Testimony of Brian Moynihan

Chief Executive Officer

Bank of America

May 26, 2021

Chairman Brown, Ranking Member Toomey, and members of the Committee:

On behalf of all of us at Bank of America, I am grateful for your consideration of this written statement,
and I look forward to discussing these matters with you during my appearance before the Committee.

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Beginning in 2020, the U.S.—and countries around the world—have faced challenges without modern
precedent caused by a global health and humanitarian crisis. In response, Bank of America has taken
many steps that will be discussed in this statement to help our clients, the communities we serve—and
ultimately the U.S. economy—through the pandemic-driven economic crisis and recovery. We made
additional investments to address the needs of our teammates and their families, to support our
communities and to help deliver progress on important issues facing society, with a particular focus on
racial equality and economic opportunity.

When the crisis hit, we were well-positioned to be a source of strength and stability. That reflects our
decade-plus focus on driving Responsible Growth.

I. 2010-2020: A decade of transformation

I assumed the role of CEO on January 1, 2010. Over the past decade, my teammates and I have
transformed Bank of America into a strong, straightforward, stable, transparent and client-centric
company.

Our approach to how we run the company is shared and commonly understood by our team at Bank of
America. We call this Responsible Growth, and it has four straightforward tenets:

1. We must grow in the market;

2. We must grow with a customer focus;
3. We must grow within our risk framework; and
4. And we must grow in a sustainable manner.

I’ll discuss each of these tenets in greater detail later in this statement.

Coming out of the financial crisis, we adopted a straightforward strategy, serving three groups of
customers—people, companies of all sizes and institutional investors—through eight lines of business.
All of those lines of business operate within the United States. Outside the United States, we operate
those lines of business serving companies and institutional investors.

We also took significant steps to reduce the scope and complexity of our company, as envisioned in the
Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). We divested more than
$80 billion of non-core activities and businesses, including private equity holdings, an insurance
company, an asset management company, equity positions in non-U.S. financial institutions, and
businesses outside the United States that served consumers and retail investors. We consolidated our
capital to support the U.S. consumer, small and mid-sized companies, corporate clients and institutional
investors we serve.

We also improved our risk management framework, again consistent with the principles embodied by
Dodd-Frank and in alignment with a business model that emphasizes deepening relationships with core
clients.

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Another central element of our company’s transformation since the financial crisis is how we have
strengthened our capital and liquidity. Since the end of 2009, we have increased our tangible common
equity1 from $112 billion to $180 billion. Over the same period, our average global liquidity sources have
increased from $214 billion to over $1 trillion. Our capital and liquidity levels give us the financial
strength and flexibility to support our clients, regardless of the economic environment.

In addition, we have managed our loan portfolio to a more balanced credit profile, making it consistent
with our risk framework.

As a result of these improvements, the Federal Reserve has modeled Bank of America’s loan loss rate in
its annual Comprehensive Capital Analysis and Review (CCAR) stress tests to be the lowest among peers
in seven of the last eight years. Bank of America also had the lowest loan loss rate (6.1%) in the
additional December 2020 CCAR stress test, which was prompted by macroeconomic uncertainties
caused by the global pandemic.

Subject to federal bank regulations, we have remained committed to returning excess capital to
shareholders, absent what is needed to support economic growth, deliver for customers and
communities, reward our teammates through shared success, invest in our future and sustain strength
and stability. From the beginning of 2011 through the end of the first quarter of 2021, we returned
almost $115 billion through share repurchases and dividends, and ended that period with $35 billion in
excess capital above our required minimum as well as record liquidity. And while we have continued to
repurchase shares over the past decade, the number of shares currently outstanding is still nearly
double the amount outstanding before the 2008 financial crisis, due to capital raised in the wake of the
financial crisis. Table 1 in the Appendix shows end of year capital and leverage ratios as well as capital
distributions over the past 10 years.

Thanks to the efforts of our team to transform the company over the past decade, and their ongoing
focus on Responsible Growth, our company has been well-positioned to be a source of strength for all of
our stakeholders during the health, economic and social crises of the past year.

II. Delivering for clients, teammates and communities

Supporting our clients when and where they needed us

For over a decade, we have invested heavily in our capabilities to be able to serve all of our clients
where, when and how they choose. That includes investment in technology; from 2009 to 2011 we
doubled our new technology initiative spending budget to roughly $3 billion and it has remained at that
level or higher every year since then. This strong and consistent level of investment enabled us to
rapidly respond to evolving client needs in 2020—and to be there for them when they needed us most.

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Represents a non-GAAP financial measure. Tangible common equity is calculated as common shareholders’
equity of $249.7 billion and $207.2 billion for the first quarter of 2021 and the fourth quarter of 2009, which has
been reduced by goodwill of $69.0 billion and $86.3 billion for the first quarter of 2021 and the fourth quarter of
2009 and intangible assets (excluding mortgage servicing rights) of $2.1 billion and 12.0 billion, net of related
deferred tax liabilities of $0.9 billion and $3.5 billion for the first quarter of 2021 and the fourth quarter of 2009.

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Client support programs

Our support for clients included far-ranging measures to assist those impacted by the health and
ensuing economic crisis, through our own relief programs and through government relief programs.

Client Assistance Program

Through our Client Assistance Program, we helped nearly 2 million consumers and small businesses
defer payments on credit cards, vehicle loans and home loans as they managed their finances through
the pandemic. Even with a deferral, the vast majority of those clients remained current on their
payments. A small percentage have needed extended assistance, and we continue to work with them
individually to help them get back on track. For example, for clients with mortgages originated by us, we
are adding deferred payments to the end of the loan term so they aren’t making a lump-sum payment
up front.

At peak, we deferred roughly $55 billion in client loans through our Client Assistance Program. Today,
due in part to government stimulus efforts, clients are better positioned to manage through the
pandemic and deferrals are less than $7 billion.

Paycheck Protection Program

Beginning in late March 2020, thousands of Bank of America teammates worked to design, develop and
deliver a digital platform to support clients through the Paycheck Protection Program (PPP). We began
accepting PPP applications the day after the program details were announced in early April—the first
major bank to do so. And in 2020, we provided PPP loans to more small businesses than any other
financial institution.

To support that work, we dedicated more than 3,000 employees by the first week of the program to
assist small business customers with PPP applications. We did not prioritize among client applicants
when processing or submitting completed applications to the Small Business Administration (SBA) based
on the amount of the customer’s loan request or any broader client relationship.

To date, we have provided PPP loans to nearly 500,000 small businesses—reflecting more than $35
billion in funding. Of all PPP loans provided to Bank of America clients, 83% have gone to businesses
with 10 or fewer employees; nearly 40% have gone to businesses in majority-minority communities; and
24% have gone to low- to moderate-income (LMI) communities. We sent millions of emails to help
clients understand the program, and encourage them to apply if eligible, including targeted outreach to
drive awareness in LMI and majority-minority communities.

We also took immediate measures to implement SBA guidance related to some of the smallest
businesses—sole proprietors, independent contractors and single-member LLCs—allowing them to use
gross income, instead of net profit, in the PPP application process and potentially benefit from a higher
loan amount. We have provided PPP loans to more than 10,000 of these small businesses, with an
average loan amount of under $20,000.

Bank of America’s process for the PPP allowed any business client with an existing credit relationship, or
a business client that had no credit relationship with Bank of America or another bank, to apply online
for a PPP loan, because we could provide financial assistance more quickly to those with whom we
already had a relationship. To assist businesses in under-served communities that weren’t Bank of

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America clients, we partnered with dozens of community development financial institutions (CDFIs) to
assist them in providing PPP loans to more than 10,000 small businesses in the communities they serve.

In August 2020, we launched our digital portal to help clients apply for forgiveness on their PPP loan. We
have since updated our portal to support the SBA’s simplified application processes. To date we have
helped more than 220,000 clients receive loan forgiveness and we continue to work closely with clients
to help them in the PPP forgiveness process.

We expect to receive fees from our participation in the PPP consistent with the rules and formulas set
forth in applicable laws, and will have a final assessment of total fees received once all loans have been
processed. In 2020, we announced that any net proceeds related to PPP fees will be dedicated to
support small businesses and the communities and nonprofits we serve.

Stimulus Payments
Since the start of the pandemic, we have supported clients and non-clients through three federal
stimulus programs as well as two state programs and one local program. Through these efforts, we have
processed over 43 million stimulus transactions totaling $73 billion.

We took steps to ensure all clients were able to access their funds immediately. Additionally, we
provided overdraft credits to help those with a negative balance on their account access the full
payment amount. If a client had a negative balance on their account when they received a stimulus
payment, we provided a temporary credit to their account—for at least 30 days—equal to the amount
of the negative balance. Through this expanded support, we have helped more than 1 million clients
access the full amount of their stimulus payment.

To help non-clients access the full amount of their payment, we waived non-client check cashing fees for
stimulus checks.

We continue to process stimulus payments pursuant to all applicable federal and state regulations on
garnishments, including executive orders on garnishments issued in several states during the pandemic.

Unemployment Insurance
Bank of America has supported 12 state government unemployment agencies (Arizona, California, Iowa,
Kansas, Kentucky, Maryland, Massachusetts, Michigan, Nevada, New Jersey, North Carolina and South
Carolina) with the distribution of unemployment benefits during the pandemic.

Those states have contracted with Bank of America to help distribute unemployment funds using pre-
paid debit cards. Since March 1, 2020, we have experienced a more than six-fold increase in cards
issued, compared with the rate of issuance prior to the pandemic, and loaded over $195 billion in
unemployment payments to more than 24.7 million recipients, with California representing the largest
share of active pre-paid cards and aggregate funds.

The delivery of unemployment benefit payments is a collaborative effort between state agencies and
the bank they select to administer the delivery of payments, with each having different responsibilities.
Unemployment claimants submit an application for unemployment benefits to the state agency, online,
via email or by phone. The state agency determines both eligibility and benefit amount, then transmits a
file with benefits recipient and payment information to the bank. The bank creates and mails a card, and
loads funds into an account associated with that card. Once the benefits account is opened, the bank is

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responsible for routine card servicing issues relating to account access, lost or stolen cards, personal
identification numbers, as well as account transaction claims and disputes. The state agency is also
responsible for addressing ongoing questions regarding benefit recipient eligibility status.

The vast majority of state unemployment funds have been delivered to recipients as intended during the
period of heightened activity brought about by the pandemic. However, Bank of America and the
relevant state agencies have also seen unprecedented levels of criminal fraudulent activity in the form
of eligibility and identity fraud. We have faced these challenges in all 12 states, although the scale of
fraudulent activity related to California’s program has been uniquely large.

A spike in criminal activity occurred in the third quarter of 2020, resulting in heavy volumes in our call
centers and claims departments. In response, we took a number of actions with authorities in order to
reduce fraud, including freezing suspicious cards, while also implementing measures to improve the
experience for valid recipients. These steps, in connection with additional measures being taken by
states, have led to a meaningful reduction in fraudulent activity and improved processes for legitimate
recipients. We continue to monitor and adjust our response as needed to support these important state
programs.

Supporting clients’ day-to-day financial needs

Our services are essential to our clients and to the economy. Throughout the past year, our team has
redoubled its efforts to support the everyday financial needs of our clients—in person and through
digital channels—in all of the communities we serve.

Ongoing support through our financial centers

From the beginning of the health crisis, we’ve taken additional health and safety measures within our
financial centers to protect our teammates, clients and communities. That includes implementing
enhanced deep cleanings and temperature checks, and installing more than 44,000 wellness barriers.
Like many businesses, we’ve had to continuously adjust our local operations in response to the spread
of coronavirus, state regulations and local ordinances.

Through it all, our financial center teammates have been there for our clients—and our entire company
is grateful for their efforts. I will talk more about how we have supported our teammates in financial
centers later in this testimony.

Staying connected through digital platforms

For more than a decade, we’ve invested heavily to develop a secure, user-friendly digital platform that
supports the full range of client needs. These industry-leading digital capabilities have allowed us to
remain connected to our clients and deliver essential products and services without interruption during
the health crisis.

In 2020, more than 9 billion out of 10 billion total client interactions with Bank of America came through
digital channels. As clients navigated lockdowns and quarantines, we saw 84% of deposits come through
our automated channels (mobile, online and ATMs), up from 78% the prior year. This includes a record
160 million checks—many of them government stimulus checks—deposited using our mobile banking
app in 2020.

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As the health crisis hit, we saw a spike in digital adoption among older clients, who needed a safe and
reliable way to continue banking. As one client shared with us in the spring of 2020:

“I’m a 75-year old senior in New York, currently sheltering in place at home. I received a few
checks that I needed to deposit so I could pay my bills. I had heard about a way to deposit using
my iPhone, so I decided the time had come to learn how to do it.”

At a time when clients’ schedules were pressured, our digital capabilities made it easier to connect with
our teammates for support and guidance. In 2020, clients used digital tools to arrange a record 2.6
million in-person and virtual appointments. Our Bank by Appointment capabilities were responsible for
more than 20% of account sales and service interactions in our financial centers, up from 13% in 2019.

The strength of our digital platforms enabled us to be responsive to rapidly changing needs of our clients
during the crisis. For example, Erica, our AI-based financial assistant located in our mobile app, learned
60,000 new pandemic-related intents—for example, “Erica, tell me about coronavirus relief options”–in
a matter of days to support our clients and connect them with the information and resources they
needed. And our CashPro platform allowed our commercial clients—including those pivoting to remote
work—to continue managing payments and cash flow uninterrupted.

Supporting underserved communities

We are committed to ensuring everyone has access to the products and services they need to achieve
their financial goals, regardless of where they live and what they earn.

Throughout 2020, we continued to use our network of financial centers—including financial centers in
LMI communities and our designated community financial centers, which I describe in greater detail
later in this testimony—as well as our digital capabilities, to support financial needs within underserved
communities. To complement these channels and to ensure these communities have access to capital,
we continue to invest heavily in alternative channels of funding, including CDFIs.

Bank of America is the nation’s largest lender to CDFIs, which provide affordable, responsible lending
and support to low-income and other disadvantaged clients and communities. By funding CDFIs,
including our support for PPP lending described above, we help make it possible for credit to flow to
needs we might otherwise be unable to serve through direct lending.

Currently, we provide $1.8 billion to finance affordable housing, community facilities and small
businesses through 256 CDFIs in all 50 U.S. states and the District of Columbia. More than $510 million
of that total has been focused on small businesses.

In addition to funding CDFIs directly, Bank of America connects CDFIs with other sources of flexible
capital. For example, Bank of America has facilitated CDFIs accessing more than $750 million in loan
capital under the Federal Reserve’s PPP Liquidity Facility.

Sustained outreach and engagement

Throughout the health crisis, our teams have continued to reach out to clients across all businesses in
order to support their financial needs and help them navigate the current environment.

 We sent tens of millions of emails and placed outbound phone calls to Consumer & Small
Business clients;

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  We held thousands of calls, meeting and broadcasts to actively advise and connect with our
Wealth Management clients; and
 We issued guidance and market insight from our BofA Global Research and Investment Insights
teams through multiple channels, including virtual investor conferences.

While each outreach to clients varied in content, the overarching message was always the same: Bank of
America is here to support you.

Taking care of our teammates and their families

Our teammates’ health and safety is always our top priority. Since the beginning of the health crisis, we
have taken many broad ranging steps to protect our more than 200,000 teammates and to support their
families.

First, we transitioned about 85% of our employees, including any teammate who identified as high-risk,
to work from home. Many high-risk employees have been redeployed to roles they can perform
remotely.

We also expanded many of our benefits and resources, including additional support for mental health,
free virtual medical consultations and no-cost coronavirus testing. And we delivered face coverings to all
employees and contractors to help them stay safe, in line with guidance of medical experts, health
officials, and the U.S. Centers for Disease Control and Prevention.

As the pandemic hit, we knew our teammates were going to be under pressure at home. For most of
them, their home became their workplace. For our 40,000 teammates with children, home was often
also a school or daycare. For many teammates with aging parents, home became an assisted living space
as well. Our teammates needed help. We offered them $100 per day to hire that help and, to date,
we’ve funded more than 4 million days of care. And we continue to expand our childcare benefit
programs to support our teammates with children. Beginning in July, we will provide childcare
reimbursement up to $275 per month, per child, for U.S. employees earning up to $100,000 in cash
compensation.

We took additional actions to support the health of teammates working daily in our offices, and to
recognize their efforts to serve our clients and help the economy move forward. In our financial centers,
we implemented on-site coronavirus testing, temperature checks, daily health screenings, physical
distancing markings and wellness barriers to keep teammates and clients safe. And we provided these
teammates with special compensation programs, including supplemental pay and enhanced overtime
pay, as well as transportation and meal subsidies.

We expanded our dedicated team of Life Event Services specialists—which was established in 2014 to
assist teammates through disasters and other times of crisis—to provide personalized support to
teammates impacted by the coronavirus. And we continue to offer 24/7 confidential counseling through
our Employee Assistance Program for teammates and their immediate family members.

More than one year into this health crisis, we recognize that COVID-19 vaccines are key to returning to a
more normal way of life—for our company and for the world. We continue to share extensive
information and resources, including local tip sheets, to help our teammates learn more about vaccines

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and find out where they can get one. And we are providing all employees up to two half-days of paid
time off to complete vaccination appointments in 2021.

Helping our communities move forward

Last year, as we confronted overlapping crises, we invested heavily to support the communities in which
we work and live and, at the same time, help deliver progress on important issues impacting us all.

Promoting local health and safety

In response to the health and humanitarian crisis, our teams immediately set to work providing
important resources to our local communities—including those hardest hit by the impacts of the
coronavirus. We pledged $100 million toward medical supplies, food security and other vital support,
and an additional $250 million to CDFIs to provide more companies and not-for-profits access to
important capital.

Our support also included the donation of personal protective equipment (PPE) to communities across
the country. To date, we have delivered roughly 29 million face coverings, more than 5 million gloves
and more than 28,000 cases of sanitizer to communities in need.

In May of 2020, we also launched a $1 billion corporate social bond, the first issued by a U.S. commercial
bank to focus exclusively on fighting the pandemic.

Racial equality and economic opportunity

Last year, we saw intensified passion to address the obstacles to true racial equality in the United States
and around the world. In June of 2020, we accelerated our longstanding work to promote racial equality
and economic opportunity for all under-represented groups with a $1 billion, four-year commitment.
We recently expanded that to $1.25 billion over five-years.

We are delivering our commitment in our local communities through targeted investments in four key
areas: jobs, small businesses, housing, and healthcare. Since June 2020, we have already deployed more
than $350 million of the money into our communities, including:

 MDIs and CDFIs – We have completed equity capital investments in 17 minority depository
institutions (MDIs) and CDFIs as part of a $50 million commitment made in 2020. As part of this
commitment, we have acquired up to 4.9% of common equity in MDIs and CDFI banks
facilitating benefits in the communities that these institutions serve through lending, housing,
neighborhood revitalization, and other banking services. These equity investments are in
addition to approximately $100 million in deposits from Bank of America in MDIs as well as our
$1.8 billion CDFI portfolio, discussed earlier in this testimony.

 Private equity funds – We recently increased our target for equity investment in minority-
focused funds to $350 million, and have already committed more than $250 million to 90
private equity funds across the U.S. These funds provide capital to Black, Hispanic-Latino, Asian,
Native American, other under-represented minority and women entrepreneurs to help them
establish and grow their businesses. These investments help advance racial equality and
economic opportunity on several levels. The investments we make in the funds themselves
provide capital to under-represented minority and women investors who own and manage the

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 funds. These investors, in turn, are helping fund minority-owned businesses, and we anticipate
the private equity funds investments we have already made will lead to more than 2,000
minority-owned operating companies getting the investments they need to hire employees,
including, of course, under-represented minorities and women.

 Higher education institutions – Through our partnerships with 21 historically Black colleges and
universities (HBCU) and Hispanic-serving institutions (HSI), we have worked to enhance up-
skilling and re-skilling for Black and Hispanic-Latino students and create pathways to long-term
career success.

 For example, in February, we partnered with the Black Economic Alliance Foundation,
Morehouse College and Spelman College to launch the Center for Black Entrepreneurship (CBE),
the first-ever academic center of its kind. Our $10 million anchor funding will support the
development of an academic curriculum, faculty recruitment, co-curricular programming,
modernization of existing facilities and the development of new physical space. The CBE will be
located on the campuses of Spelman College and Morehouse College in southwest Atlanta.

In 2020, we also issued an industry-first $2 billion equality progress sustainability bond designed to
advance racial equality, economic opportunity and environmental sustainability.

Affordable housing
During 2020, we continued to address the affordable housing shortage for individuals, families,
students, veterans, the formerly homeless, those with special needs, and other at-risk groups.

We recently tripled our affordable homeownership commitment to $15 billion by 2025. By providing
grants for down payments and closing costs through this program, we aim to help more than 60,000
individuals and families in low- and moderate-income communities purchase homes and, importantly,
build wealth through the power of homeownership. And we have expanded our funding and long
standing partnerships with non-profits like Neighborhood Assistance Corporation of America (NACA) for
the same reasons.

Additionally, in 2020, we provided a record $5.87 billion in loans, tax credit equity investments and
other real estate development solutions, and deployed $3.62 billion in debt commitments and $2.25
billion in investments to help build strong, sustainable communities by financing affordable housing and
economic development across the country. Between 2005 and 2020, we financed more than 215,000
affordable housing units.

In April 2021, we committed $60 million—$30 million in loans and $30 million in equity financing—to
support Enterprise Community Partners’ Equitable Path Forward, a five-year initiative to help facilitate
racial equality in housing. The investment will increase access to capital and career opportunities for
diverse leaders developing multi-family, affordable and supportive housing across the country. Through
this initiative, we will help provide much-needed Low Income Housing Tax Credit capital and debt
financing to directly source, structure and close deals with diverse developers, especially emerging
developers seeking both flexible capital and technical assistance.

III. Responsible Growth

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Our company’s purpose is to make financial lives better. Responsible Growth is how we deliver on that
purpose. By driving Responsible Growth, we create value for our shareholders as well as our clients, our
teammates, our communities and, at the same time, help deliver progress on important issues facing
society.

Our decade-long focus on Responsible Growth prepared us well for the current health crisis. It
positioned us to continue serving our clients through the worst economic shock in recent history, while
at the same time increasing investments to support the needs of our teammates and our communities.

To reiterate what I described at the beginning of my statement, there are four tenets to Responsible
Growth. First, like every business, we must grow to be successful. Second, we must grow with a
customer focus. Third, we must grow within our risk framework. Fourth, we must grow in a sustainable
manner.

1. Grow in the market

To be successful, we have to grow in the market—and that growth has to be consistent with our
principles and risk framework, and beneficial for our stakeholders.

In 2020, we saw a surge in client activity due to the health crisis. As a result of our planning and
investments over the past decade, and the tireless efforts of our global team, we were there to support
our clients’ evolving needs—including those consumers and small businesses hardest hit by the impacts
of the coronavirus.

We supported our clients with our various customer assistance programs. We supported small
businesses with PPP loans. We supported wealth management clients with advice, expertise and
execution in volatile markets. We supported commercial clients with our strong balance sheet: providing
more than $70 billion in loans in a few-week period, and raising $772 billion in capital for clients over
the course of 2020. We supported institutional investors by providing market expertise and insights,
trading capabilities and access to help them navigate through the uncertainty.

And we leveraged our digital capabilities to help all of our clients—from retail clients to CFOs to
institutional investors—manage their finances wherever and whenever they needed.

All of this, and more, allowed us to continue to serve clients through the pandemic, even as volumes
surged. We played our part, with our industry colleagues, in helping ensure economies around the
world, and here in the U.S., recover more quickly. In the end, that is the role of the bank.

Our diverse set of businesses allowed us to respond to and support the financial needs of all clients, and
our results for 2020 reflected the trust clients placed in us to do so.

In 2020, average deposits at our bank increased 18% year-over-year to approximately $1.6 trillion.

In Consumer Banking, we added $115 billion in average deposits during the year.

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During 2020, we added roughly 22,000 Merrill and 1,800 Private Bank relationships, and ended the year
with client balances at all-time highs of $3.3 trillion.

Apart from the role we played as one of the largest PPP lenders, we remained the largest small business
lender in the country overall, ending 2020 with more than $32 billion in small business loan balances.

We supported our commercial clients in their rush to borrow as they sought liquidity in February, March
and April of 2020—reaching a high of $585 billion in commercial loans during the year. As conditions
stabilized, we helped provide market access for these clients to raise needed and permanent capital.

Through a dynamic market environment, we remained a source of strength and stability for our clients.
And we grew as a result.

Benefits provided by the U.S. Federal Government

Bank of America benefits from its status as a nationally chartered financial institution as well as from
government support for, and assistance in, the safeguarding of our physical and digital security.
Prudently enacted fiscal and monetary policy fosters a strong national economy and the well-being of
our population. We are fortunate to play a part in a robust U.S. banking system, and our ongoing success
as a business relies on a strong, stable and predictable U.S. regulatory environment coupled with
appropriate and rigorous oversight and supervision.

The U.S. regulatory framework in place prior to the health crisis put Bank of America and the industry on
a strong footing, and we applaud the swift and comprehensive actions that Congress, Treasury
Department, Federal Reserve and other U.S. Federal Government agencies took to mitigate the
economic impact of the coronavirus. Those actions—quantitative easing, stimulus programs, financing
facilities, and pre-emptive regulatory relief—combined to ensure the continued health of our citizens,
our markets and our economy. Overall, the government’s robust response bolstered confidence and
ensured the health crisis did not evolve into a financial one.

Adjustments to U.S. financial regulations in response to the pandemic were sensible given the
heightened uncertainty, and would have been even more meaningful to provide stability to the sector if
the financial impacts of the crisis been more severe:

 Temporarily excluding U.S. Treasuries and central bank reserves from the consolidated
Supplementary Leverage Ratio (SLR) made sense, given the uncertain amount of bank balance
sheet expansion that quantitative easing could have caused. While that exclusion has now
sunset—with no firm having breached its minimums—it will be important for regulators to
revisit that requirement, since the relationship between low-risk assets and risk assets has
changed meaningfully since the leverage backstops were calibrated. While the temporary
exclusions increased Bank of America’s SLR, as of the first quarter of 2021, our company’s more
binding constraint was the common equity tier 1 capital ratio. Excluding the temporary relief,
our SLR at the end of the first quarter 2021 was in excess of the minimum 5% requirement.

 Allowing an optional extended phase-in of the regulatory capital impact of the Current Expected
Credit Loss (CECL) accounting standard helped ensure capital was available for customers and
markets.

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  Permitting banks to offer forbearance to borrowers without causing those loans to be
characterized as troubled debt restructurings helped preserve capital for those who needed it.

Additionally, the U.S. Federal Government’s relief measures were beneficial to markets generally, and to
consumers including our clients.

 While quantitative and monetary easing pressured our net interest income due to lower interest
rates, we saw high deposit inflows as liquidity flooded into the system.

 The funding facilities for various types of assets helped stabilize the markets for those assets
(although Bank of America did not need to access these facilities).

 As a major facilitator of PPP lending, discussed earlier in this testimony, we saw first-hand how
PPP loans helped businesses across the country weather the storm and continue paying their
workers.

 Stimulus checks and supplemental unemployment payments helped keep our clients current on
their loan payments, even if temporarily displaced from the workforce.

Finally, Bank of America’s clients also benefit from protections, such as deposit insurance, that
safeguard depositor assets and increase consumer confidence in the banking system. Bank of America
pays into the Federal Deposit Insurance Corporation (FDIC) Deposit Insurance Fund, which is used to
protect the depositors of insured banks and to resolve failed banks. We paid approximately $585 million
in premiums to the FDIC in 2020, and nearly $13 billion over the past decade.

2. Grow with a customer focus

To drive Responsible Growth, we must grow with a customer focus. And by focusing on the needs of our
customers and clients in 2020—through the extraordinary pandemic-related efforts described above
and across the full range of our high-touch and high-tech capabilities—we made a meaningful difference
in their lives. How do we know? In 2020, our client satisfaction scores were the highest in company
history.

Our company has developed over many decades to one which now serves cities and towns across
America. Our nationwide coverage, combined with our industry leading digital platforms, gives us the
scale and breadth to address the individual financial needs of our roughly 66 million clients—with whom
we interact tens of millions of times each day.

Our branch network

Our network of financial centers is an important high-touch way we connect with our clients, work with
them to achieve their financial goals, and support the economic wellbeing of our communities.

Today, Bank of America’s nationwide network consists of approximately 4,300 financial centers and
17,000 ATMs across 38 states and the District of Columbia. Over the past two decades, the size and
footprint of our network has evolved to help us more effectively serve clients where they are. In 1999,

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we had had approximately 4,500 banking centers. Over the following years, the number of financial
centers increased during a period of acquisitions to a high of 6,149 at the end of 2007.

Since 2008, we have opened approximately 650 financial centers to help provide local access to more
clients and communities. During this period, we expanded our physical footprint into 5 new states
(Colorado, Minnesota, Ohio, Utah and Kentucky). And we’ve continued to invest in renovations across
our financial center network to help us more effectively support the financial needs of our clients. We
completed more than 1,500 renovations in the past 3 years alone.

We continuously monitor client behavior, including digital engagement, and traffic patterns and make
adjustments to our financial center footprint to most effectively serve them. This includes selectively
consolidating financial centers, primarily in areas in which we have overlapping coverage.

In 2010, we reviewed our branch network and identified a number of locations that we felt could be
better served by more local financial institutions. We sold more than 350 branches to nearly 30 other
financial service institutions. That gave these local providers the opportunity to strengthen their local
networks while preserving access to those branches for the people they serve.

Supporting LMI communities

As our network has evolved, we have made significant investments in LMI communities to ensure that
they have better access to the full range of high-quality financial services and products that we offer.
Since 2008, the portion of our financial centers in LMI communities has remained steady at
approximately one-third. At the same time, the portion of centers in majority-minority communities has
increased from 33% to 36%.

All our financial centers are staffed with professionals who can readily assist clients with any financial
need. Each center provides free Wi-Fi for our clients’ convenience, giving them the opportunity to
connect to our leading digital and mobile resources and tools. At the same time, 72% of our financial
centers are multi-lingual, reflecting the communities we serve.

Seven hundred of our financial centers are designated community financial centers focused on meeting
clients’ and communities’ unique needs by connecting them to products and services, jobs and capital
that will increase financial resilience and help our local communities thrive. Many community financial
centers also include enhancements such as local art and cultural exhibits prominently featured in the
lobby; kiosks with interactive, self-guided financial education content; and conference rooms where
clients can attend Better Money Habits financial education seminars in English and Spanish. Many
clients have appreciated the additional resources and support our community financial centers provide,
and client satisfaction rates in these centers is at an all-time high.

Our efforts to lend, invest and provide services in LMI communities are subject to the Community
Reinvestment Act (CRA) and are currently rated outstanding.

Digital banking

Complementing our high-touch offerings, our high-tech digital capabilities help us serve clients when
and where they need us. Today, we have more than 40 million digital customers. In the first quarter of
2021 alone, these clients made 2.6 billion digital logins. In the first quarter, approximately 70% of

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Consumer & Small Business households actively used digital platforms and roughly half of all Consumer
Banking sales came through digital channels. Of those clients, 61% are now fully paperless.

Digital is transforming how our clients send and receive money. Our 13.5 million Zelle active users,
including Small Businesses, sent and received 170 million transfers worth $49 billion in the first quarter
alone, that’s up 66% and 83%, respectively, over 2019 levels.

On the commercial side, our CashPro platform continues to enable businesses and corporations to
efficiently manage their finances from the office, home or somewhere in between. CashPro sign-ins
were up 37% in the first quarter of 2021 compared to one year earlier.

Our wealth management advisors also used our digital capabilities to support the needs of our Merrill
Lynch and Private Bank clients in a virtual setting. Digital engagement for both businesses hit records
highs in the first quarter of 2021.

We deliver a wealth of services through our digital platforms for all customers and clients, across all
lines of business. These benefits are equally accessible and applicable across all demographics. And we
are constantly exploring ways to expand and interconnect these tools to deliver a more seamless,
personalized experience for each client that spans and supports their entire relationship with us.

Emerging technologies

Artificial Intelligence
One of the ways we improve the overall client experience and better serve their financial needs across
our platforms is by the thoughtful and responsible application of artificial intelligence (AI).

In evaluating the potential uses of AI, we first we look at the customer needs and how our potential AI-
driven solution might benefit them and fit into our overall business process. We treat AI like every other
technology: If it can improve the client experience, we will consider including it. If it does not, we won’t.

While there are many new applications of AI available today, the building blocks of this technology—
data science, predictive modeling, testing and training—have been around for over half a century. As
with all technologies we use, we have rigorous policies and procedures in place for how we develop
capabilities using AI.

Importantly, we take measures to ensure we have a diverse team in place to build, test and refine our AI
capabilities. This helps remove the potential bias in algorithms. Ultimately, we understand that
members of our team must be held accountable for the output of our AI. Human oversight is a critical
factor in AI success.

We do not utilize the type of AI commonly associated with explainability challenges to decision
outcomes for lending or hiring.

One of our most prominent applications of AI is Erica, our AI-based virtual financial assistant located in
our mobile app. More than 20 million of our digital clients use Erica to do everything from checking their
balances to paying their bills, and 99% of our clients who engage with Erica are able to find the
information they need without calling a contact center. Additionally, Erica’s personalized, proactive
insights and guidance can help clients manage cash flow and optimize savings. For example, even if a

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client has not directly engaged the Erica financial assistant, Erica will reach out to help if a client’s
balance is at risk of going below $0 in the next week, or if a merchant charges them twice.

Erica continues to gain new capabilities and learn new ways to support our clients. This, in turn, has
driven increased client engagement. In the first three months of 2021, clients interacted with Erica 100
million times, whereas it took 18 months for Erica to reach the first 100 million interactions.

Distributed Ledger Technology and blockchain

We continue to evaluate applications of new technologies that have the potential to deliver value to our
customer and clients, including distributed ledger technology (DLT) and blockchain. While Bank of
America holds more than 60 blockchain patents, we still have not found a use case at scale.

In 2019, we joined the Marco Polo trade finance network that leverages Corda DLT to provide
transformative solutions to global trade participants. Through the network, we will be able to offer
clients access to innovative risk mitigation solutions such as receivables discounting, payment
commitment and payables finance programs, providing them greater transparency and making
traditionally paper-based processes more efficient.

Cryptocurrency
We continue to evaluate the opportunities, risks and client demand for products and services related to
cryptocurrency. Currently, we do not lend against cryptocurrencies and do not bank companies whose
primary business is cryptocurrency or the facilitation of cryptocurrency trading and investment.

Data privacy

Bank of America does not sell personally identifiable customer data to third parties, nor do we allow
third parties to conduct research for their own purposes using personally identifiable customer data that
the bank has collected in the normal course of business. If any of our vendors receive customer data in
the course of performing a function for us, Bank of America requires that the vendor meet our privacy
and data protection standards and that the data be protected by the bank’s strict information security
controls. No further use of that data can be made without Bank of America’s express approval.

Consumer-focused products and services

Early in the financial crisis, it became clear to us that customers in all income groups wanted clarity,
consistency, transparency and simplicity in their financial products and services. As part of our
transformation over the past decade, we’ve embedded these principles into our existing portfolio of
products and services.

For example, we have cut the number of credit cards we offer from 25 to six today, and condensed 22
checking accounts into one operating account.

We also continue to add to our series of fair and affordable banking solutions to help clients budget,
save, spend and borrow with confidence as well as attract the unbanked into the mainstream of
available financial services.

In 2020, we added Balance Assist, a short-term, low-cost, and digital-only lending solution. An
alternative to payday lenders, Balance Assist allows clients to borrow up to $500 (in $100 increments)

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for a $5 flat fee, regardless of the amount advanced to their account. Clients repay the loan in three
equal monthly installments over a 90-day period.

In 2014, we introduced Advantage SafeBalance Banking, a full-featured bank account with no overdraft
or non-sufficient fund fees. The low monthly fees for the account are waived for students under 24 and
members of our Preferred Rewards program. Today, about 2.5 million clients use SafeBalance accounts
to manage their everyday finances.

For clients who want to establish, strengthen or rebuild their credit, we offer Bank of America Secured
Card. Clients can apply for an account with a security deposit of $300. With responsible credit behavior,
clients can improve their credit score and, over time, may qualify for credit without the security deposit.
More than 830,000 households currently use a Bank of America Secured credit card.

Our digital platforms help us deliver these products and services to our clients, and extend our reach
further into our communities. Today, 64% of underserved clients use our mobile app to actively manage
their accounts as well as to access information and resources to help them achieve their financial goals.

In September 2020, we launched LifePlan, which gives clients the power to select what’s most important
to them, selecting from items like “improve credit,” “pay off student loans,” and “budget and start
saving.” Clients then receive personalized insights to help them achieve their goals, through both high-
tech and high-touch interactions. By the end of the first quarter of 2021, our clients had created more
than 3 million plans, one of the fastest product rollouts in our history.

In 2013, we launched Better Money Habits, a free financial education program that helps people build
financial know-how, with tools and resources in English and Spanish. For Bank of America customers,
the platform is embedded in our online and mobile offerings—including LifePlan—and is enhanced by
our Spending and Budgeting Tool, which puts timely information at clients’ fingertips to help them
improve their financial outcomes. Last year, consumers accessed financial education information on the
Better Money Habits website 7 million times, reflecting a 12% year-over-year increase in traffic to our
English site and a 133% increase in traffic to our Spanish site.

The impact of Better Money Habits has been significant. Among clients who use both Better Money
Habits and our Spending and Budgeting Tool, about one in four grew savings by 20 percent or more,
while about one in three grew their checking balance by 20 percent or more.

Mandatory arbitration
Bank of America avoids relying on mandatory arbitration clauses in nearly all cases. Since 2009, Bank of
America has not used mandatory arbitration in banking disputes with individual customers regarding
consumer credit cards; auto, recreational vehicle and marine loans; and deposit accounts. Bank of
America eliminated mandatory arbitration in its mortgage and home equity agreements several years
before that, other than in a limited number of jurisdictions, where we have customized loan agreements
with high net worth borrowers that contain mandatory arbitration provisions.

Bank of America, along with other securities industry firms, also uses arbitration clauses in our client
agreements when establishing a brokerage or investment advisory account relationship. FINRA provides
the forum and sets the rules for these arbitrations, subject to oversight and approval of the Securities
and Exchange Commission.

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Additionally, Bank of America does not include mandatory arbitration clauses in our offer letters to
employees and thus, employees we hire are not required to arbitrate discrimination and harassment
claims (though employees registered with FINRA are required to arbitrate non-discrimination
employment claims as result of industry requirements and we have a mutual arbitration clause with a
managed service provider for contract employees).

Supporting Small Businesses

Small businesses are the backbone of the U.S. economy and key to the economic wellbeing of our
communities. Bank of America serves 13 million business owner clients nationwide who rely on us for
their financial needs, both business and personal. More than 3 million of those business owners have
their business banking relationship with us, and our team of more than 2,000 dedicated small business
bankers work within our communities to help address their everyday needs.

According to the FDIC, Bank of America maintained its position as the nation’s top small business lender
at the end of 2020, with $50.3 billion in total outstanding small business loans (defined as business loans
in original amounts of $1 million and under).

The success of the small businesses we serve helps support the wellbeing of their communities through
economic growth, development and job creation. Currently, 60% of our small business lending is to LMI
clients or communities. Approximately 40% of our small business clients are women and 13% of our
small business clients are Hispanic, in-line with the nationwide averages for small business ownership.
We serve over 1 million Hispanic business owners, making us a market share leader according to
Deloitte.

Capital markets activity

Our capital markets businesses include Global Banking and Global Markets.

Global Banking, which includes Global Corporate Banking, Global Commercial Banking, Business Banking
and Global Investment Banking, serves middle-market and large corporate clients. We help clients raise
capital and hedge risks. When markets are volatile and clients are trying to manage their business, they
turn to us for help. When markets are stable and there is less client activity or volatility, our revenues
may be lower.

In 2020, we were the number three investment banking firm in the world with total investment banking
fees of $7.2 billion, up 27% from the prior year primarily driven by higher equity issuance and
underwriting fees as we provided clients access to markets.

Our Global Markets business offers sales and trading services and research services to institutional
clients across fixed-income, credit, currency, commodity and equity businesses. Global Markets’ product
coverage includes securities and derivative products in both the primary and secondary markets.

Since the financial crisis, we have positioned this business to deliver steady and sustainable returns
across the range of market conditions, while taking less risk. Over the years, our performance bears that
out. Over the past five years and with all of the volatility in markets and trading activities during that
period, Global Markets has delivered annual sales and trading revenue within a range of $12.9 billion
and $15.2 billion. The average over that period was $13.6 billion. This relative stability reflects our

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leadership positions across multiple products and our ability to maintain the appropriate business mix
during market shifts.

Our Global Markets business generated a 22% return on capital in the first quarter of 2021. This helped
offset other segments that were more negatively impacted by the health crisis, reflecting the value of
our diverse and complementary lines of business.

Our goal for our Global Markets business is to be large enough to serve customers and clients in every
major market around the world but not so large, risky or volatile as to ever—even in the worst of
times—hamper our ability to serve all our customers across every line of business.

Through our focus on Responsible Growth, we manage our Global Markets business through a well-
established risk framework and oversight. This naturally limits activities that are highly leveraged and
concentrated. As one example of the impact of these strategies, Bank of America did not have any
exposure to recent events involving Archegos Capital Management.

3. Grow within our risk framework

Growing within our established risk framework is integral to how we drive Responsible Growth. Our
principled approach to risk management allowed us to continue supporting our customers and clients
against the backdrop of one of the worst economic declines in U.S. history, driven by the global
pandemic.

Our risk management begins with the board of directors. The directors set the risk appetite for the
company. That cascades through the company and defines the risk we take in credit risk, operational
risk, trading, or otherwise. The Enterprise Risk Committee of the board reviews dashboards quarterly to
review compliance with the risk appetite.

The risk function is an independent control function that is outside the lines of business hierarchies. The
7,000-plus teammates in the Risk & Compliance group report to the Chief Risk Officer, who has a
reporting relationship to the Chief Executive Officer and to the Enterprise Risk Committee of the board.
Other control functions, also outside the lines of business and reporting to the CEO, include the 1,100
person audit team that reports to the Chief Auditor (who reports to the Audit Committee of the board),
the Chief Financial Officer, the head of Global Human Resources, the Global General Counsel, and the
Chief Technology and Operations Officer.

We drive a culture of compliance and risk management deep into our company. To ensure that all
employees across all levels are managing risk effectively, we conduct educational sessions and
mandatory training on key risk types facing our company, including strategic risk, credit risk, market risk,
liquidity risk, operational risk, compliance risk and reputational risk. We also sustain an open
environment in which employees are encouraged to identify, escalate and debate potential issues.

As a global systemically important bank, Bank of America’s business operations, resiliency and financial
strength have the potential to both bolster and affect the stability of the financial system and the
economy as whole, as the current health crisis demonstrated. Managing systemic risk is a priority for
Bank of America, as it is for our regulators. It important to both external stakeholders and the
company’s core business strategy. To avoid passing these risks onto the government and taxpayers,

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Bank of America maintains billions of dollars in additional capital; plans extensively for the possibility of
economic, financial or market stress; and expends substantial resources to meet heightened supervisory
expectations for risk governance. As our balance sheet and external testing reflects, we are much
stronger than we were ten years ago, having transformed the company in the wake of the financial
crisis: We reduced scope and complexity, improved risk management, and are fully committed to
growing responsibly.

Cybersecurity
Cyber threats are evolving and pervasive, and we continue to invest heavily in our cybersecurity
capabilities to protect our clients and our company. That begins with the strength of our team, and over
the past decade, we have doubled the size of our Global Information Security (GIS) team to nearly 3,000
teammates.

Our cybersecurity framework is designed to prepare, prevent, detect, mitigate, respond to and recover
from cyber threats. We maintain strong, ongoing relationships with government partners, including the
Department of Homeland Security, the Department of the Treasury, law enforcement, and the
intelligence community. Coordination within our industry and across other industries is also critical to
mitigating and managing today’s cyber challenges. We continue to invest in partnerships to build a
trusted community for cyber threat information sharing, and are leading efforts across the financial
services industry to define resilience and recovery in today’s marketplace.

We helped drive the creation of the first financial sector organization focused specifically on systemic
risk and analysis, the Analysis and Resilience Center for Systemic Risk (ARC, formerly the Financial
Systemic Analysis & Resilience Center). We hold or have held leadership/board positions in financial
sector organizations working to improve the security and resilience of the sector. These include the ARC,
FS-ISAC, FSSCC, and Sheltered Harbor.

We also participate in industry-wide exercises, along with government partners, to test the resilience of
our crisis management plans and response to threats and incidents. We are leveraging our leadership
role to help ensure that the financial sector is truly resilient. We are also working with partners in the
electricity and communications sectors on these topics, given our mutual dependencies with them.

Compliance commitment
Since 2019, Bank of America has continued to take steps to improve compliance and prevent violations
of laws and regulations. We have made important progress, and our work continues. Based on readily
accessible public information, we entered into three settlements with government regulators valued at
greater than $1 million since the last hearing: (1) in June 2019 Merrill Lynch Commodities Inc. agreed to
pay $36.5 million to the U.S. Department of Justice and the Commodity Futures Trading Commission to
resolve allegations that former precious metals traders misled the market for precious metals futures
contracts; (2) in September 2019, Bank of America agreed to pay $4.2 million in back wages and interest
to resolve allegations of hiring discrimination violations between 2008 and 2013 at six branches, as
identified by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs; and (3) in
December 2020, Merrill Lynch paid $2 million to the New Hampshire Bureau of Securities Regulation,
and $24.3 million to an affected investor to resolve claims of unauthorized and excessive trading by a
former financial advisor. To the extent a settlement included restitution to investors or consumers, the
relevant terms are set forth in the respective settlement agreement. Two Foreign Exchange Consent
Orders, one issued by the Office of the Comptroller of the Currency (OCC) and one by the Federal
Reserve Board (FRB), were terminated in April and December of 2019, respectively.

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4. Grow in a sustainable manner

To drive Responsible Growth, we must ensure that our growth is sustainable. There are three
complementary and interdependent tenets to how we approach sustainable growth: driving operational
excellence, being a great place for teammates to work and sharing our success with our communities.

Driving operational excellence

Operational excellence is key to ensuring our growth is sustainable and instrumental to our success. It
describes the ways in which we drive continuous improvement, reduce operational risk and seek to find
faster, simpler and more efficient ways of working and serving our clients. We then reinvest savings back
into our team, our capabilities, our client experience, our communities and our shareholders.

In 2015, we had $57 billion in expenses. In 2020, we had $55 billion, including roughly $1.5 billion in net
coronavirus-related costs. Compared with 2015, we have more customers and clients and more
transactions—so more work. Yet compared with 2015, costs are down and client satisfaction is up. And
over the same period, we invested about $18 billion in technology initiatives, provided companywide
supplemental bonuses, increased our minimum hourly rate of pay for U.S. employees, opened 300
financial centers and refurbished 2,000 more. That’s the power of operational excellence.

This work is fueled by the ingenuity and creativity of our teammates, who continuously look for ways we
can do things better. In total, we’ve approved nearly 8,600 of their ideas, which commit to delivering
billions in expense savings. In 2020 alone, our team generated more than 1,700 ideas that helped us
define commitments to save nearly $1 billion.

Being a great place to work

Attracting and retaining the best talent is key to driving Responsible Growth and one of our top
priorities. It helps us manage our operations, provide the best service for our clients and support our
communities.

We strive to make Bank of America a great place to work for all teammates. And we fulfill this
commitment by being a diverse and inclusive workplace, attracting and developing talent, recognizing
and rewarding performance and supporting teammates’ physical, emotional and financial wellness. For
additional information on these topics, including detailed metrics on workforce diversity, please see our
2020 Human Capital Management Report, which is included with this testimony.

In 2020, one of the most important ways we made our company a great place to work was by
supporting the health and safety of our teammates during the health crisis, described earlier in this
testimony.

Diversity and inclusion

Another way we make our company a great place to work is by fostering a diverse and inclusive
workplace. We want our workforce to reflect the communities we serve across all dimensions. As
highlighted in our 2020 Human Capital Management Report, we have continued to make progress in our

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goal to ensure diverse representation at all levels of our company. That begins with our board, which is
50% diverse and one of only a handful of S&P 100 boards with six or more women. Looking across our
company, 50% percent of our management team is diverse, more than half of our global workforce is
women, and 45% of our U.S.-based teammates are people of color. And over the past decade, the
number of people of color we hire in the U.S. from universities has increased by 50%.

In 2018, we made a five-year commitment to hire and train 10,000 employees from LMI communities
through our Pathways program, a program designed to provide the opportunity for long-term careers.
To date, we’ve already hired more than 11,000 teammates through the program—well ahead of our
commitment to do so by 2023.

We also surpassed our five-year pledge in 2014 to hire 10,000 veterans, National Guard and reservists,
and continue to maintain that hiring momentum today by attracting, developing and retaining military
talent.

At the same time, we are focused on creating a culture of inclusion in which every employee can be
their best. We currently have 11 Employee Networks with over 340 local chapters across the globe.
More than 90,000 of our teammates participate in at least one network, and our participation rate grew
from 38.2% in 2019 to 42.7% in 2020. Additionally, our Courageous Conversations series helps us break
down barriers, while driving greater accountability and action. Last year, we reached more than 165,000
employees through conversations with civil rights, social justice and inclusion leaders focused on racial,
social and economic injustices.

A diverse and inclusive supply chain

In addition to our focus on workplace diversity, we recognize the value of having and promoting
diversity in our supply chain, and actively seek to do business with certified diverse businesses either
directly or indirectly through our Supplier Diversity Program. Examples of diverse vendors include
companies owned by minorities, individuals with disabilities, veterans, women and lesbian, gay, bi-
sexual or transgender individuals. We also encourage supplier diversity by mentoring and developing
certified diverse-owned businesses so that they can become qualified to provide products and services
that meet our requirements.

As part of our vendor Code of Conduct, we expect vendors to actively promote a diverse and inclusive
environment through specific programs and initiatives to recruit, develop and retain diverse talent of all
types. We also expect vendors to measure and report on the success of their workplace diversity
programs and initiatives. Additionally, we expect our vendors to have policies and procedures to drive,
and report on, inclusion of certified diverse owned businesses in their own supply chains.

We have taken additional steps to promote diversity and inclusion in the policies and practices of those
with whom we do business, and throughout the broader economy. For example, our Chief Investment
Office (CIO) has introduced initiatives to promote the representation of women and people of color
among asset managers on our wealth management platform and across the industry. The CIO is now
incorporating diversity analysis into the review and selection of all existing and new asset managers who
are available to Merrill and Bank of America Private Bank clients.

In 2020, the CIO Due Diligence team enhanced its investment process to evaluate all asset managers’
policies and practices on diversity and inclusion at both their organizational and investment team levels.
Going forward, this analysis will be used in the CIO team’s overall investment assessments and factor

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into their level of conviction in investment strategies. In addition, this team will collaborate with asset
managers and industry groups who are focused on developing investment solutions that serve to (1)
aggregate and direct capital to diverse managers, and (2) provide capital to diverse-owned businesses
and populations as part of their underlying investment mandates.

Competitive wages and benefits

We want teammates who are invested in our company and our clients, and want to enjoy long careers
with Bank of America.

To do so, we provide competitive starting wage and benefits, and then continue to invest in our teams
over time. This includes a progressive compensation model. Each year, teammates with lower salaries,
on average, receive higher compensation increases as a percentage of salary when compared to
employees with higher salaries, with the highest increases going to those teammates earning less than
$50,000. You can see our average compensation growth rates broken down by salary in Chart 1 in the
Appendix. This illustrates, for example, how a teammate who joined our company in 2010 at a salary
below $50,000 has, on average, seen a 7% increase in his/her comp each year since.

In 2020, we moved our minimum hourly rate of pay for U.S. teammates to $20—roughly $42,000 per
year—one year earlier than planned. And we recently committed to raising our U.S. minimum hourly
wage to $25 by 2025. Additionally, for teammates earning lower salaries, we provide higher company
subsidies for medical premiums. For the tenth consecutive year, in 2022 there will be no increase in
medical premiums for teammates earning less than $50,000.

The employees of our vendors are also integral to our ability to serve and deliver for our customers. We
have been working with vendors to ensure all of their employees within the U.S. who are working
exclusively on our account receive competitive wages. All of our U.S. vendors are now required to pay
their employees dedicated to the bank at or above $15 per hour. Today, over 99% of our more than
2,000 U.S. vendor firms and 43,000 vendor employees are at or above the $15 per hour rate, as a result
of the implementation of this policy.

We offer ongoing training and resources to support our teammates’ continuous development. That
includes providing up to $7,500 (up to $5,250 tax-free) tuition reimbursement per year for eligible
undergraduate or graduate courses and discounts at a number of universities—plus free, unlimited
individual academic advisory services. These resources help our teammates grow and thrive within our
organization and, in 2020 alone, we helped more than 18,000 employees find new roles within the
company.

The many steps we took in 2020 to support our teammates helped them individually, and contributed to
an even stronger company culture. In the most recent companywide survey, our employee engagement
scores were at an all-time high. At the same time, by increasing our support for our teammates, we
enabled them to better serve our clients and deliver for our communities.

Compensation policies
At Bank of America, we are committed to ensuring that all employees are compensated equitably and
competitively based on market rates for their roles and their job performance. We regularly benchmark
compensation against other companies, both within and outside our industry, to ensure that our pay is
competitive with comparable roles in the market.

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This commitment to fair compensation has benefited all our employees, regardless of their position in
the company. That includes our move to a minimum hourly rate of pay for U.S. teammates of $20, as
described above, and our planned move to $25 per hour by 2025.

For our senior-level employees, we have developed a strong pay-for-performance governance

framework that rewards long-term, sustainable results that are aligned with stockholder interests. And,
for 2020, we recognized approximately 97% of our teammates globally with special compensation
awards—the fourth year in a row we’ve done so.

Consistent with the principles embedded in Dodd-Frank, including a requirement for an annual
shareholder “Say on Pay” vote, the company’s CEO is compensated through base salary, cash-settled
restricted stock units, performance-restricted stock units and time-based restricted stock units. From
2013 to 2020, CEO base salary was $1.5 million, while from 2010 to 2012 base salary was $950,000. The
vast majority of CEO compensation (93.9 percent in 2020) was variable and directly linked to company
performance. As has been the case since 2010, all variable compensation was awarded in equity-based
awards. Each year, the CEO pay structure is put before shareholders for an advisory Say on Pay vote. In
our most recent annual shareholder meeting (2021), 94.4 percent of the 6.4 billion votes cast voted in
favor of the structure. Since 2011, the shareholder vote in support of the company’s compensation plan
has averaged 94.2 percent.

The CEO’s direct reports receive a portion of their total compensation as base salary and the remainder
as variable pay—a majority of which is delivered as deferred equity-based awards. Finally, the Board of
Directors’ Compensation and Human Capital Committee oversees all compensation plans and practices
with periodic input from the Chief Risk Officer. Additionally, compensation plans are reviewed and
certified annually by our risk management team and Management Compensation Committee of which
the Chief Risk Officer is a member, and all variable pay awards are subject to clawback policies.

In 2009, we made equity-based awards to executive officers and other key risk-takers subject to a
performance-based clawback to encourage sustainable profitability over the vesting period. If losses
occur during the vesting period, awards may be canceled in whole or in part. Also beginning in 2009,
equity awards have been subject to a detrimental conduct clawback to encourage compliance with
policies and appropriate behaviors. If an executive officer engages in detrimental conduct, unvested
awards can be cancelled and previously vested awards can be recouped. An additional recoupment
policy, instituted in 2007, permits the Board to require reimbursement of any incentive compensation
paid to an executive officer whose fraud or intentional misconduct caused the company to restate its
financial statements.

Our Corporate Governance Guidelines require the CEO to hold at least 500,000 shares of common stock,
and for executive officers other than the CEO to hold at least 300,000 shares of our common stock. The
Guidelines also require that (i) our CEO retain at least 50 percent of the net after-tax shares from future
equity awards until one year after retirement and (ii) our other executive officers retain at least 50
percent of the net after-tax shares until retirement. This ensures that executive officers have a
significant and long-term financial stake in the company.

Furthermore, since 2011, certain executive officers have received a portion of their incentive
compensation in the form of performance restricted stock units (PRSUs). Our performance-based
awards continue to use a re-earn approach, meaning 100% of the award is the maximum that can be
earned, and vest only if performance standards are met over a three-year period. Future performance

24
below these standards will decrease the amount paid, and no PRSUs will be re-earned if results are
below the minimum standards. As has been consistent practice, the Committee does not exercise
discretion to change payouts.

In 2016, our Incentive Compensation Forfeiture & Recoupment Disclosure Policy became effective.
Pursuant to this Policy, we will disclose publicly the incentive forfeitures or clawbacks recovered from
certain senior executives in the aggregate pursuant to our Detrimental Conduct and Incentive
Compensation Recoupment policies, subject to certain privacy, privilege, and regulatory limitations.

Bank of America is committed to equal pay for equal work through our pay-for-performance philosophy.
We maintain robust policies and practices that reinforce equal pay for equal work, including reviews
with oversight from our Board and senior leaders. We have a standard U.S. practice that restricts the
solicitation of compensation information from candidates during our hiring process. This helps ensure
that we consider new hires for their individual qualifications and roles, rather than how they may have
been previously compensated. For over 15 years, we have conducted rigorous analysis with outside
experts to examine individual employee pay before year-end compensation decisions are finalized, and
we adjust compensation where appropriate. Results of our most recent review of employee
compensation at Bank of America showed that compensation received by women is on average greater
than 99% of that received by men, and compensation received by people of color is on average greater
than 99% of non-people of color teammates, as validated by third-party analysis.

In 2020, the CEO to median employee pay ratio was 274:1.

Our compensation policies reflect the principles and requirements of Dodd-Frank. Transparent,
equitable, competitive compensation is central to being a great place to work, which, in turn, is a
fundamental element of Responsible Growth.

Sharing our success with our communities

One of the ways we ensure our growth is sustainable is by sharing our success with the communities in
which we work and live and, at the same time, doing our part to deliver progress against society’s
biggest challenges. Last year, we significantly increased investments to do both.

Our support for our communities begins with $250 million in annual corporate philanthropy. In 2020, as
discussed previously, we added another $100 million to increase access to food and medical supplies.
Individual giving by my teammates, combined with matching gifts from Bank of America, amounted to
more than $65 million in additional philanthropic support in 2020. To maximize the impact of each
employee gift, we lowered the employee matching gift minimum to $1 and doubled our match for
employee donations to 17 organizations whose work aligns to our commitment to racial equality and
economic opportunity, through 2020.

Beyond corporate philanthropy, as important as that is, we commit all of our resources and capabilities
to help create positive change. We commit our operations, our human resources practices, our client
financing capabilities and the guidance we provide to investor clients. We bring our $2.8 trillion balance
sheet, our $55 billion expense base and the trillions of dollars we raise each year for our clients to the
task. And we leverage the considerable ingenuity, innovation and passion of our team.

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Our work to promote racial equality and economic opportunity, discussed earlier in this testimony,
demonstrates how we align all of our resources to help drive tangible progress on major societal
issues—and we take a similar approach in addressing the issue of climate change.

The path to a low-carbon, sustainable economy

We are committed to achieving net zero greenhouse gas emissions in our financing activities, operations
and supply chain before 2050. This is a focus that began many years ago at Bank of America. To
accelerate the transition to a low-carbon, sustainable economy, we aim to deploy and mobilize $1
trillion by 2030 through our recently-expanded Environmental Business Initiative to help our clients
make a just transition. This opportunity is made possible by commitments that clients themselves are
making, and our ability to help finance their commitments. This is part of a broader $1.5 trillion
sustainable finance goal aligned to addressing the United Nation’s Sustainable Development Goals
(SDGs).

To achieve our environmental targets and drive progress on this important issue, we take a “whole of
bank” approach.

First, we drive environmental sustainability in our own operations. We are carbon neutral today and
continuously look for opportunities to reduce emissions across our global footprint.

Second, we provide financing and our team’s wealth of expertise to help small- and medium-sized
companies refit their own operations to become more sustainable.

Third, we help our larger corporate clients raise capital to fund the restructuring of their operations,
new facilities and clean energy. That includes helping fossil fuel companies—and others with business
activities related to “brown energy”—make their own transition. We are a top underwriter in
Environmental, Social and Governance (ESG) capital markets globally and a leading underwriter of green
bonds. We have supported the sustainable business needs of more than 225 clients by raising in excess
of $300 billion through more than 400 ESG-themed bond offerings—including green, social and
sustainability bonds. We also raise equity for innovative new companies to fund their technologies and
growth.

Fourth, our Global Research team helps show investors the path toward companies that prioritize
sustainability and other ESG priorities in their operations, supporting the flow of capital to those
companies driving progress. And through our investment platform of over $3 trillion in customer assets,
we bring capital from individual investors, from whom demand for ESG funds or similar investments is
growing.

All of these steps will help society’s transition to a low-carbon economy, and we firmly believe the
private sector is key to driving that transition. As more and our more of our customers and clients make
their own environmental commitments, we are committed to helping them make this important change.

Driving profits and purpose

The principles of stakeholder capitalism—a concept created by the World Economic Forum (WEF) half a
century ago, and discussed anew today by groups like the U.S. Business Roundtable—are embedded in
Responsible Growth. We must deliver for our shareholders, our clients, our teammates, our
communities and, at the same time, help deliver progress on important issues facing society. More

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details about our company’s commitment to the principles of stakeholder capitalism are available in my
2020 Letter to Shareholders, which is included with this testimony.

As a financial institution, our success has always been tied to the success of the communities and
markets we serve. And we know from our own research that companies that focus on ESG issues tend to
perform better over time than companies that do not. Our commitments to society’s priorities are
therefore complementary to the commitments we have to our shareholders.

We know what society’s priorities are: The countries of the world identified them in 2015, when nearly
200 countries agreed to the SDGs. The SDGs reflect 17 categories of societal priorities that address
equality of opportunity, affordable housing, prosperity, access to clean water, renewable energy, and
other priorities, with specific goals to be met. Leaders in each country agreed these goals are the ones
we need to address to build a sustainable future and create opportunity and prosperity for all.

Last year, the WEF’s International Business Council, which I have the privilege to chair—working with
the accounting firms Deloitte, EY, KPMG and PwC—developed a set of Stakeholder Capitalism Metrics
(SCM) aligned to the SDGs. These metrics create a consistent way of measuring companies’ long-term
value, across industries. This, in turn, helps direct investment toward high performers and align capital
to progress on the SDG and ultimately defines stakeholder capitalism. It also aligns capitalism’s
innovation, its entrepreneurship and its massive resources to the progress, which won’t be made
without the private sector.

To date, nearly 80 global corporations have agreed to implement reporting on the SCMs. Bank of
America is one of those companies, and we published select SCMs in our 2020 Annual Report for the
first time. We believe disclosing our progress against the SDGs creates public transparency and
accountability in how we deliver for society.

We embrace our dual responsibility to drive both profits and purpose.

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 IV. Appendix

Table 1 – Year-end capital and leverage ratios and capital distributions

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Capital and leverage ratios at year end1

Tier 1 common
capital ratio 9.7% 10.8% 10.9% n/a n/a n/a n/a n/a n/a n/a
Common equity tier
1 capital ratio n/a n/a n/a 12.3% 10.2% 11.0% 11.8% 11.6% 11.2% 11.9%
Tier 1 leverage ratio 7.4% 7.2% 7.7% 8.2% 8.6% 8.9% 8.6% 8.4% 7.9% 7.4%
Tangible common
equity2 6.6% 6.7% 7.2% 7.5% 7.8% 8.0% 7.9% 7.6% 7.3% 6.5%

1We reported regulatory capital ratios under both the Standardized and Advanced approaches from 2015 to 2020. The approach that yields the
lower ratio is used to assess capital adequacy, which was the Advanced approaches at December 31, 2015, 2016, and 2017; and the Standardized
approach at December 2018, 2019, and 2020. We reported under Basel 3 Standardized - Transition at December 31, 2014, and under the general
risk-based approach at December 31, 2011, 2012, and 2013.
2
The tangible common equity ratio is a non-GAAP financial measure and represents adjusted ending shareholders’ equity divided by total tangible
assets. For a reconciliation to GAAP see Table 2 of the Appendix.

Total
Capital distribution (millions) (2011 - 2020)

Dividends $ 413 $ 437 $ 428 $ 1,262 $ 2,091 $ 2,573 $ 4,027 $ 5,424 $ 6,146 $ 6,289 $ 29,090

Repurchases - - $ 3,220 $ 1,675 $ 2,374 $ 5,112 $ 12,814 $ 20,094 $ 28,144 $ 7,025 80,458
Total $ 413 $ 437 $ 3,648 $ 2,937 $ 4,465 $ 7,685 $ 16,841 $ 25,518 $ 34,290 $ 13,314 $ 109,548

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Table 2

Reconciliation of year-end shareholders’ equity to year-end tangible

shareholders’ equity and year-end tangible common shareholders’
equity 2020 2019 2018
Shareholders’ equity $ 272,924 $ 264,810 $ 265,325
Goodwill (68,951) (68,951) (68,951)
Intangible assets (excluding MSRs) (2,151) (1,661) (1,774)
Related deferred tax liabilities 920 713 858
Tangible shareholders’ equity 202,742 194,911 195,458
Preferred stock (24,510) (23,401) (22,326)
Tangible common shareholders’ equity $ 178,232 $ 171,510 $ 173,132

Reconciliation of year-end assets to year-end tangible assets

Assets $ 2,819,627 $ 2,434,079 $ 2,354,507
Goodwill (68,951) (68,951) (68,951)
Intangible assets (excluding MSRs) (2,151) (1,661) (1,774)
Related deferred tax liabilities 920 713 858
Tangible assets $ 2,749,445 $ 2,364,180 $ 2,284,640

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Table 2 (continued)

Reconciliation of year-end shareholders’ equity to year-end tangible

shareholders’ equity and year-end tangible common shareholders’
equity 2017 2016 2015
Shareholders’ equity $ 267,146 $ 266,195 $ 255,615
Goodwill (68,951) (69,744) (69,761)
Intangible assets (excluding MSRs) (2,312) (2,989) (3,768)
Related deferred tax liabilities 943 1,545 1,716
Tangible shareholders’ equity 196,826 195,007 183,802
Preferred stock (22,323) (25,220) (22,272)
Tangible common shareholders’ equity $ 174,503 $ 169,787 $ 161,530

Reconciliation of year-end assets to year-end tangible assets

Assets $ 2,281,234 $ 2,188,067 $ 2,144,606
Goodwill (68,951) (69,744) (69,761)
Intangible assets (excluding MSRs) (2,312) (2,989) (3,768)
Related deferred tax liabilities 943 1,545 1,716
Tangible assets $ 2,210,914 $ 2,116,879 $ 2,072,793

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Table 2 (continued)

Reconciliation of year-end shareholders’ equity to year-end

tangible shareholders’ equity and year-end tangible common
shareholders’ equity 2014 2013 2012 2011
Shareholders’ equity $ 243,476 $ 232,475 $ 236,962 $ 230,101
Goodwill (69,777) (69,844) (69,976) (69,967)
Intangible assets (excluding MSRs) (4,612) (5,574) (6,684) (8,021)
Related deferred tax liabilities 1,960 2,166 2,428 2,702
Tangible shareholders’ equity 171,047 159,223 162,730 154,815
Preferred stock (19,309) (13,351) (18,768) (18,397)
Tangible common shareholders’ equity $ 151,738 $ 145,872 $ 143,962 $ 136,418

Reconciliation of year-end assets to year-end tangible assets

Assets $ 2,104,539 $ 2,102,064 $ 2,209,981 $ 2,129,046
Goodwill (69,777) (69,844) (69,976) (69,967)
Intangible assets (excluding MSRs) (4,612) (5,574) (6,684) (8,021)
Related deferred tax liabilities 1,960 2,166 2,428 2,702
Tangible assets $ 2,032,110 $ 2,028,812 $ 2,135,749 $ 2,053,760

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Chart 1 - Total compensation growth (including special awards) for global employees
Data as of compensation year-end 2020

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