BANK OF AMERICA CORPORATION Bank of America
4Q22 Financial Results
January 13, 2023
4Q22 Financial Results
Summary Income Statement | 4Q22 | 3Q22 | Inc / (Dec) | 4Q21 | Inc / (Dec) | ||||
($B, except per share data) | |||||||||
Total Revenue, net of interest expense | $24.5 | $24.5 | $- | - % | $22.1 | $2.5 | 11 | % | |
Provision (benefit) for credit losses | 1.1 | 0.9 | 0.2 | 22 | (0.5) | 1.6 | N/M | ||
Net charge-offs | 0.7 | 0.5 | 0.2 | 33 | 0.4 | 0.3 | 90 | ||
Reserve build (release)1 | 0.4 | 0.4 | - | 7 | (0.9) | 1.3 | N/M | ||
Noninterest expense | 15.5 | 15.3 | 0.2 | 2 | 14.7 | 0.8 | 6 | ||
Pretax income | 7.9 | 8.3 | (0.4) | (5) | 7.8 | 0.1 | 1 | ||
Pretax, pre-provision income2 | 9.0 | 9.2 | (0.2) | (2) | 7.3 | 1.7 | 23 | ||
Income tax expense | 0.8 | 1.2 | (0.5) | (37) | 0.8 | - | (5) | ||
Net income | $7.1 | $7.1 | $0.1 | 1 | $7.0 | $0.1 | 2 | ||
Diluted earnings per share | $0.85 | $0.81 | $0.04 | 5 | $0.82 | $0.03 | 4 | ||
Average diluted common shares (in millions) | 8,156 | 8,161 | (5) | - | 8,305 | (149) | (2) | ||
Return Metrics and Efficiency Ratio | |||||||||
Return on average assets | 0.92 | % | 0.90 | % | 0.88 | % | |||
Return on average common shareholders' equity | 11.2 | 10.8 | 10.9 | ||||||
Return on average tangible common shareholders' equity2 | 15.8 | 15.2 | 15.2 | ||||||
Efficiency ratio | 63 | 62 | 67 | ||||||
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 38.
- Represent non-GAAP financial measures. For more information on pretax, pre-provision income and a reconciliation to GAAP, see note B on slide 38. For important presentation information about these measures, see slide 41.
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4Q22 Highlights
(Comparisons to 4Q21, unless otherwise noted)
- Net income of $7.1B; diluted earnings per share of $0.85; ROE1 11.2%, ROTCE1,2 15.8%
- Revenue, net of interest expense, of $24.5B increased $2.5B, or 11%
- Net interest income (NII) of $14.7B ($14.8B FTE2) increased $3.3B, or 29%, driven by benefits from higher interest rates, including lower premium amortization expense, and solid loan growth
- Noninterest income of $9.9B decreased $0.8B, or 8%, as declines in investment banking and asset management fees, as well as lower service charges, more than offset higher sales and trading revenue
- Provision for credit losses of $1.1B vs. a benefit of $489MM in 4Q21; asset quality remains strong
- Reserve build of $403MM vs. release of $851MM in 4Q21; build of $378MM in 3Q223
- Net charge-offs (NCOs) of $689MM3 increased compared to 4Q21 and 3Q22 but remained well below pre-pandemic levels
- Net charge-off ratio of 26 bps increased 11 bps vs. 4Q21 and 6 bps from 3Q22
- Noninterest expense of $15.5B increased $0.8B, or 6%, vs. 4Q21
- Generated operating leverage4 for the sixth consecutive quarter (569 bps in 4Q22)
- Balance sheet remained strong
- Average loans and leases grew $94B from 4Q21
- Average deposits decreased $92B from 4Q21
- Common Equity Tier 1 (CET1) ratio of 11.2% increased 25 bps from 3Q22
- Average Global Liquidity Sources (GLS)5 of $868B
- Paid $1.8B in common dividends and repurchased $1.0B of common stock, including repurchases to offset shares awarded under equity-based compensation plans
Note: FTE stands for fully taxable-equivalent basis. | |
1 ROE stands for return on average common shareholders' equity; ROTCE stands for return on average tangible common shareholders' equity. | |
2 Represent non-GAAP financial measures. For important presentation information about these measures, see slide 41. | |
3 For more information on reserve build (release), see note A on slide 38. Net charge-offs exclude loans measured at fair value. | |
4 Operating leverage is calculated as the year-over-year percentage change in revenue, net of interest expense, less the percentage change in noninterest expense. | 3 |
5 See note C on slide 38 for definition of Global Liquidity Sources. |
2022 Financial Results
Summary Income Statement | 2022 | 2021 | Inc / (Dec) | |
($B, except per share data) | ||||
Total Revenue, net of interest expense | $95.0 | $89.1 | $5.8 | 7 % |
Provision (benefit) for credit losses | 2.5 | (4.6) | 7.1 | N/M |
Net charge-offs | 2.2 | 2.2 | (0.1) | (3) |
Reserve build (release)1 | 0.4 | (6.8) | 7.2 | N/M |
Noninterest Expense
Pretax Income
Pretax, pre-provision income2
Income tax expense
Net income
Diluted earnings per share
Average diluted common shares (in millions)
61.4 | 59.7 | 1.7 | 3 |
31.0 | 34.0 | (3.0) | (9) |
33.5 | 29.4 | 4.1 | 14 |
3.4 | 2.0 | 1.4 | 72 |
$27.5 | $32.0 | ($4.5) | (14) |
$3.19 | $3.57 | ($0.38) | (11) |
8,167 | 8,558 | (391) | (5) |
Return Metrics and Efficiency Ratio
Return on average assets | 0.88 | % | 1.05 | % |
Return on average common shareholders' equity | 10.8 | 12.2 | ||
Return on average tangible common shareholders' equity2 | 15.1 | 17.0 | ||
Efficiency ratio | 65 | 67 | ||
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 38.
- Represent non-GAAP financial measures. For more information on pretax, pre-provision income and a reconciliation to GAAP, see note B on slide 38. For important presentation information about these measures, see slide 41.
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Continued Organic Growth in 2022
Consumer Banking | Global Wealth & Investment Management |
Added over 1 million net new checking accounts | Added nearly 28,000 net new relationships |
Record 3.5 million consumer investment accounts and | Added more than 800 wealth advisors in 2H221 |
$28 billion net client flows | 51 consecutive quarters of average loans and |
Grew digital sales 22% YoY to a record 6.8 million | leases growth |
Over 1 billion client interactions with ERICA since | $87 billion of client flows |
launch in June 2018 | Over 119,000 new bank accounts in 2022 |
Global Banking | Global Markets |
Grew average loans and leases 14% YoY to $375 billion | Grew sales and trading revenue 9% YoY |
$10.4 billion Global Transaction Services revenue, | Record 4th quarter sales and trading revenue and |
up 38% YoY | highest full year since 2010 |
#3 in investment banking fees,2 up from #4 in 2021 | Macro trading business revenues3 up 38% YoY |
Grew CashPro App active users and percentage of | Average trading-related assets up 9% |
credit documents uploaded digitally | Average loans of $117 billion, up 28% |
- Includes advisors across all wealth management businesses in Global Wealth & Investment Management and Consumer Banking.
2 Source: Dealogic as of January 2, 2023.
3 Macro products include currencies, interest rates and commodities products.
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Bank of America Corporation published this content on 18 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 January 2023 17:29:01 UTC.
