1
Bank of America Reports Q4-17 Net Income of $2.4 Billion, EPS $0.20
Results Include Charge of $2.9 Billion, or $0.27 per Diluted Share, for the Tax Act1
Q4-17 Financial Highlights2,3 Q4-17 Business Segment Highlights2
Consumer Banking
Global Wealth and Investment
Management
Global Banking
Global Markets
1 Amount represents the estimated impact of the Tax Act, which may change as additional guidance and information become available.
2 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.
3 Effective October 1, 2017, the accounting method for retirement-eligible equity incentives was changed; prior periods presented have been restated to conform to the current period
presentation. For more information, see page 9 of this press release.
4 Represents a non-GAAP financial measure. For additional information (including reconciliation information), see endnote B.
• Revenue rose 10% to $9.0 billion
• Loans up 9%; deposits up 8%
• Merrill Edge brokerage assets up 22%
• Mobile banking active users increased
12% to 24.2 million
• Credit/debit spend up 7% to $143 billion
• Net income of $2.4 billion, or $0.20 per diluted
share, including a charge of $2.9 billion, or $0.27
per diluted share, related to the Tax Cuts and Jobs
Act (the "Tax Act")
• Revenue, net of interest expense, increased 2% to
$20.4 billion from $20.0 billion
– Net interest income (NII) increased $1.2 billion,
or 11%, to $11.5 billion, reflecting benefits
from higher interest rates, as well as loan and
deposit growth(A)
– Noninterest income decreased $724 million, or
7%, to $9.0 billion, primarily driven by the
impact of the Tax Act and lower mortgage
banking income, partially offset by higher asset
management fees, investment banking
revenues and card income
• Net charge-offs rose to $1.2 billion from $880
million, primarily driven by a single-name non-U.S.
commercial charge-off totaling $292 million
– Net charge-off ratio 0.53% compared to 0.39%
– Excluding the single-name charge-off, the net
charge-off ratio was fairly consistent with the
prior quarter
• Provision for credit losses rose to $1.0 billion
from $774 million
• Noninterest expense declined $139 million, or
1%, to $13.3 billion, with reductions in both
personnel and non-personnel expenses
• Average loan balances in business segments rose
6% to $857 billion
• Revenue rose 7% to $4.7 billion
• Total client balances increased $243
billion to a record of nearly $2.8 trillion
• Loans increased 7% to $157 billion
• Record assets under management (AUM)
balances of more than $1 trillion
• Revenue rose 10% to $5.0 billion
• Loans increased 4% to record $350
billion
• Deposits increased 5% to record $330
billion
• Firmwide investment banking fees up
16% to $1.4 billion
• Sales and trading revenue of $2.5 billion,
including negative net debit valuation
adjustment (DVA) of $118 million
• Excluding net DVA, sales and trading
revenue down 9% vs. strong Q4-16(E)
– FICC down 13%(E)
– Equities flat(E)
CEO Commentary
“Responsible growth delivered solid results in 2017. Pretax earnings rose 17 percent, and we continued to close in on our long-term
return targets. We gained market share across our businesses while carefully managing credit, risk exposures, and expenses. We
invested in technology, client engagement, and in our own team, including the $1,000 bonus we announced last month for 145,000
employees. We also shared our success with stakeholders through our high level of funding philanthropic initiatives, our 2 million
employee volunteer hours, and our commitment to long-term shareholder value by returning nearly $17 billion in capital through
common stock repurchases and dividends."
— Brian Moynihan, Chief Executive Officer
Financial Highlights3 Reported
Tax Act
Impact1 Excl. Tax Act Impact4
($ in billions, except per share data) Q4-17 FY 2017 Q4-17 FY 2017
Total revenue, net of interest expense $ 20.4 $ 87.4 $(0.9) $ 21.4 $ 88.3
Net income 2.4 18.2 (2.9) 5.3 21.1
Diluted earnings per common share $0.20 $1.56 $(0.27) $0.47 $1.83
Return on average assets 0.41% 0.80% 0.90% 0.93%
Return on average common shareholders' equity 3.3 6.7 7.8 7.9
Return on average tangible common shareholders' equity4 4.6 9.4 10.9 11.0
Efficiency ratio 65 63 62 62
2
CFO Commentary
Consumer Banking
Three months ended
Financial Results1 ($ in millions) 12/31/2017 9/30/2017 12/31/2016
Total revenue (FTE)2 $8,954 $8,774 $8,111
Provision for credit losses 886 967 760
Noninterest expense 4,506 4,460 4,330
Pretax income 3,562 3,347 3,021
Income tax expense 1,365 1,260 1,101
Net income $2,197 $2,087 $1,920
1 Comparisons are to the year-ago quarter unless noted.
2 Revenue, net of interest expense.
Three months ended
Business Highlights1,2 ($ in billions) 12/31/2017 9/30/2017 12/31/2016
Average deposits $665.5 $659.0 $618.0
Average loans and leases 275.7 268.8 253.6
Brokerage assets (EOP) 177.0 167.3 144.7
Mobile banking active users
(MM)
24.2 23.6 21.6
Number of financial centers 4,470 4,511 4,579
Efficiency ratio (FTE) 50% 51% 53%
Return on average allocated
capital
24 22 22
Total U.S. Consumer Credit Card2
Average credit card
outstanding balances
$93.5 $91.6 $89.5
Total credit/debit spend 143.4 137.0 134.3
Risk-adjusted margin 8.7% 8.6% 9.2%
1 Comparisons are to the year-ago quarter unless noted.
2 The U.S. consumer credit card portfolio includes Consumer Banking and GWIM.
"Client activity was strong across all of our businesses in 2017. We grew average deposits by $47 billion, or 4 percent, and we
increased average loan balances in our business segments by $45 billion, or 6 percent. Once again, we delivered positive operating
leverage by carefully managing expenses even as we continued to invest in new capabilities and technology that make it easier for
our customers to do business with us. Our balance sheet remains strong and we believe we are well positioned for growth."
— Paul M. Donofrio, Chief Financial Officer
• Net income increased $277 million, or 14%, to $2.2
billion, driven by solid operating leverage as revenue
growth outpaced expense growth; pretax, pre-
provision net revenue increased 18% to $4.4 billion(C)
• Revenue increased $843 million, or 10%, to $9.0
billion
– NII increased $888 million, or 16%, driven by
strong deposit and loan growth
– Noninterest income decreased $45 million, or 2%,
reflecting lower mortgage banking income, partially
offset by higher card income and service charges
• Provision for credit losses increased $126 million,
primarily driven by credit card seasoning and loan
growth. Net charge-offs increased $107 million to
$839 million; net charge-off ratio was relatively
stable at 1.21%
• Noninterest expense rose $176 million, or 4%, driven
by the shared success discretionary year-end bonus
and investments in digital capabilities and business
growth
• Average deposits grew $47.6 billion, or 8%; average
loans grew $22.1 billion, or 9%
• Merrill Edge brokerage assets grew $32.3 billion, or
22%, to $177 billion, driven by strong client flows
and market performance
• Combined credit/debit card spending up 7%
• 4,470 financial centers, including 30 new openings
and 289 renovations during the past 12 months
• Digital usage continued to grow; digital sales grew to
24% of all Consumer Banking sales
– Mobile channel usage up 34% to 1.3 billion
interactions
– 23.1 million person-to-person payments through
Zelle, up more than double from Q4-16
– 24.2 million mobile banking active users, up 12%
• Efficiency ratio improved to 50% from 53%, despite
continued investment in primary sales professionals
and financial center builds/renovations
3
Global Wealth and Investment
Management
Three months ended
Financial Results1 ($ in millions) 12/31/2017 9/30/2017 12/31/2016
Total revenue (FTE)2 $4,683 $4,620 $4,377
Provision for credit losses 6 16 22
Noninterest expense 3,472 3,371 3,359
Pretax income 1,205 1,233 996
Income tax expense 463 464 362
Net income $742 $769 $634
1 Comparisons are to the year-ago quarter unless noted.
2 Revenue, net of interest expense.
Three months ended
Business Highlights1 ($ in billions) 12/31/2017 9/30/2017 12/31/2016
Average deposits $240.1 $239.6 $256.6
Average loans and leases 157.1 154.3 146.2
Total client balances 2,751.9 2,676.2 2,508.6
AUM flows 18.2 20.7 18.9
Pretax margin 26% 27% 23%
Return on average allocated
capital
21 22 19
1 Comparisons are to the year-ago quarter unless noted.
2 Includes financial advisors in Consumer Banking of 2,402 and 2,200 in Q4-17 and Q4-16.
• Net income increased $108 million, or 17%, to $742
million as solid revenue growth more than offset
increased revenue-related expenses
• Revenue rose $306 million, or 7%, to $4.7 billion
– NII grew $71 million, or 5%, driven by higher short-
term interest rates and loan balances
– Noninterest income increased $235 million, or 8%,
as higher asset management fees more than offset
lower transactional revenue
• Noninterest expense increased $113 million, or 3%,
primarily driven by higher revenue-related incentive
costs
• Total client balances increased $243 billion, or 10%,
to $2.75 trillion, driven by higher market valuations
and positive AUM flows
• Average deposit balances declined $16.5 billion, or
6%, due primarily to clients shifting balances into
investments
• Average loans and leases grew $10.9 billion, or 7%,
driven by mortgage and structured lending; 31st
consecutive quarter of average loan growth
• Strong AUM flows of $18.2 billion in Q4-17,
reflecting solid client activity, as well as a shift from
brokerage to AUM
• Pretax margin increased to 26% from 23%
• Number of wealth advisors2 increased 3% to 19,238
4
Global Banking
Three months ended
Financial Results1 ($ in millions) 12/31/2017 9/30/2017 12/31/2016
Total revenue (FTE)2,3 $5,018 $4,987 $4,549
Provision for credit losses 132 48 13
Noninterest expense 2,160 2,119 2,036
Pretax income 2,726 2,820 2,500
Income tax expense 1,046 1,062 912
Net income $1,680 $1,758 $1,588
1 Comparisons are to the year-ago quarter unless noted.
2 Global Banking and Global Markets share in certain deal economics from investment banking
and loan origination activities.
3 Revenue, net of interest expense.
Three months ended
Business Highlights1,2 ($ in billions) 12/31/2017 9/30/2017 12/31/2016
Average deposits $329.8 $315.7 $315.4
Average loans and leases 350.3 346.1 337.8
Total Corp. IB fees (excl. self-
led)2
1.4 1.5 1.2
Global Banking IB fees2 0.8 0.8 0.7
Business Lending revenue 2.3 2.3 2.1
Global Transaction Services
revenue
1.9 1.8 1.7
Efficiency ratio (FTE) 43% 43% 45%
Return on average allocated
capital
17 17 17
1 Comparisons are to the year-ago quarter unless noted.
2 Global Banking and Global Markets share in certain deal economics from investment banking
and loan origination activities.
• Net income increased $92 million, or 6%, to $1.7
billion, as higher revenue more than offset increased
business investments
• Revenue increased $469 million, or 10%, to $5.0
billion
– NII increased 12%, reflecting the benefits of
higher short-term interest rates, as well as deposit
and loan growth
– Noninterest income increased $168 million, or 8%,
primarily due to higher investment banking fees
• Provision for credit losses increased $119 million to
$132 million, driven by Global Banking's portion of a
single-name non-U.S. commercial charge-off,
partially offset by reductions in energy exposures and
continued portfolio improvement
• Noninterest expense increased $124 million, or 6%,
primarily due to higher personnel expenses and
continued technology investments
• Average deposits increased $14.4 billion, or 5%, to a
record $330 billion
• Average loans and leases grew $12.4 billion, or 4%,
to a record $350 billion
• Total firmwide investment banking fees increased
16% to $1.4 billion (excluding self-led deals)
• Ranked No. 3 globally in total investment banking
fees in 2017(D)
• Highest annual advisory fees since the Merrill Lynch
merger
• Efficiency ratio improved to 43% from 45%
5
Global Markets
Three months ended
Financial Results1 ($ in millions) 12/31/2017 9/30/2017 12/31/2016
Total revenue (FTE)2,3 $3,395 $3,901 $3,473
Net DVA4 (118) (21) (101)
Total revenue
(excl. net DVA) (FTE)2,3,4
3,513 3,922 3,574
Provision for credit losses 162 (6) 8
Noninterest expense 2,613 2,711 2,482
Pretax income 620 1,196 983
Income tax expense 210 440 325
Net income $410 $756 $658
Net income (excl. net
DVA)4
$483 $769 $721
1 Comparisons are to the year-ago quarter unless noted.
2 Global Banking and Global Markets share in certain deal economics from investment banking
and loan origination activities.
3 Revenue, net of interest expense.
4 Revenue and net income, excluding net DVA, are non-GAAP financial measures. See endnote E
for more information.
Three months ended
Business Highlights1,2 ($ in billions) 12/31/2017 9/30/2017 12/31/2016
Average total assets $659.4 $642.4 $595.3
Average trading-related
assets
449.7 442.3 417.2
Average loans and leases 73.6 72.3 70.6
Sales and trading revenue 2.5 3.1 2.8
Sales and trading revenue
(excl. net DVA)(E)
2.7 3.2 2.9
Global Markets IB fees2 0.6 0.6 0.6
Efficiency ratio (FTE) 77% 69% 71%
Return on average allocated
capital
5 9 7
1 Comparisons are to the year-ago quarter unless noted.
2 Global Banking and Global Markets share in certain deal economics from investment banking
and loan origination activities.
• Net income decreased $248 million, or 38%, to $410
million
– Excluding net DVA4, net income declined $238
million, or 33%, to $483 million
• Revenue down $78 million, or 2%, to $3.4 billion,
driven by lower sales and trading revenue, partially
offset by a gain on the sale of a non-core asset
– Excluding net DVA4, revenue decreased $61
million, or 2%, to $3.5 billion
• Noninterest expense increased $131 million, or 5%,
to $2.6 billion, as lower revenue-related incentive
costs were offset by continued investments in
technology
• The provision for credit losses increased $154 million
to $162 million, reflecting Global Markets' portion of
a single-name non-U.S. commercial charge-off
• Sales and trading revenue decreased $272 million, or
10%, to $2.5 billion
• Excluding net DVA, sales and trading revenue declined
9% to $2.7 billion(E)
– Fixed Income, Currencies and Commodities (FICC)
decreased 13%, driven by lower volatility and client
activity across macro products, particularly rates
products
– Equities was flat, reflecting growth in client
financing activities, offset by a decline in cash and
derivatives trading, due to low levels of market
volatility
• 2017 full-year sales and trading revenue decreased
5% from 2016 to $12.8 billion. Excluding net DVA,
2017 full-year sales and trading revenue decreased
$423 million, or 3%, from 2016 to $13.2 billion(E)
6
All Other
Three months ended
Financial Results1 ($ in millions) 12/31/2017 9/30/2017 12/31/2016
Total revenue (FTE)2 $(1,363) $(203) $(286)
Provision for credit losses (185) (191) (29)
Noninterest expense 523 733 1,206
Pretax loss (1,701) (745) (1,463)
Income tax expense (benefit) 963 (799) (1,198)
Net income (loss) $(2,664) $54 $(265)
1 Comparisons are to the year-ago quarter unless noted.
2 Revenue, net of interest expense.
Note: All Other consists of asset 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 both core and non-core MSRs and the
related economic hedge results and ineffectiveness, liquidating businesses, residual expense
allocations and other. ALM activities encompass certain residential mortgages, debt securities,
interest rate and foreign currency risk management activities, the impact of certain allocation
methodologies and accounting 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 Global Principal Investments, which is comprised of a portfolio of equity, real
estate and other alternative investments. During the second quarter of 2017, we sold our non-
U.S. consumer credit card business.
• Net loss of $2.7 billion, compared to a net loss of
$265 million, primarily driven by the impact from the
Tax Act
– $946 million pretax valuation adjustment on
renewable energy investments, which was offset
by the tax benefit from repricing the related
deferred tax liability
– $1.9 billion income tax expense related primarily
to the repricing of deferred tax assets and
deferred tax liabilities
• Revenue declined $1.1 billion, driven by the impact
of the Tax Act and lower mortgage banking income
• The provision for credit losses improved $156 million
to a benefit of $185 million, primarily driven by
continued runoff of the non-core portfolio and the
sale of the non-U.S. consumer credit card business in
Q2-17
• Noninterest expense decreased $683 million, due to
lower mortgage servicing costs, lower operational
costs from the sale of the non-U.S. consumer card
business, and lower litigation expense
• Q4-17 results included a $379 million tax benefit
from the restructuring of certain subsidiaries
7
Credit Quality
Three months ended
Highlights1 ($ in millions) 12/31/2017 9/30/2017 12/31/2016
Provision for credit losses $1,001 $834 $774
Net charge-offs2 1,237 900 880
Net charge-off ratio3 0.53% 0.39% 0.39%
At period-end
Nonperforming loans, leases
and foreclosed properties
$6,758 $6,869 $8,084
Nonperforming loans, leases
and foreclosed properties
ratio4
0.73% 0.75% 0.89%
Allowance for loan and lease
losses5
$10,393 $10,693 $11,480
Allowance for loan and lease
losses ratio5
1.12% 1.16% 1.26%
1 Comparisons are to the year-ago quarter unless noted.
2 Includes net charge-offs of $41 million in Q4-16 for non-U.S. credit card loans. During the
second quarter of 2017, we sold our non-U.S. consumer credit card business.
3 Net charge-off ratio is calculated as annualized net charge-offs divided by average
outstanding loans and leases during the period.
4 Nonperforming loans, leases and foreclosed properties ratio is calculated as nonperforming
loans, leases and foreclosed properties divided by outstanding loans, leases and foreclosed
properties at the end of the period.
5 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. Excluding non-U.S. consumer
credit card allowance of $243 million and loans of $9.2 billion, the allowance for loan and
lease losses in Q4-16 was $11.2 billion and the allowance ratio was 1.25%.
Note: Ratios do not include loans accounted for under the fair value option.
• Overall credit quality remained strong
• Net charge-offs increased $357 million to $1.2
billion, primarily driven by a single-name non-U.S.
commercial charge-off totaling $292 million
– The net charge-off ratio increased to 0.53% from
0.39%
– Excluding the single-name charge-off, the net
charge-off ratio was fairly consistent with the prior
period
• The provision for credit losses increased $227 million
to $1.0 billion, driven primarily by the single-name
charge-off mentioned above
• Nonperforming assets declined $1.3 billion to $6.8
billion, driven primarily by loan sales and credit quality
improvement in the energy sector
Reserve Release
• The net reserve release increased to $236 million,
from $106 million in the year-ago quarter. The
reserve release was driven by continued
improvements in consumer real estate and energy
exposures, partially offset by seasoning and loan
growth in the U.S. Card portfolio
8
Balance Sheet, Liquidity and Capital Highlights ($ in billions except per share data, end of period, unless otherwise noted)
Three months ended
12/31/2017 9/30/2017 12/31/2016
Total assets $2,281.2 $2,284.2 $2,188.1
Total loans and leases 936.7 927.1 906.7
Total loans and leases in business segments (excluding All Other) 867.3 854.3 819.2
Total deposits 1,309.5 1,284.4 1,260.9
Average Balance Sheet
Average total assets $2,301.7 $2,271.1 $2,208.4
Average loans and leases1 927.8 918.1 908.4
Average deposits 1,293.6 1,271.7 1,250.9
Funding and Liquidity
Long-term debt $227.4 $228.7 $216.8
Global Liquidity Sources, average(F) 522 517 515
Time to Required Funding (months)(F) 49 52 35
Liquidity Coverage Ratio(F) 125% 126% n/a
Equity
Common shareholders’ equity $244.8 $249.6 $241.0
Common equity ratio 10.7% 10.9% 11.0%
Tangible common shareholders’ equity2 $174.5 $179.7 $169.8
Tangible common equity ratio2 7.9% 8.1% 8.0%
Per Share Data3
Common shares outstanding (in billions) 10.29 10.46 10.05
Book value per common share $23.80 $23.87 $23.97
Tangible book value per common share2 16.96 17.18 16.89
Regulatory Capital(G)
Basel 3 Transition (as reported)
Common equity tier 1 (CET1) capital $171.1 $176.1 $168.9
Risk-weighted assets 1,450 1,482 1,530
CET1 ratio 11.8% 11.9% 11.0%
Basel 3 Fully Phased-in(G)
CET1 capital $168.5 $173.6 $162.7
Standardized approach
Risk-weighted assets $1,442 $1,420 $1,417
CET1 ratio 11.7% 12.2% 11.5%
Advanced approaches
Risk-weighted assets $1,460 $1,460 $1,512
CET1 ratio 11.5% 11.9% 10.8%
Supplementary leverage(H)
Bank holding company supplementary leverage ratio (SLR) 6.9% 7.1% 6.9%
1 Includes $9.1 billion of non-U.S. consumer credit card loans in Q4-16. During the second quarter of 2017, we sold our non-U.S. consumer credit card business.
2 Represents a non-GAAP financial measure. For reconciliation, see pages 17-18 of this press release.
3 Berkshire Hathaway exercised its warrants to purchase 700 million shares of BAC common stock in Q3-17 using its Series T preferred shares, which resulted in an
increase to common shares outstanding.
n/a = not applicable
9
A The Corporation also measures 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. 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 on an FTE basis was $11.7 billion and $10.5 billion for the three months ended December 31,
2017 and 2016. For reconciliation to GAAP financial measures, refer to pages 17–18 of this press release. The FTE adjustment was $251 million,
$240 million, $237 million, $197 million and $234 million for Q4-17, Q3-17, Q2-17, Q1-17 and Q4-16 respectively. The FTE adjustment will decline
in 2018 as a result of a lower U.S. corporate tax rate; reductions to the FTE adjustment will be offset in tax expense.
B The financial information under Financial Highlights excluding the Tax Act impact, return on average tangible common shareholders' equity, and
tangible book value per share of common stock are non-GAAP financial measures. For reconciliation to GAAP financial measures of the financial
information included under Financial Highlights excluding the Tax Act impact, refer to the table on page 1, or below. For reconciliation of return on
average tangible common shareholder's equity and tangible book value per share of common stock to GAAP financial measures, see pages 17–18 of
this press release. Enactment of the Tax Act reduced Q4-17 net income by $2.9 billion and 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 page 1 of this press release.
C Pretax, pre-provision net revenue (PPNR) is a non-GAAP financial measure. PPNR is total revenue, net of interest expense (on an FTE basis), less
noninterest expense. Consumer Banking total revenue, net of interest expense (on an FTE basis) was $9.0 billion and $8.1 billion for the three months
ended December 31, 2017 and 2016. Noninterest expense was $4.5 billion and $4.3 billion for the three months ended December 31, 2017 and 2016.
D Rankings per Dealogic as of January 2, 2018 for the year ended December 31, 2017, excluding self-led deals.
E 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 losses were $118 million, $21 million and $101 million for the three months ended December 31, 2017,
September 30, 2017 and December 31, 2016, respectively. Net DVA losses were $428 million and $238 million for 2017 and 2016, respectively. FICC
net DVA losses were $112 million, $14 million and $98 million for the three months ended December 31, 2017, September 30, 2017 and December
31, 2016, respectively. FICC net DVA losses were $394 million and $238 million for 2017 and 2016, respectively. Equities net DVA losses were $6
million, $7 million and $3 million for the three months ended December 31, 2017, September 30, 2017 and December 31, 2016, respectively. Equities
net DVA losses were $34 million and $0 for 2017 and 2016, respectively.
F Liquidity Coverage Ratio at December 31, 2017 is preliminary. 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.
The Liquidity Coverage Ratio (LCR) represents the consolidated average amount of high-quality liquid assets as a percentage of the prescribed
average net cash outflows over a 30-calendar-day period of significant liquidity stress, under the U.S. LCR final rule. Time to required funding (TTF) is
a debt coverage measure and is expressed as the number of months unsecured holding company obligations of Bank of America Corporation can be
met using only the Global Liquidity Sources held at the BAC parent company and NB Holdings without the BAC parent company issuing debt or
sourcing additional liquidity. We define unsecured contractual obligations for purposes of this metric as maturities of senior or subordinated debt
issued or guaranteed by Bank of America Corporation.
G Regulatory capital ratios at December 31, 2017 are preliminary. Fully phased-in estimates are non-GAAP financial measures. For reconciliation to
GAAP financial measures, refer to page 13 of this press release. As an Advanced approaches institution, we are required to report regulatory capital
risk-weighted assets and ratios under both the Standardized and Advanced approaches. The approach that yields the lower ratio is to be used to
assess capital adequacy, which is the Advanced approaches for the periods presented. During the fourth quarter of 2017, we obtained approval from
U.S. banking regulators to use our internal models methodology (IMM) to calculate counterparty credit risk-weighted assets for derivatives under the
Advanced approaches. Fully phased-in estimates for prior periods assumed approval.
H The numerator of the SLR is quarter-end Basel 3 Tier 1 capital calculated on a fully phased-in basis. The denominator is total leverage exposure
based on the daily average of the sum of on-balance sheet exposures less permitted Tier 1 deductions, as well as the simple average of certain off-
balance sheet exposures, as of the end of each month in a quarter. Off-balance sheet exposures primarily include undrawn lending commitments,
letters of credit, potential future derivative exposures and repo-style transactions.
Effective October 1, 2017, the Corporation changed its accounting method for stock-based compensation awards granted to retirement-eligible employees from
expensing their value in full at the grant date (generally in the first quarter of each year) to expensing the estimated value ratably over the year prior to the grant date.
This change affects consolidated financial information and All Other; it does not affect the business segments. All prior periods presented herein have been restated
for this change in accounting method. Under the applicable bank regulatory rules, we are not required to and, accordingly, did not restate previously filed capital metrics
and ratios.
Endnotes
10
Contact Information and Investor Conference Call Invitation
Note: Chief Executive Officer Brian Moynihan and Chief Financial Officer Paul Donofrio will discuss fourth-
quarter 2017 financial results in a conference call at 8:30 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), and the conference ID is 79795. Please dial in 10 minutes prior to the start of the call.
Investors can access replays of the conference call by visiting the Investor Relations website or by calling
1.800.934.4850 (U.S.) or 1.402.220.1178 (international) from noon on January 17, through 11:59 p.m. ET on
January 24.
Investor Call
Information
Investors May Contact:
Lee McEntire, Bank of America, 1.980.388.6780
Jonathan Blum, Bank of America (Fixed Income),
1.212.449.3112
Reporters May Contact:
Jerry Dubrowski, Bank of America, 1.646.855.1195
jerome.f.dubrowski@bankofamerica.com
About 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 47 million consumer and
small business relationships with approximately 4,500 retail financial centers, approximately 16,000 ATMs, and award-winning digital
banking with approximately 35 million active users, including approximately 24 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 in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico 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.
11
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 2016 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,
including inquiries into our retail sales practices, and the possibility that amounts may be in excess of the Company’s recorded liability
and estimated range of possible loss for litigation 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;
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, currency exchange
rates, economic conditions, 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 potential impact of total loss-absorbing capacity requirements; potential adverse changes to our global
systemically important bank (G-SIB) surcharge; the potential impact of Federal Reserve actions on the Company's capital plans; the
possible impact of the Company's failure to remediate shortcomings identified by banking regulators in the Company's Resolution
Plan; 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; and other similar matters.
"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 http://newsroom.bankofamerica.com.
www.bankofamerica.com
Current period information is preliminary and based on company data available at the time of the presentation.
12
Bank of America Corporation and Subsidiaries
Selected Financial Data
(Dollars in millions, except per share data; shares in thousands)
Summary Income Statement
Year Ended
December 31
Fourth
Quarter
2017
Third
Quarter
2017
Fourth
Quarter
20162017 2016
Net interest income $ 44,667 $ 41,096 $ 11,462 $ 11,161 $ 10,292
Noninterest income 42,685 42,605 8,974 10,678 9,698
Total revenue, net of interest expense 87,352 83,701 20,436 21,839 19,990
Provision for credit losses 3,396 3,597 1,001 834 774
Noninterest expense 54,743 55,083 13,274 13,394 13,413
Income before income taxes 29,213 25,021 6,161 7,611 5,803
Income tax expense 10,981 7,199 3,796 2,187 1,268
Net income $ 18,232 $ 17,822 $ 2,365 $ 5,424 $ 4,535
Preferred stock dividends 1,614 1,682 286 465 361
Net income applicable to common shareholders $ 16,618 $ 16,140 $ 2,079 $ 4,959 $ 4,174
Average common shares issued and outstanding 10,195,646 10,284,147 10,470,672 10,197,891 10,170,031
Average diluted common shares issued and outstanding 10,778,428 11,046,806 10,621,809 10,746,666 10,992,258
Summary Average Balance Sheet
Total debt securities $ 435,005 $ 418,289 $ 441,624 $ 436,886 $ 430,719
Total loans and leases 918,731 900,433 927,790 918,129 908,396
Total earning assets 1,922,061 1,866,824 1,950,048 1,919,502 1,884,112
Total assets 2,268,633 2,190,218 2,301,687 2,271,104 2,208,391
Total deposits 1,269,796 1,222,561 1,293,572 1,271,711 1,250,948
Common shareholders’ equity 247,101 241,187 250,838 249,214 244,519
Total shareholders’ equity 271,289 265,843 273,162 273,238 269,739
Performance Ratios
Return on average assets 0.80% 0.81% 0.41% 0.95% 0.82%
Return on average common shareholders' equity 6.72 6.69 3.29 7.89 6.79
Return on average tangible common shareholders’ equity (1) 9.41 9.51 4.56 10.98 9.58
Per common share information
Earnings $ 1.63 $ 1.57 $ 0.20 $ 0.49 $ 0.41
Diluted earnings 1.56 1.49 0.20 0.46 0.39
Dividends paid 0.39 0.25 0.12 0.12 0.075
Book value 23.80 23.97 23.80 23.87 23.97
Tangible book value (1) 16.96 16.89 16.96 17.18 16.89
December 31
2017
September 30
2017
December 31
2016
Summary Period-End Balance Sheet
Total debt securities $ 440,130 $ 439,209 $ 430,731
Total loans and leases 936,749 927,117 906,683
Total earning assets 1,941,542 1,938,821 1,849,752
Total assets 2,281,234 2,284,174 2,188,067
Total deposits 1,309,545 1,284,417 1,260,934
Common shareholders’ equity 244,823 249,646 240,975
Total shareholders’ equity 267,146 271,969 266,195
Common shares issued and outstanding 10,287,302 10,457,474 10,052,626
Credit Quality
Year Ended
December 31
Fourth
Quarter
2017
Third
Quarter
2017
Fourth
Quarter
20162017 2016
Total net charge-offs (2) $ 3,979 $ 3,821 $ 1,237 $ 900 $ 880
Net charge-offs as a percentage of average loans and leases outstanding (3) 0.44% 0.43% 0.53% 0.39% 0.39%
Provision for credit losses $ 3,396 $ 3,597 $ 1,001 $ 834 $ 774
December 31
2017
September 30
2017
December 31
2016
Total nonperforming loans, leases and foreclosed properties (4) $ 6,758 $ 6,869 $ 8,084
Nonperforming loans, leases and foreclosed properties as a percentage of total loans, leases
and foreclosed properties (3) 0.73% 0.75% 0.89%
Allowance for loan and lease losses (5) $ 10,393 $ 10,693 $ 11,480
Allowance for loan and lease losses as a percentage of total loans and leases outstanding (3,5) 1.12% 1.16% 1.26%
For footnotes see page 13.
Current period information is preliminary and based on company data available at the time of the presentation.
13
Bank of America Corporation and Subsidiaries
Selected Financial Data (continued)
(Dollars in millions)
Basel 3 Transition
Capital Management December 31
2017
September 30
2017
December 31
2016
Risk-based capital metrics (6):
Common equity tier 1 capital $ 171,124 $ 176,094 $ 168,866
Common equity tier 1 capital ratio 11.8% 11.9% 11.0%
Tier 1 leverage ratio 8.6 9.0 8.9
Tangible equity ratio (7) 8.9 9.1 9.2
Tangible common equity ratio (7) 7.9 8.1 8.0
Regulatory Capital Reconciliations (6, 8) December 31
2017
September 30
2017
December 31
2016
Regulatory capital – Basel 3 transition to fully phased-in
Common equity tier 1 capital (transition) $ 171,124 $ 176,094 $ 168,866
Deferred tax assets arising from net operating loss and tax credit carryforwards phased in during
transition (1,296) (1,357) (3,318)
Accumulated OCI phased in during transition (879) (747) (1,899)
Intangibles phased in during transition (348) (316) (798)
Defined benefit pension fund assets phased in during transition (228) (187) (341)
DVA related to liabilities and derivatives phased in during transition 239 158 276
Other adjustments and deductions phased in during transition (75) (77) (57)
Common equity tier 1 capital (fully phased-in) $ 168,537 $ 173,568 $ 162,729
Risk-weighted assets – As reported to Basel 3 (fully phased-in)
Basel 3 Standardized approach risk-weighted assets as reported $ 1,433,310 $ 1,407,093 $ 1,399,477
Changes in risk-weighted assets from reported to fully phased-in 8,915 12,710 17,638
Basel 3 Standardized approach risk-weighted assets (fully phased-in) $ 1,442,225 $ 1,419,803 $ 1,417,115
Basel 3 Advanced approaches risk-weighted assets as reported $ 1,450,210 $ 1,481,919 $ 1,529,903
Changes in risk-weighted assets from reported to fully phased-in 9,450 (21,768) (18,113)
Basel 3 Advanced approaches risk-weighted assets (fully phased-in) (9) $ 1,459,660 $ 1,460,151 $ 1,511,790
Regulatory capital ratios
Basel 3 Standardized approach common equity tier 1 (transition) 11.9% 12.5% 12.1%
Basel 3 Advanced approaches common equity tier 1 (transition) 11.8 11.9 11.0
Basel 3 Standardized approach common equity tier 1 (fully phased-in) 11.7 12.2 11.5
Basel 3 Advanced approaches common equity tier 1 (fully phased-in) (9) 11.5 11.9 10.8
(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 pages 17-18.
(2) Includes non-U.S. credit card net charge-offs of $75 million for the year ended December 31, 2017, including $31 million and $44 million for the three months ended June 30, 2017 and March
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) For the fourth quarter of 2016, excluding the non-U.S. consumer credit card allowance of $243 million and loans and leases of $9.2 billion, the allowance for loan and lease losses is $11.2
billion and the allowance for loan and lease losses as a percentage of total loans and leases outstanding is 1.25%.
(6) As an Advanced approaches institution, we are required to report regulatory capital risk-weighted assets and ratios under both the Standardized and Advanced approaches. The approach that
yields the lower ratio is to be used to assess capital adequacy, which is the Advanced approaches for the periods presented.
(7) 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 pages 17-18.
(8) Fully phased-in estimates are non-GAAP financial measures. For reconciliations to GAAP financial measures, see above.
(9) During the fourth quarter of 2017, we obtained approval from U.S. banking regulators to use our internal models methodology (IMM) to calculate counterparty credit risk-weighted assets for
derivatives under the Advanced approaches. Fully phased-in estimates for prior periods assumed approval.
Effective October 1, 2017, the Corporation changed its accounting method for stock-based compensation awards granted to retirement-eligible employees from
expensing their value in full at the grant date (generally in the first quarter of each year) to expensing the estimated value ratably over the year prior to the grant date.
This change affects consolidated financial information and All Other; it does not affect the business segments. All prior periods presented herein have been restated
for this change in accounting method. Under the applicable bank regulatory rules, we are not required to and, accordingly, did not restate previously-filed capital metrics
and ratios.
Current period information is preliminary and based on company data available at the time of the presentation.
14
Bank of America Corporation and Subsidiaries
Quarterly Results by Business Segment and All Other
(Dollars in millions)
Fourth Quarter 2017
Consumer
Banking GWIM
Global
Banking
Global
Markets
All
Other
Total revenue, net of interest expense (FTE basis) (1) $ 8,954 $ 4,683 $ 5,018 $ 3,395 $ (1,363)
Provision for credit losses 886 6 132 162 (185)
Noninterest expense 4,506 3,472 2,160 2,613 523
Net income (loss) 2,197 742 1,680 410 (2,664)
Return on average allocated capital (2) 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 (2) 37,000 14,000 40,000 35,000 n/m
Period 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
Third Quarter 2017
Consumer
Banking GWIM
Global
Banking
Global
Markets
All
Other
Total revenue, net of interest expense (FTE basis) (1) $ 8,774 $ 4,620 $ 4,987 $ 3,901 $ (203)
Provision for credit losses 967 16 48 (6) (191)
Noninterest expense 4,460 3,371 2,119 2,711 733
Net income 2,087 769 1,758 756 54
Return on average allocated capital (2) 22% 22% 17% 9% n/m
Balance Sheet
Average
Total loans and leases $ 268,810 $ 154,333 $ 346,093 $ 72,347 $ 76,546
Total deposits 658,974 239,647 315,692 32,125 25,273
Allocated capital (2) 37,000 14,000 40,000 35,000 n/m
Period end
Total loans and leases $ 272,360 $ 155,871 $ 349,838 $ 76,225 $ 72,823
Total deposits 669,647 237,771 319,545 33,382 24,072
Fourth Quarter 2016
Consumer
Banking GWIM
Global
Banking
Global
Markets
All
Other
Total revenue, net of interest expense (FTE basis) (1) $ 8,111 $ 4,377 $ 4,549 $ 3,473 $ (286)
Provision for credit losses 760 22 13 8 (29)
Noninterest expense 4,330 3,359 2,036 2,482 1,206
Net income (loss) 1,920 634 1,588 658 (265)
Return on average allocated capital (2) 22% 19% 17% 7% n/m
Balance Sheet
Average
Total loans and leases $ 253,602 $ 146,180 $ 337,828 $ 70,615 $ 100,171
Total deposits 617,967 256,629 315,359 33,775 27,218
Allocated capital (2) 34,000 13,000 37,000 37,000 n/m
Period end
Total loans and leases (3) $ 258,991 $ 148,179 $ 339,271 $ 72,743 $ 96,713
Total deposits 632,786 262,530 307,630 34,927 23,061
(1) Fully taxable-equivalent (FTE) basis is a performance measure used by management in operating the business that management believes provides investors with 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.
(2) 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.
(3) Includes $9.2 billion of non-U.S. credit card loans, which were included in assets of business held for sale on the Consolidated Balance Sheet at December 31, 2016.
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.
15
Bank of America Corporation and Subsidiaries
Annual Results by Business Segment and All Other
(Dollars in millions)
Year Ended December 31, 2017
Consumer
Banking GWIM
Global
Banking
Global
Markets
All
Other
Total revenue, net of interest expense (FTE basis) (1) $ 34,521 $ 18,590 $ 19,999 $ 15,951 $ (784)
Provision for credit losses 3,525 56 212 164 (561)
Noninterest expense 17,787 13,564 8,596 10,731 4,065
Net income (loss) 8,207 3,088 6,953 3,293 (3,309)
Return on average allocated capital (2) 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 (2) 37,000 14,000 40,000 35,000 n/m
Period 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
Year Ended December 31, 2016
Consumer
Banking GWIM
Global
Banking
Global
Markets
All
Other
Total revenue, net of interest expense (FTE basis) (1) $ 31,731 $ 17,650 $ 18,445 $ 16,090 $ 685
Provision for credit losses 2,715 68 883 31 (100)
Noninterest expense 17,654 13,175 8,486 10,169 5,599
Net income (loss) 7,172 2,775 5,729 3,818 (1,672)
Return on average allocated capital (2) 21% 21% 15% 10% n/m
Balance Sheet
Average
Total loans and leases $ 245,808 $ 142,429 $ 333,820 $ 69,641 $ 108,735
Total deposits 599,651 256,425 304,741 34,250 27,494
Allocated capital (2) 34,000 13,000 37,000 37,000 n/m
Period end
Total loans and leases (3) $ 258,991 $ 148,179 $ 339,271 $ 72,743 $ 96,713
Total deposits 632,786 262,530 307,630 34,927 23,061
(1) Fully taxable-equivalent (FTE) basis is a performance measure used by management in operating the business that management believes provides investors with 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.
(2) 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.
(3) Includes $9.2 billion of non-U.S. credit card loans, which were included in assets of business held for sale on the Consolidated Balance Sheet at December 31, 2016.
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.
16
Bank of America Corporation and Subsidiaries
Supplemental Financial Data
(Dollars in millions)
Fully taxable-equivalent (FTE) basis data (1)
Year Ended
December 31 FourthQuarter
2017
Third
Quarter
2017
Fourth
Quarter
20162017 2016
Net interest income $ 45,592 $ 41,996 $ 11,713 $ 11,401 $ 10,526
Total revenue, net of interest expense 88,277 84,601 20,687 22,079 20,224
Net interest yield 2.37% 2.25% 2.39% 2.36% 2.23%
Efficiency ratio 62.01 65.11 64.16 60.67 66.33
Other Data
December 31
2017
September 30
2017
December 31
2016
Number of financial centers - U.S. 4,470 4,511 4,579
Number of branded ATMs - U.S. 16,039 15,973 15,928
Headcount 209,376 209,839 210,673
(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 with 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. See Reconciliations to GAAP Financial Measures on pages 17-18.
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.
17
The Corporation evaluates its business based on a fully taxable-equivalent basis, a non-GAAP financial measure. Total revenue, net of interest expense, on a fully taxable-equivalent basis includes
net interest income on a fully taxable-equivalent basis and noninterest income. The Corporation believes that this presentation allows for comparison of amounts from both taxable and tax-
exempt sources and is consistent with industry practices. The Corporation presents related ratios and analyses (i.e., efficiency ratios and net interest yield) on a fully taxable-equivalent basis. To
derive the fully taxable-equivalent basis, net interest income is adjusted to reflect tax-exempt income on an equivalent before-tax basis with a corresponding increase in income tax expense. For
purposes of this calculation, the Corporation uses the federal statutory tax rate of 35 percent. The efficiency ratio measures the costs expended to generate a dollar of revenue, and net interest
yield measures the basis points the Corporation earns over the cost of funds.
The Corporation also 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 and on page 18 for reconciliations of these non-GAAP financial measures to financial measures defined by GAAP for the years ended December 31, 2017 and 2016 and the
three months ended December 31, 2017, September 30, 2017 and December 31, 2016. 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.
Bank of America Corporation and Subsidiaries
Reconciliations to GAAP Financial Measures
(Dollars in millions)
Year Ended
December 31
Fourth
Quarter
2017
Third
Quarter
2017
Fourth
Quarter
20162017 2016
Reconciliation of net interest income to net interest income on a fully taxable-equivalent basis
Net interest income $ 44,667 $ 41,096 $ 11,462 $ 11,161 $ 10,292
Fully taxable-equivalent adjustment 925 900 251 240 234
Net interest income on a fully taxable-equivalent basis $ 45,592 $ 41,996 $ 11,713 $ 11,401 $ 10,526
Reconciliation of total revenue, net of interest expense to total revenue, net of interest expense on a fully taxable-equivalent basis
Total revenue, net of interest expense $ 87,352 $ 83,701 $ 20,436 $ 21,839 $ 19,990
Fully taxable-equivalent adjustment 925 900 251 240 234
Total revenue, net of interest expense on a fully taxable-equivalent basis $ 88,277 $ 84,601 $ 20,687 $ 22,079 $ 20,224
Reconciliation of income tax expense to income tax expense on a fully taxable-equivalent basis
Income tax expense $ 10,981 $ 7,199 $ 3,796 $ 2,187 $ 1,268
Fully taxable-equivalent adjustment 925 900 251 240 234
Income tax expense on a fully taxable-equivalent basis $ 11,906 $ 8,099 $ 4,047 $ 2,427 $ 1,502
Reconciliation of average common shareholders’ equity to average tangible common shareholders’ equity
Common shareholders’ equity 247,101 241,187 250,838 249,214 244,519
Goodwill (69,286) (69,750) (68,954) (68,969) (69,745)
Intangible assets (excluding mortgage servicing rights) (2,652) (3,382) (2,399) (2,549) (3,091)
Related deferred tax liabilities 1,463 1,644 1,344 1,465 1,580
Tangible common shareholders’ equity $ 176,626 $ 169,699 $ 180,829 $ 179,161 $ 173,263
Reconciliation of average shareholders’ equity to average tangible shareholders’ equity
Shareholders’ equity $ 271,289 $ 265,843 $ 273,162 $ 273,238 $ 269,739
Goodwill (69,286) (69,750) (68,954) (68,969) (69,745)
Intangible assets (excluding mortgage servicing rights) (2,652) (3,382) (2,399) (2,549) (3,091)
Related deferred tax liabilities 1,463 1,644 1,344 1,465 1,580
Tangible shareholders’ equity $ 200,814 $ 194,355 $ 203,153 $ 203,185 $ 198,483
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.
18
Bank of America Corporation and Subsidiaries
Reconciliations to GAAP Financial Measures (continued)
(Dollars in millions)
Year Ended
December 31
Fourth
Quarter
2017
Third
Quarter
2017
Fourth
Quarter
20162017 2016
Reconciliation of period-end common shareholders’ equity to period-end tangible common shareholders’ equity
Common shareholders’ equity $ 244,823 $ 240,975 $ 244,823 $ 249,646 $ 240,975
Goodwill (68,951) (69,744) (68,951) (68,968) (69,744)
Intangible assets (excluding mortgage servicing rights) (2,312) (2,989) (2,312) (2,459) (2,989)
Related deferred tax liabilities 943 1,545 943 1,435 1,545
Tangible common shareholders’ equity $ 174,503 $ 169,787 $ 174,503 $ 179,654 $ 169,787
Reconciliation of period-end shareholders’ equity to period-end tangible shareholders’ equity
Shareholders’ equity $ 267,146 $ 266,195 $ 267,146 $ 271,969 $ 266,195
Goodwill (68,951) (69,744) (68,951) (68,968) (69,744)
Intangible assets (excluding mortgage servicing rights) (2,312) (2,989) (2,312) (2,459) (2,989)
Related deferred tax liabilities 943 1,545 943 1,435 1,545
Tangible shareholders’ equity $ 196,826 $ 195,007 $ 196,826 $ 201,977 $ 195,007
Reconciliation of period-end assets to period-end tangible assets
Assets $ 2,281,234 $ 2,188,067 $ 2,281,234 $ 2,284,174 $ 2,188,067
Goodwill (68,951) (69,744) (68,951) (68,968) (69,744)
Intangible assets (excluding mortgage servicing rights) (2,312) (2,989) (2,312) (2,459) (2,989)
Related deferred tax liabilities 943 1,545 943 1,435 1,545
Tangible assets $ 2,210,914 $ 2,116,879 $ 2,210,914 $ 2,214,182 $ 2,116,879
Book value per share of common stock
Common shareholders’ equity $ 244,823 $ 240,975 $ 244,823 $ 249,646 $ 240,975
Ending common shares issued and outstanding 10,287,302 10,052,626 10,287,302 10,457,474 10,052,626
Book value per share of common stock $ 23.80 $ 23.97 $ 23.80 $ 23.87 $ 23.97
Tangible book value per share of common stock
Tangible common shareholders’ equity $ 174,503 $ 169,787 $ 174,503 $ 179,654 $ 169,787
Ending common shares issued and outstanding 10,287,302 10,052,626 10,287,302 10,457,474 10,052,626
Tangible book value per share of common stock $ 16.96 $ 16.89 $ 16.96 $ 17.18 $ 16.89
Certain prior period amounts have been reclassified to conform to current period presentation.
