Bank of America : Earnings Release Q2 2023

Bank of America Reports Q2-23 Net Income of $7.4 Billion; EPS of $0.88, up 21% YoY

Revenue Grew 11%1 led by 14% Improvement in Net Interest Income to $14.2 Billion2

Eighth Consecutive Quarter of Operating Leverage(A); CET1 Ratio of 11.6%

Q2-23 Financial Highlights2		Q2-23 Business Segment Highlights2,3(B)
• Net income rose 19% to $7.4 billion, or $0.88 per diluted	Consumer Banking
share, compared to $6.2 billion, or $0.73 per diluted share
for Q2-22	• Net income of $2.9 billion
• Revenue, net of interest expense, increased 11% to	• Revenue of $10.5 billion, up 15%
$25.2 billion	• Average deposits of $1 trillion, down 7%; 40% above pre-pandemic levels
- Net interest income (NII) up $1.7 billion, or 14%, to
• Average loans and leases of $307 billion increased $17 billion, or 6%
$14.2 billion ($14.3 billion FTE)(C), driven primarily by
• Combined credit / debit card spend of $226 billion, up 3%
benefits from higher interest rates and loan growth
• Client Activity
- Noninterest income of $11.0 billion increased $795
- Added ~157,000 net new Consumer checking accounts in Q2-23; 18th
million, or 8%, as higher sales and trading revenue		consecutive quarter of growth
more than offset lower service charges and
- Record 36.3 million consumer checking accounts with 92% being primary4
investment and brokerage fees	- Small Business checking accounts of 3.8 million, up 4%
• Provision for credit losses of $1.1 billion increased
- Record consumer investment assets of $387 billion grew 23%; accounts
$602 million
	grew 10% with record client flows of $46 billion since Q2-22
- Net reserve build of $256 million vs. net reserve	-	Record digital logins exceeded 3 billion, up 11%; digital sales represented
release of $48 million in Q2-22(D)		51% of total sales
- Net charge-offs of $869 million increased compared
to the prior year and remained below pre-pandemic	Global Wealth and Investment Management
levels
• Noninterest expense increased $765 million, or 5%, to	• Net income of $978 million
$16.0 billion driven by investments in the franchise across
• Client balances of $3.6 trillion, up 8%, driven by higher market valuations and
people and technology, as well as higher FDIC expense;
operating leverage of 6%(A); efficiency ratio of 64%	positive net client flows
• Average loan and lease balances up $32 billion, or 3%, to	• Strong brokerage flows of nearly $100 billion since Q2-22
• Client Activity
$1.0 trillion led by solid commercial loan growth as well
as higher credit card balances	-	Added over 12,000 net new relationships across Merrill and Private Bank
• Average deposit balances down $18 billion, or 1%, from		in Q2-23
Q1-23 to $1.9 trillion; declined $137 billion, or 7%,	-	AUM balances of $1.5 trillion, up $120 billion; $14 billion of AUM flows
from Q2-22		in Q2-23
• Average Global Liquidity Sources of $867 billion(E)	-	Average loan and lease balances of $219 billion were relatively flat
• Common equity tier 1 (CET1) ratio of 11.6%
(Standardized) increased 23 bps from Q1-23(F); returned	Global Banking
$2.3 billion to shareholders through common stock
dividends and share repurchases5	• Net income of $2.7 billion
• Book value per common share rose 7% to $32.05;
tangible book value per common share rose 10% to	• Global Transaction Services revenue of $2.9 billion, up $542 million or 23%
$23.237	• Total investment banking fees (excl. self-led) of $1.2 billion increased 7%
• Return on average common shareholders' equity ratio of	• No. 2 in investment banking fees6
11.2%; return on average tangible common shareholders'	• Client Activity
equity ratio of 15.5%7	-	Average loan and lease balances of $383 billion, up $6 billion, or 2%
	- As of May 2023 YTD, added more than 1,100 new clients while deepening
From Chair and CEO Brian Moynihan:		relationships with existing clients
"We delivered one of the strongest quarters and first half net	Global Markets
income periods in the company's history. Continued organic
client growth and client activity across our businesses	• Net income of $1.1 billion
complemented beneficial impacts of higher interest rates and
produced an 11% increase in revenue. We continue to see a	• Sales and trading revenue up 3% to $4.3 billion, including net debit valuation
healthy U.S. economy that is growing at a slower pace, with a	adjustment (DVA) losses of $102 million; Fixed Income Currencies and
resilient job market. All businesses performed well, and we
Commodities (FICC) revenue up 7% to $2.7 billion and Equities revenue down
saw improved market shares, particularly in our Sales and
2% to $1.6 billion
Trading and Investment Banking businesses. A strong balance
• Excluding net DVA(G), sales and trading revenue up 10% to $4.4 billion; FICC
sheet and ample liquidity allowed us to continue investments
in our franchise to drive long-term value for stakeholders."	revenue up 18% to $2.8 billion; Equities revenue down 2% to $1.6 billion
	• Zero days of trading losses in Q2-23

See page 10 for endnotes. Amounts may not total due to rounding.

• Revenue, net of interest expense.

• 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.
  3 The Corporation reports the results of operations of its four business segments and All Other on a fully taxable-equivalent (FTE) basis.

• 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).
  5 Includes repurchases to offset shares awarded under equity-based compensation plans.
  6 Source: Dealogic as of July 1, 2023.
  7 Tangible book value per common share and return on average tangible common shareholders' equity ratio represent non-GAAP financial measures. For more information, see page 19.

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From Chief Financial Officer Alastair Borthwick:

"Our focus remains on growing our businesses organically by deepening existing client relationships, establishing new relationships, and driving operating leverage. We did that again in the second quarter, producing our eighth consecutive quarter of operating leverage. We delivered strong top line and bottom line growth with net income growing 19 percent from Q2-22.

"Asset quality and the overall health of the U.S. consumer remained strong. Total loss rates remained below pre-pandemic levels. Our balance sheet remained strong with $190 billion of regulatory capital and a CET1 ratio nearly 120 basis points above our current minimum requirements. Capital strength allowed us to return more than $2.3 billion to shareholders in dividends and share repurchases, and we announced our plan to increase our quarterly common stock dividend by 9 percent in Q3-23, subject to approval by our Board of Directors. These results demonstrate the steadfast value of our responsible growth strategy."

Bank of America Financial Highlights

	Three Months Ended
($ in billions, except per share data)	6/30/2023	3/31/2023	6/30/2022
Total revenue, net of interest expense	$25.2	$26.3	$22.7
Provision for credit losses	1.1	0.9	0.5
Noninterest expense	16.0	16.2	15.3
Pretax income	8.0	9.1	6.9
Pretax, pre-provision income1(H)	9.2	10.0	7.4
Income tax expense	0.6	0.9	0.6
Net income	7.4	8.2	6.2
Diluted earnings per share	$0.88	$0.94	$0.73

• Pretax, pre-provision income represents a non-GAAP financial measure. For more information, see page 19.

Spotlight on Net Income and Common Equity Tier 1 Capital ($B)

						1
	Net Income			Common Equity Tier 1 Capital
				Common Equity Tier 1 capital
		$8.2			Common Equity Tier 1 capital ratio
					$190.1
$7.1	$7.1	$7.4		$180.1	$184.4
	$171.8	$175.6

$6.2

11.6%

11.4% 11.2%

11.0%

10.5%

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q2 2023

Q2 2022

Q3 2022

Q4 2022

Q1 2023

Q2 2023

• Common equity tier 1 capital ratio under the Standardized approach.

2

Consumer Banking1,2

• Net income of $2.9 billion decreased 1%, as strong revenue growth was offset by increased provision and noninterest expense
• • Pretax income of $3.8 billion decreased 1%
  • Pretax, pre-provision income(H) of $5.1 billion increased 21%
  • 9th consecutive quarter of operating leverage(A); efficiency ratio improved to 52%
• Revenue of $10.5 billion improved 15%, due to increased NII driven by higher interest rates and loan balances, partially offset by lower service charges
• Provision for credit losses of $1.3 billion increased $917 million
• • Net reserve build of $448 million(D) in Q2-23, driven primarily by credit card loan growth
  • Net charge-offs of $819 million increased $317 million, driven by credit card
• Noninterest expense of $5.5 billion increased 10%, driven primarily by continued investments in employees and higher litigation expense, including consumer regulatory matters

Business Highlights1,4(B)

• Average deposits decreased $72 billion, or 7%, and remained above $1 trillion
• • 57% of deposits in checking accounts; 92% primary accounts5
• Average loans and leases of $307 billion increased $17 billion, or 6%
• Record combined credit / debit card spend up $6 billion, or 3%, with credit up 1% and debit up 3%
• Record consumer investment assets3 of $387 billion grew $72 billion, or 23%, driven by record $46 billion of client flows from new and existing clients and higher market valuations
• • Record 3.7 million consumer investment accounts, up 10%
• 10.4 million Total clients6 enrolled in Preferred Rewards, up 6%, with 99% annualized retention rate

Strong Digital Usage Continued1

• Record 74% of overall households7 actively using digital platforms
• Record 46 million active digital banking users, up 7% or ~3.0 million
• ~1.8 million digital sales, up 8%
• Record 3.1 billion digital logins, up 11%
• Record 20.3 million active Zelle® users sent and received a record 303 million transactions worth a record $91 billion, up 27% and 25% YoY respectively
• Clients booked ~871,000 digital appointments

Financial Results
	Three months ended
($ in millions)	6/30/2023	3/31/2023	6/30/2022
Total revenue2	$10,524	$10,706	$9,136
Provision for credit losses	1,267	1,089	350
Noninterest expense	5,453	5,473	4,959
Pretax income	3,804	4,144	3,827
Income tax expense	951	1,036	938
Net income	$2,853	$3,108	$2,889
Business Highlights(B)
	Three months ended
($ in billions)	6/30/2023	3/31/2023	6/30/2022
Average deposits	$1,006.3	$1,026.2	$1,078.0
Average loans and leases	306.7	303.8	289.6
Consumer investment assets	386.8	354.9	315.2
(EOP)3
Active mobile banking users	37.3	36.3	34.2
(MM)
Number of financial centers	3,887	3,892	3,984
Efficiency ratio	52 %	51 %	54 %
Return on average allocated	27	30	29
capital
Total Consumer Credit Card4
Average credit card	$94.4	$91.8	$81.0
outstanding balances
Total credit/debit spend	226.1	209.9	220.5
Risk-adjusted margin	7.8 %	8.7 %	9.9 %

• Comparisons are to the year-ago quarter unless noted.
  2 Revenue, net of interest expense.
  3 Consumer investment assets includes client brokerage assets, deposit sweep balances, Bank
  of America, N.A. brokered CDs, and AUM in Consumer Banking.
  4 The Consumer credit card portfolio includes Consumer Banking and GWIM.
  5 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).
  6 As of May 2023. Includes clients in Consumer, Small Business and GWIM.
  7 Household adoption represents households with consumer bank login activities in a 90-day period, as of May 2023.

Continued Business Leadership

• No. 1 in estimated U.S. Retail Deposits(a)
• No. 1 Online Banking and Mobile Banking Functionality(b)
• No. 1 Small Business Lender(c)
• Best Bank in North America(d)
• Best Consumer Digital Bank in the U.S.(e)
• Best Bank in the U.S. for Small and Medium Enterprises(f)
• Certified by J.D. Power for Outstanding Client satisfaction with Customer Financial Health Support - Banking & Payments(g)
• No. 1 in Customer Satisfaction for U.S. Retail Banking Advice(h)

See page 11 for Business Leadership sources.

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1 Comparisons are to the year-agoquarter unless noted.

2 Revenue, net of interest expense.

3 Percentage of digitally active Merrill primary households ($250K+ in investable assets within the enterprise). Excludes Stock Plan and Banking only households.

4 Percentage of digitally active Private Bank core relationships ($3MM+ in total Balances). Includes third-partyactivities and excludes Irrevocable Trust-onlyrelationships, Institutional Philanthropic relationships, and exiting relationships.

Continued Business Leadership

• No. 1 on Forbes' Best-in-StateWealth Advisors (2023), Top Women Wealth Advisors (2023), Top Women Wealth Advisors Best-inState (2023), Best-in-StateTeams (2023) and Top Next Generation Advisors (2022)

• No. 1 on Barron's Top 100 Women Financial Advisors List (2023)

• No. 1 on Financial Planning's 'Top 40 Advisors Under 40' List (2023)

• Celent Model Wealth Manager award (2023)

• No. 1 in personal trust AUM(i)

• Best National Private Bank by Family Wealth Report(j) and in North America by Global Private Banking(k)

• Best Use of Technology and Best Digital Client Service(l)

• Best Private Bank for Transfer/Succession Planning and Best Private Bank for Digital in North America(m)

• Best Account Opening and Onboarding Technology(k)

See page 11 for Business Leadership sources.

Financial Results

($ in millions) Total revenue2 Provision for credit losses Noninterest expense Pretax income

Income tax expense Net income

Business Highlights(B)

($ in billions) Average deposits Average loans and leases Total client balances (EOP) AUM flows

Pretax margin

Return on average allocated capital

Global Wealth and Investment Management1,2

• Net income of $978 million decreased 15%

• Pretax margin 25%
• Strong organic client activity

• Revenue of $5.2 billion decreased 4%, as lower average equity and fixed income market levels and transactional volumes drove asset management and brokerage fees lower

• Noninterest expense of $3.9 billion increased 1%, as investments in the business, including strategic hiring, were mostly offset by lower revenue-related incentives

Business Highlights1(B)

• Client balances of $3.6 trillion increased 8%, driven by higher market valuations and positive net client flows

- AUM flows of $14 billion in Q2-23

- Average deposits of $295 billion decreased $69 billion, or 19%

- Average loans and leases of $219 billion were relatively flat to Q2-22

Merrill Wealth Management Highlights1

Client Activity and Advisor Engagement

- Client balances of $3.1 trillion

- AUM balances of $1.2 trillion

• ~11,100 net new households in Q2-23, up nearly 2.5x from Q2-22; record 2Q

Strong Digital Usage Continued

• 83% of Merrill households3 digitally active across the enterprise
• Continued strength of advisor / client digital communications; ~420,000 households exchanged ~1.6 million secure messages
• Record 79% of households enrolled in eDelivery; ~335,000 planning reports generated, up 31%; 56% of clients received a planning report in the last 24 months, up from 37% a year ago
• 74% of eligible checks deposited through automated channels
• 64% of eligible Bank and Brokerage accounts opened through Digital Onboarding in Q2, up from 29% a year ago

Bank of America Private Bank Highlights1

Client Engagement

• Client balances of $578 billion
• AUM balances of $345 billion
• ~960 net new relationships in Q2-23, up 46%

Strong Digital Usage Continued

• Record 92% of clients4 digitally active across the enterprise
• 75% of eligible checks deposited through automated channels
• Clients continued leveraging the convenience and effectiveness of our digital capabilities:
• • Zelle® transactions up 38%
  • Digital wallet transactions up 42%

Three months ended

6/30/2023	3/31/2023	6/30/2022
$5,242	$5,315	$5,433
13	25	33
3,925	4,067	3,875
1,304	1,223	1,525
326	306	374
$978	$917	$1,151

Three months ended

6/30/2023	3/31/2023	6/30/2022
$295.4	$314.0	$363.9
218.6	221.4	219.3
3,635.2	3,521.6	3,367.1
14.3	15.3	1.0
25 %	23 %	28 %
21	20	26

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Global Banking1,2,3

• Net income of $2.7 billion increased 76%
• • Pretax income of $3.6 billion increased 77%
  • Pretax, pre-provision income(H) of $3.6 billion increased 65%
• Revenue of $6.5 billion increased 29%, driven primarily by higher NII, higher leasing revenue, and the absence of mark-to-market losses related to leveraged finance positions in Q2-22; partially offset by lower treasury service charges due to higher earnings credit rates
• Provision for credit losses of $9 million decreased $148 million from Q2-22 as the prior year included a reserve build(D)
• Noninterest expense of $2.8 billion increased 1%, as continued investments in the business, including technology and strategic hiring in 2022, were mostly offset by the absence of expenses recognized for certain regulatory matters in Q2-22

Business Highlights1,2(B)

• Total Corporation investment banking fees (excl. self-led) of $1.2 billion increased $84 million, or 7%
• Average deposits of $498 billion decreased $12 billion, or 2%
• Average loans and leases of $383 billion increased $6 billion, or 2%

Strong Digital Usage Continued1

• 75% digitally active clients across commercial, corporate, and business banking clients (CashPro and BA360 platforms) (as of May 2023)
• Record quarterly CashPro App active users increased 27% and record number of sign-ins increased 58%
• Record quarterly CashPro App Payment Approvals value was $201 billion, increased 20%
• Quarterly percentage of eligible credit monitoring documents uploaded digitally at 39% (as of May 2023)

Financial Results
	Three months ended
($ in millions)	6/30/2023	3/31/2023	6/30/2022
Total revenue2,3	$6,462	$6,203	$5,006
Provision for credit losses	9	(237)	157
Noninterest expense	2,819	2,940	2,799
Pretax income	3,634	3,500	2,050
Income tax expense	981	945	543
Net income	$2,653	$2,555	$1,507
Business Highlights2(B)
	Three months ended
($ in billions)	6/30/2023	3/31/2023	6/30/2022
Average deposits	$497.5	$492.6	$509.3
Average loans and leases	383.1	381.0	377.2
Total Corp. IB fees (excl. self-	1.2	1.2	1.1
led)2
Global Banking IB fees2	0.7	0.7	0.7
Business Lending revenue	2.7	2.3	2.0
Global Transaction Services	2.9	3.1	2.4
revenue
Efficiency ratio	44 %	47 %	56 %
Return on average allocated	22	21	14
capital

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

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

• Revenue, net of interest expense.

Continued Business Leadership

• World's Most Innovative Bank - 2023, Most Innovative Bank in North America(n)
• World's Best Digital Bank, World's Best Bank for Financing, North America's Best Digital Bank, North America's Best Bank for Small to Medium-sized Enterprises, North America's Best Bank for Sustainable Finance(m)
• Best Bank for Payment & Collections in North America(o)
• Model Bank award for Product Innovation in Cash Management - 2023, for CashPro Mobile, CashPro Forecasting, and CashPro API(p)
• World's Best Bank for Supply Chain Finance (q)
• 2022 Quality, Share and Excellence Awards for U.S. Large Corporate Banking and Cash Management(r)
• Relationships with 73% of the Global Fortune 500; 95% of the U.S. Fortune 1,000 (2022)

See page 11 for Business Leadership sources.

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