Bank of America : Earnings Release Q3 2021

Bank of America Reports Q3-21 Net Income of $7.7 Billion, EPS of $0.85

Q3-21 Financial Highlights1

• Net income rose 58% to $7.7 billion, or $0.85 per diluted share
• Revenue, net of interest expense, increased 12% to $22.8 billion
• • Net interest income (NII)(B) up $1 billion, or 10%, to $11.1 billion, driven by strong deposit growth and related investment of liquidity, and Paycheck Protection Program (PPP) activities
  • Noninterest income up 14% to $11.7 billion, driven by record asset management fees, strong investment banking revenue and higher sales and trading revenues
• Provision for credit losses improved by $2.0 billion to a benefit of $624 million, reflecting a reserve release of $1.1 billion driven primarily by asset quality improvements during the quarter(C)
• Noninterest expense was relatively flat at $14.4 billion as higher revenue-related expenses were largely offset by lower litigation expense and lower COVID-related costs
• Average loan and lease balances in business segments increased $14 billion QoQ to $903 billion; excluding PPP, loan balances grew $21 billion QoQ(D)
• Average deposits up $247 billion, or 15%, to $1.9 trillion
• Average Global Liquidity Sources rose $261 billion, or 30%, to record $1.1 trillion(E)
• Common equity tier 1 (CET1) ratio 11.1% (Standardized); returned $11.7 billion to shareholders through common stock dividends and share repurchases(F)

From Chairman and CEO Brian Moynihan

"We reported strong results as the economy continued to improve and our businesses regained the organic customer growth momentum we saw before the pandemic. Deposit growth was strong and loan balances increased for the second consecutive quarter, leading to an improvement in net interest income even as interest rates remained low.

"Each day clients entrust us with more of their business, whether it's new checking and credit card accounts in Consumer; broader and deeper relationships in Wealth Management; increased commercial loan balances; or near- record investment banking activities. Our institutional clients also relied on us to help them manage risk through our market-leading sales and trading capabilities, where we had strong revenues this quarter.

"For our shareholders, we returned nearly $12 billion in capital this quarter, while continuing to support clients and communities. The team has done a remarkable job, and I couldn't be prouder of how they stepped up to support our clients and deliver another quarter of outstanding results."

Q3-21 Business Segment Highlights1,2(A)

Consumer Banking

• Net income of $3.0 billion
• Deposit balances exceeded $1.0 trillion for the first time, up 16%
• Consumer investment assets up $87 billion, or 32%, to a record $353 billion, driven by market valuations and strong client flows of $21 billion since Q3-20
• Accelerated Client Activity
• • Record consumer checking accounts: 34.2 million; 93% primary3
  • Combined credit and debit card spend up 21% to $201 billion; credit up 26% and debit up 17%
  • 3.2 million Consumer Investment accounts, up 9%

Global Wealth and Investment Management

• Record net income of $1.2 billion
• Record client balances of $3.7 trillion, up $626 billion, or 20%, driven by higher market valuations and $91 billion in client flows since Q3-20
• Deposits up 16% to $339 billion
• Pretax margin of 31%
• Accelerated Client Activity
• • Record AUM balances of $1.6 trillion, up 23%
  • Average loan balances up 8% to $200 billion; 46th consecutive quarter of average loan and lease balance growth
  • Merrill Lynch Wealth Management added ~4,200 net new households; Private Bank added ~275 net new relationships

Global Banking

• Net income of $2.5 billion
• Total investment banking fees (excl. self-led) increased 23% to near- record levels of $2.2 billion
• • Record advisory fees of $654 million, up 65%
• Deposits up 13% to $534 billion
• Accelerated Client Activity
• • Debt underwriting fees rose 26%; 9 of the top 10 debt deals4
  • Raised $221 billion in capital on behalf of clients in Q3-21, $728 billion YTD5

Global Markets

• Net income of $926 million
• Sales and trading revenue up 12% to $3.6 billion, including net debit valuation adjustment (DVA) losses of $20 million, with Fixed Income Currencies and Commodities (FICC) revenue of $2.0 billion and Equities revenue of $1.6 billion
• Excluding net DVA, sales and trading revenue up 9% to $3.6 billion; FICC down 5% to $2.0 billion;(G) Equities up 33% to $1.6 billion(G)
• Accelerated Client Activity
• • Average assets increased $124 billion to $805 billion, driven by higher client balances in equities and loan growth

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 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). 4 Source: Dealogic as of Oct. 1, 2021.

5 Source: Dealogic as of Oct. 1, 2021. Global Capital Raise includes Equity, Debt, Loans (Mortgage Backed Securities, Asset Backed Securitizations and self-funded deals are excluded). Shown on a	1
proportional share basis.

From Chief Financial Officer Paul Donofrio:

"We grew revenues faster than expenses, producing year-over-year operating leverage in every business segment and 12% for the company. Net interest income improved, despite a challenging rate environment, and our fee-based businesses continued to benefit from robust markets and the strong relationships we have built with our clients over many years.

"Asset quality remained strong, with loss rates approaching 50-year lows, enabling the release of loan loss reserves again this quarter. Because of the way we run our business, we were able to increase the quarterly dividend by 17% and buy back nearly $10 billion in common stock. As we head into our second decade of driving responsible growth, we are well positioned to support our clients, serve our communities and deliver for our shareholders."

Bank of America Financial Highlights

				Three Months Ended
($ in billions, except per share data)		9/30/2021	6/30/2021	9/30/2020
Total revenue, net of interest expense		$22.8	$21.5	$20.3
Provision for credit losses			(0.6)	(1.6)	1.4
Noninterest expense			14.4	15.0	14.4
Pretax income				9.0	8.0	4.5
Pretax, pre-provision income1(H)			8.3	6.4	5.9
Income tax expense				1.3	(1.2)	(0.3)
Net Income				7.7	9.2	4.9
Diluted earnings per share			$0.85	$1.03	$0.51
1 Pretax, pre-provision income represents a non-GAAP financial measure. For more information, see page 19.
			Strength of Responsible Growth
Well Capitalized	Strong Liquidity	Low Loss Rates
11.9%	11.5%	11.1%		$1,120
	$1,063
		0.40%

$859

Regulatory minimum 9.5%

0.27%

0.20%

Q3-20	Q2-21	Q3-21	Q3-20	Q2-21	Q3-21	Q3-20	Q2-21	Q3-21
	CET-1 Ratio (F)	Avg. Global Liquidity Sources	Net Charge-off Ratio
				($B) (E)

2

Consumer Banking1,2

• Net income increased to $3.0 billion, as higher revenue and lower expenses combined to create 16% positive operating leverage3
• Revenue of $8.8 billion increased 10%, driven by improved NII and higher fee income
• Provision for credit losses improved $232 million to $247 million, driven primarily by asset quality improvements
• • Net charge-off ratio improved to 0.69%, compared to 0.82%
• Noninterest expense decreased 6% to $4.6 billion, driven by lower COVID-19 related costs

Business Highlights1,4(A)

• Average deposits grew $140 billion, or 16%, to $1 trillion; average loans and leases declined $37 billion, or 12%, to $281 billion, driven by lower first mortgage and card balances
• Consumer investment assets grew $87 billion, or 32%, to $353 billion, driven by market performance and strong client flows
• • $21 billion of client flows since Q3-20
  • 3.2 million client accounts, up 9%
• Combined credit/debit card spend up $35 billion, or 21%; credit card up 26% and debit card up 17%
• 7.8 million Consumer clients enrolled in Preferred Rewards, up 13%, with 99% annualized retention rate

Digital Usage Continued to Grow1

• 40.9 million active digital banking users, up 4%, or
  1.6 million
• 1.4 million digital sales, up 27%
• 2.6 billion digital logins
• 15.1 million active Zelle® users, now including small businesses, sent and received 202 million transfers worth $60 billion, up 44% and 53% YoY, respectively
• Clients booked ~853,000 digital appointments

Financial Results1
	Three months ended
($ in millions)	9/30/2021	6/30/2021	9/30/2020
Total revenue2	$8,838	$8,186	$8,039
Provision for credit losses	247	(697)	479
Noninterest expense	4,558	4,859	4,842
Pretax income	4,033	4,024	2,718
Income tax expense	988	986	666
Net income	$3,045	$3,038	$2,052
Business Highlights1,4(A)
	Three months ended
($ in billions)	9/30/2021	6/30/2021	9/30/2020
Average deposits	$1,000.8	$979.1	$861.0
Average loans and leases	281.4	281.8	318.8
Consumer investment assets	353.3	345.8	266.7
(EOP)
Active mobile banking users	32.5	31.8	30.6
(MM)
Number of financial centers	4,215	4,296	4,309
Efficiency ratio	52 %	59 %	60 %
Return on average allocated	31	32	21
capital
Total Consumer Credit Card4
Average credit card	$75.6	$73.4	$81.3
outstanding balances
Total credit/debit spend	200.6	200.3	166.1
Risk-adjusted margin	10.7 %	9.8 %	9.7 %

• Comparisons are to the year-ago quarter unless noted.
  2 Revenue, net of interest expense.
  3 Operating leverage is calculated as the year-over-year percentage change in revenue, net of
  interest expense, less the percentage change in noninterest expense.
  4 The Consumer credit card portfolio includes Consumer Banking and GWIM.

Continued Business Leadership

• No. 1 in customer satisfaction for U.S. Online (a) Banking among National Banks by J.D. Power (b)
• No. 1 in customer satisfaction for U.S. Mobile Banking Apps among National Banks by J.D. Power (b)
• No. 1 in customer satisfaction for U.S. Retail Banking Advice by J.D. Power (c)
• No. 1 in estimated U.S. Retail Deposits (d)
• No. 1 Online Banking and Mobile Banking Functionality (e)
• No. 1 in Prime Auto Credit Distribution of New Originations Among Peers (f)
• No. 1 Mortgage and Home Equity Lending Digital Experience (g)
• No. 1 Small Business Lender (h)

See page 11 for Business Leadership sources.

3

Global Wealth and Investment Management1,2

• Net income increased $478 million, or 64%, to $1.2 billion, with revenue rising faster than expenses generating 11% positive operating leverage
  - Pretax margin of 31%
• Record revenue of $5.3 billion, up 17%, driven by a 19% increase in asset management fees and the impact of strong loan and deposit growth
• Noninterest expense increased 6% to $3.7 billion, primarily driven by higher revenue-related incentives

Business Highlights1(A)

• Total client balances up $626 billion, or 20%, to a record of $3.7 trillion, driven by higher market valuations and positive client flows
• • Average deposits increased $48 billion, or 16%, to $339 billion; average loans and leases grew $14 billion, or 8%, to $200 billion, driven by securities- based lending, custom lending and residential mortgage lending
  • Strong AUM flows of $15 billion in Q3-21

Merrill Lynch Wealth Management Highlights1

• Strong Client Growth and Advisor Engagement
• • Record client balances of $3.1 trillion up 21%
  • Record AUM balances of $1.2 trillion, up 24%
  • Added ~4,200 net new households in Q3-21
• Digital Usage Continued to Grow
• • 78% of Merrill Lynch households actively using online or mobile platforms
  • Continued growth of advisor/client digital communications; 337,000 households exchanged ~1.4 million secure messages
  • 227,000 forms signed digitally in Q3-21, 49% of eligible transactions
  • Record 74% of eligible checks deposited through automated channels

Bank of America Private Bank Highlights1

• Strong Client Engagement
• • Record client balances of $584 billion, up 18% YoY
  • Record AUM balances of $341 billion, up 18% YoY
  • Added ~275 net new relationships in Q3-21
• Digital Usage Continued to Grow
• • Record 83% of clients digitally active across the enterprise
  • Record 75% of checks deposited through automated channels
  • Logins up 5%; once clients are digitally engaged they are using features more frequently:
  • • Erica sessions up 349%
    • Zelle® transactions up 48%
    • Digital wallet transactions up 73%

Financial Results1
	Three months ended
($ in millions)	9/30/2021	6/30/2021	9/30/2020
Total revenue2	$5,310	$5,065	$4,546
Provision for credit losses	(58)	(62)	24
Noninterest expense	3,745	3,813	3,533
Pretax income	1,623	1,314	989
Income tax expense	398	322	242
Net income	$1,225	$992	$747
Business Highlights1(A)
	Three months ended
($ in billions)	9/30/2021	6/30/2021	9/30/2020
Average deposits	$339.4	$333.5	$291.8
Average loans and leases	199.7	194.0	185.6
Total client balances (EOP)	3,692.8	3,652.8	3,066.6
AUM flows	14.8	11.7	1.4
Pretax margin	31 %	26 %	22 %
Return on average allocated	30	24	20
capital

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

Continued Business Leadership

• No. 1 in Barron's Top 1,200 Financial Advisors and Top 100 Women Advisors (2021)
• No. 1 in Forbes' Top Next Generation Advisors and Best-in-State Wealth Advisors (2021)
• No. 1 in personal trust assets under management(l)
• Digital Wealth Impact Innovation Award for Digital Engagement(j)
• Wealth Tech Award - Best Use of Technology (North America) and Best Use of Technology for client acquisition (North America)(k)
• Wealth Manager award for emerging technology(l)
• Best Technology for The Client Engagement Workstation and Redefining Wealth Planning(m)
• Best Private Bank in North America(n)

See page 11 for Business Leadership sources.

4

Global Banking1,2

• Net income increased $1.6 billion to $2.5 billion, driven by lower credit costs and higher revenue
• • 9% positive operating leverage
• Revenue of $5.2 billion rose 16%, reflecting higher investment banking fees, higher leasing-related revenue, and strong deposit growth, which benefited
  NII
• Provision for credit losses improved $1.7 billion to a benefit of $781 million
• • Current quarter reserve release primarily driven by asset quality improvements, whereas the reserve build in the year-ago quarter was driven by COVID-19 impacted industries, such as travel and entertainment(C)
• Noninterest expense rose $169 million, or 7%, to $2.5 billion, largely driven by higher revenue-related costs and continued investments in the franchise

Business Highlights1,2(A)

• Average deposits increased $63 billion, or 13%, to $534 billion, reflecting client liquidity and valued relationships
• Average loans and leases declined $48 billion, or 13%, to $325 billion, driven by paydowns
• Excluding PPP, average loans and leases increased $3.2 billion, or 1%, from the prior quarter, driven by growth in Middle Market and Commercial Real Estate Banking(D)
• Total investment banking fees rose 23% to near- record levels of $2.2 billion (excl. self-led)

Digital Usage Continued to Grow1

• 74% digitally active clients across commercial, corporate, and business banking clients (CashPro & BA360 platforms) (as of August 2021)
• CashPro App Active Users increased 69% and sign- ins increased 49% (rolling 12 months), surpassing 1 million sign-ins in the past year
• CashPro App Payment Approvals value was $304 billion, with volumes increasing 80% (rolling 12 months)
• Global Digital disbursements up 33% YTD YoY (as of August 2021), 85% of volume sent via Zelle (as of August 2021)

Financial Results1
	Three months ended
($ in millions)	9/30/2021	6/30/2021	9/30/2020
Total revenue2,3	$5,244	$5,090	$4,517
Provision for credit losses	(781)	(831)	883
Noninterest expense	2,534	2,599	2,365
Pretax income	3,491	3,322	1,269
Income tax expense	942	897	343
Net income	$2,549	$2,425	$926
Business Highlights1,2(A)
	Three months ended
($ in billions)	9/30/2021	6/30/2021	9/30/2020
Average deposits	$534.2	$506.6	$471.3
Average loans and leases	324.7	325.1	373.1
Total Corp. IB fees (excl. self-	2.2	2.1	1.8
led)2
Global Banking IB fees2	1.3	1.2	1.0
Business Lending revenue	1.9	1.9	1.8
Global Transaction Services	1.9	1.7	1.6
revenue
Efficiency ratio	48 %	51 %	52 %
Return on average allocated	24	23	9
capital

• Comparisons are to the year-ago quarter unless noted.

• Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities, and sales and trading activities.

• Revenue, net of interest expense.

Continued Business Leadership

• Outstanding Financial Innovator - 2021 Global(o)
• North America's Best Bank for Small to Medium-sized Enterprises(p)
• Best Global Bank for Cash Management and Payments & Collections(q)
• Best Mobile Cash Management Software(q)
• World's Best Bank for Payments and Treasury and North America's Best Bank for Transaction Services(p)
• Best Transaction Bank in North America, Best Supply Chain Finance Bank(r)
• 2020 Quality, Share and Excellence Awards for U.S. Large Corporate Banking and Cash Management(s)
• Outstanding Global Leader in Social Bonds, Outstanding Leader in Social Bonds and Sustainable Loans for North America(o)
• Relationships with 74% of the Global Fortune 500; 95% of the U.S. Fortune 1,000 (2021)

See page 11 for Business Leadership sources.

5