Company Overview - Wall Street Horizon provides institutional traders and investors with accurate and comprehensive forward-looking event data [1] - The company covers 9,500 companies worldwide and offers more than 40 corporate event types [1] - Data delivery options are varied to meet client needs [1] Service Offerings - Services include earnings calendars, dividend dates, option expiration dates, splits, and investor conferences [1] - The company keeps clients informed of critical market-moving events and event revisions [1] Market Impact - The data provided by Wall Street Horizon empowers financial professionals to take advantage of or avoid ensuing volatility [1]

Bank of America's Note Redemption - Bank of America will redeem all $1,500,000,000 principal amount of its Floating Rate Senior Notes on February 5, 2025, at 100% of the principal amount plus accrued interest [1] - Interest on the Notes will cease to accrue on the redemption date [1] - The redemption payment will be made through The Depository Trust Company, with The Bank of New York Mellon Trust Company, N A serving as trustee and paying agent [2] Bank of America's Business Overview - Bank of America is a leading global financial institution offering a full range of banking, investing, asset management, and risk management products and services [3] - The company serves approximately 69 million consumer and small business clients in the US through 3,700 retail financial centers and 15,000 ATMs [3] - Bank of America has approximately 58 million verified digital users and provides industry-leading support to 4 million small business households [3] - The company operates across the US, its territories, and more than 35 countries, with its stock listed on the NYSE under the ticker BAC [3] Additional Information - For more news and updates, including dividend announcements, investors and reporters can visit the Bank of America newsroom or contact designated representatives [5][6]

Brokerage Recommendations and ABR - Bank of America (BAC) currently has an average brokerage recommendation (ABR) of 1.48, which approximates between Strong Buy and Buy on a scale of 1 to 5 [2] - Out of 25 recommendations, 17 are Strong Buy (68%) and 4 are Buy (16%) [2] - The ABR suggests buying Bank of America, but relying solely on it for investment decisions may not be ideal due to the positive bias in brokerage recommendations [4][5] - Brokerage firms issue five "Strong Buy" recommendations for every "Strong Sell," indicating a strong positive bias [5] Zacks Rank and Earnings Estimate Revisions - Zacks Rank is a proprietary stock rating tool that categorizes stocks into five groups, ranging from Zacks Rank 1 (Strong Buy) to Zacks Rank 5 (Strong Sell) [7] - Unlike ABR, Zacks Rank is based on earnings estimate revisions and has a strong correlation with near-term stock price movements [10] - Zacks Rank is displayed in whole numbers (1 to 5), while ABR is displayed in decimals [8] - Zacks Rank is more timely than ABR, as it quickly reflects changes in earnings estimates [11] Bank of America's Investment Potential - The Zacks Consensus Estimate for Bank of America's current year earnings has increased by 0.2% over the past month to $3.67 [12] - Analysts' growing optimism about the company's earnings prospects, indicated by upward revisions in EPS estimates, could drive the stock higher in the near term [12] - Bank of America has a Zacks Rank 2 (Buy), which aligns with its Buy-equivalent ABR, making it a potentially attractive investment [13]

Industry Perspective - The US banking industry is likely to adopt cryptocurrencies for payments if regulatory frameworks permit [1] - The banking system would heavily engage in the transactional aspects of cryptocurrencies if clear rules are established [2] - Currently, American banks have mostly avoided allowing retail customers to use cryptocurrencies for transactions, although institutional trading and wealth management divisions have participated in bitcoin ETF markets [3] Company Perspective - Bank of America has already secured hundreds of patents related to blockchain technology, indicating readiness to enter the cryptocurrency payment space [4] - The CEO of Bank of America views cryptocurrencies primarily as a form of payment rather than an investment or store of value, distinguishing it from other financial applications [4] Regulatory and Market Context - The industry's approach to cryptocurrencies could shift significantly due to political enthusiasm for digital currencies, as highlighted by President Donald Trump's stance [1] - Despite the potential for adoption, some industry leaders, such as JPMorgan Chase's CEO, have criticized cryptocurrencies like bitcoin for their association with criminal activities [3]

Earnings Performance - Bank of America's Q4 2024 earnings exceeded expectations, with net profits more than doubling year-over-year to $6.67 billion, or $0.82 per share [1] - Revenues increased by 15% to $25.5 billion, driven by stronger investment banking business and higher net interest income [1] - Net interest income rose by 3% to $14.5 billion, slightly ahead of estimates [1] - Investment banking fees surged 44% to $1.65 billion, supported by increased M&A activity and capital issuances [1] - Sales and trading revenue grew by 10%, with equities up 6% and fixed income, currencies, and commodities up 13% [1] Stock Performance and Volatility - BAC stock has shown volatile annual returns over the past four years: 50% in 2021, -24% in 2022, 5% in 2023, and 34% in 2024 [2] - The Trefis High Quality Portfolio, comprising 30 stocks, has outperformed the S&P 500 with less volatility [2] - Uncertainty around macroeconomic factors, such as rate cuts and geopolitical tensions, could impact BAC's performance relative to the S&P 500 [2] Interest Rate Environment and Outlook - Higher interest rates in recent years increased deposit costs for lenders, but the Fed's rate easing since September 2024 may boost loan demand and reduce deposit costs [2] - Bank of America expects net interest income (NII) to reach $14.6 billion in Q1 2025, with sequential growth potentially reaching $15.7 billion by Q4 2025 [2] - NII is a critical metric for Bank of America due to its large deposit base compared to rivals [2] Political and Regulatory Impact - Donald Trump's re-election as U.S. president is expected to benefit the financial sector through potential deregulation and a more lenient approach to bank oversight [3] - Antitrust-related rules may ease, potentially boosting deal volumes, lending activity, and profitability for banks [3] - Trump's focus on tax cuts could further enhance the bottom lines of banks like Bank of America [3] Valuation and Market Position - BAC is currently trading at $47 per share, aligning with Trefis' valuation estimate for Bank of America [3] - The broader U.S. banking sector has performed well during the earnings season, supported by rising stock markets, softer interest rates, and stronger dealmaking activity [1]

Investment Banking Performance - The largest US banks reported significant revenue and profit gains in Q4, driven by a resurgence in Wall Street dealmaking [2] - Investment banking revenue surged, with the largest banks reporting increases of 25% or more compared to the same quarter a year ago [2] - JPMorgan Chase and Bank of America led with investment banking revenue gains of 49% and 44% respectively [2] Market Reaction - Investors responded positively, with the SPDR S&P Bank ETF gaining over 8% last week [3] - Shares of major banks like JPMorgan, Wells Fargo, and Citigroup surged, recovering most of the decline since early December [3] Deals Driving Growth - Increased activity in securities underwriting and mergers and acquisitions fueled investment banking growth in Q4 [4] - US corporations issued $67.8 billion in bonds in December, nearly double the $35.7 billion issued in the same month a year earlier [6] - Global M&A deals totaled $3.4 trillion in 2024, up 15% from 2023 [6] Private Equity and Venture Capital - Private equity and venture capital firms hold approximately $3 trillion in uncommitted capital, which could further fuel an M&A rebound in 2025 [7] Net Interest Income and Investment Banking - Banks had enjoyed net interest income expansion due to the Fed's rate hikes over the past two years, but gains halted once the Fed started cutting rates [8][10] - Investment banking helped offset the decline in net interest income, contributing to overall revenue growth [8][10] JPMorgan's Performance - JPMorgan's net interest income fell marginally from Q3 and dropped 3% from Q4 2023 [9] - Overall revenue rose 10%, driven by a surge in investment banking and a 21% increase in asset management fees [9] - Quarterly profit increased 50% year over year, supported by revenue gains and a 7% decline in non-interest expenses [9] Industry Trends - Other large banks also saw similar trends, with investment banking business being the common driver of growth [11]

Core View - Wells Fargo and Merrill Lynch settled SEC charges related to violations of Advisers Act rules in their cash sweep programs, with penalties totaling $60 million [1][2] - The firms failed to prioritize clients' best interests when selecting cash sweep options and managing advisory account cash [1][3] Settlement Details - Wells Fargo Clearing Services agreed to pay a civil penalty of $28 million [2] - Wells Fargo Advisors Financial Network agreed to pay a civil penalty of $7 million [2] - Merrill Lynch agreed to pay a civil penalty of $25 million [2] SEC Allegations - The firms set interest rates for their bank deposit sweep programs (BDSPs), with yield differences reaching nearly 4% compared to other cash sweep alternatives during rising interest rates [2] - Advisory firms must have policies to ensure cash in advisory accounts is managed in line with clients' investment profiles [3] Company Responses - Wells Fargo stated the settlement resolves a broader industry matter and that the issues have already been addressed [4] - Merrill Lynch claimed it took significant steps before the SEC investigation, including increasing rates for advisory clients and lowering investment thresholds for money market funds [5] Industry Context - Several financial institutions faced lawsuits in August for allegedly paying unreasonably low interest rates in cash sweep programs [5]

Investment Rating - The report does not explicitly state the investment rating for Bank of America (BAC US) [1][2][3] Core Views - Bank of America's 24Q4 revenue and profit exceeded expectations, with both net interest income and non-interest income surpassing forecasts [2][3] - The net interest margin (NIM) was higher than expected, and loan and deposit growth also exceeded expectations [2][3] - The non-performing loan (NPL) ratio was higher than expected, indicating a slight deterioration in asset quality [2][3] - Return on equity (ROE) and return on tangible common equity (ROTCE) exceeded expectations, and the CET1 ratio also surpassed forecasts [2][3] Financial Performance Summary - Revenue grew by 15.4% YoY, higher than the Bloomberg consensus forecast of 14.0% [2][3] - Net interest income increased by 3.0% YoY, above the expected 1.7% [2][3] - Non-interest income surged by 37.1% YoY, exceeding the expected 36.0% [2][3] - Consumer banking revenue grew by 3.1% YoY, higher than the expected 1.2% [2][3] - Global wealth and investment management revenue increased by 14.8% YoY, above the expected 14.0% [2][3] - Global markets revenue grew by 18.4% YoY, below the expected 20.4% [2][3] - Net profit attributable to common shareholders surged by 125.5% YoY, significantly higher than the expected 112.9% [2][3] - The cost-to-income ratio decreased by 14.5 percentage points YoY to 66.2%, slightly worse than the expected 65.9% [2][3] - Provisions for credit losses were $1.452 billion, a 31.5% YoY increase, lower than the expected 42.0% [2][3] - The NPL ratio increased by 2 basis points QoQ to 0.55%, higher than the expected 0.52% [2][3] - ROE increased by 5.04 percentage points YoY to 9.37%, above the expected 8.76% [2][3] - ROTCE rose by 6.71 percentage points YoY to 12.63%, higher than the expected 11.86% [2][3] - The CET1 ratio increased by 0.1 percentage points YoY to 11.90%, above the expected 11.70% [2][3] - The net interest margin (NIM) increased by 5 basis points QoQ to 1.97%, higher than the expected 1.94% [2][3] - Total loans grew by 4.0% YoY, above the expected 2.9%, while total deposits grew by 2.2% YoY, higher than the expected 1.2% [2][3] Business Segment Performance - Consumer banking revenue: $10.646 billion, up 3.1% YoY [3] - Global wealth and investment management revenue: $6.002 billion, up 14.8% YoY [3] - Global banking revenue: $6.091 billion, up 2.7% YoY [3] - Global markets revenue: $4.840 billion, up 18.4% YoY [3]

Financial Data and Key Metrics Changes - The company reported a net income of $6.7 billion for Q4 2024, translating to an EPS of $0.82, marking a solid finish to the year [8][24] - For the full year 2024, revenue reached $102 billion with a net income of $27.1 billion and an EPS of $3.21, achieving a return on assets of 83 basis points and a 13% return on tangible common equity [10][22] - The fourth quarter revenue was $25.5 billion, up 15% year-over-year, and up 8% when excluding the previous year's BSBY cessation charge [26][27] Business Line Data and Key Metrics Changes - Consumer Banking generated $10.6 billion in revenue and $2.8 billion in net income for Q4, both showing modest growth from the previous year [57] - Wealth Management reported $6 billion in revenue for Q4, growing 15% year-over-year, with net income rising 15% to nearly $1.2 billion [63] - Global Banking generated $8.1 billion in earnings for 2024, with investment banking fees in Q4 growing 44% year-over-year to $1.7 billion [66][68] Market Data and Key Metrics Changes - The company ended the year with $953 billion in liquidity, reflecting strong client activity and a healthy economic environment [11][12] - Deposits grew by $35 billion in Q4, with total deposits reaching $952 billion, indicating a recovery in consumer banking deposits [31][60] - Commercial loans grew 5% year-over-year, while consumer loans showed growth across all categories linked quarter [16][36] Company Strategy and Development Direction - The company aims to drive organic growth across all business lines, with a focus on deposit franchise growth and maintaining a disciplined pricing strategy [14][15] - Investment in technology and brand continues, with significant partnerships announced to enhance service offerings [48][50] - The company is positioned for growth in 2025, expecting record net interest income driven by improved loan and deposit growth [12][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in a stable economic environment with GDP growth expected between 2% to 3% [11] - The company anticipates continued growth in net interest income, projecting a 6% to 7% increase in 2025 compared to 2024 [41][79] - Management noted that consumer spending remains strong, with early January spending up 4% to 5% year-over-year [11] Other Important Information - The company returned $21 billion to shareholders in 2024, a 75% increase from 2023, including an 8% increase in the common dividend [22] - The CET1 ratio improved to 11.9%, providing a buffer above the regulatory requirement [33] Q&A Session Summary Question: Drivers of NII growth in '25 - Management highlighted deposit growth and increased loan demand as key drivers for net interest income growth, with expectations for continued acceleration in the second half of 2025 [83][87] Question: Confidence in delivering sustainable operating leverage - Management expressed confidence based on historical performance and current growth rates, emphasizing the importance of stable headcount and expense management [90][92] Question: Capital targets and buyback strategy - Management indicated a focus on maintaining a CET1 buffer while continuing to return capital to shareholders through dividends and buybacks [113][115] Question: Trading performance and business mix - Management noted consistent year-over-year growth in trading revenues, emphasizing a stable business model that avoids volatility [125][127] Question: Credit reserves and economic outlook - Management clarified that reserve levels are based on conservative estimates, with expectations for stable unemployment and GDP growth [129][131]

Digital Transformation and Consumer Engagement - 61% of consumer sales are now made through digital channels, up from 49% a year ago [1] - 78% of households are "digitally active," up from 75% a year ago [1] - Interactions with Erica, the virtual financial assistant, reached 171.5 million in the latest quarter, up from 122.9 million last year [2] - Zelle peer-to-peer payments totaled $127 billion in Q4, up from $101 billion in the same quarter last year [2] Financial Performance and Growth - Revenue grew year-over-year across all business segments [2] - Net new checking accounts increased by 1.1 million, and 4 million new credit card accounts were added in 2024 [4] - Consumer deposits stood at $942 billion in Q4, up slightly from $938 billion in Q3 [4] - Commercial loans grew 5% year-over-year, with loan and deposit growth expected to outpace last year's [5] Consumer Spending and Economic Outlook - Consumer spending in the first two weeks of January increased by 4% to 5% compared to last year [3] - The economy is settling into a 2% to 3% GDP growth environment, supported by healthy employment [3] - Credit card loss rates were 3.79% in Q4, up 0.09% from Q3 [5] Deposit and Loan Trends - Consumer banking deposits appear to have bottomed in mid-August, with a floor forming after periods of decline [6] - Average checking account balances are stable at around $9,000, down from a peak of $11,000 in previous years [6] - Increased optimism among clients is driving demand for loan growth and deposit growth [6] Small Business and Commercial Banking - Small business and middle-market lending activity remains lower than pre-pandemic levels [7] - Optimism among small businesses has improved due to a shifting regulatory environment and reduced election uncertainty [7] - The company aims to translate this optimism into increased loan growth [8]