01—Abstract
Summary
Summary of the 10-K filed February 22, 2018. Cited figures are marked; the original filing is the authoritative source.
Bank of America Corporation (BAC) reported solid financial performance for the fiscal year ended December 31, 2017.
The company demonstrated revenue growth, primarily driven by an increase in net interest income, and benefited from lower provision for credit losses and a decrease in noninterest expense. Diluted earnings per common share improved to $1.56a from $1.49 in the prior year. A significant event impacting the results was the U.S. Tax Cuts and Jobs Act, which reduced net income by an estimated $2.9 billion due to adjustments in deferred tax assets and liabilities.
The company's capital position remained strong, with a Common Equity Tier 1 capital ratio of 11.9% under the Basel 3 Advanced approach, well above regulatory minimums. BAC continued its focus on returning capital to shareholders through share repurchases and dividends, with approximately $12.8 billionb repurchased during 2017. Key business segments, including Consumer Banking, Global Wealth & Investment Management, and Global Banking, all contributed positively to the company's results, showing revenue growth.
Global Markets experienced a slight revenue decline but maintained profitability. The company's robust deposit base and diverse funding sources underscored its stable financial condition. BAC's strategic focus on simplifying its organizational structure and improving operational efficiency appears to be yielding positive results, positioning the company to navigate the evolving financial landscape.
02—Key points
Key Highlights
- Net income increased to $18.2 billion ($1.56 per diluted share) in 2017, up from $17.8 billion ($1.49 per diluted share) in 2016.
- The company's Common Equity Tier 1 capital ratio stood at 11.9% under the Basel 3 Advanced approach at year-end 2017, demonstrating strong capital adequacy.
- Total revenue, net of interest expense, increased to $87.4 billion from $83.7 billion in the prior year.
- Net interest income rose by $3.6 billion to $44.7 billion, driven by higher interest rates and loan and deposit growth.
- Noninterest expense decreased by $340 million to $54.7 billion, primarily due to lower operating costs and litigation expenses.
- The Tax Cuts and Jobs Act enacted in December 2017 resulted in an estimated reduction of net income by $2.9 billion for the year.
- The company repurchased approximately $12.8 billion of common stock in 2017 as part of its capital management strategy.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2017filed February 22, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $87.13B$83.70B | +4.1% |
| Interest Expense | $12.34B$9.96B | +23.9% |
| Net Income | $18.23B$17.82B | +2.3% |
| EPS (Basic) | $1.63$1.57 | +3.8% |
| EPS (Diluted) | $1.56$1.49 | +4.7% |
| Shares Outstanding (Basic) | 10.20B10.28B | −0.9% |
| Shares Outstanding (Diluted) | 10.78B11.05B | −2.4% |
05—Questions
Frequently Asked Questions
What was Bank of America's net income for 2017?
Bank of America reported a net income of $18.2 billion, or $1.56 per diluted common share, for the fiscal year ended December 31, 2017.
How did the Tax Cuts and Jobs Act impact Bank of America's 2017 results?
The Tax Cuts and Jobs Act, enacted in December 2017, had a significant impact, resulting in an estimated reduction in net income of $2.9 billion for the year. This was primarily due to a lower valuation of certain U.S. deferred tax assets and liabilities.
What is Bank of America's Common Equity Tier 1 capital ratio, and how does it compare to regulatory requirements?
At December 31, 2017, Bank of America's Common Equity Tier 1 capital ratio was 11.9% under the Basel 3 Advanced approach. This ratio is well above the regulatory minimums required by U.S. banking regulators, including transitional requirements for capital conservation and G-SIB surcharges.
How much common stock did Bank of America repurchase in 2017?
In 2017, Bank of America repurchased approximately $12.8 billion of its common stock as part of its capital management plan, which included amounts authorized under its CCAR capital plans and an additional authorization approved in December 2017.
06—Continue