01—Abstract
Summary
Summary of the 10-K filed February 22, 2022. Cited figures are marked; the original filing is the authoritative source.
Bank of America Corporation's (BAC) 2021 10-K filing indicates a strong financial recovery, with net income significantly increasing to $32.0 billiona from $17.9 billion in 2020.
This improvement was driven by a substantial benefit from the provision for credit losses, reflecting an improved macroeconomic outlook, and higher total revenue, which grew to $89.1 billionb from $85.5 billion. The company's balance sheet also strengthened, with total assets reaching $3.2 trillion, up from $2.8 trillion in the prior year, largely due to increased debt securities funded by deposit growth. Key business segments showed robust performance, with Global Banking and Global Wealth & Investment Management (GWIM) reporting significant increases in net income.
Consumer Banking also saw growth, aided by improved credit quality. The company continues to manage its capital effectively, repurchasing $25.1 billionc in common stock during 2021 and increasing its quarterly common stock dividend. While noninterest expense increased, primarily due to higher compensation and transactional costs, the bank's overall financial health appears solid, supported by a well-managed risk framework and strong capital ratios.
02—Key points
Key Highlights
- Net income surged to $32.0 billion in 2021, a significant increase from $17.9 billion in 2020, driven by improved provision for credit losses and higher revenue.
- Total revenue increased to $89.1 billion in 2021, up from $85.5 billion in 2020, reflecting growth across key segments.
- Total assets grew to $3.2 trillion at the end of 2021, an increase of $350 billion from the prior year, primarily due to higher debt securities and deposit growth.
- The company returned $25.1 billion to shareholders through common stock repurchases and paid $7.6 billion in dividends in 2021.
- Provision for credit losses improved significantly, shifting to a benefit of $4.6 billion in 2021 from an expense of $11.3 billion in 2020, due to a better macroeconomic outlook.
- Strong performance in Global Banking and Global Wealth & Investment Management contributed to higher net income in those segments.
- Capital ratios remain strong, with Common Equity Tier 1 capital ratio at 10.6% under the Standardized approach as of December 31, 2021, well above regulatory minimums.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 22, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $89.11B$85.53B | +4.2% |
| Interest Expense | $4.74B$8.22B | −42.4% |
| Net Income | $31.98B$17.89B | +78.7% |
| EPS (Basic) | $3.60$1.88 | +91.5% |
| EPS (Diluted) | $3.57$1.87 | +90.9% |
| Shares Outstanding (Basic) | 8.49B8.75B | −3.0% |
| Shares Outstanding (Diluted) | 8.56B8.80B | −2.7% |
05—Questions
Frequently Asked Questions
What was Bank of America's net income in 2021 and how does it compare to 2020?
Bank of America's net income for 2021 was $31.98 billion, a significant increase from $17.89 billion in 2020. This improvement was driven by a benefit from the provision for credit losses and higher total revenue.
How did the company's total assets change in 2021?
Total assets increased by approximately $350 billion to $3.17 trillion at December 31, 2021, compared to $2.82 trillion at December 31, 2020. This growth was primarily due to higher debt securities funded by deposit growth.
What was the company's provision for credit losses in 2021?
The provision for credit losses resulted in a benefit of $4.59 billion in 2021, a substantial improvement compared to an expense of $11.32 billion in 2020. This improvement was primarily due to positive changes in the macroeconomic outlook and improved credit quality.
How did Bank of America manage its capital in 2021?
In 2021, Bank of America returned capital to shareholders through common stock repurchases totaling $25.1 billion and paid dividends of $7.6 billion. The company maintained strong capital ratios, with its Common Equity Tier 1 capital ratio at 10.6% under the Standardized approach as of December 31, 2021, exceeding regulatory requirements.
06—Continue