BANK OF AMERICA CORPORATION

(BAC)
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Delayed Nyse  -  04:00 2022-06-24 pm EDT
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Bank of America : Q1 News Release

04/18/2022 | 06:54am EDT

Bank of America Reports Q1-22 Net Income of $7.1 Billion; EPS of $0.80

Average Loan Balances up $70 Billion to $978 Billion; Average Deposits up $240 Billion to $2.0 Trillion

Third Consecutive Quarter of Operating Leverage(A)

Q1-22 Financial Highlights1

  • • Net income of $7.1 billion, or $0.80 per diluted share

  • • Pretax income declined 14% to $7.9 billion reflecting a smaller reserve release than Q1-21(C)

    - Pretax, pre-provision income(D) increased 8% to $7.9 billion

  • • Revenue, net of interest expense, increased 2% to $23.2 billion

    • - Net interest income (NII)(E) up $1.4 billion, or 13%, to $11.6 billion, driven by strong deposit growth and investment of excess liquidity, loan growth and benefits from higher long-end interest rates

    • - Noninterest income declined $968 million, or 8%, to $11.7 billion, primarily driven by lower investment banking revenue

  • • Provision for credit losses of $30 million increased $1.9 billion

    • - Net reserve release of $362 million vs. $2.7 billion in Q1-21(C)

    • - Net charge-offs declined 52% from Q1-21

  • • Noninterest expense decreased 1% to $15.3 billion

  • • Average loan and lease balances up $70 billion, or 8%, to $978 billion led by strong commercial loan growth as well as higher consumer balances; excluding Paycheck Protection Program (PPP), loans grew $89 billion5

  • • Average deposits up $240 billion, or 13%, to $2.0 trillion

  • • Average Global Liquidity Sources rose $106 billion, or 11%, to $1.1 trillion(F)

  • • Common equity tier 1 (CET1) ratio 10.4% (Standardized)(G); returned $4.4 billion to shareholders through common stock dividends and share repurchases

  • • Return on average common shareholders' equity ratio of 11.0%; return on average tangible common shareholders' equity ratio of 15.5%7

From Chair and CEO Brian Moynihan:

"We achieved solid first-quarter results earning $7.1 billion, continuing the momentum from record net income in 2021. Across our businesses, ongoing organic growth combined with good expense management drove operating leverage for the third consecutive quarter. Year over year we grew loans $70 billion and deposits by $240 billion. Our teammates supported our clients while managing through the impacts of the pandemic, war in Ukraine, and an evolving rate environment. Our strong first quarter client activity drove results that allow us to deliver for shareholders while continuing to invest in our people, businesses, and communities."

See page 10 for endnotes. Amounts may not total due to rounding.

Q1-22 Business Segment Highlights1,2(B)

Consumer Banking

  • Net income of $3.0 billion

  • • Record deposit balances up 14% to more than $1 trillion

  • • In Small Business, record deposit balances up 21% to $172 billion; average loans and leases, excluding PPP, up 4% to $19 billion3

  • Organic Client Growth

    • - Added ~228,000 net new Consumer checking accounts from Q4-21; Record 34.8 million accounts with 92% being primary4

    • - Record Consumer investment accounts of 3.3 million, up 7%

    • - Record digital sales increased to 53% of total sales, with financial centers back to operating at high capacity, as of the end of the quarter

Global Wealth and Investment Management

  • Net income of $1.1 billion

  • • Client balances of more than $3.7 trillion, up $234 billion, or 7%, driven by net client flows and higher market valuations

  • • Deposits up 18% to $385 billion

  • Organic Client Growth

    • - AUM balances of $1.6 trillion, up 7%; $64 billion of AUM flows since Q1-21

    • - Average loan and lease balances up 12% to $211 billion; 48 consecutive quarters of average loan and lease balance growth

    • - Merrill Wealth Management added ~6,900 net new households; Private Bank added ~830 net new relationships

Global Banking

  • Net income of $1.7 billion

  • • No. 3 in investment banking fees with 6.9% market share, up 60bps6

  • • Total investment banking fees (excl. self-led) of $1.5 billion, decreased 35%, as industry-wide underwriting activity retreated from record levels; Advisory fees of $473 million, up 18%

  • • Deposits up 11% to $540 billion

  • Organic Client Growth

    • - Ending period loans and leases of $367 billion up $41 billion, or 13%

    • - Global Transaction Services revenue of $2.1 billion up $383 million, or 22%

Global Markets

  • Net income of $1.6 billion

  • • Sales and trading revenue down 7% to $4.7 billion, including net debit valuation adjustment (DVA) gains of $69 million; Fixed Income Currencies and Commodities (FICC) revenue of $2.7 billion and Equities revenue of $2.0 billion

  • • Excluding net DVA(H), sales and trading revenue down 8% to $4.7 billion; FICC down 19% to $2.6 billion; Equities up 9% to $2.0 billion

  • • Zero days of trading losses in Q1-22

  • 1 Financial Highlights and Business Segment Highlights are compared to the year-ago quarter unless noted. Loan and deposit balances are shown on an average basis unless noted.

  • 2 The Corporation reports the results of operations of its four business segments and All Other on a fully taxable-equivalent (FTE) basis.

  • 3 Average loans and leases were $22B and $33B for Q1-22 and Q1-21. Excluding PPP loan balances of $2B and $14B, average loan balances were $19B for both periods.

  • 4 Represents the percentage of Consumer checking accounts that are estimated to be the customers' primary account based on multiple relationship factors (e.g., linked to their direct deposit).

  • 5 Average loans and leases were $978B and $908B for Q1-22 and Q1-21. Excluding PPP loan balances of $4B and $23B, average loan balances were $974B and $885B for the same periods.

  • 6 Source: Dealogic as of April 1, 2022.

  • 7 Return on average tangible common shareholders'equity ratio represents a non-GAAP financial measure. For more information, see page 18.

1

From Chief Financial Officer Alastair Borthwick:

"First quarter results were strong despite challenging markets and volatility, which we believe reflect the value of our Responsible Growth strategy. Net interest income increased by $1.4 billion versus the year-ago quarter supported by strong loan and deposit growth. Going forward, and with the forward curve expectation of rising interest rates, we anticipate realizing more of the benefit of our deposit franchise.

"Asset quality continued to remain strong with net charge-offs about half of the year-ago quarter amount. Our balance sheet remained strong with $170 billion of regulatory capital and a CET1 ratio nearly 90 bps above our current minimum requirements. Capital strength allowed us to grow loans, weather the worst bond market in 40 years, support communities, and return more than $4 billion back to shareholders. With very minor direct exposure to Russia-based companies, our teams were able to assist clients and navigate through the complexities of the sanctions."

Bank of America Financial Highlights

Three Months Ended

($ in billions, except per share data)

3/31/2021

Total revenue, net of interest expense

$22.1

$22.8

Provision for credit losses

(0.5)

(1.9)

Noninterest expense

14.7

15.5

Pretax income

7.8

9.2

Pretax, pre-provision income1(D)

7.3

7.3

Income tax expense

0.8

1.1

Net Income

7.0

8.1

Diluted earnings per share

$0.82

$0.86

3/31/2022

12/31/2021

$23.2

-

15.3

7.9

7.9

0.8

7.1

$0.80

1 Pretax, pre-provision income represents a non-GAAP financial measure. For more information, see page 18.

Spotlight on Loan Growth - Average Loan Balances ($B), Excluding PPP

Q1-221

Change vs. Q1-211

Commercial

$539 16%

Consumer

$435 4%

Total

$974 10%

1 Excludes balances related to PPP (recorded in Commercial) of $3.8 billion and $23.1 billion for Q1-22 and Q1-21. Average loan balances were $543.0 billion and $489.5 billion for Q1-22 and Q1-21.

Consumer Banking1,2

  • • Net income of $3.0 billion increased 11% from Q1-21 as a result of improved revenue and lower expenses, partially offset by a decrease in provision benefit

    - 13% operating leverage(A)

  • • Revenue of $8.8 billion increased 9%, driven by higher NII

  • • Provision for credit losses increased $565 million to a benefit of $52 million, driven by a smaller reserve release

  • • Noninterest expense decreased 4% to $4.9 billion, primarily driven by the absence of a prior-period impairment charge, partially offset by investments in the business and increased client activity

Business Highlights1,3(B)

  • • Record average deposits grew $132 billion, or 14%, to more than $1 trillion - 56% of deposits in checking accounts; 92% primary accounts4

  • • Average loans and leases declined $7 billion, or 2%, to $284 billion; average loans and leases, excluding PPP, grew $5 billion, or 2%, to $282 billion5

  • • Consumer investment assets6 grew $33 billion, or 10%, to $358 billion, driven by client flows from new and existing clients and higher market valuations - $20 billion of client flows since Q1-21 - Record 3.3 million client accounts, up 7%

  • • Combined credit/debit card spend up $26 billion, or 15%; credit card up 25% and debit card up 9%

  • • 9.5 million total clients7 enrolled in Preferred

Financial Results

($ in millions)

Three months ended

3/31/2022 12/31/2021 3/31/2021

Total revenue2

$8,813 $8,912 $8,069

4,921 4,742 5,131

Provision for credit losses Noninterest expense Pretax income Income tax expense Net income

Business Highlights3(B)

($ in billions)

Average deposits Average loans and leases

Consumer investment assets (EOP)6

Active mobile banking users (MM)

Number of financial centers Efficiency ratio

Return on average allocated capital

Total Consumer Credit Card3

(52) 32 (617)

3,944 4,138 3,555

966

1,014

871

$2,978

$3,124

$2,684

Three months ended

3/31/2022 12/31/2021 3/31/2021

$1,056.1 $1,026.8 $924.1

284.1 282.3 290.9

357.6 368.8 324.5

33.6

4,056 56 % 30

Average credit card outstanding balances

$78.4

$78.4 $74.2

10.9 %

9.3 %

Total credit/debit spend Risk-adjusted margin

198.5 10.4 %

Rewards, up 10%, with 99% annualized retention rate 1 Comparisons are to the year-ago quarter unless noted.

Digital Usage Continued to Grow1

  • • 71% of overall households8 actively using digital platforms

  • • 42.3 million active digital banking users, up 5%, or 2.0 million

  • • Over 1.7 million digital sales, up 26%

  • • Over 2.7 billion digital logins

  • • 16.2 million active Zelle® users, now including small businesses, sent and received 213 million transfers worth $65 billion, up 26% and 31% YoY, respectively

  • • Clients booked ~813,000 digital appointments

  • 2 Revenue, net of interest expense.

    33.0

    4,173 53 %

    32 28

    211.9 172.5

  • 3 The Consumer credit card portfolio includes Consumer Banking and GWIM.

    31.5

    4,324 64 %

  • 4 Represents the percentage of consumer checking accounts that are estimated to be the customer's primary account based on multiple relationship factors (e.g., linked to their direct deposit).

  • 5 Average loans and leases were $284B and $291B for Q1-22 and Q1-21. Excluding average PPP loan balances of $2B and $14B, average loan balances were $282B and $277B for the same periods.

  • 6 Consumer investment assets includes client brokerage assets, deposit sweep balances and AUM in Consumer Banking.

  • 7 Includes clients in Consumer, Small Business and GWIM. As of February 2022.

  • 8 Household adoption represents households with consumer bank login activities in a 90-day period, as of February 2022.

    Continued Business Leadership

    • No. 1 in estimated U.S. Retail Deposits(a)

    • • No. 1 Online Banking and Mobile Banking Functionality(b)

    • • No. 1 in customer satisfaction for U.S. Online(c) Banking among National Banks by J.D. Power(d)

    • • No. 1 in customer satisfaction for U.S. Mobile Banking Apps among National Banks by J.D. Power(d)

    • • No. 1 in customer satisfaction for U.S. Retail Banking Advice by J.D. Power(e)

    • • No. 1 in customer satisfaction with Merchant Services by J.D. Power(f)

    • • Best Consumer Digital Bank in the U.S.(g)

    • • Certified by J.D. Power for providing outstanding client satisfaction for financial wellness support(h)

  • See page 11 for Business Leadership sources.

Global Wealth and Investment Management1,2

  • • Net income increased $251 million, or 28%, to $1.1 billion

    - 6% operating leverage(A)

  • • Record revenue of $5.5 billion, up 10%, driven by higher asset management fees and the NII benefit from strong deposit and loan growth

  • • Noninterest expense increased 4% to $4.0 billion, primarily driven by higher revenue-related incentives

Business Highlights1(B)

  • • Total client balances up $234 billion, or 7%, to $3.7 trillion, driven by net client flows and higher market valuations

    • - Strong AUM flows of $64 billion since Q1-21

    • - Average deposits increased $59 billion, or 18%, to $385 billion

    • - Average loans and leases grew $22 billion, or 12%, to $211 billion, driven by securities-based lending, residential mortgage lending, and custom lending

Merrill Wealth Management Highlights1

Strong Client Growth and Advisor Engagement

  • - Client balances of $3.1 trillion, up 7%

  • - AUM balances of $1.2 trillion, up 8%

  • - Added ~6,900 net new households in Q1-22, up 9%

Digital Usage Continued to Grow

  • - Record 81% of Merrill households digitally active across the enterprise

  • - Continued growth of advisor/client digital communications; 380,000 households exchanged ~1.7 million secure messages

  • - Record 76% households enrolled in eDelivery; 246,000 forms signed digitally in Q1-22, 51% of eligible transactions

  • - 74% of eligible checks deposited through automated channels

-

Erica interactions up 19%

Bank of America Private Bank Highlights1

Strong Client Engagement

  • - Client balances of $598 billion, up 7%

  • - AUM balances of $334 billion, up 3%

  • - Added ~830 net new relationships in Q1-22, up 24%

Digital Usage Continued to Grow

  • - Record 85% of clients digitally active across the enterprise

  • - Record 76% of checks deposited through automated channels

  • - Clients increasingly leveraging the convenience and effectiveness of our digital capabilities:

    • Erica interactions up 24%

    • Zelle® transactions up 41%

    • Digital wallet transactions up 66%

Financial Results

($ in millions)

Total revenue2

Three months ended 3/31/2022 12/31/2021 3/31/2021

$5,476

$5,402 $4,971

(41)

(56) (65)

1,502

1,624 1,169

Provision for credit losses Noninterest expense Pretax income Income tax expense

4,015

3,834 3,867

368

398 286

Net income

$1,134

$1,226 $883

Business Highlights(B)

($ in billions)

Average deposits Average loans and leases Total client balances (EOP)

Three months ended 3/31/2022 12/31/2021 3/31/2021

Pretax margin

AUM flows

Return on average allocated capital

$384.9

$360.9

$326.4

210.9

205.2

188.5

3,714.2

3,840.3

3,480.3

15.5

21.6

18.2

27 %

30 %

24 %

26

30

22

  • 1 Comparisons are to the year-ago quarter unless noted.

  • 2 Revenue, net of interest expense.

    Continued Business Leadership

    • • No. 1 on Forbes' Top 100 Women Advisors (2022), Top Women Advisors Best-in State (2022), Best-in-State Wealth Advisors (2022) and Top Next Generation Advisors (2021)

    • • No. 1 on Barron's Top 100 Women Financial Advisors List (2021)

    • • MMI/Barron's Industry Awards for Digital Innovation - Digital Wealth Overview (2021)

    • • Celent Model Wealth Manager award for Client Experience (2022)

    • • No. 1 in personal trust AUM(i)

    • • Best Private Bank for Customer Service (U.S.)(j)

    • • Best Private Bank for Philanthropic Services (Global) and Most Innovative Private Bank (North America)(k)

    • • Best Private Bank in North America(l)

See page 11 for Business Leadership sources.

Global Banking1,2,3

  • • Net income of $1.7 billion decreased 21%, driven by the absence of a reserve release that benefited Q1-21, partially offset by higher revenue and lower noninterest expense

    - 16% operating leverage(A)

  • • Revenue of $5.2 billion rose 12%, reflecting higher leasing-related revenue and higher NII on strong loan and deposit growth, partially offset by lower investment banking fees

  • • Provision for credit losses of $165 million, primarily reflects a reserve build driven by Russian exposure and loan growth, compared to a reserve release in Q1-21(C)

  • Noninterest expense decreased $99 million, or 4%, to $2.7 billion, primarily driven by lower incentive compensation due to the absence of Q1-21 award changes

Business Highlights1,2(B)

  • • Average deposits increased $53 billion, or 11%, to $540 billion, reflecting client liquidity and valued relationships

  • • Average loans and leases increased $29 billion, or 9%, to $359 billion, reflecting increased client demand

  • • Total investment banking fees (excl. self-led) decreased $789 million to $1.5 billion; record first quarter advisory fees of $473 million, debt underwriting and equity underwriting fees of $831 million and $225 million, respectively

Financial Results

($ in millions)

Total revenue2,3

Provision for credit losses Noninterest expense Pretax income Income tax expense Net income

Business Highlights2(B)

($ in billions)

Average deposits Average loans and leases

Three months ended 3/31/2022 12/31/2021 3/31/2021 $5,194 $5,907 $4,633 165 (463) (1,126)

2,683

2,717

2,782

2,346

3,653

2,977

622

986

804

$1,724

$2,667

$2,173

Three months ended 3/31/2022 12/31/2021 3/31/2021 $539.9 $562.4 $487.0

358.8

338.6 330.1

Total Corp. IB fees (excl. self-led)2

1.5

2.4 2.2

2.2 1.6

Global Banking IB fees2 Business Lending revenue

Global Transaction Services revenue4

0.9 2.1 2.1

1.5 1.2

2.1 1.7

Efficiency ratio

Return on average allocated capital

52 % 16

  • 1 Comparisons are to the year-ago quarter unless noted.

    46 % 25

    60 % 21

  • 2 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities, and sales and trading activities.

  • 3 Revenue, net of interest expense.

  • 4 Prior periods have been revised to conform to current-period presentation.

    Digital Usage Continued to Grow1

    • • 74% digitally active clients across commercial, corporate, and business banking clients (CashPro & BA360 platforms) (as of February 2022)

    • • CashPro App Active Users increased 45% and sign-ins increased 51% (rolling 12 months), surpassing 1.7 million sign-ins in the past year

    • • CashPro App Payment Approvals value was $454 billion, increasing 118% (rolling 12 months)

    • • Global Payments to Digital Wallets increased 38% (rolling 12 months as of February 2022)

    Continued Business Leadership

    • • Outstanding Financial Innovator - 2021 Global(k)

    • • North America's Best Bank for Small to Medium-sized Enterprises(m)

    • • Best Global Bank for Payments & Collections(n)

    • • Model Bank for Corporate Digital Banking - For CashPro App(o)

    • • Best Bank for Cash Management in North America(n)

    • • World's Best Bank for Payments and Treasury and North America's Best Bank for Transaction Services(m)

    • • Best Transaction Bank in North America, Best Supply Chain Finance Bank(p)

    • • 2021 Quality, Share and Excellence Awards for U.S. Large Corporate Banking and Cash Management(q)

    • • Outstanding Global Leader in Social Bonds, Outstanding Leader in Social Bonds and Sustainable Loans for North America(k)

    • • Relationships with 74% of the Global Fortune 500; 95% of the U.S. Fortune 1,000 (2021)

See page 11 for Business Leadership sources.

Disclaimer

Bank of America Corporation published this content on 18 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 April 2022 10:53:01 UTC.


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Financials (USD)
Sales 2022 94 726 M - -
Net income 2022 27 145 M - -
Net Debt 2022 - - -
P/E ratio 2022 9,69x
Yield 2022 2,77%
Capitalization 260 B 260 B -
Capi. / Sales 2022 2,75x
Capi. / Sales 2023 2,53x
Nbr of Employees 208 000
Free-Float 99,8%
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Technical analysis trends BANK OF AMERICA CORPORATION
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Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 25
Last Close Price 32,31 $
Average target price 47,12 $
Spread / Average Target 45,8%
EPS Revisions
Managers and Directors
Brian T. Moynihan Chairman, President & Chief Executive Officer
Alastair Borthwick Chief Financial Officer
Catherine P. Bessant Vice Chairman-Global Strategy
Aditya Bhasin Chief Technology & Information Officer
Steve D. Boland Chief Administrative Officer
Sector and Competitors