UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ü] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 2017
or
[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from          to
Commission file number:
1-6523
Exact name of registrant as specified in its charter:
Bank of America Corporation
State or other jurisdiction of incorporation or organization:
Delaware
IRS Employer Identification No.:
56-0906609
Address of principal executive offices:
Bank of America Corporate Center
100 N. Tryon Street
Charlotte, North Carolina 28255
Registrant's telephone number, including area code:
(704) 386-5681
Former name, former address and former fiscal year, if changed since last report:
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ü No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ü No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act (check one).
Large accelerated filer ü
 
Accelerated filer
 
Non-accelerated filer
(do not check if a smaller
reporting company)
 
Smaller reporting company
Emerging growth company
Yes No ü
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Yes No
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).
Yes No ü
On October 27, 2017, there were 10,430,613,675 shares of Bank of America Corporation Common Stock outstanding.
 
 
 
 
 


Bank of America Corporation and Subsidiaries
September 30, 2017
Form 10-Q
INDEX
Part I. Financial Information
Item 1. Financial Statements
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

1 Bank of America



Part II. Other Information
 
 
 
 
 
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Bank of America Corporation (the "Corporation") 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 Corporation's current expectations, plans or forecasts of its future results, revenues, expenses, efficiency ratio, capital measures, 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 Corporation's control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements.
You should not place undue reliance on any forward-looking statement and should consider the following uncertainties and risks, as well as the risks and uncertainties more fully discussed under Item 1A. Risk Factors of our 2016 Annual Report on Form 10-K and in any of the Corporation’s subsequent Securities and Exchange Commission filings: 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 Corporation’s recorded liability and estimated range of possible loss for litigation exposures; the possibility that the Corporation 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 Corporation’s recorded liability and estimated range of possible loss for its representations and warranties exposures; the Corporation’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 Corporation’s exposures to such risks, including direct, indirect and operational; the impact of U.S. and global interest rates, currency exchange rates
 
and economic conditions; the impact on the Corporation'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 impact on the Corporation’s business, financial condition and results of operations from a protracted period of lower oil prices or ongoing volatility with respect to oil prices; the Corporation's ability to achieve its expense targets or net interest income expectations or other projections or expectations; adverse changes to the Corporation’s credit ratings from the major credit rating agencies; estimates of the fair value of certain of the Corporation’s assets and liabilities; uncertainty regarding the content, timing and impact of regulatory capital and liquidity requirements, including the approval of our internal models methodology for calculating counterparty credit risk for derivatives; the potential impact of total loss-absorbing capacity requirements; potential adverse changes to our global systemically important bank surcharge; the potential impact of Federal Reserve actions on the Corporation’s capital plans; the possible impact of the Corporation's failure to remediate shortcomings identified by banking regulators in the Corporation's Resolution Plan or failure to take actions identified therein; 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 assessments, the Volcker Rule, fiduciary standards and derivatives regulations; a failure in or breach of the Corporation’s operational or security systems or infrastructure, or those of third parties, including as a result of cyber attacks; the impact on the Corporation's business, financial condition and results of operations from the planned exit of the United Kingdom from the European Union; and other similar matters.
Forward-looking statements speak only as of the date they are made, and the Corporation undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.
Notes to the Consolidated Financial Statements referred to in the Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) are incorporated by reference into the MD&A. Certain prior-period amounts have been reclassified to conform to current-period presentation. Throughout the MD&A, the Corporation uses certain acronyms and abbreviations which are defined in the Glossary.



 
 
Bank of America     2

Executive Summary
Business Overview
The Corporation is a Delaware corporation, a bank holding company (BHC) and a financial holding company. When used in this report, “the Corporation” may refer to Bank of America Corporation individually, Bank of America Corporation and its subsidiaries, or certain of Bank of America Corporation’s subsidiaries or affiliates. Our principal executive offices are located in Charlotte, North Carolina. Through our banking and various nonbank subsidiaries throughout the U.S. and in international markets, we provide a diversified range of banking and nonbank financial services and products through four business segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking and Global Markets, with the remaining operations recorded in All Other. We operate our banking activities primarily under the Bank of America, National Association (Bank of America, N.A. or BANA) charter. At September 30, 2017, the Corporation had approximately $2.3 trillion in assets and a headcount of approximately 210,000 employees. Headcount remained relatively unchanged since December 31, 2016.
As of September 30, 2017, we operated in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and more than 35 countries. Our retail banking footprint covers approximately 83 percent of the U.S. population, and we serve approximately 47 million consumer and small business relationships with approximately 4,500 retail financial centers, approximately 16,000 ATMs, and leading digital banking platforms (www.bankofamerica.com) with approximately 34 million active users, including approximately 24 million mobile active users. We offer industry-leading support to approximately three million small business owners. Our wealth management businesses, with client balances of approximately $2.7 trillion, provide tailored solutions to meet client needs through a full set of investment management, brokerage, banking, trust and retirement products. We are a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world.
Third Quarter 2017 Economic and Business Environment
U.S. macroeconomic trends in the third quarter were characterized by a softening in economic growth and low inflation. GDP advanced at a slower pace than the previous quarter. At the same time, inflation remained subdued overall despite some energy-related pressure stemming from the hurricanes that impacted the southern U.S.
Despite sustained growth in the third quarter, the hurricanes added uncertainty to economic forecasts and distorted economic data releases. As a result of the hurricanes, there was an estimated 0.1 to 0.5 percent reduction from annualized GDP growth. Consumer spending slowed in August but recovered, especially vehicle sales, the following month. Business investment in equipment remained buoyant. While nonfarm payroll growth decelerated, the unemployment rate remained low. Despite tight labor market conditions, wage gains were modest.
The Federal Reserve, as expected, kept its target federal funds rate corridor at 1 to 1.25 percent, while announcing that balance
 
sheet normalization would begin in October. U.S. equities rose in the quarter, in part due to improvement in corporate earnings and despite the realization that domestic fiscal policy changes will likely take longer than previously expected. Despite a late rally, the U.S. dollar index fell primarily on the strength of the euro. Amid a weaker dollar, gold and oil prices both rose. The U.S. yield curve flattened modestly while interest rates increased.
Abroad, eurozone recovery remained robust in the third quarter, maintaining momentum following its best quarter in two years. The more robust economic momentum has failed to translate into stronger inflationary pressures, which remained depressed over the quarter. As a result, the European Central Bank remained cautious about the outlook for monetary policy and it has been carefully evaluating how to extend the ongoing quantitative easing program into next year.
Many survey indicators suggest that the subdued momentum from the first half of the year in the United Kingdom (U.K.) economy has extended into the third quarter. At the same time, inflation continued in an upward trend and reached the highest level since 2012, well above the Bank of England target, driven by the pass-through from the sterling depreciation that followed the Brexit referendum.
In Japan, business surveys suggest that moderate economic momentum remained intact in the third quarter. In China, the service sector remained a key driver of economic growth. The yuan had a volatile third quarter, reaching a one-year high in September with Chinese foreign exchange reserves rising steadily over the quarter.
Recent Events
Capital Management
During the third quarter of 2017, we repurchased approximately $3.0 billion of common stock pursuant to the Board's 2017 repurchase authorization of $12.9 billion announced on June 28, 2017. For additional information, see Capital Management on page 28. On July 26, 2017, the Board declared a quarterly common stock dividend of $0.12 per share, payable on September 29, 2017 to shareholders of record as of September 1, 2017.
Series T Preferred Stock
In connection with an investment in the Corporation’s Series T 6% Non-cumulative preferred stock (Series T) in 2011, the Series T holders also received warrants to purchase 700 million shares of the Corporation’s common stock at an exercise price of $7.142857 per share. On August 24, 2017, the Series T holders exercised the warrants and acquired the 700 million shares of our common stock using the Series T preferred stock as consideration for the exercise price, which increased the number of common shares outstanding, but had no effect on diluted earnings per share as this conversion had been included in the Corporation’s diluted earnings per share calculation under the applicable accounting guidance. The carrying amount of the Series T was $2.9 billion and, upon conversion, was recorded as additional paid-in capital, increasing the Common equity tier 1 capital ratio by 20 basis points.

3 Bank of America



Selected Financial Data
Table 1 provides selected consolidated financial data for the three and nine months ended September 30, 2017 and 2016, and at September 30, 2017 and December 31, 2016.
 
 
 
 
 
 
 
 
 
Table 1
Selected Financial Data
 
 
 
 
 
 
 
 
 
Three Months Ended
September 30
 
Nine Months Ended
September 30
(Dollars in millions, except per share information)
2017
 
2016
 
2017
 
2016
Income statement
 

 
 

 
 
 
 
Revenue, net of interest expense
$
21,839

 
$
21,635

 
$
66,916

 
$
63,711

Net income
5,587

 
4,955

 
15,712

 
13,210

Diluted earnings per common share
0.48

 
0.41

 
1.35

 
1.10

Dividends paid per common share
0.12

 
0.075

 
0.27

 
0.175

Performance ratios
 

 
 

 
 
 
 
Return on average assets
0.98
%
 
0.90
%
 
0.93
%
 
0.81
%
Return on average common shareholders' equity
8.14

 
7.27

 
7.81

 
6.61

Return on average tangible common shareholders’ equity (1)
11.32

 
10.28

 
10.95

 
9.40

Efficiency ratio
60.16

 
62.31

 
62.34

 
65.59

 
 
 
 
 
 
 
 
 
 
 
 
 
September 30
2017
 
December 31
2016
Balance sheet
 

 
 

 
 

 
 

Total loans and leases
 
 
 
 
$
927,117

 
$
906,683

Total assets
 
 
 
 
2,283,896

 
2,187,702

Total deposits
 
 
 
 
1,284,417

 
1,260,934

Total common shareholders’ equity
 
 
 
 
250,136

 
241,620

Total shareholders’ equity
 
 
 
 
272,459

 
266,840

(1) 
Return on average tangible common shareholders' equity is a non-GAAP financial measure. For additional information and a corresponding reconciliation to accounting principles generally accepted in the United States of America (GAAP) financial measures, see Non-GAAP Reconciliations on page 67.
Financial Highlights
Net income was $5.6 billion and $15.7 billion, or $0.48 and $1.35 per diluted share for the three and nine months ended September 30, 2017 compared to $5.0 billion and $13.2 billion, or $0.41 and $1.10 per diluted share for the same periods in 2016. The results for the three- and nine-month periods compared to the same periods in 2016 were primarily driven by higher revenue, lower provision for credit losses and noninterest expense.
Total assets increased $96.2 billion from December 31, 2016 to $2.3 trillion at September 30, 2017 due to higher trading account assets primarily driven by additional inventory in fixed-income, currencies and commodities (FICC) to meet expected client demand, and increased client financing activities in equities, growth in cash and cash equivalents primarily due to an increase in deposits, as well as higher loans and leases and securities
 
borrowed or purchased under agreements to resell. These increases were partially offset by the impact of the sale of the non-U.S. consumer credit card business to a third party in the second quarter of 2017. Total liabilities increased $90.6 billion from December 31, 2016 to $2.0 trillion at September 30, 2017 primarily driven by higher deposits due to strong organic growth, an increase in trading account liabilities, higher securities loaned or sold under agreements to repurchase due to increased matched-book activity, as well as increases in long-term debt and accrued expenses and other liabilities. Shareholders' equity increased $5.6 billion from December 31, 2016 primarily due to net income, partially offset by returns of capital to shareholders of $12.0 billion through common stock repurchases and common and preferred stock dividends.


 
 
Bank of America     4

 
 
 
 
 
 
 
 
 
Table 2
Summary Income Statement
 
 
 
 
 
 
 
 
 
Three Months Ended September 30
 
Nine Months Ended September 30
(Dollars in millions)
2017
 
2016
 
2017
 
2016
Net interest income
$
11,161

 
$
10,201

 
$
33,205

 
$
30,804

Noninterest income
10,678

 
11,434

 
33,711

 
32,907

Total revenue, net of interest expense
21,839

 
21,635

 
66,916

 
63,711

Provision for credit losses
834

 
850

 
2,395

 
2,823

Noninterest expense
13,139

 
13,481

 
41,713

 
41,790

Income before income taxes
7,866

 
7,304

 
22,808

 
19,098

Income tax expense
2,279

 
2,349

 
7,096

 
5,888

Net income
5,587

 
4,955

 
15,712

 
13,210

Preferred stock dividends
465

 
503

 
1,328

 
1,321

Net income applicable to common shareholders
$
5,122

 
$
4,452

 
$
14,384

 
$
11,889

 
 
 
 
 
 
 
 
 
Per common share information
 
 
 
 
 
 
 
Earnings
$
0.50

 
$
0.43

 
$
1.42

 
$
1.15

Diluted earnings
0.48

 
0.41

 
1.35

 
1.10

Net Interest Income
Net interest income increased $960 million to $11.2 billion, and $2.4 billion to $33.2 billion for the three and nine months ended September 30, 2017 compared to the same periods in 2016. The net interest yield increased 13 basis points (bps) to 2.31 percent, and 11 bps to 2.32 percent. These increases were primarily driven by the benefits from higher interest rates and loan and deposit growth, partially offset by the decline resulting from the sale of the non-U.S. consumer credit card business in the second quarter of 2017. For more information regarding interest rate risk management, see Interest Rate Risk Management for the Banking Book on page 63.
Noninterest Income
 
 
 
 
 
 
 
 
 
Table 3
Noninterest Income
 
 
 
 
 
 
 
 
 
Three Months Ended September 30
 
Nine Months Ended September 30
(Dollars in millions)
2017
 
2016
 
2017
 
2016
Card income
$
1,429

 
$
1,455

 
$
4,347

 
$
4,349

Service charges
1,968

 
1,952

 
5,863

 
5,660

Investment and brokerage services
3,303

 
3,160

 
9,882

 
9,543

Investment banking income
1,477

 
1,458

 
4,593

 
4,019

Trading account profits
1,837

 
2,141

 
6,124

 
5,821

Mortgage banking income
(20
)
 
589

 
332

 
1,334

Gains on sales of debt securities
125

 
51

 
278

 
490

Other income
559

 
628

 
2,292

 
1,691

Total noninterest income
$
10,678

 
$
11,434

 
$
33,711

 
$
32,907

Noninterest income decreased $756 million to $10.7 billion, and increased $804 million to $33.7 billion for the three and nine months ended September 30, 2017 compared to the same periods in 2016. The following highlights the more significant changes.
●
Service charges remained relatively unchanged for the three-month period and increased $203 million for the nine-month period with the increase primarily driven by the impact of pricing strategies and higher treasury services-related revenue.
●
Investment and brokerage services income increased $143 million and $339 million primarily driven by the impact of assets under management (AUM) flows and higher market valuations, partially offset by the impact of changing market dynamics on transactional revenue and AUM pricing.
 
●
Investment banking income remained relatively unchanged for the three-month period and increased $574 million for the nine-month period primarily due to higher debt and equity issuance fees and higher advisory fees.
●
Trading account profits decreased $304 million for the three-month period primarily due to weaker performance in fixed-income products, and increased $303 million for the nine-month period primarily due to increased client financing activity in equities.
●
Mortgage banking income decreased $609 million and $1.0 billion primarily driven by lower net servicing income due to lower mortgage servicing rights (MSR) results, net of the related hedge performance, and lower production income primarily due to lower volume.

5 Bank of America



●
Gains on sales of debt securities increased $74 million for the three-month period and decreased $212 million for the nine-month period primarily driven by sales volume.
●
Other income decreased $69 million for the three-month period due to lower fair value adjustments from economic hedging activities in the fair value option portfolio, partially offset by higher gains on asset sales, and increased $601 million for the nine-month period primarily due to the $793 million pre-tax gain recognized in connection with the sale of the non-U.S. consumer credit card business in the second quarter of 2017.
 
Provision for Credit Losses
The provision for credit losses decreased $16 million to $834 million, and $428 million to $2.4 billion for the three and nine months ended September 30, 2017 compared to the same periods in 2016 primarily due to credit quality improvements in the consumer real estate portfolio and reductions in energy exposures in the commercial portfolio, partially offset by portfolio seasoning and loan growth in the U.S. credit card portfolio. For more information on the provision for credit losses, see Provision for Credit Losses on page 57.
Noninterest Expense
 
 
 
 
 
 
 
 
 
Table 4
Noninterest Expense
 
 
 
 
 
 
 
 
 
Three Months Ended September 30
 
Nine Months Ended September 30
(Dollars in millions)
2017
 
2016
 
2017
 
2016
Personnel
$
7,483

 
$
7,704

 
$
24,353

 
$
24,278

Occupancy
999

 
1,005

 
3,000

 
3,069

Equipment
416

 
443

 
1,281

 
1,357

Marketing
461

 
410

 
1,235

 
1,243

Professional fees
476

 
536

 
1,417

 
1,433

Amortization of intangibles
151

 
181

 
473

 
554

Data processing
777

 
685

 
2,344

 
2,240

Telecommunications
170

 
189

 
538

 
551

Other general operating
2,206

 
2,328

 
7,072

 
7,065

Total noninterest expense
$
13,139

 
$
13,481

 
$
41,713

 
$
41,790

Noninterest expense declined $342 million to $13.1 billion for the three months ended September 30, 2017 compared to the same period in 2016. The decrease was primarily due to lower personnel and other general operating expense, including the reduction related to the sale of the non-U.S. credit card business.
 
Noninterest expense for the nine-month period remained relatively unchanged as a $295 million impairment charge related to certain data centers in the process of being sold and higher Federal Deposit Insurance Corporation (FDIC) expense were largely offset by lower litigation expense.
Income Tax Expense
 
 
 
 
 
 
 
 
 
Table 5
Income Tax Expense
 
 
 
 
 
 
 
 
 
Three Months Ended September 30
 
Nine Months Ended September 30
(Dollars in millions)
2017
 
2016
 
2017
 
2016
Income before income taxes
$
7,866

 
$
7,304

 
$
22,808

 
$
19,098

Income tax expense
2,279

 
2,349

 
7,096

 
5,888

Effective tax rate
29.0
%
 
32.2
%
 
31.1
%
 
30.8
%
The effective tax rates for both the three and nine months ended September 30, 2017 were driven by the impact of our recurring tax preference benefits. The nine-month 2017 effective tax rate also included tax expense of $690 million recognized in connection with the sale of the non-U.S. consumer credit card business in the second quarter of 2017.
 
The effective tax rates for the three and nine months ended September 30, 2016 were driven by our recurring tax preference benefits, and the third quarter of 2016 included a $350 million charge for the impact of the U.K. tax law changes enacted in September 2016.

 
 
Bank of America     6

 
 
 
 
 
 
 
 
 
 
 
Table 6
Selected Quarterly Financial Data
 
 
 
 
 
 
 
 
 
 
 
2017 Quarters
 
2016 Quarters
(Dollars in millions, except per share information)
Third
 
Second
 
First
 
Fourth
 
Third
Income statement
 

 
 

 
 

 
 

 
 

Net interest income
$
11,161

 
$
10,986

 
$
11,058

 
$
10,292

 
$
10,201

Noninterest income
10,678

 
11,843

 
11,190

 
9,698

 
11,434

Total revenue, net of interest expense
21,839

 
22,829

 
22,248

 
19,990

 
21,635

Provision for credit losses
834

 
726

 
835

 
774

 
850

Noninterest expense
13,139

 
13,726

 
14,848

 
13,161

 
13,481

Income before income taxes
7,866

 
8,377

 
6,565

 
6,055

 
7,304

Income tax expense
2,279

 
3,108

 
1,709

 
1,359

 
2,349

Net income
5,587

 
5,269

 
4,856

 
4,696

 
4,955

Net income applicable to common shareholders
5,122

 
4,908

 
4,354

 
4,335

 
4,452

Average common shares issued and outstanding
10,198

 
10,014

 
10,100

 
10,170

 
10,250

Average diluted common shares issued and outstanding
10,725

 
10,822

 
10,915

 
10,959

 
11,000

Performance ratios
 

 
 

 
 

 
 

 
 

Return on average assets
0.98
%
 
0.93
%
 
0.88
%
 
0.85
%
 
0.90
%
Four quarter trailing return on average assets (1)
0.91

 
0.89

 
0.88

 
0.82

 
0.76

Return on average common shareholders’ equity
8.14

 
8.00

 
7.27

 
7.04

 
7.27

Return on average tangible common shareholders’ equity (2)
11.32

 
11.23

 
10.28

 
9.92

 
10.28

Return on average shareholders' equity
8.10

 
7.79

 
7.35

 
6.91

 
7.33

Return on average tangible shareholders’ equity (2)
10.89

 
10.54

 
10.00

 
9.38

 
9.98

Total ending equity to total ending assets
11.93

 
12.02

 
11.93

 
12.20

 
12.30

Total average equity to total average assets
12.05

 
11.95

 
12.01

 
12.24

 
12.28

Dividend payout
24.78

 
15.25

 
17.37

 
17.68

 
17.32

Per common share data
 

 
 

 
 

 
 

 
 

Earnings
$
0.50

 
$
0.49

 
$
0.43

 
$
0.43

 
$
0.43

Diluted earnings
0.48

 
0.46

 
0.41

 
0.40

 
0.41

Dividends paid
0.12

 
0.075

 
0.075

 
0.075

 
0.075

Book value
23.92

 
24.88

 
24.36

 
24.04

 
24.19

Tangible book value (2)
17.23

 
17.78

 
17.23

 
16.95

 
17.14

Market price per share of common stock
 

 
 

 
 

 
 

 
 

Closing
$
25.34

 
$
24.26

 
$
23.59

 
$
22.10

 
$
15.65

High closing
25.45

 
24.32

 
25.50

 
23.16

 
16.19

Low closing
22.89

 
22.23

 
22.05

 
15.63

 
12.74

Market capitalization
$
264,992

 
$
239,643

 
$
235,291

 
$
222,163

 
$
158,438

(1) 
Calculated as total net income for four consecutive quarters divided by annualized average assets for four consecutive quarters.
(2) 
Tangible equity ratios and tangible book value per share of common stock are non-GAAP financial measures. For more information on these ratios and for corresponding reconciliations to GAAP financial measures, see Non-GAAP Reconciliations on page 67.
(3) 
For more information on the impact of the purchased credit-impaired (PCI) loan portfolio on asset quality, see Consumer Portfolio Credit Risk Management on page 39.
(4) 
Includes the allowance for loan and lease losses and the reserve for unfunded lending commitments.
(5) 
Balances and ratios do not include loans accounted for under the fair value option. For additional exclusions from nonperforming loans, leases and foreclosed properties, see Consumer Portfolio Credit Risk Management – Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity on page 48 and corresponding Table 33, and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 52 and corresponding Table 40.
(6) 
Asset quality metrics include $242 million and $243 million of non-U.S. credit card allowance for loan and lease losses and $9.5 billion and $9.2 billion of non-U.S. credit card loans in the first quarter of 2017 and in the fourth quarter of 2016, which were previously included in assets of business held for sale. During the second quarter of 2017, the Corporation sold its non-U.S. consumer credit card business.
(7) 
Primarily includes amounts allocated to the U.S. credit card and unsecured consumer lending portfolios in Consumer Banking, PCI loans and the non-U.S. credit card portfolio in All Other.
(8) 
Net charge-offs exclude $73 million, $55 million, $33 million, $70 million, and $83 million of write-offs in the PCI loan portfolio in the third, second and first quarters of 2017, and in the fourth and third quarters of 2016, respectively. For more information on PCI write-offs, see Consumer Portfolio Credit Risk Management – Purchased Credit-impaired Loan Portfolio on page 45.
(9) 
Includes net charge-offs of $31 million, $44 million and $41 million on non-U.S. credit card loans in the second and first quarters of 2017, and in the fourth quarter of 2016, which were previously included in assets of business held for sale on the Consolidated Balance Sheet at March 31, 2017 and December 31, 2016.
(10) 
Risk-based capital ratios are reported under Basel 3 Advanced - Transition. For additional information, see Capital Management on page 28.

7 Bank of America



 
 
 
 
 
 
 
 
 
 
 
Table 6
Selected Quarterly Financial Data (continued)
 
 
 
 
 
 
 
 
 
 
 
2017 Quarters
 
2016 Quarters
(Dollars in millions)
Third
 
Second
 
First
 
Fourth
 
Third
Average balance sheet
 

 
 

 
 

 
 

 
 

Total loans and leases
$
918,129

 
$
914,717

 
$
914,144

 
$
908,396

 
$
900,594

Total assets
2,270,872

 
2,269,153

 
2,231,420

 
2,208,039

 
2,189,490

Total deposits
1,271,711

 
1,256,838

 
1,256,632

 
1,250,948

 
1,227,186

Long-term debt
227,309

 
224,019

 
221,468

 
220,587

 
227,269

Common shareholders’ equity
249,624

 
246,003

 
242,883

 
245,139

 
243,679

Total shareholders’ equity
273,648

 
271,223

 
268,103

 
270,360

 
268,899

Asset quality (3)
 

 
 

 
 

 
 

 
 

Allowance for credit losses (4)
$
11,455

 
$
11,632

 
$
11,869

 
$
11,999

 
$
12,459

Nonperforming loans, leases and foreclosed properties (5)
6,869

 
7,127

 
7,637

 
8,084

 
8,737

Allowance for loan and lease losses as a percentage of total loans and leases outstanding (5, 6)
1.16
%
 
1.20
%
 
1.25
%
 
1.26
%
 
1.30
%
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases (5, 6)
163

 
160

 
156

 
149

 
140

Allowance for loan and lease losses as a percentage of total nonperforming loans and leases, excluding the PCI loan portfolio (5, 6)
158

 
154

 
150

 
144

 
135

Amounts included in allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases (7)
$
3,880

 
$
3,782

 
$
4,047

 
$
3,951

 
$
4,068

Allowance for loan and lease losses as a percentage of total nonperforming loans and leases, excluding the allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases (5, 7)
104
%
 
104
%
 
100
%
 
98
%
 
91
%
Net charge-offs (8, 9)
$
900

 
$
908

 
$
934

 
$
880

 
$
888

Annualized net charge-offs as a percentage of average loans and leases outstanding (5, 8)
0.39
%
 
0.40
%
 
0.42
%
 
0.39
%
 
0.40
%
Annualized net charge-offs as a percentage of average loans and leases outstanding, excluding the PCI loan portfolio (5)
0.40

 
0.41

 
0.42

 
0.39

 
0.40

Annualized net charge-offs and PCI write-offs as a percentage of average loans and leases outstanding (5)
0.42

 
0.43

 
0.43

 
0.42

 
0.43

Nonperforming loans and leases as a percentage of total loans and leases outstanding (5, 6)
0.71

 
0.75

 
0.80

 
0.85

 
0.93

Nonperforming loans, leases and foreclosed properties as a percentage of total loans, leases and foreclosed properties (5, 6)
0.75

 
0.78

 
0.84

 
0.89

 
0.97

Ratio of the allowance for loan and lease losses at period end to annualized net charge-offs (6, 8)
3.00

 
2.99

 
3.00

 
3.28

 
3.31

Ratio of the allowance for loan and lease losses at period end to annualized net charge-offs, excluding the PCI loan portfolio (6)
2.91

 
2.88

 
2.88

 
3.16

 
3.18

Ratio of the allowance for loan and lease losses at period end to annualized net charge-offs and PCI write-offs (6)
2.77

 
2.82

 
2.90

 
3.04

 
3.03

Capital ratios at period end (10)
 

 
 

 
 

 
 

 
 

Risk-based capital:
 

 
 

 
 

 
 

 
 

Common equity tier 1 capital
11.9
%
 
11.6
%
 
11.0
%
 
11.0
%
 
11.0
%
Tier 1 capital
13.3

 
13.2

 
12.5

 
12.4

 
12.4

Total capital
15.1

 
15.1

 
14.4

 
14.3

 
14.2

Tier 1 leverage
9.0

 
8.9

 
8.8

 
8.9

 
9.1

Tangible equity (2)
9.1

 
9.2

 
9.1

 
9.2

 
9.4

Tangible common equity (2)
8.1

 
8.0

 
7.9

 
8.1

 
8.2

For footnotes see page 7.

 
 
Bank of America     8

 
 
 
 
 
Table 7
Selected Year-to-Date Financial Data
 
 
 
 
 
Nine Months Ended September 30
(In millions, except per share information)
2017
 
2016
Income statement
 
 
 
Net interest income
$
33,205

 
$
30,804

Noninterest income
33,711

 
32,907

Total revenue, net of interest expense
66,916

 
63,711

Provision for credit losses
2,395

 
2,823

Noninterest expense
41,713

 
41,790

Income before income taxes
22,808

 
19,098

Income tax expense
7,096

 
5,888

Net income
15,712

 
13,210

Net income applicable to common shareholders
14,384

 
11,889

Average common shares issued and outstanding
10,103

 
10,313

Average diluted common shares issued and outstanding
10,820

 
11,047

Performance ratios
 

 
 

Return on average assets
0.93
%
 
0.81
%
Return on average common shareholders’ equity
7.81

 
6.61

Return on average tangible common shareholders’ equity (1)
10.95

 
9.40

Return on average shareholder's equity
7.75

 
6.66

Return on average tangible shareholders’ equity (1)
10.48

 
9.13

Total ending equity to total ending assets
11.93

 
12.30

Total average equity to total average assets
12.01

 
12.13

Dividend payout
19.28

 
15.19

Per common share data
 

 
 

Earnings
$
1.42

 
$
1.15

Diluted earnings
1.35

 
1.10

Dividends paid
0.27

 
0.175

Book value
23.92

 
24.19

Tangible book value (1)
17.23

 
17.14

Market price per share of common stock
 

 
 

Closing
$
25.34

 
$
15.65

High closing
25.50

 
16.43

Low closing
22.05

 
11.16

Market capitalization
$
264,992

 
$
158,438

(1) 
Tangible equity ratios and tangible book value per share of common stock are non-GAAP financial measures. For more information on these ratios and for corresponding reconciliations to GAAP financial measures, see Non-GAAP Reconciliations on page 67.
(2) 
For more information on the impact of the PCI loan portfolio on asset quality, see Consumer Portfolio Credit Risk Management on page 39.
(3) 
Includes the allowance for loan and lease losses and the reserve for unfunded lending commitments.
(4) 
Balances and ratios do not include loans accounted for under the fair value option. For additional exclusions from nonperforming loans, leases and foreclosed properties, see Consumer Portfolio Credit Risk Management – Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity on page 48 and corresponding Table 33, and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 52 and corresponding Table 40.
(5) 
Primarily includes amounts allocated to the U.S. credit card and unsecured consumer lending portfolios in Consumer Banking, PCI loans and the non-U.S. credit card portfolio in All Other. During the second quarter of 2017, the Corporation sold its non-U.S. consumer credit card business.
(6) 
Net charge-offs exclude $161 million and $270 million of write-offs in the PCI loan portfolio for the nine months ended September 30, 2017 and 2016. For more information on PCI write-offs, see Consumer Portfolio Credit Risk Management – Purchased Credit-impaired Loan Portfolio on page 45.

9 Bank of America



 
 
 
 
 
Table 7
Selected Year-to-Date Financial Data (continued)
 
 
Nine Months Ended September 30
(Dollars in millions)
2017
 
2016
Average balance sheet
 

 
 

Total loans and leases
$
915,678

 
$
897,760

Total assets
2,257,293

 
2,183,905

Total deposits
1,261,782

 
1,213,029

Long-term debt
224,287

 
231,313

Common shareholders’ equity
246,195

 
240,440

Total shareholders’ equity
271,012

 
264,907

Asset quality (2)
 

 
 

Allowance for credit losses (3)
$
11,455

 
$
12,459

Nonperforming loans, leases and foreclosed properties (4)
6,869

 
8,737

Allowance for loan and lease losses as a percentage of total loans and leases outstanding (4)
1.16
%
 
1.30
%
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases (4)
163

 
140

Allowance for loan and lease losses as a percentage of total nonperforming loans and leases, excluding the PCI loan portfolio (4)
158

 
135

Amounts included in allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases (5)
$
3,880

 
$
4,068

Allowance for loan and lease losses as a percentage of total nonperforming loans and leases, excluding the allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases (4, 5)
104
%
 
91
%
Net charge-offs (6)
$
2,742

 
$
2,941

Annualized net charge-offs as a percentage of average loans and leases outstanding (4, 6)
0.40
%
 
0.44
%
Annualized net charge-offs as a percentage of average loans and leases outstanding, excluding the PCI loan portfolio (4)
0.41

 
0.45

Annualized net charge-offs and PCI write-offs as a percentage of average loans and leases outstanding (4)
0.43

 
0.48

Nonperforming loans and leases as a percentage of total loans and leases outstanding (4)
0.71

 
0.93

Nonperforming loans, leases and foreclosed properties as a percentage of total loans, leases and foreclosed properties (4)
0.75

 
0.97

Ratio of the allowance for loan and lease losses at period end to annualized net charge-offs (6)
2.92

 
2.98

Ratio of the allowance for loan and lease losses at period end to annualized net charge-offs, excluding the PCI loan portfolio
2.83

 
2.86

Ratio of the allowance for loan and lease losses at period end to annualized net charge-offs and PCI write-offs
2.76

 
2.73

For footnotes see page 9.

 
 
Bank of America     10

Supplemental Financial Data
In this Form 10-Q, we present certain non-GAAP financial measures. Non-GAAP financial measures exclude certain items or otherwise include components that differ from the most directly comparable measures calculated in accordance with GAAP. Non-GAAP financial measures are provided as additional useful information to assess our financial condition, results of operations (including period-to-period operating performance) or compliance with prospective regulatory requirements. These non-GAAP financial measures are not intended as a substitute for GAAP financial measures and may not be defined or calculated the same way as non-GAAP financial measures used by other companies.
We view net interest income and related ratios and analyses on a fully taxable-equivalent (FTE) basis, which when presented on a consolidated basis, are non-GAAP financial measures. To derive the FTE 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, we use the federal statutory tax rate of 35 percent and a representative state tax rate. In addition, certain performance measures including the efficiency ratio and net interest yield utilize net interest income (and thus total revenue) on an FTE basis. The efficiency ratio measures the costs expended to generate a dollar of revenue, and net interest yield measures the bps we earn over the cost of funds. We believe that presentation of these items on an FTE basis allows for comparison of amounts from both taxable and tax-exempt sources and is consistent with industry practices.
We may present certain key performance indicators and ratios excluding certain items (e.g., debit valuation adjustment (DVA)) which result in non-GAAP financial measures. We believe that the presentation of measures that exclude these items are useful because they provide additional information to assess the underlying operational performance and trends of our businesses and to allow better comparison of period-to-period operating performance.
 
We also evaluate our business based on certain 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 certain acquired intangible assets (excluding MSRs), net of related deferred tax liabilities. These measures are used to evaluate our use of equity. In addition, profitability, relationship and investment models use both return on average tangible common shareholders’ equity and return on average tangible shareholders’ equity as key measures to support our overall growth goals. These ratios are as follows:
●
Return on average tangible common shareholders’ equity measures our earnings contribution as a percentage of adjusted common shareholders’ equity. The tangible common equity ratio represents adjusted ending common shareholders’ equity divided by total assets less goodwill and certain acquired intangible assets (excluding MSRs), net of related deferred tax liabilities.
●
Return on average tangible shareholders’ equity measures our 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 certain acquired intangible assets (excluding MSRs), net of related deferred tax liabilities.
●
Tangible book value per common share represents adjusted ending common shareholders’ equity divided by ending common shares outstanding.
We believe that 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.
The aforementioned supplemental data and performance measures are presented in Tables 6 and 7. Table 8 presents certain non-GAAP financial measures and performance measurements on an FTE basis.
 
 
 
 
 
 
 
 
 
Table 8
Supplemental Financial Data
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended September 30
 
Nine Months Ended September 30
(Dollars in millions)
2017
 
2016
 
2017
 
2016
Fully taxable-equivalent basis data
 

 
 

 
 
 
 
Net interest income
$
11,401

 
$
10,429

 
$
33,879

 
$
31,470

Total revenue, net of interest expense
22,079

 
21,863

 
67,590

 
64,377

Net interest yield
2.36
%
 
2.23
%
 
2.36
%
 
2.26
%
Efficiency ratio
59.51

 
61.66

 
61.71

 
64.91


11 Bank of America



 
 
 
 
 
 
 
 
 
 
 
 
 
Table 9
Quarterly Average Balances and Interest Rates – FTE Basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Third Quarter 2017
 
Third Quarter 2016
(Dollars in millions)
Average
Balance
 
Interest
Income/
Expense
 
Yield/
Rate
 
Average
Balance
 
Interest
Income/
Expense
 
Yield/
Rate
Earning assets
 

 
 

 
 

 
 

 
 

 
 

Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks
$
127,835

 
$
323

 
1.00
%
 
$
133,866

 
$
148

 
0.44
%
Time deposits placed and other short-term investments
12,503

 
68

 
2.17

 
9,336

 
34

 
1.45

Federal funds sold and securities borrowed or purchased under agreements to resell
223,585

 
659

 
1.17

 
214,254

 
267

 
0.50

Trading account assets
124,068

 
1,125

 
3.60

 
128,879

 
1,111

 
3.43

Debt securities (1)
436,886

 
2,670

 
2.44

 
423,182

 
2,169

 
2.07

Loans and leases (2):
 
 
 
 
 
 
 
 
 
 
 
Residential mortgage
199,240

 
1,724

 
3.46

 
188,234

 
1,612

 
3.42

Home equity
61,225

 
664

 
4.31

 
70,603

 
681

 
3.84

U.S. credit card
91,602

 
2,253

 
9.76

 
88,210

 
2,061

 
9.30

Non-U.S. credit card (1)
—

 
—

 
—

 
9,256

 
231

 
9.94

Direct/Indirect consumer (3)
93,510

 
678

 
2.88

 
92,870

 
585

 
2.51

Other consumer (4)
2,762

 
28

 
4.07

 
2,358

 
18

 
2.94

Total consumer
448,339

 
5,347

 
4.74

 
451,531

 
5,188

 
4.58

U.S. commercial
293,203

 
2,542

 
3.44

 
276,833

 
2,040

 
2.93

Commercial real estate (5)
59,044

 
552

 
3.71

 
57,606

 
452

 
3.12

Commercial lease financing
21,818

 
160

 
2.92

 
21,194

 
153

 
2.88

Non-U.S. commercial
95,725

 
676

 
2.80

 
93,430

 
599

 
2.55

Total commercial
469,790

 
3,930

 
3.32

 
449,063

 
3,244

 
2.87

Total loans and leases
918,129

 
9,277

 
4.02

 
900,594

 
8,432

 
3.73

Other earning assets
76,496

 
775

 
4.02

 
59,951

 
677

 
4.50

Total earning assets (6)
1,919,502

 
14,897

 
3.09

 
1,870,062

 
12,838

 
2.74

Cash and due from banks (1)
28,990

 
 
 
 
 
27,361

 
 
 
 
Other assets, less allowance for loan and lease losses (1)
322,380

 
 
 
 
 
292,067

 
 
 
 
Total assets
$
2,270,872

 
 
 
 
 
$
2,189,490

 
 
 
 
Interest-bearing liabilities
 

 
 

 
 

 
 

 
 

 
 

U.S. interest-bearing deposits:
 

 
 

 
 

 
 

 
 

 
 

Savings
$
54,328

 
$
1

 
0.01
%
 
$
49,885

 
$
2

 
0.01
%
NOW and money market deposit accounts
631,270

 
333

 
0.21

 
592,907

 
73

 
0.05

Consumer CDs and IRAs
44,239

 
31

 
0.27

 
48,695

 
33

 
0.27

Negotiable CDs, public funds and other deposits
38,119

 
101

 
1.05

 
32,023

 
43

 
0.54

Total U.S. interest-bearing deposits
767,956

 
466

 
0.24

 
723,510

 
151

 
0.08

Non-U.S. interest-bearing deposits:
 
 
 
 
 
 
 
 
 
 
 
Banks located in non-U.S. countries
2,259

 
5

 
0.97

 
4,294

 
9

 
0.87

Governments and official institutions
1,012

 
3

 
1.04

 
1,391

 
3

 
0.61

Time, savings and other
63,716

 
150

 
0.93

 
59,340

 
103

 
0.70

Total non-U.S. interest-bearing deposits
66,987

 
158

 
0.93

 
65,025

 
115

 
0.71

Total interest-bearing deposits
834,943

 
624

 
0.30

 
788,535

 
266

 
0.13

Federal funds purchased, securities loaned or sold under agreements to repurchase, short-term borrowings and other interest-bearing liabilities
230,230

 
944

 
1.63

 
207,634

 
569

 
1.09

Trading account liabilities
48,390

 
319

 
2.62

 
37,229

 
244

 
2.61

Long-term debt
227,309

 
1,609

 
2.82

 
227,269

 
1,330

 
2.33

Total interest-bearing liabilities (6)
1,340,872

 
3,496

 
1.04

 
1,260,667

 
2,409

 
0.76

Noninterest-bearing sources:
 
 
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
436,768

 
 
 
 
 
438,651

 
 
 
 
Other liabilities
219,584

 
 
 
 
 
221,273

 
 
 
 
Shareholders’ equity
273,648

 
 
 
 
 
268,899

 
 
 
 
Total liabilities and shareholders’ equity
$
2,270,872

 
 
 
 
 
$
2,189,490

 
 
 
 
Net interest spread
 
 
 
 
2.05
%
 
 
 
 
 
1.98
%
Impact of noninterest-bearing sources
 
 
 
 
0.31

 
 
 
 
 
0.25

Net interest income/yield on earning assets
 
 
$
11,401

 
2.36
%
 
 
 
$
10,429

 
2.23
%
(1) 
Includes assets of the Corporation's non-U.S. consumer credit card business, which was sold during the second quarter of 2017.
(2) 
Nonperforming loans are included in the respective average loan balances. Income on these nonperforming loans is generally recognized on a cost recovery basis. PCI loans were recorded at fair value upon acquisition and accrete interest income over the estimated life of the loan.
(3) 
Includes non-U.S. consumer loans of $2.9 billion and $3.2 billion in the third quarter of 2017 and 2016.
(4) 
Includes consumer finance loans of $406 million and $501 million; consumer leases of $2.2 billion and $1.7 billion, and consumer overdrafts of $193 million and $187 million in the third quarter of 2017 and 2016, respectively.
(5) 
Includes U.S. commercial real estate loans of $55.2 billion and $54.3 billion, and non-U.S. commercial real estate loans of $3.8 billion and $3.3 billion in the third quarter of 2017 and 2016, respectively.
(6) 
Interest income includes the impact of interest rate risk management contracts, which decreased interest income on the underlying assets by $7 million and $64 million in the third quarter of 2017 and 2016. Interest expense includes the impact of interest rate risk management contracts, which decreased interest expense on the underlying liabilities by $346 million and $560 million in the third quarter of 2017 and 2016. For additional information, see Interest Rate Risk Management for the Banking Book on page 63.

 
 
Bank of America     12

 
 
 
 
 
 
 
 
 
 
 
 
 
Table 10
Year-to-Date Average Balances and Interest Rates – FTE Basis
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30
 
 
2017
 
2016
(Dollars in millions)
Average
Balance
 
Interest
Income/
Expense
 
Yield/
Rate
 
Average
Balance
 
Interest
Income/
Expense
 
Yield/
Rate
Earning assets
 

 
 

 
 

 
 

 
 

 
 

Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks
$
127,000

 
$
786

 
0.83
%
 
$
135,910

 
$
460

 
0.45
%
Time deposits placed and other short-term investments
11,820

 
173

 
1.96

 
8,784

 
101

 
1.54

Federal funds sold and securities borrowed or purchased under agreements to resell
222,255

 
1,658

 
1.00

 
215,476

 
803

 
0.50

Trading account assets
128,547

 
3,435

 
3.57

 
130,785

 
3,432

 
3.50

Debt securities (1)
432,775

 
7,875

 
2.42

 
414,115

 
6,990

 
2.27

Loans and leases (2):
 

 
 

 
 

 
 

 
 

 
 

Residential mortgage
196,288

 
5,082

 
3.45

 
187,325

 
4,867

 
3.46

Home equity
63,339

 
1,967

 
4.15

 
73,015

 
2,095

 
3.83

U.S. credit card
90,238

 
6,492

 
9.62

 
87,362

 
6,065

 
9.27

Non-U.S. credit card (1)
5,253

 
358

 
9.12

 
9,687

 
734

 
10.12

Direct/Indirect consumer (3)
93,316

 
1,929

 
2.76

 
91,291

 
1,698

 
2.48

Other consumer (4)
2,648

 
81

 
4.07

 
2,240

 
50

 
2.99

Total consumer
451,082

 
15,909

 
4.71

 
450,920

 
15,509

 
4.59

U.S. commercial
290,632

 
7,167

 
3.30

 
274,669

 
5,982

 
2.91

Commercial real estate (5)
58,340

 
1,545

 
3.54

 
57,550

 
1,320

 
3.06

Commercial lease financing
21,862

 
547

 
3.33

 
21,049

 
482

 
3.05

Non-U.S. commercial
93,762

 
1,886

 
2.69

 
93,572

 
1,748

 
2.50

Total commercial
464,596

 
11,145

 
3.21

 
446,840

 
9,532

 
2.85

Total loans and leases
915,678

 
27,054

 
3.95

 
897,760

 
25,041

 
3.72

Other earning assets
74,554