10-KPeriod: FY2023

BANK OF AMERICA CORP /DE/ Annual Report, Year Ended Dec 31, 2023

Filed February 20, 2024For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

Bank of America Corporation (BAC) reported a solid financial performance for the fiscal year ended December 30, 2023, characterized by increased net interest income, reflecting benefits from higher interest rates and loan growth. Despite a slight decrease in net income compared to the prior year, primarily due to higher noninterest expenses and provisions for credit losses, the company maintained a strong capital position. Key developments during the period included a substantial FDIC special assessment charge and a non-cash charge related to the cessation of the BSBY index. The company continued its capital return strategy through dividends and share repurchases, underscoring its commitment to shareholder value while navigating a dynamic economic environment marked by elevated interest rates and geopolitical uncertainties.

Financial Highlights

35 data points
Beta

Revenue

$102.77B

Net Income

$26.30B

25.6% Net Margin

EPS (Diluted)

$3.05

Total Assets

$3.18T

Cash & Equivalents

$333.07B

Free Cash Flow

$44.98B

Financial Statements
Beta
Revenue$102.77B
Interest Expense$73.33B
Net Income$26.30B
EPS (Basic)$3.07
EPS (Diluted)$3.05
Shares Outstanding (Basic)8.03B
Shares Outstanding (Diluted)8.08B

Key Highlights

  • 1Net interest income increased by $4.5 billion to $56.9 billion in 2023, driven by higher interest rates and loan growth.
  • 2Total revenue, net of interest expense, increased to $98.6 billion in 2023 from $95.0 billion in 2022.
  • 3Noninterest expense increased by $4.4 billion to $65.8 billion, primarily due to increased investments in personnel and technology, along with a significant FDIC special assessment.
  • 4Provision for credit losses rose by $1.9 billion to $4.4 billion, largely driven by the consumer portfolio, particularly credit card loans.
  • 5Total assets grew by $128.8 billion to $3.2 trillion, primarily due to an increase in cash and cash equivalents.
  • 6Common equity tier 1 capital ratio remained strong at 11.8% under the Standardized approach as of December 31, 2023.
  • 7The company declared a quarterly common stock dividend of $0.24 per share, payable in March 2024.

Frequently Asked Questions

Bank of America's net income was $26.5 billion in 2023, a decrease from $27.5 billion in 2022. This decrease was primarily attributed to higher noninterest expenses and a higher provision for credit losses, partially offset by an increase in net interest income.

In the fourth quarter of 2023, Bank of America recorded a noninterest expense of $2.1 billion for its estimated share of the FDIC special assessment, which was implemented to recover losses to the Deposit Insurance Fund resulting from the failures of Silicon Valley Bank and Signature Bank.

Net interest income increased by $4.5 billion in 2023, primarily driven by the benefits of higher interest rates and loan growth. While higher funding costs and lower deposit balances partially offset this, the company's asset-sensitive balance sheet indicates a positive outlook for net interest income in a higher rate environment. However, changes in deposit mix and customer behavior could influence future results.

Bank of America manages credit risk through rigorous underwriting, ongoing portfolio monitoring, and the establishment of an allowance for credit losses, which is based on management's estimate of expected credit losses. The company utilizes multiple macroeconomic scenarios to inform its loss forecasting. While asset quality remained relatively stable in 2023, the company continues to monitor economic conditions, including inflationary pressures and geopolitical factors, which could impact credit quality metrics in the future.