1 Q3-21 Financial Highlights1 Q3-21 Business Segment Highlights1,2(A) Consumer Banking Global Wealth and Investment Management Global Banking Global Markets Bank of America Reports Q3-21 Net Income of $7.7 Billion, EPS of $0.85 See page 10 for endnotes. 1 Financial Highlights and Business Segment Highlights are compared to the year-ago quarter unless noted. Loan and deposit balances are shown on an average basis unless noted. 2 The Corporation reports the results of operations of its four business segments and All Other on a fully taxable-equivalent (FTE) basis. 3 Represents the percentage of consumer checking accounts that are estimated to be the customer’s primary account based on multiple relationship factors (e.g., linked to their direct deposit). 4 Source: Dealogic as of Oct. 1, 2021. 5 Source: Dealogic as of Oct. 1, 2021. Global Capital Raise includes Equity, Debt, Loans (Mortgage Backed Securities, Asset Backed Securitizations and self-funded deals are excluded). Shown on a proportional share basis. • Net income of $3.0 billion • Deposit balances exceeded $1.0 trillion for the first time, up 16% • Consumer investment assets up $87 billion, or 32%, to a record $353 billion, driven by market valuations and strong client flows of $21 billion since Q3-20 • Accelerated Client Activity – Record consumer checking accounts: 34.2 million; 93% primary3 – Combined credit and debit card spend up 21% to $201 billion; credit up 26% and debit up 17% – 3.2 million Consumer Investment accounts, up 9% • Net income rose 58% to $7.7 billion, or $0.85 per diluted share • Revenue, net of interest expense, increased 12% to $22.8 billion – Net interest income (NII)(B) up $1 billion, or 10%, to $11.1 billion, driven by strong deposit growth and related investment of liquidity, and Paycheck Protection Program (PPP) activities – Noninterest income up 14% to $11.7 billion, driven by record asset management fees, strong investment banking revenue and higher sales and trading revenues • Provision for credit losses improved by $2.0 billion to a benefit of $624 million, reflecting a reserve release of $1.1 billion driven primarily by asset quality improvements during the quarter(C) • Noninterest expense was relatively flat at $14.4 billion as higher revenue-related expenses were largely offset by lower litigation expense and lower COVID-related costs • Average loan and lease balances in business segments increased $14 billion QoQ to $903 billion; excluding PPP, loan balances grew $21 billion QoQ(D) • Average deposits up $247 billion, or 15%, to $1.9 trillion • Average Global Liquidity Sources rose $261 billion, or 30%, to record $1.1 trillion(E) • Common equity tier 1 (CET1) ratio 11.1% (Standardized); returned $11.7 billion to shareholders through common stock dividends and share repurchases(F) • Net income of $926 million • Sales and trading revenue up 12% to $3.6 billion, including net debit valuation adjustment (DVA) losses of $20 million, with Fixed Income Currencies and Commodities (FICC) revenue of $2.0 billion and Equities revenue of $1.6 billion • Excluding net DVA, sales and trading revenue up 9% to $3.6 billion; FICC down 5% to $2.0 billion;(G) Equities up 33% to $1.6 billion(G) • Accelerated Client Activity – Average assets increased $124 billion to $805 billion, driven by higher client balances in equities and loan growth From Chairman and CEO Brian Moynihan "We reported strong results as the economy continued to improve and our businesses regained the organic customer growth momentum we saw before the pandemic. Deposit growth was strong and loan balances increased for the second consecutive quarter, leading to an improvement in net interest income even as interest rates remained low. "Each day clients entrust us with more of their business, whether it's new checking and credit card accounts in Consumer; broader and deeper relationships in Wealth Management; increased commercial loan balances; or near- record investment banking activities. Our institutional clients also relied on us to help them manage risk through our market-leading sales and trading capabilities, where we had strong revenues this quarter. "For our shareholders, we returned nearly $12 billion in capital this quarter, while continuing to support clients and communities. The team has done a remarkable job, and I couldn't be prouder of how they stepped up to support our clients and deliver another quarter of outstanding results." • Record net income of $1.2 billion • Record client balances of $3.7 trillion, up $626 billion, or 20%, driven by higher market valuations and $91 billion in client flows since Q3-20 • Deposits up 16% to $339 billion • Pretax margin of 31% • Accelerated Client Activity – Record AUM balances of $1.6 trillion, up 23% – Average loan balances up 8% to $200 billion; 46th consecutive quarter of average loan and lease balance growth – Merrill Lynch Wealth Management added ~4,200 net new households; Private Bank added ~275 net new relationships • Net income of $2.5 billion • Total investment banking fees (excl. self-led) increased 23% to near- record levels of $2.2 billion – Record advisory fees of $654 million, up 65% • Deposits up 13% to $534 billion • Accelerated Client Activity – Debt underwriting fees rose 26%; 9 of the top 10 debt deals4 – Raised $221 billion in capital on behalf of clients in Q3-21, $728 billion YTD5
2 Bank of America Financial Highlights Three Months Ended ($ in billions, except per share data) 9/30/2021 6/30/2021 9/30/2020 Total revenue, net of interest expense $22.8 $21.5 $20.3 Provision for credit losses (0.6) (1.6) 1.4 Noninterest expense 14.4 15.0 14.4 Pretax income 9.0 8.0 4.5 Pretax, pre-provision income1(H) 8.3 6.4 5.9 Income tax expense 1.3 (1.2) (0.3) Net Income 7.7 9.2 4.9 Diluted earnings per share $0.85 $1.03 $0.51 1 Pretax, pre-provision income represents a non-GAAP financial measure. For more information, see page 19. From Chief Financial Officer Paul Donofrio: "We grew revenues faster than expenses, producing year-over-year operating leverage in every business segment and 12% for the company. Net interest income improved, despite a challenging rate environment, and our fee-based businesses continued to benefit from robust markets and the strong relationships we have built with our clients over many years. "Asset quality remained strong, with loss rates approaching 50-year lows, enabling the release of loan loss reserves again this quarter. Because of the way we run our business, we were able to increase the quarterly dividend by 17% and buy back nearly $10 billion in common stock. As we head into our second decade of driving responsible growth, we are well positioned to support our clients, serve our communities and deliver for our shareholders." CET-1 Ratio Well Capitalized 11.9% 11.5% 11.1% Q3-20 Q2-21 Q3-21 Avg. Global Liquidity Sources ($B) Strong Liquidity $859 $1,063 $1,120 Q3-20 Q2-21 Q3-21 Net Charge-off Ratio Low Loss Rates 0.40% 0.27% 0.20% Q3-20 Q2-21 Q3-21 Strength of Responsible Growth (F) (E) Regulatory minimum 9.5%
3 Consumer Banking1,2 Financial Results1 Three months ended ($ in millions) 9/30/2021 6/30/2021 9/30/2020 Total revenue2 $8,838 $8,186 $8,039 Provision for credit losses 247 (697) 479 Noninterest expense 4,558 4,859 4,842 Pretax income 4,033 4,024 2,718 Income tax expense 988 986 666 Net income $3,045 $3,038 $2,052 Business Highlights1,4(A) Three months ended ($ in billions) 9/30/2021 6/30/2021 9/30/2020 Average deposits $1,000.8 $979.1 $861.0 Average loans and leases 281.4 281.8 318.8 Consumer investment assets (EOP) 353.3 345.8 266.7 Active mobile banking users (MM) 32.5 31.8 30.6 Number of financial centers 4,215 4,296 4,309 Efficiency ratio 52 % 59 % 60 % Return on average allocated capital 31 32 21 Total Consumer Credit Card4 Average credit card outstanding balances $75.6 $73.4 $81.3 Total credit/debit spend 200.6 200.3 166.1 Risk-adjusted margin 10.7 % 9.8 % 9.7 % 1 Comparisons are to the year-ago quarter unless noted. 2 Revenue, net of interest expense. 3 Operating leverage is calculated as the year-over-year percentage change in revenue, net of interest expense, less the percentage change in noninterest expense. 4 The Consumer credit card portfolio includes Consumer Banking and GWIM. • Net income increased to $3.0 billion, as higher revenue and lower expenses combined to create 16% positive operating leverage3 • Revenue of $8.8 billion increased 10%, driven by improved NII and higher fee income • Provision for credit losses improved $232 million to $247 million, driven primarily by asset quality improvements – Net charge-off ratio improved to 0.69%, compared to 0.82% • Noninterest expense decreased 6% to $4.6 billion, driven by lower COVID-19 related costs Business Highlights1,4(A) • Average deposits grew $140 billion, or 16%, to $1 trillion; average loans and leases declined $37 billion, or 12%, to $281 billion, driven by lower first mortgage and card balances • Consumer investment assets grew $87 billion, or 32%, to $353 billion, driven by market performance and strong client flows – $21 billion of client flows since Q3-20 – 3.2 million client accounts, up 9% • Combined credit/debit card spend up $35 billion, or 21%; credit card up 26% and debit card up 17% • 7.8 million Consumer clients enrolled in Preferred Rewards, up 13%, with 99% annualized retention rate Digital Usage Continued to Grow1 • 40.9 million active digital banking users, up 4%, or 1.6 million • 1.4 million digital sales, up 27% • 2.6 billion digital logins • 15.1 million active Zelle® users, now including small businesses, sent and received 202 million transfers worth $60 billion, up 44% and 53% YoY, respectively • Clients booked ~853,000 digital appointments Continued Business Leadership • No. 1 in customer satisfaction for U.S. Online (a) Banking among National Banks by J.D. Power (b) • No. 1 in customer satisfaction for U.S. Mobile Banking Apps among National Banks by J.D. Power (b) • No. 1 in customer satisfaction for U.S. Retail Banking Advice by J.D. Power (c) • No. 1 in estimated U.S. Retail Deposits (d) • No. 1 Online Banking and Mobile Banking Functionality (e) • No. 1 in Prime Auto Credit Distribution of New Originations Among Peers (f) • No. 1 Mortgage and Home Equity Lending Digital Experience (g) • No. 1 Small Business Lender (h) See page 11 for Business Leadership sources.
4 Global Wealth and Investment Management1,2 Financial Results1 Three months ended ($ in millions) 9/30/2021 6/30/2021 9/30/2020 Total revenue2 $5,310 $5,065 $4,546 Provision for credit losses (58) (62) 24 Noninterest expense 3,745 3,813 3,533 Pretax income 1,623 1,314 989 Income tax expense 398 322 242 Net income $1,225 $992 $747 Business Highlights1(A) Three months ended ($ in billions) 9/30/2021 6/30/2021 9/30/2020 Average deposits $339.4 $333.5 $291.8 Average loans and leases 199.7 194.0 185.6 Total client balances (EOP) 3,692.8 3,652.8 3,066.6 AUM flows 14.8 11.7 1.4 Pretax margin 31 % 26 % 22 % Return on average allocated capital 30 24 20 1 Comparisons are to the year-ago quarter unless noted. 2 Revenue, net of interest expense. Continued Business Leadership • No. 1 in Barron’s Top 1,200 Financial Advisors and Top 100 Women Advisors (2021) • No. 1 in Forbes’ Top Next Generation Advisors and Best-in-State Wealth Advisors (2021) • No. 1 in personal trust assets under management(l) • Digital Wealth Impact Innovation Award for Digital Engagement(j) • Wealth Tech Award – Best Use of Technology (North America) and Best Use of Technology for client acquisition (North America)(k) • Wealth Manager award for emerging technology(l) • Best Technology for The Client Engagement Workstation and Redefining Wealth Planning(m) • Best Private Bank in North America(n) See page 11 for Business Leadership sources. • Net income increased $478 million, or 64%, to $1.2 billion, with revenue rising faster than expenses generating 11% positive operating leverage – Pretax margin of 31% • Record revenue of $5.3 billion, up 17%, driven by a 19% increase in asset management fees and the impact of strong loan and deposit growth • Noninterest expense increased 6% to $3.7 billion, primarily driven by higher revenue-related incentives Business Highlights1(A) • Total client balances up $626 billion, or 20%, to a record of $3.7 trillion, driven by higher market valuations and positive client flows – Average deposits increased $48 billion, or 16%, to $339 billion; average loans and leases grew $14 billion, or 8%, to $200 billion, driven by securities- based lending, custom lending and residential mortgage lending – Strong AUM flows of $15 billion in Q3-21 Merrill Lynch Wealth Management Highlights1 • Strong Client Growth and Advisor Engagement – Record client balances of $3.1 trillion up 21% – Record AUM balances of $1.2 trillion, up 24% – Added ~4,200 net new households in Q3-21 • Digital Usage Continued to Grow – 78% of Merrill Lynch households actively using online or mobile platforms – Continued growth of advisor/client digital communications; 337,000 households exchanged ~1.4 million secure messages – 227,000 forms signed digitally in Q3-21, 49% of eligible transactions – Record 74% of eligible checks deposited through automated channels • Strong Client Engagement – Record client balances of $584 billion, up 18% YoY – Record AUM balances of $341 billion, up 18% YoY – Added ~275 net new relationships in Q3-21 Bank of America Private Bank Highlights1 • Digital Usage Continued to Grow – Record 83% of clients digitally active across the enterprise – Record 75% of checks deposited through automated channels – Logins up 5%; once clients are digitally engaged they are using features more frequently: – Erica sessions up 349% – Zelle® transactions up 48% – Digital wallet transactions up 73%
5 Global Banking1,2 Financial Results1 Three months ended ($ in millions) 9/30/2021 6/30/2021 9/30/2020 Total revenue2,3 $5,244 $5,090 $4,517 Provision for credit losses (781) (831) 883 Noninterest expense 2,534 2,599 2,365 Pretax income 3,491 3,322 1,269 Income tax expense 942 897 343 Net income $2,549 $2,425 $926 Business Highlights1,2(A) Three months ended ($ in billions) 9/30/2021 6/30/2021 9/30/2020 Average deposits $534.2 $506.6 $471.3 Average loans and leases 324.7 325.1 373.1 Total Corp. IB fees (excl. self- led)2 2.2 2.1 1.8 Global Banking IB fees2 1.3 1.2 1.0 Business Lending revenue 1.9 1.9 1.8 Global Transaction Services revenue 1.9 1.7 1.6 Efficiency ratio 48 % 51 % 52 % Return on average allocated capital 24 23 9 1 Comparisons are to the year-ago quarter unless noted. 2 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities, and sales and trading activities. 3 Revenue, net of interest expense. • Net income increased $1.6 billion to $2.5 billion, driven by lower credit costs and higher revenue – 9% positive operating leverage • Revenue of $5.2 billion rose 16%, reflecting higher investment banking fees, higher leasing-related revenue, and strong deposit growth, which benefited NII • Provision for credit losses improved $1.7 billion to a benefit of $781 million – Current quarter reserve release primarily driven by asset quality improvements, whereas the reserve build in the year-ago quarter was driven by COVID-19 impacted industries, such as travel and entertainment(C) • Noninterest expense rose $169 million, or 7%, to $2.5 billion, largely driven by higher revenue-related costs and continued investments in the franchise Continued Business Leadership • Outstanding Financial Innovator – 2021 Global(o) • North America’s Best Bank for Small to Medium-sized Enterprises(p) • Best Global Bank for Cash Management and Payments & Collections(q) • Best Mobile Cash Management Software(q) • World’s Best Bank for Payments and Treasury and North America’s Best Bank for Transaction Services(p) • Best Transaction Bank in North America, Best Supply Chain Finance Bank(r) • 2020 Quality, Share and Excellence Awards for U.S. Large Corporate Banking and Cash Management(s) • Outstanding Global Leader in Social Bonds, Outstanding Leader in Social Bonds and Sustainable Loans for North America(o) • Relationships with 74% of the Global Fortune 500; 95% of the U.S. Fortune 1,000 (2021) See page 11 for Business Leadership sources. Digital Usage Continued to Grow1 • 74% digitally active clients across commercial, corporate, and business banking clients (CashPro & BA360 platforms) (as of August 2021) • CashPro App Active Users increased 69% and sign- ins increased 49% (rolling 12 months), surpassing 1 million sign-ins in the past year • CashPro App Payment Approvals value was $304 billion, with volumes increasing 80% (rolling 12 months) • Global Digital disbursements up 33% YTD YoY (as of August 2021), 85% of volume sent via Zelle (as of August 2021) Business Highlights1,2(A) • Average deposits increased $63 billion, or 13%, to $534 billion, reflecting client liquidity and valued relationships • Average loans and leases declined $48 billion, or 13%, to $325 billion, driven by paydowns • Excluding PPP, average loans and leases increased $3.2 billion, or 1%, from the prior quarter, driven by growth in Middle Market and Commercial Real Estate Banking(D) • Total investment banking fees rose 23% to near- record levels of $2.2 billion (excl. self-led)
6 Global Markets1,2,6 Financial Results1 Three months ended ($ in millions) 9/30/2021 6/30/2021 9/30/2020 Total revenue2,3 $4,519 $4,720 $4,283 Net DVA4 (20) (34) (116) Total revenue (excl. net DVA)2,3,4 $4,539 $4,754 $4,399 Provision for credit losses 16 22 21 Noninterest expense 3,252 3,471 3,102 Pretax income 1,251 1,227 1,160 Income tax expense 325 319 302 Net income $926 $908 $858 Net income (excl. net DVA)4 $941 $934 $946 Business Highlights1,2(A) Three months ended ($ in billions) 9/30/2021 6/30/2021 9/30/2020 Average total assets $804.9 $797.6 $681.0 Average trading-related assets 563.7 566.8 485.3 Average loans and leases 97.1 87.8 72.3 Sales and trading revenue2 3.6 3.6 3.2 Sales and trading revenue (excl. net DVA)2(G) 3.6 3.6 3.3 Global Markets IB fees2 0.8 1.0 0.7 Efficiency ratio 72 % 74 % 72 % Return on average allocated capital 10 10 9 1 Comparisons are to the year-ago quarter unless noted. 2 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities, and sales and trading activities. 3 Revenue, net of interest expense. 4 Revenue and net income, excluding net DVA, are non-GAAP financial measures. See endnote G on page 10 for more information. 5 VaR model uses a historical simulation approach based on three years of historical data and an expected shortfall methodology equivalent to a 99% confidence level. Average VaR was $78MM, $77MM and $109MM for Q3-21, Q2-21 and Q3-20, respectively. 6 The explanations for current period-over-period changes for Global Markets are the same for amounts including and excluding net DVA. • Net income increased $68 million to $926 million, with revenues growing modestly faster than expenses – Excluding net DVA, net income decreased 1% to $941 million4 • Revenue of $4.5 billion increased 6%, driven by higher sales and trading results – Excluding net DVA, revenue increased 3%4 • Noninterest expense increased $150 million, or 5%, to $3.3 billion, driven by higher activity-based expenses • Average VaR of $78 million5 Business Highlights1,2,6(A) • Sales and trading revenue increased to $3.6 billion – FICC revenue of $2.0 billion – Equities revenue of $1.6 billion • Excluding net DVA, sales and trading revenue increased 9% to $3.6 billion(G) – FICC revenue decreased 5% to $2.0 billion, driven by a weaker trading environment for mortgage and interest rate products, partially offset by improved client flows in foreign exchange – Equities revenue increased 33% to $1.6 billion, driven by growth in client financing activities, a stronger trading performance and increased client activity Additional Highlights • 680+ research analysts covering 3,300+ companies, 1,200+ corporate bond issuers across 55+ economies and 24 industries Continued Business Leadership • Global Derivatives House of the Year(t) • Clearing House of the Year(t) • Overall Leader for North America in Sustainable Finance(o) • No. 2 Global Research Firm(u) • No. 2 Global Fixed Income Research Team(u) • No. 1 Municipal Bonds Underwriter(v) See page 11 for Business Leadership sources.
7 All Other1 Financial Results1 Three months ended ($ in millions) 9/30/2021 6/30/2021 9/30/2020 Total revenue2 $(1,044) $(1,485) $(935) Provision for credit losses (48) (53) (18) Noninterest expense 351 303 559 Pretax loss (1,347) (1,735) (1,476) Income tax expense (benefit) (1,293) (3,596) (1,774) Net income (loss) $(54) $1,861 $298 1 Comparisons are to the year-ago quarter unless noted. 2 Revenue, net of interest expense. Note: All Other primarily consists of asset and liability management (ALM) activities, liquidating businesses and certain expenses not otherwise allocated to a business segment. ALM activities encompass interest rate and foreign currency risk management activities for which substantially all of the results are allocated to our business segments. • Net loss of $54 million, compared to net income of $1.9 billion in Q2-21 and $298 million in Q3-20 – Q2-21 and Q3-20 included positive income tax adjustments related to the revaluation of U.K. deferred tax assets of $2.0 billion and $0.7 billion, respectively • Revenue was down modestly and included higher partnership losses for Environmental, Social and Governance (ESG) investments (offset in All Other tax expense) • Noninterest expense declined 37%, driven primarily by lower litigation expense • Q3-21 total corporate effective tax rate (ETR) was 14%; excluding ESG tax credits, the ETR would have been approximately 25%
8 Credit Quality Highlights1 Three months ended ($ in millions) 9/30/2021 6/30/2021 9/30/2020 Provision for credit losses ($624) ($1,621) $1,389 Net charge-offs 463 595 972 Net charge-off ratio2 0.20 % 0.27 % 0.40 % At period-end Nonperforming loans and leases $4,714 $4,907 $4,550 Nonperforming loans and leases ratio 0.51 % 0.54 % 0.48 % Allowance for loan and lease losses $13,155 $14,095 $19,596 Allowance for loan and lease losses ratio3 1.43 % 1.55 % 2.07 % 1 Comparisons are to the year-ago quarter unless noted. 2 Net charge-off ratio is calculated as annualized net charge-offs divided by average outstanding loans and leases during the period. 3 Allowance for loan and lease losses ratio is calculated as allowance for loan and lease losses divided by loans and leases outstanding at the end of the period. Note: Ratios do not include loans accounted for under the fair value option. Charge-offs • Total net charge-offs decreased $132 million, or 22%, from the prior quarter to $463 million – Consumer net charge-offs decreased $184 million to $329 million, driven by lower credit card losses – Commercial net charge-offs remained low at $134 million • Net charge-off ratio decreased 7 basis points from the prior quarter to 0.20% Provision for credit losses • Provision for credit losses was a benefit of $624 million, reflecting a net $1.1 billion reserve release driven primarily by asset quality improvements – Consumer reserve release of $0.2 billion – Commercial reserve release of $0.8 billion Allowance for credit losses • Allowance for credit losses, including unfunded commitments, decreased 7% from the prior quarter to $14.7 billion – Allowance for loan and lease losses decreased $0.9 billion, or 7%, from the prior quarter to $13.2 billion, representing 1.43% of total loans and leases • Nonperforming loans decreased $193 million from the prior quarter to $4.7 billion, primarily driven by Commercial • Commercial reservable criticized utilized exposure decreased $4.7 billion from the prior quarter to $24.1 billion, driven by improvements across a broad range of industries
9 Balance Sheet, Liquidity and Capital Highlights ($ in billions except per share data, end of period, unless otherwise noted)(A)(E)(F) Three months ended 9/30/2021 6/30/2021 9/30/2020 Ending Balance Sheet Total assets $3,085.4 $3,029.9 $2,738.5 Total loans and leases 927.7 918.9 955.2 Total loans and leases in business segments (excluding All Other) 910.9 900.6 932.1 Total deposits 1,964.8 1,909.1 1,702.9 Average Balance Sheet Average total assets $3,076.5 $3,015.1 $2,739.7 Average loans and leases 920.5 907.9 974.0 Average deposits 1,942.7 1,888.8 1,695.5 Funding and Liquidity Long-term debt $278.6 $274.6 $255.7 Global Liquidity Sources, average(E) 1,120 1,063 859 Equity Common shareholders’ equity $249.0 $253.7 $245.4 Common equity ratio 8.1 % 8.4 % 9.0 % Tangible common shareholders’ equity1 $178.7 $183.4 $175.2 Tangible common equity ratio1 5.9 % 6.2 % 6.6 % Per Share Data Common shares outstanding (in billions) 8.24 8.49 8.66 Book value per common share $30.22 $29.89 $28.33 Tangible book value per common share1 21.69 21.61 20.23 Regulatory Capital(F) CET1 capital $174.4 $178.8 $173.2 Standardized approach Risk-weighted assets $1,567 $1,552 $1,460 CET1 ratio 11.1 % 11.5 % 11.9 % Advanced approaches Risk-weighted assets $1,381 $1,380 $1,364 CET1 ratio 12.6 % 13.0 % 12.7 % Supplementary leverage Supplementary leverage ratio (SLR) 5.6 % 5.9 % 6.9 % 1 Represents a non-GAAP financial measure. For reconciliation, see page 19.
10 A We present certain key financial and nonfinancial performance indicators (KPIs) that management uses when assessing consolidated and/or segment results. We believe this information is useful because it provides management and investors with information about underlying operational performance and trends. KPIs are presented in Balance Sheet, Liquidity and Capital Highlights and on the Segment pages for each segment. B We measure NII on an FTE basis, which is a non-GAAP financial measure. FTE basis is a performance measure used in operating the business that management believes provides investors a more accurate picture of the interest margin for comparative purposes. We believe that this presentation allows for comparison of amounts from both taxable and tax-exempt sources and is consistent with industry practice. NII on an FTE basis was $11.2 billion, $10.3 billion and $10.2 billion for the three months ended September 30, 2021, June 30, 2021 and September 30, 2020, respectively. The FTE adjustment was $101 million, $110 million and $114 million for the three months ended September 30, 2021, June 30, 2021 and September 30, 2020, respectively. C Reserve Build (or Release) is calculated by subtracting net charge-offs for the period from the provision for credit losses recognized in that period. The period-end allowance, or reserve, for credit losses reflects the beginning of the period allowance adjusted for net charge-offs recorded in that period plus the provision for credit losses recognized in that period. D Average loans and leases in business segments were $903 billion and $889 billion for the three months ended September 30, 2021 and June 30, 2021, an increase of $14 billion. Excluding average PPP loan balances of $13 billion and $20 billion, loan balances were $890 billion and $869 billion for the same periods. For Global Banking, average loans and leases were $324.7 billion and $325.1 billion for the three months ended September 30, 2021 and June 30, 2021. Excluding average PPP loan balances of $4.1 billion and $7.7 billion, Global Banking loan balances were $320.6 billion and $317.4 billion for the same periods. E Global Liquidity Sources (GLS) include cash and high-quality, liquid, unencumbered securities, inclusive of 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 other investment-grade securities, and are readily available to meet funding requirements as they arise. It does not include Federal Reserve Discount Window or Federal Home Loan Bank borrowing capacity. Transfers of liquidity among legal entities may be subject to certain regulatory and other restrictions. F Regulatory capital ratios at September 30, 2021 are preliminary. The Corporation reports regulatory capital ratios under both the Standardized and Advanced approaches. The approach that yields the lower ratio is used to assess capital adequacy, which for Common equity tier 1 (CET1) is the Standardized approach for September 30, 2021, June 30, 2021 and September 30, 2020. Supplementary leverage exposure at September 30, 2020 excludes U.S. Treasury securities and deposits at Federal Reserve Banks. G The following table includes Global Markets sales and trading revenue, excluding net DVA, which is a non-GAAP financial measure. For the three months ended September 30, 2021, June 30, 2021 and September 30, 2020, net DVA losses were $(20) million, $(34) million and $(116) million, FICC net DVA losses were $(16) million, $(28) million and $(107) million, and Equities net DVA gains (losses) were $(4) million, $(6) million and $(9) million, respectively. H Pretax, pre-provision income (PTPI) at the consolidated level is a non-GAAP financial measure calculated by adjusting consolidated pretax income to add back provision for credit losses. Management believes that PTPI is a useful financial measure as it enables an assessment of the Company’s ability to generate earnings to cover credit losses through a credit cycle and provides an additional basis for comparing the Company's results of operations between periods by isolating the impact of provision for credit losses, which can vary significantly between periods. For Reconciliations to GAAP financial measures, see page 19. Endnotes Three months ended (Dollars in millions) 9/30/2021 6/30/2021 9/30/2020 Sales and trading revenue: Fixed-income, currencies and commodities $ 2,009 $ 1,937 $ 2,019 Equities 1,605 1,624 1,205 Total sales and trading revenue $ 3,614 $ 3,561 $ 3,224 Sales and trading revenue, excluding net debit valuation adjustment: Fixed-income, currencies and commodities $ 2,025 $ 1,965 $ 2,126 Equities 1,609 1,630 1,214 Total sales and trading revenue, excluding net debit valuation adjustment $ 3,634 $ 3,595 $ 3,340
11 (a) Tied in the national segment of the J.D. Power 2021 U.S. Online Banking Satisfaction Study. (b) J.D. Power’s 2021 U.S. Banking Mobile App Satisfaction, U.S. Online Banking Satisfaction studies measure overall satisfaction with banking digital channels based on four factors: navigation; speed; visual appeal; and information/content. The studies are based on responses from 9,926 retail bank customers nationwide and were fielded in March-April 2021. For J.D. Power award information, visit jdpower.com/awards. (c) J.D. Power 2021 U.S. Retail Banking Advice Satisfaction Study. (d) Estimated U.S. retail deposits based on June 30, 2021 FDIC deposit data. (e) Javelin 2021 Online and Mobile Banking Scorecards. (f) Experian AutoCount; Franchised Dealers; Largest percentage of 680+ Vantage 3.0 loan originations among key competitors as of July 2021. (g) Keynova 2021 Mortgage-Home Equity Scorecard. (h) FDIC, Q2-21. (i) Industry Q2-21 FDIC call reports. (j) AITE Group, 2021. (k) Professional Wealth Management, a Financial Times publication, 2021. (l) Celent, 2021. (m) WealthManagement.com, 2021. (n) The Digital Banker, 2021. (o) Global Finance, 2021. (p) Euromoney, 2021. (q) Global Finance Treasury & Cash Management Awards, 2021. (r) Transaction Banking Awards, The Banker, 2021. (s) Greenwich, 2021. (t) GlobalCapital, 2021. (u) Institutional Investor, 2020. (v) Refinitiv, 2021. Business Leadership Sources
12 Contact Information and Investor Conference Call Invitation Investor Call Information Note: Chief Executive Officer Brian Moynihan and Chief Financial Officer Paul Donofrio will discuss third- quarter 2021 financial results in a conference call at 9:00 a.m. ET today. The presentation and supporting materials can be accessed on the Bank of America Investor Relations website at https://investor.bankofamerica.com. For a listen-only connection to the conference call, dial 1.877.200.4456 (U.S.) or 1.785.424.1732 (international). The conference ID is 79795. Please dial in 10 minutes prior to the start of the call. Investors 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 October 14 through 11:59 p.m. ET on October 24. Investors May Contact: Lee McEntire, Bank of America Phone: 1.980.388.6780 lee.mcentire@bofa.com Jonathan G. Blum, Bank of America (Fixed Income) Phone: 1.212.449.3112 jonathan.blum@bofa.com Bank of America Bank of America is one of the world’s leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving approximately 66 million consumer and small business clients with approximately 4,200 retail financial centers, approximately 17,000 ATMs, and award-winning digital banking with approximately 41 million active users, including approximately 32 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 households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and approximately 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, provision for credit losses, 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. Reporters May Contact: Jerry Dubrowski, Bank of America Phone: 1.646.855.1195 (office) or 1.508.843.5626 (mobile) jerome.f.dubrowski@bofa.com Christopher Feeney, Bank of America Phone: 1.980.386.6794 (office) christopher.feeney@bofa.com
13 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 2020 Annual Report on Form 10-K and in any of the Company’s subsequent Securities and Exchange Commission filings: the Company’s potential judgments, damages, penalties, fines and reputational damage resulting from pending or future litigation and regulatory investigations, proceedings and enforcement actions, including as a result of our participation in and execution of government programs related to the Coronavirus Disease 2019 (COVID-19) pandemic; the possibility that the Company's future liabilities may be in excess of its recorded liability and estimated range of possible loss for litigation, and regulatory and government actions; the possibility that the Company could face increased claims from one or more parties involved in mortgage securitizations; the Company’s ability to resolve representations and warranties repurchase and related claims; the risks related to the discontinuation of the London Interbank Offered Rate and other reference rates, including increased expenses and litigation and the effectiveness of hedging strategies; uncertainties about the financial stability and growth rates of non-U.S. jurisdictions, the risk that those jurisdictions may face difficulties servicing their sovereign debt, and related stresses on financial markets, currencies and trade, and the Company’s exposures to such risks, including direct, indirect and operational; the impact of U.S. and global interest rates, inflation, currency exchange rates, economic conditions, trade policies and tensions, including tariffs, and potential geopolitical instability; the impact of the interest rate and inflationary environment on the Company’s business, financial condition and results of operations; 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 concentration of credit risk; the Company's ability to achieve its expense targets and expectations regarding revenue, net interest income, provision for credit losses, net charge-offs, effective tax rate, loan growth or other projections; adverse changes to the Company’s credit ratings from the major credit rating agencies; an inability to access capital markets or maintain deposits or borrowing costs; estimates of the fair value and other accounting values, subject to impairment assessments, of certain of the Company’s assets and liabilities; the estimated or actual impact of changes in accounting standards or assumptions in applying those standards; uncertainty regarding the content, timing and impact of regulatory capital and liquidity requirements; the impact of adverse changes to total loss-absorbing capacity requirements, stress capital buffer requirements and/or global systemically important bank surcharges; the potential impact of actions of the Board of Governors of the Federal Reserve System on the Company’s capital plans; the effect of changes in or interpretations of income tax laws and regulations; 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, derivatives regulations and the Coronavirus Aid, Relief, and Economic Security Act and any similar or related rules and regulations; a failure or disruption 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 or campaigns; the impact on the Company’s business, financial condition and results of operations from the United Kingdom's exit from the European Union; the impact of climate change; the ability to achieve environmental, social and governance goals and commitments; the impact of any future federal government shutdown and uncertainty regarding the federal government’s debt limit or changes in fiscal, monetary or regulatory policy; the emergence of widespread health emergencies or pandemics, including the magnitude and duration of the COVID-19 pandemic and its impact on the U.S. and/or global, financial market conditions and our business, results of operations, financial condition and prospects; the impact of natural disasters, extreme weather events, military conflict, terrorism or other geopolitical events; and other matters. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made. “Bank of America” and “BofA Securities” are the marketing names used by the Global Banking and Global Markets divisions of Bank of America Corporation. Lending, other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Trading in securities and financial instruments, and strategic advisory, and other investment banking activities, are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”) or other affiliates, including, in the United States, BofA Securities, Inc., Merrill Lynch Professional Clearing Corp. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, each of which are registered broker-dealers and Members of SIPC, and, in other jurisdictions, by locally registered entities. BofA Securities, Inc. and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA. Investment products offered by Investment Banking Affiliates: Are Not FDIC Insured · May Lose Value · Are Not Bank Guaranteed. Bank of America Corporation’s broker-dealers are not banks and are separate legal entities from their bank affiliates. The obligations of the broker-dealers are not obligations of their bank affiliates (unless explicitly stated otherwise), and these bank affiliates are not responsible for securities sold, offered, or recommended by the broker-dealers. The foregoing also applies to other non-bank affiliates. For more Bank of America news, including dividend announcements and other important information, visit the Bank of America newsroom at https://newsroom.bankofamerica.com. www.bankofamerica.com
Current-period information is preliminary and based on company data available at the time of the presentation. 14 Bank of America Corporation and Subsidiaries Selected Financial Data (In millions, except per share data) Nine Months Ended September 30 Third Quarter 2021 Second Quarter 2021 Third Quarter 2020Summary Income Statement 2021 2020 Net interest income $ 31,524 $ 33,107 $ 11,094 $ 10,233 $ 10,129 Noninterest income 35,529 32,322 11,672 11,233 10,207 Total revenue, net of interest expense 67,053 65,429 22,766 21,466 20,336 Provision for credit losses (4,105) 11,267 (624) (1,621) 1,389 Noninterest expense 45,000 41,286 14,440 15,045 14,401 Income before income taxes 26,158 12,876 8,950 8,042 4,546 Income tax expense 1,193 452 1,259 (1,182) (335) Net income $ 24,965 $ 12,424 $ 7,691 $ 9,224 $ 4,881 Preferred stock dividends 1,181 1,159 431 260 441 Net income applicable to common shareholders $ 23,784 $ 11,265 $ 7,260 $ 8,964 $ 4,440 Average common shares issued and outstanding 8,583.1 8,762.6 8,430.7 8,620.8 8,732.9 Average diluted common shares issued and outstanding 8,702.2 8,800.5 8,492.8 8,735.5 8,777.5 Summary Average Balance Sheet Total debt securities $ 878,437 $ 491,664 $ 949,009 $ 895,902 $ 533,261 Total loans and leases 912,091 998,473 920,509 907,900 974,018 Total earning assets 2,572,166 2,284,909 2,654,015 2,578,668 2,374,926 Total assets 2,990,984 2,646,607 3,076,452 3,015,113 2,739,684 Total deposits 1,879,597 1,598,031 1,942,705 1,888,834 1,695,488 Common shareholders’ equity 250,889 242,626 252,043 250,948 243,896 Total shareholders’ equity 274,726 266,062 275,484 274,632 267,323 Performance Ratios Return on average assets 1.12 % 0.63 % 0.99 % 1.23 % 0.71 % Return on average common shareholders’ equity 12.67 6.20 11.43 14.33 7.24 Return on average tangible common shareholders’ equity (1) 17.61 8.71 15.85 19.90 10.16 Per Common Share Information Earnings $ 2.77 $ 1.29 $ 0.86 $ 1.04 $ 0.51 Diluted earnings 2.75 1.28 0.85 1.03 0.51 Dividends paid 0.57 0.54 0.21 0.18 0.18 Book value 30.22 28.33 30.22 29.89 28.33 Tangible book value (1) 21.69 20.23 21.69 21.61 20.23 Summary Period-End Balance Sheet September 30 2021 June 30 2021 September 30 2020 Total debt securities $ 968,617 $ 940,314 $ 584,397 Total loans and leases 927,736 918,928 955,172 Total earning assets 2,658,502 2,608,408 2,360,146 Total assets 3,085,446 3,029,894 2,738,452 Total deposits 1,964,804 1,909,142 1,702,880 Common shareholders’ equity 249,023 253,678 245,423 Total shareholders’ equity 272,464 277,119 268,850 Common shares issued and outstanding 8,241.2 8,487.2 8,661.5 Nine Months Ended September 30 Third Quarter 2021 Second Quarter 2021 Third Quarter 2020Credit Quality 2021 2020 Total net charge-offs $ 1,881 $ 3,240 $ 463 $ 595 $ 972 Net charge-offs as a percentage of average loans and leases outstanding (2) 0.28 % 0.44 % 0.20 % 0.27 % 0.40 % Provision for credit losses $ (4,105) $ 11,267 $ (624) $ (1,621) $ 1,389 September 30 2021 June 30 2021 September 30 2020 Total nonperforming loans, leases and foreclosed properties (3) $ 4,831 $ 5,031 $ 4,730 Nonperforming loans, leases and foreclosed properties as a percentage of total loans, leases and foreclosed properties (3) 0.52 % 0.55 % 0.50 % Allowance for loan and lease losses $ 13,155 $ 14,095 $ 19,596 Allowance for loan and lease losses as a percentage of total loans and leases outstanding (2) 1.43 % 1.55 % 2.07 % For footnotes, see page 15.
Current-period information is preliminary and based on company data available at the time of the presentation. 15 Bank of America Corporation and Subsidiaries Selected Financial Data (continued) (Dollars in millions) Capital Management September 30 2021 June 30 2021 September 30 2020 Regulatory capital metrics (4): Common equity tier 1 capital $ 174,407 $ 178,818 $ 173,213 Common equity tier 1 capital ratio - Standardized approach 11.1 % 11.5 % 11.9 % Common equity tier 1 capital ratio - Advanced approaches 12.6 13.0 12.7 Tier 1 leverage ratio 6.6 6.9 7.4 Supplementary leverage ratio 5.6 5.9 6.9 Tangible equity ratio (5) 6.7 7.0 7.4 Tangible common equity ratio (5) 5.9 6.2 6.6 (1) Return on average tangible common shareholders’ equity and tangible book value per share of common stock are non-GAAP financial measures. We believe the use of ratios that utilize tangible equity provides additional useful information because they present measures of those assets that can generate income. Tangible book value per share provides additional useful information about the level of tangible assets in relation to outstanding shares of common stock. See Reconciliations to GAAP Financial Measures on page 19. (2) Ratios do not include loans accounted for under the fair value option. Charge-off ratios are annualized for the quarterly presentation. (3) 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, and nonperforming loans held for sale or accounted for under the fair value option. (4) Regulatory capital ratios at September 30, 2021 are preliminary. Bank of America Corporation reports regulatory capital ratios under both the Standardized and Advanced approaches. The approach that yields the lower ratio is used to assess capital adequacy, which for Common equity tier 1 (CET1) is the Standardized approach for September 30, 2021, June 30, 2021 and September 30, 2020. Supplementary leverage exposure at September 30, 2020 excluded U.S. Treasury securities and deposits at Federal Reserve Banks. (5) Tangible equity ratio equals period-end tangible shareholders’ equity divided by period-end tangible assets. Tangible common equity ratio equals period-end tangible common shareholders’ equity divided by period-end tangible assets. Tangible shareholders’ equity and tangible assets are non-GAAP financial measures. We believe the use of ratios that utilize tangible equity provides additional useful information because they present measures of those assets that can generate income. See Reconciliations to GAAP Financial Measures on page 19.
Current-period information is preliminary and based on company data available at the time of the presentation. 16 Bank of America Corporation and Subsidiaries Quarterly Results by Business Segment and All Other (Dollars in millions) Third Quarter 2021 Consumer Banking GWIM Global Banking Global Markets All Other Total revenue, net of interest expense $ 8,838 $ 5,310 $ 5,244 $ 4,519 $ (1,044) Provision for credit losses 247 (58) (781) 16 (48) Noninterest expense 4,558 3,745 2,534 3,252 351 Net income (losses) 3,045 1,225 2,549 926 (54) Return on average allocated capital (1) 31 % 30 % 24 % 10 % n/m Balance Sheet Average Total loans and leases $ 281,380 $ 199,664 $ 324,736 $ 97,148 $ 17,581 Total deposits 1,000,765 339,357 534,166 54,650 13,767 Allocated capital (1) 38,500 16,500 42,500 38,000 n/m Quarter end Total loans and leases $ 280,803 $ 202,268 $ 328,893 $ 98,892 $ 16,880 Total deposits 1,015,276 345,590 536,476 54,941 12,521 Second Quarter 2021 Consumer Banking GWIM Global Banking Global Markets All Other Total revenue, net of interest expense $ 8,186 $ 5,065 $ 5,090 $ 4,720 $ (1,485) Provision for credit losses (697) (62) (831) 22 (53) Noninterest expense 4,859 3,813 2,599 3,471 303 Net income 3,038 992 2,425 908 1,861 Return on average allocated capital (1) 32 % 24 % 23 % 10 % n/m Balance Sheet Average Total loans and leases $ 281,767 $ 193,988 $ 325,110 $ 87,826 $ 19,209 Total deposits 979,072 333,487 506,618 55,584 14,073 Allocated capital (1) 38,500 16,500 42,500 38,000 n/m Quarter end Total loans and leases $ 282,900 $ 198,361 $ 323,256 $ 96,105 $ 18,306 Total deposits 987,655 330,624 520,026 57,297 13,540 Third Quarter 2020 Consumer Banking GWIM Global Banking Global Markets All Other Total revenue, net of interest expense $ 8,039 $ 4,546 $ 4,517 $ 4,283 $ (935) Provision for credit losses 479 24 883 21 (18) Noninterest expense 4,842 3,533 2,365 3,102 559 Net income 2,052 747 926 858 298 Return on average allocated capital (1) 21 % 20 % 9 % 9 % n/m Balance Sheet Average Total loans and leases $ 318,751 $ 185,587 $ 373,118 $ 72,319 $ 24,243 Total deposits 860,999 291,845 471,288 56,475 14,881 Allocated capital (1) 38,500 15,000 42,500 36,000 n/m Quarter end Total loans and leases $ 312,447 $ 187,211 $ 356,919 $ 75,475 $ 23,120 Total deposits 872,022 295,893 465,399 56,727 12,839 (1) Return on average allocated capital is calculated as net income, adjusted for cost of funds and earnings credits and certain expenses related to intangibles, divided by average allocated capital. Other companies may define or calculate these measures differently. n/m = not meaningful Certain prior-period amounts have been reclassified among the segments to conform to current-period presentation. The Company reports the results of operations of its four business segments and All Other on a fully taxable-equivalent (FTE) basis.
Current-period information is preliminary and based on company data available at the time of the presentation. 17 Bank of America Corporation and Subsidiaries Year-to-Date Results by Business Segment and All Other (Dollars in millions) Nine Months Ended September 30, 2021 Consumer Banking GWIM Global Banking Global Markets All Other Total revenue, net of interest expense $ 25,093 $ 15,346 $ 14,967 $ 15,437 $ (3,468) Provision for credit losses (1,067) (185) (2,738) 33 (148) Noninterest expense 14,548 11,425 7,915 10,150 962 Net income 8,767 3,100 7,147 3,888 2,063 Return on average allocated capital (1) 30 % 25 % 22 % 14 % n/m Balance Sheet Average Total loans and leases $ 284,644 $ 194,090 $ 326,632 $ 87,535 $ 19,190 Total deposits 968,272 333,119 509,445 54,699 14,062 Allocated capital (1) 38,500 16,500 42,500 38,000 n/m Period end Total loans and leases $ 280,803 $ 202,268 $ 328,893 $ 98,892 $ 16,880 Total deposits 1,015,276 345,590 536,476 54,941 12,521 Nine Months Ended September 30, 2020 Consumer Banking GWIM Global Banking Global Markets All Other Total revenue, net of interest expense $ 25,020 $ 13,907 $ 14,208 $ 14,859 $ (2,179) Provision for credit losses 5,761 349 4,849 233 75 Noninterest expense 14,074 10,596 6,910 8,598 1,108 Net income 3,915 2,236 1,788 4,461 24 Return on average allocated capital (1) 14 % 20 % 6 % 17 % n/m Balance Sheet Average Total loans and leases $ 319,084 $ 182,138 $ 394,331 $ 72,702 $ 30,218 Total deposits 803,002 280,828 449,273 45,002 19,926 Allocated capital (1) 38,500 15,000 42,500 36,000 n/m Period end Total loans and leases $ 312,447 $ 187,211 $ 356,919 $ 75,475 $ 23,120 Total deposits 872,022 295,893 465,399 56,727 12,839 (1) Return on average allocated capital is calculated as net income, adjusted for cost of funds and earnings credits and certain expenses related to intangibles, divided by average allocated capital. Other companies may define or calculate these measures differently. n/m = not meaningful Certain prior-period amounts have been reclassified among the segments to conform to current-period presentation.
Current-period information is preliminary and based on company data available at the time of the presentation. 18 Bank of America Corporation and Subsidiaries Supplemental Financial Data (Dollars in millions) Nine Months Ended September 30 Third Quarter 2021 Second Quarter 2021 Third Quarter 2020FTE basis data (1) 2021 2020 Net interest income $ 31,846 $ 33,493 $ 11,195 $ 10,343 $ 10,243 Total revenue, net of interest expense 67,375 65,815 22,867 21,576 20,450 Net interest yield 1.66 % 1.96 % 1.68 % 1.61 % 1.72 % Efficiency ratio 66.79 62.73 63.14 69.73 70.42 Other Data September 30 2021 June 30 2021 September 30 2020 Number of financial centers - U.S. 4,215 4,296 4,309 Number of branded ATMs - U.S. 16,513 16,795 16,962 Headcount 209,407 211,608 211,225 (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. Net interest income includes FTE adjustments of $322 million and $386 million for the nine months ended September 30, 2021 and 2020, respectively; $101 million and $110 million for the third and second quarters of 2021, respectively, and $114 million for the third quarter of 2020. Certain prior-period amounts have been reclassified to conform to current-period presentation.
Current-period information is preliminary and based on company data available at the time of the presentation. 19 The Corporation evaluates its business based on the following ratios that utilize tangible equity, a non-GAAP financial measure. Tangible equity represents an adjusted shareholders’ equity or common shareholders’ equity amount which has been reduced by goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities. Return on average tangible common shareholders’ equity measures the Corporation’s net income applicable to common shareholders 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 net income as a percentage of adjusted average total shareholders’ equity. The tangible equity ratio represents adjusted ending shareholders’ equity divided by total assets less goodwill and intangible assets (excluding mortgage servicing rights), net of related deferred tax liabilities. Tangible book value per common share represents adjusted ending common shareholders’ equity divided by ending common shares outstanding. These measures are used to evaluate the Corporation’s use of equity. In addition, profitability, relationship and investment models all use return on average tangible shareholders’ equity as key measures to support our overall growth goals. See the tables below for reconciliations of these non-GAAP financial measures to the most closely related financial measures defined by GAAP for the nine months ended September 30, 2021 and 2020, and the three months ended September 30, 2021, June 30, 2021 and September 30, 2020. 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, except per share information) Nine Months Ended September 30 Third Quarter 2021 Second Quarter 2021 Third Quarter 2020 2021 2020 Reconciliation of income before income taxes to pretax, pre-provision income Income before income taxes $ 26,158 $ 12,876 $ 8,950 $ 8,042 $ 4,546 Provision for credit losses (4,105) 11,267 (624) (1,621) 1,389 Pretax, pre-provision income $ 22,053 $ 24,143 $ 8,326 $ 6,421 $ 5,935 Reconciliation of average shareholders’ equity to average tangible shareholders’ equity and average tangible common shareholders’ equity Shareholders’ equity $ 274,726 $ 266,062 $ 275,484 $ 274,632 $ 267,323 Goodwill (68,999) (68,951) (69,023) (69,023) (68,951) Intangible assets (excluding mortgage servicing rights) (2,181) (1,758) (2,185) (2,212) (1,976) Related deferred tax liabilities 916 791 915 915 855 Tangible shareholders’ equity $ 204,462 $ 196,144 $ 205,191 $ 204,312 $ 197,251 Preferred stock (23,837) (23,437) (23,441) (23,684) (23,427) Tangible common shareholders’ equity $ 180,625 $ 172,707 $ 181,750 $ 180,628 $ 173,824 Reconciliation of period-end shareholders’ equity to period-end tangible shareholders’ equity and period-end tangible common shareholders’ equity Shareholders’ equity $ 272,464 $ 268,850 $ 272,464 $ 277,119 $ 268,850 Goodwill (69,023) (68,951) (69,023) (69,023) (68,951) Intangible assets (excluding mortgage servicing rights) (2,172) (2,185) (2,172) (2,192) (2,185) Related deferred tax liabilities 913 910 913 915 910 Tangible shareholders’ equity $ 202,182 $ 198,624 $ 202,182 $ 206,819 $ 198,624 Preferred stock (23,441) (23,427) (23,441) (23,441) (23,427) Tangible common shareholders’ equity $ 178,741 $ 175,197 $ 178,741 $ 183,378 $ 175,197 Reconciliation of period-end assets to period-end tangible assets Assets $ 3,085,446 $ 2,738,452 $ 3,085,446 $ 3,029,894 $ 2,738,452 Goodwill (69,023) (68,951) (69,023) (69,023) (68,951) Intangible assets (excluding mortgage servicing rights) (2,172) (2,185) (2,172) (2,192) (2,185) Related deferred tax liabilities 913 910 913 915 910 Tangible assets $ 3,015,164 $ 2,668,226 $ 3,015,164 $ 2,959,594 $ 2,668,226 Book value per share of common stock Common shareholders’ equity $ 249,023 $ 245,423 $ 249,023 $ 253,678 $ 245,423 Ending common shares issued and outstanding 8,241.2 8,661.5 8,241.2 8,487.2 8,661.5 Book value per share of common stock $ 30.22 $ 28.33 $ 30.22 $ 29.89 $ 28.33 Tangible book value per share of common stock Tangible common shareholders’ equity $ 178,741 $ 175,197 $ 178,741 $ 183,378 $ 175,197 Ending common shares issued and outstanding 8,241.2 8,661.5 8,241.2 8,487.2 8,661.5 Tangible book value per share of common stock $ 21.69 $ 20.23 $ 21.69 $ 21.61 $ 20.23 Certain prior-period amounts have been reclassified to conform to current-period presentation.