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Barall, Catherine E Bank of America tamara.stitt@bankofamerica.com Stitt, Tamara H
4Q19 Presentation Bank of America 4Q19 Financial Results
January 15, 2020
Full Year 2019 Financial Results
Summary Income Statement ($B, except per share data)
Total revenue, net of interest expense Noninterest expense Provision for credit losses Pretax income Income tax expense Net income Diluted earnings per share Average diluted common shares (in millions)
FY19
Reported
$91.2 54.9 3.6 32.8 5.3 $27.4 $2.75 9,443
Ex- 3Q19 JV impairment 1
$91.2 52.8 3.6 34.8 5.7 $29.1 $2.93 9,443
FY18
Reported
$91.0 53.2 3.3 34.6 6.4 $28.1 $2.61 10,237
FY19 vs. FY18
FY19 ex-3Q19 JV vs. FY18 1
% Inc / (Dec)
% Inc / (Dec)
0 % 3 9 (5) (17) (3) 5 (8)
0 % (1) 9 1 (11) 3 12 (8)
Return Metrics and Efficiency Ratio
Return on average assets Return on average common shareholders' equity Return on average tangible common shareholders' equity 2 Efficiency ratio
1.14 % 10.6 14.9
60
1.21 % 11.3 15.8
58
1.21 % 11.0 15.5
58
(7) bps (42) (69) 177
0 bps 24 22 (50)
Note: Amounts may not total due to rounding.
1 As previously reported, 3Q19 included a non-cash, pretax impairment charge of $2.1B related to the notice of termination of the merchant services joint venture at the conclusion of
its current term, which reduced FY19 results by $0.18 per diluted common share. Amounts in this column represent non-GAAP financial measures. For a reconciliation to GAAP of the presented financial metrics, see note A on slide 27. For important presentation information, see slide 30.
2
2 Represents a non-GAAP financial measure. For important presentation information, see slide 30.
Capital Deployment Highlights in 2019
Community
$5B in
community development
lending for affordable housing
$250MM
philanthropic contributions
2MM
volunteer hours
Environment
Associates
Committed to
$20 per hour
minimum wage in 1Q20
Three years
of special compensation awards totaling
over $1.6B
$125B
10-year environmental
business initiative goal
achieved six years early
Additional
$300B capital
commitment
by 2030
Infrastructure
Lending
$39B
of additional average loans outstanding to
clients
$694B of
capital raised for clients globally
& Innovation
$1.7B capital
investments in
Capital Return
office space and new and renovated
financial centers
Returned
$34B to
common shareholders via
$3B annual
share buybacks
technology initiative spending
of $28B and
dividends of
$6B
3
Full Year Business Segment Results 1
Net Income (Loss) ($B)
Consumer Banking $13.0
$12.1
GWIM
Global Banking
Global Markets
2
All Other
$8.0 $7.0
$4.0 $4.3 $2.6 $3.0
$8.3 $8.1 $6.9
$5.6
$3.7 $3.1 $4.0 $3.5
$0.1
$0.3
($1.1)
($0.3)
FY 2019
ROAAC 3
Efficiency ratio
Operating leverage
Consumer Banking 35% 46%
3%
2016 2017 2018 2019
GWIM 29% 71%
2%
Global Banking 20% 44%
(1%)
Global Markets 10% 69%
(2%)
1 All business segments and All Other are presented on a fully-taxable equivalent (FTE) basis throughout this presentation. 2 Amounts for 2019 and 2017 represent non-GAAP financial measures. FY 2019 for All Other adjusted to exclude $1.7B for the impairment charge related to the notice of termination
of the merchant services joint venture at the conclusion of its current term. See note A on slide 27. FY 2017 for All Other adjusted to exclude the $2.9B charge for the 2017 4
enactment of the Tax Cuts and Jobs Act (Tax Act). Reported net loss for All Other was $1.4B and $2.8B for FY 2019 and FY 2017. For important presentation information, see slide 30. 3 ROAAC defined as return on average allocated capital.
Increased Capital Returned to Shareholders
Average Diluted Shares Outstanding (B)
11.4 11.3 11.2 11.0 10.6 10.0
9.1
Common Dividends and Share Repurchases ($B) $34.3
$25.5
$16.8
$20.1
$28.1
4Q13 4Q14 4Q15 4Q16 4Q17 4Q18 4Q19
$3.6
$3.2 $0.4 2013
$7.7
$2.9
$1.7 $1.3 2014
$4.5
$2.4 $2.1 2015
$5.1 $2.6 2016
Common Dividends
$12.8
$4.0
$5.4
$6.1
2017 2018 2019 Gross repurchases
Note: Amounts may not total due to rounding.
5
4Q19 Financial Results
Summary Income Statement ($B, except per share data)
Total revenue, net of interest expense Noninterest expense Provision for credit losses Pretax income Income tax expense Net income Diluted earnings per share Average diluted common shares (in millions)
Return Metrics and Efficiency Ratio
Return on average assets Return on average common shareholders' equity Return on average tangible common shareholders' equity 1 Efficiency ratio
4Q19
$22.3 13.2 0.9 8.2 1.2 $7.0 $0.74 9,079
4Q18
% Inc / (Dec)
$22.7 13.1 0.9 8.7 1.4 $7.3 $0.70 9,996
(1) % 1 4 (6) (17) (4) 6 (9)
1.13 % 11.0 15.4
59
1.24 % 11.6 16.3
58
(11) bps (57) (86) 147
Note: Amounts may not total due to rounding. 1 Represents a non-GAAP financial measure. For important presentation information, see slide 30.
6
Continued Progress in Driving Financial Performance 1
Diluted Earnings per Share
Net Income ($B)
$0.8
$0.70
$0.74
YoY
+6%
$0.4 $0.27
$0.39
$0.47
$8
$7.3
$7.0
YoY
(4%)
$6
$5.3
$4.5
$4 $3.3
$2
$0.0 4Q15
4Q16
4Q17
4Q18
4Q19
Average Diluted Shares Outstanding (B)
$0 4Q15
4Q16
4Q17
4Q18
4Q19
Expenses ($B) and Efficiency Ratio
12
11.2
11.0
11
10.6
10.0 10
9
YoY (9%)
9.1
$14.0 71%
$13.4 67%
$13.2 62%
$13.1 58%
YoY
$13.2 +1%
59%
8
7 4Q15
4Q16
4Q17
4Q18
4Q19
4Q15
4Q16
4Q17
4Q18
4Q19
Expenses
Efficiency Ratio
1 4Q17 results adjusted to exclude the impact of the Tax Act, which represent non-GAAP financial measures. The Tax Act reduced 2017 net income by $2.9B, or $0.27 per diluted
common share, which included a $0.9B pretax charge in other noninterest income, predominantly related to the revaluation of certain tax-advantaged energy investments, as well 7
as $1.9B of tax expense principally associated with the revaluation of certain deferred tax assets and liabilities. Reported 4Q17 net income, diluted earnings per share and efficiency ratio were $2.4B, $0.20 and 65%, respectively. For important presentation information, see slide 30.
Balance Sheet, Liquidity and Capital
(EOP basis unless noted)
Balance Sheet ($B) Total assets Total loans and leases Total loans and leases in business segments 1 Total debt securities
Funding & Liquidity ($B) Total deposits Long-term debt Global Liquidity Sources (average) 2
Equity ($B) Common shareholders' equity Common equity ratio Tangible common shareholders' equity 3 Tangible common equity ratio 3
Per Share Data Book value per common share Tangible book value per common share 3 Common shares outstanding (in billions)
4Q19 $2,434.1
983.4 946.3 472.2
3Q19 $2,426.3
972.9 933.2 444.6
4Q18 $2,354.5
946.9 898.8 441.8
$1,434.8 240.9 576
$1,392.8 243.4 552
$1,381.5 229.4 544
Basel 3 Capital ($B) 4 Common equity tier 1 capital (CET1) Standardized approach
Risk-weighted assets CET1 ratio Advanced approaches Risk-weighted assets CET1 ratio Supplementary leverage Supplementary leverage ratio (SLR)
4Q19 $166.8
$1,495 11.2 %
$1,447 11.5 %
6.4 %
3Q19 $169.2
$1,484 11.4 %
$1,440 11.7 %
6.6 %
4Q18 $167.3
$1,437 11.6 %
$1,409 11.9 %
6.8 %
$241.4 9.9 %
$171.5 7.3 %
$244.8 10.1 %
$174.9 7.4 %
$243.0 10.3 %
$173.1 7.6 %
$27.32 19.41 8.84
$26.96 19.26 9.08
$25.13 17.91 9.67
· CET1 ratio of 11.2% 4 declined 25 bps from 3Q19 CET1 capital of $166.8B, down $2.4B
Standardized RWA of $1,495B increased $11B · Capital returned to shareholders
Repurchased $7.7B of common shares and paid $1.6B in
common dividends in 4Q19
Common shares outstanding down 9% from 4Q18 to 8.8B · Book value per share increased 9% from 4Q18 to $27.32 · $576B of average Global Liquidity Sources 2
1 Excludes loans and leases in All Other. 2 See note B on slide 27 for definition of Global Liquidity Sources. 3 Represents a non-GAAP financial measure. For important presentation information, see slide 30.
4 Regulatory capital metrics at December 31, 2019 are preliminary. The Company reports regulatory capital ratios under both the Standardized and Advanced approaches. The approach 8
that yields the lower ratio is used to assess capital adequacy, which for CET1 is the Standardized approach for all reporting periods presented.
Average Deposits
Bank of America Ranked #1 in U.S. Deposit Market Share 1
Total Corporation ($B)
Consumer Banking ($B)
$1,500 $1,000
$1,251 450
$1,294 442
$1,345 422
$1,410
YoY +5%
$800
409
(3%)
$600
$618 169
$666 183
$687 194
$400
140
154
165
$500 801
852
923
1,002
+9%
$200
309
328
327
YoY
$720
+5%
209 +8%
178
333
+2%
$0 4Q16
4Q17
4Q18
4Q19
Interest-bearing
Noninterest-bearing
$0 4Q16
4Q17
Money market, Savings, CD/IRA
4Q18 Interest checking
4Q19 Noninterest-bearing
GWIM ($B)
Global Banking ($B)
$300 $200
$257 17
239 $100
$240 17
223
$247 16
231
$256 15
240
$0 4Q16
4Q17
4Q18
4Q19
Interest-bearing
Noninterest-bearing
YoY
$400
+3%
(6%)
$300
$200 +4%
$100
$0
$315 242
$330 223
73
107
4Q16
4Q17
Interest-bearing
$360 196
$379 169
209 163
4Q18
4Q19
Noninterest-bearing
YoY +5% (14%)
+28%
Note: Amounts may not total due to rounding. Total Corporation also includes Global Markets and All Other.
1 Based on June 30, 2019 FDIC deposit data.
9
Average Loans and Leases
Total Loans and Leases ($B)
$1,000
$908
$928
$935
$750
$500
$250
$0 4Q16
4Q17
4Q18
$974
4Q19
Total Loans and Leases in All Other ($B)
YoY
+4%
$150
$100 $50 $0
$100
9 18
$71
14
73
58
4Q16
4Q17
Residential mortgage
$53
10 43
4Q18 Home equity
$38
5 33
4Q19 Other
Loans and Leases in Business Segments ($B)
$1,000 $750 $500 $250 $0
$808
71 338
146 254
4Q16
$857
74 350
157 276
4Q17
$881
71 357
164 290
4Q18
YoY
$936
+6%
73
+3%
377
+6%
174
+7%
311
+7%
4Q19
Consumer Banking GWIM Global Banking Global Markets
Year-Over-Year Growth in Business Segments
8%
6%
6%
6%
4%
4%
2% 3% 4%
0% 1Q19
Consumer loans
4%
4% 4%
6% 6%
7% 6%
2Q19
3Q19
4Q19
Commercial loans
Total in business segments
Note: Amounts may not total due to rounding.
10
Net Interest Income
Net Interest Income (FTE, $B) 1
$15
$12.7
$12.5
$12.3
$10
$12.5
$5
$12.4
$12.2
$12.3 $12.2
$12.3 $12.1
$0 4Q18
1Q19
2Q19
3Q19
4Q19
Net interest income (GAAP) FTE adjustment
Net Interest Yield (FTE) 1
3.5%
3.03%
3.0%
3.03%
2.98%
2.89%
2.77%
2.5%
2.52%
2.0%
4Q18
2.51%
1Q19
2.44%
2Q19
2.41%
3Q19
2.35%
4Q19
Reported net interest yield
Net interest yield excl. GM
· Net interest income of $12.1B ($12.3B FTE 1) Decreased $0.4B, or 3%, from 4Q18, driven primarily by
lower interest rates, partially offset by loan and deposit growth
Declined modestly from 3Q19, as lower asset yields were
partially offset by lower funding costs as well as benefits of loan and deposit growth
· Net interest yield of 2.35% decreased 17 bps from 4Q18 and
decreased 6 bps from 3Q19 1
Average rate paid on interest-bearing deposits declined
15 bps from 3Q19 to 0.61%
· Asset sensitivity position relatively unchanged compared to 3Q19
Notes: FTE stands for fully taxable-equivalent basis. GM stands for Global Markets. 1 Represent non-GAAP financial measures. Net interest yield adjusted to exclude Global Markets NII of $1.1B, $1.0B, $0.8B, $1.0B and $0.9B and average earning assets of $481.4B,
$476.9B, $474.1B, $472.4B and $458.3B for 4Q19, 3Q19, 2Q19, 1Q19 and 4Q18, respectively. The Company believes the presentation of net interest yield excluding Global Markets 11
provides investors with transparency of NII and net interest yield in core banking activities. For important presentation information, see slide 30.
Expense and Efficiency
Total Noninterest Expense ($B)
$15 $13.3
$13.2
$13.8
$10
5.5
5.6
5.4
$13.2
5.3
$13.0
5.3
$13.1
5.3
$13.2
5.0
$13.3
5.3
$15.2
2.1
5.3
$13.2
5.3
$5 7.8
$0 3Q17
Efficiency Ratio
65%
60%
61%
55%
7.6
8.5
4Q17
1Q18
Compensation and benefits
65% 60%
7.9 2Q18
59%
7.7
7.7
3Q18
4Q18
Other
57%
58%
8.2
8.0
7.8
1Q19
2Q19
3Q191
JV impairment charge
8.0 4Q19
59%
57%
57%
57%
50% 3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
1
3Q19
4Q19
· Noninterest expense of $13.2B increased $0.2B from 4Q18, as investments across the franchise including in client-facing associates, employee
compensation programs, technology, and real estate were partially offset by efficiency savings enabled by operational excellence work, lower
FDIC costs and lower amortization of intangibles
·
1
Noninterest expense declined $1.9B from 3Q19, driven by absence of 3Q19 impairment charge of $2.1B for notice of termination of the
merchant services joint venture at the conclusion of its current term
· Compared to 4Q19, 1Q20 expenses expected to include approximately $0.4B for seasonally elevated personnel costs
Note: Amounts may not total due to rounding. 1 3Q19 efficiency ratio is adjusted to exclude the 3Q19 impairment charge of $2.1B for the notice of termination of the merchant services joint venture at the conclusion of its current
12
term, which represents a non-GAAP financial measure. Reported 3Q19 efficiency ratio was 67%. See note A on slide 27 for reconciliations.
Asset Quality
Net Charge-offs ($MM) 1
$1,200 $800
$924
$991
$887
$400 0.39%
0.43%
0.38%
$811
0.34%
1.0%
$959
0.5% 0.39%
$0 4Q18
1Q19
2Q19
3Q19
4Q19
Net charge-offs
Net charge-off ratio
3Q19 and 2Q19 included recoveries from the sale of previously charged-off non-core consumer real estate loans of $198MM and $118MM; NCO ratio of 0.42% and 0.43%
excluding these sales; impact of sales on other periods presented was immaterial
Provision for Credit Losses ($MM)
0.0%
$1,200 $800
$905
$1,013
$857
$779
$941
$400
$0 4Q18
1Q19
2Q19
3Q19
4Q19
· Total net charge-offs of $959MM
Net charge-offs were modestly down from 3Q19, excluding
3Q19 recoveries from the sale of previously charged-off noncore consumer real estate loans of $198MM
· Net charge-off (NCO) ratio of 39 bps
Excluding the loan sales in 3Q19, net charge-off ratio
decreased 3 bps
· Provision expense of $941MM increased $162MM from 3Q19,
due primarily to loan sale recoveries in 3Q19
4Q19 included a small reserve release of $18MM, similar to
3Q19
· Allowance for loan and lease losses of $9.4B represented 0.97%
of total loans and leases 1
· Nonperforming loans (NPLs) of $3.6B were stable vs. 3Q19
As a percentage of loans and leases, NPL ratio remains near
historic lows
44% of consumer NPLs are contractually current
· Commercial reservable criticized utilized exposure of $11.5B
declined modestly from 3Q19, and reservable criticized ratio remains near historic lows
1 Excludes loans measured at fair value.
13
Asset Quality Consumer and Commercial Portfolios
Consumer Net Charge-offs ($MM)
$1,000 $800 $600 $400 $200 $0 ($200)
$804 $835 $691
0.71%
0.77%
0.62%
4Q18
1Q19
2Q19
Credit card
Other
$622
0.55%
$838 1.5%
1.0% 0.72%
0.5%
3Q19
4Q19
0.0%
Consumer NCO ratio
Consumer Metrics ($MM)
Provi s i on Nonperformi ng l oa ns a nd l ea s es
% of loans and leases 1 Cons umer 30+ da ys performi ng pa s t due
Ful l y-i ns ured 2 Non ful l y-i ns ured Al l owa nce for l oa ns a nd l ea s es % of loans and leases 1 # ti mes a nnua l i zed NCOs
4Q19
$798 2,053
0.44 % $5,776
1,811 3,965 4,542
0.98 % 1.37 x
3Q19
$564 2,189
0.48 % $5,530
1,919 3,611 4,576
1.01 % 1.86 x
4Q18
$734 3,842
0.86 % $6,741
2,790 3,951 4,802
1.08 % 1.51 x
Commercial Net Charge-offs ($MM)
$200
$150 $120
$156
$196
$189
$100 0.10%
$50
0.13%
0.16%
0.15%
0.3%
$121 0.2%
0.09% 0.1%
$0 4Q18
1Q19
2Q19
3Q19
4Q19
0.0%
C&I Small business and other
Commercial NCO ratio
Commercial Metrics ($MM)
Provi s i on Res erva bl e cri ti ci zed uti l i zed expos ure Nonperformi ng l oa ns a nd l ea s es
% of loans and leases 1 Al l owa nce for l oa ns a nd l ea s es
% of loans and leases 1
4Q19
$143 11,452
1,499 0.29 %
$4,874 0.96 %
3Q19
$215 11,835
1,287 0.25 %
$4,857 0.95 %
4Q18
$171 11,061
1,102 0.22 %
$4,799 0.97 %
1 Excludes loans measured at fair value.
2 Fully-insured loans are FHA-insured loans and other loans individually insured under long-term standby agreements.
14
Consumer Banking
Summary Income Statement ($MM)
Total revenue, net of interest expense Provision for credit losses Noninterest expense Pretax income Income tax expense Net income
Key Indicators ($B)
Average deposits Rate paid on deposits Cost of deposits 1
Average loans and leases Net charge-off ratio Consumer investment assets 2 Active mobile banking users (MM) % Consumer sales through digital channels Number of financial centers Combined credit / debit purchase volumes 3 Total consumer credit card risk-adjusted margin 3 Return on average allocated capital Allocated capital Efficiency ratio
4Q19
$9,514 934
4,466 4,114 1,008 $3,106
Inc / (Dec)
3Q19 4Q18
($210) ($448)
17
19
75
31
(302)
(498)
(74)
(166)
($228) ($332)
4Q19
$719.6 0.11 % 1.51
$311.0 1.18 %
$240.1 29.2 29 %
4,300 $167.2
8.68 % 33
$37 47 %
3Q19 4Q18
$709.3 $686.8
0.11 % 0.07 %
1.50
1.55
$303.8 $289.9
1.18 % 1.22 %
$223.2 $185.9
28.7
26.4
26 %
27 %
4,302
4,341
$162.0 $158.1
8.45 % 8.73 %
36
37
$37
$37
45 %
45 %
· Net income of $3.1B decreased from 4Q18, as solid client activity
partially offset the impact of lower interest rates in the second half of 2019
· Revenue of $9.5B decreased $0.4B, or 4%, from 4Q18, driven
primarily by lower NII and the absence of a small gain in 4Q18
· Provision increased modestly from 4Q18
· Noninterest expense increased 1% from 4Q18, driven by the cost of
increased client activity and investments for business growth, largely offset by improved productivity and lower FDIC expense
Continued investment in financial center and ATM
builds/renovations, sales professionals, digital capabilities, minimum wage increases and Shared Success programs
Digital usage increased for sales, service and appointments
· Average deposits of $720B grew $33B, or 5%, from 4Q18 53% of deposits in checking accounts; 91% primary accounts 4 Average cost of deposits of 1.51% 1; rate paid of 11 bps
· Average loans and leases of $311B increased $21B, or 7%, from
4Q18, driven by growth in residential mortgages
· Consumer investment assets of $240B grew $54B, or 29%, from
4Q18, driven by strong market performance and client flows
$20B of client flows since 4Q18 Client accounts of 2.7MM, up 7%
· Combined credit / debit card spend increased 6% from 4Q18,
including record holiday spend
· 6.1MM consumer clients enrolled in Preferred Rewards; 99%
retention
1 Cost of deposits calculated as annualized noninterest expense as a percentage of total average deposits within the Deposits subsegment.
2 Consumer investment assets include client brokerage assets, deposit sweep balances and assets under management in Consumer Banking.
3 Includes consumer credit card portfolios in Consumer Banking and GWIM.
15
4 Represents the percentage of consumer checking accounts that are estimated to be the customer's primary account based on multiple relationship factors (e.g., linked to their direct
deposit).
Consumer Banking Trends
Business Leadership 1
· #1 Consumer Deposit Market Share A
· #1 Small Business Lender B
· #1 Online Banking and Mobile Banking Functionality C
· #1 Home Equity Originator D
· #1 in Prime Auto Credit distribution of new originations among peers E
· #1 Customer Satisfaction for Retail Banking Advice F
· 4-Star Rating by Barron's 2019 Best Online Brokers
· Named North America's Best Digital Bank G
Total Revenue ($B)
$12
$10.0 $9.6 $9.7 $9.7 $9.5
$9
2.9
2.5
2.6
2.7
2.6
$6
$3
7.1
7.1
7.1
7.0
6.9
$0 4Q18 1Q19 2Q19 3Q19 4Q19
Net interest income
Noninterest income
Total Expense ($B) and Efficiency
$5 $4.4 $4.4 $4.4 $4.4 $4.5 60%
$4
50%
$3
45%
45% 45% 45% 47%
$2
40%
$1
$0
30%
4Q18 1Q19 2Q19 3Q19 4Q19
Noninterest expense
Efficiency ratio
Average Deposits ($B) $800 687 697 707 709 720 0.20%
$600 $400 $200
330
0.07% 357
332 0.09% 365
333 0.10%
374
332 0.11%
377
335 0.11%
384
0.15% 0.10% 0.05%
$0
0.00%
4Q18 1Q19 2Q19 3Q19 4Q19
Checking
Other
Rate paid (%)
Average Loans and Leases ($B)
$350
$290 $292
$300
20
20
$250 37
36
$200 50
50
$150
93
92
$100
$50 90
94
$0
4Q18 1Q19 Residential mortgage Vehicle lending Small business / other
$296
20 35 51
91
$304
20 34 51
92
$311
21 32 51
92
100
108
115
2Q19 3Q19 4Q19 Consumer credit card
Home equity
Consumer Investment Assets (EOP, $B) 2
$250
$211 $220 $223 $240
$200 $186
$150
$100
$50
$0 4Q18 1Q19 2Q19 3Q19 4Q19
Note: Amounts may not total due to rounding.
1 See slide 28 for business leadership sources.
2 Consumer investment assets include client brokerage assets, deposit sweep balances and assets under management in Consumer Banking.
16
Consumer Banking Digital Usage Trends 1
Active Digital Banking Users (MM)
10.3MM Erica users
YoY
40 32.9
34.9
36.3
38.3 +6%
30
20 21.6
24.2
26.4
29.2 +10%
10
0 4Q16
4Q17
Digital banking users
4Q18
4Q19
Mobile banking users
Total Payments ($B)
$900
$618
$600
315
$673 324
$300
303 350
$0 4Q16 4Q17 Digital
$725 331
YoY
$776 +7%
+1%
333
+12%
395 443
4Q18 4Q19 Non-Digital
Person-to-Person Payments (Zelle) 4
9.7MM users
100
95.0 $60
75 $40
51.6
50
25
23.1
11.4
0
$4
$7
$14
$24 $20
$0
4Q16 4Q17 4Q18 4Q19
Transactions (MM)
Volume ($B)
Mobile Channel Usage 2, 3
YoY
1,800 1,600 1,400
1,522 1,578 1,315
1,000 +4% 750 +11%
1,200 1,000
982
394
490
547
500
800 317
250
600
400
0
4Q16 4Q17 4Q18 4Q19
Mobile Channel Usage (MM) Digital Appointments (000's)
Deposit Transactions
100%
29% 26% 23% 21%
75%
50%
71% 74% 77% 79%
25%
0% 4Q16
4Q17
4Q18
4Q19
Mobile/ATM
Financial Center
Digital % of Total Sales
35%
27%
28%
24%
20%
21%
51%
59%
14% 62%
7%
38%
0%
4Q16
41%
4Q17
49%
4Q18
Mobile Desktop
Note: Amounts may not total due to rounding. 1 Digital users represent mobile and/or online users. 2 Mobile channel usage represents the total number of mobile banking sessions. 3 Digital appointments represent the number of client-scheduled appointments made via online, smartphone or tablet. 4 Includes Bank of America person-to-person payments sent and received through e-mail or mobile identification. Zelle users represent 90-day active users.
29% 47% 53%
4Q19
17
Global Wealth & Investment Management
Summary Income Statement ($MM)
Total revenue, net of interest expense Provision for credit losses Noninterest expense Pretax income Income tax expense Net income
Key Indicators ($B)
Average deposits Average loans and leases Net charge-off ratio AUM flows 1 Pretax margin Return on average allocated capital Allocated capital
4Q19
$4,913 19
3,523 1,371
336 $1,035
Inc / (Dec)
3Q19
4Q18
$9
($126)
(18)
(4)
110
(40)
(83)
(82)
(20)
(34)
($63)
($48)
4Q19
$255.9 174.4 0.04 % $8.1 28 % 28 $14.5
3Q19
$254.4 170.4 0.09 % $5.5 30 % 30 $14.5
4Q18
$247.4 163.5 0.02 % $4.5 29 % 30 $14.5
· Net income of $1.0B decreased 4% from 4Q18; ROAAC of 28% Pretax margin of 28%
· Revenue of $4.9B decreased 2% from 4Q18 4Q18 included gain on sale of non-core asset Asset management fees increased 5%, driven by the impact
of higher market valuations and positive AUM flows, while transactional revenue declined
Net interest income declined, as solid loan and deposit
growth partially offset the impact from lower interest rates
· Noninterest expense decreased 1% from 4Q18, as investments
for business growth were more than offset by lower amortization of intangibles, litigation and FDIC expense
· Client balances of over $3T, up 16% from 4Q18, driven by higher
market valuations and positive net flows
AUM flows of $8B in 4Q19 1 Average deposits of $256B increased $8B, or 3%, from 4Q18,
partially driven by money market fund conversion in 4Q18
Average loans and leases of $174B increased $11B, or 7%,
from 4Q18, driven by residential mortgage and custom lending
· 2019 net new households increased 64% in Private Bank and
25% in Merrill Lynch vs. 2018
· Household mobile channel usage increased 47% in Merrill Lynch
and 38% in Private Bank from 4Q18
1 Starting in 2Q19, AUM flows include managed deposits in investment accounts.
18
Global Wealth & Investment Management Trends
Business Leadership 1
· #1 U.S. wealth management market position across client assets, deposits and loans H
· #1 in personal trust assets under management I · #1 in Barron's Top 1,200 ranked Financial
Advisors (2019) · #1 in Forbes' Top Next Generation Advisors
(2019) and Best-in-State Wealth Advisors (2019) · #1 in Financial Times Top 401K Retirement Plan
Advisers (2019) · #1 in Barron's Top 100 Women Advisors (2019) · #1 in Forbes' Top Women Advisors (2019)
Average Deposits ($B) $300 $247 $262 $254 $254 $256
$200
$100
$0 4Q18 1Q19 2Q19 3Q19 4Q19
Average Loans and Leases ($B)
$200 $164 $164 $166 $170 $174
$150
41
42
43
44
45
$100 40
39
39
39
39
$50
80
80
$0
4Q18 1Q19 Consumer real estate Custom lending
82
84
87
2Q19 3Q19 4Q19 Securities-based lending Credit card / Other
Total Revenue ($B)
$6
$5.0
$4.8
$4.9
$4.9
$4.9
0.9
0.7
0.8
0.7
0.7
$4
2.5
2.4
2.5
2.6
2.6
$2
1.6 $0
4Q18
1.7 1Q19
1.6 2Q19
1.6 3Q19
1.6 4Q19
Net interest income
Asset management fees
Brokerage / Other
Client Balances (EOP, $B) 2,3
$3,250 $2,600 $1,950 $1,300
$2,621
168 269
1,072
$2,837
126671
1,170
$2,899
127522
1,204
$2,906
127562
1,212
$3,048
179 263
1,276
$650
1,163
1,282
$0 4Q18
Brokerage / Other
1Q19 AUM
1,314
1,306
1,373
2Q19
3Q19
4Q19
Deposits
Loans and leases
Note: Amounts may not total due to rounding.
1 See slide 28 for business leadership sources.
2 Loans and leases include margin receivables which are classified in customer and other receivables on the Consolidated Balance Sheet.
3 Managed deposits in investment accounts of $43B, $40B, $44B, $43B and $51B for 4Q19, 3Q19, 2Q19, 1Q19 and 4Q18, respectively, are included in both AUM and Deposits. Total
19
client balances only include these balances once.
Global Banking
Summary Income Statement ($MM)
Total revenue, net of interest expense 1 Provision (benefit) for credit losses Noninterest expense Pretax income Income tax expense Net income
Selected Revenue Items ($MM)
Total Corporation IB fees (excl. self-led) 1 Global Banking IB fees 1 Business Lending revenue Global Transaction Services revenue
Key Indicators ($B)
Average deposits Average loans and leases Net charge-off ratio Return on average allocated capital Allocated capital Efficiency ratio
4Q19
$5,141 58
2,321 2,762
745 $2,017
Inc/(Dec)
3Q19 4Q18
($71) (62) 102
(111) (31)
($80)
($29) (27) 193
(195) (24)
($171)
4Q19
$1,474 809
2,122 2,136
3Q19
$1,533 902
2,135 2,096
4Q18
$1,348 761
2,213 2,142
4Q19
3Q19
4Q18
$378.5 377.4 0.04 % 20 $41 45 %
$360.5 377.1 0.12 % 20 $41 43 %
$359.6 357.4 0.06 % 21 $41 41 %
· Net income of $2.0B decreased 8% from 4Q18; ROAAC of 20%
· Revenue of $5.1B decreased 1% from 4Q18, as higher leasing-
related revenue and investment banking fees were more than offset by lower net interest income
· Total Corporation investment banking fees of $1.5B (excl. self-
led) increased 9% from 4Q18, driven by higher debt and equity underwriting fees
6.2% investment banking fee market share, up 70 bps 2
· Noninterest expense increased 9% from 4Q18, primarily due to
continued investments in the business, including in technology and client-facing associates
· Average deposits of $379B increased 5% from 4Q18, driven by
increased client coverage
· Average loans and leases of $377B increased 6% from 4Q18,
driven by broad-based growth across corporate and commercial clients
1 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities and sales and trading activities.
2 Per Dealogic as of January 2, 2020.
20
Global Banking Trends
Business Leadership 1
· North America's Best Bank for Small to Medium-sized Enterprises G
· North America's Best Bank for Financing G · 2019 Quality, Share and Excellence Awards for
U.S. Large Corporate Banking and Cash Management L
· Best Bank for Liquidity Management, North America M
· Best Investment Bank for Debt in Western Europe M
· Relationships with 77% of the Global Fortune 500; 95% of the U.S. Fortune 1,000 (2019)
Average Deposits ($B) $400 $360 $349 $363 $360 $379
$300 45% 50% 54% 55% 55%
$200
$100 55% 50% 46% 45% 45% $0 4Q18 1Q19 2Q19 3Q19 4Q19 Noninterest-bearing Interest-bearing
Average Loans and Leases ($B)
$400 $357 $370 $373 $377 $377
16
15
15
15
15
$300 166 176 176 179 180
$200
$100 176 178 182 183 183
$0 4Q18 1Q19 2Q19
Commercial Corporate
3Q19 4Q19 Business Banking
Total Revenue ($B) 2
$6
$5.2
$5.2
$5.0
$5.2
$5.1
0.8
0.9
0.8
0.9
1.0
$4
0.7
0.7
0.7
0.8
0.8
0.8
0.7
0.7
0.9
0.8
$2
2.8
2.8
2.7
2.6
2.6
$0 4Q18
1Q19
2Q19
3Q19
4Q19
Net interest income
IB fees
Service charges
All other income
Total Corporation IB Fees ($MM) 2
$1,348
397 272
699
$1,264
343 234
748
$1,371
288 395
746
$1,533
452 308
816
$1,474
377 322
797
(20) 4Q18
Debt
(61) 1Q19
Equity
(58) 2Q19
Advisory 3
(43) 3Q19
(22) 4Q19
Self-led deals
Note: Amounts may not total due to rounding.
1 See slide 28 for business leadership sources.
2 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities and sales and trading activities.
21
3 Advisory includes fees on debt and equity advisory and mergers and acquisitions.
Global Banking Digital Update 1
CashPro® Online Users across commercial, corporate and business
banking clients
~500K
CashPro® Mobile App Logins
+110%
Rolling 12 mos. YoY
CashPro® Mobile Checks Deposited
+118%
Rolling 12 mos. YoY
CashPro® Assistant
Utilizing Predictive Analytics and APIs to make it easier for clients
to analyze info
CashPro® Mobile Payment Approvals Value
$160B
up 82% Rolling 12 mos. YoY
eSignature
Documents e-Signed via CashPro Assistant
47K
In 2019
Investing in Digital Technology to Develop Integrated Solutions for Our Clients that are:
FAST
SMART
SECURE
CashPro Mobile
Expanding access and capabilities
Mobile Wallet
For Commercial Card
Real Time Payments
For U.S. payments
CashPro API
Supporting real-time access
Digitizing KYC refreshes
Faster and easier through CashPro Assistant
Notifications
For added visibility
Intelligent Receivables
Bringing AI to Receivables with awardwinning solution
Email Assist
Intelligently casing service requests
CashPro Assistant
Driving a fast, smart, secure experience
eSignature
Also on CashPro Mobile
Automatic Fraud Monitoring
Smart and secure
Mobile Token
Expanding access
Document Exchange
CashPro Online and Mobile
Paperless Statements
For commercial card
Biometrics
For CashPro Mobile
Improving Connectivity and Access
Leveraging Data and Intelligence
Confidently doing business anytime, anywhere
1 Metrics as of December 31, 2019 unless otherwise indicated.
22
Global Markets
Summary Income Statement ($MM)
Total revenue, net of interest expense 1 Net DVA Total revenue (excl. net DVA) 1,2
Provision for credit losses Noninterest expense Pretax income Income tax expense Net income
Net income (excl. net DVA) 2
Selected Revenue Items ($MM) 1
Sales and trading revenue Sales and trading revenue (excl. net DVA) 2
FICC (excl. net DVA) 2 Equities (excl. net DVA) 2 Global Markets IB fees
Key Indicators ($B)
Average total assets Average trading-related assets Average 99% VaR ($MM) 3 Average loans and leases Return on average allocated capital Allocated capital Efficiency ratio
4Q19
$3,426 (86)
3,512 9
2,614 803 229
$574 $639
Inc/(Dec)
3Q19 4Q18
($437) $179
(71)
(138)
(366)
317
9
3
(64)
62
(382)
114
(109)
50
($273)
$64
($219) $169
4Q19
$2,773 2,859 1,836 1,023 581
3Q19
$3,204 3,219 2,074 1,145 585
4Q18
$2,588 2,536 1,472 1,064 513
4Q19
$680.1 489.3 35 73.0 7% $35 76 %
3Q19 4Q18
$687.4 $655.1
498.8 464.0
34
36
71.6
70.6
10 %
6%
$35 69 %
$35 79 %
· Net income of $574MM increased 13% from 4Q18; ROAAC of 7% · [ BuEllexctslutdoincgomneet]DVA, net income of $639MM increased 36% 2
· Revenue of $3.4B increased 6% from 4Q18; excluding net DVA,
revenue increased 10% 2
· Excluding net DVA, sales and trading revenue of $2.9B increased
13% from 4Q18 2
FICC revenue of $1.8B increased 25%, driven by an
improvement in most products, particularly mortgages
Equities revenue of $1.0B decreased 4%, driven by lower
levels of client activity in derivatives
· Noninterest expense increased 2% vs. 4Q18
· Average VaR remained low at $35MM in 4Q19 3
1 Global Banking and Global Markets share in certain deal economics from investment banking, loan origination activities and sales and trading activities.
2 Represent non-GAAP financial measures; see note C on slide 27 and slide 30 for important presentation information. 3 See note D on slide 27 for the definition of VaR.
23
Global Markets Trends and Revenue Mix
Business Leadership 1
· Derivatives House of the Year K, P · Most Innovative Bank for Equity Derivatives J · #1 for U.S. FICC Overall Trading Quality and #1
for U.S. FICC Overall Sales Quality L
· Quality Leader in Global Top-Tier Foreign Exchange Sales and Corporate FX Sales L
· Leader in U.S. Fixed Income Market Share L · #1 Municipal Bonds Underwriter N · #1 Global Research Firm O · #1 Global Fixed Income Research Team O
2019 Global Markets Revenue Mix
(excl. net DVA) 2
65% 35%
U.S. / Canada International
2019 Total FICC S&T Revenue Mix
(excl. net DVA) 2
60% 40%
3
Credit / Other Macro
Total Sales and Trading Revenue (excl. net DVA) ($B) 2
Average Trading-related Assets ($B) and VaR ($MM) 4
$14 $13.1
$12 4.1
$10
$8
$6
$4
9.0
$2
$0 2014
$13.0
4.4
8.6 2015
$13.6
4.0
9.6 2016
$13.2
4.2
9.1 2017
$13.3
4.9
8.4 2018
$12.9
4.5
8.4 2019
$500 $450
$400 $56
$300
$200
$100
$0 2014
$433
$53
2015
$413
$41 2016
$442
$40 2017
$465
$34 2018
$490
$80
$60
$35
$40
$20
$0 2019
FICC Equities
Avg. trading-related assets
Avg. VaR
Note: Amounts may not total due to rounding.
1 See slide 28 for business leadership sources.
2 Represents a non-GAAP financial measure. Reported sales and trading revenue was $12.7B, $13.2B, $12.8B, $13.4B, $12.2B and $12.9B for 2019, 2018, 2017, 2016, 2015 and 2014, respectively. Reported FICC
sales and trading revenue was $8.2B, $8.3B, $8.7B, $9.4B, $7.9B and $8.7B for 2019, 2018, 2017, 2016, 2015 and 2014, respectively. Reported Equities sales and trading revenue was $4.5B, $4.9B, $4.1B,
$4.0B, $4.3B and $4.2B for 2019, 2018, 2017, 2016, 2015 and 2014, respectively. See note C on slide 27 and slide 30 for important presentation information. 3 Macro includes G10 FX, rates and commodities products.
24
4 See note D on slide 27 for definition of VaR.
All Other 1
Summary Income Statement ($MM)
Total revenue, net of interest expense Provision (benefit) for credit losses Noninterest expense Pretax income (loss) Income tax expense (benefit) Net income (loss)
4Q19
($500) (79) 315
(736) (998) $262
Inc/(Dec)
3Q19
4Q18
$248
$86
216
45
(2,153)
(81)
2,185
122
324
(81)
$1,861
$203
· Net income of $262MM in 4Q19
· Comparison to the prior quarter impacted by the 3Q19
impairment charge related to the notice of termination of the merchant services joint venture 2
· Compared with 3Q19, 4Q19 Total Corporation other income
included $0.2B of higher partnership losses associated with an increase in tax-advantaged solar and wind investments in our leasing business
· Total Corporation effective tax rate of 14% was positively
impacted by:
$0.3B benefit from the resolution of certain tax matters Higher levels of credits related to tax-advantaged
investments
1 All Other consists of asset and liability management (ALM) activities, equity investments, non-core mortgage loans and servicing activities, liquidating businesses and certain expenses
not otherwise allocated to a business segment. ALM activities encompass certain residential mortgages, debt securities, and interest rate and foreign currency risk management
activities. Substantially all of the results of ALM activities are allocated to our business segments. Equity investments include our merchant services joint venture, as well as a portfolio of equity, real estate and other alternative investments.
25
2 See note A on slide 27.
Appendix
Notes
A Our financial results, after giving effect to the impact of the non-cash impairment charge related to the notice of termination of the merchant services joint venture at the conclusion of its current term, include non-GAAP financial measures. This impairment charge was recorded in 3Q19 and reduced net income by $1.7B, or $0.19 per diluted share ($0.18 per diluted share for full-year 2019), which included an increase in noninterest expense and a reduction in pretax income of $2.1B and a reduction in income tax expense of $373MM. The impairment charge negatively impacted 2019 return on average assets by 7 bps, return on average common shareholders' equity by 66 bps, return on average tangible common shareholders' equity by 91 bps, and increased the efficiency ratio by 227 bps. Reported 2019 metrics are shown on slide 2. We believe the use of these non-GAAP financial measures provides additional clarity in understanding our results of operations and comparing our operational performance between periods. B Global Liquidity Sources (GLS) include cash and high-quality, liquid, unencumbered securities, limited to U.S. government securities, U.S. agency securities, U.S. agency MBS, and a select group of non-U.S. government and supranational securities, and are readily available to meet funding requirements as they arise. 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. C Revenue for all periods included net debit valuation adjustments (DVA) on derivatives, as well as amortization of own credit portion of purchase discount and realized DVA on structured liabilities. Net DVA gains (losses) were ($86MM), ($15MM) and $52MM for 4Q19, 3Q19 and 4Q18, respectively, and ($222MM), ($162MM), ($428MM), ($238MM), ($786MM) and ($240MM) for 2019, 2018, 2017, 2016, 2015 and 2014, respectively. Net DVA gains (losses) included in FICC revenue were ($81MM), ($18MM) and $45MM for 4Q19, 3Q19 and 4Q18, respectively, and ($208MM), ($142MM), ($394MM), ($238MM), ($763MM) and ($308MM) for 2019, 2018, 2017, 2016, 2015 and 2014, respectively. Net DVA gains (losses) included in Equities revenue were ($5MM), $3MM and $7MM for 4Q19, 3Q19 and 4Q18, respectively, and ($14MM), ($20MM), ($34MM), $0MM, ($23MM) and $68MM for 2019, 2018, 2017, 2016, 2015 and 2014, respectively. D VaR model uses historical simulation approach based on three years of historical data and an expected shortfall methodology equivalent to a 99% confidence level. Using a 95% confidence level, average VaR was $20MM, $19MM and $22MM for 4Q19, 3Q19 and 4Q18, respectively, and $20MM, $19MM, $20MM, $22MM, $25MM and $29MM for 2019, 2018, 2017, 2016, 2015 and 2014, respectively.
27
Sources
A Estimated retail consumer deposits based on June 30, 2019 FDIC deposit data. B FDIC, 3Q19. C Dynatrace 4Q19 Online Banker Scorecard and 3Q19 Mobile Banker Scorecard; Javelin 2019 Online and Mobile Banking Scorecards. D Inside Mortgage Finance, 3Q19. E Experian Autocount; Franchised Dealers; Largest percentage of 680+ Vantage 3.0 originations among key competitors as of October 2019. F J.D. Power, February 2019. G Euromoney, July 2019. H U.S.-based full-service wirehouse peers based on 3Q19 earnings releases. I Industry 2Q19 FDIC call reports. J The Banker, 2019. K Global Capital, 2019. L Greenwich, 2019. M Global Finance, 2019. N Refinitiv, 2019. O Institutional Investor, 2019. P Risk Awards, 2020.
28
Forward-Looking Statements
Bank of America Corporation (the "Company") and its management may make certain statements that constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as "anticipates," "targets," "expects," "hopes," "estimates," "intends," "plans," "goals," "believes," "continue" and other similar expressions or future or conditional verbs such as "will," "may," "might," "should," "would" and "could." Forward-looking statements represent the Company's current expectations, plans or forecasts of its future results, revenues, expenses, efficiency ratio, capital measures, strategy, and future business and economic conditions more generally, and other future matters. These statements are not guarantees of future results or performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict and are often beyond the Company's control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements.
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 2018 Annual Report on Form 10-K and in any of the Company's subsequent Securities and Exchange Commission filings: the Company's potential claims, damages, penalties, fines and reputational damage resulting from pending or future litigation, regulatory proceedings and enforcement actions; the possibility that the Company's future liabilities may be in excess of its recorded liability and estimated range of possible loss for litigation, regulatory, and representations and warranties exposures; the possibility that the Company could face increased servicing, fraud, indemnity, contribution, or other claims from one or more counterparties, including trustees, purchasers of loans, underwriters, issuers, monolines, private-label and other investors, or other parties involved in securitizations; the Company's ability to resolve representations and warranties repurchase and related claims, including claims brought by investors or trustees seeking to avoid the statute of limitations for repurchase claims; 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 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 ability to achieve its expense targets and expectations regarding net interest income, 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, including the new credit loss accounting standard; uncertainty regarding the content, timing and impact of regulatory capital and liquidity requirements; the impact of adverse changes to total loss-absorbing capacity 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 regulations, other guidance or additional information on the impact from the Tax Cuts and Jobs Act; the impact of implementation and compliance with U.S. and international laws, regulations and regulatory interpretations, including, but not limited to, recovery and resolution planning requirements, Federal Deposit Insurance Corporation assessments, the Volcker Rule, fiduciary standards and derivatives 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; the impact on the Company's business, financial condition and results of operations from the planned exit of the United Kingdom from the European Union; the impact of any future federal government shutdown and uncertainty regarding the federal government's debt limit; 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.
29
Important Presentation Information
· The information contained herein is preliminary and based on Company data available at the time of the earnings presentation. It speaks only as of the particular
date or dates included in the accompanying slides. Bank of America does not undertake an obligation to, and disclaims any duty to, update any of the information provided.
· In the Consolidated Statement of Income, amounts related to certain asset and liability management activities have been reclassified from Other income to
Market making and similar activities, which was previously referred to as Trading account income. All prior periods presented reflect this change, which has no impact on the Company's Total noninterest income or Net income, and has no impact on business segment results. The amounts included in Market making and similar activities related to this change in presentation are as follows: $930 million and $1.1 billion for the years ended December 31, 2019 and 2018, and $53 million, $411 million, $36 million, $430 million and $177 million in the fourth, third, second and first quarters of 2019 and the fourth quarter of 2018, respectively.
· The Company may present certain key performance indicators and ratios, including year-over-year comparisons of revenue, noninterest expense and pretax
income, excluding certain items (e.g., DVA) which result in non-GAAP financial measures. The Company believes the use of these non-GAAP financial measures provides additional clarity in understanding its results of operations and trends. For more information about the non-GAAP financial measures contained herein, please see the presentation of the most directly comparable financial measures calculated in accordance with GAAP and accompanying reconciliations in the earnings press release for the quarter ended December 31, 2019 and other earnings-related information available through the Bank of America Investor Relations website at: http://investor.bankofamerica.com.
· The Company views 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. The Company believes managing the business with net interest income on an FTE basis provides investors with a more accurate picture of the interest margin for comparative purposes. The Company believes that the presentation allows for comparison of amounts from both taxable and tax-exempt sources and is consistent with industry practices. The FTE adjustment was $145MM, $148MM, $149MM, $153MM and $155MM for 4Q19, 3Q19, 2Q19, 1Q19 and 4Q18, respectively.
· The Company allocates capital to its business segments using a methodology that considers the effect of regulatory capital requirements in addition to internal
risk-based capital models. The Company's internal risk-based capital models use a risk-adjusted methodology incorporating each segment's credit, market, interest rate, business and operational risk components. Allocated capital is reviewed periodically and refinements are made based on multiple considerations that include, but are not limited to, risk-weighted assets measured under Basel 3 Standardized and Advanced approaches, business segment exposures and risk profile, and strategic plans.
30
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