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) — Q4 2014 Earnings Presentation
27 slides from Bank Of America's earnings presentation, Jan 15, 2015
Slide 1: Bank of America 4Q14 Financial Results
Bank of America 4Q14 Financial Results January 15, 2015
Slide 2: Simplified and Stronger Company
Simplified and Stronger Company $144 $146 $152 6.74% 7.20% 7.47% 0% 2% 4% 6% 8% 10% $0 $40 $80 $120 $160 4Q12 4Q13 4Q14 Tangible common equity Tangible common equity ratio 55.8 54.4 53.3 11.0 8.7 5.4 5.3 6.1 16.4 $72.1 $69.2 $75.1 $0 $30 $60 $90 2012 2013 2014 All other LAS (excl. litigation & IFR)
Slide 3: 4Q14 Results
4Q14 Results 3 ____________________ 1 Amounts may not total due to rounding. 2 FTE basis. Represents a non-GAAP financial measure; see note E on slide 24. 4Q14 Net interest income 2 $9.9 Noninterest income 9.1 Total revenue, net of interest expense 2 19.0 Noninterest expense 14.2 Pre-tax, pre-provis
Slide 4: Balance Sheet Highlights
____________________ 1 Represents a non-GAAP financial measure. For important presentation information, see slide 26. n/m = not meaningful Balance Sheet Highlights 4 • Total assets of $2.1T, down $19.1B from 3Q14 • Total loans and leases declined $9.9B from 3Q14, driven primarily by a reduction in r
Slide 5: Regulatory Capital
Basel 3 Transition (under Standardized approach) 2 • Common equity tier 1 capital (CET1) ratio was 12.3% in 4Q14 Basel 3 Fully Phased-in 3 • CET1 capital grew $6.2B from 3Q14, driven by earnings, deferred tax asset utilization and an improvement in AOCI • Under the fully phased-in Standardized appro
Slide 6: Funding and Liquidity
• Long-term debt decreased $7B from 3Q14 as maturities outpaced new issuances – Issued $2B of parent long-term subordinated debt in 4Q14 – Expect to remain opportunistic to meet future funding needs • Global Excess Liquidity Sources 3 increased to a record $439B – Parent company liquidity increased
Slide 7: Net Interest Income
Net Interest Income 7 • Reported net interest income (NII) 1 of $9.9B, down $0.6B from 3Q14, driven by a $0.5B change in market-related adjustments – Lower interest rates and a flatter yield curve resulted in a $578MM negative market-related adjustment from the acceleration of bond premium amortizat
Slide 8: Expense Highlights
13.2 12.8 12.7 1.8 1.3 1.1 2.3 6.0 0.4 $17.3 $20.1 $14.2 $0 $5 $10 $15 $20 4Q13 3Q14 4Q14 All other LAS (excl. litigation) Litigation Expense Highlights ____________________ 1 Represents a non-GAAP financial measure; see note D on slide 24. 2 Represents a non-GAAP financial measure. For important pr
Slide 9: Asset Quality Trends Continued to Improve
$17.4 $16.6 $15.8 $15.1 $14.4 2.78x 2.95x 3.67x 3.65x 4.14x 0x 1x 2x 3x 4x 5x 6x 7x $0 $5 $10 $15 $20 4Q13 1Q14 2Q14 3Q14 4Q14 T h o u s a n d s Allowance for loans and leases Allowance/annualized net charge-offs $1.6 $1.4 $1.1 $1.0 $0.9 0.68% 0.62% 0.48% 0.46% 0.40% 0% 1% 2% $0 $1 $2 4Q13 1Q14 2Q14
Slide 10: Consumer & Business Banking (CBB)
Consumer & Business Banking (CBB) 10 ____________________ 1 FTE basis. 2 Represents a non-GAAP financial measure. For important presentation information, see slide 26. 3 Total U.S. consumer credit card includes portfolios in CBB and GWIM. In 4Q14, 3Q14 and 4Q13, $3.2B, $3.2B and $3.3B of the U.S. co
Slide 11: Consumer Real Estate Services (CRES)
Consumer Real Estate Services (CRES) 1 11 • 4Q14 net loss of $0.4B improved from 3Q14 and 4Q13, primarily due to lower litigation expense • Core production revenue and servicing fees were stable vs. 3Q14 • Servicing income increased $157MM from 3Q14, due mainly to favorable MSR net of hedge results
Slide 12: Global Wealth & Investment Management (GWIM)
1,181 1,190 1,229 1,209 1,221 821 842 879 888 903 245 244 237 239 245 119 120 123 126 129 $2,366 $2,396 $2,468 $2,462 $2,498 $500 $1,000 $1,500 $2,000 $2,500 4Q13 1Q14 2Q14 3Q14 4Q14 Other client balances Assets under management Client deposits Loans and leases Global Wealth & Investment Management
Slide 13: Global Banking
Global Banking 13 ____________________ 1 FTE basis. 2 Represents a non-GAAP financial measure. For important presentation information, see slide 26. 3 Ranking per Dealogic for the fourth quarter as of January 6, 2015. • [ Bullets to come ] • Net income of $1.4B, up 14% from 4Q13, driven by lower cre
Slide 14: Global Markets
Global Markets 14 • [ Bullets to come ] ____________________ 1 FTE basis. 2 Represents a non-GAAP financial measure; see note H on slide 24. 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 15: All Other
• Net loss of $0.4B as results declined from both comparative periods • Total revenue decreased $1.3B from 4Q13 – Net interest income decline was due primarily to negative market-related adjustments driven by the acceleration of bond premium amortization on debt securities – Noninterest income decli
Slide 16: Key Takeaways
Key Takeaways 16 • Record capital and liquidity • Strong leadership positions across the businesses • Focused on operating leverage, while continuing to invest in the franchise • Reduced LAS operating and litigation costs improved the company’s risk profile and earnings visibility • Continued positi
Slide 17: Appendix
Appendix
Slide 18: Results by Business Segment
____________________ 1 FTE basis. FTE basis for the total Corporation and pre-tax, pre-provision earnings are non-GAAP financial measures. Results by Business Segment $ in millions Total Corporation CBB CRES GWIM Global Banking Global Markets All Other Net interest income 1 $9,865 $4,853 $714 $1,407
Slide 19: Business Metrics Reflect Progress: Consumer Metrics
Business Metrics Reflect Progress Consumer Metrics 19 Avg. Consumer and Business Banking Deposits ($B) and Rate Paid (bps) Mobile Banking Active Accounts (units in MM) Banking Centers 5,478 5,151 4,855 3,000 4,000 5,000 6,000 4Q12 4Q13 4Q14 $76 $96 $114 $0 $20 $40 $60 $80 $100 $120 4Q12 4Q13 4Q14 $4
Slide 20: Business Metrics Reflect Progress: Banking and Markets Metrics
Business Metrics Reflect Progress Banking and Markets Metrics 20 ____________________ Note: Amounts may not total due to rounding. 1 FTE basis. For important presentation information, see slide 26. 2 Represents a non-GAAP financial measure; see notes H and I on slide 24. 3 VaR model uses historical
Slide 21: Representations and Warranties Exposure
Representations and Warranties Exposure 1 21 ____________________ 1 Exposures identified above relate only to repurchase claims associated with purported representations and warranties breaches. They do not include any exposures associated with related litigation matters; separate foreclosure costs
Slide 22: Residential Mortgage and Home Equity Portfolio Data
____________________ 1 Excludes FVO loans. 2 Excludes write-offs of PCI loans of $0MM and $196MM related to residential mortgage and $13MM and $50MM related to home equity for 4Q14 and 3Q14. Net charge-off ratios including the PCI write- offs for residential mortgage were (0.46)% and 0.42%, and for
Slide 23: Regulatory Capital Reconciliations
____________________ 1 Regulatory capital ratios are preliminary. 2 On January 1, 2014, the Basel 3 rules became effective, subject to transition provisions primarily related to regulatory deductions and adjustments impacting CET1 capital and Tier 1 capital. 3 Our estimates under the Basel 3 Advance
Slide 24: Notes
Notes 24 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 Common shareholders’ equity was $224.2B, $220.8B and $219.3B for 4Q14, 4Q13 and 4Q12, respectively. Common
Slide 25: Forward-Looking Statements
Forward-Looking Statements 25 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 26: 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 27: Bank of America
Bankof America