Bank of America : 4Q20 Earnings Press Release

Bank of America Reports Q4 Net Income of $5.5 Billion, EPS of $0.59

CET1 Ratio Improved to 11.9%, Average Deposits up $327 billion to $1.7 trillion(A)

Full-Year 2020 Net Income of $17.9 billion, EPS of $1.87

Q4-20 Financial Highlights1

• Net income of $5.5 billion, or $0.59 per diluted share
• Revenue, net of interest expense, decreased 10% to $20.1 billion
• • Net interest income (NII)(B) declined 16% to $10.3 billion, driven by lower interest rates
  • Noninterest income declined 4% to $9.8 billion, reflecting a decline in other income while trading and investment banking results improved
• Provision for credit losses decreased to $53 million, reflecting a reserve release of $828 million(H)
• Noninterest expense increased 5% to $13.9 billion, driven primarily by higher net COVID-19 costs
• Loan and lease balances in the business segments declined $23 billion, or 2%, to $913 billion, driven primarily by lower card balances and declines in commercial loans
• Deposits rose $327 billion, or 23%, to $1.7 trillion
• Common equity tier 1 (CET1) ratio increased 76 basis points YoY to 11.9% (Standardized)(A)
• Average Global Liquidity Sources rose $367 billion, or 64%, to $943 billion(D)
• Book value per common share rose 5% to $28.72; tangible book value per common share rose 6% to $20.603
• Return on average common shareholders' equity ratio of 8.4%; return on average tangible common shareholders' equity ratio of 11.7%3

From Chairman and CEO Brian Moynihan:

"During 2020, we witnessed the dramatic effects of the health crisis on the economy and our company's operations. In the fourth quarter, we continued to see signs of a recovery, led by increased consumer spending, stabilizing loan demand by our commercial customers, and strong markets and investing activity. The latest stimulus package, continued progress on vaccines, and our talented teammates

• who performed well helping their customers through this crisis - position us well as the recovery continues.

"In the fourth quarter, we saw higher net interest income, higher Consumer revenue, record asset management fees, strong results from our Global Markets teams, and a stronger balance sheet. In 2020, we earned nearly $18 billion and achieved several key strategic objectives: gaining market share in deposits, expanding our digital leadership, and adding thousands of wealth management clients. In addition, we gained market share in investment banking and supported clients with liquidity and superior trading execution.

"Also we made progress in support of our communities, committing $300 million of our $1 billion four-year initiative to help drive racial equality and economic opportunity."

Q4-20 Business Segment Highlights1,2(C)

Consumer Banking

• Net income of $2.6 billion
• Deposits up 23% to $885 billion; loans down 2% to $305 billion
• Consumer investment assets up 27% to $306 billion; record client flows of $26 billion since Q4-19
• Client Support Actions:
• • ~343,000 Paycheck Protection Program loans to small business owners in 2020; ~$23 billion in outstanding balances
  • Processed ~2 million payment deferrals in 2020, of which ~77,000 were still in place as of December 31

Global Wealth and Investment Management

• Net income of $836 million
• Record client balances of more than $3.3 trillion, up 10%, driven by higher market valuations and client flows
• Deposits up 20% to $306 billion; loans up 7% to $187 billion
• Merrill added ~22,000 net new households in 2020, and Private Bank added ~1,800 net new relationships in 2020
• Client Support Actions:
• • 77% of Wealth Management clients used online or mobile platforms
  • Record 137K WebEx meetings hosted by Merrill Lynch Wealth Management Financial Advisors, nearly 8 times Q4-19 levels
  • Private Bank averaged 1,800+ client interactions per day in 2020

Global Banking

• Net income of $1.7 billion
• Firmwide investment banking fees (excl. self-led) up 26% to $1.9 billion; record 2020 investment banking fees of $7.2 billion
• Improved industry ranking for investment banking fees to No. 3 for 2020(E)
• Deposits up 26% to $478 billion; loans down 8% to $346 billion
• Client Support Actions:
  - Raised $772 billion in capital in 2020 on behalf of clients

Global Markets

• Net income of $791 million
• Sales and trading revenue of $3.0 billion, including net debit valuation adjustment (DVA) losses of $56 million
• Excluding net DVA, sales and trading revenue of $3.1 billion increased 7%, led by Equities(F)
• Client Support Action:
• • Supported clients by providing liquidity and a strong and resilient trading platform

See page 10 for endnotes.

• Financial Highlights and Business Segment Highlights are compared to the year-ago quarter unless noted. Loan and deposit balances are shown on an average basis unless noted.
  2 The Corporation reports the results of operations of its four business segments and All Other on a fully taxable-equivalent (FTE) basis.

3 Tangible book value per common share and Tangible common equity ratio represent non-GAAP financial measures. For more information, see page 18.

1

From Chief Financial Officer Paul Donofrio:

"Despite one of the worst economic environments in modern memory, we ended the year stronger than before the health crisis and well positioned to support our clients. We grew deposits by $361 billion, improved our capital ratios and increased liquidity to record levels, exceeding loans. Because of the responsible way we have operated the company over many years, we were able to support the economy by raising $772 billion in capital on behalf of clients, invest in our franchise and still be in a position to return $4.8 billion in capital to our shareholders in the first quarter of 2021 in the form of common stock repurchases and dividends."

Bank of America Financial Highlights(G)

($ in billions, except per share data)		Q4-20	Q4-19
Total revenue, net of interest expense	$20.1	$22.3
Provision for credit losses	0.1	0.9
Noninterest expense	13.9	13.2
Pretax income	6.1	8.2
Pretax, pre-provision income1(G)	6.2	9.1
Income tax expense	0.6	1.2
Net Income	5.5	7.0
Diluted earnings per share	$0.59	$0.74
($ in billions, except per share data)		FY 2020	FY 2019
Total revenue, net of interest expense		$85.5	$91.2
Provision for credit losses	11.3	3.6
Noninterest expense	55.2	54.9
Pretax income	19.0	32.8
Pretax, pre-provision income1(G)	30.3	36.3
Income tax expense	1.1	5.3
Net Income	17.9	27.4
Diluted earnings per share	$1.87	$2.75

1 Pretax, pre-provision income represents a non-GAAP financial measure. For more information, see page 18.

2

Consumer Banking1,2

• Net income declined $515 million to $2.6 billion, reflecting the impact of lower interest rates, lower consumer fees and higher operating costs associated with measures to protect the health and safety of employees and clients
• Revenue of $8.2 billion decreased 13%, due to lower NII from lower rates, as well as lower service charges, and lower card income driven by reduced credit card activity
• Provision for credit losses decreased $930 million to $4 million, reflecting a Q4-20 reserve release(H) of $559 million
• • Net charge-off ratio improved to 0.73%, compared to 1.18%
• Noninterest expense increased 8% to $4.8 billion, driven primarily by incremental expense to support customers and employees during COVID-19

Business Highlights1,3(C)

• Average deposits grew $166 billion, or 23%; average loans fell $6 billion, or 2%, driven by lower card balances
• Consumer investment assets grew $66 billion, or 27%, to $306 billion, driven by market performance and client flows
• • $26 billion of client flows since Q4-19 set a new record
  • 3 million client accounts, up 10% YoY
• Combined credit/debit card spend up 4%; debit card up 12% and credit card down 6%
• 7.2 million Consumer customers enrolled in Preferred Rewards, with 99% retention rate

Digital Usage Continued to Grow1

• 39.3 million active digital banking users, up 3%
• 30.8 million active mobile banking users, up 6%
• Digital sales were 45% of all Consumer Banking sales
• 2.4 billion digital logins in Q4-20
• 12.9 million active Zelle® users, now including small businesses; sent and received 157 million transfers worth $43 billion, up 65% and 79% YoY respectively
• Clients booked ~636,000 digital appointments with an associate

Financial Results1
	Three months ended
($ in millions)	12/31/2020	9/30/2020	12/31/2019
Total revenue2	$8,242	$8,039	$9,514
Provision for credit losses	4	479	934
Noninterest expense	4,807	4,842	4,468
Pretax income	3,431	2,718	4,112
Income tax expense	841	666	1,007
Net income	$2,590	$2,052	$3,105
Business Highlights1,3(C)
	Three months ended
($ in billions)	12/31/2020	9/30/2020	12/31/2019
Average deposits	$885.2	$861.0	$719.7
Average loans and leases	305.1	318.8	311.0
Consumer investment assets	306.1	266.7	240.1
(EOP)
Active mobile banking users	30.8	30.6	29.2
(MM)
Number of financial centers	4,312	4,309	4,300
Efficiency ratio	58 %	60 %	47 %
Return on average allocated	27	21	33
capital
Total Consumer Credit Card3
Average credit card	$78.2	$81.3	$95.0
outstanding balances
Total credit/debit spend	173.7	166.1	167.2
Risk-adjusted margin	10.8 %	9.7 %	8.7 %

• Comparisons are to the year-ago quarter unless noted.
  2 Revenue, net of interest expense.
  3 The Consumer credit card portfolio includes Consumer Banking and GWIM.

Continued Business Leadership

• No. 1 Consumer Deposit Market Share (Estimated retail consumer deposits based on June 30, 2020 FDIC deposit data)
• No. 1 Small Business Lender (FDIC, Q3-20)
• No. 1 Online Banking and Mobile Banking Functionality (Keynova Q4-20 Online Banker Scorecard, Javelin 2020 Online and Mobile Banking Scorecards)
• No. 1 in Prime Auto Credit Distribution of New Originations Among Peers (Experian AutoCount; Franchised Dealers; largest percentage of 680+ Vantage 3.0 loan originations among key competitors as of October 2020)
• Named North America's Best Digital Bank (Euromoney, July 2020)
• Best Mortgage Lender for First-Time Homebuyers (Nerdwallet, 2020)
• Merrill Guided Investing - Best Robo-Advisor for Education (Investopedia, October 2020)

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Global Wealth and Investment Management1,2

• Net income decreased $199 million to $836 million, reflecting the impact of lower interest rates
• Revenue decreased 5% to $4.7 billion as lower NII from lower rates more than offset a 6% rise in asset management fees
• Noninterest expense increased 1% to $3.6 billion, mainly driven by investments in primary sales professionals

Business Highlights1(C)

• Total client balances up $302 billion, or 10%, to a record of more than $3.3 trillion, driven by market valuations and positive client flows
• • Average deposits increased $50 billion, or 20%, to $306 billion; average loans and leases grew $13 billion, or 7%, to $187 billion, driven by residential mortgage, custom lending and securities-based lending
  • AUM flows of $8 billion in Q4-20

Merrill Lynch Wealth Management Highlights1

• Strong Client Growth and Advisor Engagement
• • Record client balances of $2.8 trillion, up 10%
  • Record AUM balances of $1.1 trillion, up 11%
  • Added ~5,100 net new households in Q4-20 and ~22,000 in 2020
• Digital Usage Continued to Grow
• • 77% of Merrill Lynch households actively using online or mobile platforms; record 38% Merrill Lynch mobile app adoption, up from 26%
  • Continued growth of advisor/client digital communications; ~420k households used Secure Messaging, up 70k+ or ~20% QoQ
  • Record number of checks deposited through automated channels; 50% of all eligible checks deposited in Q4, up from 33%
  • Clients are using features more frequently: Record eDelivery enrollment of 70% (up from 60% last year), and Zelle transactions up 77% YoY

Bank of America Private Bank Highlights1

• Strong Client Engagement
• Record client balances of $541 billion, up 11%
• Added ~400 net new relationships in Q4-20 and ~1,800 in 2020
• Digital Usage Continued to Grow
• Record 77% client adoption across online and mobile platforms; record 22% Private Bank mobile app usage, up from 12%
• Record 71% of checks deposited through automated channels, up from 63% last year
• Record logins up 33%; once logged in, clients are using features more frequently: Erica sessions up 111%, Zelle transactions up 82%, and digital wallet transactions up 26%

Financial Results1
	Three months ended
($ in millions)	12/31/2020	9/30/2020	12/31/2019
Total revenue2	$4,677	$4,546	$4,913
Provision for credit losses	8	24	19
Noninterest expense	3,561	3,530	3,523
Pretax income	1,108	992	1,371
Income tax expense	272	243	336
Net income	$836	$749	$1,035
Business Highlights1(C)
	Three months ended
($ in billions)	12/31/2020	9/30/2020	12/31/2019
Average deposits	$305.9	$291.8	$255.9
Average loans and leases	187.2	185.6	174.4
Total client balances (EOP)	3,349.8	3,066.6	3,047.8
AUM flows	7.6	1.4	8.1
Pretax margin	24 %	22 %	28 %
Return on average allocated	22	20	28
capital

• Comparisons are to the year-ago quarter unless noted.
  2 Revenue, net of interest expense.

Continued Business Leadership

• No. 1 U.S. wealth management market position across client assets, deposits and loans (U.S.-based,full-service wirehouse peers based on Q3-20 earnings releases)
• No. 1 in personal trust assets under management (industry Q3-20 FDIC call reports)
• Most advisors (284) on Barron's 2020 Top 1,200 Financial Advisors list for the 11th consecutive year
• Most advisors (240) named to Forbes' Top Women Wealth Advisors list
• Most advisors (1,013) on Forbes' Best-In-State Wealth Advisors list
• No. 1 in Forbes' Top Next Generation Advisors (2020)
• No. 1 in Financial Times Top 401K Retirement Plan Advisors (2020)
• No. 1 in Barron's Top 100 Women Advisors (2020)
• Digital Wealth Impact Innovation Award for Digital Engagement (AITE Group, 2020)
• Wealth Tech Award (Professional Wealth Management, a Financial Times publication, 2020) - Best Wealth Manager in North America for use of technology
• Recognized as best Private Bank for Customer Service (North America) and Best Private Bank for Philanthropy Services (globally) by Professional Wealth Management, a Financial Times publication (2020)
• Recognized as best Private Bank in the U.S. for clients with $5-$30 million in assets by Euromoney (2020)

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