Bank of America Corporation (NYSE:BAC) Q1 2019 Earnings Conference Call - Final Transcript

Apr 16, 2019 • 08:30 am ET


Bank of America Corporation (NYSE:BAC) Q1 2019 Earnings Conference Call - Final Transcript


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Good day everyone, and welcome to today's Bank of America Earnings Announcement. (Operator Instructions) Please note this call is being recorded.

And it's now my pleasure to turn the conference over to Mr. Lee McEntire. Please go ahead.

Lee McEntire

Good morning. Thanks for joining this morning's call to review our 1Q '19 results. By now I trust that everyone's had a chance to review the earnings release documents, which are available on the Investor Relations section of's website.

Before I turn the call over to the CEO, Brian Moynihan, let me remind you that we may make forward-looking statements during this call. After Brian's comments, our CFO, Paul Donofrio will review the details of the 1Q results. After that, we'll open it up for all of your questions. For further information on forward-looking comments, please refer to either our earnings release documents, our website or our SEC filings.

With that, take it away, Brian.

Brian Moynihan

Thank you, Lee, and good morning everyone. Thank you for joining us this morning to review our first quarter of 2019 results. In the first quarter, we reported $7.3 billion of net income after tax, the best quarter in the company's history.

So, let's begin on slide 2. This slide shows the building blocks in achieving another record quarter. It also shows our commitment to responsible growth, and how it drives our shareholder model. We reported diluted EPS of $0.70, which grew 13% from the first quarter 2018. This reflects a nice mix of both operating improvements and capital returns.

Pretax income of $8.8 billion, grew 4%. You can see that in the upper right. And we generated operating leverage of more than 400 basis points, which you can see in the lower right. Asset quality remains strong, as net charge-offs remained around $1 billion, the same level it had been for several quarters. Provision expense is up year-over-year to match those net charge-offs more closely and we had a small reserve build this quarter against the net reserve release last year.

Through disciplined capital deployment, after meeting all the requirements to make loans to our customers and support their businesses, we continue to drive our share count lower. You can see that on the lower left. We are well underway with our goal to wring out the dilution in shares caused by the increased capital build after the crisis.

Through share buybacks, our diluted shares are down 7% compared to the first quarter of 2018 and down 1.5 billion shares in the past four years.

Turning to slide 3. Part of responsible growth is to produce sustainable results, and part of that is to drive operational excellence, and we did it again this quarter. As you can see on slide 3, we extended our positive operating leverage streak to 17 consecutive quarters. As you think across the last four years or so, we've had many different markets out there, many different interest rate environments, many different changes and perceptions in the U.S. economy and the global