What was Bank of America's net income in 2015, and what drove the change from 2014?

Bank of America reported a net income of $15.9 billion in 2015, a significant increase from $4.8 billion in 2014. This improvement was primarily driven by a substantial decrease in litigation expenses, which reduced noninterest expense by $15.2 billion.

How did Bank of America's capital position fare in 2015?

Bank of America maintained a strong capital position in 2015. The Common Equity Tier 1 (CET1) capital ratio was 10.2% under the Basel 3 Advanced – Transition rules as of December 31, 2015. The Supplementary Leverage Ratio (SLR) was 6.6%, comfortably above the required minimum.

What is the outlook for Bank of America's provision for credit losses in 2016?

The company expects reserve releases to decrease from 2015 levels in 2016. This would likely result in increased provision expense, assuming asset quality remains stable.

How did the company manage its expenses in 2015?

Bank of America significantly reduced its noninterest expense by $17.9 billion to $57.2 billion in 2015. This reduction was primarily due to a decrease of $16.0 billion in 'Other general operating expense,' largely driven by lower litigation expenses. Personnel expenses also decreased by $919 million due to streamlining efforts.

BAC 10-K FY2015 Annual Report — Revenue, Net Income, EPS

01—Abstract

Summary

Summary of the 10-K filed February 24, 2016. Cited figures are marked; the original filing is the authoritative source.

Bank of America Corporation (BAC) reported a significant recovery in net income for 2015, reaching $15.9 billion^a, a substantial increase from $4.8 billion in 2014.

This improvement was largely driven by a considerable decrease in litigation expenses, which significantly impacted the prior year's results. The bank maintained a strong capital position, with a Common Equity Tier 1 (CET1) capital ratio of 10.2% under the Basel 3 Advanced – Transition rules as of December 31, 2015, and a Supplementary Leverage Ratio (SLR) of 6.6%. Total assets grew to $2.1 trillion^b, supported by an increase in deposits, reflecting a strong customer base.

Despite a slight decline in total revenue, BAC demonstrated a more efficient operational structure, evidenced by an improved efficiency ratio and a significant reduction in noninterest expense, primarily due to lower litigation costs. The company also managed its balance sheet effectively, increasing liquidity sources and maintaining capital ratios well above regulatory minimums.

Key business segments like Consumer Banking and Global Banking showed improved net income, while Global Markets and LAS navigated challenging economic environments. The company returned approximately $5.9 billion^c in capital to shareholders through dividends and share repurchases, signaling a commitment to shareholder returns while navigating a complex regulatory landscape.

02—Key points

Key Highlights

Net income surged to $15.9 billion in 2015, up from $4.8 billion in 2014, primarily due to a $15.2 billion reduction in litigation expenses.
Total assets increased by $39.8 billion to $2.1 trillion, driven by deposit inflows and deployment into debt securities and loans.
Common Equity Tier 1 (CET1) capital ratio stood at 10.2% under Basel 3 Advanced – Transition rules as of December 31, 2015.
Noninterest expense decreased significantly by $17.9 billion to $57.2 billion, largely due to a reduction in litigation expenses.
The company returned $5.9 billion in capital to shareholders through dividends and share repurchases.
Consumer Banking segment net income increased 5% to $6.7 billion, driven by lower expenses and provisions, partially offset by lower net interest income.
The Federal Reserve did not object to the resubmitted CCAR capital plan on December 10, 2015, indicating improved capital planning processes.

03—One dollar

04—Financials

Financial Highlights

10-KFY2015filed February 24, 2016

Revenue$82.97B Net Income$15.91B19.2% Net Margin EPS (Diluted)$1.31 Total Assets$2.14T Cash & Equivalents$159.35B Free Cash Flow$28.40B

Financial Statements

FY2015 against FY2014

Line item	FY2015FY2014	FY2014	Change
Revenue	$82.97B$85.89B	$85.89B	−3.4%
Interest Expense	$10.55B$10.94B	$10.94B	−3.5%
Net Income	$15.91B$5.52B	$5.52B	+188.2%
EPS (Basic)	$1.38$0.43	$0.43	+220.9%
EPS (Diluted)	$1.31$0.42	$0.42	+211.9%
Shares Outstanding (Basic)	10.46B10.53B	10.53B	−0.6%
Shares Outstanding (Diluted)	11.24B10.58B	10.58B	+6.2%

05—Questions

Frequently Asked Questions

What was Bank of America's net income in 2015, and what drove the change from 2014?
Bank of America reported a net income of $15.9 billion in 2015, a significant increase from $4.8 billion in 2014. This improvement was primarily driven by a substantial decrease in litigation expenses, which reduced noninterest expense by $15.2 billion.
How did Bank of America's capital position fare in 2015?
Bank of America maintained a strong capital position in 2015. The Common Equity Tier 1 (CET1) capital ratio was 10.2% under the Basel 3 Advanced – Transition rules as of December 31, 2015. The Supplementary Leverage Ratio (SLR) was 6.6%, comfortably above the required minimum.
What is the outlook for Bank of America's provision for credit losses in 2016?
The company expects reserve releases to decrease from 2015 levels in 2016. This would likely result in increased provision expense, assuming asset quality remains stable.
How did the company manage its expenses in 2015?
Bank of America significantly reduced its noninterest expense by $17.9 billion to $57.2 billion in 2015. This reduction was primarily due to a decrease of $16.0 billion in 'Other general operating expense,' largely driven by lower litigation expenses. Personnel expenses also decreased by $919 million due to streamlining efforts.

06—Continue

← View all 10-K filings