Anthony Li
Marissa Dyrdahl

Banking Industry Outlook
• Improving credit environment
• Deceleration on cost-cutting
– Focus on growth
• Lower loan-loss provision
• Increasing adaptation to regulations

Improving Margins (BofA)
Net Interest Margin
4,50%
4,00%
3,50%
3,00%
2,50%
2,00%
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
Q1
2013
Wells Fargo
Citigroup
Bank of America
U.S. Bancorp
JPMorgan

“Bank of America Corp. posted its strongest annual profit since 2007, driven by lower expenses and growth in key businesses such as consumer lending and wealth management.”
BofA earns $3.44 billion in Q4 2013

BofA Highlights
• 10% Increase in trading revenue Q4 ’13 – only major U.S. Investment bank to report an increase
• Total revenue Increase to 21.7 Billion vs. 18.9 Billion YoY
• Interest income rose 4% % noninterest income rose 28% in 4Q2013 net interest margin increased from 2.35% to 2.56% (as compared to
4Q2012)
• Basel III Tier 1 Capital Ratio of 9%; higher than JPM, WFC, C

Relative Stock Performance (‘05-’14)

BofA Undervalued?
Trailing P/E (ttm, intraday):
Industry BAC C GS JPM
0 18.12
11.04
10.65
12.66
WFC
11.7
MS
21.29
UBS
217.91
HSBC
12.16 N/A
DB CS
16.58
PEG Ratio (5 yr expected):
Return on Assets (ttm):
Return on Equity (ttm):
Profit Margin (ttm):
Operating Margin (ttm):
1.31
0.6
0.5
0.5% 0.7% N/A
1.97
1.58
1.21
0.8% 1.5% N/A
0.48 N/A 0.95
1.4
1.27
0.1% 0.7% 0.0% 0.4%
4.9% 7.0% 10.4% 8.6% 13.5%
13.4% 20.2% 23.5% 18.6% 26.9%
5.4%
9.3%
1.1%
1.1%
9.9%
26.0%
-0.9%
-1.7%
7.5%
12.0%
29.0% 20.2% 28.9% 37.1% 27.6% 43.1% 26.6% 7.0% 39.9% 19.4% 20.0%

Executive Team
• CEO/President
• CFO
Brian T. Moynihan
Bruce R. Thompson
•
• Co-COO
Co-COO
David C. Darnell
Thomas K. Montag
• Head of Compliance Gary G. Lynch

$50 Billion - 2008
$4.1 Billion - 2008

Business Segmentation
• Consumer and Business Banking
• Consumer Real Estate Services
• Global Wealth and Investment Management
• Global Banking
• Global Markets
• All Other

Consumer and Business Banking (CBB)
Opportunities/Highlights
• Low-interest environment
• Increase of 6% in credit card spending
• Return on average allocated capital increased to 26% Q4 ‘13 from 24%
Q4 ‘12
• 3.9M+ credit cards issued in 2013
• Average deposit balances increased 9%
Risks
• Potential litigation expense
• Weakness in consumer spending

Consumer Real Estate Services (CRES)
Opportunities/Highlights
• Rises in value of real estate
• Decreases in credit losses and noninterest expense
• Growth in home loans as housing market improves
Risk Risks
• Facing FHFA lawsuits
• Continued losses from legacy portfolios
• Rising rates

Global Wealth and Investment Management
Opportunities/Highlights
• Record earnings of $3B in GWIM
- major income source diversifier
• Pretax margin increased from
21.1% to 26.6%
• Asset management fees grew
15%
• 18th consecutive quarter for positive fund flows (up 81% from a year ago)
Risks
• Increases in expenses (largely due to higher volumes)
• Increase in credit losses within home loan portfolios

Global Banking
Opportunities/Highlights
• BAML maintained #2 position in global investment banking fees
(up 9%)
• Average loan & lease balances increased 16%
• Average deposits grew 7%
• Optimistic growth in M&A & leveraged loan markets
Risks
• Regulatory risk

Global Markets
Opportunities/Highlights
• Sales & Trading revenues rose
19% (the only major US investment bank to report an increase)
• FI trading revenues increased
16%
Risks
• Continued increases in provisions for credit losses
• Potential for further RMBS litigation (increased noninterest expense from $2.6B to $3.3B)

Looking Forward
• Improving banking environment
• Bank of America is undervalued
• PEG, NIM increase