Post on 18-Aug-2015
transcript
Bank of America Opportunities For GrowthKen LewisChairman, President and Chief Executive Officer
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Forward Looking StatementsThis presentation contains forward-looking statements, including statements about the financial conditions, results of operations and earnings outlook of Bank of America Corporation. The forward-looking statements involve certain risks and uncertainties. Factors that may cause actual results or earnings to differ materially from such forward-looking statements include, among others, the following: 1) projected business increases following process changes and other investments are lower than expected; 2) competitive pressure among financial services companies increases significantly; 3) general economic conditions are less favorable than expected; 4) political conditions including the threat of future terrorist activity and related actions by the United States abroad may adversely affect the company’s businesses and economic conditions as a whole; 5) changes in the interest rate environment reduce interest margins and impact funding sources; 6) changes in foreign exchange rates increases exposure; 7) changes in market rates and prices may adversely impact the value of financial products; 8) legislation or regulatory environments, requirements or changes adversely affect the businesses in which the company is engaged; 9) changes in accounting standards, rules or interpretations, 10) litigation liabilities, including costs, expenses, settlements and judgments, may adversely affect the company or its businesses; 11) mergers and acquisitions and their integration into the company; and 12) decisions to downsize, sell or close units or otherwise change the business mix of any of the company. For further information regarding Bank of America Corporation, please read the Bank of America reports filed with the SEC and available at www.sec.gov.
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Investor Conference Goals
• Better understand embedded franchise opportunities
• Interact with management team
• Hear feedback from investors and analysts
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Who We Are
• Best franchise in U.S. banking
• Leveraging the advantages of scale and convenience
• Strong track record of strategic execution and growth
• Franchise full of opportunities
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The 4 “I’s” of Increasing Shareholder Value
Information
Integration
Investment
Innovation
Shareholder Value
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Information Flow Begins With Our Customers
IntegratedDelivery
CustomerInsights
InnovativeSolutions
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Client Manager
Banking CapitalMarkets
InvestmentBanker
Integration Brings all of Bank of America to Clients
Client Manager
Banking Investments
Financial Advisor
Premier Customer Business Customer
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Innovation – Anticipating Customer Needs
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Investing in Future Growth
• Capital markets platform
• Premier banking distribution
• Treasury services capabilities
• Back office delivery
• Online sales and service
• Strengthen payments businesses
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Risk ManagementAs A
CompetitiveAdvantage
Improve the Customer
Experience
Build a StrongBrand
Execution is Driving Organic Growth
Use the Advantages of Scale
Innovation
Organic Growth
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Brand – Critical to Growing a Retail Business
Bank of America Unaided Brand Awareness
Source: Brand Research & Analytics, Fortune, FT
23%
2000
200643%
• Wells Fargo – 19%• Citibank – 19%• Wachovia – 16%• Chase – 20%
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Associate• More than 9,000 Six Sigma green, black and master
black belts certified since 2001• Over 80,000 associates introduced to
quality principles• Business leaders trained in Six Sigma skills
Driving Results Through Process Improvement
Customer• 20%+ improvement in customer delight scores since 2001• Awarded Outstanding corporate innovator award from
Product Development and Management Assoc.
Shareholder • Savings reinvested in businesses• Several processes at Six Sigma quality
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Strong Risk Culture
2007 & Beyond: To Competitive Advantage• Increased predictive capabilities• Greater market understanding• Holistic risk view• Deeper organizational understanding and
ownership
2001-2006: Built Core Competency• Comprehensive risk coverage• Stronger risk disciplines• Enhanced tools and processes• Increased executive ownership and
partnership
14 FTE basis; excludes merger & restructuring charges
Effectively Managing Costs
2005
Efficiency Ratio
50%
54%
52%53%
2000 2001 2002 2003 2004
47%
2006
50% target
54%
52%
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$9.89
$15.89
$7.57
$5.24
$4.70
$2.55$0.00
$5.00
$10.00
$15.00
$20.00
2000 2001 2002 2003 2004 2005 2006
Revenue per share Expense per share Earnings per share
Compound Annual Growth Rates
Revenue 8%
Expense 6%
Earnings 11%
Based on originally reported results on a per share basis excluding goodwill amortization expense in 2000 and 2001 and merger and restructuring charges in all periods.EPS is diluted.
On a per share basis
Operating Leverage Provides Good Returns
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Consistent Attractive Earnings Growth
$3.55
$3.05
$3.75
$2.88 $2.55
11% Compound Growth
2000 - $2.26 reported EPS has been adjusted to exclude $.10 impact of restructuring charges as well as $.19 goodwill amortization expense eliminated in 2002 for comparability to other periods.
2001 - $2.30 reported EPS has been adjusted to exclude $.39 impact of business exit costs as well as $.19 goodwill amortization expense eliminated in 2002 for comparability to other periods.
2004 - $3.64 reported EPS has been adjusted $. 11 to exclude charges for merger and restructuring costs.2005 - $4.04 reported EPShas been adjusted $.07 to excludes charges for merger and restructuring costs2006 - $4.59 reported EPShas been adjusted $.11 to excludes charges for merger and restructuring costs
Diluted EPS
2001 2002 2003 20042000 2005
$4.11
$4.70
2006
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Bank of America
S & P 500Dow
KBW BankIndex
Wachovia
US Bancorp
Wells FargoCitigroup
JP Morgan
Total Annualized Shareholder Return From 12/31/00
Bank of America
S & P 500
Dow
KBW Bank Index
JP MorganUS Bancorp
WachoviaWells Fargo
Citigroup
Total Annualized Shareholder Return From 12/31/03
Providing Good Returns
15%
10%
8%
10%
13%12%
11%10%
9%
20%
3%5%
8%
16%
12%
7%6% 5%
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$2.12
1977 2006
13% annualized growth
29 Consecutive Years of Dividend Increases
Dividend Yield4.0%+
Yield based on annualized dividend and price as of 2/15/07
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How We Will Grow?
ORGANIC GROWTH
Acquisitions
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What Will Differentiate Bank of America?
Execution
Customers