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 2017 Earnings Presentation
29 slides from Bank Of America's earnings presentation, Jan 17, 2018
Slide 1: Bank of America 4Q17 Financial Results
Bank of America 4Q17 Financial Results January 17, 2018
Slide 2: 4Q17 and Full Year 2017 Results
4Q17 and Full Year 2017 Results 2 ____________________ Note: Amounts may not total due to rounding. 1 Reported on a GAAP basis. On a fully taxable-equivalent basis (FTE), reported revenue of $20.7B and $88.3B for 4Q17 and FY 2017 and adjusted revenue of $21.6B and $89.2B for 4Q17 and FY 2017. For im
Slide 3: Operating Leverage Trend
(7%) (5%) (2%) 1% (3%) 1% 3% 2% 7% 7% 1% 7% (29%) (25%) (31%) (2%) (10%) (2%) (1%) (4%) (1%) 2% (2%) (1%) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 YoY revenue growth (decline) YoY expense growth (decline) Operating leverage Operating Leverage Trend 3 ____________________ Note: Amo
Slide 4: Balance Sheet, Liquidity and Capital Highlights
Balance Sheet, Liquidity and Capital Highlights 4 $ in billions, except per share data Balance Sheet (end of period balances) Total assets $2,281.2 $2,284.2 $2,188.1 Total loans and leases 936.7 927.1 906.7 Total loans and leases in business segments 1 867.3 854.3 819.2 Total deposits 1,309.5 1,284.
Slide 5: Loans & Leases and Deposits
Loans & Leases and Deposits ____________________ Notes: Amounts may not total due to rounding. GWIM defined as Global Wealth & Investment Management. 1 Includes $6.5B, $9.4B and $9.1B of average non-U.S. consumer credit card loans in 2Q17, 1Q17 and 4Q16, respectively. During 2Q17, the Company sold i
Slide 6: Asset Quality
$880 $934 $908 $900 $1,237 0.39% 0.42% 0.40% 0.39% 0.53% 0.0% 0.5% 1.0% $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 4Q16 1Q17 2Q17 3Q17 4Q17 Net charge-offs Net charge-off ratio ____________________ 1 Excludes loans measured at fair value. Asset Quality 6 Net Charge-offs ($MM) Provision for Credit L
Slide 7: Asset Quality – Consumer and Commercial Portfolios
$105 $107 $157 $169 $468 0.09% 0.10% 0.14% 0.14% 0.39% 0.0% 0.5% 1.0% 1.5% 2.0% $0 $250 $500 $750 $1,000 4Q16 1Q17 2Q17 3Q17 4Q17 C&I Small business and other Commercial NCO ratio Asset Quality – Consumer and Commercial Portfolios 7 Consumer Net Charge-offs ($MM) $775 $827 $751 $731 $769 0.68% 0.74%
Slide 8: Net Interest Income
Net Interest Income 8 • Net interest income of $11.5B ($11.7B FTE 1) increased $1.2B from 4Q16, 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 $0.3B compare
Slide 9: Expense Highlights
210.7 210.5 210.9 209.8 209.4 42.9 43.0 44.0 44.7 45.1 35 40 45 50 55 60 0 50 100 150 200 250 4Q16 1Q17 2Q17 3Q17 4Q17 Total headcount Primary sales headcount Expense Highlights ____________________ Note: Amounts may not total due to rounding. • Total noninterest expense of $13.3B declined 1% from 4
Slide 10: Consumer Banking
Consumer Banking 10 ____________________ Note: ROAAC defined as return on average allocated capital 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 GWI
Slide 11: Consumer Banking Trends
Consumer Banking Trends 11 • #1 Consumer Deposit Market Share 1 • 2018 JD Power Certified Mobile App • #1 in Mobile Banking and Digital Sales Functionality 2 • #1 in Online Banking Functionality 3 • #1 Online Broker 4 • #1 Home Equity Lender and #2 bank for Retail Mortgage Originations 5 • #1 in Pri
Slide 12: Consumer Banking Digital Trends
4.4 7.0 11.4 23.1 $1.1 $2.0 $3.6 $6.9 $0 $2 $4 $6 $8 $10 0 5 10 15 20 25 4Q14 4Q15 4Q16 4Q17 Transactions (MM) Volume ($B) Zelle integrated into BAC mobile app in 2017 257 288 302 346 317 316 314 323 $574 $604 $616 $669 $0 $200 $400 $600 $800 4Q14 4Q15 4Q16 4Q17 Digital Non-Digital Consumer Banking
Slide 13: Global Wealth & Investment Management
Global Wealth & Investment Management 13 ____________________ 1 FTE basis. 2 Includes financial advisors in Consumer Banking of 2,402 and 2,200 in 4Q17 and 4Q16. • Net income of $0.7B, up 17% from 4Q16; ROAAC of 21% and pretax margin of 26% • Revenue of $4.7B improved 7% from 4Q16, due to higher NII
Slide 14: Global Wealth & Investment Management Trends
Global Wealth & Investment Management Trends 14 Business Leadership Average Loans and Leases ($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 15: Global Banking
Global Banking 15 ____________________ 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 January 2, 2018 for the year ended December 31, 2017; excludes self-led deals. • [ Bullets to
Slide 16: Global Banking Trends
Global Banking Trends 16 ____________________ 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 17: Global Markets
Global Markets 17 • [ 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 26. 4 See note G on slide 26 for defin
Slide 18: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix 18 8.6 9.6 9.1 4.4 4.0 4.1 $13.0 $13.6 $13.2 $0 $2 $4 $6 $8 $10 $12 $14 2015 2016 2017 FICC Equities $433 $413 $442 $53 $41 $40 $0 $25 $50 $75 $100 $0 $100 $200 $300 $400 $500 2015 2016 2017 Avg. trading-related assets Avg. VaR • Best Bank for Markets in Asia (E
Slide 19: All Other
• Net loss of $2.7B in 4Q17, which included a net loss of $2.9B from the impact of the Tax Act • Revenue declined $1.1B from 4Q16, primarily due to a $0.9B charge related to the Tax Act as well as the absence of the non- U.S. consumer credit card business sold in 2Q17 • Provision improved from 4Q16,
Slide 20: 2017 Key Takeaways
2017 Key Takeaways 20 • Delivered responsible growth • Solid client activity with good deposit, loan and AUM growth – Average deposits grew $47B, or 4%, from 2016 – Average loans and leases in business segments grew 6% from 2016 – Wealth management client balances increased to nearly $2.8T with AUM
Slide 21: Appendix
Appendix
Slide 22: Full Year Business Results
$7.2 $2.8 $5.7 $3.8 ($1.7) $8.2 $3.1 $7.0 $3.3 ($0.4) Consumer Banking GWIM Global Banking Global Markets All Other 2016 2017 Full Year Business Results 22 Net Income (Loss) ($B) ____________________ 1 Global Markets net income included net DVA losses of $0.4B and $0.2B in 2017 and 2016 as well as a
Slide 23: Our people are the foundation for growing responsibly
Our people are the foundation for growing responsibly We give our employees the support they need so they are able to make a genuine impact and contribute to sustainable growth of our business and the communities we serve We deliver on our promise of being a great place to work by: Being an inclusiv
Slide 24: 2017 Awards and Recognition
Latina Style 50 Best Companies for Latinas to Work (18 years running) Working Mother Top 10 on 100 Best Companies (29 years running) American Banker Top Team and five BAC leaders recognized Fatherly.com 50 Best Places for New Dads to Work Out & Equal 2017 Outie Award for Workplace Excellence U.S. Bu
Slide 25: Regulatory Capital – Basel 3 transition to fully phased-in
Regulatory Capital – Basel 3 transition to fully phased-in 4Q17 3Q17 4Q16 Common equity tier 1 capital (transition) $171,124 $176,094 $168,866 Deferred tax assets arising from net operating loss and tax credit carryforwards phased in during transition (1,296) (1,357) (3,318) Accumulated OCI phased i
Slide 26: Notes
Notes 26 A Enactment of the Tax Act reduced 4Q17 net income by $2.9B and negatively impacted 4Q17 and FY 2017 return on average assets by 49 bps and 13 bps, respectively, return on average common shareholders’ equity by 455 bps and 117 bps, respectively, return on average tangible common shareholder
Slide 27: Forward-Looking Statements
Forward-Looking Statements 27 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 28: 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 29: Bank of America
Bank of America