Bank of America
2Q24 Financial Results
July 16, 2024
2Q24 Financial Results
2Q24 | 1Q24 | Inc / (Dec) | 1Q24 | Inc / (Dec) | 2Q23 | Inc / (Dec) | |||||||||||
($B, except per share data) | Adj.1 | ||||||||||||||||
Total revenue, net of interest expense | $25.4 | $25.8 | ($0.4) | (2) % | $25.8 | ($0.4) | (2) % | $25.2 | $0.2 | 1 % | |||||||
Provision for credit losses | 1.5 | 1.3 | 0.2 | 14 | 1.3 | 0.2 | 14 | 1.1 | 0.4 | 34 | |||||||
Net charge-offs | 1.5 | 1.5 | - | 2 | 1.5 | - | 2 | 0.9 | 0.7 | 76 | |||||||
Reserve build (release)2 | - | (0.2) | 0.2 | (86) | (0.2) | 0.2 | (86) | 0.3 | (0.3) | (110) | |||||||
Noninterest expense | 16.3 | 17.2 | (0.9) | (5) | 16.5 | (0.2) | (1) | 16.0 | 0.3 | 2 | |||||||
Pretax income | 7.6 | 7.3 | 0.3 | 4 | 8.0 | (0.4) | (5) | 8.0 | (0.5) | (6) | |||||||
Pretax, pre-provision income3 | 9.1 | 8.6 | 0.5 | 6 | 9.3 | (0.2) | (2) | 9.2 | (0.1) | (1) | |||||||
Income tax expense | 0.7 | 0.6 | 0.1 | 13 | 0.8 | (0.1) | (12) | 0.6 | - | 6 | |||||||
Net income | $6.9 | $6.7 | $0.2 | 3 | $7.2 | ($0.3) | (4) | $7.4 | ($0.5) | (7) | |||||||
Diluted earnings per share | $0.83 | $0.76 | $0.07 | 9 | $0.83 | $- | - | $0.88 | ($0.05) | (6) | |||||||
Average diluted common shares (in millions) | 7,961 | 8,031 | (71) | (1) | 8,031 | (71) | (1) | 8,081 | (120) | (1) | |||||||
Return Metrics and Efficiency Ratio | |||||||||||||||||
Return on average assets | 0.85 | % | 0.83 | % | 0.89 | % | 0.94 | % | |||||||||
Return on average common shareholders' equity | 10.0 | 9.4 | 10.2 | 11.2 | |||||||||||||
Return on average tangible common shareholders' equity3 | 13.6 | 12.7 | 13.8 | 15.5 | |||||||||||||
Efficiency ratio | 64 | 67 | 64 | 64 | |||||||||||||
Note: Amounts may not total due to rounding.
- Amounts in this column (other than total revenue, net of interest expense, provision for credit losses, and average diluted common shares) are adjusted for the FDIC special assessment accrual. Adjusted amounts
represent non-GAAP financial measures. For a reconciliation to the most directly comparable GAAP financial measures, see note A on slide 32. For important presentation information, see slide 36. | |
2 For more information on reserve build (release), see note B on slide 32. | 2 |
3 Represent non-GAAP financial measures. For more information on pretax, pre-provision income and a reconciliation to the most directly comparable GAAP financial measure, see note C on slide 33. For important |
presentation information about these measures, see slide 36.
Continued Organic Growth in 2Q24
Consumer Banking
Added ~278,000 net new checking accounts; 22 consecutive quarters of growth
Added ~1MM credit card accounts1
Record consumer investment assets of $476B,2 up 23% YoY; 3.9MM accounts, up 6%
13 consecutive quarters of Small Business loan growth
Global Wealth & Investment Management
Added ~6,100 net new relationships across Merrill and Private Bank
Opened ~30,000 new bank accounts; over 60% of clients have banking relationship
Record client balances of over $4T, up 10% YoY
Grew loan balances 3% YoY to $225B
$5.7T total deposits, loans, and investment balances
$58B total net wealth spectrum flows since 2Q233
Global Banking | Global Markets |
#3 investment banking fee ranking; grew 1H24 market share 42 bps YoY4
Grew 1H24 investment banking fees 32% YoY to $3.1B
Grew Middle Market loan balances 4% YoY5
Grew average deposits 6% from 2Q23
9 consecutive quarters of YoY sales and trading revenue growth
Highest 2Q sales and trading revenue in over a decade
Record average loan balances of $135B, up 5% YoY; 15 consecutive quarters of growth
Zero trading loss days in 1H24
Note: Balance sheet metrics are end of period unless otherwise noted.
- Includes credit cards across Consumer Banking, Small Business, and Global Wealth & Investment Management (GWIM).
-
Consumer investment assets include client brokerage assets, deposit sweep balances, Bank of America N.A. brokered certificates of deposit (CDs), and assets under management (AUM) in Consumer Banking.
3 Includes net client flows across Merrill, Private Bank, and Consumer Investments.
4 Source: Dealogic as of June 30, 2024. | 3 |
- Includes loans to Global Commercial Banking clients, excluding commercial real estate and specialized industries.
Average Deposits and Rate Paid Trends
Total Corporation ($B) | Consumer Banking ($B) |
$2,250
$1,500
$750
$0
$2,012 $1,963 $1,926 $1,894 $1,875 $1,876 $1,905 $1,907 $1,910
2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 |
1.00%$1,250
$1,000
$750
0.50%
$500
$250
0.00%$0
$1,078 | $1,069 | $1,047 | $1,026 | $1,006 | ||||
$980 | $959 | $952 | $949 | |||||
2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 |
0.50%
0.25%
0.00%
Interest-bearing | Noninterest-bearing | QoQ Δ in total rate paid (RHS) | Other deposits | Core operating deposits | QoQ Δ in total rate paid (RHS) | |||||
GWIM ($B)
$400 | 2.00% |
$364
$339
$318 $314
$295 $292 $292 $297 $288
$200 | 1.00% |
$0 | 0.00% | |||||||||||||||
2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | ||||||||
Bank deposits1 | Sweep deposits | QoQ Δ in total rate paid (RHS) | ||||||||||||||
Note: Total Corporation also includes Global Markets and All Other.
- Includes Preferred Deposits, other non-sweep Merrill bank deposits, and Private Bank deposits.
Global Banking ($B)
$600 | 1.50% | ||||||
$509 | $528 | $526 | $525 | ||||
$495 | $503 | $493 | $498 | $504 | |||
$400 | 1.00% |
$200 | 0.50% |
$0 | 0.00% | |||||||||||||
2Q22 | 3Q22 | 4Q22 | 1Q23 | 2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | ||||||
Interest-bearing | Noninterest-bearing | QoQ Δ in total rate paid (RHS) | ||||||||||||
4
Credit Card Update
30+ Days Past Due ($MM)1
Delinquency rate
$3,000
2.43%
2.09%
$2,000
$1,000
$0 | |
4Q19 | 2Q24 |
Payment Rates Remain Elevated while Utilization Rates are Lower Compared to 4Q191,2
1.5X
1.3X | 1.2X |
1.0X | |
0.9X | |
0.8X | |
4Q19 | 2Q24 |
Utilization rate | Payment rate |
90+ Days Past Due ($MM)1
Delinquency rate
$1,500
1.26%
1.07%
$1,000
$500
$0 | |
4Q19 | 2Q24 |
Growth in Deposit and Investment Balances of Credit Card Clients3
40%
+25%
20%
0%
(20%) | |
4Q19 | 2Q24 |
- Includes consumer credit card portfolios in Consumer Banking and GWIM.
- Utilization rate is calculated as ending loan balances divided by open or active credit line commitments. Payment rate is calculated as in-month payment volume divided by previous month ending loan balances.
Quarterly payment rate is the average of monthly payment rates.
- Represent average Bank of America deposit and investment account balances of consumer credit card clients in Consumer Banking and GWIM.
5
2Q24 Highlights
(Comparisons to 2Q23, unless otherwise noted)
- Net income of $6.9B; diluted earnings per share of $0.83; ROE1 10.0%, ROTCE1,2 13.6%
- Revenue, net of interest expense, of $25.4B increased $0.2B, or 1%, reflecting higher asset management and investment banking fees, as well as sales and trading revenue, and lower net interest income (NII)
- NII of $13.7B ($13.9B FTE)1,2 decreased $0.5B, or 3%, as higher deposit costs more than offset higher asset yields and modest loan growth
- Provision for credit losses of $1.5B vs. $1.1B in 2Q23 and $1.3B in 1Q24
- Net charge-offs (NCOs)3 of $1.5B increased compared to 2Q23, driven by credit card and commercial real estate office, and were relatively flat compared to 1Q24
- Net reserve release of $25MM vs. net reserve build of $256MM in 2Q23 and net reserve release of $179MM in 1Q24
- Noninterest expense of $16.3B increased $0.3B, or 2%, driven by investments in people and revenue-related compensation
- Balance sheet remained strong
- Average deposits of $1.91T increased $35B, or 2%, vs. 2Q23
- Average loans and leases of $1.05T increased modestly vs. 2Q23
- Average Global Liquidity Sources4 of $909B
- Common Equity Tier 1 capital of $198B increased $1B from 1Q24
- Returned $5.4B to shareholders
- Paid $1.9B in common dividends; announced an 8% increase in quarterly common dividend, effective 3Q245
- Repurchased $3.5B of common stock, including repurchases to offset shares awarded under equity-based compensation plans
- Common Equity Tier 1 ratio of 11.9% increased 6 bps from 1Q24; 122 bps above new regulatory minimum, effective October 1, 2024
-
ROE stands for return on average common shareholders' equity. ROTCE stands for return on average tangible common shareholders' equity. FTE stands for fully taxable-equivalent basis.
2 Represent non-GAAP financial measures. For important presentation information about these measures, see slide 36. 3 Exclude loans measured at fair value.
4 See note D on slide 33 for definition of Global Liquidity Sources.
5 Subject to approval from the Bank of America Corporation (the Corporation) Board of Directors. | 6 |
Balance Sheet, Liquidity, and Capital
(EOP1 basis unless noted)
Balance Sheet Metrics | 2Q24 | 1Q24 | 2Q23 | |||
Assets ($B) | ||||||
Total assets | $3,258 | $3,274 | $3,123 | |||
Total loans and leases | 1,057 | 1,049 | 1,051 | |||
Cash and cash equivalents | 321 | 313 | 374 | |||
Total debt securities | 878 | 910 | 756 | |||
Funding & Liquidity ($B) | ||||||
Total deposits | $1,910 | $1,946 | $1,877 | |||
Long-term debt | 290 | 296 | 286 | |||
Global Liquidity Sources (average)2 | 909 | 909 | 867 | |||
Equity ($B) | ||||||
Common shareholders' equity | $267 | $265 | $255 | |||
Common equity ratio | 8.2 | % | 8.1 | % | 8.2 | % |
Tangible common shareholders' equity3 | $197 | $195 | $185 | |||
Tangible common equity ratio3 | 6.2 | % | 6.1 | % | 6.1 | % |
Per Share Data | ||||||
Book value per common share | $34.39 | $33.71 | $32.05 | |||
Tangible book value per common share3 | 25.37 | 24.79 | 23.23 | |||
Common shares outstanding (in billions) | 7.77 | 7.87 | 7.95 | |||
Basel 3 Capital ($B)4 | 2Q24 | 1Q24 | 2Q23 | |||
Common equity tier 1 capital | $198 | $197 | $190 | |||
Standardized approach | ||||||
Risk-weighted assets (RWA) | $1,662 | $1,658 | $1,639 | |||
CET1 ratio | 11.9 | % | 11.9 | % | 11.6 | % |
Advanced approaches | ||||||
Risk-weighted assets | $1,469 | $1,463 | $1,436 | |||
CET1 ratio | 13.5 | % | 13.4 | % | 13.2 | % |
Supplementary leverage | ||||||
Supplementary Leverage Ratio | 6.0 | % | 6.0 | % | 6.0 | % |
- CET1 ratio of 11.9% increased 6 bps from 1Q244
- CET1 capital of $198B increased $1B
- Standardized RWA of $1,662B increased $4B
- Book value per share of $34.39 improved 7% from 2Q23; tangible book value per share of $25.37 improved 9% from 2Q233
- Average Global Liquidity Sources of $909B were flat compared to 1Q242
- EOP stands for end of period.
- See note D on slide 33 for definition of Global Liquidity Sources.
- Represent non-GAAP financial measures. For important presentation information, see slide 36.
- Regulatory capital ratios at June 30, 2024, are preliminary. The Corporation reports regulatory capital ratios under both the Standardized and Advanced approaches. Capital adequacy is evaluated against the lower of
the Standardized or Advanced approaches compared to their respective regulatory capital ratio requirements. The Corporation's binding ratio was the Total capital ratio under the Standardized approach for June 30, | 7 |
2024, and March 31, 2024, and the CET1 ratio under the Standardized approach for June 30, 2023. |
Average Loan and Lease Trends
Total Loans and Leases ($B)
$1,100
$1,047 $1,046 $1,051 $1,048 $1,051 YoY
+0.5%
$1,000
$900
$800
2Q23 3Q23 4Q23 1Q24 2Q24
Loans and Leases in Business Segments ($B)
$1,250 | $1,037 | $1,037 | $1,041 | $1,039 | $1,043 | YoY | |
+1% | |||||||
$1,000 | |||||||
129 | 131 | 134 | 134 | 135 | +5% | ||
$750 | 383 | 376 | 375 | 374 | 373 | (3%) | |
$500 | 219 | 219 | 219 | 219 | 223 | +2% | |
$250 | 307 | 311 | 313 | 313 | 312 | +2% | |
$0 | |||||||
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | |||
Consumer Banking GWIM Global Banking Global Markets
Note: Amounts may not total due to rounding.
- Includes residential mortgage and home equity.
- Includes direct / indirect and other consumer and commercial lease financing.
Total Loans and Leases by Portfolio ($B)
$750
$593 $589 $592 $591 $596
$500 | $454 | $457 | $459 | $456 | $456 |
$250
$0
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | |
Consumer | Commercial | ||||
Total Loans and Leases by Product ($B)
$1,250 | $1,047 | $1,046 | $1,051 | $1,048 | $1,051 | |||||
$1,000 | 74 | 74 | 73 | 72 | 71 | |||||
94 | 98 | 100 | 100 | 99 | ||||||
$750 | 119 | 118 | 118 | 118 | 119 | |||||
126 | 124 | 125 | 125 | 123 | ||||||
$500 | 255 | 255 | 255 | 253 | 253 | |||||
$250 | 379 | 378 | 379 | 380 | 386 | |||||
$0 | ||||||||||
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | ||||||
U.S. commercial | Home lending1 | |||||||||
Non-U.S. commercial | Other2 | |||||||||
Consumer credit card | Commercial real estate | |||||||||
8
Net Interest Income
Net Interest Income (FTE, $B)1
$15.0 | $14.3 | $14.5 | $14.1 | $14.2 | $13.9 | ||||||||||||||
$10.0 | |||||||||||||||||||
$14.2 | $14.4 | $13.9 | $14.0 | $13.7 | |||||||||||||||
$5.0 | |||||||||||||||||||
$0.0 | |||||||||||||||||||
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | |||||||||||||||
Net interest income (GAAP) | FTE adjustment | ||||||||||||||||||
Net Interest Yield (FTE)1 | |||||||||||||||||||
3.00% | 2.65% | 2.64% | 2.47% | 2.50% | |||||||||||||||
2.41% | |||||||||||||||||||
2.00% | 2.06% | 2.11% | |||||||||||||||||
1.97% | 1.99% | 1.93% | |||||||||||||||||
1.00% | |||||||||||||||||||
2Q23 | 3Q23 | 4Q23 | 1Q24 | 2Q24 | |||||||||||||||
Reported net interest yield | Net interest yield excl. GM | ||||||||||||||||||
- Net interest income of $13.7B ($13.9B FTE)1
- Decreased $0.5B YoY, as higher deposit costs more than offset higher asset yields, higher NII related to Global Markets (GM) activity, and modest loan growth
- Decreased $0.3B from 1Q24, driven primarily by higher deposit costs
- NII related to GM activity increased approximately $0.5B YoY and $0.1B from 1Q24
- Net interest yield of 1.93% decreased 13 bps YoY and 6 bps from 1Q24
- Excluding GM, net interest yield of 2.41%1
Net Interest Income excl. GM (FTE, $B)1
$15.0 | $14.3 | $14.5 | $14.1 | $14.2 | $13.9 |
$10.0
$14.0 $13.9 $13.5 $13.5 $13.1
$5.0
$0.0
2Q23 3Q23 4Q23 1Q24 2Q24
NII excl. GM | GM NII |
Note: Amounts may not total due to rounding. FTE stands for fully taxable-equivalent basis.
- Represent non-GAAP financial measures. Net interest yield adjusted to exclude Global Markets NII of $0.8B, $0.7B, $0.6B, $0.7B, and $0.3B and average earning assets of $706.4B, $692.9B, $667.1B, $656.0B, and $657.9B for 2Q24, 1Q24, 4Q23, 3Q23, and 2Q23, respectively. The Corporation believes the presentation of NII and net interest yield excluding Global Markets provides investors with transparency of NII and net interest yield in core banking activities. For important presentation information, see slide 36.
9
Net Interest Income Outlook1,2
~($50MM)- | ~$14.5B | |||
~$125MM | ~($225MM) | $200MM | ||
~$200MM | ~$100MM | |||
~$300MM
$13.9B | • 25 bp interest | • Low-single | |||||
• Held-to- | rate cuts in | digit loan | |||||
September, | and deposit | ||||||
maturity | November, | growth | |||||
(HTM) | and December | • Slowing | |||||
securities | 2024 | ||||||
deposit | |||||||
• Mortgage | |||||||
rotation | |||||||
loans | |||||||
• Auto loans | |||||||
2Q24 | Fixed-rate | BSBY cessation | Day | Impact of | Global Markets | Other balance | 4Q24 |
asset repricing | impact 3 | count | interest rate | NII | sheet growth / | ||
cuts | mix |
Note: Amounts may not total due to use of ranges for select drivers presented.
- FTE basis. Represents a non-GAAP financial measure. For important presentation information, see slide 36. A reconciliation to the most directly comparable GAAP measure for the 4Q24 period is not included as it cannot be prepared without unreasonable effort.
- For cautionary information in connection with these forward-looking statements, see note E on slide 33, and slide 35.
3 The 4Q23 pretax noninterest income charge of $1.6B related to the Bloomberg Short-Term Bank Yield Index (BSBY) cessation is expected to be recognized back into interest income beginning with the November 15, 2024 BSBY | 10 |
cessation and through subsequent periods, largely through 2026. |
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Bank of America Corporation published this content on 16 July 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 July 2024 10:51:05 UTC.