Bank of America Corporation (BAC) 2024 Q2 Earnings Call Summary
July 16, 2024 
Bank of America Corporation (BAC)
| Market Cap | 0.21T |
|---|---|
| Beta | |
| P/E | 39.75452774136047 |
| EPS | 12.247158441111395 |
| Dividend | 0 |
| Dividend Yield | 0.00% |
Optimistic Highlights
Strong Fee Performance: Fees grew 6% year-over-year, with a 14% improvement in asset management fees and a 29% increase in investment banking fees.
Organic Growth and Customer Acquisition: Added 278,000 net new checking accounts and 6,100 new wealth management relationships in the quarter.
Digital Banking Expansion: Consumer mobile banking app serves over 47 million active users, with digital sales representing 53% of total sales in consumer businesses.
Strategic Investments in Core Businesses: Opened 11 new financial centers and renovated 243, with significant investments in technology, including AI enhancements.
Capital Strength and Shareholder Returns: CET1 ratio held at 11.9%, with $3.5 billion in share repurchases and $1.9 billion in dividends paid.
Pessimistic Highlights
Drop in Net Interest Income: Despite revenue growth, there was a decline in net interest income for the quarter.
Consumer Net Charge-offs: Net charge-offs were 59 basis points, indicating a stabilization but at a relatively high level compared to historical rates.
Commercial Real Estate Challenges: Aggressively working through loans in the modest CRA office portfolio, with a focus on decreasing reservable criticized loans and NPLs.
Company Outlook
Net Interest Income Growth Expected: Anticipates NII to grow in the third and fourth quarters of the year, with a forecasted increase around 4% to 5% higher than the current quarter's NII.
Deposit and Loan Growth: Expects modest growth in loans and deposits, with a slowing in deposit-seeking behavior.
Expense Management: Plans to maintain expense levels around the second quarter level, with investments made for growth.
Q & A Highlights
Q: Can you comment on the expectations for NII looking flattish with the fourth quarter number? (Glenn Schorr, from Evercore)
A: We're not providing guidance for 2025 at this stage. We believe Q2 is the trough for NII, and we're in a good position to grow from here. (Alastair Borthwick)
Q: How are you handling rate paid on cash in advisory accounts and expectations for behavioral changes in wealth management? (Glenn Schorr, from Evercore)
A: Our deposit pricing changes were made in the quarter to ensure growth, having stabilized around $280 billion in the wealth management business. (Brian Moynihan)
Q: What gives you confidence that NII is at a trough given the forward curve implies more rate cuts? (Jim Mitchell, from Seaport Global)
A: Our bridge on slide 10 outlines the expected impacts, including fixed asset repricing and the cessation of BSBY, contributing to NII growth. (Alastair Borthwick)
Q: Can you discuss the opportunity to optimize higher cost funding and the pace of NIM build beyond 2024? (Steven Chubak, from Wolfe Research)
A: We have the ability to pay down higher cost securities and liabilities, aiming for a NIM around 2.30-ish over time. (Alastair Borthwick)
Q: How do you expect to price deposits as rates continue to fall, especially with excess deposit levels? (Gerard Cassidy, from RBC)
A: Deposit pricing will adjust with rate changes, especially in higher-yielding accounts, aiming to grow deposits faster than the economy. (Brian Moynihan)