As filed with the Securities and Exchange Commission on January 16, 2019
 
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
January 16, 2019
BANK OF AMERICA CORPORATION
(Exact name of registrant as specified in its charter)
 
 
 
 
 
 
Delaware
 
1-6523
 
56-0906609
(State or Other Jurisdiction of Incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)
100 North Tryon Street
Charlotte, North Carolina 28255
(Address of principal executive offices)
(704) 386-5681
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2)
o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
o





ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On January 16, 2019 , Bank of America Corporation (the "Corporation") announced financial results for the fourth quarter and year ended December 31, 2018 , reporting fourth quarter net income of $7.3 billion , or $0.70 per diluted share, and net income for the year of $28 billion , or $2.61 per diluted share. A copy of the press release announcing the Corporation's results for the fourth quarter and year ended December 31, 2018 (the "Press Release") is attached hereto as Exhibit 99.1 and is incorporated by reference in this Item 2.02. The Press Release is available on the Corporation's website.
The information provided in Item 2.02 of this report, including Exhibit 99.1, shall be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
ITEM 7.01. REGULATION FD DISCLOSURE.
On January 16, 2019 , the Corporation will hold an investor conference call and webcast to discuss financial results for the fourth quarter and year ended December 31, 2018 , including the Press Release and other matters relating to the Corporation.
The Corporation has also made available on its website presentation materials containing certain historical and forward-looking information relating to the Corporation (the "Presentation Materials") and materials that contain additional information about the Corporation's financial results for the fourth quarter and year ended December 31, 2018 (the "Supplemental Information"). The Presentation Materials and the Supplemental Information are furnished herewith as Exhibit 99.2 and Exhibit 99.3, respectively, and are incorporated by reference in this Item 7.01. All information in Exhibits 99.2 and 99.3 is presented as of the particular date or dates referenced therein, and the Corporation does not undertake any obligation to, and disclaims any duty to, update any of the information provided.
The information provided in Item 7.01 of this report, including Exhibits 99.2 and 99.3, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall the information or Exhibits 99.2 or 99.3 be deemed incorporated by reference in any filings under the Securities Act of 1933, as amended.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits.
Exhibit 99.1 is filed herewith. Exhibits 99.2 and 99.3 are furnished herewith.
 
 
 
 
EXHIBIT NO.
  
DESCRIPTION OF EXHIBIT
 
 
  
 
 
  
 
 
  





SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Corporation has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
BANK OF AMERICA CORPORATION
 
 
By:
 
/s/ Rudolf A. Bless
 
 
Rudolf A. Bless
 
 
Chief Accounting Officer

Dated: January 16, 2019



Bank of America Reports Record Quarterly Earnings of $7.3 Billion, EPS $0.70 Full-Year Earnings of $28.1 Billion, EPS $2.61; 16 Consecutive Quarters of Positive Operating Leverage Q4-18 Financial Highlights1 Q4-18 Business Segment Highlights1,3 • Net income of $7.3 billion rose 208% (39% Consumer Banking • Net income rose 52% to $3.3 billion 2 adjusting for the impact of the Tax Act in 2017) , • Loans up 5% to $290 billion driven by continued strong operating leverage • Deposits up 3% to $687 billion and asset quality, as well as the benefit of tax reform impacting 2018 • Full-year Merrill Edge brokerage client flows of $25 billion • Diluted earnings per share of $0.70 rose 250% (49% on an adjusted basis)2 • Efficiency ratio improved to 45% • Pretax income of $8.7 billion rose 41% (22% on • 26.4 million mobile banking users, up 9% an adjusted basis)2 • Consumer payments $721 billion, up 7% • Revenue, net of interest expense, increased 11% Global Wealth and Investment • Net income rose 43% to $1.1 billion (6% on an adjusted basis)2 to $22.7 billion, led Management • Pretax margin increased to 29% by net interest income (NII), reflecting benefits from higher interest rates as well as loan and • Full-year client balance flows of $56 deposit growth(A) billion • Net interest yield (FTE basis) of 2.48%, up 9 • Loans increased 4% to $164 billion (A) bps • 2018 organic growth in net new ML • Provision for credit losses decreased $96 million households more than 4 times 2017 to $905 million Global Banking • Net income rose 25% to $2.1 billion – Net charge-off ratio declined to 0.39% • Firmwide investment banking fees of • Noninterest expense declined $141 million, or $1.3• billion (excludes self-led) 1%, to $13.1 billion; efficiency ratio improved to • Loans increased 2% to $357 billion 58% • Deposits increased 9% to $360 billion • Average loan and lease balances in business • segments rose $25 billion, or 3%, to $881 billion Efficiency ratio remained low at 42% – Loans to consumers up 4% and commercial Global Markets • Net income rose 20% to $493 million up 2% • Sales and trading revenue of $2.6 billion, • Average deposit balances rose $51 billion, or 4%, including net debit valuation adjustment to $1.3 trillion (DVA) gains of $52 million • Excluding net DVA, sales and trading • Repurchased $20.1 billion in common stock and (B) paid $5.4 billion in common dividends during revenue down 6% to $2.5 billion 2018 – Equities up 11% to $1.1 billion(B) – FICC down 15% to $1.4 billion(B) Q4-18 Financial Highlights Q4-18 Reported vs. ($ in billions, except per share data) Q4-18 vs. Q4-17 Reported Q4-17 Excl. Tax Act Excl. Tax Act Q4-18 Q4-17 % Inc / (Dec) Q4-172,4 % Inc / (Dec) Total revenue, net of interest expense $22.7 $20.4 11% $21.4 6% Pretax income 8.7 6.2 41 7.1 22 Net income 7.3 2.4 208 5.3 39 Diluted earnings per share $0.70 $0.20 250 $0.47 49 Return on average assets 1.24% 0.41% 0.90% Return on average common shareholders’ equity 11.6 3.3 7.8 Return on average tangible common shareholders’ equity4 16.3 4.6 10.9 Efficiency ratio 58 65 62 See page 11 for endnotes. 1 Financial Highlights and Business Segment Highlights compare to the year-ago quarter unless noted. Loan and deposit balances are shown on an average basis unless noted. 2 On December 22, 2017, the Tax Cuts and Jobs Act (the Tax Act) was enacted, which included a lower U.S. corporate tax rate effective in 2018. The Tax Act reduced Q4-17 net income by $2.9 billion, or $0.27 per diluted common share, which included a $0.9 billion pretax charge in other noninterest income predominantly related to the revaluation of certain tax-advantaged energy investments, as well as $1.9 billion of tax expense principally associated with the revaluation of certain deferred tax assets and liabilities. Adjusted net income, diluted earnings per share, pretax income and revenue are non-GAAP financial measures and exclude the Q4-17 impact of the enactment of the Tax Act. 3 The Corporation reports the results of operations of its four business segments and All Other on a fully-taxable equivalent (FTE) basis. 4 Represents a non-GAAP financial measure. For additional information (including reconciliation information), see endnotes C and D on page 11 and page 19. 1


 
Full-Year Financial Highlights FY 2018 Reported vs. ($ in billions, except per share data) FY 2018 vs. FY 2017 Reported FY 2017 Excl. Tax Act Excl. Tax Act FY 2018 FY 2017 % Inc / (Dec) FY 20171,2 % Inc / (Dec) Total revenue, net of interest expense $91.2 $87.4 4% $88.3 3% Pretax income 34.6 29.2 18 30.2 15 Net income 28.1 18.2 54 21.1 33 Diluted earnings per share $2.61 $1.56 67 $1.83 43 Return on average assets 1.21% 0.80% 0.93% Return on average common shareholders’ equity 11.0 6.7 7.9 Return on average tangible common shareholders’ equity2 15.5 9.4 11.0 Efficiency ratio 59 63 62 CEO Commentary “I am proud of our teammates who produced record earnings for the quarter and the year by driving responsible growth. Our teammates worked for our customers and delivered solid loan and deposit growth, and other activity, while managing risk well. Operating leverage based on disciplined expense management while investing in our future, solid asset quality, and loan and deposit growth drove this quarter’s results. In addition to lending and investing activities, we shared success in many ways: returning nearly $26 billion in capital to our shareholders; a second bonus since U.S. tax reform passed last year, impacting 95% of our teammates, to share success from our performance and the benefits of tax reduction; and more than $200 million of philanthropic giving to our communities. “Through the trillions of dollars of consumer transactions we process and from the steady confidence and activity of our small business and commercial clients, we see a healthy consumer and business climate driving a solid economy. Each of our businesses faces opportunities to grow even more. We are well positioned to serve clients, teammates, and communities by listening to their answer when we ask them: ‘What would you like the power to do?’” — Brian Moynihan, Chairman and Chief Executive Officer CFO Commentary “We have now seen 16 consecutive quarters of positive operating leverage, enabled by responsible growth. Our net income grew robustly and our EPS grew faster as we invested part of our profits in share repurchases. We significantly improved our returns in the fourth quarter, with a 1.24% return on average assets and a 16.3% return on average tangible common shareholders’ equity. Each line of business contributed to these results. With a strong balance sheet, we’re ready to deliver again in 2019.” — Paul Donofrio, Chief Financial Officer 1 On December 22, 2017, the Tax Act was enacted, which included a lower U.S. corporate tax rate effective in 2018. The Tax Act reduced 2017 net income by $2.9 billion, or $0.27 per diluted common share, which included a $0.9 billion pretax charge in other noninterest income predominantly related to the revaluation of certain tax-advantaged energy investments, as well as $1.9 billion of tax expense principally associated with the revaluation of certain deferred tax assets and liabilities. 2 Represents a non-GAAP financial measure. For additional information (including reconciliation information), see endnotes C and D on page 11 and page 19. . 2


 
Consumer Banking Three months ended Financial Results1 ($ in millions) 12/31/2018 9/30/2018 12/31/2017 2 • Net income of $3.3 billion, up $1.1 billion or 52% Total revenue $9,877 $9,403 $8,955 Provision for credit losses 915 870 886 • Revenue increased $922 million, or 10%, to $9.9 billion. NII increased $777 million, or 12%, driven by Noninterest expense 4,483 4,354 4,509 higher interest rates and deposit and loan growth. Pretax income 4,479 4,179 3,560 Noninterest income included higher card income and Income tax expense 1,141 1,066 1,364 service charges Net income $3,338 $3,113 $2,196 • Provision for credit losses increased $29 million to 1 Comparisons are to the year-ago quarter unless noted. $915 million 2 Revenue, net of interest expense. Tax expense compared to prior year impacted by a lower U.S. corporate tax rate. – Net charge-offs increased due to credit card portfolio seasoning and loan growth – Net charge-off ratio was 1.22% compared to 1.21% • Noninterest expense decreased $26 million, or 1%, to $4.5 billion as investments for business growth were more than offset by improved productivity and lower FDIC expense Three months ended Business Highlights1,2 ($ in billions) 12/31/2018 9/30/2018 12/31/2017 • Average deposits grew $21 billion, or 3%; average Average deposits $686.8 $687.5 $665.5 loans grew $14 billion, or 5% Average loans and leases 289.9 285.0 275.7 • Merrill Edge brokerage assets grew $9 billion, or 5%, Brokerage assets (EOP) 185.9 203.9 177.0 to $186 billion, as $25 billion in client flows more Active mobile banking users 26.4 25.9 24.2 than offset lower market valuations (MM) • Combined credit/debit card spending up 6% Number of financial centers 4,341 4,385 4,477 • Digital usage continued to grow Efficiency ratio 45% 46% 50% – 26.4 million active mobile banking users, up 9% Return on average allocated 36 33 24 capital – Digital sales were 27% of all Consumer Banking 2 sales Total U.S. Consumer Credit Card – Mobile channel usage up 16% Average credit card $95.8 $94.7 $93.5 outstanding balances – 51.6 million person-to-person payments through Zelle®, more than double the year-ago quarter Total credit/debit spend 151.9 146.4 143.4 • Efficiency ratio improved to 45% from 50% Risk-adjusted margin 8.8% 8.2% 8.7% 1 Comparisons are to the year-ago quarter unless noted. 2 The U.S. consumer credit card portfolio includes Consumer Banking and GWIM. 3


 
Global Wealth and Investment Management Three months ended Financial Results1 ($ in millions) 12/31/2018 9/30/2018 12/31/2017 2 • Record net income of $1.1 billion, up $318 million or Total revenue $4,990 $4,783 $4,683 43% Provision for credit losses 23 13 6 • Revenue increased $307 million, or 7%, primarily Noninterest expense 3,542 3,414 3,470 driven by higher net interest income and higher asset Pretax income 1,425 1,356 1,207 management fees as well as a small gain on sale of a non-core asset, partially offset by lower transactional Income tax expense 363 346 463 revenue Net income $1,062 $1,010 $744 1 Comparisons are to the year-ago quarter unless noted. • Noninterest expense increased 2% as higher revenue- 2 Revenue, net of interest expense. Tax expense compared to prior year impacted by a lower related incentives, as well as investments for U.S. corporate tax rate. business growth, were partially offset by continued expense discipline Three months ended Business Highlights1 ($ in billions) 12/31/2018 9/30/2018 12/31/2017 • Total client balances decreased $131 billion, or 5%, Average deposits $247.4 $238.3 $240.1 to $2.6 trillion, as positive client flows of $56 billion Average loans and leases 163.5 161.9 157.1 were more than offset by impact of lower market Total client balances (EOP) 2,620.9 2,841.4 2,751.9 valuations AUM flows (6.2) 7.6 18.2 • Average loans and leases grew $6 billion, or 4%, driven by mortgages and custom lending Pretax margin 29% 28% 26% Return on average allocated 29 28 21 • Pretax margin improved to 29% capital 2 • Wealth advisors up 1% to 19,459 1 Comparisons are to the year-ago quarter unless noted. 2 Includes financial advisors in Consumer Banking of 2,722 and 2,402 in Q4-18 and Q4-17. • Accelerated organic wealth management household growth – Net new Merrill Lynch relationships up more than 4 times the 2017 level – U.S. Trust new relationships up 9% in 2018 4


 
Global Banking Three months ended Financial Results1 ($ in millions) 12/31/2018 9/30/2018 12/31/2017 • Record net income of $2.1 billion, up $426 million or Total revenue2,3 $5,050 $4,738 $5,019 25% Provision for credit losses 85 (70) 132 • Record revenue of $5.1 billion, up $31 million or 1% Noninterest expense 2,119 2,121 2,161 - Reflects higher NII from the benefit of higher Pretax income 2,846 2,687 2,726 interest rates and growth in deposits Income tax expense 740 699 1,046 - Noninterest income includes lower investment banking fees Net income $2,106 $1,988 $1,680 1 Comparisons are to the year-ago quarter unless noted. • Provision improved to $85 million, primarily driven by 2 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities, and sales and trading activities. the absence of the prior year's single-name non-U.S. 3 2 Revenue, net of interest expense. Tax expense compared to prior year impacted by a lower commercial charge-off U.S. corporate tax rate. • Noninterest expense fell 2%, primarily due to lower FDIC expense, partially offset by continued investment in the business Three months ended Business Highlights1,2 ($ in billions) 12/31/2018 9/30/2018 12/31/2017 • Average deposits increased $30 billion, or 9%, to Average deposits $359.6 $337.7 $329.8 $360 billion Average loans and leases 357.4 352.7 350.3 • Average loans and leases grew $7 billion, or 2%, to Total Corp. IB fees (excl. self- 1.3 1.2 1.4 2 $357 billion led) 2 • Total firmwide investment banking fees (excluding Global Banking IB fees 0.8 0.6 0.8 self-led deals) decreased 5% to $1.3 billion, driven Business Lending revenue 2.2 2.1 2.3 primarily by lower debt underwriting and advisory Global Transaction Services 2.1 2.0 1.9 fees revenue • Efficiency ratio remained low at 42% Efficiency ratio 42% 45% 43% Return on average allocated 20 19 17 capital 1 Comparisons are to the year-ago quarter unless noted. 2 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities, and sales and trading activities. 5


 
Global Markets Three months ended Financial Results1 ($ in millions) 12/31/2018 9/30/2018 12/31/2017 2,3 • Net income of $493 million, up $83 million or 20% Total revenue $3,213 $3,843 $3,396 Net DVA4 52 (99) (118) • Revenue of $3.2 billion, down $183 million or 5%; excluding net DVA, revenue decreased 10%4 Total revenue $3,161 $3,942 $3,514 (excl. net DVA)2,3,4 - Reflects sales and trading revenue decline of 6% (ex-DVA), the absence of a prior-year gain on the Provision for credit losses 6 (2) 162 sale of a non-core asset and lower investment Noninterest expense 2,540 2,613 2,614 banking fees Pretax income 667 1,232 620 • Provision improved to $6 million, driven by the Income tax expense 174 320 210 absence of the prior year’s single-name non-U.S. Net income $493 $912 $410 commercial charge-off2 Net income (excl. net $453 $987 $483 • Noninterest expense decreased $74 million, or 3%, to DVA)4 $2.5 billion driven by lower revenue-related expenses 1 Comparisons are to the year-ago quarter unless noted. 2 5 Global Banking and Global Markets share in certain deal economics from investment banking, • Average VaR of $36 million remained low loan origination activities, and sales and trading activities. 3 Revenue, net of interest expense. Tax expense compared to prior year impacted by a lower U.S. corporate tax rate. 4 Revenue and net income, excluding net DVA, are non-GAAP financial measures. See endnote B for more information. 5 VaR model uses a historical simulation approach based on three years of historical data and an expected shortfall methodology equivalent to a 99% confidence level. Average VaR was $36MM, $31MM and $36MM for Q4-18, Q3-18 and Q4-17, respectively. Three months ended Business Highlights1,2 ($ in billions) 12/31/2018 9/30/2018 12/31/2017 • Reported sales and trading revenue increased 1% to Average total assets $655.1 $652.5 $659.4 $2.6 billion Average trading-related 464.0 460.3 449.7 assets • Excluding net DVA, sales and trading revenue decreased 6% to $2.5 billion(B) Average loans and leases 70.6 71.2 73.6 2 – FICC revenue of $1.4 billion decreased 15%, due Sales and trading revenue 2.6 3.0 2.5 to weakness in credit and mortgage markets and Sales and trading revenue 2.5 3.1 2.7 lower client activity in credit products (excl. net DVA)(B),2 – Equities revenue of $1.1 billion increased 11%, Global Markets IB fees2 0.5 0.5 0.6 due to strength in client financing and derivatives Efficiency ratio 79% 68% 77% Return on average allocated 6 10 5 capital 1 Comparisons are to the year-ago quarter unless noted. 2 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities, and sales and trading activities. 6


 
All Other Three months ended Financial Results1 ($ in millions) 12/31/2018 9/30/2018 12/31/2017 2 • Net income of $0.3 billion compared with a loss of Total revenue $(239) $161 $(1,366) $2.7 billion Provision for credit losses (124) (95) (185) - Q4-17 included charges of $2.9 billion from the Noninterest expense 449 565 520 enactment of the Tax Act, comprised of a charge Pretax loss (564) (309) (1,701) of $0.9 billion in other income and $1.9 billion of tax expense Income tax expense (benefit) (843) (453) 964 • Revenue improved $1.1 billion from Q4-17 Net income (loss) $279 $144 $(2,665) 1 Comparisons are to the year-ago quarter unless noted. - Excluding the Tax Act impact, revenue improved 2 Revenue, net of interest expense. Tax expense compared to prior year impacted by a lower U.S. $0.2 billion from Q4-17, driven by a small gain corporate tax rate. from the sale of non-core consumer real estate Note: All Other consists of asset and liability management (ALM) activities, equity investments, loans non-core mortgage loans and servicing activities, the net impact of periodic revisions to the mortgage servicing rights (MSR) valuation model for core and non-core MSRs and the related economic hedge results, liquidating businesses and residual expense allocations. ALM activities • Benefit in provision for credit losses declined $61 encompass certain residential mortgages, debt securities, interest rate and foreign currency risk million to $124 million due to a slower pace of management activities, the impact of certain allocation methodologies and hedge ineffectiveness. The results of certain ALM activities are allocated to our business segments. portfolio improvement driven by runoff and the sale Equity investments include our merchant services joint venture, as well as a portfolio of equity, of non-core consumer real estate loans real estate and other alternative investments. • Noninterest expense decreased $71 million to $449 million, reflecting lower FDIC expense and other costs • Q4-18 included $0.2 billion in net tax benefits, including lower tax expense on international earnings due to updated tax guidance, partially offset by charges related to a variety of other tax matters 7


 
Credit Quality Three months ended Highlights1 ($ in millions) 12/31/2018 9/30/2018 12/31/2017 • Overall credit quality remained strong across both Provision for credit losses $905 $716 $1,001 the consumer and commercial portfolios Net charge-offs 924 932 1,237 2 • Net charge-offs declined $313 million to $924 Net charge-off ratio 0.39% 0.40% 0.53% million, primarily driven by the absence of the prior At period-end year's single-name non-U.S. commercial charge-off Nonperforming assets $5,244 $5,449 $6,758 – The net charge-off ratio declined 14 bps to 0.39% Nonperforming assets ratio3 0.56% 0.59% 0.73% • The provision for credit losses decreased $96 million Allowance for loan and lease $9,601 $9,734 $10,393 to $905 million losses – Q4-18 provision expense closely matched net Allowance for loan and lease 1.02% 1.05% 1.12% charge-offs losses ratio4 • Nonperforming assets declined $1.5 billion to $5.2 1 Comparisons are to the year-ago quarter unless noted. 2 Net charge-off ratio is calculated as annualized net charge-offs divided by average billion, primarily driven by improvements in consumer outstanding loans and leases during the period. 3 Nonperforming assets ratio is calculated as nonperforming loans, leases and foreclosed • Commercial reservable criticized utilized exposure properties (nonperforming assets) divided by outstanding loans, leases and foreclosed down $2.5 billion, or 18%, to $11.1 billion properties at the end of the period. 4 Allowance for loan and lease losses ratio is calculated as allowance for loan and lease losses divided by loans and leases outstanding at the end of the period. Note: Ratios do not include loans accounted for under the fair value option. 8


 
Leadership in high-tech, high-touch (Figures are for Q4-18 unless otherwise specified) High-Tech High-Touch No. 1 in mobile banking, online banking and digital sales 4,341 financial centers functionality • 81 new openings in last 12 months Digital banking has won 30+ digital awards in the last two years • 567 renovations in last 12 months Online- and Mobile-certified by J.D. Power as providing “Outstanding Customer Experience” 16,255 ATMs No. 1 Mobile Banking app in S&P Global Market Intelligence’s • 5,365 new or replaced in last 12 months 2018 U.S. Mobile Banking Market Report • 100% contactless-enabled “Best in Class” in Javelin’s 2018 Mobile Banking Scorecard No. 1 Overall | No. 1 Ease of Use | No. 1 in Functionality in Dynatrace’s Q4-18 Online Banker Scorecard Erica chosen as 2018 BAI Global Innovation Award winner for Expanded in 26 new and existing Customer Experience in the “People’s Choice” category markets in 2018 Consumer digital banking momentum 36.3MM active digital banking users 26.4MM active mobile banking users 66MM Consumer and Small Business 1.5B logins to consumer banking app clients 27% of all Consumer sales through digital • 49% of all digital sales came from mobile 19,459 Wealth advisors in Global Wealth and Investment Management • 19% of total consumer mortgage applications came from and Consumer Banking digital 52MM P2P payments via Zelle®, representing $14B, up 97% YoY 490K digital appointments Global footprint serving middle- 4.8MM users have completed 23MM interactions with Erica since market, large corporate and launch institutional clients Innovation in Global Banking 55,000 relationships with companies and ~485K digital channel users across our commercial, large institutions corporate and business banking businesses 35+ countries • CashPro Mobile users up 104% YoY; logins up 186% in 2018 79% of the 2018 Global Fortune 500 and • Volume of Intelligent Receivables, which uses AI to match 94% of the U.S. Fortune 1,000 have a payments and receivables, grew 5X YoY and won “New Product relationship with us Development” award from Aite Group Increased client-facing professionals to • Digital Disbursements, the business-to-consumer payments further strengthen local market coverage solution that leverages the bank’s investment in Zelle, saw domestic volumes grow 66% in 2018 BofAML ranks No. 1 in all four of • Electronic signature and document exchange, introduced in Greenwich Associates’ 2018 surveys 2018, provides capability to reduce processing time from 4 of European equities: Trading Share, days to 4 hours Algorithmic Trading Share, Electronic Trading Quality, and Trading & Execution Innovation in wealth management Service Quality 26% increase in clients using the Merrill Lynch mobile app in 2018 Digital innovation supporting our advisors’ growth objectives:   • 88% of ML advisors have an online digital presence • Evolved broad suite of acquisition and collaboration capabilities, including personalized advisor websites, LinkedIn Sales Navigator and compliant texting 9


 
Balance Sheet, Liquidity and Capital Highlights ($ in billions except per share data, end of period, unless otherwise noted) Three months ended 12/31/2018 9/30/2018 12/31/2017 Ending Balance Sheet Total assets $2,354.5 $2,338.8 $2,281.2 Total loans and leases 946.9 929.8 936.7 Total loans and leases in business segments (excluding All Other) 898.8 874.8 867.3 Total deposits 1,381.5 1,345.6 1,309.5 Average Balance Sheet Average total assets $2,334.6 $2,317.8 $2,301.7 Average loans and leases 934.7 930.7 927.8 Average deposits 1,345.0 1,316.3 1,293.6 Funding and Liquidity Long-term debt $229.3 $234.1 $227.4 Global Liquidity Sources, average(E) 544 537 522 Equity Common shareholders’ equity $243.0 $239.8 $244.8 Common equity ratio 10.3% 10.3% 10.7% Tangible common shareholders’ equity1 $173.1 $169.9 $174.5 Tangible common equity ratio1 7.6% 7.5% 7.9% Per Share Data Common shares outstanding (in billions) 9.67 9.86 10.29 Book value per common share $25.13 $24.33 $23.80 Tangible book value per common share1 17.91 17.23 16.96 Regulatory Capital(F) Basel 3 CET1 capital $167.3 $164.4 $168.5 Standardized approach Risk-weighted assets $1,437 $1,439 $1,443 CET1 ratio 11.6% 11.4% 11.7% Advanced approaches Risk-weighted assets $1,408 $1,424 $1,459 CET1 ratio 11.9% 11.5% 11.5% Supplementary leverage Supplementary leverage ratio (SLR) 6.8% 6.7% n/a 1 Represents a non-GAAP financial measure. For reconciliation, see page 19 of this press release. n/a = not applicable 10


 
Endnotes A We also measure net interest income on an FTE basis, which is a non-GAAP financial measure. FTE basis is a performance measure used in operating the business that management believes provides investors a more accurate picture of the interest margin for comparative purposes. We believe that this presentation allows for comparison of amounts from both taxable and tax-exempt sources, and is consistent with industry practices. Net interest income on an FTE basis was $12.5 billion, $12.0 billion and $11.7 billion for the three months ended December 31, 2018, September 30, 2018 and December 31, 2017, respectively. The FTE adjustment was $155 million, $151 million and $251 million for the three months ended December 31, 2018, September 30, 2018 and December 31, 2017, respectively. B Global Markets revenue and net income, excluding net debit valuation adjustments (DVA), and sales and trading revenue, excluding net DVA, are non- GAAP financial measures. Net DVA gains (losses) were $52 million, $(99) million and $(118) million for the three months ended December 31, 2018, September 30, 2018 and December 31, 2017, respectively. FICC net DVA gains (losses) were $45 million, $(80) million and $(112) million for the three months ended December 31, 2018, September 30, 2018 and December 31, 2017, respectively. Equities net DVA gains (losses) were $7 million, $(19) million and $(6) million for the three months ended December 31, 2018, September 30, 2018 and December 31, 2017, respectively. C Enactment of the Tax Act reduced Q4-17 and FY 2017 net income by $2.9 billion, or $0.27 per diluted common share, which included a $0.9 billion pretax charge in other noninterest income (which reduced pretax income and revenue, net of interest expense) predominantly related to the revaluation of certain tax-advantaged energy investments, as well as $1.9 billion of tax expense principally associated with the revaluation of certain deferred tax assets and liabilities. The enactment negatively impacted Q4-17 and FY 2017 return on average assets by 49 bps and 13 bps, respectively; return on average common shareholders’ equity by 455 bps and 117 bps, respectively; return on average tangible common shareholders’ equity by 630 bps and 162 bps, respectively; and efficiency ratio by 287 bps and 67 bps, respectively. Reported metrics are shown on pages 1 and 2 of this press release. D Return on average tangible common shareholders’ equity is a non-GAAP financial measure. See page 19 of this press release for reconciliation to GAAP financial measures. E Global Liquidity Sources (GLS) include cash and high-quality, liquid, unencumbered securities, limited to U.S. government securities, U.S. agency securities, U.S. agency MBS, and a select group of non-U.S. government and supranational securities, and are readily available to meet funding requirements as they arise. They do not include Federal Reserve Discount Window or Federal Home Loan Bank borrowing capacity. Transfers of liquidity among legal entities may be subject to certain regulatory and other restrictions. F Regulatory capital ratios at December 31, 2018 are preliminary. We report regulatory capital ratios under both the Standardized and Advanced approaches. The approach that yields the lower ratio is used to assess capital adequacy, which for CET1 is the Standardized approach at December 31, 2018 and September 30, 2018 and the Advanced approaches at December 31, 2017. Basel 3 transition provisions for regulatory capital adjustments and deductions were fully phased-in as of January 1, 2018. Prior periods are presented on a fully phased-in basis. SLR requirements became effective January 1, 2018. 11


 
Contact Information and Investor Conference Call Invitation Note: Chief Executive Officer Brian Moynihan and Chief Financial Officer Paul Donofrio will discuss fourth- quarter 2018 financial results in a conference call at 8:00 a.m. ET today. The presentation and supporting materials can be accessed on the Bank of America Investor Relations website at http://investor.bankofamerica.com. For a listen-only connection to the conference call, dial 1.877.200.4456 (U.S.) or 1.785.424.1732 (international). The conference ID is 79795. Please dial in 10 minutes prior to the start of the call. Investors Investor Call can access replays of the conference call by visiting the Investor Relations website or by calling Information 1.800.934.4850 (U.S.) or 1.402.220.1178 (international) from January 16 through January 23. Investors May Contact: Reporters May Contact: Lee McEntire, Bank of America, 1.980.388.6780 Lawrence Grayson, Bank of America, 1.704.995.5825 lawrence.grayson@bankofamerica.com Jonathan Blum, Bank of America (Fixed Income), 1.212.449.3112 Bank of America Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 66 million consumer and small business clients with approximately 4,300 retail financial centers, including approximately 1,800 lending centers, 2,200 Merrill Edge investment centers and 1,500 business centers; approximately 16,300 ATMs; and award-winning digital banking with more than 36 million active users, including over 26 million mobile users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. Bank of America offers industry-leading support to approximately 3 million small business owners through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange. Forward-Looking Statements Bank of America Corporation (the “Company”) and its management may make certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipates,” “targets,” “expects,” “hopes,” “estimates,” “intends,” “plans,” “goals,” “believes,” “continue” and other similar expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could.” Forward-looking statements represent the Company’s current expectations, plans or forecasts of its future results, revenues, expenses, efficiency ratio, capital measures, strategy, and future business and economic conditions more generally, and other future matters. These statements are not guarantees of future results or performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict and are often beyond the Company’s control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements. 12


 
You should not place undue reliance on any forward-looking statement and should consider the following uncertainties and risks, as well as the risks and uncertainties more fully discussed under Item 1A. Risk Factors of the Company’s 2017 Annual Report on Form 10-K and in any of the Company’s subsequent Securities and Exchange Commission filings: the Company’s potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions, and the possibility that amounts may be in excess of the Company’s recorded liability and estimated range of possible loss for litigation and regulatory exposures; the possibility that the Company could face increased servicing, securities, fraud, indemnity, contribution or other claims from one or more counterparties, including trustees, purchasers of loans, underwriters, issuers, other parties involved in securitizations, monolines or private-label and other investors; the possibility that future representations and warranties losses may occur in excess of the Company’s recorded liability and estimated range of possible loss for its representations and warranties exposures; the Company’s ability to resolve representations and warranties repurchase and related claims, including claims brought by investors or trustees seeking to avoid the statute of limitations for repurchase claims; the risks related to the discontinuation of LIBOR and other reference rates, including increased expenses and litigation and the effectiveness of hedging strategies; uncertainties about the financial stability and growth rates of non-U.S. jurisdictions, the risk that those jurisdictions may face difficulties servicing their sovereign debt, and related stresses on financial markets, currencies and trade, and the Company’s exposures to such risks, including direct, indirect and operational; the impact of U.S. and global interest rates, inflation, currency exchange rates, economic conditions, trade policies, including tariffs, and potential geopolitical instability; the impact on the Company’s business, financial condition and results of operations of a potential higher interest rate environment; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior, adverse developments with respect to U.S. or global economic conditions and other uncertainties; the Company’s ability to achieve its expense targets, net interest income expectations, or other projections; adverse changes to the Company’s credit ratings from the major credit rating agencies; estimates of the fair value of certain of the Company’s assets and liabilities; uncertainty regarding the content, timing and impact of regulatory capital and liquidity requirements; the impact of adverse changes to total loss-absorbing capacity requirements and/or global systemically important bank surcharges; the potential impact of Federal Reserve actions on the Company’s capital plans; the effect of regulations, other guidance or additional information on our estimated impact of the Tax Act; the impact of implementation and compliance with U.S. and international laws, regulations and regulatory interpretations, including, but not limited to, recovery and resolution planning requirements, Federal Deposit Insurance Corporation (FDIC) assessments, the Volcker Rule, fiduciary standards and derivatives regulations; a failure in or breach of the Company’s operational or security systems or infrastructure, or those of third parties, including as a result of cyber-attacks; the impact on the Company’s business, financial condition and results of operations from the planned exit of the United Kingdom from the European Union; the impact of a prolonged federal government shutdown and threats not to increase the federal government’s debt limit; and other similar matters. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made. “Bank of America Merrill Lynch” is the marketing name for the Global Banking and Global Markets businesses of Bank of America Corporation. Lending, derivatives and other commercial banking activities are performed by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, financial advisory and other investment banking activities are performed by investment banking affiliates of Bank of America Corporation (Investment Banking Affiliates), including Merrill Lynch, Pierce, Fenner & Smith Incorporated, which are registered broker-dealers and members of FINRA and SIPC. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed. Bank of America Corporation’s broker-dealers are not banks and are separate legal entities from their bank affiliates. The obligations of the broker- dealers are not obligations of their bank affiliates (unless explicitly stated otherwise), and these bank affiliates are not responsible for securities sold, offered or recommended by the broker-dealers. The foregoing also applies to other non-bank affiliates. For more Bank of America news, including dividend announcements and other important information, visit the Bank of America newsroom at https://newsroom.bankofamerica.com. www.bankofamerica.com 13


 
14 Bank of America Corporation and Subsidiaries Selected Financial Data (In millions, except per share data) Year Ended Fourth Third Fourth December 31 Quarter Quarter Quarter Summary Income Statement 2018 2017 2018 2018 2017 Net interest income $ 47,432 $ 44,667 $ 12,304 $ 11,870 $ 11,462 Noninterest income 43,815 42,685 10,432 10,907 8,974 Total revenue, net of interest expense 91,247 87,352 22,736 22,777 20,436 Provision for credit losses 3,282 3,396 905 716 1,001 Noninterest expense 53,381 54,743 13,133 13,067 13,274 Income before income taxes 34,584 29,213 8,698 8,994 6,161 Income tax expense 6,437 10,981 1,420 1,827 3,796 Net income $ 28,147 $ 18,232 $ 7,278 $ 7,167 $ 2,365 Preferred stock dividends 1,451 1,614 239 466 286 Net income applicable to common shareholders $ 26,696 $ 16,618 $ 7,039 $ 6,701 $ 2,079 Average common shares issued and outstanding 10,096.5 10,195.6 9,855.8 10,031.6 10,470.7 Average diluted common shares issued and outstanding 10,236.9 10,778.4 9,996.0 10,170.8 10,621.8 Summary Average Balance Sheet Total debt securities $ 437,312 $ 435,005 $ 440,967 $ 445,813 $ 441,624 Total loans and leases 933,049 918,731 934,721 930,736 927,790 Total earning assets 1,980,231 1,922,061 1,986,734 1,972,437 1,950,048 Total assets 2,325,246 2,268,633 2,334,586 2,317,829 2,301,687 Total deposits 1,314,941 1,269,796 1,344,951 1,316,345 1,293,572 Common shareholders’ equity 241,799 247,101 241,372 241,812 250,838 Total shareholders’ equity 264,748 271,289 263,698 264,653 273,162 Performance Ratios Return on average assets 1.21% 0.80% 1.24% 1.23% 0.41% Return on average common shareholders’ equity 11.04 6.72 11.57 10.99 3.29 Return on average tangible common shareholders’ equity (1) 15.55 9.41 16.29 15.48 4.56 Per Common Share Information Earnings $ 2.64 $ 1.63 $ 0.71 $ 0.67 $ 0.20 Diluted earnings 2.61 1.56 0.70 0.66 0.20 Dividends paid 0.54 0.39 0.15 0.15 0.12 Book value 25.13 23.80 25.13 24.33 23.80 Tangible book value (1) 17.91 16.96 17.91 17.23 16.96 December 31 September 30 December 31 Summary Period-End Balance Sheet 2018 2018 2017 Total debt securities $ 441,753 $ 446,107 $ 440,130 Total loans and leases 946,895 929,801 936,749 Total earning assets 2,011,474 1,982,338 1,941,542 Total assets 2,354,507 2,338,833 2,281,234 Total deposits 1,381,476 1,345,649 1,309,545 Common shareholders’ equity 242,999 239,832 244,823 Total shareholders’ equity 265,325 262,158 267,146 Common shares issued and outstanding 9,669.3 9,858.3 10,287.3 Year Ended Fourth Third Fourth December 31 Quarter Quarter Quarter Credit Quality 2018 2017 2018 2018 2017 Total net charge-offs (2) $ 3,763 $ 3,979 $ 924 $ 932 $ 1,237 Net charge-offs as a percentage of average loans and leases outstanding (3) 0.41% 0.44% 0.39% 0.40% 0.53% Provision for credit losses $ 3,282 $ 3,396 $ 905 $ 716 $ 1,001 December 31 September 30 December 31 2018 2018 2017 Total nonperforming loans, leases and foreclosed properties (4) $ 5,244 $ 5,449 $ 6,758 Nonperforming loans, leases and foreclosed properties as a percentage of total loans, leases and foreclosed properties (3) 0.56% 0.59% 0.73% Allowance for loan and lease losses $ 9,601 $ 9,734 $ 10,393 Allowance for loan and lease losses as a percentage of total loans and leases outstanding (3) 1.02% 1.05% 1.12% For footnotes, see page 15. Current period information is preliminary and based on company data available at the time of the presentation.


 
15 Bank of America Corporation and Subsidiaries Selected Financial Data (continued) (Dollars in millions) Basel 3 Capital Management December 31 September 30 December 31 2018 2018 2017 Regulatory capital metrics (5): Common equity tier 1 capital $ 167,272 $ 164,386 $ 168,461 Common equity tier 1 capital ratio - Standardized approach 11.6% 11.4% 11.7% Common equity tier 1 capital ratio - Advanced approaches 11.9 11.5 11.5 Tier 1 leverage ratio 8.4 8.3 8.6 Tangible equity ratio (6) 8.6 8.5 8.9 Tangible common equity ratio (6) 7.6 7.5 7.9 (1) Return on average tangible common shareholders’ equity and tangible book value per share of common stock are non-GAAP financial measures. We believe the use of ratios that utilize tangible equity provides additional useful information because they present measures of those assets that can generate income. Tangible book value per share provides additional useful information about the level of tangible assets in relation to outstanding shares of common stock. See Reconciliations to GAAP Financial Measures on page 19. (2) Includes non-U.S. credit card net charge-offs of $75 million for the year ended December 31, 2017. These net charge-offs represent net charge-offs of non-U.S. credit card loans, which were sold in the second quarter of 2017. (3) Ratios do not include loans accounted for under the fair value option. Charge-off ratios are annualized for the quarterly presentation. (4) Balances do not include past due consumer credit card loans, consumer loans secured by real estate where repayments are insured by the Federal Housing Administration and individually insured long-term stand-by agreements (fully insured home loans), and in general, other consumer and commercial loans not secured by real estate; purchased credit-impaired loans even though the customer may be contractually past due; and nonperforming loans held-for-sale or accounted for under the fair value option. (5) Regulatory capital ratios at December 31, 2018 are preliminary. Bank of America Corporation (the Corporation) reports regulatory capital ratios under both the Standardized and Advanced approaches. The approach that yields the lower ratio is used to assess capital adequacy, which for CET1 is the Standardized approach at December 31, 2018 and September 30, 2018 and the Advanced approaches at December 31, 2017. Basel 3 transition provisions for regulatory capital adjustments and deductions were fully phased-in as of January 1, 2018. Prior periods are presented on a fully phased-in basis. (6) Tangible equity ratio equals period-end tangible shareholders’ equity divided by period-end tangible assets. Tangible common equity ratio equals period-end tangible common shareholders’ equity divided by period-end tangible assets. Tangible shareholders’ equity and tangible assets are non-GAAP financial measures. We believe the use of ratios that utilize tangible equity provides additional useful information because they present measures of those assets that can generate income. See Reconciliations to GAAP Financial Measures on page 19. Current period information is preliminary and based on company data available at the time of the presentation.


 
16 Bank of America Corporation and Subsidiaries Quarterly Results by Business Segment and All Other (Dollars in millions) Fourth Quarter 2018 Consumer Global Global All Banking GWIM Banking Markets Other Total revenue, net of interest expense $ 9,877 $ 4,990 $ 5,050 $ 3,213 $ (239) Provision for credit losses 915 23 85 6 (124) Noninterest expense 4,483 3,542 2,119 2,540 449 Net income 3,338 1,062 2,106 493 279 Return on average allocated capital (1) 36% 29% 20% 6% n/m Balance Sheet Average Total loans and leases $ 289,862 $ 163,516 $ 357,410 $ 70,609 $ 53,324 Total deposits 686,826 247,427 359,642 31,077 19,979 Allocated capital (1) 37,000 14,500 41,000 35,000 n/m Quarter end Total loans and leases $ 294,335 $ 164,854 $ 365,717 $ 73,928 $ 48,061 Total deposits 696,146 268,700 360,248 37,841 18,541 Third Quarter 2018 Consumer Global Global All Banking GWIM Banking Markets Other Total revenue, net of interest expense $ 9,403 $ 4,783 $ 4,738 $ 3,843 $ 161 Provision for credit losses 870 13 (70) (2) (95) Noninterest expense 4,354 3,414 2,121 2,613 565 Net income 3,113 1,010 1,988 912 144 Return on average allocated capital (1) 33% 28% 19% 10% n/m Balance Sheet Average Total loans and leases $ 284,994 $ 161,869 $ 352,712 $ 71,231 $ 59,930 Total deposits 687,530 238,291 337,685 30,721 22,118 Allocated capital (1) 37,000 14,500 41,000 35,000 n/m Quarter end Total loans and leases $ 287,277 $ 162,191 $ 352,332 $ 73,023 $ 54,978 Total deposits 692,770 239,654 350,748 41,102 21,375 Fourth Quarter 2017 Consumer Global Global All Banking GWIM Banking Markets Other Total revenue, net of interest expense $ 8,955 $ 4,683 $ 5,019 $ 3,396 $ (1,366) Provision for credit losses 886 6 132 162 (185) Noninterest expense 4,509 3,470 2,161 2,614 520 Net income (loss) 2,196 744 1,680 410 (2,665) Return on average allocated capital (1) 24% 21% 17% 5% n/m Balance Sheet Average Total loans and leases $ 275,716 $ 157,063 $ 350,262 $ 73,552 $ 71,197 Total deposits 665,536 240,126 329,761 34,250 23,899 Allocated capital (1) 37,000 14,000 40,000 35,000 n/m Quarter end Total loans and leases $ 280,473 $ 159,378 $ 350,668 $ 76,778 $ 69,452 Total deposits 676,530 246,994 329,273 34,029 22,719 (1) Return on average allocated capital is calculated as net income, adjusted for cost of funds and earnings credits and certain expenses related to intangibles, divided by average allocated capital. Other companies may define or calculate these measures differently. n/m = not meaningful Certain prior period amounts have been reclassified among the segments to conform to current period presentation. The Company reports the results of operations of its four business segments and All Other on a fully-taxable equivalent (FTE) basis. Current period information is preliminary and based on company data available at the time of the presentation.


 
17 Bank of America Corporation and Subsidiaries Annual Results by Business Segment and All Other (Dollars in millions) Year Ended December 31, 2018 Consumer Global Global All Banking GWIM Banking Markets Other Total revenue, net of interest expense $ 37,523 $ 19,338 $ 19,644 $ 16,063 $ (711) Provision for credit losses 3,664 86 8 — (476) Noninterest expense 17,713 13,777 8,591 10,686 2,614 Net income (loss) 12,029 4,079 8,173 3,979 (113) Return on average allocated capital (1) 33% 28% 20% 11% n/m Balance Sheet Average Total loans and leases $ 283,807 $ 161,342 $ 354,236 $ 72,651 $ 61,013 Total deposits 684,173 241,256 336,337 31,209 21,966 Allocated capital (1) 37,000 14,500 41,000 35,000 n/m Year end Total loans and leases $ 294,335 $ 164,854 $ 365,717 $ 73,928 $ 48,061 Total deposits 696,146 268,700 360,248 37,841 18,541 Year Ended December 31, 2017 Consumer Global Global All Banking GWIM Banking Markets Other Total revenue, net of interest expense $ 34,521 $ 18,590 $ 19,999 $ 15,951 $ (784) Provision for credit losses 3,525 56 212 164 (561) Noninterest expense 17,795 13,556 8,596 10,731 4,065 Net income (loss) 8,202 3,093 6,953 3,293 (3,309) Return on average allocated capital (1) 22% 22% 17% 9% n/m Balance Sheet Average Total loans and leases $ 266,058 $ 152,682 $ 346,089 $ 71,413 $ 82,489 Total deposits 653,320 245,559 312,859 32,864 25,194 Allocated capital (1) 37,000 14,000 40,000 35,000 n/m Year end Total loans and leases $ 280,473 $ 159,378 $ 350,668 $ 76,778 $ 69,452 Total deposits 676,530 246,994 329,273 34,029 22,719 (1) Return on average allocated capital is calculated as net income, adjusted for cost of funds and earnings credits and certain expenses related to intangibles, divided by average allocated capital. Other companies may define or calculate these measures differently. n/m = not meaningful Certain prior period amounts have been reclassified among the segments to conform to current period presentation. Current period information is preliminary and based on company data available at the time of the presentation.


 
18 Bank of America Corporation and Subsidiaries Supplemental Financial Data (Dollars in millions) Year Ended Fourth Third Fourth December 31 Quarter Quarter Quarter FTE basis data (1) 2018 2017 2018 2018 2017 Net interest income $ 48,042 $ 45,592 $ 12,459 $ 12,021 $ 11,713 Total revenue, net of interest expense 91,857 88,277 22,891 22,928 20,687 Net interest yield 2.42% 2.37% 2.48% 2.42% 2.39% Efficiency ratio 58.11 62.01 57.37 56.99 64.16 December 31 September 30 December 31 Other Data 2018 2018 2017 Number of financial centers - U.S. 4,341 4,385 4,477 Number of branded ATMs - U.S. 16,255 16,089 16,039 Headcount 204,489 204,681 209,376 (1) FTE basis is a non-GAAP financial measure. FTE basis is a performance measure used by management in operating the business that management believes provides investors a more accurate picture of the interest margin for comparative purposes. The Corporation believes that this presentation allows for comparison of amounts from both taxable and tax-exempt sources and is consistent with industry practices. Net interest income includes FTE adjustments of $610 million and $925 million for the years ended December 31, 2018 and 2017, and $155 million, $151 million and $251 million for the fourth and third quarters of 2018 and the fourth quarter of 2017, respectively. Certain prior period amounts have been reclassified to conform to current period presentation. Current period information is preliminary and based on company data available at the time of the presentation.


 
19 Bank of America Corporation and Subsidiaries Reconciliations to GAAP Financial Measures (Dollars in millions) The Corporation evaluates its business based on the following ratios that utilize tangible equity, a non-GAAP financial measure. Tangible equity represents an adjusted shareholders’ equity or common shareholders’ equity amount which has been reduced by goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities. Return on average tangible common shareholders’ equity measures the Corporation’s earnings contribution as a percentage of adjusted average common shareholders’ equity. The tangible common equity ratio represents adjusted ending common shareholders’ equity divided by total assets less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities. Return on average tangible shareholders’ equity measures the Corporation’s earnings contribution as a percentage of adjusted average total shareholders’ equity. The tangible equity ratio represents adjusted ending shareholders’ equity divided by total assets less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities. Tangible book value per common share represents adjusted ending common shareholders’ equity divided by ending common shares outstanding. These measures are used to evaluate the Corporation’s use of equity. In addition, profitability, relationship and investment models all use return on average tangible shareholders’ equity as key measures to support our overall growth goals. See the tables below for reconciliations of these non-GAAP financial measures to financial measures defined by GAAP for the years ended December 31, 2018 and 2017 and the three months ended December 31, 2018, September 30, 2018 and December 31, 2017. The Corporation believes the use of these non-GAAP financial measures provides additional clarity in understanding its results of operations and trends. Other companies may define or calculate supplemental financial data differently. Year Ended Fourth Third Fourth December 31 Quarter Quarter Quarter 2018 2017 2018 2018 2017 Reconciliation of average shareholders’ equity to average tangible common shareholders’ equity and average tangible shareholders’ equity Shareholders’ equity $ 264,748 $ 271,289 $ 263,698 $ 264,653 $ 273,162 Goodwill (68,951) (69,286) (68,951) (68,951) (68,954) Intangible assets (excluding mortgage servicing rights) (2,058) (2,652) (1,857) (1,992) (2,399) Related deferred tax liabilities 906 1,463 874 896 1,344 Tangible shareholders’ equity $ 194,645 $ 200,814 $ 193,764 $ 194,606 $ 203,153 Preferred stock (22,949) (24,188) (22,326) (22,841) (22,324) Tangible common shareholders’ equity $ 171,696 $ 176,626 $ 171,438 $ 171,765 $ 180,829 Reconciliation of period-end shareholders’ equity to period-end tangible common shareholders’ equity and period-end tangible shareholders’ equity Shareholders’ equity $ 265,325 $ 267,146 $ 265,325 $ 262,158 $ 267,146 Goodwill (68,951) (68,951) (68,951) (68,951) (68,951) Intangible assets (excluding mortgage servicing rights) (1,774) (2,312) (1,774) (1,908) (2,312) Related deferred tax liabilities 858 943 858 878 943 Tangible shareholders’ equity $ 195,458 $ 196,826 $ 195,458 $ 192,177 $ 196,826 Preferred stock (22,326) (22,323) (22,326) (22,326) (22,323) Tangible common shareholders’ equity $ 173,132 $ 174,503 $ 173,132 $ 169,851 $ 174,503 Reconciliation of period-end assets to period-end tangible assets Assets $ 2,354,507 $ 2,281,234 $ 2,354,507 $ 2,338,833 $ 2,281,234 Goodwill (68,951) (68,951) (68,951) (68,951) (68,951) Intangible assets (excluding mortgage servicing rights) (1,774) (2,312) (1,774) (1,908) (2,312) Related deferred tax liabilities 858 943 858 878 943 Tangible assets $ 2,284,640 $ 2,210,914 $ 2,284,640 $ 2,268,852 $ 2,210,914 Book value per share of common stock Common shareholders’ equity $ 242,999 $ 244,823 $ 242,999 $ 239,832 $ 244,823 Ending common shares issued and outstanding 9,669.3 10,287.3 9,669.3 9,858.3 10,287.3 Book value per share of common stock $ 25.13 $ 23.80 $ 25.13 $ 24.33 $ 23.80 Tangible book value per share of common stock Tangible common shareholders’ equity $ 173,132 $ 174,503 $ 173,132 $ 169,851 $ 174,503 Ending common shares issued and outstanding 9,669.3 10,287.3 9,669.3 9,858.3 10,287.3 Tangible book value per share of common stock $ 17.91 $ 16.96 $ 17.91 $ 17.23 $ 16.96 Certain prior period amounts have been reclassified to conform to current period presentation. Current period information is preliminary and based on company data available at the time of the presentation.


 
Bank of America 4Q18 Financial Results January 16, 2019


 
2018 Financial Results 2018 Reported vs. Reported 2018 vs. 2017 Excl. Tax Act Summary Income Statement 2017 Excl. Tax Act ($B, except per share data) 2018 2017 % Inc / (Dec) 2017 1,2 % Inc / (Dec) Total revenue, net of interest expense $91.2 $87.4 4 % $88.3 3 % 6% operating Noninterest expense 53.4 54.7 (2) 54.7 (2) leverage YoY 2,4 Provision for credit losses 3.3 3.4 (3) 3.4 (3) Pretax income 34.6 29.2 18 30.2 15 Income tax expense 6.4 11.0 (41) 9.0 (29) Net income $28.1 $18.2 54 $21.1 33 Diluted earnings per share $2.61 $1.56 67 $1.83 43 Average diluted common shares (in millions) 10,237 10,778 (5) 10,778 (5) Return Metrics and Efficiency Return on average assets 1.21 % 0.80 % 0.93 % Return on average common shareholders' equity 11.0 6.7 7.9 3 Return on average tangible common shareholders' equity 15.5 9.4 11.0 Efficiency ratio 59 63 62 Note: Amounts may not total due to rounding. 1 On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”) was enacted, which included a lower U.S. corporate tax rate effective in 2018. The Tax Act reduced 2017 net income by $2.9B, or $0.27 per diluted common share, which included a $0.9B pretax charge in other noninterest income, predominantly related to the revaluation of certain tax-advantaged energy investments, as well as $1.9B of tax expense principally associated with the revaluation of certain deferred tax assets and liabilities. 2 Represents a non-GAAP financial measure. For a reconciliation to GAAP of the presented return metrics, see note A on slide 28. For important presentation information, see slide 31. 2 3 Represents a non-GAAP financial measure. For important presentation information, see note A on slide 28, and slide 31. 4 Reported operating leverage of 7%.


 
Full Year Business Results 1 Net Income (Loss) ($B) Consumer Banking GWIM Global Banking Global Markets All Other 2 $12.0 $8.2 $8.2 $7.2 $7.0 $5.7 $4.1 $3.8 $4.0 $3.3 $2.8 $3.1 ($0.4) ($0.1) ($1.7) 2016 2017 2018 FY 2018 Consumer Banking GWIM Global Banking Global Markets ROAAC 3 33% 28% 20% 11% Efficiency 47% 71% 44% 67% ratio Operating 4 9% 2% (2%) 1% leverage 1 All business segments and All Other are presented on a fully-taxable equivalent (FTE) basis throughout this presentation. 2 All Other adjusted to exclude the $2.9B charge for the 2017 enactment of the Tax Act. Reported net loss for All Other for FY 2017 was $3.3B. 3 ROAAC defined as return on average allocated capital. 4 Global Banking revenue and operating leverage were negatively impacted by the Tax Act in 2018. Excluding tax reform impact on revenue in 2018, operating leverage for Global 3 Banking was 2%.


 
Significantly Reduced Expenses While Investing in the Franchise $83.1 $80.3 $75.7 $72.1 $69.2 87.1% 88.1% 85.5% $57.6 $55.1 79.1% $54.7 $53.4 75.4% 69.4% 65.8% 62.7% 58.5% 2010 2011 2012 2013 2014 2015 2016 2017 2018 Noninterest Expense ($B) Efficiency Ratio (%) 4


 
Delivered Positive Operating Leverage for 16 Consecutive Quarters Operating Leverage Trend 1 +22% +21% +29% +3% +8% +3% +5% +6% +8% +6% +3% +8% 2 +5% +4% +7% +7% 2 Reported revenue Reported revenue growth of 2% and growth of 11% and operating leverage operating leverage of 3% of 12% 7% 7% 7% 6% 4% 4% 3% 2% 2% 1% 1% 1% (1%) (1%) (1%) (1%) (2%) (2%) (1%) (1%) (2%) (3%) (2%) (2%) (4%) (5%) (5%) (7%) (25%) (10%) (29%) (31%) 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 YoY revenue growth (decline) YoY expense growth (decline) Operating leverage Note: Amounts may not total due to rounding. 1 Operating leverage calculated as the year-over-year percentage change in revenue, net of interest expense, less the percentage change in noninterest expense. Quarterly expense for 2017 and 2016 has been restated to reflect the accounting change for retirement-eligible equity incentives adopted in 4Q17; 2015 and 2014 periods are as reported. 2 Revenue growth and operating leverage adjusted to exclude the $0.9B noninterest income charge in 4Q17 from the Tax Act; represents a non-GAAP financial measure. For 5 important presentation information, see slide 8, Note A on slide 28, and slide 31.


 
Growth in NII Driven by Rates as well as Client Activity Quarterly Net Interest Income ($B) Total Average Deposits ($B) CAGR $12.5 +4% FY18 $1,400 $47.4B $1,315 $1,270 $12.0 $1,223 $1,200 $1,156 FY17 $44.7B $11.5 $1,000 2015 2016 2017 2018 $11.0 Average Loans and Leases in Business Segments ($B) 1 $10.5 FY16 CAGR $41.1B $1,000 +6% $872 $836 $10.0 $792 FY15 $800 $39.0B $732 $9.5 1Q 2Q 3Q 4Q $600 2015 2016 2017 2018 2015 2016 2017 2018 Note: Amounts may not total due to rounding. 1 Loans in Business Segments exclude loan balances in All Other of $61B, $82B, $109B and $145B for 2018, 2017, 2016 and 2015, respectively. Total loans and leases were $933B, $919B, $900B and $877B for 2018, 2017, 2016 and 2015, respectively. 6


 
Increased Capital Returned to Shareholders Average Diluted Shares Outstanding (B) Common Dividends and Share Repurchases ($B) $25.5 11.4 11.3 11.2 11.0 $16.8 10.6 $20.1 10.0 $12.8 $7.7 $4.5 $3.6 $5.1 $2.9 $2.4 $5.4 $3.2 $1.7 $4.0 $2.1 $2.6 $0.4 $1.3 4Q13 4Q14 4Q15 4Q16 4Q17 4Q18 2013 2014 2015 2016 2017 2018 Common Dividends Gross repurchases Note: Amounts may not total due to rounding. 7


 
4Q18 Financial Results 4Q18 Reported vs. Reported 4Q18 vs. 4Q17 Excl. Tax Act Summary Income Statement 4Q17 Excl. Tax Act ($B, except per share data) 4Q18 4Q17 % Inc / (Dec) 4Q17 1,2 % Inc / (Dec) Total revenue, net of interest expense $22.7 $20.4 11 % $21.4 6 % 7% operating 2,4 Noninterest expense 13.1 13.3 (1) 13.3 (1) leverage YoY Provision for credit losses 0.9 1.0 (10) 1.0 (10) Pretax income 8.7 6.2 41 7.1 22 Income tax expense 1.4 3.8 (63) 1.9 (24) Net income $7.3 $2.4 208 $5.3 39 Diluted earnings per share $0.70 $0.20 250 $0.47 49 Average diluted common shares (in millions) 9,996 10,622 (6) 10,622 (6) Return Metrics and Efficiency Return on average assets 1.24 % 0.41 % 83 bps 0.90 % Return on average common shareholders' equity 11.6 3.3 828 7.8 3 Return on average tangible common shareholders' equity 16.3 4.6 1,173 10.9 Efficiency ratio 58 65 (719) 62 Note: Amounts may not total due to rounding. 1 Enactment of the Tax Act reduced 4Q17 net income by $2.9B, or $0.27 per diluted common share, which included a $0.9B pretax charge recorded in other noninterest income, predominantly related to the revaluation of certain tax-advantaged energy investments, as well as $1.9B of tax expense principally associated with the revaluation of certain deferred tax assets and liabilities. 2 Represents a non-GAAP financial measure. For a reconciliation to GAAP of the presented return metrics, see note A on slide 28. For important presentation information, see slide 31. 8 3 Represents a non-GAAP financial measure. For important presentation information, see Note A on slide 28, and slide 31. 4 Reported operating leverage of 12%.


 
Fourth Quarter 2018 Highlights (% comparisons are to 4Q17 adjusted for enactment of Tax Act) Earnings Returns and Efficiency • Diluted earnings per share of $0.70, up 49% 1 • Return on average assets of 1.24% improved 34 bps 1 • Record net income of $7.3B, up 39% 1 • Return on average common shareholders’ equity of 11.6% increased 373 bps 1 • Pretax income of $8.7B, up 22% 1 Return on average tangible common shareholders’ equity of • Total revenue of $22.7B, up 6% 1 • 16.3% improved 543 bps 1,2 • Noninterest expense of $13.1B, down 1% • Efficiency ratio of 58% improved 432 bps 1 • Net charge-off ratio of 0.39%, down 14 bps Client Balances Capital and Liquidity • Average loans and leases in business segments grew 3% • $167B of Common Equity Tier 1 Capital (CET1) and CET1 ratio of 11.6% 3 – Consumer up 4% and commercial up 2% • $544B of average Global Liquidity Sources 4 • Average deposits increased 4% • Capital returned to shareholders • Full year Merrill Edge client flows of $25B ‒ Repurchased $20.1B of common shares and paid $5.4B in • Full year total client balance flows within Global Wealth & common dividends in 2018; returned 96% of net income Investment Management of $56B available to common shareholders 1 Represent non-GAAP financial measures which exclude 4Q17 charge for enactment of the Tax Act. See slide 31 for important presentation information. In addition, for the non-GAAP financial measures under the “Earnings” section, see slide 8 for the percentages calculated using GAAP financial measures along with reconciliations. For the non-GAAP financial measures under “Returns and Efficiency”, see slide 8 for the percentages calculated using GAAP financial measures and note A on slide 28 for reconciliations. 2 Return on average tangible common shareholders’ equity is a non-GAAP financial measure. See slide 8 for additional information. 3 Regulatory capital ratios at December 31, 2018 are preliminary. The Company reports regulatory capital ratios under both the Standardized and Advanced approaches. The approach 9 that yields the lower ratio is used to assess capital adequacy, which for CET1 is the Standardized approach for 4Q18. 4 See note B on slide 28 for definition of Global Liquidity Sources.


 
Balance Sheet, Liquidity and Capital (EOP basis unless noted) 3 Balance Sheet ($B) 4Q18 3Q18 4Q17 Basel 3 Capital ($B) 4Q18 3Q18 4Q17 Total assets $2,354.5 $2,338.8 $2,281.2 Common equity tier 1 capital (CET1) $167.3 $164.4 $168.5 Total loans and leases 946.9 929.8 936.7 Standardized approach Total loans and leases in business segments 1 898.8 874.8 867.3 Risk-weighted assets $1,437 $1,439 $1,443 Total debt securities 441.8 446.1 440.1 CET1 ratio 11.6 % 11.4 % 11.7 % Advanced approaches Funding & Liquidity ($B) Risk-weighted assets $1,408 $1,424 $1,459 Total deposits $1,381.5 $1,345.6 $1,309.5 CET1 ratio 11.9 % 11.5 % 11.5 % Long-term debt 229.3 234.1 227.4 Supplementary leverage Global Liquidity Sources (average) 2 544 537 522 Supplementary leverage ratio (SLR) 6.8 % 6.7 % n/a Equity ($B) Common shareholders' equity $243.0 $239.8 $244.8 Common equity ratio 10.3 % 10.3 % 10.7 % Tangible common shareholders' equity 4 $173.1 $169.9 $174.5 Tangible common equity ratio 4 7.6 % 7.5 % 7.9 % Per Share Data Book value per common share $25.13 $24.33 $23.80 Tangible book value per common share 4 17.91 17.23 16.96 Common shares outstanding (in billions) 9.67 9.86 10.29 Note: n/a = not applicable. 1 Excludes loans and leases in All Other. 2 See note B on slide 28 for definition of Global Liquidity Sources. 3 Regulatory capital ratios at December 31, 2018 are preliminary. The Company reports regulatory capital ratios under both the Standardized and Advanced approaches. The approach that yields the lower ratio is used to assess capital adequacy. Basel 3 transition provisions for regulatory capital adjustments and deductions were fully phased-in as of January 1, 2018. Prior periods are presented on a fully phased-in basis. SLR requirements became effective January 1, 2018. 4 Represents a non-GAAP financial measure. For important presentation information, see slide 31. 10


 
Average Deposits Bank of America Ranked #1 in U.S. Deposit Market Share 1 Total Corporation ($B) Consumer Banking ($B) YoY YoY $1,500 $1,294 $1,345 +4% $800 +3% $1,186 $1,251 $666 $687 $618 422 (5%) $564 442 $600 183 194 +6% $1,000 438 450 169 155 $400 154 165 +7% 122 140 $500 923 +8% 748 801 852 $200 287 309 328 327 (0%) $0 $0 4Q15 4Q16 4Q17 4Q18 4Q15 4Q16 4Q17 4Q18 Interest-bearing Noninterest-bearing Money market, Savings, CD/IRA Interest checking Noninterest-bearing GWIM ($B) Global Banking ($B) $400 $300 YoY $360 YoY $251 $257 $247 +3% $330 $240 $308 $315 +9% $250 18 17 17 16 (5%) $300 $200 196 (12%) 223 $200 $150 242 242 234 239 231 +4% $100 223 $100 $50 163 +53% 107 66 73 $0 $0 4Q15 4Q16 4Q17 4Q18 4Q15 4Q16 4Q17 4Q18 Interest-bearing Noninterest-bearing Interest-bearing Noninterest-bearing Note: Amounts may not total due to rounding. Total corporation includes Global Markets & All Other. 1 Based on June 30, 2018 FDIC deposit data. 11


 
Average Loans and Leases Total Loans and Leases ($B) Total Loans and Leases in All Other ($B) YoY YoY $928 $932 $935 $931 $935 +1% 2018 includes $10B in sales, (25%) $1,000 $100 primarily non-core consumer real estate loans $800 $71 $68 $75 $63 $60 $600 14 13 $53 12 12 $50 10 $400 $25 58 55 51 $200 48 43 $0 $0 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 Residential mortgage Home equity Loans and Leases in Business Segments ($B) Year-over-Year Growth in Business Segments YoY $864 $872 $871 $881 $900 $857 +3% 8% 74 74 75 71 71 (4%) 6% $600 350 352 355 353 357 +2% 5% 5% 4% +4% 7% 3% 157 159 161 162 164 6% 3% $300 5% 5% 2% 4% 4% 276 280 281 285 290 +5% 2% 2% $0 0% 4Q17 1Q18 2Q18 3Q18 4Q18 1Q18 2Q18 3Q18 4Q18 Consumer Banking GWIM Global Banking Global Markets Consumer loans Commercial loans Total in business segments Note: Amounts may not total due to rounding. 12


 
Net Interest Income Net Interest Income (FTE, $B) 1 1 $15 • Net interest income of $12.3B ($12.5B FTE ) $12.5 $11.7 $11.8 $11.8 $12.0 – Increased $0.8B from 4Q17, reflecting the benefits from higher interest rates as well as loan and deposit growth, $10 modestly offset by loan spread compression and higher funding costs in Global Markets $11.5 $11.6 $11.7 $11.9 $12.3 $5 – Increased $0.4B from 3Q18, driven by benefits from higher interest rates, loan and deposit growth, and lower long-term debt costs $0 4Q17 1Q18 2Q18 3Q18 4Q18 • Net interest yield of 2.48% increased 9 bps from 4Q17 Net interest income (GAAP) FTE adjustment – Excluding Global Markets, the net interest yield was 3.03%, up 14 bps from 4Q17 1 • Interest rate sensitivity as of December 31, 2018 2 Net Interest Yield (FTE) 1 – Remain positioned for NII to benefit as rates move higher 3.5% – +100 bps parallel shift in interest rate yield curve is 3.03% estimated to benefit NII by $2.7B over the next 12 months, 2.93% 2.95% 2.96% 3.0% 2.89% driven primarily by sensitivity to short-end interest rates • 1Q19 will be negatively impacted by approximately $200MM for two fewer interest accrual days than 4Q18 2.5% 2.48% 2.39% 2.39% 2.38% 2.42% 2.0% 4Q17 1Q18 2Q18 3Q18 4Q18 Reported net interest yield Net interest yield excl. GM Notes: FTE stands for fully taxable-equivalent basis. GM stands for Global Markets. 1 Represent non-GAAP financial measures. Net interest yield adjusted to exclude Global Markets NII of $746MM, $754MM, $801MM, $870MM and $932MM, and average earning assets of $458B, $459B, $490B, $486B and $464B for 4Q18, 3Q18, 2Q18, 1Q18 and 4Q17, respectively. The Company believes the presentation of net interest yield excluding Global Markets provides investors with transparency of NII and net interest yield in core banking activities. For important presentation information, see slide 31. 13 2 NII asset sensitivity represents banking book positions.


 
Expense and Efficiency Total Noninterest Expense ($B) • Total noninterest expense of $13.1B declined $0.1B, or 1%, from $16 $13.3 $13.9 $13.3 $13.1 $13.1 4Q17, as efficiency savings offset investments and inflationary costs $12 5.4 5.7 5.3 5.3 5.4 – Noninterest expense flat versus 3Q18, as impact of “Shared $8 Success” year-end bonus to associates as well as higher marketing spend offset lower FDIC expense $4 7.6 8.5 7.9 7.7 7.7 • Efficiency ratio improved to 58% in 4Q18 • Compared to 4Q18, 1Q19 expenses expected to include $0 approximately $0.5B for seasonally elevated personnel costs 4Q17 1Q18 2Q18 3Q18 4Q18 Personnel Non-personnel Efficiency Ratio 70% 60% 65% 60% 59% 50% 57% 58% 40% 30% 4Q17 1Q18 2Q18 3Q18 4Q18 Note: Amounts may not total due to rounding. 14


 
Asset Quality Net Charge-offs ($MM) 1 $1,500 1.0% • Total net charge-offs of $0.9B were stable from 3Q18 $1,237 – Consumer and Commercial net charge-offs of $0.8B and $996 $1,000 $911 $932 $924 $0.1B were relatively flat from 3Q18 0.53% 0.5% • Net charge-off ratio of 39 bps decreased 1 bp from 3Q18 and 14 0.40% 0.43% 0.40% 0.39% bps from 4Q17 $500 – Consumer and Commercial net charge-off ratios remained low at 71 bps and 10 bps, respectively $0 0.0% 4Q17 1Q18 2Q18 3Q18 4Q18 • Provision expense of $0.9B increased $0.2B from 3Q18 Net charge-offs Net charge-off ratio – Provision expense closely matched net charge-offs • Allowance for loan and lease losses of $9.6B represented 1.02% of total loans and leases 1 Provision for Credit Losses ($MM) • Nonperforming loans (NPLs) decreased $0.2B from 3Q18, driven $1,500 by improvements in Consumer $1,001 – 49% of consumer NPLs are contractually current $1,000 $834 $827 $905 $716 • Commercial reservable criticized utilized exposure decreased $0.5B from 3Q18, reflecting broad-based improvements across $500 several industries $0 4Q17 1Q18 2Q18 3Q18 4Q18 1 Excludes loans measured at fair value. 15


 
Asset Quality – Consumer and Commercial Portfolios Consumer Net Charge-offs ($MM) Consumer Metrics ($MM) 4Q18 3Q18 4Q17 $1,000 2.0% Provision $734 $710 $619 $830 $830 $769 $776 $804 Nonperforming loans and leases 3,842 4,306 5,166 $750 1.5% % of loans and leases 1 0.86 % 0.97 % 1.14 % $500 1.0% Consumer 30+ days performing past due $6,741 $7,158 $8,811 Fully-insured 2 2,790 3,183 4,466 0.68% 0.75% 0.74% 0.69% 0.71% $250 0.5% Non fully-insured 3,951 3,975 4,345 Allowance for loans and leases 4,802 4,980 5,383 $0 0.0% 1 4Q17 1Q18 2Q18 3Q18 4Q18 % of loans and leases 1.08 % 1.12 % 1.18 % # times annualized NCOs 1.51 x 1.62 x 1.76 x Credit card Other Consumer NCO ratio Commercial Net Charge-offs ($MM) Commercial Metrics ($MM) 4Q18 3Q18 4Q17 $468 4Q17 included $500 $0.3B single-name 2.0% Provision $171 $6 $382 non-US C&I charge-off Reservable criticized utilized exposure 11,061 11,597 13,563 1.5% Nonperforming loans and leases 1,102 848 1,304 $250 1.0% % of loans and leases 1 0.22 % 0.18 % 0.27 % $166 $156 $120 Allowance for loans and leases $4,799 $4,754 $5,010 $81 0.5% 0.39% % of loans and leases 1 0.97 % 0.99 % 1.05 % 0.14% 0.13% 0.10% $0 0.07% 0.0% 4Q17 1Q18 2Q18 3Q18 4Q18 C&I Small business and other Commercial NCO ratio 1 Excludes loans measured at fair value. 2 Fully-insured loans are FHA-insured loans and other loans individually insured under long-term standby agreements. 16


 
Consumer Banking • Net income of $3.3B increased 52% from 4Q17; ROAAC of 36% Inc / (Dec) – 11% operating leverage and steady credit costs drove results Summary Income Statement ($MM) 1 4Q18 3Q18 4Q17 Total revenue, net of interest expense $9,877 $474 $922 • Revenue of $9.9B increased $0.9B, or 10%, from 4Q17, driven primarily by NII due to higher interest rates and growth in deposits and loans, as Provision for credit losses 915 45 29 well as higher card income and service charges Noninterest expense 4,483 129 (26) Pretax income 4,479 300 919 • Provision increased modestly from 4Q17 Income tax expense 1,141 75 (223) – Net charge-offs increased due to credit card portfolio seasoning Net income $3,338 $225 $1,142 and loan growth • Noninterest expense declined 1% from 4Q17, as investments for Key Indicators ($B) 4Q18 3Q18 4Q17 business growth were more than offset by improved productivity and Average deposits $686.8 $687.5 $665.5 lower FDIC expense Rate paid on deposits 0.07 % 0.06 % 0.04 % – Efficiency ratio improved nearly 500 bps to 45% 2 1.52 1.52 1.61 Cost of deposits – Continued investment in financial center builds/renovations and Average loans and leases $289.9 $285.0 $275.7 digital capabilities Net charge-off ratio 1.22 % 1.19 % 1.21 % – Active mobile banking users of 26.4MM increased 9% from 4Q17, Client brokerage assets $185.9 $203.9 $177.0 and mobile channel usage increased 16% from 4Q17 Active mobile banking users (MM) 26.4 25.9 24.2 Average deposits of $687B grew $21B, or 3%, from 4Q17 % Consumer sales through digital channels 27 % 23 % 24 % • 4 Number of financial centers 4,341 4,385 4,477 – 52% of deposits in checking accounts; 91% primary accounts 2 Combined credit / debit purchase volumes 3 $151.9 $146.4 $143.4 – Average cost of deposits of 1.52% ; rate paid of 7 bps Total consumer credit card risk-adjusted margin 3 8.83 % 8.15 % 8.74 % • Average loans and leases of $290B increased $14B, or 5%, from 4Q17, Return on average allocated capital 36 33 24 driven by growth in residential mortgage and credit card Allocated capital $37 $37 $37 • Client brokerage assets of $186B grew $9B, or 5%, from 4Q17 Efficiency ratio 45 % 46 % 50 % – $25B of strong client flows were partially offset by $16B lower market valuation • Combined card spend grew 6% from 4Q17 Note: ROAAC stands for return on average allocated capital. 1 Tax expense compared to prior year impacted by a lower U.S. corporate tax rate. 2 Cost of deposits calculated as annualized noninterest expense as a percentage of total average deposits within the Deposits subsegment. 3 Includes U.S. consumer credit card portfolios in Consumer Banking and GWIM. 17 4 Represents the percentage of consumer checking accounts that are estimated to be the customer’s primary account based on multiple relationship factors (e.g., linked to their direct deposit).


 
Consumer Banking Trends Business Leadership 1 Total Revenue ($B) Total Expense ($B) and Efficiency • #1 Consumer Deposit Market Share A $9.9 $9.4 • 2018 and 2019 J.D. Power Certified Mobile App $10 $9.0 $9.0 $9.2 $5 $4.5 $4.5 $4.4 $4.4 $4.5 70% • 2019 J.D. Power Certified Website 2.7 $8 2.6 2.5 $4 B 2.6 2.5 • Named North America's Best Digital Bank 60% • #1 Online Banking and Mobile Banking Functionality C $6 $3 • #1 U.S. Checking Account Digital Sales Functionality D $4 $2 • 4-Star Rating by Barron’s 2018 Best Online Brokers 6.4 6.5 6.6 6.9 7.1 50% 50% 50% E 48% • #1 Home Equity Originator $2 $1 46% 45% • #1 in Prime Auto Credit distribution of new originations among peers F $0 $0 40% 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 • #2 Small Business Lender G • Global Retail Bank of the Year H Net interest income Noninterest income Noninterest expense Efficiency ratio Average Deposits ($B) Average Loans and Leases ($B) Client Brokerage Assets (EOP, $B) $674 $688 $688 $687 $285 $290 $700 $666 0.20% $300 $276 $280 $281 $225 $204 20 $191 19 19 19 $182 $186 $600 19 $177 90 $500 352 354 357 0.15% 73 77 81 86 334 341 $200 $150 $400 41 39 38 37 37 0.10% $300 53 52 51 50 50 0.07% $100 $75 $200 0.06% 0.05% 0.05% 0.05% 0.04% $100 90 91 90 92 93 $0 0.00% $0 $0 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 Consumer credit card Vehicle lending Other deposits Checking Home equity Residential mortgage Rate paid (%) Small business / other Note: Amounts may not total due to rounding. 1 See slide 29 for business leadership sources. 18


 
Consumer Banking Digital Usage Trends 1 Active Digital Banking Users (MM) Total Payments ($B) Person-to-Person Payments (Zelle) 4 CAGR 4.8MM Erica users since launch in April 2018 $800 $721 +6% 60 $60 $673 51.6 40 36.3 $604 $618 50 32.9 34.9 31.0 $600 +1% 4.9MM users, up 329 40 $40 30 324 2.4x since launch 26.4 316 315 in June 2017 24.2 $400 30 21.6 23.1 20 18.7 +11% 20 $20 $200 10 392 11.4 $14 288 303 350 10 7.0 $7 $4 0 $0 0 $2 $0 4Q15 4Q16 4Q17 4Q18 4Q15 4Q16 4Q17 4Q18 4Q15 4Q16 4Q17 4Q18 Digital banking users Mobile banking users Digital Non-Digital Transactions (MM) Volume ($B) Mobile Channel Usage 2, 3 Digital Deposit Transactions Digital % of Total Sales 1,600 1,522 700 100% 30% 27% 1,315 24% 600 23% 25% 80% 33% 1,200 19% 20% 982 490 500 20% 51% 60% 791 394 400 59% 800 15% 317 62% 300 40% 77% 79% 67% 10% 400 192 200 20% 5% 49% 100 38% 41% 21% 0 0 0% 0% 4Q15 4Q16 4Q17 4Q18 4Q15 4Q18 4Q15 4Q16 4Q17 4Q18 Mobile Channel Usage (MM) Digital (Mobile/ATM) Financial Center Digital Appointments (000's) Mobile Desktop 1 Digital users represent mobile and/or online users in consumer businesses. 2 Mobile channel usage represents the total number of application logins using a smartphone or tablet. 3 Digital appointments represent the number of appointments made via online, smartphone or tablet. 19 4 Includes Bank of America person-to-person payments sent and/or received through e-mail or mobile identification.


 
Global Wealth & Investment Management • Record net income of $1.1B increased 43% from 4Q17; ROAAC of Inc / (Dec) 29% 1 4Q18 3Q18 4Q17 Summary Income Statement ($MM) – Strong pretax margin of 29% Total revenue, net of interest expense $4,990 $207 $307 Provision for credit losses 23 10 17 • Revenue of $5.0B increased 7% from 4Q17, driven primarily by higher net interest income and asset management fees, as well Noninterest expense 3,542 128 72 as a small gain on sale of a non-core asset, partially offset by Pretax income 1,425 69 218 lower transactional revenue Income tax expense 363 17 (100) Net income $1,062 $52 $318 – 83% of revenue from asset management fees and net interest income Key Indicators ($B) 4Q18 3Q18 4Q17 – Impact of December equity market declines will be reflected Average deposits $247.4 $238.3 $240.1 in 1Q19 results Average loans and leases 163.5 161.9 157.1 • Noninterest expense increased 2% from 4Q17, as higher Net charge-off ratio 0.02 % 0.03 % 0.01 % revenue-related incentives and investment in business growth AUM flows ($6.2) $7.6 $18.2 were largely offset by continued expense discipline Pretax margin 29 % 28 % 26 % Client balances of $2.6T, down 5% from 4Q17, as strong flows Return on average allocated capital 29 28 21 • were more than offset by impact of lower market valuations Allocated capital $14.5 $14.5 $14.0 – Total client balance flows of $35B in 4Q18 driven by strong deposit and brokerage flows, partially offset by AUM flows of ($6B), reflecting impact of investor sentiment towards cash due to market volatility • Organic growth in net new Merrill Lynch households in 2018 was more than four times 2017 level • Average deposits of $247B increased 3% from 4Q17 – Included the impact of some client portfolio rebalancing out of AUM, as well as account structure simplification • Average loans and leases of $164B increased $6B, or 4%, from 4Q17, driven by residential mortgage and custom lending Wealth advisors grew 1% from 4Q17 to 19,459 2 1 Tax expense compared to prior year impacted by a lower U.S. corporate tax rate. • 2 Includes financial advisors in Consumer Banking of 2,722 and 2,402 in 4Q18 and 4Q17. 20


 
Global Wealth & Investment Management Trends Business Leadership 1 Average Deposits ($B) Average Loans and Leases ($B) • #1 U.S. wealth management market position $300 I $180 $161 $162 $164 across client assets, deposits and loans $240 $243 $238 $247 $157 $159 $250 $236 • #1 in personal trust assets under management J 36 38 39 40 41 • #1 in Barron’s U.S. high net worth client assets $200 $120 (2018) $150 42 42 41 41 40 • #1 in Barron’s Top 1,200 ranked Financial Advisors (2018) $100 $60 • #1 in Forbes’ Top 500 America’s Top Next $50 75 77 77 79 80 Generation Advisors (2018) • #1 in Financial Times Top 401K Retirement Plan $0 $0 Advisers (2018) 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 • #1 in Barron’s Top 100 Women Advisors (2018) Consumer real estate Securities-based lending Custom lending Credit card / Other Total Revenue ($B) Client Balances (EOP, $B) 2 $4.9 $5.0 $5 $4.7 $4.7 $4.8 $2,841 $3,000 $2,752 $2,725 $2,754 $2,621 0.9 165 0.7 0.7 0.7 0.7 162 162 165 $4 $2,500 247 242 234 240 168 269 $2,000 $3 1,081 1,101 1,144 2.4 2.5 2.5 2.5 2.5 1,085 1,021 $1,500 $2 $1,000 $1 1,262 1,237 1,254 1,292 1.5 1.6 1.5 1.5 1.6 $500 1,163 $0 $0 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 Net interest income Asset management fees Brokerage / Other Brokerage / Other AUM Deposits Loans and leases Note: Amounts may not total due to rounding. 1 See slide 29 for business leadership sources. 2 Loans and leases include margin receivables which are classified in customer and other receivables on the consolidated balance sheet. 21


 
Global Banking Inc/(Dec) Summary Income Statement ($MM) 1 4Q18 3Q18 4Q17 • Net income of $2.1B increased 25% from 4Q17; ROAAC of 20% Total revenue, net of interest expense 2 $5,050 $312 $31 • Revenue of $5.1B increased 1% from 4Q17 Provision (benefit) for credit losses 85 155 (47) Reflected higher NII from the benefit of higher interest rates Noninterest expense 2,119 (2) (42) – and growth in deposits, partially offset by lower investment Pretax income 2,846 159 120 banking fees Income tax expense 740 41 (306) Net income $2,106 $118 $426 • Total Corporation investment banking fees of $1.3B (excl. self- led) declined 5% from 4Q17 driven primarily by debt Selected Revenue Items ($MM) 4Q18 3Q18 4Q17 underwriting and advisory fees Total Corporation IB fees (excl. self-led) 2 $1,348 $1,204 $1,418 2 • Provision improved $47MM from 4Q17, driven by the absence of Global Banking IB fees 760 644 811 prior year’s single-name non-U.S. commercial charge-off 2 Business Lending revenue 2,180 2,084 2,262 Global Transaction Services revenue 2,055 1,972 1,876 • Noninterest expense decreased 2% from 4Q17, reflecting lower FDIC expense, partially offset by continued investment in the Key Indicators ($B) 4Q18 3Q18 4Q17 business Average deposits $359.6 $337.7 $329.8 • Average loans and leases of $357B increased 2% from 4Q17 Average loans and leases 357.4 352.7 350.3 Strong average deposit growth of $30B to $360B, or 9%, Net charge-off ratio 0.06 % 0.10 % 0.30 % • compared to 4Q17 Return on average allocated capital 20 19 17 Allocated capital $41 $41 $40 Efficiency ratio 42 % 45 % 43 % 1 Tax expense compared to prior year impacted by a lower U.S. corporate tax rate. 2 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities and sales and trading activities. 22


 
Global Banking Trends Business Leadership 1 Average Deposits ($B) Average Loans and Leases ($B) • North America’s Best Bank for Small to $400 Medium-sized Enterprises B $360 $400 $350 $352 $355 $353 $357 $330 $324 $323 $338 • Most Innovative Investment Bank of the Year 17 17 17 16 16 from North America K $300 $300 32% 35% 37% 41% 45% • Best Transaction Bank in North America K 162 162 164 162 166 • 2018 Quality, Share and Excellence Awards for $200 $200 U.S. Large Corporate Banking and Cash Management L 68% $100 $100 65% 63% 59% 55% 171 172 175 174 176 • Best Global Debt Bank M • Relationships with 79% of the Global Fortune $0 $0 500; 94% of the U.S. Fortune 1,000 (2018) 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 Noninterest-bearing Interest-bearing Commercial Corporate Business Banking Total Revenue ($B) 2 Total Corporation IB Fees ($MM) 2 $6 $5.0 $4.9 $5.1 $1,418 $1,422 $4.9 $4.7 $1,353 $1,348 0.7 0.7 $1,204 0.8 0.7 0.6 429 296 303 $4 397 0.8 0.8 0.8 0.8 0.7 262 204 314 290 0.8 0.7 0.7 0.6 0.8 307 272 $2 846 827 874 2.7 2.6 2.7 2.7 2.8 684 699 $0 (61) (84) (45) (49) (20) 4Q17 1Q18 2Q18 3Q18 4Q18 4Q17 1Q18 2Q18 3Q18 4Q18 Net interest income IB fees Service charges All other income Debt Equity Advisory 3 Self-led deals Note: Amounts may not total due to rounding. 1 See slide 29 for business leadership sources. 2 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities and sales and trading activities. 23 3 Advisory includes fees on debt and equity advisory and mergers and acquisitions.


 
Global Markets Inc/(Dec) 1 • Net income of $0.5B increased 20% from 4Q17; ROAAC of 6% Summary Income Statement ($MM) 4Q18 3Q18 4Q17 • [ Bullets to come ] Total revenue, net of interest expense 2 $3,213 ($630) ($183) – Excluding net DVA, net income of $0.5B decreased 6% Net DVA 52 151 170 • Revenue declined 5% from 4Q17; excluding net DVA, revenue Total revenue (excl. net DVA) 2, 3 3,161 (781) (353) decreased 10% Provision for credit losses 6 8 (156) Reflects lower sales and trading revenue (ex-DVA), absence Noninterest expense 2,540 (73) (74) – of a prior-year gain on the sale of a non-core asset, and Pretax income 667 (565) 47 lower investment banking fees Income tax expense 174 (146) (36) Net income $493 ($419) $83 • Sales and trading revenue of $2.6B increased 1% from 4Q17 Net income (excl. net DVA) 3 $453 ($534) ($30) • Excluding net DVA, sales and trading revenue of $2.5B decreased 6% from 4Q17 3 Selected Revenue Items ($MM) 2 4Q18 3Q18 4Q17 Sales and trading revenue $2,556 $2,972 $2,539 – FICC revenue of $1.4B decreased 15% from 4Q17, due to Sales and trading revenue (excl. net DVA) 3 2,504 3,071 2,657 weakness in credit and mortgage markets and lower client FICC (excl. net DVA) 1,446 2,060 1,707 activity in credit products Equities (excl. net DVA) 1,058 1,011 950 – Equities revenue of $1.1B increased 11% from 4Q17, driven Global Markets IB fees 514 522 597 by strength in client financing and derivatives Key Indicators ($B) 4Q18 3Q18 4Q17 • Provision improved $156MM from 4Q17, driven by the absence Average total assets $655.1 $652.5 $659.4 of prior year’s single-name non-U.S. commercial charge-off 2 Average trading-related assets 464.0 460.3 449.7 • Noninterest expense decreased 3% vs. 4Q17, driven by lower 4 Average 99% VaR ($MM) 36 31 36 revenue-related expenses Average loans and leases 70.6 71.2 73.6 4 Return on average allocated capital 6 % 10 % 5 % • Average VaR remained low at $36MM in 4Q18 Allocated capital $35 $35 $35 Efficiency ratio 79 % 68 % 77 % 1 Tax expense compared to prior year impacted by a lower U.S. corporate tax rate. 2 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities and sales and trading activities. 3 Represents a non-GAAP financial measure; see note C on slide 28. 24 4 See note D on slide 28 for definition of VaR.


 
Global Markets Trends and Revenue Mix Business Leadership 1 2018 Global Markets Revenue Mix 2018 Total FICC S&T Revenue Mix • #1 Equity Portfolio Trading Share – North (excl. net DVA) 2 (excl. net DVA) 2 American Institutions L • #1 for U.S. FICC Overall Trading Quality and #1 for U.S. FICC Overall Sales Quality L • 2018 Quality Leader in Global Top-Tier 63% Foreign Exchange Sales and Corporate FX 58% Sales L 37% 42% • 2018 Share Leader in U.S. Fixed Income Market Share - #1 Securitized, #2 Emerging Markets L • #1 Municipal Bonds Underwriter N 3 • #2 Global Research Firm O U.S. / Canada International Credit / other Macro Total Sales & Trading Revenue (excl. net DVA) ($B) 2 Average Trading-related Assets ($B) and VaR ($MM) 4 $15 $13.6 $13.2 $13.2 $500 $442 $465 $100 $413 $12 4.0 $400 4.2 4.9 $75 $9 $300 $50 $6 $200 $41 $40 9.6 $34 9.1 8.3 $25 $3 $100 $0 $0 $0 2016 2017 2018 2016 2017 2018 FICC Equities Avg. trading-related assets Avg. VaR Note: Amounts may not total due to rounding. 1 See slide 29 for business leadership sources. 2 Represents a non-GAAP financial measure. Reported sales & trading revenue was $13.1B, $12.8B and $13.4B for 2018, 2017 and 2016, respectively. Reported FICC sales & trading revenue was $8.2B, $8.7B and $9.4B for 2018, 2017 and 2016, respectively. Reported Equities sales & trading revenue was $4.9B, $4.1B and $4.0B for 2018, 2017 and 2016, respectively. See note C on slide 28. 3 Macro includes G10 FX, rates and commodities products. 25 4 See note D on slide 28 for definition of VaR.


 
All Other 1 Inc/(Dec) • Net income of $0.3B improved $2.9B from 4Q17 2 4Q18 3Q18 4Q17 Summary Income Statement ($MM) – 4Q17 included charges of $2.9B from the enactment of the Total revenue, net of interest expense ($239) ($400) $1,127 Tax Act, comprised of $0.9B revenue impact (other income) Provision (benefit) for credit losses (124) (29) 61 and $1.9B tax expense Noninterest expense 449 (116) (71) Pretax income (loss) (564) (255) 1,137 • Revenue improved $1.1B from 4Q17 Income tax expense (benefit) (843) (390) (1,807) – Revenue, excluding the Tax Act impact, improved $0.2B from Net income (loss) $279 $135 $2,944 4Q17, driven by a small gain from the sale of non-core consumer real estate loans • Provision benefit decreased $61MM from 4Q17, due to a slower pace of portfolio improvement driven by runoff and the sale of non-core consumer real estate loans • Noninterest expense declined $71MM from 4Q17, reflecting lower FDIC expense and other costs • 4Q18 included $0.2B in net tax benefits, including lower tax expense on international earnings due to updated tax guidance, partially offset by charges related to a variety of other tax matters 1 All Other consists of asset and liability management (ALM) activities, equity investments, non-core mortgage loans and servicing activities, the net impact of periodic revisions to the mortgage servicing rights (MSR) valuation model for core and non-core MSRs and the related economic hedge results, liquidating businesses and residual expense allocations. ALM activities encompass certain residential mortgages, debt securities, interest rate and foreign currency risk management activities, the impact of certain allocation methodologies and hedge ineffectiveness. The results of certain ALM activities are allocated to our business segments. Equity investments include our merchant services joint venture, as well as a portfolio of equity, real estate and other alternative investments. 26 2 Tax expense compared to prior year impacted by a lower U.S. corporate tax rate.


 
Appendix


 
Notes A Enactment of the Tax Act reduced 4Q17 and 2017 net income by $2.9B, or $0.27 per diluted common share, which included a $0.9B pretax charge in other noninterest income (which reduced pretax income and revenue, net of interest expense) predominantly related to the revaluation of certain tax-advantaged energy investments, as well as $1.9B of tax expense principally associated with the revaluation of certain deferred tax assets and liabilities. The enactment negatively impacted 4Q17 and 2017 return on average assets by 49 bps and 13 bps, respectively; return on average common shareholders’ equity by 455 bps and 117 bps, respectively; return on average tangible common shareholders’ equity by 630 bps and 162 bps, respectively; and efficiency ratio by 287 bps and 67 bps, respectively. Reported metrics are shown on slide 2 and slide 8. B Global Liquidity Sources (GLS) include cash and high-quality, liquid, unencumbered securities, limited to U.S. government securities, U.S. agency securities, U.S. agency MBS, and a select group of non-U.S. government and supranational securities, and are readily available to meet funding requirements as they arise. It does not include Federal Reserve Discount Window or Federal Home Loan Bank borrowing capacity. Transfers of liquidity among legal entities may be subject to certain regulatory and other restrictions. C Revenue for all periods included net debit valuation adjustments (DVA) on derivatives, as well as amortization of own credit portion of purchase discount and realized DVA on structured liabilities. Net DVA gains (losses) were $52MM, ($99MM) and ($118MM) for 4Q18, 3Q18 and 4Q17, respectively, and ($162MM), ($428MM) and ($238MM) for 2018, 2017 and 2016, respectively. Net DVA gains (losses) included in FICC revenue were $45MM, ($80MM) and ($112MM) for 4Q18, 3Q18 and 4Q17, respectively, and ($142MM), ($394MM) and ($238MM) for 2018, 2017 and 2016, respectively. Net DVA gains (losses) included in Equities revenue were $7MM, ($19MM) and ($6MM) for 4Q18, 3Q18 and 4Q17, respectively, and ($20MM), ($34MM) and $0MM for 2018, 2017 and 2016, respectively. D VaR model uses historical simulation approach based on three years of historical data and an expected shortfall methodology equivalent to a 99% confidence level. Using a 95% confidence level, average VaR was $22MM, $17MM and $17MM for 4Q18, 3Q18 and 4Q17, respectively. 28


 
Sources A Estimated retail consumer deposits based on June 30, 2018 FDIC deposit data. B Euromoney, 2018. C Dynatrace 4Q18 Online Banker Scorecard, Javelin 2018 Online Banking Scorecard, Dynatrace 3Q18 Mobile Banking Scorecard, and Javelin 2018 Mobile Banking Scorecard. D Forrester 2018 Banking Sales Wave: U.S. Mobile Sites. E Inside Mortgage Finance YTD 3Q18. F Largest percentage of 680+ Vantage 3.0 originations among key competitors as of October 2018. G FDIC, 3Q18. H 2018 Global Retail Banking Awards. I U.S.-based full-service wirehouse peers based on 3Q18 earnings releases. J Industry 3Q18 call reports. K The Banker, 2018. L Greenwich, 2018. M Global Finance, 2018. N Thomson Reuters, 2018. O Institutional Investor, 2018. 29


 
Forward-Looking Statements Bank of America Corporation (the “Company”) and its management may make certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipates,” “targets,” “expects,” “hopes,” “estimates,” “intends,” “plans,” “goals,” “believes,” “continue” and other similar expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could.” Forward-looking statements represent the Company’s current expectations, plans or forecasts of its future results, revenues, expenses, efficiency ratio, capital measures, strategy, and future business and economic conditions more generally, and other future matters. These statements are not guarantees of future results or performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict and are often beyond the Company’s control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements. You should not place undue reliance on any forward-looking statement and should consider the following uncertainties and risks, as well as the risks and uncertainties more fully discussed under Item 1A. Risk Factors of the Company’s 2017 Annual Report on Form 10-K and in any of the Company’s subsequent Securities and Exchange Commission filings: the Company’s potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions, and the possibility that amounts may be in excess of the Company’s recorded liability and estimated range of possible loss for litigation and regulatory exposures; the possibility that the Company could face increased servicing, securities, fraud, indemnity, contribution or other claims from one or more counterparties, including trustees, purchasers of loans, underwriters, issuers, other parties involved in securitizations, monolines or private-label and other investors; the possibility that future representations and warranties losses may occur in excess of the Company’s recorded liability and estimated range of possible loss for its representations and warranties exposures; the Company’s ability to resolve representations and warranties repurchase and related claims, including claims brought by investors or trustees seeking to avoid the statute of limitations for repurchase claims; the risks related to the discontinuation of LIBOR and other reference rates, including increased expenses and litigation and the effectiveness of hedging strategies; uncertainties about the financial stability and growth rates of non-U.S. jurisdictions, the risk that those jurisdictions may face difficulties servicing their sovereign debt, and related stresses on financial markets, currencies and trade, and the Company’s exposures to such risks, including direct, indirect and operational; the impact of U.S. and global interest rates, inflation, currency exchange rates, economic conditions, trade policies, including tariffs, and potential geopolitical instability; the impact on the Company’s business, financial condition and results of operations of a potential higher interest rate environment; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior, adverse developments with respect to U.S. or global economic conditions and other uncertainties; the Company’s ability to achieve its expense targets, net interest income expectations, or other projections; adverse changes to the Company’s credit ratings from the major credit rating agencies; estimates of the fair value of certain of the Company’s assets and liabilities; uncertainty regarding the content, timing and impact of regulatory capital and liquidity requirements; the impact of adverse changes to total loss-absorbing capacity requirements and/or global systemically important bank surcharges; the potential impact of Federal Reserve actions on the Company’s capital plans; the effect of regulations, other guidance or additional information on our estimated impact of the Tax Act; the impact of implementation and compliance with U.S. and international laws, regulations and regulatory interpretations, including, but not limited to, recovery and resolution planning requirements, Federal Deposit Insurance Corporation (FDIC) assessments, the Volcker Rule, fiduciary standards and derivatives regulations; a failure in or breach of the Company’s operational or security systems or infrastructure, or those of third parties, including as a result of cyber-attacks; the impact on the Company’s business, financial condition and results of operations from the planned exit of the United Kingdom from the European Union; the impact of a prolonged federal government shutdown and threats not to increase the federal government’s debt limit; and other similar matters. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made. 30


 
Important Presentation Information • The information contained herein is preliminary and based on Company data available at the time of the earnings presentation. It speaks only as of the particular date or dates included in the accompanying slides. Bank of America does not undertake an obligation to, and disclaims any duty to, update any of the information provided. • The Company may present certain key performance indicators and ratios, including year-over-year comparisons of revenue, noninterest expense and pretax income, excluding certain items (e.g., DVA) which result in non-GAAP financial measures. The Company believes the use of these non-GAAP financial measures provides additional clarity in understanding its results of operations and trends. For more information about the non-GAAP financial measures contained herein, please see the presentation of the most directly comparable financial measures calculated in accordance with GAAP and accompanying reconciliations in the earnings press release for the quarter ended December 31, 2018 and other earnings-related information available through the Bank of America Investor Relations website at: http://investor.bankofamerica.com. • The Company views net interest income and related ratios and analyses on a fully taxable-equivalent (FTE) basis, which when presented on a consolidated basis are non-GAAP financial measures. The Company believes managing the business with net interest income on an FTE basis provides investors with a more accurate picture of the interest margin for comparative purposes. The Company believes that the presentation allows for comparison of amounts from both taxable and tax-exempt sources and is consistent with industry practices. The FTE adjustment was $155MM, $151MM, $154MM, $150MM and $251MM for 4Q18, 3Q18, 2Q18, 1Q18 and 4Q17 respectively. • The Company allocates capital to its business segments using a methodology that considers the effect of regulatory capital requirements in addition to internal risk-based capital models. The Company's internal risk-based capital models use a risk-adjusted methodology incorporating each segment's credit, market, interest rate, business and operational risk components. Allocated capital is reviewed periodically and refinements are made based on multiple considerations that include, but are not limited to, risk-weighted assets measured under Basel 3 Standardized and Advanced approaches, business segment exposures and risk profile, and strategic plans. As a result of this process, in the first quarter of 2018, the Company adjusted the amount of capital being allocated to its business segments. 31


 


 





BACLOGO2018.JPG


Supplemental Information
Fourth Quarter 2018

                











Current period information is preliminary and based on company data available at the time of the earnings presentation. It speaks only as of the particular date or dates included in the accompanying pages. Bank of America Corporation (the Corporation) does not undertake an obligation to, and disclaims any duty to, update any of the information provided. Any forward-looking statements in this information are subject to the forward-looking language contained in the Corporation’s reports filed with the SEC pursuant to the Securities Exchange Act of 1934, which are available at the SEC’s website (www.sec.gov) or at the Corporation’s website (www.bankofamerica.com). The Corporation’s future financial performance is subject to risks and uncertainties as described in its SEC filings.




Bank of America Corporation and Subsidiaries
 
Table of Contents
Page
 
 
 
Consumer Banking
 
Global Wealth & Investment Management
 
Global Banking
 
Global Markets
 
All Other
 
 
 
 
 
 
 
The Corporation reports the results of operations of its four business segments and All Other on a fully-taxable equivalent (FTE) basis. Additionally, the results for the total Corporation as presented on pages 14-16 are reported on an FTE basis.

 
 








Bank of America Corporation and Subsidiaries
Consolidated Financial Highlights
(In millions, except per share information)
 
Year Ended
December 31
 
 
Fourth
Quarter
2018
 
Third
Quarter
2018
 
Second
Quarter
2018
 
First
Quarter
2018
 
Fourth
Quarter
2017
 
2018
 
2017
 
 
Income statement
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net interest income
$
47,432

 
$
44,667

 
 
$
12,304

 
$
11,870

 
$
11,650

 
$
11,608

 
$
11,462

Noninterest income
43,815

 
42,685

 
 
10,432

 
10,907

 
10,959

 
11,517

 
8,974

Total revenue, net of interest expense
91,247

 
87,352

 
 
22,736

 
22,777

 
22,609

 
23,125

 
20,436

Provision for credit losses
3,282

 
3,396

 
 
905

 
716

 
827

 
834

 
1,001

Noninterest expense
53,381

 
54,743

 
 
13,133

 
13,067

 
13,284

 
13,897

 
13,274

Income tax expense
6,437

 
10,981

 
 
1,420

 
1,827

 
1,714

 
1,476

 
3,796

Net income
28,147

 
18,232

 
 
7,278

 
7,167

 
6,784

 
6,918

 
2,365

Preferred stock dividends
1,451

 
1,614

 
 
239

 
466

 
318

 
428

 
286

Net income applicable to common shareholders
26,696

 
16,618

 
 
7,039

 
6,701

 
6,466

 
6,490

 
2,079

Diluted earnings per common share
2.61

 
1.56

 
 
0.70

 
0.66

 
0.63

 
0.62

 
0.20

Average diluted common shares issued and outstanding
10,236.9

 
10,778.4

 
 
9,996.0

 
10,170.8

 
10,309.4

 
10,472.7

 
10,621.8

Dividends paid per common share
$
0.54

 
$
0.39

 
 
$
0.15

 
$
0.15

 
$
0.12

 
$
0.12

 
$
0.12

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Performance ratios
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Return on average assets
1.21
%
 
0.80
%
 
 
1.24
%
 
1.23
%
 
1.17
%
 
1.21
%
 
0.41
%
Return on average common shareholders’ equity
11.04

 
6.72

 
 
11.57

 
10.99

 
10.75

 
10.85

 
3.29

Return on average shareholders’ equity
10.63

 
6.72

 
 
10.95

 
10.74

 
10.26

 
10.57

 
3.43

Return on average tangible common shareholders’ equity (1)
15.55

 
9.41

 
 
16.29

 
15.48

 
15.15

 
15.26

 
4.56

Return on average tangible shareholders’ equity (1)
14.46

 
9.08

 
 
14.90

 
14.61

 
13.95

 
14.37

 
4.62

Efficiency ratio
58.50

 
62.67

 
 
57.76

 
57.37

 
58.76

 
60.09

 
64.95

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
At period end
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Book value per share of common stock
$
25.13

 
$
23.80

 
 
$
25.13

 
$
24.33

 
$
24.07

 
$
23.74

 
$
23.80

Tangible book value per share of common stock (1)
17.91

 
16.96

 
 
17.91

 
17.23

 
17.07

 
16.84

 
16.96

Market capitalization
238,251

 
303,681

 
 
238,251

 
290,424

 
282,259

 
305,176

 
303,681

Number of financial centers - U.S.
4,341

 
4,477

 
 
4,341

 
4,385

 
4,433

 
4,452

 
4,477

Number of branded ATMs - U.S.
16,255

 
16,039

 
 
16,255

 
16,089

 
16,050

 
16,011

 
16,039

Headcount
204,489

 
209,376

 
 
204,489

 
204,681

 
207,992

 
207,953

 
209,376

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)  
Tangible equity ratios and tangible book value per share of common stock are non-GAAP financial measures. We believe the use of ratios that utilize tangible equity provides additional useful information because they present measures of those assets that can generate income. Tangible book value per share provides additional useful information about the level of tangible assets in relation to outstanding shares of common stock. (See Exhibit A: Non-GAAP Reconciliations - Reconciliations to GAAP Financial Measures on page 39 .)


Certain prior period amounts have been reclassified to conform to current period presentation.

Current period information is preliminary and based on company data available at the time of the presentation.
2



Bank of America Corporation and Subsidiaries
Consolidated Statement of Income
(In millions, except per share information)
 
 
Year Ended
December 31
 
 
Fourth Quarter 2018
 
Third Quarter 2018
 
Second Quarter 2018
 
First Quarter 2018
 
Fourth Quarter 2017
 
 
2018
 
2017
 
 
Interest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans and leases
 
$
40,811

 
$
36,221

 
 
$
10,716

 
$
10,401

 
$
10,071

 
$
9,623

 
$
9,344

Debt securities
 
11,724

 
10,471

 
 
3,078

 
2,986

 
2,856

 
2,804

 
2,707

Federal funds sold and securities borrowed or purchased under agreements to resell
 
3,176

 
2,390

 
 
1,046

 
799

 
709

 
622

 
732

Trading account assets
 
4,811

 
4,474

 
 
1,305

 
1,172

 
1,198

 
1,136

 
1,144

Other interest income
 
6,247

 
4,023

 
 
1,691

 
1,607

 
1,535

 
1,414

 
1,139

Total interest income
 
66,769

 
57,579

 
 
17,836

 
16,965

 
16,369

 
15,599

 
15,066

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deposits
 
4,495

 
1,931

 
 
1,562

 
1,230

 
943

 
760

 
679

Short-term borrowings
 
5,839

 
3,538

 
 
1,716

 
1,526

 
1,462

 
1,135

 
1,030

Trading account liabilities
 
1,358

 
1,204

 
 
318

 
335

 
348

 
357

 
314

Long-term debt
 
7,645

 
6,239

 
 
1,936

 
2,004

 
1,966

 
1,739

 
1,581

Total interest expense
 
19,337

 
12,912

 
 
5,532

 
5,095

 
4,719

 
3,991

 
3,604

Net interest income
 
47,432

 
44,667

 
 
12,304

 
11,870

 
11,650

 
11,608

 
11,462

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Card income
 
6,051

 
5,902

 
 
1,582

 
1,470

 
1,542

 
1,457

 
1,555

Service charges
 
7,767

 
7,818

 
 
1,931

 
1,961

 
1,954

 
1,921

 
1,955

Investment and brokerage services
 
14,160

 
13,836

 
 
3,544

 
3,494

 
3,458

 
3,664

 
3,522

Investment banking income
 
5,327

 
6,011

 
 
1,348

 
1,204

 
1,422

 
1,353

 
1,418

Trading account profits
 
8,540

 
7,277

 
 
1,633

 
1,893

 
2,315

 
2,699

 
1,153

Other income (loss)
 
1,970

 
1,841

 
 
394

 
885

 
268

 
423

 
(629
)
Total noninterest income
 
43,815

 
42,685

 
 
10,432

 
10,907

 
10,959

 
11,517

 
8,974

Total revenue, net of interest expense
 
91,247

 
87,352

 
 
22,736

 
22,777

 
22,609

 
23,125

 
20,436

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for credit losses
 
3,282

 
3,396

 
 
905

 
716

 
827

 
834

 
1,001

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Noninterest expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Personnel
 
31,880

 
31,931

 
 
7,735

 
7,721

 
7,944

 
8,480

 
7,605

Occupancy
 
4,066

 
4,009

 
 
1,015

 
1,015

 
1,022

 
1,014

 
1,009

Equipment
 
1,705

 
1,692

 
 
427

 
421

 
415

 
442

 
411

Marketing
 
1,674

 
1,746

 
 
513

 
421

 
395

 
345

 
511

Professional fees
 
1,699

 
1,888

 
 
480

 
439

 
399

 
381

 
471

Data processing
 
3,222

 
3,139

 
 
824

 
791

 
797

 
810

 
795

Telecommunications
 
699

 
699

 
 
177

 
173

 
166

 
183

 
161

Other general operating
 
8,436

 
9,639

 
 
1,962

 
2,086

 
2,146

 
2,242

 
2,311

Total noninterest expense
 
53,381

 
54,743

 
 
13,133

 
13,067

 
13,284

 
13,897

 
13,274

Income before income taxes
 
34,584

 
29,213

 
 
8,698

 
8,994

 
8,498

 
8,394

 
6,161

Income tax expense
 
6,437

 
10,981

 
 
1,420

 
1,827

 
1,714

 
1,476

 
3,796

Net income
 
$
28,147

 
$
18,232

 
 
$
7,278

 
$
7,167

 
$
6,784

 
$
6,918

 
$
2,365

Preferred stock dividends
 
1,451

 
1,614

 
 
239

 
466

 
318

 
428

 
286

Net income applicable to common shareholders
 
$
26,696

 
$
16,618

 
 
$
7,039

 
$
6,701

 
$
6,466

 
$
6,490

 
$
2,079

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Per common share information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earnings
 
$
2.64

 
$
1.63

 
 
$
0.71

 
$
0.67

 
$
0.64

 
$
0.63

 
$
0.20

Diluted earnings
 
2.61

 
1.56

 
 
0.70

 
0.66

 
0.63

 
0.62

 
0.20

Dividends paid
 
0.54

 
0.39

 
 
0.15

 
0.15

 
0.12

 
0.12

 
0.12

Average common shares issued and outstanding
 
10,096.5

 
10,195.6

 
 
9,855.8

 
10,031.6

 
10,181.7

 
10,322.4

 
10,470.7

Average diluted common shares issued and outstanding
 
10,236.9

 
10,778.4

 
 
9,996.0

 
10,170.8

 
10,309.4

 
10,472.7

 
10,621.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Certain prior period amounts have been reclassified to conform to current period presentation.

Current period information is preliminary and based on company data available at the time of the presentation.
3



Bank of America Corporation and Subsidiaries
Consolidated Statement of Comprehensive Income
(Dollars in millions)
 
 
 
 
 
 
 
 
 
 
 
 
 
Year Ended
December 31
 
 
Fourth Quarter 2018
 
Third Quarter 2018
 
Second Quarter 2018
 
First Quarter 2018
 
Fourth Quarter 2017
 
2018
 
2017
 
 
Net income
$
28,147

 
$
18,232

 
 
$
7,278

 
$
7,167

 
$
6,784

 
$
6,918

 
$
2,365

Other comprehensive income (loss), net-of-tax:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net change in debt and equity securities
(3,953
)
 
61

 
 
2,213

 
(1,172
)
 
(1,031
)

(3,963
)

(870
)
Net change in debit valuation adjustments
749

 
(293
)
 
 
566

 
(269
)
 
179

 
273

 
(144
)
Net change in derivatives
(53
)
 
64

 
 
293

 
21

 
(92
)
 
(275
)
 
(92
)
Employee benefit plan adjustments
(405
)
 
288

 
 
(496
)
 
31

 
30

 
30

 
208

Net change in foreign currency translation adjustments
(254
)
 
86

 
 
49

 
(114
)
 
(141
)
 
(48
)
 
(16
)
Other comprehensive income (loss)
(3,916
)
 
206

 
 
2,625

 
(1,503
)
 
(1,055
)
 
(3,983
)
 
(914
)
Comprehensive income
$
24,231


$
18,438



$
9,903


$
5,664


$
5,729



$
2,935



$
1,451

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Certain prior period amounts have been reclassified to conform to current period presentation.


Current period information is preliminary and based on company data available at the time of the presentation.
4



Bank of America Corporation and Subsidiaries
Consolidated Balance Sheet
(Dollars in millions)
 
 
 
 
 
 
December 31
2018
 
September 30
2018
 
December 31
2017
Assets
 
 
 
 
 
Cash and due from banks
$
29,063

 
$
27,440

 
$
29,480

Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks
148,341

 
157,418

 
127,954

Cash and cash equivalents
177,404


184,858


157,434

Time deposits placed and other short-term investments
7,494

 
7,865

 
11,153

Federal funds sold and securities borrowed or purchased under agreements to resell
261,131

 
248,237

 
212,747

Trading account assets
214,348

 
219,118

 
209,358

Derivative assets
43,725

 
45,617

 
37,762

Debt securities:
 
 
 
 
 
Carried at fair value
238,101

 
251,635

 
315,117

Held-to-maturity, at cost
203,652

 
194,472

 
125,013

Total debt securities
441,753


446,107


440,130

Loans and leases
946,895

 
929,801

 
936,749

Allowance for loan and lease losses
(9,601
)
 
(9,734
)
 
(10,393
)
Loans and leases, net of allowance
937,294


920,067


926,356

Premises and equipment, net
9,906

 
9,680

 
9,247

Goodwill
68,951

 
68,951

 
68,951

Loans held-for-sale
10,367

 
5,576

 
11,430

Customer and other receivables
65,814

 
56,962

 
61,623

Other assets
116,320

 
125,795

 
135,043

Total assets
$
2,354,507


$
2,338,833


$
2,281,234

 
 
 
 
 
 
Assets of consolidated variable interest entities included in total assets above (isolated to settle the liabilities of the variable interest entities)
Trading account assets
$
5,798

 
$
6,145

 
$
6,521

Loans and leases
43,850

 
44,163

 
48,929

Allowance for loan and lease losses
(912
)
 
(920
)
 
(1,016
)
Loans and leases, net of allowance
42,938


43,243


47,913

All other assets
337

 
357

 
1,721

Total assets of consolidated variable interest entities
$
49,073


$
49,745


$
56,155



Certain prior period amounts have been reclassified to conform to current period presentation.

Current period information is preliminary and based on company data available at the time of the presentation.
5



Bank of America Corporation and Subsidiaries
 
 
 
 
 
Consolidated Balance Sheet (continued) 
 
 
 
 
 
(Dollars in millions)
 
 
 
 
 
 
December 31
2018
 
September 30
2018
 
December 31
2017
Liabilities
 
 
 
 
 
Deposits in U.S. offices:
 
 
 
 
 
Noninterest-bearing
$
412,587

 
$
414,853

 
$
430,650

Interest-bearing
891,636

 
844,204

 
796,576

Deposits in non-U.S. offices:
 
 
 
 
 
Noninterest-bearing
14,060

 
12,896

 
14,024

Interest-bearing
63,193

 
73,696

 
68,295

Total deposits
1,381,476


1,345,649


1,309,545

Federal funds purchased and securities loaned or sold under agreements to repurchase
186,988

 
171,600

 
176,865

Trading account liabilities
68,220

 
89,964

 
81,187

Derivative liabilities
37,891

 
36,189

 
34,300

Short-term borrowings
20,189

 
29,035

 
32,666

Accrued expenses and other liabilities
165,078

 
170,138

 
152,123

Long-term debt
229,340

 
234,100

 
227,402

Total liabilities
2,089,182

 
2,076,675


2,014,088

Shareholders’ equity
 
 
 
 
 
Preferred stock, $0.01 par value; authorized – 100,000,000  shares; issued and outstanding –  3,843,140, 3,843,140   and 3,837,683 shares
22,326

 
22,326

 
22,323

Common stock and additional paid-in capital, $0.01 par value; authorized – 12,800,000,000 shares; issued and outstanding –  9,669,286,370 , 9,858,252,641and 10,287,302,431shares
118,896

 
123,921

 
138,089

Retained earnings
136,314

 
130,747

 
113,816

Accumulated other comprehensive income (loss)
(12,211
)
 
(14,836
)
 
(7,082
)
Total shareholders’ equity
265,325

 
262,158

 
267,146

Total liabilities and shareholders’ equity
$
2,354,507


$
2,338,833


$
2,281,234

 
 
 
 
 
 
Liabilities of consolidated variable interest entities included in total liabilities above
Short-term borrowings
$
742

 
$
905

 
$
312

Long-term debt
10,944

 
11,024

 
9,873

All other liabilities
30

 
39

 
37

Total liabilities of consolidated variable interest entities
$
11,716


$
11,968


$
10,222



Certain prior period amounts have been reclassified to conform to current period presentation.

Current period information is preliminary and based on company data available at the time of the presentation.
6



Bank of America Corporation and Subsidiaries
Capital Management
(Dollars in millions)
 
Basel 3
 
December 31
2018
 
September 30
2018
 
December 31
2017
Risk-based capital metrics (1) :
 
 
 
 
 
Standardized Approach
 
 
 
 
 
Common equity tier 1 capital
$
167,272

 
$
164,386

 
$
168,461

Tier 1 capital
189,038

 
186,189

 
190,189

Total capital
221,303

 
218,159

 
224,209

Risk-weighted assets
1,436,905

 
1,439,419

 
1,442,721

Common equity tier 1 capital ratio
11.6
%
 
11.4
%
 
11.7
%
Tier 1 capital ratio
13.2

 
12.9

 
13.2

Total capital ratio
15.4

 
15.2

 
15.5

 
 
 
 
 
 
Advanced Approaches
 
 
 
 
 
Common equity tier 1 capital
$
167,272

 
$
164,386

 
$
168,461

Tier 1 capital
189,038

 
186,189

 
190,189

Total capital
212,855

 
209,950

 
215,311

Risk-weighted assets
1,408,264

 
1,424,105

 
1,458,979

Common equity tier 1 capital ratio
11.9
%
 
11.5
%
 
11.5
%
Tier 1 capital ratio
13.4

 
13.1

 
13.0

Total capital ratio
15.1

 
14.7

 
14.8

 
 
 
 
 
 
Leverage-based metrics (1)
 
 
 
 
 
Adjusted average assets
$
2,257,559

 
$
2,240,166

 
$
2,223,482

Tier 1 leverage ratio
8.4
%
 
8.3
%
 
8.6
%
 
 
 
 
 
 
Supplementary leverage exposure
$
2,791,853

 
$
2,787,880

 
n/a

Supplementary leverage ratio
6.8
%
 
6.7
%
 
n/a

 
 
 
 
 
 
Tangible equity ratio (2)
8.6

 
8.5

 
8.9

Tangible common equity ratio  (2)
7.6

 
7.5

 
7.9

 
 
 
 
 
 
(1)  
Regulatory capital ratios at December 31, 2018 are preliminary. We report regulatory capital ratios under both the Standardized and Advanced approaches. The approach that yields the lower ratio is used to assess capital adequacy. Basel 3 transition provisions for regulatory capital adjustments and deductions were fully phased-in as of January 1, 2018. Prior periods are presented on a fully phased-in basis. SLR requirements became effective January 1, 2018.
(2)  
Tangible equity ratio equals period-end tangible shareholders’ equity divided by period-end tangible assets. Tangible common equity ratio equals period-end tangible common shareholders’ equity divided by period-end tangible assets. Tangible shareholders’ equity and tangible assets are non-GAAP financial measures. We believe the use of ratios that utilize tangible equity provides additional useful information because they present measures of those assets that can generate income. (See Exhibit A: Non-GAAP Reconciliations - Reconciliation to GAAP Financial Measures on page 39 .)
n/a = not applicable


Certain prior period amounts have been reclassified to conform to current period presentation.

Current period information is preliminary and based on company data available at the time of the presentation.
7



Bank of America Corporation and Subsidiaries
Quarterly Average Balances and Interest Rates – Fully Taxable-equivalent Basis
(Dollars in millions)
 
 
Fourth Quarter 2018
 
 
Third Quarter 2018
 
 
Fourth Quarter 2017
 
 
Average
Balance
 
Interest
Income/
Expense
 
Yield/
Rate
 
 
Average
Balance
 
Interest
Income/
Expense
 
Yield/
Rate
 
 
Average
Balance
 
Interest
Income/
Expense
 
Yield/
Rate
Earning assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks
 
$
129,814

 
$
494

 
1.51
%
 
 
$
144,411

 
$
523

 
1.44
%
 
 
$
128,708

 
$
336

 
1.04
%
Time deposits placed and other short-term investments
 
8,691

 
59

 
2.72

 
 
8,328

 
48

 
2.26

 
 
12,979

 
68

 
2.06

Federal funds sold and securities borrowed or purchased under agreements to resell
 
263,626

 
1,046

 
1.57

 
 
241,426

 
799

 
1.31

 
 
224,490

 
528

 
0.93

Trading account assets
 
138,046

 
1,327

 
3.82

 
 
128,896

 
1,195

 
3.68

 
 
130,370

 
1,183

 
3.61

Debt securities
 
440,967

 
3,108

 
2.76

 
 
445,813

 
3,014

 
2.66

 
 
441,624

 
2,751

 
2.48

Loans and leases (1) :
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
 
209,646

 
1,857

 
3.54

 
 
209,460

 
1,857

 
3.54

 
 
202,155

 
1,749

 
3.46

Home equity
 
50,757

 
634

 
4.96

 
 
53,050

 
656

 
4.91

 
 
59,059

 
641

 
4.32

U.S. credit card
 
95,766

 
2,533

 
10.49

 
 
94,710

 
2,435

 
10.20

 
 
93,531

 
2,299

 
9.75

Direct/Indirect and other consumer
 
91,458

 
823

 
3.57

 
 
91,828

 
787

 
3.40

 
 
96,113

 
724

 
2.99

Total consumer
 
447,627

 
5,847

 
5.20

 
 
449,048

 
5,735

 
5.08

 
 
450,858

 
5,413

 
4.78

U.S. commercial
 
308,557

 
3,203

 
4.12

 
 
303,680

 
3,034

 
3.97

 
 
297,851

 
2,598

 
3.46

Non-U.S. commercial
 
95,937

 
835

 
3.45

 
 
96,019

 
831

 
3.43

 
 
98,692

 
680

 
2.73

Commercial real estate
 
60,876

 
703

 
4.59

 
 
60,754

 
682

 
4.45

 
 
58,983

 
571