Bank Of America Corporation · NYSE:BAC
Bank Of America — Q3 2022 Earnings Presentation
36 slides from Bank Of America's earnings presentation, Oct 17, 2022
Slide 1: Bank of America 3Q22 Financial Results
Bank of America 3Q22 Financial Results October 17, 2022
Slide 2: 3Q22 Financial Results
3Q22 Financial Results Summary Income Statement 3Q22 2Q22 Inc / (Dec) 3Q21 Inc / (Dec) ($B, except per share data) Total Revenue, net of interest expense $24.5 $22.7 $1.8 8 % $22.8 $1.7 8 % Provision (benefit) for credit losses 0.9 0.5 0.4 72 (0.6) 1.5 N/M Net charge-offs 0.5 0.6 (0.1) (9) 0.5 0.1 1
Slide 3: Continued Organic Growth in 3Q22
Continued Organic Growth in 3Q22 Consumer Banking Global Wealth & Investment Management Added 418K net new checking accounts; 15th Added over 18,000 net new relationships YTD consecutive quarter of growth and highest quarter 50th consecutive quarter of average loans and since 3Q08 leases growth 1.3M
Slide 4: Consumer Spend Remained Strong; 2022 YTD up 12% YoY to $3.1T
Consumer Spend Remained Strong; 2022 YTD up 12% YoY to $3.1T Payment Spend1 ($ Volume) and YoY % Growth Payment Spend1 ($ and Transaction Volume) Quarterly YoY % Growth $3.1T $ Volume Transaction # $2.8T 50% $2.3T $2.3T 21% 25% 10% 12% 6% 0% 6% 1% (25)% 2019 YTD 2020 YTD 2021 YTD 2022 YTD 1Q- 2Q- 3Q
Slide 5: Credit Card Days Past Due Trend
Credit Card Days Past Due Trend Credit Card 30+ Days Past Due ($MM) • Beginning in 4Q20, we saw early stage $2,500 delinquencies recede below pre-pandemic levels Delinquency rate as expired deferrals worked through the 2.04% delinquency periods and payment rates increased, $2,000 fueled by stimulus
Slide 6: 3Q22 Highlights
3Q22 Highlights (Comparisons to 3Q21, unless otherwise noted) • Net income of $7.1B; diluted earnings per share of $0.81; ROE1 10.8%, ROTCE1,2 15.2% • Revenue, net of interest expense, of $24.5B increased $1.7B, or 8% – Net interest income (NII) of $13.8B ($13.9B FTE2) increased $2.7B, or 24%, drive
Slide 7: Balance Sheet, Liquidity and Capital
Balance Sheet, Liquidity and Capital (EOP1 basis unless noted) Balance Sheet Metrics 3Q22 2Q22 3Q21 Basel 3 Capital ($B)5 3Q22 2Q22 3Q21 Assets ($B) Common equity tier 1 capital $176 $172 $174 Total assets $3,073 $3,112 $3,085 Standardized approach Total loans and leases 1,032 1,031 928 Risk-weighte
Slide 8: CET1 Ratio Drivers
CET1 Ratio1 Drivers +26 bps +4 bps +40 bps (11 bps) (3 bps) $0.6B 11.0% (7 bps) $1.8B $0.4B ($1.1B) ($38.6B) 10.5% $6.6B 2Q22 Net income Common Share OCI on AFS Risk-weighted Other 3Q22 applicable to dividends repurchases 2 debt securities assets common shareholders Note: Amounts may not total due t
Slide 9: Loan and Lease Trends
Loan and Lease Trends Total Avg. Loans and Leases ($B) Total Avg. Loans and Leases in All Other ($B) $1,250 $25 YoY $1,015 $1,034 +12% $945 $978 $18 $1,000 $921 $20 $16 $15 449 +7% $14 YoY $750 435 446 $15 4 (40%) 419 428 3 3 3 $11 $500 $10 3 14 13 12 $250 501 517 543 569 585 +17% $5 12 8 $0 $0 3Q21
Slide 10: Average Deposit Trends
Average Deposit Trends Bank of America Ranked #1 in U.S. Retail Deposit Market Share1 Total Corporation ($B) Consumer Banking ($B) $2,500 $1,250 YoY YoY $1,027 $1,056 $1,078 $1,069 +7% $1,943 $2,017 $2,046 $2,012 $1,963 $1,001 $2,000 +1% $1,000 344 352 363 359 806 799 790 738 (3%) 333 $1,500 764 $75
Slide 11: Net Interest Income Increased $2.7B, or 24% YoY
Net Interest Income Increased $2.7B, or 24% YoY Net Interest Income (FTE, $B)1 • Net interest income of $13.8B ($13.9B FTE1) increased $2.7B YoY and $1.3B from 2Q22, $15.0 $13.9 driven by benefits from higher interest rates, $12.5 including lower premium amortization expense, $11.2 $11.5 $11.7 and h
Slide 12: Expense and Efficiency
Expense and Efficiency Total Noninterest Expense ($B) $20.0 $14.4 $14.7 $15.3 $15.3 $15.3 $15.0 5.7 5.7 5.8 6.4 6.4 $10.0 $5.0 8.7 9.0 9.5 8.9 8.9 $0.0 3Q21 4Q21 1Q22 2Q221 3Q221 Compensation and benefits Other Efficiency Ratio 70% 67% 67% 66% 63% 62% 60% 50% 3Q21 4Q21 1Q22 2Q22 3Q22 • Noninterest e
Slide 13: Asset Quality
Asset Quality Net Charge-offs ($MM)1 • Total net charge-offs of $520MM1 decreased $51MM from 2Q22 $800 0.50% – Consumer net charge-offs of $459MM decreased $66MM from 2Q22, primarily driven by the $571 0.40% absence of charge-offs associated with non-core $600 $520 mortgage sales $463 0.30% $362 $39
Slide 14: Asset Quality – Consumer and Commercial Portfolios
Asset Quality – Consumer and Commercial Portfolios Consumer Net Charge-offs ($MM) Consumer Metrics ($MM) 3Q22 2Q22 3Q21 Provision $722 $410 $81 $600 1.00% $525 Nonperforming loans and leases 2,760 2,866 3,017 $459 % of loans and leases1 0.61 % 0.64 % 0.71 % $450 0.75% $340 Consumer 30+ days performi
Slide 15: Consumer Banking
Consumer Banking Inc / (Dec) • Net income of $3.1B increased 1% from 3Q21, as revenue Summary Income Statement ($MM) 3Q22 2Q22 3Q21 improvement was partially offset by business investments and higher provision for credit losses Total revenue, net of interest expense $9,904 $768 $1,066 Provision (ben
Slide 16: Global Wealth & Investment Management
Global Wealth & Investment Management Inc / (Dec) • Net income of $1.2B decreased 3% from 3Q21 Summary Income Statement ($MM) 3Q22 2Q22 3Q21 – Pretax, pre-provision income1 of $1.6B increased Total revenue, net of interest expense $5,429 ($4) $119 3% from 3Q21 Provision (benefit) for credit losses 3
Slide 17: Global Banking
Global Banking Inc / (Dec) • Net income of $2.0B decreased 20% from 3Q21 Summary Income Statement ($MM) 3Q22 2Q22 3Q21 – Pretax, pre-provision income2 of $2.9B increased Total revenue, net of interest expense1 $5,591 $585 $346 8% from 3Q21 Provision (benefit) for credit losses 170 13 951 • Revenue o
Slide 18: Global Markets
Global Markets1 Inc / (Dec) • Net income of $1.1B increased 15% from 3Q21 Summary Income Statement ($MM) 3Q22 2Q22 3Q21 – Excluding net DVA, net income of $1.1B Total revenue, net of interest expense2 $4,483 ($19) ($36) increased 14%3 Net DVA (14) (172) 6 • Revenue of $4.5B decreased 1% from 3Q21, p
Slide 19: All Other
All Other1 Inc/(Dec) • Net loss of $281MM, compared to net loss of $55MM Summary Income Statement ($MM) 3Q22 2Q22 3Q21 in 3Q21, driven primarily by higher litigation expense Total revenue, net of interest expense ($799) $487 $246 as a result of the legacy monoline insurance Provision (benefit) for c
Slide 20: Supplemental Business Segment Trends
Supplemental Business Segment Trends
Slide 21: Consumer Banking Trends
Consumer Banking Trends Business Leadership1 Total Revenue ($B) Total Expense ($B) and Efficiency (A) • No. 1 in estimated U.S. Retail Deposits $9.9 $10.0 $9.1 $6.0 70% • No. 1 Online Banking and Mobile Banking $8.8 $8.9 $8.8 Functionality(B) 2.1 $4.7 $4.9 $5.0 $5.1 2.0 $4.6 • No. 1 in customer sati
Slide 22: Record 56MM Verified and 43MM Active Digital Users in 3Q22
Record 56MM Verified and 43MM Active Digital Users1 in 3Q22 Digital Adoption Client Engagement Digital Users1 and Households2 Digital Channel Usage3,4 Digital Sales 2,954 60 56 100% 3,000 1,250 2,000 1,855 100% 52 54 2,635 50 49 90% 2,500 1,000 1,500 1,367 75% 43 2,259 41 80% 2,077 1,027 1,074 38 39
Slide 23: Consumer Creditworthiness Remains Strong
Consumer Creditworthiness Remains Strong Consumer Credit Card1 Consumer Vehicle Lending3 New Accounts (000s) New Originations ($B) 1,500 1,255 $10.0 1,049 977 1,068 $6.8 $6.8 $7.1 $7.1 940 $7.5 $5.9 1,000 $5.0 500 $2.5 0 $0.0 3Q21 4Q21 1Q22 2Q22 3Q22 3Q21 4Q21 1Q22 2Q22 3Q22 Key Stats 3Q21 2Q22 3Q22
Slide 24: Global Wealth & Investment Management Trends
Global Wealth & Investment Management Trends Business Leadership1 Average Deposits ($B) Average Loans and Leases ($B)2 • No. 1 on Forbes’ Best-in-State Wealth Advisors (2022), Top Women Wealth Advisors (2022), Top Women $400 $385 $250 Wealth Advisors Best-in State (2022), and Top Next $361 $364 $219
Slide 25: Global Wealth & Investment Management Digital Update
Global Wealth & Investment Management Digital Update1 Advisor-led Client Interactions, Powered by Digital Digital Adoption GWIM2 80%, up from 78% Online Mobile 80% of Merrill households3 digitally active across the enterprise, up from 78% in 3Q21 86% of Private Bank4 relationships digitally active a
Slide 26: Global Banking Trends
Global Banking Trends Business Leadership1 Average Deposits ($B) Average Loans and Leases ($B)2 • Global Most Innovative Financial Institution – 2022(L) • World's Best Bank, North America’s Best Bank for Small to $600 $562 $400 $377 $384 $534 $540 $359 13 Medium-sized Enterprises, and Best Bank in t
Slide 27: Global Banking Digital Update
Global Banking Digital Update Creating an innovative digital experience for our clients Digital Adoption 76% Online Mobile Connect API Digitally active clients across commercial, corporate, and business banking clients (CashPro® & BA360 platforms) 186 bps YoY1 Client Engagement 2.0MM ~66MM $602B Sig
Slide 28: Global Markets Trends and Revenue Mix
Global Markets Trends and Revenue Mix Business Leadership1 2022 YTD Global Markets Revenue Mix 2022 YTD Total FICC S&T3 Revenue Mix • Americas Derivatives House of the Year and (excl. net DVA)2 (excl. net DVA)2 Americas House of the Year for Equity Derivatives, FX Derivatives, Interest Rate Derivati
Slide 29: Additional Presentation Information
Additional Presentation Information
Slide 30: Credit Risk Transformation Reflects Responsible Growth
Credit Risk Transformation Reflects Responsible Growth (EOP) Loan Mix1 Consumer Loan Portfolio ($B)1 4Q09 3Q22 $750 $675 46 44 $500 161 $451 33% (46%) 56 51 44% 154 (82%) 87 $1,003B $1,032B $250 27 56% 67% 257 229 $0 4Q09 3Q22 Residential mortgage Home equity Consumer credit card Commercial Consumer
Slide 31: Balance Sheet Transformation Highlights
Balance Sheet Transformation Highlights (EOP basis unless noted) Metric 4Q09 4Q19 3Q22 Transformation through Responsible Growth Total loans and leases1 $1,003B $983B $1,032B • Our loan portfolio is more balanced today and has less inherent risk % consumer 67% 47% 44% – Lower concentration in the co
Slide 32: Notes
Notes A Reserve Build (or Release) is calculated by subtracting net charge-offs for the period from the provision for credit losses recognized in that period. The period-end allowance, or reserve, for credit losses reflects the beginning of the period allowance adjusted for net charge-offs recorded
Slide 33: 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) Bank of America received the highest score in the J.D. Power 2022 Merchant Services Satisfaction Study of customers’ satisfaction with c
Slide 34: 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
Slide 35: 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 36: Bank of America
BANK OF AMERICA