Bank of America
2Q22 Financial Results
July 18, 2022
2Q22 Financial Results
Summary Income Statement | 2Q22 | 1Q22 | Inc / (Dec) | 2Q21 | Inc / (Dec) | ||||||||
($B, except per share data) | |||||||||||||
Total Revenue, net of interest expense | $22.7 | $23.2 | ($0.5) | (2) % | $21.5 | $1.2 | 6 % | ||||||
Provision (benefit) for credit losses | 0.5 | - | 0.5 | N/M | (1.6) | 2.1 | N/M | ||||||
Net charge-offs | 0.6 | 0.4 | 0.2 | 46 | 0.6 | - | (4) | ||||||
Reserve build (release)1 | - | (0.4) | 0.3 | N/M | (2.2) | 2.2 | N/M | ||||||
Noninterest expense | 15.3 | 15.3 | - | - | 15.0 | 0.2 | 2 | ||||||
Pretax income | 6.9 | 7.9 | (1.0) | (13) | 8.0 | (1.2) | (14) | ||||||
Pretax, pre-provision income2 | 7.4 | 7.9 | (0.5) | (6) | 6.4 | 1.0 | 15 | ||||||
Income tax expense | 2Q21 included a positive income | 0.6 | 0.8 | (0.2) | (21) | (1.2) | 1.8 | N/M | |||||
tax adjustment related to the | |||||||||||||
revaluation of U.K. deferred tax | |||||||||||||
$6.2 | |||||||||||||
Net income | assets of $2.0B | $7.1 | ($0.8) | (12) | $9.2 | ($3.0) | (32) | ||||||
Diluted earnings per share | $0.73 | $0.80 | ($0.07) | (9) | $1.03 | ($0.30) | (29) | ||||||
Average diluted common shares (in millions) | 8,163 | 8,202 | (39) | - | 8,735 | (572) | (7) | ||||||
Return Metrics and Efficiency Ratio | |||||||||||||
Return on average assets | 0.79 | % | 0.89 | % | 1.23 | % | |||||||
Return on average common shareholders' equity | 9.9 | 11.0 | 14.3 | ||||||||||
Return on average tangible common shareholders' equity2 | 14.1 | 15.5 | 19.9 | ||||||||||
Efficiency ratio | 67 | 66 | 70 | ||||||||||
Note: Amounts may not total due to rounding. N/M stands for not meaningful.
- For more information on reserve build (release), see note A on slide 33.
- Represent non-GAAP financial measures. For more information on pretax, pre-provision income and a reconciliation to GAAP, see note B on slide 33. For important presentation information about these measures, see slide 36.
2
2Q22 Highlights
(Comparison to 2Q21, unless otherwise noted)
- Net income of $6.2B; diluted earnings per share of $0.73; ROE1 9.9%, ROTCE1,2 14.1%
- Revenue, net of interest expense, of $22.7B increased $1.2B, or 6%
- Net interest income (NII) of $12.4B ($12.5B FTE2) increased $2.2B, or 22%, driven by higher interest rates, lower premium amortization and strong loan growth
- Noninterest income of $10.2B decreased $1.0B, or 9%, driven by lower investment banking fees, mark-to-market losses related to leveraged finance positions and lower service charges due to non-sufficient funds and overdraft policy changes, partially offset by higher sales and trading revenues
- Provision for credit losses of $0.5B vs. a benefit of $1.6B in 2Q21
- Reserve release of $48MM vs. release of $2.2B in 2Q213
- Net charge-offs (NCOs) of $571MM declined 4%; net charge-off ratio of 23 bps
- Noninterest expense of $15.3B increased $0.2B, or 2%, vs. 2Q21, and remained flat QoQ, despite approximately $425MM recognized for certain regulatory matters
- Generated operating leverage4 for the fourth consecutive quarter (418 bps in 2Q22)
- Balance sheet remained strong
- Loans and leases grew $38B from 1Q22
- Deposits decreased $88B from 1Q22
- Common Equity Tier 1 (CET1) ratio of 10.5% improved modestly from 1Q22
- Average Global Liquidity Sources (GLS)5 of $1.0T
- Paid $1.7B in common dividends and repurchased $1.0B of common stock, including repurchases to offset shares awarded under equity-based compensation plans
Note: FTE stands for fully taxable-equivalent basis. | |
1 ROE stands for return on average common shareholders' equity; ROTCE stands for return on average tangible common shareholders' equity. | |
2 Represents a non-GAAP financial measure. For important presentation information about this measure, see slide 36. | |
3 For more information on reserve build (release), see note A on slide 33. | |
4 Operating leverage is calculated as the year-over-year percentage change in revenue, net of interest expense, less the percentage change in noninterest expense. | 3 |
5 See note C on slide 33 for definition of Global Liquidity Sources. |
Consumer Spend Remained Strong; 2022 YTD up 13% YoY to $2.1T
Payment Spend1 ($ volume) and YoY % Growth
$2.1T
$1.8T
$1.5T $1.5T
25%
13% 5%
(2%)
2019 YTD | 2020 YTD | 2021 YTD | 2022 YTD |
2022 YTD Credit and Debit Spend2,3 ($ volume) Growth
vs. 2019 YTD | vs. 2021 YTD | |||||||
75% | 51% | |||||||
50% | ||||||||
41% | 42% | 36% | 32% | |||||
27% | ||||||||
25% | 22% | |||||||
13% | ||||||||
12% | ||||||||
4% | ||||||||
0% | ||||||||
Travel & | Gas | Food | Retail | Services | ||||
- of Entertainment
2022 YTD
Credit / | 12% | 7% | 23% | 32% | 26% |
Debit
Spend
2022 YTD Payment Spend ($ volume) | 2022 YTD YoY Change in Payment Transaction | ||
Credit | 17% | 9% | 14% |
9% | |||
Debit | 11% | ||
6% | |||
5% | |||
ACH | |||
Wires | $2.1T | ||
P2P/P2B4 | 79% | ||
Cash | 19% | ||
30% | (5%) | ||
Check | % of | Credit/Debit | ACH/Wire | P2P/P2B4 | Cash/Check | |
10% | 76% | 10% | 8% | 5% | ||
2022 YTD | ||||||
Total |
Note: Amounts may not total due to rounding.
- Total payments include total credit card, debit card, ACH, wires, billpay, person-to-person (P2P), cash and checks.
- Includes consumer and small business credit card portfolios in Consumer Banking and Global Wealth & Investment Management (GWIM).
3 Excludes credit and debit Money Transfers, Charitable Donations and miscellaneous categories with immaterial volume.
4 P2B stands for person-to-business. | 4 |
Credit Risk Transformation Reflects Responsible Growth
(EOP)
Loan Mix1 | Consumer Loan Portfolio ($B)1 | ||||||||||||||||||||||||||||||||||||||||||||||
4Q09 | 2Q22 | ||||||||||||||||||||||||||||||||||||||||||||||
$675 | |||||||||||||||||||||||||||||||||||||||||||||||
46 | |||||||||||||||||||||||||||||||||||||||||||||||
44 | |||||||||||||||||||||||||||||||||||||||||||||||
161 | $448 | ||||||||||||||||||||||||||||||||||||||||||||||
(48%) | |||||||||||||||||||||||||||||||||||||||||||||||
33% | 57 | ||||||||||||||||||||||||||||||||||||||||||||||
44% | 154 | 51 | |||||||||||||||||||||||||||||||||||||||||||||
$1,003B | $1,031B | (82%) | 84 | ||||||||||||||||||||||||||||||||||||||||||||
56% | 27 | ||||||||||||||||||||||||||||||||||||||||||||||
6 | 257 | 228 | |||||||||||||||||||||||||||||||||||||||||||||
4Q09 | 2Q22 | ||||||||||||||||||||||||||||||||||||||||||||||
Commercial | Consumer | Residential mortgage | Home equity | Consumer credit card | |||||||||||||||||||||||||||||||||||||||||||
Consumer vehicle lending | Securities based lending | Other consumer | |||||||||||||||||||||||||||||||||||||||||||||
Commercial Loan Portfolio ($B)1 | |||||||||||||||||||||||||||||||||||||||||||||||
Federal Reserve Stress Test Loan Loss Rates (%)2 | |||||||||||||||||||||||||||||||||||||||||||||||
$600 | $582 | 9.2% | |||||||||||||||||||||||||||||||||||||||||||||
14 | |||||||||||||||||||||||||||||||||||||||||||||||
64 | |||||||||||||||||||||||||||||||||||||||||||||||
$400 | $328 | 128 | 7.7% | ||||||||||||||||||||||||||||||||||||||||||||
7.1% | |||||||||||||||||||||||||||||||||||||||||||||||
>4x | |||||||||||||||||||||||||||||||||||||||||||||||
22 | 6.9% | ||||||||||||||||||||||||||||||||||||||||||||||
69 | 6.4% | ||||||||||||||||||||||||||||||||||||||||||||||
$200 | 29 | 376 | 6.0% | ||||||||||||||||||||||||||||||||||||||||||||
207 | ~2x | 5.2% | |||||||||||||||||||||||||||||||||||||||||||||
$0 | |||||||||||||||||||||||||||||||||||||||||||||||
4Q09 | 2Q22 | 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 | |||||||||||||||||||||||||||||||||||||||||||||
U.S. commercial | Non-U.S. commercial | Commercial real estate | Other | BAC | Peer 1 | Peer 2 | Peer 3 | ||||||||||||||||||||||||||||||||||||||||
Note: Amounts may not total due to rounding.
-
4Q09 reflects December 31, 2009 information adjusted to include the January 1, 2010 adoption of FAS 166/167 as reported in our Securities and Exchange Commission (SEC) filings.
2 Nine-quarter loss rate from Comprehensive Capital Analysis and Review (CCAR) severely adverse scenario.
5
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Bank of America Corporation published this content on 18 July 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 July 2022 10:53:06 UTC.