Bank of america

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DeVry University, Keller Graduate School of Management *

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561

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Finance

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Apr 3, 2024

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pptx

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BANK OF AMERICA Irene Cooper February 18 th , 2024 FIN 564

BANK OF AMERICA ◦ Financial Actuals ◦ Balance Sheet ◦ Income Statement ◦ Financial ratios ◦ Strength & Weaknesses ◦ Federal Reserve Board- Prevailing Rates ◦ Annual Report Answers ◦ Dodd-Frank Act Stress Test ◦ BASEL III ◦ Forecast

FINANCIAL ACTUALS Balance Sheet Wells Fargo Bank of America 2022 2021 2020 2019 2018 Total Loans & Leases 1,045,747 $ 979,124 $ 927,861 $ 983,426 $ 946,895 $ Total Assests 3,051,375 $ 3,169,495 $ 2,819,627 $ 2,434,079 $ 2,354,507 $ Total Deposits 1,930,341 $ 2,064,446 $ 1,795,480 $ 1,434,803 $ 1,381,476 $ Total Liabilities 2,778,178 $ 2,899,429 $ 2,546,703 $ 2,169,269 $ 2,089,182 $ Total Common Shareholders' equity 244,800 $ 245,358 $ 248,414 $ 241,409 $ 242,999 $ Total Shareholders' equity 273,197 $ 270,066 $ 272,924 $ 264,810 $ 265,325 $ Balance Sheet- in millions 2022 2021 2020 2019 2018 Debt securities 496,808 $ 537,531 $ 501,207 $ 497,125 $ 484,689 $ Loans 955,871 $ 895,394 $ 887,637 $ 962,265 $ 953,110 $ Allowance for loan losses 12,985 $ 12,490 $ 18,516 $ 9,551 $ 9,775 $ Equity securities 64,414 $ 72,886 $ 60,008 $ 68,241 $ 55,148 $ Assets 1,881,016 $ 1,948,068 $ 1,952,911 $ 1,927,555 $ 1,895,883 $ Deposits 1,383,985 $ 1,482,479 $ 1,404,381 $ 1,322,626 $ 1,286,170 $ Long-term debt 174,870 $ 160,689 $ 212,950 $ 228,191 $ 229,044 $ Common stockholders’ equity 160,614 $ 168,331 $ 164,570 $ Wells Fargo stockholders’ equity 179,889 $ 187,606 $ 184,680 $ 187,146 $ 196,166 $ Total equity 181,875 $ 190,110 $ 185,712 $ 187,984 $ 197,066 $ Balance Sheet- in millions

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FINANCIAL ACTUALS Income Statement Wells Fargo Bank of America 2022 2021 2020 2019 2018 Net interest income 52,462 $ 42,934 $ 43,360 $ 48,891 $ 48,162 $ Noninterest income 42,488 $ 46,179 $ 42,168 $ 42,353 $ 42,858 $ Total revenue, net of interest expense 94,950 $ 89,113 $ 85,528 $ 91,244 $ 91,020 $ Provision for credit losses 2,543 $ (4,594) $ 11,320 $ 3,590 $ 3,282 $ Noninterest expenses 61,438 $ 59,731 $ 55,213 $ 54,900 $ 53,154 $ Income before income taxes 30,969 $ 33,976 $ 18,995 $ 32,754 $ 34,584 $ Income tax expense 3,441 $ 1,998 $ 1,101 $ 5,324 $ 6,437 $ Net Income 27,528 $ 31,978 $ 17,894 $ 27,430 $ 28,147 $ Preferred stock dividends and other 1,513 $ 1,421 $ 1,421 $ 1,432 $ 1,451 $ Net Income applicable to common shareholders 26,015 $ 30,557 $ 16,473 $ 25,998 $ 26,696 $ Income Statement- in millions 2022 2021 2020 2019 2018 Net interest income 44,950 $ 35,779 $ (4,177) $ 47,231 $ 49,995 $ Noninterest income 28,835 $ 42,713 $ 8,405 $ 37,832 $ 36,413 $ Total revenue 73,785 $ 78,492 $ 4,228 $ 85,063 $ 86,408 $ Provision for credit losses 1,534 $ (4,155) $ (18,284) $ 2,687 $ 1,744 $ Noninterest expenses 57,282 $ 53,831 $ (3,799) $ 58,178 $ 56,124 $ Net income before noncontrolling interests 12,882 $ 23,238 $ 19,576 $ 20,041 $ 22,876 $ Less: Net income from noncontrolling interests (300) $ 1,690 $ 1,405 $ 492 $ 483 $ Net Income 13,182 $ 21,548 $ 18,171 $ 19,549 $ 22,393 $ Income Statement- in millions

FINANCIAL ACTUALS Financial Ratios Wells Fargo Bank of America 2022 2021 2020 2019 2018 Earnings per share 3.21 $ 3.60 $ 1.88 $ 2.77 $ 2.64 $ Diluted Earnings 3.19 3.57 1.87 2.75 2.61 Dividends Paid 0.86 0.78 0.72 0.66 0.54 Return on average assests 0.88% 1.05% 0.67% 1.14% 1.21% Return on average common shareholders equity 10.75 12.23 6.76 10.62 11.04 Return on average tangible common shareholders equity 15.15 17.02 9.48 14.86 15.55 Efficiency ratio 64.71 67.03 64.55 60.17 58.40 Common Industry specific Financial ratios 2022 2021 2020 2019 2018 Earnings per share 3.17 $ 4.99 $ 0.43 $ 4.08 $ 4.31 $ Diluted Earnings 3.14 4.95 0.43 4.05 4.28 Dividends Paid 1.10 0.60 1.22 1.92 1.64 Return on average assests 0.70% 1.11% 0.17% 1.02% 1.19% Return on average common shareholders equity 7.5 12.0 1.1 10.23 11.53 Return on average tangible common shareholders equity 9.0 14.3 1.3 12.2 13.73 Efficiency ratio 78 69 78 68.4 65.00 Common Industry specific Financial ratios

Strength & Weakness

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Federal Reserve Board- Prevailing Rates Feb- 23 Ma r- 23 Apr - 23 Ma y-23 Jun-23 Jul-23 Aug -23 Sep- 23 Oct-2 3 Nov - 23 Dec - 23 Jan-24 4 4.2 4.4 4.6 4.8 5 5.2 5.4 Percent Per Year

Annual Report Answers ◦ CEO Brian Moynihan

Dodd-Frank Act Stress Test https://d1io3yog0oux5.cloudfront.net/_16314d229070d92ce3cec80d374d490e/bankofamerica/db/780/9893/pdf/Bank+of+America+2023+Dodd-Frank+Act+Annual+Stress+Test+Results.pdf

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BASEL III https://investor.bankofamerica.com/regulatory-and-other-filings/basel-pillar-3-disclosures/pillar-3-regulatory-liquidity-disclosures

Forecast 2023 2022 2021 2020 2019 Avg % of Change Net interest income 64,104.47 $ 22% -1% -11% 2% 11.41% Noninterest income 39,092.01 $ -8% 10% 0% -1% -0.10% Total revenue, net of interest expense 103,196 $ Provision for credit losses (1,407.67) $ -155% -141% 215% 9% -71.23% Noninterest expenses 63,193.78 $ 3% 8% 1% 3% 14.90% Income before income taxes 41,410 $ Income tax expense 5,926.17 $ 72% 81% -79% -17% 57.08% Net Income 35,484 $ Preferred stock dividends and other 1,610.96 $ 6% 0% -1% -1% 4.40% Net Income applicable to common shareholders 33,873 $ Income Statement- in millions Forecast of Bank's profitability