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 2016 Earnings Presentation
28 slides from Bank Of America's earnings presentation, Oct 17, 2016
Slide 1: Bank of America 3Q16 Financial Results
Bank of America 3Q16 Financial Results October 17, 2016
Slide 2: 3Q16 Highlights
3Q16 Highlights 2 • Net income of $5.0B in 3Q16, or $0.41 per diluted common share – Pretax earnings of $7.3B increased 17% from 3Q15 • Revenue of $21.6B increased $0.6B, or 3%, from 3Q15 – Net interest income grew $0.3B, or 3% – Strong capital markets performance Investment banking fees of $1.5B
Slide 3: 3Q16 Results
3Q16 Results 1 3 ____________________ Note: Amounts may not total due to rounding. 1 Effective July 1, 2016, Bank of America changed its accounting method for the amortization of premiums and accretion of discounts related to certain debt securities carried at fair value and held-to- maturity under
Slide 4: Business Results
$1,757 $632 $1,278 $800 $152 $1,813 $697 $1,553 $1,074 ($182) Consumer Banking GWIM Global Banking Global Markets All Other 3Q15 3Q16 3Q16 ROAAC 2 21% 17% 12% 21% Business Results 4 Net Income (Loss) ($MM) ____________________ 1 GWIM defined as Global Wealth & Investment Management. 2 ROAAC defined
Slide 5: Balance Sheet, Liquidity and Capital Highlights
Balance Sheet, Liquidity and Capital Highlights 5 $ in billions, except per share data Balance Sheet (end of period balances) Total assets $2,195.3 $2,187.0 $2,153.0 Total loans and leases 905.0 903.2 882.1 Total deposits 1,232.9 1,216.1 1,162.0 Funding & Liquidity Long-term debt $225.1 $229.6 $237.
Slide 6: Loans & Leases and Deposits
Loans & Leases and Deposits ____________________ Note: Amounts may not total due to rounding. $877 $886 $893 $900 $901 $0 $250 $500 $750 $1,000 3Q15 4Q15 1Q16 2Q16 3Q16 556 564 578 596 606 244 251 260 255 254 296 308 297 299 306 63 63 63 63 61 $1,159 $1,186 $1,198 $1,213 $1,227 $0 $250 $500 $750 $1,
Slide 7: Asset Quality Trends
$932 $1,144 $1,068 $985 $888 0.43% 0.52% 0.48% 0.44% 0.40% 0.0% 0.5% 1.0% $0 $300 $600 $900 $1,200 3Q15 4Q15 1Q16 2Q16 3Q16 Net charge-offs Net charge-off ratio ____________________ 1 Excludes loans measured at fair value. Asset Quality Trends 7 Net Charge-offs ($MM) Provision for Credit Losses ($MM
Slide 8: Asset Quality – Consumer Portfolio
Asset Quality – Consumer Portfolio 8 Consumer Net Charge-offs ($MM) $821 $958 $917 $849 $778 0.71% 0.84% 0.82% 0.76% 0.69% 0.0% 0.5% 1.0% 1.5% 2.0% $0 $300 $600 $900 $1,200 3Q15 4Q15 1Q16 2Q16 3Q16 Credit card Other Net charge-off ratio ____________________ 1 Fully-insured loans are FHA-insured loan
Slide 9: Asset Quality – Commercial Portfolio
Asset Quality – Commercial Portfolio 9 Commercial Net Charge-offs ($MM) $111 $186 $151 $136 $110 0.11% 0.17% 0.14% 0.12% 0.10% 0.0% 0.1% 0.2% 0.3% 0.4% $0 $100 $200 3Q15 4Q15 1Q16 2Q16 3Q16 C&I Small Business and Other Net charge-off ratio Commercial Asset Quality Metrics ($MM) 3Q16 2Q16 3Q15 Provis
Slide 10: Net Interest Income
Net Interest Income 1 10 • Net interest income of $10.2B ($10.4B FTE 2) increased $0.3B from 3Q15 as the benefits from loan growth, higher short-end rates and increased debt securities balances offset the decline from lower long-end rates – Net interest yield increased 4bps to 2.23% • NII increased
Slide 11: Expense Highlights
Expense Highlights ____________________ Note: Amounts may not total due to rounding. • Total noninterest expense of $13.5B in 3Q16 declined $0.5B, or 3%, from 3Q15, driven by improvements in mortgage servicing costs and broad-based reductions in operating and support costs – Expense was relatively f
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 and is calcula
Slide 13: Consumer Banking Trends
Consumer Banking Trends 13 • #1 U.S. Retail Deposit Market Share 1 • #1 Home Equity Lender (Inside Mortgage Finance YTD 2Q16) • #2 bank in J.D. Power 2015 U.S. Primary Mortgage Origination Satisfaction Study • #3 in U.S. Credit Card Balances 2 • #1 in Prime Auto Credit distribution of new originatio
Slide 14: Digital Banking Trends
5 10 13 114 Financial center Phone ATM Digital Digital Banking Trends 31.6 31.7 32.6 33.0 33.7 0 10 20 30 40 3Q15 4Q15 1Q16 2Q16 3Q16 Digital Appointments (000’s) $229 $233 $237 $246 $243 $0 $100 $200 $300 3Q15 4Q15 1Q16 2Q16 3Q16 Digital Transfers and Bill Payments ($B) 18.4 18.7 19.6 20.2 21.3 14%
Slide 15: Global Wealth & Investment Management
Global Wealth & Investment Management 15 ____________________ 1 FTE basis. 2 Includes financial advisors in Consumer Banking of 2,179 and 2,050 in 3Q16 and 3Q15. • Net income of $0.7B, up 10% from 3Q15; ROAAC of 21% – Pretax margin of 25%, up from 22% in 3Q15 • Revenue of $4.4B, down 2% from 3Q15 –
Slide 16: Global Wealth & Investment Management Trends
Global Wealth & Investment Management Trends 16 Market Share Positioning Average Loans and Leases ($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 cl
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 3, 2016. • [ Bullets to come ] • Net income of $1.6B increased 22% from 3Q15; ROAAC of
Slide 18: Global Banking Trends
Global Banking Trends 18 ____________________ Note: Amounts may not total due to rounding. 1 Rankings per Dealogic for the third quarter as of October 3, 2016; excludes self-led deals. U.S. municipal bonds ranking per Thomson Reuters. 2 Global Banking and Global Markets share in certain deal economi
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 D on slide 25. 4 See note E on slide 25 for defin
Slide 20: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix 20 2.0 2.6 2.8 1.2 1.1 1.0 $3.1 $3.7 $3.7 $0 $1 $2 $3 $4 $5 3Q15 2Q16 3Q16 FICC Equities $431 $411 $415 $51 $46 $40 $0 $25 $50 $75 $100 $0 $100 $200 $300 $400 $500 3Q15 2Q16 3Q16 Avg. trading-related assets Avg. VaR • #1 Global Research Firm for 5th Consecutive
Slide 21: All Other
• Net loss of $0.2B in 3Q16, which included a $350MM tax charge as a result of a change in the U.K. corporate tax rate • Revenue declined $0.3B from 3Q15, driven by fewer gains on sales of debt securities and lower NII, partially offset by higher valuations of mortgage servicing rights • Provision d
Slide 22: Key Takeaways
Key Takeaways 22 • Solid earnings with year-over-year improvement in all business segments • Revenue growth reflected higher NII and improved capital markets results • Generated positive operating leverage and improved efficiency • Strong deposit growth driven by good customer activity • Asset quali
Slide 23: Appendix
Appendix
Slide 24: Regulatory Capital – Basel transition to fully phased-in
Regulatory Capital – Basel 3 transition to fully phased-in 3Q16 2Q16 3Q15 Common equity tier 1 capital (transition) $169,925 $166,173 $161,649 Deferred tax assets arising from net operating loss and tax credit carryforwards phased in during transition (3,143) (3,496) (5,554) 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 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 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