets 19 • [ 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 E on slide 25. 4 See note F on slide 25 for defin
Slide 20: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix 20 6.9 7.6 7.4 3.5 3.1 3.2 $10.4 $10.7 $10.5 $0 $4 $8 $12 2015 YTD 2016 YTD 2017 YTD FICC Equities $439 $411 $439 $56 $43 $41 $0 $25 $50 $75 $100 $0 $100 $200 $300 $400 $500 2015 YTD 2016 YTD 2017 YTD Avg. trading-related assets Avg. VaR • #1 Global Research Fir
Slide 21: All Other
• Net income of $0.2B in 3Q17 • Revenue declined $0.6B from 3Q16, reflecting lower mortgage banking income and the absence of the non-U.S. consumer credit card business 1 – Mortgage banking income was negatively impacted by less favorable valuations on mortgage servicing rights, net of related hedge
Slide 22: Key Takeaways
Key Takeaways 22 • Delivered responsible growth • Operating leverage drove improved earnings • Lowered expenses while continuing to invest in the franchise • Solid client activity with good deposit, loan and AUM growth • Asset quality remained strong • Positioned to benefit from higher interest rate
Slide 23: Appendix
Appendix
Slide 24: Regulatory Capital – Basel transition to fully phased-in
Regulatory Capital – Basel 3 transition to fully phased-in 3Q17 2Q17 3Q16 Common equity tier 1 capital (transition) $176,094 $171,431 $169,925 Deferred tax assets arising from net operating loss and tax credit carryforwards phased in during transition (1,357) (1,457) (3,143) Accumulated OCI phased i
Slide 25: Notes
Notes 25 A Global Liquidity Sources (GLS) include cash and high-quality, liquid, unencumbered securities, limited to 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 are readily available to meet funding
Slide 26: Forward-Looking Statements
Forward-Looking Statements 26 Bank of America Corporation (the “Company”) 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 d
Slide 27: 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 28: Bank of America
Bank of America