Bank of America 4Q18 Financial Results
January 16, 2019
2018 Financial Results
ReportedSummary Income Statement ($B, except per share data)
2018
2017
2018 vs. 2017 % Inc / (Dec)Excl. Tax Act
2018 Reported vs. 2017 Excl. Tax Act
2017 1,2
% Inc / (Dec)
Total revenue, net of interest expense Noninterest expense
$91.2
$87.4
4 %
$88.3
53.4
54.7
(2)
54.7 (2) leverage YoY 2,4
Provision for credit losses Pretax income
3.3
3.4
(3)
3.4 (3)
34.6
29.2
18
Income tax expense Net income
6.4
11.0
(41)
30.2 9.0
15 (29)
$28.1
$18.2
54
$21.1 33
Diluted earnings per share
$2.61
$1.56
67
$1.83 43
Average diluted common shares (in millions)
10,237
10,778
(5)
10,778 (5)
Return Metrics and Efficiency
Return on average assets
1.21 %
0.80 %
0.93 %
Return on average common shareholders' equity
11.0 6.7 7.9
Return on average tangible common shareholders' equity 3
15.5 9.4 11.0
Efficiency ratio
59 63 62
Note: Amounts may not total due to rounding.
1 On December 22, 2017, the Tax Cuts and Jobs Act (the "Tax Act") was enacted, which included a lower U.S. corporate tax rate effective in 2018. The Tax Act reduced 2017 net income by $2.9B, or $0.27 per diluted common share, which included a $0.9B pretax charge in other noninterest income, predominantly related to the revaluation of certain tax-advantaged energy investments, as well as $1.9B of tax expense principally associated with the revaluation of certain deferred tax assets and liabilities.
2 Represents a non-GAAP financial measure. For a reconciliation to GAAP of the presented return metrics, see note A on slide 28. For important presentation information, see slide 31.
3 Represents a non-GAAP financial measure. For important presentation information, see note A on slide 28, and slide 31.
4 Reported operating leverage of 7%.
Full Year Business Results 1
Net Income (Loss) ($B)
Consumer Banking
GWIM
Global Banking
Global Markets
All Other 2
$12.0
($1.7)
201620172018
FY 2018
Consumer Banking
GWIM
ROAAC 3
33%
Efficiency ratio
Operating leverage
47% 9%
28% 71% 2%
20% 44%
(2%)4
11% 67% 1%
1 All business segments and All Other are presented on a fully-taxable equivalent (FTE) basis throughout this presentation.
2 All Other adjusted to exclude the $2.9B charge for the 2017 enactment of the Tax Act. Reported net loss for All Other for FY 2017 was $3.3B.
3 ROAAC defined as return on average allocated capital.
4 Global Banking revenue and operating leverage were negatively impacted by the Tax Act in 2018. Excluding tax reform impact on revenue in 2018, operating leverage for Global Banking was 2%.
Significantly Reduced Expenses While Investing in the Franchise
$83.1
2010
2011
2012
2013
2014
2015
2016
2017
2018
Noninterest Expense ($B)Efficiency Ratio (%)
Delivered Positive Operating Leverage for 16 Consecutive Quarters
Operating Leverage Trend 1 | |||||||||||||||
+22% | +21% | +29% | +3% | +8% | +3% | +5% | +6% | +8% | +6% | +3% | +8% 2 | +5% | +4% | +7% | +7% 2 |
7%
7%
Reported revenue growth of 2% and | Reported revenue growth of 11% and operating leverage of 12% |
operating leverage of 3% |
7%
(31%)
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
YoY revenue growth (decline)YoY expense growth (decline)Operating leverage
Note: Amounts may not total due to rounding.
1 Operating leverage calculated as the year-over-year percentage change in revenue, net of interest expense, less the percentage change in noninterest expense. Quarterly expense for 2017 and 2016 has been restated to reflect the accounting change for retirement-eligible equity incentives adopted in 4Q17; 2015 and 2014 periods are as reported.
2 Revenue growth and operating leverage adjusted to exclude the $0.9B noninterest income charge in 4Q17 from the Tax Act; represents a non-GAAP financial measure. For important presentation information, see slide 8, Note A on slide 28, and slide 31.
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Bank of America Corporation published this content on 16 January 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 16 January 2019 12:03:10 UTC