8-KRegulation FDExhibits & Filings

BANK OF AMERICA CORP /DE/ 8-K Report, Regulation FD Disclosure (Apr 1, 2019)

Filed April 1, 2019For Securities:BACBAC-PBBAC-PKBAC-PLBAC-PMBAC-PNBAC-PSBML-PJBAC-PEBAC-PPBAC-PQBACRPBML-PGBML-PHBML-PLBAC-POMER-PK

Summary

This 8-K filing by Bank of America Corporation (BAC) announced significant retrospective financial reporting changes and reclassifications, effective January 1, 2019. These adjustments primarily affect the presentation of the Consolidated Statement of Income and segment allocations. The company aims to provide a more relevant presentation of its consolidated and business segment results. Importantly, the consolidated net income for prior periods, as reported in their 2018 10-K, remains unchanged, but the supplemental information allows investors to understand how prior periods would have been presented under the new methodology. The changes include a simplification of line items within net interest income and noninterest income, with detailed information still available in the financial statement notes. The noninterest expense section has been updated for better functional alignment. A key reclassification moves interest expense on structured notes from interest expense to trading account income. Additionally, methodologies for allocating funding costs, credits, and expenses related to asset and liability management have been refined, with certain financing costs reattributed from 'All Other' to 'Global Wealth & Investment Management'.

Key Highlights

  • 1Bank of America implemented retrospective financial reporting changes and reclassifications effective January 1, 2019.
  • 2The goal of these changes is to provide a more relevant presentation of consolidated and business segment results.
  • 3The Consolidated Statement of Income now features fewer line items for net interest and noninterest income, with details deferred to the notes.
  • 4Noninterest expense presentation has been updated to enhance functional alignment.
  • 5Interest expense on structured notes is now classified under 'Trading Account Income' instead of 'Interest Expense'.
  • 6Methodologies for allocating asset/liability management costs have been refined, including reattribution of certain financing costs to 'Global Wealth & Investment Management'.
  • 7Consolidated net income for prior periods as reported in the 2018 10-K remains unchanged.

Frequently Asked Questions

The main purpose of this filing is to inform investors about significant retrospective changes to Bank of America's financial reporting, including the format of its Consolidated Statement of Income and segment allocations. These changes are intended to provide a more relevant and aligned presentation of the company's financial results.

No, the company explicitly states that its consolidated net income as reported for all prior periods in its 2018 Annual Report on Form 10-K is unchanged. This filing provides supplemental information showing how prior periods would have been presented under the new reporting structure.

Key reclassifications include moving interest expense on structured notes from 'Interest Expense' to 'Trading Account Income'. Additionally, the company refined methodologies for allocating funding costs, credits, and expenses related to asset and liability management, and reattributed certain financing costs from the 'All Other' segment to 'Global Wealth & Investment Management'.

The presentation of the Consolidated Statement of Income will be simplified, with fewer line items in the net interest income and noninterest income sections. However, the level of detail historically presented will still be available within the Notes to the Consolidated Financial Statements. The noninterest expense section has also been updated for better functional alignment.