Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Bank of America Corporation (the “Corporation”) and its management may make certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often use words such as “anticipates,” “targets,” “expects,” “hopes,” “estimates,” “intends,” “plans,” “goals,” “believes,” “continue” and other similar expressions or future or conditional verbs such as “will,” “may,” “might,” “should,” “would” and “could.” Forward-looking statements represent the Corporation’s current expectations, plans or forecasts of its future results, revenues, liquidity, net interest income, provision for credit losses, expenses, efficiency ratio, capital measures, strategy, deposits, assets, and future business and economic conditions more generally, and other future matters. These statements are not guarantees of future results or performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict and are often beyond the Corporation’s control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements.
You should not place undue reliance on any forward-looking statement and should consider the following uncertainties and risks, as well as the risks and uncertainties more fully discussed under Item 1A. Risk Factors of the Corporation’s 2023 Annual Report on Form 10-K and in any of the Corporation’s subsequent Securities and Exchange Commission filings: the Corporation’s potential judgments, orders, settlements, penalties, fines and reputational damage, which are inherently difficult to predict, resulting from pending, threatened or future litigation and regulatory investigations, proceedings and enforcement actions, of which the Corporation is subject to in the ordinary course of business, including matters related to our processing of unemployment benefits for California and certain other states, the features of our automatic credit card payment service,the adequacy of the Corporation’s anti-money laundering and economic sanctions programs, the processing of electronic payments and related fraud and the rates paid on uninvested cash in investment advisory accounts that is swept into interest-paying bank deposits, which are in various stages; the possibility that the Corporation's future liabilities may be in excess of its recorded liability and estimated range of possible loss for litigation, and regulatory and government actions; the possibility that the Corporation could face increased claims from one or more parties involved in mortgage securitizations; the Corporation's ability to resolve representations and warranties repurchase and related claims; the risks related to the discontinuation of reference rates, including increased expenses and litigation and the effectiveness of hedging strategies; uncertainties about the financial stability and growth rates of non-U.S. jurisdictions, the risk that those jurisdictions may face difficulties servicing their sovereign debt, and related stresses on financial markets, currencies and trade, and the Corporation’s exposures to such risks, including direct, indirect and operational;
the impact of U.S. and global interest rates (including the potential for ongoing reductions in interest rates), inflation, currency exchange rates, economic conditions, trade policies and tensions, including tariffs, and potential geopolitical instability; the impact of the interest rate, inflationary, macroeconomic, banking and regulatory environment on the Corporation’s assets, business, financial condition and results of operations; the impact of adverse developments affecting the U.S. or global banking industry, including bank failures and liquidity concerns, resulting in worsening economic and market volatility, and regulatory responses thereto; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions, customer behavior, adverse developments with respect to U.S. or global economic conditions and other uncertainties, including the impact of supply chain disruptions, inflationary pressures and labor shortages on economic conditions and our business; potential losses related to the Corporation’s concentration of credit risk; the Corporation’s ability to achieve its expense targets and expectations regarding revenue, net interest income, provision for credit losses, net charge-offs, effective tax rate, loan growth or other projections; variances to the underlying assumptions and judgments used in estimating banking book net interest income sensitivity;adverse changes to the Corporation’s credit ratings from the major credit rating agencies; an inability to access capital markets or maintain deposits or borrowing costs; estimates of the fair value and other accounting values, subject to impairment assessments, of certain of the Corporation’s assets and liabilities; the estimated or actual impact of changes in accounting standards or assumptions in applying those standards; uncertainty regarding the content, timing and impact of regulatory capital and liquidity requirements; the impact of adverse changes to total loss-absorbing capacity requirements, stress capital buffer requirements and/or global systemically important bank surcharges; the potential impact of actions of the Board of Governors of the Federal Reserve System on the Corporation’s capital plans; the effect of changes in or interpretations of income tax laws and regulations; the impact of implementation and compliance with U.S. and international laws, regulations and regulatory interpretations, including, but not limited to, recovery and resolution planning requirements, Federal Deposit Insurance Corporation assessments, the Volcker Rule, fiduciary standards, derivatives regulations and potential changes to loss allocations between financial institutions and customers, including for losses incurred from the use of our products and services, including electronic payments and payment of checks, that were authorized by the customer but induced by fraud; the impact of failures or disruptions in or breaches of the Corporation’s operations or information systems, or those of third parties, including as a result of cybersecurity incidents; the risks related to the development, implementation, use and management of emerging technologies, including artificial intelligence and machine learning; the risks related to the transition and physical impacts of climate change; our ability to achieve environmental, social and governance goals and commitments or the impact of any changes in the Corporation’s sustainability strategy or commitments generally; the impact of
Bank of America 2
uncertain or changing political conditions or any future federal government shutdown and uncertainty regarding the federal government’s debt limit or changes in fiscal, monetary or regulatory policy; the emergence or continuation of widespread health emergencies or pandemics; the impact of natural disasters, extreme weather events, military conflicts (including the Russia/Ukraine conflict, the conflict in the Middle East, the possible expansion of such conflicts and potential geopolitical consequences), terrorism or other geopolitical events; and other matters.
Forward-looking statements speak only as of the date they are made, and the Corporation undertakes no obligation to update any forward-looking statement to reflect the impact of circumstances or events that arise after the date the forward-looking statement was made.
Notes to the Consolidated Financial Statements referred to in Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) are incorporated by reference into the MD&A. Certain prior-period amounts have been reclassified to conform to current-period presentation. Throughout the MD&A, the Corporation uses certain acronyms and abbreviations which are defined in the Glossary.
Executive Summary
Business Overview
The Corporation is a Delaware corporation, a bank holding company (BHC) and a financial holding company. When used in this report, “Bank of America,” “the Corporation,” “we,” “us” and “our” may refer to Bank of America Corporation individually, Bank of America Corporation and its subsidiaries, or certain of Bank of America Corporation’s subsidiaries or affiliates. Our principal executive offices are located in Charlotte, North Carolina. Through our various bank and nonbank subsidiaries throughout the U.S. and in international markets, we provide a diversified range of banking and nonbank financial services and products through four business segments: Consumer Banking, Global Wealth & Investment Management (GWIM), Global Banking and Global Markets, with the remaining operations recorded in All Other. We operate our banking activities primarily under the Bank of America, National Association (Bank of America, N.A. or BANA) charter. At September 30, 2024, the Corporation had $3.3 trillion in assets and a headcount of approximately 213,000 employees.
As of September 30, 2024, we served clients through operations across the U.S., its territories and more than 35 countries. Our retail banking footprint covers all major markets in the U.S., and we serve approximately 69 million consumer and small business clients with approximately 3,700 retail financial centers, approximately 15,000 ATMs, and leading digital banking platforms (www.bankofamerica.com) with approximately 48 million active users, including approximately
40 million active mobile users. We offer industry-leading support to approximately four million small business households. Our GWIM businesses, with client balances of $4.2 trillion, provide tailored solutions to meet client needs through a full set of investment management, brokerage, banking, trust and retirement products. We are a global leader in corporate and investment banking and trading across a broad range of asset classes serving corporations, governments, institutions and individuals around the world.
The Corporation’s website is www.bankofamerica.com, and the Investor Relations portion of our website is https://investor.bankofamerica.com. We use our website to distribute company information, including as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. We routinely post and make accessible financial and other information, including environmental, social and governance (ESG) information, regarding the Corporation on our website. Investors should monitor our website, including the Investor Relations portion, in addition to our press releases, U.S. Securities and Exchange Commission (SEC) filings, public conference calls and webcasts. Notwithstanding the foregoing, the information contained on our website as referenced in this paragraph is not incorporated by reference into this Quarterly Report on Form 10-Q.
Recent Developments
Capital Management
In June 2024, the Board of Governors of the Federal Reserve System (Federal Reserve) announced the results of the 2024 Comprehensive Capital Analysis and Review (CCAR) supervisory stress tests, which included preliminary stress capital buffers (SCBs) that were finalized in August 2024. Based on the results, our SCB increased to 3.2 percent from 2.5 percent, resulting in a minimum Common equity tier 1 (CET1) capital ratio requirement of 10.7 percent effective October 1, 2024. As of September 30, 2024, our CET1 capital ratio was 11.8 percent under the Standardized approach.
On July 24, 2024, the Corporation’s Board of Directors (the Board) authorized a $25 billion common stock repurchase program, effective August 1, 2024, which replaced the Corporation’s previous repurchase program. For more information, see Capital Management – CCAR and Capital Planning on page 21.
On October 16, 2024, the Board declared a quarterly common stock dividend of $0.26 per share, payable on December 27, 2024 to shareholders of record as of December 6, 2024.
For more information on our capital resources and regulatory developments, see Capital Management beginning on page 21.
3Bank of America
Financial Highlights
Table 1
Summary Income Statement and Selected Financial Data
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions, except per share information)
2024
2023
2024
2023
Income statement
Net interest income
$
13,967
$
14,379
$
41,701
$
42,985
Noninterest income
11,378
10,788
34,839
33,637
Total revenue, net of interest expense
25,345
25,167
76,540
76,622
Provision for credit losses
1,542
1,234
4,369
3,290
Noninterest expense
16,479
15,838
50,025
48,114
Income before income taxes
7,324
8,095
22,146
25,218
Income tax expense
428
293
1,679
1,847
Net income
6,896
7,802
20,467
23,371
Preferred stock dividends
516
532
1,363
1,343
Net income applicable to common shareholders
$
6,380
$
7,270
$
19,104
$
22,028
Per common share information
Earnings
$
0.82
$
0.91
$
2.42
$
2.74
Diluted earnings
0.81
0.90
2.40
2.72
Dividends paid
0.26
0.24
0.74
0.68
Performance ratios
Return on average assets (1)
0.83
%
0.99
%
0.84
%
1.00
%
Return on average common shareholders’ equity (1)
9.44
11.24
9.59
11.63
Return on average tangible common shareholders’ equity (2)
12.76
15.47
13.02
16.09
Efficiency ratio (1)
65.02
62.93
65.36
62.79
September 30 2024
December 31 2023
Balance sheet
Total loans and leases
$
1,075,800
$
1,053,732
Total assets
3,324,293
3,180,151
Total deposits
1,930,352
1,923,827
Total liabilities
3,027,781
2,888,505
Total common shareholders’ equity
271,958
263,249
Total shareholders’ equity
296,512
291,646
(1)For definitions, see Key Metrics on page 104.
(2)Return on average tangible common shareholders’ equity is a non-GAAP financial measure. For more information and a corresponding reconciliation to the most directly comparable financial measures defined by accounting principles generally accepted in the United States of America (GAAP), see Non-GAAP Reconciliations on page 49.
Net income was $6.9 billion and $20.5 billion, or $0.81 and $2.40 per diluted share, for the three and nine months ended September 30, 2024 compared to $7.8 billion and $23.4 billion, or $0.90 and $2.72 per diluted share, for the same periods in 2023. The decrease in net income was primarily due to higher noninterest expense and provision for credit losses.
Total assets increased $144.1 billion from December 31, 2023 to $3.3 trillion primarily driven by higher trading account assets and higher securities borrowed or purchased under agreements to resell to support Global Markets client activity, as well as commercial loan growth.
Total liabilities increased $139.3 billion from December 31, 2023 to $3.0 trillion primarily driven by higher securities loaned or sold under agreements to repurchase to support Global Markets client activity.
Shareholders’ equity increased $4.9 billion from December 31, 2023 to $296.5 billionprimarily due to net income and market value increases on derivatives, partially offset by returns of capital to shareholders through common stock repurchases, common and preferred stock dividends, and preferred stock redemptions.
Net Interest Income
Net interest income decreased $412 million to $14.0 billion and $1.3 billion to $41.7 billion for the three and nine months ended September 30, 2024 compared to the same periods in 2023. Net interest yield on a fully taxable-equivalent (FTE) basis decreased 19basis points (bps) to 1.92 percent and17 bps to 1.95 percent for the same periods. The decreases were primarily driven by higher deposit costs, partially offset by higher asset yields and higher net interest income related to Global Markets activity. For more information on net interest yield and FTE basis, see Supplemental Financial Data on page 6, and for more information on interest rate risk management, see Interest Rate Risk Management for the Banking Book on page 45.
Bank of America 4
Noninterest Income
Table 2
Noninterest Income
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Fees and commissions:
Card income
$
1,618
$
1,520
$
4,662
$
4,535
Service charges
1,552
1,464
4,501
4,238
Investment and brokerage services
4,546
3,963
13,053
11,654
Investment banking fees
1,403
1,188
4,532
3,563
Total fees and commissions
9,119
8,135
26,748
23,990
Market making and similar activities
3,278
3,325
10,464
11,734
Other income
(1,019)
(672)
(2,373)
(2,087)
Total noninterest income
$
11,378
$
10,788
$
34,839
$
33,637
Noninterest income increased $590 million to $11.4 billion and $1.2 billion to $34.8 billion for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The following highlights the significant changes.
● Service charges increased $88 million and $263 million primarily driven by higher treasury service charges.
● Investment and brokerage services increased $583 million and $1.4 billion primarily driven by higher asset management fees due to higher average equity market valuations and positive assets under management (AUM) flows, as well as higher brokerage fees due to increased transactional volume, partially offset by the impact of lower AUM pricing.
● Investment banking fees increased $215 million for the three-month period primarily due to higher debt issuance fees. Investment banking fees for the nine-month period increased $969 million primarily due to higher debt and equity issuance fees.
● Market making and similar activities decreased $1.3 billion for the nine-month period primarily driven by lower trading revenue from macro products in Fixed Income, Currencies and Commodities (FICC).
● Other income decreased $347 million and $286 million primarily driven by a charge of $189 million related to Visa’s increase in its litigation escrow account. The decrease in the nine-month period was also driven by higher partnership losses on tax credit investments and certain negative valuation adjustments, partially offset by lower losses on sales of available-for-sale debt securities.
Provision for Credit Losses
The provision for credit losses increased $308 million to $1.5 billion and $1.1 billion to $4.4 billion for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The provision for credit losses for the current-year periods was primarily driven by credit card loans and the commercial real estate office portfolio. For more information on the provision for credit losses, see Allowance for Credit Losses on page 41.
Noninterest Expense
Table 3
Noninterest Expense
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Compensation and benefits
$
9,916
$
9,551
$
29,937
$
28,870
Occupancy and equipment
1,836
1,795
5,465
5,370
Information processing and communications
1,784
1,676
5,347
5,017
Product delivery and transaction related
849
880
2,591
2,726
Marketing
504
501
1,446
1,472
Professional fees
723
545
1,925
1,609
Other general operating
867
890
3,314
3,050
Total noninterest expense
$
16,479
$
15,838
$
50,025
$
48,114
Noninterest expense increased $641 million to $16.5 billion and $1.9 billion to $50.0 billion for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The increases in both periods were primarily driven by higher revenue-related compensation and continued investments in the business, including people and technology,
partially offset by lower expense related to a liquidating business activity. The increase in the nine-month period also included the additional accrual of $700 million for the Federal Deposit Insurance Corporation (FDIC) special assessment recorded in the first quarter of 2024.
5Bank of America
Income Tax Expense
Table 4
Income Tax Expense
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Income before income taxes
$
7,324
$
8,095
$
22,146
$
25,218
Income tax expense
428
293
1,679
1,847
Effective tax rate
5.8
%
3.6
%
7.6
%
7.3
%
The effective tax rates for the three and nine months ended September 30, 2024 and 2023 were primarily driven by our recurring tax preference benefits that mainly consist of tax credits from investments in affordable housing and renewable energy. Also included in the effective tax rate for the nine months ended September 30, 2024 was the discrete benefit from the $700 million charge recorded in the first quarter for the FDIC special assessment. Absent the tax credits and discrete tax benefits, the effective tax rates would have been approximately 24 percent and 25 percent for the three months ended September 30, 2024 and 2023 and 25 percent and 26 percent for the nine months ended September 30, 2024 and 2023.
Supplemental Financial Data
Non-GAAP Financial Measures
In this Quarterly Report on Form 10-Q, we present certain non-GAAP financial measures. Non-GAAP financial measures exclude certain items or otherwise include components that differ from the most directly comparable measures calculated in accordance with GAAP. Non-GAAP financial measures are provided as additional useful information to assess our financial condition, results of operations (including period-to-period operating performance) or compliance with prospective regulatory requirements. These non-GAAP financial measures are not intended as a substitute for GAAP financial measures and may not be defined or calculated the same way as non-GAAP financial measures used by other companies.
When presented on a consolidated basis, we view net interest income on an FTE basis as a non-GAAP financial measure. To derive the FTE basis, net interest income is adjusted to reflect tax-exempt income on an equivalent before-tax basis with a corresponding increase in income tax expense. For purposes of this calculation, we use the federal statutory tax rate of 21 percent and a representative state tax rate. Net interest yield, which measures the basis points we earn over the cost of funds, utilizes net interest income on an FTE basis. We believe that presentation of these items on an FTE basis allows for comparison of amounts from both taxable and tax-exempt sources and is consistent with industry practices.
We may present certain key performance indicators and ratios excluding certain items (e.g., debit valuation adjustment (DVA) gains (losses)), which result in non-GAAP financial measures. We believe that the presentation of measures that exclude these items is useful because such measures provide additional information to assess the underlying operational performance and trends of our businesses and to allow better comparison of period-to-period operating performance.
We also evaluate our business based on certain ratios that utilize tangible equity, a non-GAAP financial measure. Tangible equity represents shareholders’ equity or common
shareholders’ equity reduced by goodwill and intangible assets (excluding mortgage servicing rights (MSRs)), net of related deferred tax liabilities (“adjusted” shareholders’ equity or common shareholders’ equity). These measures are used to evaluate our use of equity. In addition, profitability, relationship and investment models use both return on average tangible common shareholders’ equity and return on average tangible shareholders’ equity as key measures to support our overall growth objectives. These ratios are:
● Return on average tangible common shareholders’ equity measures our net income applicable to common shareholders as a percentage of adjusted average common shareholders’ equity. The tangible common equity ratio represents adjusted ending common shareholders’ equity divided by total tangible assets.
● Return on average tangible shareholders’ equity measures our net income as a percentage of adjusted average total shareholders’ equity. The tangible equity ratio represents adjusted ending shareholders’ equity divided by total tangible assets.
● Tangible book value per common share represents adjusted ending common shareholders’ equity divided by ending common shares outstanding.
We believe ratios utilizing tangible equity provide additional useful information because they present measures of those assets that can generate income. Tangible book value per common share provides additional useful information about the level of tangible assets in relation to outstanding shares of common stock.
The aforementioned supplemental data and performance measures are presented in Table 5 on page 7.
For more information on the reconciliation of these non-GAAP financial measures to the corresponding GAAP financial measures, see Non-GAAP Reconciliations on page 49.
Key Performance Indicators
We present certain key financial and nonfinancial performance indicators (key performance indicators) that management uses when assessing our consolidated and/or segment results. We believe they are useful to investors because they provide additional information about our underlying operational performance and trends. These key performance indicators (KPIs) may not be defined or calculated in the same way as similar KPIs used by other companies. For information on how these metrics are defined, see Key Metrics on page 104.
Our consolidated key performance indicators, which include various equity and credit metrics, are presented in Table 1 on page 4 and Table 5 on page 7.
For information on key segment performance metrics, see Business Segment Operations on page 10.
Bank of America 6
Table 5
Selected Financial Data
Nine Months Ended September 30
2024 Quarters
2023 Quarters
(In millions, except per share information)
Third
Second
First
Fourth
Third
2024
2023
Income statement
Net interest income
$
13,967
$
13,702
$
14,032
$
13,946
$
14,379
$
41,701
$
42,985
Noninterest income
11,378
11,675
11,786
8,013
10,788
34,839
33,637
Total revenue, net of interest expense
25,345
25,377
25,818
21,959
25,167
76,540
76,622
Provision for credit losses
1,542
1,508
1,319
1,104
1,234
4,369
3,290
Noninterest expense
16,479
16,309
17,237
17,731
15,838
50,025
48,114
Income before income taxes
7,324
7,560
7,262
3,124
8,095
22,146
25,218
Income tax expense
428
663
588
(20)
293
1,679
1,847
Net income
6,896
6,897
6,674
3,144
7,802
20,467
23,371
Net income applicable to common shareholders
6,380
6,582
6,142
2,838
7,270
19,104
22,028
Average common shares issued and outstanding
7,818.0
7,897.9
7,968.2
7,990.9
8,017.1
7,894.7
8,041.3
Average diluted common shares issued and outstanding
7,902.1
7,960.9
8,031.4
8,062.5
8,075.9
7,965.0
8,153.4
Performance ratios
Return on average assets (1)
0.83
%
0.85
%
0.83
%
0.39
%
0.99
%
0.84
%
1.00
%
Four-quarter trailing return on average assets (2)
0.72
0.76
0.78
0.84
0.98
n/a
n/a
Return on average common shareholders’ equity (1)
9.44
9.98
9.35
4.33
11.24
9.59
11.63
Return on average tangible common shareholders’ equity (3)
12.76
13.57
12.73
5.92
15.47
13.02
16.09
Return on average shareholders’ equity (1)
9.30
9.45
9.18
4.32
10.86
9.31
11.10
Return on average tangible shareholders’ equity (3)
12.20
12.42
12.07
5.71
14.41
12.23
14.78
Total ending equity to total ending assets
8.92
9.02
8.97
9.17
9.10
8.92
9.10
Common equity ratio (1)
8.18
8.21
8.10
8.28
8.20
8.18
8.20
Total average equity to total average assets
8.95
8.96
9.01
8.98
9.11
8.97
8.99
Dividend payout (1)
31.70
28.66
31.11
67.42
26.39
30.46
24.78
Per common share data
Earnings
$
0.82
$
0.83
$
0.77
$
0.36
$
0.91
$
2.42
$
2.74
Diluted earnings
0.81
0.83
0.76
0.35
0.90
2.40
2.72
Dividends paid
0.26
0.24
0.24
0.24
0.24
0.74
0.68
Book value (1)
35.37
34.39
33.71
33.34
32.65
35.37
32.65
Tangible book value (3)
26.25
25.37
24.79
24.46
23.79
26.25
23.79
Market capitalization
$
305,090
$
309,202
$
298,312
$
265,840
$
216,942
$
305,090
$
216,942
Average balance sheet
Total loans and leases
$
1,059,728
$
1,051,472
$
1,047,890
$
1,050,705
$
1,046,254
Total assets
3,296,171
3,274,988
3,247,159
3,213,159
3,128,466
Total deposits
1,920,748
1,909,925
1,907,462
1,905,011
1,876,153
Long-term debt
247,338
243,689
254,782
256,262
245,819
Common shareholders’ equity
269,001
265,290
264,114
260,221
256,578
Total shareholders’ equity
294,985
293,403
292,511
288,618
284,975
Asset quality
Allowance for credit losses (4)
$
14,351
$
14,342
$
14,371
$
14,551
$
14,640
Nonperforming loans, leases and foreclosed properties (5)
5,824
5,691
6,034
5,630
4,993
Allowance for loan and lease losses as a percentage of total loans and leases outstanding (5)
1.24
%
1.26
%
1.26
%
1.27
%
1.27
%
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases (5)
235
242
225
243
275
Net charge-offs
$
1,534
$
1,533
$
1,498
$
1,192
$
931
Annualized net charge-offs as a percentage of average loans and leases outstanding (5)
0.58
%
0.59
%
0.58
%
0.45
%
0.35
%
Capital ratios at period end (6)
Common equity tier 1 capital
11.8
%
11.9
%
11.9
%
11.8
%
11.9
%
Tier 1 capital
13.2
13.5
13.6
13.5
13.6
Total capital
14.9
15.1
15.2
15.2
15.4
Tier 1 leverage
6.9
7.0
7.1
7.1
7.3
Supplementary leverage ratio
5.9
6.0
6.0
6.1
6.2
Tangible equity (3)
7.0
7.0
7.0
7.1
7.0
Tangible common equity (3)
6.2
6.2
6.1
6.2
6.1
Total loss-absorbing capacity and long-term debt metrics
Total loss-absorbing capacity to risk-weighted assets
27.4
%
28.2
%
28.7
%
29.0
%
29.3
%
Total loss-absorbing capacity to supplementary leverage exposure
12.2
12.5
12.8
13.0
13.3
Eligible long-term debt to risk-weighted assets
13.3
13.7
14.2
14.5
14.8
Eligible long-term debt to supplementary leverage exposure
6.0
6.0
6.3
6.5
6.7
(1)For definitions, see Key Metrics on page 104.
(2)Calculated as total net income for four consecutive quarters divided by annualized average assets for four consecutive quarters.
(3)Tangible equity ratios and tangible book value per share of common stock are non-GAAP financial measures. For more information on these ratios and corresponding reconciliations to GAAP financial measures, see Supplemental Financial Data on page 6 and Non-GAAP Reconciliations on page 49.
(4)Includes the allowance for loan and lease losses and the reserve for unfunded lending commitments.
(5)Balances and ratios do not include loans accounted for under the fair value option. For additional exclusions from nonperforming loans, leases and foreclosed properties, see Consumer Portfolio Credit Risk Management – Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity on page 34 and corresponding Table 25 and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 38 and corresponding Table 31.
(6)For more information, including which approach is used to assess capital adequacy, see Capital Management on page 21.
n/a = not applicable
7Bank of America
Table 6
Quarterly Average Balances and Interest Rates - FTE Basis
Average Balance
Interest Income/
Expense (1)
Yield/ Rate
Average Balance
Interest
Income/
Expense (1)
Yield/ Rate
(Dollars in millions)
Third Quarter 2024
Third Quarter 2023
Earning assets
Interest-bearing deposits with the Federal Reserve, non-U.S. central
banks and other banks
$
320,781
$
4,129
5.12
%
$
353,183
$
4,613
5.18
%
Time deposits placed and other short-term investments
10,031
108
4.29
8,629
113
5.20
Federal funds sold and securities borrowed or purchased under
agreements to resell
323,119
5,196
6.40
287,403
4,888
6.75
Trading account assets
214,980
2,749
5.09
191,283
2,244
4.66
Debt securities
883,562
6,859
3.08
752,569
4,685
2.47
Loans and leases (2)
Residential mortgage
227,800
1,872
3.29
229,001
1,745
3.04
Home equity
25,664
418
6.48
25,661
390
6.04
Credit card
99,908
2,924
11.64
98,049
2,727
11.03
Direct/Indirect and other consumer
104,732
1,512
5.74
104,134
1,354
5.16
Total consumer
458,104
6,726
5.85
456,845
6,216
5.41
U.S. commercial
391,728
5,358
5.44
377,728
5,061
5.32
Non-U.S. commercial
125,377
2,222
7.05
123,781
2,088
6.69
Commercial real estate (3)
69,404
1,275
7.31
74,088
1,364
7.30
Commercial lease financing
15,115
201
5.30
13,812
166
4.79
Total commercial
601,624
9,056
5.99
589,409
8,679
5.84
Total loans and leases
1,059,728
15,782
5.93
1,046,254
14,895
5.65
Other earning assets
105,496
2,815
10.62
99,378
2,339
9.35
Total earning assets
2,917,697
37,638
5.14
2,738,699
33,777
4.90
Cash and due from banks
23,435
25,772
Other assets, less allowance for loan and lease losses
355,039
363,995
Total assets
$
3,296,171
$
3,128,466
Interest-bearing liabilities
U.S. interest-bearing deposits
Demand and money market deposits
$
943,550
$
5,497
2.32
%
$
942,368
$
4,304
1.81
%
Time and savings deposits
359,631
3,473
3.84
271,425
2,149
3.14
Total U.S. interest-bearing deposits
1,303,181
8,970
2.74
1,213,793
6,453
2.11
Non-U.S. interest-bearing deposits
110,527
1,155
4.16
97,095
887
3.63
Total interest-bearing deposits
1,413,708
10,125
2.85
1,310,888
7,340
2.22
Federal funds purchased and securities loaned or sold under agreements
to repurchase
383,334
6,193
6.43
294,878
5,342
7.19
Short-term borrowings and other interest-bearing liabilities
147,579
2,747
7.41
140,513
2,287
6.45
Trading account liabilities
52,973
538
4.04
48,084
510
4.21
Long-term debt
247,338
3,921
6.32
245,819
3,766
6.10
Total interest-bearing liabilities
2,244,932
23,524
4.17
2,040,182
19,245
3.75
Noninterest-bearing sources
Noninterest-bearing deposits
507,040
565,265
Other liabilities (4)
249,214
238,044
Shareholders’ equity
294,985
284,975
Total liabilities and shareholders’ equity
$
3,296,171
$
3,128,466
Net interest spread
0.97
%
1.15
%
Impact of noninterest-bearing sources
0.95
0.96
Net interest income/yield on earning assets (5)
$
14,114
1.92
%
$
14,532
2.11
%
(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 45.
(2)Nonperforming loans are included in the respective average loan balances. Income on these nonperforming loans is generally recognized on a cost recovery basis.
(3)Includes U.S. commercial real estate loans of $63.1 billion and $67.9 billion, and non-U.S. commercial real estate loans of $6.3 billion and $6.2 billion for the third quarter of 2024 and 2023.
(4)Includes $49.5 billion and $41.1 billion of structured notes and liabilities for the third quarter of 2024 and 2023.
(5)Net interest income includes FTE adjustments of $147 million and $153 million for the third quarter of 2024 and 2023.
Bank of America 8
Table 7
Year-to-Date Average Balances and Interest Rates - FTE Basis
Average Balance
Interest
Income/
Expense (1)
Yield/ Rate
Average Balance
Interest
Income/
Expense (1)
Yield/ Rate
Nine Months Ended September 30
(Dollars in millions)
2024
2023
Earning assets
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks
$
337,495
$
13,158
5.21
%
$
305,526
$
10,915
4.78
%
Time deposits placed and other short-term investments
10,200
347
4.54
10,153
350
4.61
Federal funds sold and securities borrowed or purchased under agreements to resell
315,468
15,530
6.58
289,823
13,555
6.25
Trading account assets
206,609
7,773
5.02
187,481
6,375
4.54
Debt securities
859,578
19,373
3.00
791,339
14,887
2.50
Loans and leases (2)
Residential mortgage
227,705
5,499
3.22
229,010
5,133
2.99
Home equity
25,572
1,213
6.33
26,041
1,060
5.44
Credit card
99,570
8,535
11.45
94,775
7,658
10.80
Direct/Indirect and other consumer
103,934
4,339
5.58
104,896
3,814
4.86
Total consumer
456,781
19,586
5.73
454,722
17,665
5.19
U.S. commercial
385,864
15,861
5.49
377,873
14,318
5.07
Non-U.S. commercial
124,501
6,562
7.04
125,525
5,815
6.19
Commercial real estate (3)
70,906
3,871
7.29
72,927
3,811
6.99
Commercial lease financing
15,003
597
5.31
13,709
462
4.50
Total commercial
596,274
26,891
6.02
590,034
24,406
5.53
Total loans and leases
1,053,055
46,477
5.89
1,044,756
42,071
5.38
Other earning assets
106,437
8,437
10.59
98,857
6,902
9.33
Total earning assets
2,888,842
111,095
5.14
2,727,935
95,055
4.66
Cash and due from banks
23,941
26,544
Other assets, less allowance for loan and lease losses
360,073
378,936
Total assets
$
3,272,856
$
3,133,415
Interest-bearing liabilities
U.S. interest-bearing deposits
Demand and money market deposits
$
947,112
$
15,743
2.22
%
$
956,165
$
10,659
1.49
%
Time and savings deposits
344,750
9,863
3.82
233,079
4,520
2.59
Total U.S. interest-bearing deposits
1,291,862
25,606
2.65
1,189,244
15,179
1.71
Non-U.S. interest-bearing deposits
107,144
3,312
4.13
95,187
2,260
3.17
Total interest-bearing deposits
1,399,006
28,918
2.76
1,284,431
17,439
1.82
Federal funds purchased, securities loaned or sold under agreements to repurchase
368,459
18,390
6.67
291,349
14,700
6.75
Short-term borrowings and other interest-bearing liabilities
147,138
8,155
7.40
153,653
7,464
6.49
Trading account liabilities
52,876
1,624
4.10
45,675
1,486
4.35
Long-term debt
248,597
11,842
6.36
246,357
10,559
5.72
Total interest-bearing liabilities
2,216,076
68,929
4.15
2,021,465
51,648
3.41
Noninterest-bearing sources
Noninterest-bearing deposits
513,735
597,224
Other liabilities (4)
249,407
233,147
Shareholders’ equity
293,638
281,579
Total liabilities and shareholders’ equity
$
3,272,856
$
3,133,415
Net interest spread
0.99
%
1.25
%
Impact of noninterest-bearing sources
0.96
0.87
Net interest income/yield on earning assets (5)
$
42,166
1.95
%
$
43,407
2.12
%
(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 45.
(2)Nonperforming loans are included in the respective average loan balances. Income on these nonperforming loans is generally recognized on a cost recovery basis.
(3)Includes U.S. commercial real estate loans of $64.9 billion and $67.2 billion, and non-U.S. commercial real estate loans of $6.0 billion and $5.8 billion for the nine months ended September 30, 2024 and 2023.
(4)Includes $46.7 billion and $39.5 billion of structured notes and liabilities for the nine months ended September 30, 2024 and 2023.
(5)Net interest income includes FTE adjustments of $465 million and $422 million for the nine months ended September 30, 2024 and 2023.
9Bank of America
Business Segment Operations
Segment Description and Basis of Presentation
We report our results of operations through four business segments: Consumer Banking, GWIM, Global Banking and Global Markets, with the remaining operations recorded in All Other. We manage our segments and report their results on an FTE basis. For more information, see Business Segment Operations in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
We periodically review capital allocated to our businesses and allocate capital annually during the strategic and capital planning processes. We utilize a methodology that considers the effect of regulatory capital requirements in addition to internal risk-based capital models. The capital allocated to the business segments is referred to as allocated capital. Allocated equity in the reporting units is comprised of allocated capital plus capital
for the portion of goodwill and intangibles specifically assigned to the reporting unit. For more information, including the definition of a reporting unit, see Note 7 – Goodwill and Intangible Assets to the Consolidated Financial Statements.
For more information on our presentation of financial information on an FTE basis, see Supplemental Financial Data on page 6, and for reconciliations to consolidated total revenue, net income and period-end total assets, see Note 17 – Business Segment Informationto the Consolidated Financial Statements.
Key Performance Indicators
We present certain key financial and nonfinancial performance indicators that management uses when evaluating segment results. We believe they are useful to investors because they provide additional information about our segments’ operational performance, client trends and business growth.
Consumer Banking
Deposits
Consumer Lending
Total Consumer Banking
Three Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
2024
2023
% Change
Net interest income
$
5,271
$
5,571
$
3,007
$
2,820
$
8,278
$
8,391
(1)
%
Noninterest income:
Card income
(10)
(11)
1,412
1,336
1,402
1,325
6
Service charges
630
605
1
—
631
605
4
All other income
91
116
16
35
107
151
(29)
Total noninterest income
711
710
1,429
1,371
2,140
2,081
3
Total revenue, net of interest expense
5,982
6,281
4,436
4,191
10,418
10,472
(1)
Provision for credit losses
57
128
1,245
1,269
1,302
1,397
(7)
Noninterest expense
3,433
3,240
2,101
2,016
5,534
5,256
5
Income before income taxes
2,492
2,913
1,090
906
3,582
3,819
(6)
Income tax expense
622
729
273
226
895
955
(6)
Net income
$
1,870
$
2,184
$
817
$
680
$
2,687
$
2,864
(6)
Effective tax rate (1)
25.0
%
25.0
%
Net interest yield
2.24
%
2.26
%
3.86
%
3.65
%
3.35
%
3.26
%
Return on average allocated capital
54
63
11
10
25
27
Efficiency ratio
57.39
51.60
47.37
48.06
53.12
50.18
Balance Sheet
Three Months Ended September 30
Average
2024
2023
2024
2023
2024
2023
% Change
Total loans and leases
$
4,383
$
4,139
$
309,398
$
306,622
$
313,781
$
310,761
1
%
Total earning assets (2)
935,946
975,968
309,563
306,982
982,058
1,019,980
(4)
Total assets (2)
968,192
1,009,390
314,344
312,731
1,019,085
1,059,152
(4)
Total deposits
933,227
974,674
5,137
5,377
938,364
980,051
(4)
Allocated capital
13,700
13,700
29,550
28,300
43,250
42,000
3
(1) Estimated at the segment level only.
(2) In segments and businesses where the total of liabilities and equity exceeds assets, we allocate assets from All Other to match the segments’ and businesses’ liabilities and allocated shareholders’ equity. As a result, total earning assets and total assets of the businesses may not equal total Consumer Banking.
Bank of America 10
Deposits
Consumer Lending
Total Consumer Banking
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
2024
2023
% Change
Net interest income
$
15,760
$
17,120
$
8,833
$
8,301
$
24,593
$
25,421
(3)
%
Noninterest income:
Card income
(30)
(31)
4,065
3,971
4,035
3,940
2
Service charges
1,821
1,727
2
2
1,823
1,729
5
All other income
288
490
51
122
339
612
(45)
Total noninterest income
2,079
2,186
4,118
4,095
6,197
6,281
(1)
Total revenue, net of interest expense
17,839
19,306
12,951
12,396
30,790
31,702
(3)
Provision for credit losses
207
414
3,526
3,339
3,733
3,753
(1)
Noninterest expense
10,196
10,082
6,277
6,100
16,473
16,182
2
Income before income taxes
7,436
8,810
3,148
2,957
10,584
11,767
(10)
Income tax expense
1,859
2,203
787
739
2,646
2,942
(10)
Net income
$
5,577
$
6,607
$
2,361
$
2,218
$
7,938
$
8,825
(10)
Effective tax rate (1)
25.0
%
25.0
%
Net interest yield
2.23
%
2.29
%
3.82
%
3.66
%
3.32
%
3.26
%
Return on average allocated capital
54
64
11
11
25
28
Efficiency ratio
57.16
52.23
48.47
49.21
53.50
51.05
Balance Sheet
Nine Months Ended September 30
Average
2024
2023
2024
2023
2024
2023
% Change
Total loans and leases
$
4,308
$
4,113
$
308,719
$
302,978
$
313,027
$
307,091
2
%
Total earning assets (2)
944,277
1,000,143
308,867
303,266
989,944
1,043,476
(5)
Total assets (2)
976,752
1,033,618
313,739
309,435
1,027,291
1,083,120
(5)
Total deposits
941,780
998,947
4,860
5,094
946,640
1,004,041
(6)
Allocated capital
13,700
13,700
29,550
28,300
43,250
42,000
3
Period end
September 30 2024
December 31 2023
September 30 2024
December 31 2023
September 30 2024
December 31 2023
% Change
Total loans and leases
$
4,492
$
4,218
$
311,605
$
310,901
$
316,097
$
315,119
—
%
Total earning assets (2)
942,038
965,088
311,805
311,008
988,856
1,009,360
(2)
Total assets (2)
974,614
999,372
316,667
317,194
1,026,293
1,049,830
(2)
Total deposits
939,050
964,136
5,308
5,436
944,358
969,572
(3)
See page 10 for footnotes.
Consumer Banking, comprised of Deposits and Consumer Lending, offers a diversified range of credit, banking and investment products and services to consumers and small businesses. For more information about Consumer Banking, see Business Segment Operations in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
Consumer Banking Results
Three-Month Comparison
Net income for Consumer Bankingdecreased$177 million to $2.7 billion due to higher noninterest expense and lower revenue, partially offset by lower provision for credit losses. Net interest income decreased $113 million to $8.3 billion primarily driven by lower deposit balances, partially offset by higher loan balances. Noninterest income increased$59 millionto $2.1 billion, primarily due to higher card income.
The provision for credit losses decreased$95 million to $1.3 billion primarily driven by overall improvement in consumer activities. Noninterest expense increased $278 million to $5.5 billion, primarily driven by investments in the business, including people and technology.
The return on average allocated capital was 25 percent, down from 27 percent, due to an increase in allocated capital and lower net income. For information on capital allocated to the business segments, see Business Segment Operations on page 10.
Nine-Month Comparison
Net income for Consumer Banking decreased $887 million to $7.9 billion primarily due to lower revenue and higher noninterest expense. Net interest income decreased $828 million to $24.6 billion primarily due to the same factors as described in the three-month discussion. Noninterest income decreased $84 million to $6.2 billion, primarily due to lower other income driven by the allocation of asset and liability management (ALM) results, partially offset by higher card income and service charges.
The provision for credit losses decreased $20 million to $3.7 billion, relatively unchanged from the same period a year ago. Noninterest expense increased$291 millionto$16.5 billion, primarily due to the same factor as described in the three-month discussion.
The return on average allocated capital was 25 percent, down from 28 percent, primarily due to the same factors as described in the three-month discussion.
Deposits
Three-Month Comparison
Net income for Depositsdecreased$315 million to $1.9 billion primarily due to lower revenue and higher noninterest expense. Net interest income decreased $300 million to $5.3 billion primarily driven by lower deposit balances. Noninterest income was $711 million, relatively unchanged from the same period a year ago.
11Bank of America
Noninterest expense increased $193 million to$3.4 billion,primarily driven by investments in the business, including people and technology.
Average deposits decreased $41.4 billion to $933.2 billion primarily due to net outflows of $48.6 billion in money market savings and $19.8 billion in checking, partially offset by growth in time deposits of $35.6 billion.
Nine-Month Comparison
Net income for Deposits decreased $1.0 billion to $5.6 billion primarily due to lower revenue. Net interest income decreased $1.4 billion to $15.8 billion primarily due to the same factor as described in the three-month discussion. Noninterest income decreased $107 million to $2.1 billion primarily driven by the allocation of ALM results, partially offset by higher service charges.
The provision for credit losses decreased$207 million to$207 million primarily driven by lower overdraft losses from fraud activity. Noninterest expense increased $114 million to $10.2 billion primarily due to the same factor as described in the three-month discussion.
Average deposits decreased $57.2 billion to $941.8 billion primarily due to net outflows of $61.0 billion in money market savings and $26.0 billion in checking, partially offset by growth in time deposits of $39.7 billion.
The table below provides key performance indicators for Deposits. Management uses these metrics, and we believe they are useful to investors because they provide additional information to evaluate our deposit profitability and digital/mobile trends.
Key Statistics – Deposits
Three Months Ended September 30
Nine Months Ended September 30
2024
2023
2024
2023
Total deposit spreads (excludes noninterest costs) (1)
2.81%
2.76%
2.76%
2.66%
Period end
Consumer investment assets (in millions) (2)
$
496,582
$
387,467
Active digital banking users (in thousands) (3)
47,830
45,797
Active mobile banking users (in thousands) (4)
39,638
37,487
Financial centers
3,741
3,862
ATMs
14,900
15,253
(1)Includes deposits held in Consumer Lending.
(2)Includes client brokerage assets, deposit sweep balances, Bank of America, N.A. brokered CDs and AUM in Consumer Banking.
(3)Represents mobile and/or online active users over the past 90 days.
(4)Represents mobile active users over the past 90 days.
Consumer investment assets increased $109.1 billion from September 30, 2023 to $496.6 billion at September 30, 2024 driven by market performance and positive net client flows. Active mobile banking users increased approximately two million, reflecting continuing changes in our clients’ banking preferences. Since September 30, 2023, we have had a net decrease of 121 financial centers and 353 ATMs as we continue to optimize our consumer banking network.
Consumer Lending
Three-Month Comparison
Net income for Consumer Lending increased $137 million to $817 million primarily due to higher revenue, partially offset by higher noninterest expense. Net interest income increased $187 million to $3.0 billion primarily due to higher loan balances. Noninterest incomeincreased $58 million to $1.4 billion, primarily driven by higher card income.
The provision for credit losses decreased $24 million to$1.2 billion, relatively unchanged from the same period a year ago. Noninterest expense increased $85 million to $2.1 billion, primarily driven by investments in the business, including people and technology.
Average loans increased $2.8 billion to $309.4 billion driven by increases in credit card, small business and consumer vehicle loans.
Nine-Month Comparison
Net income for Consumer Lending increased$143 millionto $2.4 billion driven by higher revenue, partially offset by higher provision for credit losses and higher noninterest expense. Net interest income increased $532 million to $8.8 billion primarily due to the same factor as described in the three-month discussion. Noninterest income increased$23 million to $4.1 billion, relatively unchanged from the same period a year ago.
The provision for credit losses increased $187 million to $3.5 billion primarily driven by credit card loans. Noninterest expense increased $177 million to $6.3 billion, primarily due to the same factor as described in the three-month discussion.
Average loans increased $5.7 billion to $308.7 billion primarily driven by the same factors as described in the three-month discussion.
The following table provides key performance indicators for Consumer Lending. Management uses these metrics, and we believe they are useful to investors because they provide additional information about loan growth and profitability.
Bank of America 12
Key Statistics – Consumer Lending
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Total credit card (1)
Gross interest yield (2)
12.49
%
12.03
%
12.35
%
11.85
%
Risk-adjusted margin (3)
7.22
7.70
6.93
8.06
New accounts (in thousands)
970
1,062
2,919
3,386
Purchase volumes
$
92,592
$
91,711
$
272,899
$
270,358
Debit card purchase volumes
$
139,352
$
133,553
$
412,105
$
390,891
(1)Includes GWIM's credit card portfolio.
(2)Calculated as the effective annual percentage rate divided by average loans.
(3)Calculated as the difference between total revenue, net of interest expense, and net credit losses divided by average loans.
During the three months ended September 30, 2024, the total risk-adjusted margin decreased 48bps primarily driven by higher net credit losses, partially offset by higher interest margin and higher net fee income. During the nine months ended September 30, 2024, the total risk-adjusted margin decreased 113 bps primarily driven by higher net credit losses and lower
net fee income, partially offset by higher net interest margin. During the three and nine months ended September 30, 2024, total credit card purchase volumes increased $881 million and$2.5 billion, and debit card purchase volumes increased $5.8 billion and $21.2 billion, reflecting higher levels of consumer spending.
Key Statistics – Loan Production (1)
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Consumer Banking:
First mortgage
$
2,684
$
2,547
$
7,068
$
7,392
Home equity
1,897
2,035
5,524
6,389
Total (2):
First mortgage
$
5,348
$
5,596
$
14,519
$
15,473
Home equity
2,289
2,421
6,573
7,559
(1)The loan production amounts represent the unpaid principal balance of loans and, in the case of home equity, the principal amount of the total line of credit.
(2)In addition to loan production in Consumer Banking, there is also first mortgage and home equity loan production in GWIM.
First mortgage loan originations for Consumer Banking increased $137 million during the three months ended September 30, 2024 primarily driven by increased refinancing activity due to lower interest rates. First mortgage loan originations for the total Corporation decreased$248 million during the three months ended September 30, 2024 primarily driven by lower demand in GWIM, partially offset by higher demand in Consumer Banking. During the nine months ended September 30, 2024, first mortgage loan originations for Consumer Banking and the total Corporation decreased $324 million and $954 million primarily driven by lower demand.
Home equity production in Consumer Banking and the total Corporation decreased $138 million and $132 million during the three months ended September 30, 2024 primarily driven by lower demand. During the nine months ended September 30, 2024, home equity production in Consumer Banking and the total Corporation decreased $865 million and $986 million primarily driven by lower demand.
13Bank of America
Global Wealth & Investment Management
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
% Change
2024
2023
% Change
Net interest income
$
1,709
$
1,755
(3)
%
$
5,216
$
5,436
(4)
%
Noninterest income:
Investment and brokerage services
3,874
3,396
14
11,181
9,885
13
All other income
179
170
5
530
557
(5)
Total noninterest income
4,053
3,566
14
11,711
10,442
12
Total revenue, net of interest expense
5,762
5,321
8
16,927
15,878
7
Provision for credit losses
7
(6)
n/m
1
32
(97)
Noninterest expense
4,340
3,950
10
12,803
11,942
7
Income before income taxes
1,415
1,377
3
4,123
3,904
6
Income tax expense
354
344
3
1,031
976
6
Net income
$
1,061
$
1,033
3
$
3,092
$
2,928
6
Effective tax rate
25.0
%
25.0
%
25.0
%
25.0
%
Net interest yield
2.20
2.16
2.19
2.19
Return on average allocated capital
23
22
22
21
Efficiency ratio
75.32
74.28
75.64
75.21
Balance Sheet
Three Months Ended September 30
Nine Months Ended September 30
Average
2024
2023
% Change
2024
2023
% Change
Total loans and leases
$
225,355
$
218,569
3
%
$
222,260
$
219,530
1
%
Total earning assets
309,231
322,032
(4)
318,026
331,738
(4)
Total assets
322,924
335,124
(4)
331,635
344,709
(4)
Total deposits
279,999
291,770
(4)
288,319
300,308
(4)
Allocated capital
18,500
18,500
—
18,500
18,500
—
Period end
September 30 2024
December 31 2023
% Change
Total loans and leases
$
227,318
$
219,657
3
%
Total earning assets
314,594
330,653
(5)
Total assets
328,831
344,626
(5)
Total deposits
283,432
299,657
(5)
n/m = not meaningful
GWIM consists of two primary businesses: Merrill Wealth Management andBank of America Private Bank. For additional information on GWIM, see Business Segment Operations in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
Three-Month Comparison
Net income for GWIM increased $28 million to $1.1 billion primarily due to higher revenue, largely offset by higher noninterest expense. The operating margin was 25 percent compared to 26 percenta year ago.
Net interest income decreased $46 million to $1.7 billion, relatively unchanged from the same period a year ago.
Noninterest income, which primarily includes investment and brokerage services income, increased $487 million to $4.1 billion. The increase was primarily driven by higher asset management fees due to higher average equity market valuations and positive AUM flows, as well as higher brokerage fees due to increased transactional volume, partially offset by the impact of lower AUM pricing.
Noninterest expense increased $390 million to $4.3 billion primarily due to higher revenue-related incentives.
The return on average allocated capital was 23 percent, up from 22 percent, due to higher net income. For information on capital allocated to the business segments, see Business Segment Operations on page 10.
Average loans increased $6.8 billion to $225.4 billion primarily driven by custom lending and residential mortgage. Average deposits decreased $11.8 billion to $280.0 billion primarily driven by clients moving deposits to higher yielding investment cash alternatives, including offerings on our investment and brokerage platforms.
Merrill Wealth Management revenue of $4.8 billion increased nine percent primarily driven by higher asset management fees due to the impact of higher average equity market valuations and positive AUM flows, as well as higher brokerage fees due to increased transactional volume.
Bank of America Private Bank revenue of $973 million increased five percent primarily driven by higher asset management fees due to the impact of higher average equity market valuations and the impact of positive AUM flows.
Nine-Month Comparison
Net income for GWIM increased $164 million to $3.1 billion primarily due to higher revenue, partially offset by higher noninterest expense. The operating margin was 24 percent compared to 25 percent a year ago.
Net interest income decreased $220 million to $5.2 billion primarily due to lower average deposit balances.
Noninterest income, which primarily includes investment and brokerage services income, increased $1.3 billion to $11.7 billion due to the same factors as described in the three-month discussion.
Bank of America 14
Noninterest expense increased $861 million to $12.8 billion due to the same factor as described in the three-month discussion.
The return on average allocated capital was 22 percent, up from 21 percent, due to the same factor as described in the three-month discussion.
Average loans increased $2.7 billion to $222.3 billion primarily due to the same factors as described in the three-month discussion. Average deposits decreased $12.0 billion to
$288.3 billion due to the same factors as described in the three-month discussion.
Merrill Wealth Management revenue of $14.1 billion increased seven percent primarily driven by the same factors as described in the three-month discussion.
Bank of America Private Bank revenue of $2.9 billion increased five percent primarily driven by the same factors as described in the three-month discussion.
Key Indicators and Metrics
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Revenue by Business
Merrill Wealth Management
$
4,789
$
4,398
$
14,059
$
13,135
Bank of America Private Bank
973
923
2,868
2,743
Total revenue, net of interest expense
$
5,762
$
5,321
$
16,927
$
15,878
Client Balances by Business, at period end
Merrill Wealth Management
$
3,527,319
$
2,978,229
Bank of America Private Bank
666,622
572,624
Total client balances
$
4,193,941
$
3,550,853
Client Balances by Type, at period end
Assets under management
$
1,861,124
$
1,496,601
Brokerage and other assets
1,856,806
1,578,123
Deposits
283,432
290,732
Loans and leases (1)
230,062
221,684
Less: Managed deposits in assets under management
(37,483)
(36,287)
Total client balances
$
4,193,941
$
3,550,853
Assets Under Management Rollforward
Assets under management, beginning of period
$
1,758,875
$
1,531,042
$
1,617,740
$
1,401,474
Net client flows
21,289
14,226
56,734
43,784
Market valuation/other
80,960
(48,667)
186,650
51,343
Total assets under management, end of period
$
1,861,124
$
1,496,601
$
1,861,124
$
1,496,601
(1)Includes margin receivables, which are classified in customer and other receivables on the Consolidated Balance Sheet.
Client Balances
Client balances increased $643.1 billion, or 18 percent, to $4.2 trillion at September 30, 2024 compared to September 30, 2023. The increase in client balances was primarily due to the impact of higher market valuations and positive net client flows.
15Bank of America
Global Banking
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
% Change
2024
2023
% Change
Net interest income
$
3,230
$
3,613
(11)
%
$
9,965
$
11,210
(11)
%
Noninterest income:
Service charges
802
754
6
2,327
2,203
6
Investment banking fees
783
743
5
2,468
2,129
16
All other income
1,019
1,093
(7)
3,107
3,326
(7)
Total noninterest income
2,604
2,590
1
7,902
7,658
3
Total revenue, net of interest expense
5,834
6,203
(6)
17,867
18,868
(5)
Provision for credit losses
229
(119)
n/m
693
(347)
n/m
Noninterest expense
2,991
2,804
7
8,902
8,563
4
Income before income taxes
2,614
3,518
(26)
8,272
10,652
(22)
Income tax expense
719
950
(24)
2,275
2,876
(21)
Net income
$
1,895
$
2,568
(26)
$
5,997
$
7,776
(23)
Effective tax rate
27.5
%
27.0
%
27.5
%
27.0
%
Net interest yield
2.22
2.68
2.36
2.84
Return on average allocated capital
15
21
16
21
Efficiency ratio
51.27
45.22
49.82
45.38
Balance Sheet
Three Months Ended September 30
Nine Months Ended September 30
Average
2024
2023
% Change
2024
2023
% Change
Total loans and leases
$
371,216
$
376,214
(1)
%
$
372,516
$
380,076
(2)
%
Total earning assets
578,988
534,153
8
563,649
528,205
7
Total assets
647,541
601,378
8
631,659
595,329
6
Total deposits
549,629
504,432
9
533,620
498,224
7
Allocated capital
49,250
49,250
—
49,250
49,250
—
Period end
September 30 2024
December 31 2023
% Change
Total loans and leases
$
375,159
$
373,891
—
%
Total earning assets
583,742
552,453
6
Total assets
650,936
621,751
5
Total deposits
556,953
527,060
6
n/m = not meaningful
Global Banking, which includes Global Corporate Banking, Global Commercial Banking, Business Banking and Global Investment Banking, provides a wide range of lending-related products and services, integrated working capital management and treasury solutions, and underwriting and advisory services through our network of global offices and client relationship teams. For more information about Global Banking, see Business Segment Operations in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
Three-Month Comparison
Net income for Global Banking decreased $673 million to $1.9 billion driven by lower revenue, higher provision for credit losses and higher noninterest expense.
Net interest income decreased $383 million to $3.2 billion primarily due to the impact of interest rates, partially offset by the benefit of higher average deposit balances.
Noninterest income was $2.6 billion, relatively unchanged from the same period a year ago.
The provision for credit losses increased $348 million to $229 million primarily driven by the commercial and industrial portfolio, as well as the commercial real estate office portfolio.
Noninterest expense increased $187 million to $3.0 billion due to continued investments in the business, including people and technology.
The return on average allocated capital was 15 percent, down from 21 percent, due to lower net income. For information on capital allocated to the business segments, see Business Segment Operations on page 10.
Nine-Month Comparison
Net income for Global Banking decreased $1.8 billion to $6.0 billion driven by higher provision for credit losses, lower revenue and higher noninterest expense.
Net interest income decreased $1.2 billion to $10.0 billion primarily due to the same factors as described in the three-month discussion.
Noninterest income increased $244 million to $7.9 billion due to higher investment banking fees and treasury service charges, partially offset by lower leasing-related revenue.
The provision for credit losses increased $1.0 billion to $693 million primarily driven by the commercial real estate office portfolio compared to a benefit in the prior year due to certain improved macroeconomic conditions.
Noninterest expense increased $339 million to $8.9 billion primarily due to continued investment in the business, including people and technology, and higher regulatory costs.
The return on average allocated capital was 16 percent, down from 21 percent, due to lower net income.
Bank of America 16
Global Corporate, Global Commercial and Business Banking
The following table and discussion present a summary of the results, which exclude certain investment banking and other activities in Global Banking.
Global Corporate, Global Commercial and Business Banking
Global Corporate Banking
Global Commercial Banking
Business Banking
Total
Three Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
2024
2023
2024
2023
Revenue
Business Lending
$
1,102
$
1,300
$
1,246
$
1,262
$
57
$
61
$
2,405
$
2,623
Global Transaction Services
1,243
1,392
968
998
369
379
2,580
2,769
Total revenue, net of interest expense
$
2,345
$
2,692
$
2,214
$
2,260
$
426
$
440
$
4,985
$
5,392
Balance Sheet
Average
Total loans and leases
$
162,053
$
169,384
$
196,681
$
194,604
$
12,373
$
12,071
$
371,107
$
376,059
Total deposits
301,070
272,007
195,475
182,040
53,084
50,381
549,629
504,428
Global Corporate Banking
Global Commercial Banking
Business Banking
Total
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
2024
2023
2024
2023
Revenue
Business Lending
$
3,427
$
3,693
$
3,773
$
3,765
$
174
$
191
$
7,374
$
7,649
Global Transaction Services
3,839
4,424
2,876
3,172
1,092
1,161
7,807
8,757
Total revenue, net of interest expense
$
7,266
$
8,117
$
6,649
$
6,937
$
1,266
$
1,352
$
15,181
$
16,406
Balance Sheet
Average
Total loans and leases
$
163,122
$
172,964
$
196,953
$
194,496
$
12,315
$
12,397
$
372,390
$
379,857
Total deposits
292,967
266,425
189,415
180,850
51,238
50,951
533,620
498,226
Period end
Total loans and leases
$
165,142
$
166,974
$
197,583
$
194,318
$
12,333
$
11,932
$
375,058
$
373,224
Total deposits
305,000
266,481
198,482
179,914
53,471
48,537
556,953
494,932
Business Lending revenue decreased $218 million for the three months ended September 30, 2024 compared to the same period a year ago primarily driven by the impact of interest rates and lower leasing-related revenue. Business lending revenue decreased $275 million for the nine months ended September 30, 2024 compared to the same period a year ago primarily driven by same factors as described in the three-month discussion.
Global Transaction Services revenue decreased $189 million for the three months ended September 30, 2024 primarily driven by the impact of interest rates, partially offset by the benefit of higher average deposit balances and treasury service charges. Global Transaction Services revenue decreased $950 million for the nine months ended September 30, 2024 primarily driven by the same factors as described in the three-month discussion.
Average loans and leases of $371.1 billion decreased one percent for the three months ended September 30, 2024, and average loans and leases of $372.4 billiondecreased two percent for the nine months ended September 30, 2024 due to lower client demand.
Average deposits of $549.6 billion increased nine percent for the three months ended September 30, 2024, and average deposits of $533.6 billion increasedseven percentfor the nine months ended September 30, 2024 due to growth in both domestic and international balances.
Global Investment Banking
Client teams and product specialists underwrite and distribute debt, equity and loan products, and provide advisory services and tailored risk management solutions. The economics of certain investment banking and underwriting activities are shared primarily between Global Banking and Global Markets under an internal revenue-sharing arrangement. Global Banking originates certain deal-related transactions with our corporate and commercial clients that are executed and distributed by Global Markets. To provide a complete discussion of our consolidated investment banking fees, the table below presents total Corporation investment banking fees and the portion attributable to Global Banking.
17Bank of America
Investment Banking Fees
Global Banking
Total Corporation
Global Banking
Total Corporation
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
2024
2023
2024
2023
Products
Advisory
$
351
$
396
$
387
$
448
$
990
$
1,042
$
1,134
$
1,186
Debt issuance
332
255
780
570
1,078
808
2,545
1,814
Equity issuance
100
92
270
232
400
279
990
687
Gross investment banking fees
783
743
1,437
1,250
2,468
2,129
4,669
3,687
Self-led deals
(6)
(19)
(34)
(62)
(24)
(39)
(137)
(124)
Total investment banking fees
$
777
$
724
$
1,403
$
1,188
$
2,444
$
2,090
$
4,532
$
3,563
Total Corporation investment banking fees, which exclude self-led deals and are primarily included within Global Banking and Global Markets, were $1.4 billion and $4.5 billion for the three and nine months ended September 30, 2024. The three-month period increased 18 percent compared to the same period in 2023 primarily due to higher debt issuance fees. The nine-month period increased 27 percent compared to the same period in 2023 primarily due to higher debt and equity issuance fees.
Global Markets
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
% Change
2024
2023
% Change
Net interest income
$
898
$
674
33
%
$
2,349
$
1,080
118
%
Noninterest income:
Investment and brokerage services
562
475
18
1,573
1,507
4
Investment banking fees
589
463
27
2,016
1,435
40
Market making and similar activities
3,349
3,195
5
10,397
11,002
(5)
All other income
232
135
72
637
415
53
Total noninterest income
4,732
4,268
11
14,623
14,359
2
Total revenue, net of interest expense
5,630
4,942
14
16,972
15,439
10
Provision for credit losses
7
(14)
n/m
(42)
(71)
n/m
Noninterest expense
3,443
3,235
6
10,421
9,935
5
Income before income taxes
2,180
1,721
27
6,593
5,575
18
Income tax expense
632
473
34
1,912
1,533
25
Net income
$
1,548
$
1,248
24
$
4,681
$
4,042
16
Effective tax rate
29.0
%
27.5
%
29.0
%
27.5
%
Return on average allocated capital
14
11
14
12
Efficiency ratio
61.17
65.47
61.40
64.35
Balance Sheet
Three Months Ended September 30
Nine Months Ended September 30
Average
2024
2023
% Change
2024
2023
% Change
Trading-related assets:
Trading account securities
$
325,236
$
307,990
6
%
$
323,223
$
321,607
1
%
Reverse repurchases
150,751
135,401
11
141,611
133,912
6
Securities borrowed
133,588
119,936
11
136,040
118,912
14
Derivative assets
36,032
46,417
(22)
37,551
44,477
(16)
Total trading-related assets
645,607
609,744
6
638,425
618,908
3
Total loans and leases
140,806
131,298
7
136,572
128,317
6
Total earning assets
728,186
655,971
11
709,208
647,386
10
Total assets
924,093
863,653
7
909,386
870,366
4
Total deposits
34,952
31,890
10
33,167
33,725
(2)
Allocated capital
45,500
45,500
—
45,500
45,500
—
Period end
September 30 2024
December 31 2023
% Change
Total trading-related assets
$
653,798
$
542,544
21
%
Total loans and leases
148,447
136,223
9
Total earning assets
742,221
637,955
16
Total assets
958,227
817,588
17
Total deposits
35,142
34,833
1
n/m = not meaningful
Bank of America 18
Global Markets 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. For more information about Global Markets, see Business Segment Operations in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
The following explanations for period-over-period changes in results for Global Markets, including those disclosed under Sales and Trading Revenue, are the same for amounts including and excluding net DVA. Amounts excluding net DVA are a non-GAAP financial measure. For more information on net DVA, see Supplemental Financial Data on page 6.
Three-Month Comparison
Net income for Global Markets increased $300 million to $1.5 billion for the three months ended September 30, 2024 compared to the same period in 2023. Net DVA losses totaled $8 millioncompared to $16 million in 2023. Excluding net DVA, net income increased $294 million to $1.6 billion. These increases were primarily driven by higher revenue, partially offset by higher noninterest expense.
Revenue increased $688 million to $5.6 billion primarily due to higher sales and trading revenue and investment banking fees. Sales and trading revenue increased $525 million, and excluding net DVA, increased $517 million. These increases were driven by higher revenue in both Equities and FICC.
Noninterest expense increased $208 million to $3.4 billion, primarily driven by revenue-related expenses and continued investments in the business, including technology.
Average total assets increased $60.4 billion to $924.1 billion for the three months ended September 30, 2024 compared to the same period in 2023 driven by increased securities financing activity, higher levels of inventory and loan growth.
The return on average allocated capital was 14 percent, up from 11 percent in the same period a year ago, reflecting higher net income. For information on capital allocated to the business segments, see Business Segment Operations on page 10.
Nine-Month Comparison
Net income for Global Markets increased $639 million to $4.7 billion for the nine months ended September 30, 2024 compared to the same period in 2023. Net DVA losses were $94 million compared to $104 million in 2023. Excluding net DVA, net income increased $631 million to $4.8 billion. These increases were primarily driven by higher revenue, partially offset by higher noninterest expense.
Revenue increased $1.5 billion to $17.0 billion primarily due to the same factors as described in the three-month discussion. Sales and trading revenue increased $944 million, and excluding net DVA, sales and trading revenue increased $934 million. These increases were driven by the same factors as described in the three-month discussion.
Noninterest expense increased $486 million to $10.4 billion, driven by the same factors as described in the three-month discussion.
Average total assets increased $39.0 billion to $909.4 billion, and period-end total assets increased $140.6 billion from December 31, 2023 to $958.2 billion. The increases were driven by the same factors as described in the three-month discussion.
The return on average allocated capital was 14 percent, up from 12 percent in the same period a year ago, reflecting higher net income.
Sales and Trading Revenue
For a description of sales and trading revenue, see Business Segment Operations in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K. The following table and related discussion present sales and trading revenue, substantially all of which is in Global Markets, with the remainder in Global Banking. In addition, the following table and related discussion also present sales and trading revenue, excluding net DVA, which is a non-GAAP financial measure. For more information on net DVA, seeSupplemental Financial Dataon page 6.
Sales and Trading Revenue (1, 2, 3)
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Sales and trading revenue (2)
Fixed-income, currencies and commodities
$
2,934
$
2,710
$
8,907
$
8,817
Equities
1,996
1,695
5,794
4,940
Total sales and trading revenue
$
4,930
$
4,405
$
14,701
$
13,757
Sales and trading revenue, excluding net DVA (4)
Fixed-income, currencies and commodities
$
2,942
$
2,723
$
8,986
$
8,916
Equities
1,996
1,698
5,809
4,945
Total sales and trading revenue, excluding net DVA
$
4,938
$
4,421
$
14,795
$
13,861
(1)For more information on sales and trading revenue, see Note 3 – Derivatives to the Consolidated Financial Statements.
(2)Includes FTE adjustments of $262 million and $553 million for the three and nine months ended September 30, 2024 compared to $109 million and $285 million for the same periods in 2023.
(3)Includes Global Banking sales and trading revenue of $165 million and $495 million for the three and nine months ended September 30, 2024 compared to $133 million and $464 million for the same periods in 2023.
(4)FICC and Equities sales and trading revenue, excluding net DVA, is a non-GAAP financial measure. FICC net DVA gains (losses) were $(8) million and $(79) million for the three and nine months ended September 30, 2024 compared to $(13) million and $(99) million for the same periods in 2023. Equities net DVA gains (losses) were $0 and $(15) million for the three and nine months ended September 30, 2024 compared to $(3) million and $(5) million for the same periods in 2023.
19Bank of America
Three-Month Comparison
Including and excluding net DVA, FICC revenue increased $224 million and $219 million for the three months ended September 30, 2024 compared to the same period in 2023. The increases were driven by improved client activity and trading performance in foreign exchange and interest rate products. Including and excluding net DVA, Equities revenue increased $301 million and $298 million driven by strong client activity and trading performance in cash and derivatives.
Nine-Month Comparison
Including and excluding net DVA, FICC revenue increased $90 million and $70 million for the nine months ended September 30, 2024 compared to the same period in 2023 driven by improved trading in mortgages, partially offset by a weaker trading environment for interest rate products. Including and excluding net DVA, Equities revenue increased $854 million and $864 million driven by the same factors as described in the three-month discussion.
All Other
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
% Change
2024
2023
% Change
Net interest income
$
(1)
$
99
(101)
%
$
43
$
260
(83)
%
Noninterest income (loss)
(2,151)
(1,717)
25
(5,594)
(5,103)
10
Total revenue, net of interest expense
(2,152)
(1,618)
33
(5,551)
(4,843)
15
Provision for credit losses
(3)
(24)
(88)
(16)
(77)
(79)
Noninterest expense
171
593
(71)
1,426
1,492
(4)
Loss before income taxes
(2,320)
(2,187)
6
(6,961)
(6,258)
11
Income tax benefit
(2,025)
(2,276)
(11)
(5,720)
(6,058)
(6)
Net loss
$
(295)
$
89
n/m
$
(1,241)
$
(200)
n/m
Balance Sheet
Three Months Ended September 30
Nine Months Ended September 30
Average
2024
2023
% Change
2024
2023
% Change
Total loans and leases
$
8,570
$
9,412
(9)
%
$
8,680
$
9,742
(11)
%
Total assets (1)
382,528
269,159
42
372,885
239,891
55
Total deposits
117,804
68,010
73
110,995
45,357
145
Period end
September 30 2024
December 31 2023
% Change
Total loans and leases
$
8,779
$
8,842
(1)
%
Total assets (1)
360,006
346,356
4
Total deposits
110,467
92,705
19
(1)In segments where the total of liabilities and equity exceeds assets, which are generally deposit-taking segments, we allocate assets from All Other to those segments to match liabilities (i.e., deposits) and allocated shareholders’ equity. Average allocated assets were $944.4 billion and $948.0 billion for the three and nine months ended September 30, 2024 compared to $955.7 billion and $981.8 billion for the same periods in 2023, and period-end allocated assets were $953.6 billion and $972.9 billion at September 30, 2024 and December 31, 2023.
n/m = not meaningful
All Other primarily consists of ALM activities, liquidating businesses and certain expenses not otherwise allocated to a business segment. ALM activities encompass interest rate and foreign currency risk management activities for which substantially all of the results are allocated to our business segments. For more information on our ALM activities, see Note 17 – Business Segment Information to the Consolidated Financial Statements.
Three-Month Comparison
Results for All Other decreased $384 million to a net loss of $295 million compared to net income of $89 million for the same period a year ago, reflecting lower revenue and income tax benefit, partially offset by lower noninterest expense.
Revenue decreased $534 million to a net loss of $2.2 billion primarily due to a charge of $189 million related to Visa’s increase in its litigation escrow account and certain negative valuation adjustments.
Noninterest expense decreased $422 million to $171 million primarily due to lower expenses related to a liquidating business activity and lower technology expenses.
The income tax benefit decreased $251 million to $2.0 billion due to lower tax preference benefits primarily related to tax credit investment activity. Both periods included income tax benefit adjustments to eliminate the FTE treatment of certain tax credits recorded in Global Banking and Global Markets.
Nine-Month Comparison
The net loss in All Other increased $1.0 billion to $1.2 billion primarily due to lower revenue and income tax benefit.
Revenue decreased $708 million to a net loss of $5.6 billion primarily due to the same factors as described in the three-month discussion and higher partnership losses on tax credit investments.
The income tax benefit decreased $338 million to $5.7 billion primarily due the same factor as described in the three-month discussion. Both periods included income tax benefit adjustments to eliminate the FTE treatment of certain tax credits recorded in Global Banking and Global Markets.
Bank of America 20
Managing Risk
Risk is inherent in all our business activities. The seven key types of risk faced by the Corporation are strategic, credit, market, liquidity, compliance, operational and reputational. Sound risk management enables us to serve our customers and deliver for our shareholders. If not managed well, risk can result in financial loss, regulatory sanctions and penalties, and damage to our reputation, each of which may adversely impact our ability to execute our business strategies. We take a comprehensive approach to risk management with a defined Risk Framework and an articulated Risk Appetite Statement, which are approved annually by the Enterprise Risk Committee (ERC) and the Board.
Our Risk Framework serves as the foundation for the consistent and effective management of risks facing the Corporation. The Risk Framework sets forth roles and responsibilities for the management of risk and provides a blueprint for how the Board, through delegation of authority to committees and executive officers, establishes risk appetite and associated limits for our activities.
Our risk appetite provides a common framework that includes a set of measures to assist senior management and the Board in assessing the Corporation’s risk profile across all risk types against our risk appetite and risk capacity. Our risk appetite is formally articulated in the Risk Appetite Statement, which includes both qualitative statements and quantitative limits.
For more information on the Corporation’s risks, see Item 1A. Risk Factors of the Corporation’s 2023 Annual Report on Form 10-K. These risks are being managed within our Risk Framework and supporting risk management programs. For more information on our Risk Framework, risk management activities and the key types of risk faced by the Corporation, see the Managing Risk section in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
Capital Management
The Corporation manages its capital position so that its capital is more than adequate to support its business activities and aligns with risk, risk appetite and strategic planning. For more information, see Capital Management in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
CCAR and Capital Planning
The Federal Reserve requires BHCs to submit a capital plan and planned capital actions on an annual basis, consistent with the rules governing capital planning and the SCB requirement, which include supervisory stress testing by the Federal Reserve. Based on the results of our 2024 CCAR stress test, our SCB increased to 3.2 percent from 2.5 percent, resulting in a CET1 minimum requirement of 10.7 percent. The new SCB is effective from October 1, 2024 through September 30, 2025.
In October 2021, the Board authorized the repurchase of up to $25 billion of common stock over time. This authorization was modified in September 2023 to include common stock repurchases to offset shares awarded under the Corporation’s equity-based compensation plans when determining the remaining repurchase authority. On July 24, 2024, the Board authorized a $25 billion common stock repurchase program, effective August 1, 2024, which replaced the Corporation’s previous program that expired on August 1, 2024.
Pursuant to Board authorizations, during the three months ended September 30, 2024, we repurchased $3.5 billion of common stock. For more information, see Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds on page 106 and Capital Management – CCAR and Capital Planning in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
The timing and amount of common stock repurchases are subject to various factors, including the Corporation’s capital position, liquidity, financial performance and alternative uses of capital, stock trading price, regulatory requirements and general market conditions, and may be suspended at any time. Such repurchases may be effected through open market purchases or privately negotiated transactions, including repurchase plans that satisfy the conditions of Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (Exchange Act).
Regulatory Capital
As a BHC, we are subject to regulatory capital rules, including Basel 3, issued by U.S. banking regulators. The Corporation's depository institution subsidiaries are also subject to the Prompt Corrective Action (PCA) framework. The Corporation and its primary affiliated banking entity, BANA, are Advanced approaches institutions under Basel 3 and are required to report regulatory risk-based capital ratios and risk-weighted assets (RWA) under both the Standardized and Advanced approaches. The lower of the capital ratios under Standardized or Advanced approaches compared to their respective regulatory capital ratio requirements is used to assess capital adequacy, including under the PCA framework. As of September 30, 2024, the CET1 capital, Tier 1 capital and Total capital ratios under the Standardized approach were the binding ratios.
Minimum Capital Requirements
In order to avoid restrictions on capital distributions and discretionary bonus payments to executive officers, the Corporation must meet risk-based capital ratio requirements that include a capital conservation buffer of 2.5 percent (under the Advanced approaches only), an SCB (under the Standardized approach only), plus any applicable countercyclical capital buffer and a global systemically important bank (G-SIB) surcharge. The buffers and surcharge must be comprised solely of CET1 capital. For the period from January 1, 2024 through September 30, 2024, the Corporation's minimum CET1 capital ratio requirements were 10.0 percent under both the Standardized approach and the Advanced approaches.
The Corporation is required to calculate its G-SIB surcharge on an annual basis under two methods and is subject to the higher of the resulting two surcharges. Method 1 is consistent with the approach prescribed by the Basel Committee’s assessment methodology and is calculated using specified indicators of systemic importance. Method 2 modifies the Method 1 approach by, among other factors, including a measure of the Corporation’s reliance on short-term wholesale funding. Effective January 1, 2024, the Corporation’s G-SIB surcharge, which is higher under Method 2, increased 50 bps, resulting in an increase in our minimum CET1 capital ratio requirement under the Standardized approach and the Advanced approaches to 10.0 percent from 9.5 percent. At September 30, 2024, the Corporation’s CET1 capital ratio of 11.8 percent under the Standardized approach exceeded its CET1 capital ratio requirement.
21Bank of America
The Corporation is also required to maintain a minimum supplementary leverage ratio (SLR) of 3.0 percent plus a leverage buffer of 2.0 percent in order to avoid certain restrictions on capital distributions and discretionary bonus payments to executive officers. At September 30, 2024, our insured depository institution subsidiaries exceeded their requirement to maintain a minimum 6.0 percent SLR to be considered well capitalized under the PCA framework.
Capital Composition and Ratios
Table 8 presents Bank of America Corporation’s capital ratios and related information in accordance with Basel 3 Standardized and Advanced approaches as measured at September 30, 2024 and December 31, 2023. For the periods presented herein, the Corporation met the definition of well capitalized under current regulatory requirements.
Table 8
Bank of America Corporation Regulatory Capital under Basel 3
Standardized Approach (1)
Advanced Approaches (1)
Regulatory Minimum (2)
(Dollars in millions, except as noted)
September 30, 2024
Risk-based capital metrics:
Common equity tier 1 capital
$
199,805
$
199,805
Tier 1 capital
222,942
222,942
Total capital (3)
252,381
241,794
Risk-weighted assets (in billions)
1,689
1,482
Common equity tier 1 capital ratio
11.8
%
13.5
%
10.0
%
Tier 1 capital ratio
13.2
15.0
11.5
Total capital ratio
14.9
16.3
13.5
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)
$
3,218
$
3,218
Tier 1 leverage ratio
6.9
%
6.9
%
4.0
Supplementary leverage exposure (in billions)
$
3,788
Supplementary leverage ratio
5.9
%
5.0
December 31, 2023
Risk-based capital metrics:
Common equity tier 1 capital
$
194,928
$
194,928
Tier 1 capital
223,323
223,323
Total capital (3)
251,399
241,449
Risk-weighted assets (in billions)
1,651
1,459
Common equity tier 1 capital ratio
11.8
%
13.4
%
9.5
%
Tier 1 capital ratio
13.5
15.3
11.0
Total capital ratio
15.2
16.6
13.0
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)
$
3,135
$
3,135
Tier 1 leverage ratio
7.1
%
7.1
%
4.0
Supplementary leverage exposure (in billions)
$
3,676
Supplementary leverage ratio
6.1
%
5.0
(1)Capital ratios as of September 30, 2024 and December 31, 2023 are calculated using the regulatory capital rule that allows a five-year transition period related to the adoption of the current expected credit losses (CECL) accounting standard on January 1, 2020.
(2)The CET1 capital regulatory minimum is the sum of the CET1 capital ratio minimum of 4.5 percent, our G-SIB surcharge of 3.0 percent at September 30, 2024 and 2.5 percent at December 31, 2023, and our capital conservation buffer (under the Advanced approaches) or SCB (under the Standardized approach) of 2.5 percent, as applicable. The countercyclical capital buffer was zero for both periods. The SLR regulatory minimum includes a leverage buffer of 2.0 percent.
(3)Total capital under the Advanced approaches differs from the Standardized approach due to differences in the amount permitted in Tier 2 capital related to the qualifying allowance for credit losses.
(4)Reflects total average assets adjusted for certain Tier 1 capital deductions.
At September 30, 2024, CET1 capital was $199.8 billion, an increase of $4.9 billion from December 31, 2023, primarily due to earnings, partially offset by capital distributions. Tier 1 capital decreased $381 million primarily driven by preferred stock redemptions, partially offset by the increase in CET1 capital. Total capital under the Standardized approach increased $982 million primarily due to an increase in subordinated debt and adjusted allowance for credit losses included in Tier 2 capital,
partially offset by the decrease in Tier 1 capital. RWA under the Standardized approach, which yielded the lower CET1 capital ratio at September 30, 2024, increased $37.5 billion during 2024 to $1,689 billion primarily driven by client activity in Global Markets and lending activity in GWIM and Global Banking. Supplementary leverage exposure at September 30, 2024 increased $111.3 billion primarily driven by increased activity in Global Markets andALM activities in All Other.
Bank of America 22
Table 9 shows the capital composition at September 30, 2024 and December 31, 2023.
Table 9
Capital Composition under Basel 3
(Dollars in millions)
September 30 2024
December 31 2023
Total common shareholders’ equity
$
271,958
$
263,249
CECL transitional amount (1)
627
1,254
Goodwill, net of related deferred tax liabilities
(68,648)
(68,648)
Deferred tax assets arising from net operating loss and tax credit carryforwards
(8,188)
(7,912)
Intangibles, other than mortgage servicing rights, net of related deferred tax liabilities
(1,453)
(1,496)
Defined benefit pension plan net assets
(801)
(764)
Cumulative unrealized net (gain) loss related to changes in fair value of financial liabilities attributable to own creditworthiness, net-of-tax
1,509
1,342
Accumulated net (gain) loss on certain cash flow hedges (2)
4,926
8,025
Other
(125)
(122)
Common equity tier 1 capital
199,805
194,928
Qualifying preferred stock, net of issuance cost
23,158
28,396
Other
(21)
(1)
Tier 1 capital
222,942
223,323
Tier 2 capital instruments
16,201
15,340
Qualifying allowance for credit losses (3)
13,575
12,920
Other
(337)
(184)
Total capital under the Standardized approach
252,381
251,399
Adjustment in qualifying allowance for credit losses under the Advanced approaches (3)
(10,587)
(9,950)
Total capital under the Advanced approaches
$
241,794
$
241,449
(1)September 30, 2024 and December 31, 2023 include 25 percent and 50 percent of the CECL transition provision’s impact as of December 31, 2021.
(2)Includes amounts in accumulated other comprehensive income (OCI) related to the hedging of items that are not recognized at fair value on the Consolidated Balance Sheet.
(3)Includes the impact of transition provisions related to the CECL accounting standard.
Table 10 shows the components of RWA as measured under Basel 3 at September 30, 2024 and December 31, 2023.
Table 10
Risk-weighted Assets under Basel 3
Standardized Approach
Advanced Approaches
Standardized Approach
Advanced Approaches
(Dollars in billions)
September 30, 2024
December 31, 2023
Credit risk
$
1,616
$
1,005
$
1,580
$
983
Market risk
73
73
71
71
Operational risk
n/a
359
n/a
361
Risks related to credit valuation adjustments
n/a
45
n/a
44
Total risk-weighted assets
$
1,689
$
1,482
$
1,651
$
1,459
n/a = not applicable
23Bank of America
Bank of America, N.A. Regulatory Capital
Table 11 presents regulatory capital information for BANA in accordance with Basel 3 Standardized and Advanced approaches as measured at September 30, 2024 and December 31, 2023. BANA met the definition of well capitalized under the PCA framework for both periods.
Table 11
Bank of America, N.A. Regulatory Capital under Basel 3
Standardized Approach (1)
Advanced Approaches (1)
Regulatory Minimum (2)
(Dollars in millions, except as noted)
September 30, 2024
Risk-based capital metrics:
Common equity tier 1 capital
$
191,412
$
191,412
Tier 1 capital
191,412
191,412
Total capital (3)
206,410
196,057
Risk-weighted assets (in billions)
1,428
1,137
Common equity tier 1 capital ratio
13.4
%
16.8
%
7.0
%
Tier 1 capital ratio
13.4
16.8
8.5
Total capital ratio
14.5
17.2
10.5
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)
$
2,507
$
2,507
Tier 1 leverage ratio
7.6
%
7.6
%
5.0
Supplementary leverage exposure (in billions)
$
2,974
Supplementary leverage ratio
6.4
%
6.0
December 31, 2023
Risk-based capital metrics:
Common equity tier 1 capital
$
187,621
$
187,621
Tier 1 capital
187,621
187,621
Total capital (3)
201,932
192,175
Risk-weighted assets (in billions)
1,395
1,114
Common equity tier 1 capital ratio
13.5
%
16.8
%
7.0
%
Tier 1 capital ratio
13.5
16.8
8.5
Total capital ratio
14.5
17.2
10.5
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)
$
2,471
$
2,471
Tier 1 leverage ratio
7.6
%
7.6
%
5.0
Supplementary leverage exposure (in billions)
$
2,910
Supplementary leverage ratio
6.4
%
6.0
(1)Capital ratios as of September 30, 2024 and December 31, 2023 are calculated using the regulatory capital rule that allows a five-year transition period related to the adoption of the CECL accounting standard on January 1, 2020.
(2)Risk-based capital regulatory minimums at both September 30, 2024 and December 31, 2023 are the minimum ratios under Basel 3 including a capital conservation buffer of 2.5 percent. The regulatory minimums for the leverage ratios as of both period ends are the percent required to be considered well capitalized under the PCA framework.
(3)Total capital under the Advanced approaches differs from the Standardized approach due to differences in the amount permitted in Tier 2 capital related to the qualifying allowance for credit losses.
(4)Reflects total average assets adjusted for certain Tier 1 capital deductions.
Total Loss-Absorbing Capacity Requirements
Total loss-absorbing capacity (TLAC) consists of the Corporation’s Tier 1 capital and eligible long-term debt issued directly by the Corporation. Eligible long-term debt for TLAC ratios is comprised of unsecured debt that has a remaining maturity of at least one year and satisfies additional requirements as prescribed in the TLAC final rule. As with the
risk-based capital ratios and SLR, the Corporation is required to maintain TLAC ratios in excess of minimum requirements plus applicable buffers to avoid restrictions on capital distributions and discretionary bonus payments to executive officers. Table 12 presents the Corporation's TLAC and long-term debt ratios and related information as of September 30, 2024 and December 31, 2023.
Bank of America 24
Table 12
Bank of America Corporation Total Loss-Absorbing Capacity and Long-Term Debt
TLAC (1)
Regulatory Minimum (2)
Long-term Debt
Regulatory Minimum (3)
(Dollars in millions)
September 30, 2024
Total eligible balance
$
463,241
$
225,379
Percentage of risk-weighted assets (4)
27.4
%
22.0
%
13.3
%
9.0
%
Percentage of supplementary leverage exposure
12.2
9.5
6.0
4.5
December 31, 2023
Total eligible balance
$
479,156
$
239,892
Percentage of risk-weighted assets (4)
29.0
%
22.0
%
14.5
%
8.5
%
Percentage of supplementary leverage exposure
13.0
9.5
6.5
4.5
(1)As of September 30, 2024 and December 31, 2023, TLAC ratios are calculated using the regulatory capital rule that allows a five-year transition period related to the adoption of the CECL accounting standard on January 1, 2020.
(2)The TLAC RWA regulatory minimum consists of 18.0 percent plus a TLAC RWA buffer comprised of 2.5 percent plus the Method 1 G-SIB surcharge of 1.5 percent. The countercyclical buffer is zero for both periods. The TLAC supplementary leverage exposure regulatory minimum consists of 7.5 percent plus a 2.0 percent TLAC leverage buffer. The TLAC RWA and leverage buffers must be comprised solely of CET1 capital and Tier 1 capital, respectively.
(3)The long-term debt RWA regulatory minimum is comprised of 6.0 percent plus the Corporation’s G-SIB surcharge of 3.0 percent at September 30, 2024 and 2.5 percent at December 31, 2023. The long-term debt leverage exposure regulatory minimum is 4.5 percent. Effective January 1, 2024, the Corporation’s G-SIB surcharge, which is higher under Method 2, increased 50 bps, resulting in an increase in our long-term debt RWA regulatory minimum requirement to 9.0 percent from 8.5 percent.
(4)The approach that yields the higher RWA is used to calculate TLAC and long-term debt ratios, which was the Standardized approach as of September 30, 2024 and December 31, 2023.
RegulatoryDevelopments
For information on regulatory developments, see Capital Management – Regulatory Developments in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
Regulatory Capital and Securities Regulation
The Corporation’s principal U.S. broker-dealer subsidiaries are BofA Securities, Inc. (BofAS) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). The Corporation's principal European subsidiaries undertaking broker-dealer activities are Merrill Lynch International (MLI) and BofA Securities Europe SA (BofASE).
The U.S. broker-dealer subsidiaries are subject to the net capital requirements of Rule 15c3-1 under the Exchange Act. BofAS computes its capital requirements as an alternative net capital broker-dealer under Rule 15c3-1e, and MLPF&S computes its capital requirements in accordance with the alternative standard under Rule 15c3-1. BofAS is registered as a futures commission merchant and is subject to Commodity Futures Trading Commission (CFTC) Regulation 1.17. The U.S. broker-dealer subsidiaries are also registered with the Financial Industry Regulatory Authority, Inc. (FINRA). Pursuant to FINRA Rule 4110, FINRA may impose higher net capital requirements than Rule 15c3-1 under the Exchange Act with respect to each of the broker-dealers.
BofAS provides institutional services, and in accordance with the alternative net capital requirements, is required to maintain tentative net capital in excess of $5.0 billion and net capital in excess of the greater of $1.0 billion or a certain percentage of its reserve requirement in addition to a certain percentage of securities-based swap risk margin. BofAS must also notify the SEC in the event its tentative net capital is less than $6.0 billion. BofAS is also required to hold a certain percentage of its customers' and affiliates' risk-based margin in order to meet its CFTC minimum net capital requirement. At September 30, 2024, BofAS had tentative net capital of $21.8 billion. BofAS also had regulatory net capital of $18.9 billion, which exceeded the minimum requirement of $4.8 billion.
MLPF&S provides retail services. At September 30, 2024, MLPF&S' regulatory net capital was $6.7 billion, which exceeded the minimum requirement of $160 million.
Our European broker-dealers are subject to requirements from U.S. and non-U.S. regulators. MLI, a U.K. investment firm, is regulated by the Prudential Regulation Authority and the Financial Conduct Authority and is subject to certain regulatory
capital requirements. At September 30, 2024, MLI’s capital resources were $33.7 billion, which exceeded the minimum Pillar 1 requirement of $13.1 billion.
BofASE, an authorized credit institution with its head office located in France, is regulated by the Autorité de Contrôle Prudentiel et de Résolution and the Autorité des Marchés Financiers, and supervised under the Single Supervisory Mechanism by the European Central Bank. At September 30, 2024, BofASE's capital resources were $10.2 billion, which exceeded the minimum Pillar 1 requirement of $3.4 billion.
In addition, MLI and BofASE remained conditionally registered with the SEC as security-based swap dealers, and maintained net liquid assets at September 30, 2024 that exceeded the applicable minimum requirements under the Exchange Act. The entities are also registered as swap dealers with the CFTC and met applicable capital requirements at September 30, 2024.
Liquidity Risk
Funding and Liquidity Risk Management
Our primary liquidity risk management objective is to meet expected or unexpected cash flow and collateral requirements, including payments under long-term debt agreements, commitments to extend credit and customer deposit withdrawals, while continuing to support our businesses and customers under a range of economic conditions. To achieve that objective, we analyze and monitor our liquidity risk under expected and stressed conditions, maintain liquidity and access to diverse funding sources, including our stable deposit base, and seek to align liquidity-related incentives and risks. These liquidity risk management practices have allowed us to effectively manage market fluctuations from the rising interest rate environment, inflationary pressures and changes in the macroeconomic environment.
We define liquidity as readily available assets, limited to cash and high-quality, liquid, unencumbered securities that we can use to meet our contractual and contingent financial obligations as they arise. We manage our liquidity position through line of business and ALM activities, as well as through our legal entity funding strategy, on both a forward and current (including intraday) basis under both expected and stressed conditions. We believe that a centralized approach to funding and liquidity management enhances our ability to monitor
25Bank of America
liquidity requirements, maximizes access to funding sources, minimizes borrowing costs and facilitates timely responses to liquidity events.
We provide centralized funding and liquidity management through a variety of activities, including monitoring of established limits, assessing exposures under both normal and stressed conditions and reviewing liquidity risk management processes and controls. Global Risk Management (GRM) provides oversight of liquidity management across the Corporation, including front-line units and legal entities. GRM oversees the liquidity risk management governance structure, establishes liquidity risk policies, and provides independent review and challenge of the Corporation's liquidity risk management processes.
The Board, its risk committee and various management committees oversee the Corporation’s liquidity risk activities. The Board and/or ERC approve our liquidity risk policy, Financial Contingency and Recovery Plan and liquidity risk appetite limits. Management committees responsible for liquidity governance include the Corporation’s Management Risk Committee, Asset and Liability Governance Committee, Liquidity Risk Committee and Asset and Liability Management Investment Committee.
For more information on the Corporation’s liquidity risks, see the Liquidity section within Item 1A. Risk Factors of the Corporation’s 2023 Annual Report on Form 10-K. For more information regarding global funding and liquidity risk management, as well as liquidity sources, liquidity arrangements, contingency planning and credit ratings discussed below, see Liquidity Risk in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
NB Holdings Corporation
Bank of America Corporation, as the parent company (the Parent), which is a separate and distinct legal entity from our bank and nonbank subsidiaries, has an intercompany arrangement with our wholly-owned holding company subsidiary, NB Holdings Corporation (NB Holdings). We have transferred, and agreed to transfer, additional Parent assets not required to satisfy anticipated near-term expenditures to NB Holdings. The Parent is expected to continue to have access to the same flow of dividends, interest and other amounts of cash necessary to service its debt, pay dividends and perform other obligations as it would have had it not entered into these arrangements and transferred any assets. These arrangements support our preferred single point of entry resolution strategy, under which only the Parent would be resolved under the U.S. Bankruptcy Code.
Global Liquidity Sources and Other Unencumbered Assets
We maintain liquidity available to the Corporation, including the Parent and selected subsidiaries, in the form of cash and high- quality, liquid, unencumbered securities. Our liquidity buffer, referred to as Global Liquidity Sources (GLS), is comprised of assets that are readily available to the Parent and selected subsidiaries, including holding company, bank and broker-dealer subsidiaries, even during stressed market conditions. Our cash is primarily on deposit with the Federal Reserve Bank and, to a lesser extent, central banks outside of the U.S. We limit the composition of high-quality, liquid, unencumbered securities to U.S. government securities, U.S. agency securities, U.S. agency mortgage-backed securities and other investment-grade securities, and a select group of non-U.S. government securities. We can obtain cash for these securities, even in stressed conditions, through repurchase agreements or outright sales. We hold our GLS in legal entities that allow us to meet the liquidity requirements of our global businesses, and we consider the impact of potential regulatory, tax, legal and other restrictions that could limit the transferability of funds among entities.
Table 13 presents average GLS for the three months ended September 30, 2024 and December 31, 2023.
Table 13
Average Global Liquidity Sources
Three Months Ended
(Dollars in billions)
September 30 2024
December 31 2023
Bank entities
$
769
$
735
Nonbank and other entities (1)
178
162
Total Average Global Liquidity Sources
$
947
$
897
(1) Nonbank includes Parent, NB Holdings and other regulated entities.
Our bank subsidiaries’ liquidity is primarily driven by deposit and lending activity, as well as securities valuation and net debt activity. Bank subsidiaries can also generate incremental liquidity by pledging a range of unencumbered loans and securities to certain Federal Home Loan Banks (FHLBs) and the Federal Reserve Discount Window. The cash we could have obtained by borrowing against this pool of specifically-identified eligible assets was $334 billion and $312 billion at September 30, 2024 and December 31, 2023. We have established operational procedures to enable us to borrow against these assets, including regularly monitoring our total pool of eligible loans and securities collateral. Eligibility is defined in guidelines from the FHLBs and the Federal Reserve and is subject to change at their discretion. Due to regulatory restrictions, liquidity generated by the bank subsidiaries can generally be used only to fund obligations within the bank subsidiaries, and transfers to the Parent or nonbank subsidiaries may be subject to prior regulatory approval.
Bank of America 26
Liquidity is also held in nonbank entities, including the Parent, NB Holdings and other regulated entities. The Parent and NB Holdings liquidity is typically in the form of cash deposited at BANA, which is excluded from the liquidity at bank subsidiaries, and high-quality, liquid, unencumbered securities. Liquidity held in other regulated entities, comprised primarily of broker-dealer subsidiaries, is primarily available to meet the obligations of that entity, and transfers to the Parent or to any other subsidiary may be subject to prior regulatory approval due to regulatory restrictions and minimum requirements. Our other regulated entities also hold unencumbered investment-grade securities and equities that we believe could be used to generate additional liquidity.
Table 14 presents the composition of average GLS for the three months ended September 30, 2024 and December 31, 2023.
Table 14
Average Global Liquidity Sources Composition
Three Months Ended
(Dollars in billions)
September 30 2024
December 31 2023
Cash on deposit
$
318
$
380
U.S. Treasury securities
300
197
U.S. agency securities, mortgage-backed securities, and other investment-grade securities
303
299
Non-U.S. government securities
26
21
Total Average Global Liquidity Sources
$
947
$
897
Our GLS are substantially the same in composition to what qualifies as High Quality Liquid Assets (HQLA) under the final U.S. Liquidity Coverage Ratio (LCR) rules. However, HQLA for purposes of calculating LCR is not reported at market value, but at a lower value that incorporates regulatory deductions and the exclusion of excess liquidity held at certain subsidiaries. The LCR is calculated as the amount of a financial institution’s unencumbered HQLA relative to the estimated net cash outflows the institution could encounter over a 30-day period of significant liquidity stress, expressed as a percentage. Our average consolidated HQLA, on a net basis, was $610 billion and $590 billion for the three months ended September 30, 2024 and December 31, 2023. For both periods, the average consolidated LCR was 115 percent. Our LCR fluctuates due to normal business flows from customer activity.
Liquidity Stress Analysis
We utilize liquidity stress analysis to assist us in determining the appropriate amounts of liquidity to maintain at the Parent and our subsidiaries to meet contractual and contingent cash outflows under a range of scenarios. For more information on liquidity stress analysis, see Liquidity Risk – Liquidity Stress Analysis in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
Net Stable Funding Ratio
The Net Stable Funding Ratio (NSFR) is a liquidity requirement for large banks to maintain a minimum level of stable funding over a one-year period. The requirement is intended to support the ability of banks to lend to households and businesses in both normal and adverse economic conditions and is complementary to the LCR, which focuses on short-term liquidity
risks. The U.S. NSFR applies to the Corporation on a consolidated basis and to our insured depository institutions. At September 30, 2024, the Corporation and its insured depository institutions were in compliance with the U.S. NSFR. For more information, see the Pillar 3 U.S. NSFR Disclosure report for the quarters ended March 31, 2024 and June 30, 2024 on the Corporation’s website, the contents of which are not incorporated by reference into this Quarterly Report on Form 10-Q.
Diversified Funding Sources
We fund our assets primarily with a mix of deposits, and secured and unsecured liabilities through a centralized, globally coordinated funding approach diversified across products, programs, markets, currencies and investor groups. We fund a substantial portion of our lending activities through our deposits, which were $1.93 trillion and $1.92 trillion at September 30, 2024 and December 31, 2023. Our trading activities in other regulated entities are primarily funded on a secured basis through securities lending and repurchase agreements, and these amounts will vary based on customer activity and market conditions.
Deposits
Our deposit base is well-diversified by clients, geography and product type across our business segments. At September 30, 2024, 49 percent of our deposits were in Consumer Banking, 15 percent in GWIM and 29 percent in Global Banking. We consider a substantial portion of our deposit base to be a stable, low-cost and consistent source of liquidity. At September 30, 2024 approximately 68 percent of consumer and small business deposits and 80 percent of U.S. deposits in Global Banking were held by clients who have had accounts with us for 10 or more years. In addition, at September 30, 2024 and December 31, 2023, 27 percent and 28 percent of our deposits were noninterest bearing and included operating accounts of our consumer and commercial clients. Deposits at September 30, 2024 increased $6.5 billion from December 31, 2023 primarily due to higher commercial deposits and time deposit growth, partially offset by consumer deposit outflows and customers’ movement of balances to higher yielding investment alternatives.
During the three months ended September 30, 2024 and 2023, rates paid on deposits were 65 bps and 34 bps in Consumer Banking, 313 bps and 269 bps in GWIM, and 327 bps and 266 bps in Global Banking. For information on rates paid on consolidated deposit balances, see Table 6 on page 8.
Long-term Debt
During the nine months ended September 30, 2024, we issued $41.9 billion of long-term debt consisting of $12.4 billion of notes issued by Bank of America Corporation, substantially all of which were TLAC compliant, $13.2 billion of notes issued by Bank of America, N.A. and $16.3 billion of other debt.
During the nine months ended September 30, 2024, we had total long-term debt maturities and redemptions in the aggregate of $50.0 billion consisting of $28.6 billion for Bank of America Corporation, $12.8 billion for Bank of America, N.A. and $8.6 billion of other debt. Table 15 presents the carrying value of aggregate annual contractual maturities of long-term debt at September 30, 2024.
27Bank of America
Table 15
Long-term Debt by Maturity
(Dollars in millions)
Remainder of 2024
2025
2026
2027
2028
Thereafter
Total
Bank of America Corporation
Senior notes (1)
$
—
$
9,290
$
25,110
$
21,866
$
28,510
$
107,992
$
192,768
Senior structured notes
129
1,864
1,497
987
950
13,256
18,683
Subordinated notes
100
5,161
4,920
2,094
926
11,791
24,992
Junior subordinated notes
—
—
—
192
—
557
749
Total Bank of America Corporation
229
16,315
31,527
25,139
30,386
133,596
237,192
Bank of America, N.A.
Senior notes
—
7,108
3,266
—
692
—
11,066
Subordinated notes
—
—
—
—
—
1,471
1,471
Advances from Federal Home Loan Banks
—
3,147
8
3
8
39
3,205
Securitizations and other Bank VIEs (2)
—
2,302
3,285
1,249
1,234
285
8,355
Other
—
691
122
11
45
70
939
Total Bank of America, N.A.
—
13,248
6,681
1,263
1,979
1,865
25,036
Other debt
Structured Liabilities
1,527
6,551
5,171
4,672
1,985
14,263
34,169
Nonbank VIEs (2)
6
3
9
—
4
508
530
Total other debt
1,533
6,554
5,180
4,672
1,989
14,771
34,699
Total long-term debt
$
1,762
$
36,117
$
43,388
$
31,074
$
34,354
$
150,232
$
296,927
(1)Total includes $175.7 billion of outstanding notes that are both TLAC eligible and callable one year before their stated maturities, including $2.0 billion during the remainder of 2024, and $22.3 billion, $21.9 billion, $25.5 billion and $20.2 billion during each year of 2025 through 2028, respectively, and $83.8 billion thereafter. For more information on our TLAC eligible and callable outstanding notes, see Liquidity Risk – Diversified Funding Sources in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
(2)Represents liabilities of consolidated variable interest entities (VIEs) included in total long-term debt on the Consolidated Balance Sheet.
Total long-term debt decreased $5.3 billionto $296.9 billion during the nine months ended September 30, 2024 primarily due to debt maturities, partially offset by debt issuances and valuation adjustments. We may, from time to time, purchase outstanding debt instruments in various transactions, depending on market conditions, liquidity and other factors. Our other regulated entities may also make markets in our debt instruments to provide liquidity for investors.
During the nine months ended September 30, 2024, we issued $21.2 billion of structured notes, which are debt obligations that pay investors returns linked to other debt or equity securities, indices, currencies or commodities. These structured notes are typically issued to meet client demand, and notes with certain attributes may also be TLAC eligible. We typically hedge the returns we are obligated to pay on these liabilities with derivatives and/or investments in the underlying instruments, so that from a funding perspective, the cost is similar to our other unsecured long-term debt. We could be required to settle certain structured note obligations for cash or other securities prior to maturity under certain circumstances, which we consider for liquidity planning purposes. We believe, however, that a portion of such borrowings will remain outstanding beyond the earliest put or redemption date.
Substantially all of our senior and subordinated debt obligations contain no provisions that could trigger a requirement for an early repayment, require additional collateral support, result in changes to terms, accelerate maturity or create additional financial obligations upon an adverse change in our credit ratings, financial ratios, earnings, cash flows or stock price. For more information on long-term debt funding,
including issuances and maturities and redemptions, see Note 11 – Long-term Debt to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
We use derivative transactions to manage the duration, interest rate and currency risks of our borrowings, considering the characteristics of the assets they are funding. For more information on our ALM activities, see Interest Rate Risk Management for the Banking Book on page 45.
Credit Ratings
Credit ratings and outlooks are opinions expressed by rating agencies on our creditworthiness and that of our obligations or securities, including long-term debt, short-term borrowings, preferred stock and other securities, including asset securitizations. Table 16 presents the Corporation’s current long-term/short-term senior debt ratings and outlooks expressed by the rating agencies.
The ratings and outlooks from Moody's Investors Service, Standard & Poor’s Global Ratings and Fitch Ratings for the Corporation and its subsidiaries have not changed from those disclosed in the Corporation's 2023 Annual Report on Form 10-K.
For more information on additional collateral and termination payments that could be required in connection with certain over-the-counter derivative contracts and other trading agreements in the event of a credit rating downgrade, see Note 3 – Derivatives to the Consolidated Financial Statements herein and Item 1A. Risk Factors of the Corporation’s 2023 Annual Report on Form 10-K.
Bank of America 28
Table 16
Senior Debt Ratings
Moody’s Investors Service
Standard & Poor’s Global Ratings
Fitch Ratings
Long-term
Short-term
Outlook
Long-term
Short-term
Outlook
Long-term
Short-term
Outlook
Bank of America Corporation
A1
P-1
Stable
A-
A-2
Stable
AA-
F1+
Stable
Bank of America, N.A.
Aa1
P-1
Negative
A+
A-1
Stable
AA
F1+
Stable
Bank of America Europe Designated Activity Company
NR
NR
NR
A+
A-1
Stable
AA
F1+
Stable
Merrill Lynch, Pierce, Fenner & Smith Incorporated
NR
NR
NR
A+
A-1
Stable
AA
F1+
Stable
BofA Securities, Inc.
NR
NR
NR
A+
A-1
Stable
AA
F1+
Stable
Merrill Lynch International
NR
NR
NR
A+
A-1
Stable
AA
F1+
Stable
BofA Securities Europe SA
NR
NR
NR
A+
A-1
Stable
AA
F1+
Stable
NR = not rated
Finance Subsidiary Issuers and Parent Guarantor
BofA Finance LLC, a Delaware limited liability company (BofA Finance), is a consolidated finance subsidiary of the Corporation that has issued and sold, and is expected to continue to issue and sell, its senior unsecured debt securities (Guaranteed Notes) that are fully and unconditionally guaranteed by the Corporation. The Corporation guarantees the due and punctual payment, on demand, of amounts payable on the Guaranteed Notes if not paid by BofA Finance. In addition, each of BAC Capital Trust XIII, BAC Capital Trust XIV and BAC Capital Trust XV, Delaware statutory trusts (collectively, the Trusts) is a 100 percent owned finance subsidiary of the Corporation that has issued and sold trust preferred securities (the Trust Preferred Securities) or capital securities (the Capital Securities and, together with the Guaranteed Notes and the Trust Preferred Securities, the Guaranteed Securities), as applicable, that remained outstanding at September 30, 2024. The Corporation has fully and unconditionally guaranteed (or effectively provided for the full and unconditional guarantee of) all such securities issued by such finance subsidiaries. For more information regarding such guarantees by the Corporation, see Liquidity Risk – Finance Subsidiary Issuers and Parent Guarantor in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
Representations and Warranties Obligations
For information on representations and warranties obligations in connection with the sale of mortgage loans, see Note 12 – Commitments and Contingencies to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Credit Risk Management
For information on our credit risk management activities, see the following: Consumer Portfolio Credit Risk Management on page 29, Commercial Portfolio Credit Risk Management on page 34, Non-U.S. Portfolio on page 40, Allowance for Credit Losses on page 41, Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements, and Credit Risk Management in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K. For information on the Corporation’s loan modification programs, see Note 1 – Summary of Significant Accounting Principles and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements. For more information on the Corporation’s credit risks, see the Credit section within Item 1A. Risk Factors of the Corporation’s 2023 Annual Report on Form 10-K.
During the nine months ended September 30, 2024, our net charge-off ratio increased primarily driven by credit card loans and the commercial real estate office portfolio. Commercial
reservable criticized exposure increased compared to December 31, 2023 driven by an increase across a broad range of industries. Nonperforming loans also increased compared to December 31, 2023 primarily driven by commercial real estate. Uncertainty remains regarding broader economic impacts as a result of higher costs associated with inflationary pressures experienced over the past several years, elevated rates as well as the current geopolitical environment, and could lead to adverse impacts to credit quality metrics in future periods.
Consumer Portfolio Credit Risk Management
Credit risk management for the consumer portfolio begins with initial underwriting and continues throughout a borrower’s credit cycle. Statistical techniques in conjunction with experiential judgment are used in all aspects of portfolio management including underwriting, product pricing, risk appetite, setting credit limits, and establishing operating processes and metrics to quantify and balance risks and returns. Statistical models are built using detailed behavioral information from external sources, such as credit bureaus, and/or internal historical experience and are a component of our consumer credit risk management process. These models are used in part to assist in making both new and ongoing credit decisions as well as portfolio management strategies, including authorizations and line management, collection practices and strategies, and determination of the allowance for loan and lease losses and allocated capital for credit risk.
Consumer Credit Portfolio
During the nine months ended September 30, 2024, the U.S. unemployment rate remained relatively stable and home prices continued to rise. During the three and nine months ended September 30, 2024, net charge-offs increased $240 million and $954 million to $1.0 billion and $3.1 billion compared to the same periods in 2023, primarily due to higher credit card loan charge-offs.
The consumer allowance for loan and lease losses was $8.6 billion, relatively unchanged from December 31, 2023. For more information, see Allowance for Credit Losses on page 41.
For more information on our accounting policies regarding delinquencies, nonperforming status, charge-offs and loan modifications for the consumer portfolio, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.
Table 17 presents our outstanding consumer loans and leases, consumer nonperforming loans and accruing consumer loans past due 90 days or more.
29Bank of America
Table 17
Consumer Credit Quality
Outstandings
Nonperforming
Accruing Past Due 90 Days or More
(Dollars in millions)
September 30 2024
December 31 2023
September 30 2024
December 31 2023
September 30 2024
December 31 2023
Residential mortgage (1)
$
227,842
$
228,403
$
2,089
$
2,114
$
215
$
252
Home equity
25,483
25,527
413
450
—
—
Credit card
100,841
102,200
n/a
n/a
1,306
1,224
Direct/Indirect consumer (2)
105,695
103,468
175
148
1
2
Other consumer
161
124
—
—
—
—
Consumer loans excluding loans accounted for under the fair value option
$
460,022
$
459,722
$
2,677
$
2,712
$
1,522
$
1,478
Loans accounted for under the fair value option (3)
229
243
Total consumer loans and leases
$
460,251
$
459,965
Percentage of outstanding consumer loans and leases (4)
n/a
n/a
0.58
%
0.59
%
0.33
%
0.32
%
Percentage of outstanding consumer loans and leases, excluding fully-insured loan portfolios (4)
n/a
n/a
0.60
0.60
0.29
0.27
(1)Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At September 30, 2024 and December 31, 2023, residential mortgage included $114 million and $156 million of loans on which interest had been curtailed by the Federal Housing Administration (FHA), and therefore were no longer accruing interest, although principal was still insured, and $101 million and $96 million of loans on which interest was still accruing.
(2)Outstandings primarily includes auto and specialty lending loans and leases of $54.9 billion and $53.9 billion, U.S. securities-based lending loans of $47.3 billion and $46.0 billion at September 30, 2024 and December 31, 2023, and non-U.S. consumer loans of $2.8 billion at both September 30, 2024 and December 31, 2023.
(3)For more information on the fair value option, see Note 15 – Fair Value Option to the Consolidated Financial Statements.
(4)Excludes consumer loans accounted for under the fair value option. At September 30, 2024 and December 31, 2023, loans accounted for under the fair value option past due 90 days or more and not accruing interest were insignificant.
n/a= not applicable
Table 18 presents net charge-offs and related ratios for consumer loans and leases.
Table 18
Consumer Net Charge-offs and Related Ratios
Net Charge-offs
Net Charge-off Ratios (1)
Three Months Ended September 30
Nine Months Ended September 30
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
2024
2023
2024
2023
Residential mortgage
$
(2)
$
2
$
1
$
5
—
%
—
%
—
%
—
%
Home equity
(5)
(14)
(32)
(42)
(0.07)
(0.22)
(0.17)
(0.22)
Credit card
928
673
2,782
1,784
3.70
2.72
3.73
2.52
Direct/Indirect consumer
56
25
172
43
0.21
0.10
0.22
0.05
Other consumer
67
118
208
387
n/m
n/m
n/m
n/m
Total
$
1,044
$
804
$
3,131
$
2,177
0.91
0.70
0.92
0.64
(1)Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding loans and leases, excluding loans accounted for under the fair value option.
n/m = not meaningful
We believe that the presentation of information adjusted to exclude the impact of the fully-insured loan portfolio and loans accounted for under the fair value option is more representative of the ongoing operations and credit quality of the business. As a result, in the following tables and discussions of the residential mortgage and home equity portfolios, we exclude loans accounted for under the fair value option and provide information that excludes the impact of the fully-insured loan portfolio in certain credit quality statistics.
Residential Mortgage
The residential mortgage portfolio made up the largest percentage of our consumer loan portfolio at 50 percent of consumer loans and leases at September 30, 2024. Approximately 50 percent of the residential mortgage portfolio was in Consumer Banking, 47 percent was in GWIM and the remaining portion was in All Other.
Outstanding balances in the residential mortgage portfolio decreased $561 million during the nine months ended September 30, 2024, as paydowns and payoffs outpaced new originations.
At September 30, 2024 and December 31, 2023, the residential mortgage portfolio included $10.3 billion and $11.0 billion of outstanding fully-insured loans, of which $2.2 billion had FHA insurance as of both dates, with the remainder protected by Fannie Mae long-term standby agreements.
Table 19 presents certain residential mortgage key credit statistics on both a reported basis and excluding the fully-insured loan portfolio. The following discussion presents the residential mortgage portfolio excluding the fully-insured loan portfolio.
Bank of America 30
Table 19
Residential Mortgage – Key Credit Statistics
Reported Basis (1)
Excluding Fully-insured Loans (1)
(Dollars in millions)
September 30 2024
December 31 2023
September 30 2024
December 31 2023
Outstandings
$
227,842
$
228,403
$
217,528
$
217,439
Accruing past due 30 days or more
1,442
1,513
979
986
Accruing past due 90 days or more
215
252
—
—
Nonperforming loans (2)
2,089
2,114
2,089
2,114
Percent of portfolio
Refreshed LTV greater than 90 but less than or equal to 100
1
%
1
%
1
%
1
%
Refreshed LTV greater than 100
—
—
—
—
Refreshed FICO below 620
1
1
1
1
(1)Outstandings, accruing past due, nonperforming loans and percentages of portfolio exclude loans accounted for under the fair value option.
(2)Includes loans that are contractually current that have not yet demonstrated a sustained period of payment performance following a modification.
Nonperforming outstanding balances in the residential mortgage portfolio remained relatively unchanged during the nine months ended September 30, 2024. Of the nonperforming residential mortgage loans at September 30, 2024, $1.3 billion, or 62 percent, were current on contractual payments. Loans accruing past due 30 days or more of $979 millionalso remained relatively unchanged.
Of the $217.5 billion in total residential mortgage loans outstanding at September 30, 2024, $63.5 billion, or 29 percent, of loans were originated as interest-only. The outstanding balance of interest-only residential mortgage loans that had entered the amortization period was $3.5 billion, or six percent, at September 30, 2024. Residential mortgage loans that have entered the amortization period generally experience a higher rate of early stage delinquencies and nonperforming status compared to the residential mortgage portfolio as a whole. At September 30, 2024, $45 million, or one percent, of outstanding interest-only residential mortgages that had entered the amortization period were accruing past due 30 days or more compared to $979 million, or less than one percent, for the
entire residential mortgage portfolio. In addition, at September 30, 2024, $218 million, or six percent, of outstanding interest-only residential mortgage loans that had entered the amortization period were nonperforming, of which $74 million were contractually current. Loans that have yet to enter the amortization period in our interest-only residential mortgage portfolio are primarily well-collateralized loans to our wealth management clients and have an interest-only period of three years to 10 years. Substantially all of these loans that have yet to enter the amortization period will not be required to make a fully-amortizing payment until 2026 or later.
Table 20 presents outstandings, nonperforming loans and net charge-offs by certain state concentrations for the residential mortgage portfolio. In the New York area, the New York-Northern New Jersey-Long Island Metropolitan Statistical Area (MSA) made up 15 percent of outstandings at both September 30, 2024 and December 31, 2023. The Los Angeles-Long Beach-Santa Ana MSA within California represented 14 percent of outstandings at both September 30, 2024 and December 31, 2023.
Table 20
Residential Mortgage State Concentrations
Outstandings (1)
Nonperforming (1)
Net Charge-offs
September 30 2024
December 31 2023
September 30 2024
December 31 2023
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
California
$
81,379
$
81,085
$
637
$
641
$
(1)
$
1
$
1
$
—
New York
25,804
25,975
309
320
1
—
2
3
Florida
15,614
15,450
140
131
(2)
—
(3)
(2)
Texas
9,329
9,361
91
88
—
—
—
1
New Jersey
8,596
8,671
90
97
—
—
(1)
(1)
Other
76,806
76,897
822
837
—
1
2
4
Residential mortgage loans
$
217,528
$
217,439
$
2,089
$
2,114
$
(2)
$
2
$
1
$
5
Fully-insured loan portfolio
10,314
10,964
Total residential mortgage loan portfolio
$
227,842
$
228,403
(1)Outstandings and nonperforming loans exclude loans accounted for under the fair value option.
Home Equity
At September 30, 2024, the home equity portfolio made up six percent of the consumer portfolio and was comprised of home equity lines of credit (HELOCs), home equity loans and reverse mortgages. HELOCs generally have an initial draw period of 10 years, and after the initial draw period ends, the loans generally convert to 15- or 20-year amortizing loans. We no longer originate home equity loans or reverse mortgages.
At September 30, 2024, 85 percent of the home equity portfolio was in Consumer Banking, 10 percent was in GWIM and the remainder of the portfolio was in All Other. Outstanding
balances in the home equity portfolio decreased $44 million during the nine months ended September 30, 2024 primarily due to paydowns outpacing draws on existing lines and new originations. Of the total home equity portfolio at September 30, 2024 and December 31, 2023, $9.3 billion and $10.1 billion, or 37 percent and 39 percent, were in first-lien positions. At September 30, 2024, outstanding balances in the home equity portfolio that were in a second-lien or more junior-lien position and where we also held the first-lien loan totaled $4.5 billion, or 18 percent, of our total home equity portfolio.
31Bank of America
Unused HELOCs totaled $44.7 billion and $45.1 billion at September 30, 2024 and December 31, 2023. The HELOC utilization rate was 36 percent and 35 percentat September 30, 2024 and December 31, 2023. Table 21 presents certain home equity portfolio key credit statistics.
Table 21
Home Equity – Key Credit Statistics (1)
(Dollars in millions)
September 30 2024
December 31 2023
Outstandings
$
25,483
$
25,527
Accruing past due 30 days or more
82
95
Nonperforming loans (2)
413
450
Percent of portfolio
Refreshed CLTV greater than 90 but less than or equal to 100
—
%
—
%
Refreshed CLTV greater than 100
—
—
Refreshed FICO below 620
2
3
(1)Outstandings, accruing past due, nonperforming loans and percentages of the portfolio exclude loans accounted for under the fair value option.
(2)Includes loans that are contractually current that have not yet demonstrated a sustained period of payment performance following a modification.
Nonperforming outstanding balances in the home equity portfolio decreased $37 million to $413 million at September 30, 2024, primarily driven by paydowns and payoffs and returns to performing status outpacing new additions. Of the nonperforming home equity loans at September 30, 2024, $253 million, or 61 percent, were current on contractual payments. In addition, $90 million, or 22 percent, were 180 days or more past due and had been written down to the estimated fair value of the collateral, less costs to sell. Accruing loans that were 30 days or more past due remained relatively unchanged during the nine months ended September 30, 2024.
Of the $25.5 billion in total home equity portfolio outstandings at September 30, 2024, as shown in Table 21, nine percent require interest-only payments. The outstanding balance of HELOCs that had reached the end of their draw period and entered the amortization period was $3.5 billion at September 30, 2024. The HELOCs that have entered the amortization period have experienced a higher percentage of early stage delinquencies and nonperforming status when compared to the HELOC portfolio as a whole. At September 30, 2024, $30 million, or one percent, of outstanding HELOCs that
had entered the amortization period were accruing past due 30 days or more. In addition, at September 30, 2024, $253 million, or seven percent, were nonperforming.
For our interest-only HELOC portfolio, we do not actively track how many of our home equity customers pay only the minimum amount due on their home equity loans and lines; however, we can infer some of this information through a review of our HELOC portfolio that we service and is still in its revolving period. During the nine months ended September 30, 2024, 30 percent of these customers with an outstanding balance did not pay any principal on their HELOCs.
Table 22 presents outstandings, nonperforming balances and net recoveries by certain state concentrations for the home equity portfolio. In the New York area, the New York-Northern New Jersey-Long Island MSA made up 11 percentof the outstanding home equity portfolio at both September 30, 2024 and December 31, 2023. The Los Angeles-Long Beach-Santa Ana MSA within California made up 11 percent and 10 percentof the outstanding home equity portfolio at September 30, 2024 and December 31, 2023.
Table 22
Home Equity State Concentrations
Outstandings (1)
Nonperforming (1)
Net Charge-Offs
September 30 2024
December 31 2023
September 30 2024
December 31 2023
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
California
$
6,985
$
6,966
$
104
$
109
$
(1)
$
(3)
$
(6)
$
(5)
Florida
2,521
2,576
47
53
(2)
(3)
(6)
(8)
New Jersey
1,807
1,870
36
46
—
—
(4)
(3)
Texas
1,487
1,410
16
16
(1)
—
1
—
New York
1,464
1,590
65
71
1
(2)
(3)
(6)
Other
11,219
11,115
145
155
(2)
(6)
(14)
(20)
Total home equity loan portfolio
$
25,483
$
25,527
$
413
$
450
$
(5)
$
(14)
$
(32)
$
(42)
(1)Outstandings and nonperforming loans exclude loans accounted for under the fair value option.
Credit Card
At September 30, 2024, 97 percent of the credit card portfolio was managed in Consumer Banking with the remainder in GWIM. Outstandings in the credit card portfolio decreased $1.4 billion during the nine months ended September 30, 2024 to $100.8 billion, as payments more than offset purchase volume and card transfers. Net charge-offs increased $255 million to $928 million and $998 million to $2.8 billion during the
three and nine months ended September 30, 2024 compared to the same periods in 2023. Credit card loans 30 days or more past due and still accruing interest increased $144 million, and 90 days or more past due and still accruing interest increased $82 million at September 30, 2024.
Unused lines of credit for credit card increased to $397.4 billion at September 30, 2024 from $390.2 billion at December 31, 2023.
Bank of America 32
Table 23 presents certain state concentrations for the credit card portfolio.
Table 23
Credit Card State Concentrations
Outstandings
Accruing Past Due 90 Days or More
Net Charge-offs
September 30 2024
December 31 2023
September 30 2024
December 31 2023
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
California
$
16,757
$
16,952
$
240
$
216
$
176
$
120
$
514
$
317
Florida
10,485
10,521
185
168
127
89
380
238
Texas
8,891
8,978
132
125
91
64
275
169
New York
5,659
5,788
80
84
59
52
181
142
Washington
5,435
5,352
46
41
31
21
89
53
Other
53,614
54,609
623
590
444
327
1,343
865
Total credit card portfolio
$
100,841
$
102,200
$
1,306
$
1,224
$
928
$
673
$
2,782
$
1,784
Direct/Indirect Consumer
At September 30, 2024, 52 percent of the direct/indirect portfolio was included in Consumer Banking (consumer auto and recreational vehicle lending) and 48 percent was included in GWIM (principally securities-based lending loans). Outstandings in the direct/indirect portfolio increased $2.2 billion during the
nine months ended September 30, 2024 to $105.7 billion driven by increases in securities-based lending and consumer auto.
Table 24 presents certain state concentrations for the direct/indirect consumer loan portfolio.
Table 24
Direct/Indirect State Concentrations
Outstandings
Nonperforming
Net Charge-offs
September 30 2024
December 31 2023
September 30 2024
December 31 2023
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
California
$
15,803
$
15,416
$
37
$
27
$
14
$
5
$
41
$
11
Florida
14,253
13,550
20
18
9
3
24
6
Texas
10,012
9,668
18
14
9
2
24
5
New York
7,578
7,335
14
11
4
2
11
4
New Jersey
4,454
4,376
6
5
2
1
6
2
Other
53,595
53,123
80
73
18
12
66
15
Total direct/indirect loan portfolio
$
105,695
$
103,468
$
175
$
148
$
56
$
25
$
172
$
43
Other Consumer
Other consumer primarily consists of deposit overdraft balances. Net charge-offs decreased $51 millionto$67 millionand$179 million to $208 million during the three and nine months ended September 30, 2024 compared to the same periods in 2023, primarily driven by lower overdraft losses from fraud activity.
Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity
Table 25 presents nonperforming consumer loans, leases and foreclosed properties activity for the three and nine months
ended September 30, 2024 and 2023. During the nine months ended September 30, 2024, nonperforming consumer loans of $2.7 billion remained relatively unchanged.
At September 30, 2024, $475 million, or 18 percent, of nonperforming loans were 180 days or more past due and had been written down to their estimated property value less costs to sell. In addition, at September 30, 2024, $1.6 billion, or 60 percent, of nonperforming consumer loans were current and classified as nonperforming loans in accordance with applicable policies.
During the nine months ended September 30, 2024, foreclosed properties decreased $22 million to $81 million.
33Bank of America
Table 25
Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Nonperforming loans and leases, beginning of period
$
2,671
$
2,729
$
2,712
$
2,754
Additions
232
297
709
808
Reductions:
Paydowns and payoffs
(98)
(117)
(347)
(351)
Sales
(1)
(2)
(3)
(6)
Returns to performing status (1)
(115)
(91)
(349)
(353)
Charge-offs
(8)
(13)
(25)
(38)
Transfers to foreclosed properties
(4)
(11)
(20)
(22)
Total net additions (reductions) to nonperforming loans and leases
6
63
(35)
38
Total nonperforming loans and leases, September 30
2,677
2,792
2,677
2,792
Foreclosed properties, September 30
81
112
81
112
Nonperforming consumer loans, leases and foreclosed properties, September 30 (2)
$
2,758
$
2,904
$
2,758
$
2,904
Nonperforming consumer loans and leases as a percentage of outstanding consumer loans and leases (3)
0.58
%
0.61
%
Nonperforming consumer loans, leases and foreclosed properties as a percentage of outstanding consumer loans, leases and foreclosed properties (3)
0.60
0.63
(1)Consumer loans may be returned to performing status when all principal and interest is current and full repayment of the remaining contractual principal and interest is expected, or when the loan otherwise becomes well-secured and is in the process of collection.
(2)Includes repossessed non-real estate assets of $21 million and $19 million at September 30, 2024 and 2023.
(3)Outstanding consumer loans and leases exclude loans accounted for under the fair value option.
Commercial Portfolio Credit Risk Management
Commercial credit risk is evaluated and managed with the goal that concentrations of credit exposure continue to be aligned with our risk appetite. We review, measure and manage concentrations of credit exposure by industry, product, geography, customer relationship and loan size. We also review, measure and manage commercial real estate loans by geographic location and property type. In addition, within our non-U.S. portfolio, we evaluate exposures by region and by country. Tables 30, 32 and 35 summarize our concentrations. We also utilize syndications of exposure to third parties, loan sales, hedging and other risk mitigation techniques to manage the size and risk profile of the commercial credit portfolio. For more information on our industry concentrations, see Table 32 and Commercial Portfolio Credit Risk Management – Industry Concentrations on page 38.
For more information on our accounting policies regarding delinquencies, nonperforming status, net charge-offs and loan modifications for the commercial portfolio, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.
Commercial Credit Portfolio
Outstanding commercial loans and leases increased $21.8 billion during the nine months ended September 30, 2024 due to growth in U.S. commercial, primarily in Global Banking and Global Markets. During the nine months ended September 30, 2024, commercial credit quality deteriorated as reservable criticized utilized exposure increased across a broad range of industries, and nonperforming commercial loans increased primarily driven by commercial real estate. Commercial net charge-offs increased $363 million and $1.0 billion to $490 million and $1.4 billion during the three and nine months ended September 30, 2024 compared to the same periods in 2023 primarily due to higher losses in the commercial real estate office portfolio and U.S. commercial portfolio.
With the exception of the office property type, which is further discussed in the Commercial Real Estate section herein, credit quality of commercial real estate borrowers has remained relatively stable since December 31, 2023; however, we are closely monitoring emerging trends and borrower performance in a higher interest rate environment. Recent demand for office space continues to be stagnant, and future demand for office space continues to be uncertain as companies evaluate space needs with employment models that utilize a mix of remote and conventional office use.
Bank of America 34
The commercial allowance for loan and lease losses decreased $164 million during the nine months ended September 30, 2024 to $4.7 billion. For more information, see Allowance for Credit Losses on page 41.
Total commercial utilized credit exposure increased $20.7 billion during the nine months ended September 30, 2024 to $717.0 billion primarily driven by increased loans and leases, partially offset by lower derivative assets. The utilization rate for loans and leases, standby letters of credit (SBLCs) and financial guarantees, and commercial letters of credit, in the aggregate, was 55 percent at both September 30, 2024 and December 31, 2023.
Table 26 presents commercial credit exposure by type for utilized, unfunded and total binding committed credit exposure. Commercial utilized credit exposure includes SBLCs and financial guarantees and commercial letters of credit that have been issued and for which we are legally bound to advance funds under prescribed conditions during a specified time period, and excludes exposure related to trading account assets. Although funds have not yet been advanced, these exposure types are considered utilized for credit risk management purposes.
Table 26
Commercial Credit Exposure by Type
Commercial Utilized (1)
Commercial Unfunded (2, 3, 4)
Total Commercial Committed
(Dollars in millions)
September 30 2024
December 31 2023
September 30 2024
December 31 2023
September 30 2024
December 31 2023
Loans and leases
$
615,549
$
593,767
$
533,663
$
507,641
$
1,149,212
$
1,101,408
Derivative assets (5)
34,182
39,323
—
—
34,182
39,323
Standby letters of credit and financial guarantees
32,933
31,348
2,038
1,953
34,971
33,301
Debt securities and other investments
18,540
20,422
4,006
3,083
22,546
23,505
Loans held-for-sale
8,884
4,338
6,571
4,904
15,455
9,242
Operating leases
5,285
5,312
—
—
5,285
5,312
Commercial letters of credit
742
943
174
232
916
1,175
Other
869
846
—
—
869
846
Total
$
716,984
$
696,299
$
546,452
$
517,813
$
1,263,436
$
1,214,112
(1)Commercial utilized exposure includes loans of $3.9 billion and $3.3 billion accounted for under the fair value option at September 30, 2024 and December 31, 2023.
(2)Commercial unfunded exposure includes commitments accounted for under the fair value option with a notional amount of $2.4 billion and $2.6 billion at September 30, 2024 and December 31, 2023.
(3)Excludes unused business card lines, which are not legally binding.
(4)Includes the notional amount of unfunded legally binding lending commitments, net of amounts distributed (i.e., syndicated or participated) to other financial institutions. The distributed amounts were $10.3 billion at both September 30, 2024 and December 31, 2023.
(5)Derivative assets are carried at fair value, reflect the effects of legally enforceable master netting agreements and have been reduced by cash collateral of $26.4 billion and $29.4 billion at September 30, 2024 and December 31, 2023. Not reflected in utilized and committed exposure is additional non-cash derivative collateral held of $58.1 billion and $56.1 billion at September 30, 2024 and December 31, 2023, which consists primarily of other marketable securities.
Table 27 presents our commercial loans and leases portfolio and related credit quality information at September 30, 2024 and December 31, 2023.
Table 27
Commercial Credit Quality
Outstandings
Nonperforming
Accruing Past Due 90 Days or More
(Dollars in millions)
September 30 2024
December 31 2023
September 30 2024
December 31 2023
September 30 2024
December 31 2023
Commercial and industrial:
U.S. commercial
$
379,563
$
358,931
$
699
$
636
$
219
$
51
Non-U.S. commercial
127,738
124,581
85
175
12
4
Total commercial and industrial
507,301
483,512
784
811
231
55
Commercial real estate
68,420
72,878
2,124
1,927
206
32
Commercial lease financing
14,992
14,854
18
19
5
7
590,713
571,244
2,926
2,757
442
94
U.S. small business commercial (1)
20,893
19,197
26
16
183
184
Commercial loans excluding loans accounted for under the fair value option
$
611,606
$
590,441
$
2,952
$
2,773
$
625
$
278
Loans accounted for under the fair value option (2)
3,943
3,326
Total commercial loans and leases
$
615,549
$
593,767
(1)Includes card-related products.
(2)Commercial loans accounted for under the fair value option includes U.S. commercial of $2.7 billion and $2.2 billion and non-U.S. commercial of $1.3 billion and $1.2 billion at September 30, 2024 and December 31, 2023. For more information on the fair value option, see Note 15 – Fair Value Option to the Consolidated Financial Statements.
35Bank of America
Table 28 presents net charge-offs and related ratios for our commercial loans and leases for the three and nine months ended September 30, 2024 and 2023.
Table 28
Commercial Net Charge-offs and Related Ratios
Net Charge-offs
Net Charge-off Ratios (1)
Three Months Ended September 30
Nine Months Ended September 30
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
2024
2023
2024
2023
Commercial and industrial:
U.S. commercial
$
135
$
5
288
$
57
0.15
%
0.01
%
0.11
%
0.02
%
Non-U.S. commercial
60
(2)
48
18
0.19
(0.01)
0.05
0.02
Total commercial and industrial
195
3
336
75
0.16
—
0.09
0.02
Commercial real estate
171
39
747
130
0.98
0.21
1.41
0.24
Commercial lease financing
—
3
1
3
—
0.08
0.01
0.02
366
45
1,084
208
0.25
0.03
0.25
0.05
U.S. small business commercial
124
82
350
222
2.40
1.74
2.32
1.62
Total commercial
$
490
$
127
$
1,434
$
430
0.33
0.09
0.32
0.10
(1)Net charge-off ratios are calculated as annualized net charge-offs divided by average outstanding loans and leases, excluding loans accounted for under the fair value option.
Table 29 presents commercial reservable criticized utilized exposure by loan type. Criticized exposure corresponds to the Special Mention, Substandard and Doubtful asset categories as defined by regulatory authorities. Total commercial reservable criticized utilized exposure increased $4.1 billion during the nine
months ended September 30, 2024 primarily driven by U.S. commercial and commercial real estate. At both September 30, 2024 and December 31, 2023, 89 percent of commercial reservable criticized utilized exposure was secured.
Total commercial reservable criticized utilized exposure
$
27,439
4.25
$
23,300
3.74
(1)Total commercial reservable criticized utilized exposure includes loans and leases of $26.3 billion and $22.5 billion and commercial letters of credit of $1.1 billion and $795 million at September 30, 2024 and December 31, 2023.
(2)Percentages are calculated as commercial reservable criticized utilized exposure divided by total commercial reservable utilized exposure for each exposure category.
Commercial and Industrial
Commercial and industrial loans include U.S. commercial and non-U.S. commercial portfolios.
U.S. Commercial
At September 30, 2024, 61 percent of the U.S. commercial loan portfolio, excluding small business, was managed in Global Banking, 23 percent in Global Markets, 15 percent in GWIM (loans that provide financing for asset purchases, business investments and other liquidity needs for high net worth clients) and the remainder primarily in Consumer Banking. U.S. commercial loans increased $20.6 billion, or six percent, during the nine months ended September 30, 2024 primarily driven by Global Banking and Global Markets. Reservable criticized utilized exposure increased $2.3 billion, or 19 percent, driven by a broad range of industries.
Non-U.S. Commercial
At September 30, 2024, 58 percent of the non-U.S. commercial loan portfolio was managed in Global Banking, 41 percent in Global Markets and the remainder primarily in GWIM. Non-U.S. commercial loans increased $3.2 billion, or three percent, during the nine months ended September 30, 2024 primarily
driven by Global Markets. Reservable criticized utilized exposure increased $517 million, or 29 percent. For information on the non-U.S. commercial portfolio, see Non-U.S. Portfolio on page 40.
Commercial Real Estate
Commercial real estate primarily includes commercial loans secured by non-owner-occupied real estate and is dependent on the sale or lease of the real estate as the primary source of repayment. Outstanding loans decreased $4.5 billion, or six percent, during the nine months ended September 30, 2024 to $68.4 billion primarily driven by the office property type. The commercial real estate portfolio is primarily managed in Global Banking and consists of loans made primarily to public and private developers, and commercial real estate firms. The portfolio remains diversified across property types and geographic regions. California represented the largest state concentration at 20 percent of commercial real estate at both September 30, 2024 and December 31, 2023.
Reservable criticized utilized exposure increased $1.1 billion, or 13 percent, during the nine months ended September 30, 2024 primarily driven by industrial/warehouse and multi-family rental loans.
Bank of America 36
Office loans represented the largest property type concentration at 23 percent of the commercial real estate portfolio at September 30, 2024, and approximately one percent of total loans for the Corporation. This property type is roughly 75 percent Class A and had an origination loan-to-value of approximately 55 percent. Reservable criticized exposure for the office property type was $5.1 billion at September 30, 2024, representing a decrease of $397 million, or seven percent, from December 31, 2023, with an aggregate loan-to-value of approximately 80 percent based on property appraisals completed in the last twelve months. Approximately $3.5 billion of office loans are scheduled to mature by the end of 2024.
During the three and nine months ended September 30, 2024, net charge-offs increased $132 million and $617 million to $171 million and $747 million compared to the same periods in 2023 driven by office loans. We use a number of proactive risk mitigation initiatives to reduce adversely rated exposure in the commercial real estate portfolio, including transfers of deteriorating exposures for management by independent special asset officers and the pursuit of loan restructurings or asset sales to achieve the best results for our customers and the Corporation.
Table 30 presents outstanding commercial real estate loans by geographic region, based on the geographic location of the collateral, and by property type.
Table 30
Outstanding Commercial Real Estate Loans
(Dollars in millions)
September 30 2024
December 31 2023
By Geographic Region
Northeast
$
15,650
$
15,920
California
13,673
14,551
Southwest
8,011
9,318
Southeast
7,160
8,368
Florida
4,636
4,986
Illinois
3,299
3,361
Midsouth
2,675
2,785
Midwest
2,571
3,149
Northwest
1,930
2,095
Non-U.S.
6,576
6,052
Other
2,239
2,293
Total outstanding commercial real estate loans
$
68,420
$
72,878
By Property Type
Non-residential
Office
$
15,768
$
17,976
Industrial / Warehouse
13,912
14,746
Multi-family rental
11,670
10,606
Shopping centers / Retail
5,423
5,756
Hotel / Motels
4,717
5,665
Multi-use
2,073
2,681
Other
14,159
14,201
Total non-residential
67,722
71,631
Residential
698
1,247
Total outstanding commercial real estate loans
$
68,420
$
72,878
U.S. Small Business Commercial
The U.S. small business commercial loan portfolio is comprised of small business card loans and small business loans primarily managed in Consumer Banking. Credit card-related products were 54 percent of the U.S. small business commercial portfolio at both September 30, 2024 and December 31, 2023 and represented 100 percent and 99 percent of net charge-offs for the three and nine months ended September 30, 2024 and 2023. Accruing past due 90 days or more of $183 million remained relatively unchanged.
Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity
Table 31 presents the nonperforming commercial loans, leases and foreclosed properties activity during the three and nine months ended September 30, 2024 and 2023. Nonperforming loans do not include loans accounted for under the fair value option. During the nine months ended September 30, 2024, nonperforming commercial loans and leases increased $179 million to $3.0 billion. At September 30, 2024, 98 percent of commercial nonperforming loans, leases and foreclosed properties were secured, and 33 percent were contractually current. Commercial nonperforming loans were carried at 81 percent of their unpaid principal balance, as the carrying value of these loans has been reduced to the estimated collateral value less costs to sell.
37Bank of America
Table 31
Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity (1, 2)
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Nonperforming loans and leases, beginning of period
$
2,802
$
1,397
$
2,773
$
1,054
Additions
965
875
2,675
1,778
Reductions:
Paydowns
(374)
(153)
(1,099)
(396)
Sales
(7)
—
(17)
(3)
Returns to performing status (3)
(21)
(2)
(154)
(61)
Charge-offs
(386)
(67)
(1,111)
(242)
Transfers to foreclosed properties
(27)
—
(115)
(23)
Transfers to loans held-for-sale
—
(9)
—
(66)
Total net additions to nonperforming loans and leases
150
644
179
987
Total nonperforming loans and leases, September 30
2,952
2,041
2,952
2,041
Foreclosed properties, September 30
114
48
114
48
Nonperforming commercial loans, leases and foreclosed properties, September 30
$
3,066
$
2,089
$
3,066
$
2,089
Nonperforming commercial loans and leases as a percentage of outstanding commercial loans and leases (4)
0.48
%
0.35
%
Nonperforming commercial loans, leases and foreclosed properties as a percentage of outstanding commercial loans, leases and foreclosed properties (4)
0.50
0.36
(1)Balances do not include nonperforming loans held-for-sale of $785 million and $173 million at September 30, 2024 and 2023.
(2)Includes U.S. small business commercial activity. Small business card loans are excluded as they are not classified as nonperforming.
(3)Commercial loans and leases may be returned to performing status when all principal and interest is current and full repayment of the remaining contractual principal and interest is expected, when the loan otherwise becomes well-secured and is in the process of collection, or when a modified loan demonstrates a sustained period of payment performance.
(4)Outstanding commercial loans exclude loans accounted for under the fair value option.
Industry Concentrations
Table 32 presents commercial committed and utilized credit exposure by industry. For information on net notional credit protection purchased to hedge funded and unfunded exposures for which we elected the fair value option, as well as certain other credit exposures, see Commercial Portfolio Credit Risk Management – Risk Mitigation.
Commercial credit exposure is diversified across a broad range of industries. Total commercial committed exposure increased $49.3 billion during the nine months ended September 30, 2024 to $1.3 trillion. The increase in commercial committed exposure was concentrated in Finance companies, Asset managers and funds and Individuals and trusts.
For information on industry limits, see Commercial Portfolio Credit Risk Management – Risk Mitigation in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
Asset managers and funds, our largest industry concentration with committed exposure of $178.6 billion, increased $9.3 billion, or five percent, during the nine months ended September 30, 2024, which was primarily driven by investment-grade exposures.
Finance companies, our second largest industry concentration with committed exposure of $105.7 billion, increased $16.6 billion, or 19 percent, during the nine months ended September 30, 2024. The increase in committed exposure was primarily driven by increases in Consumer finance, Thrifts and mortgage finance and Diversified financials.
Real estate, our third largest industry concentration with committed exposure of $97.9 billion, decreased $2.4 billion, or two percent, during the nine months ended September 30, 2024. For more information on the commercial real estate and related portfolios, see Commercial Portfolio Credit Risk Management – Commercial Real Estate on page 36.
Various macroeconomic challenges, including geopolitical tensions, higher costs associated with inflationary pressures experienced over the past several years and elevated interest rates, have led to uncertainty in the U.S. and global economies and have adversely impacted, and may continue to adversely impact, a number of industries. We continue to monitor all industries, particularly higher risk industries that are experiencing or could experience a more significant impact to their financial condition.
Bank of America 38
Table 32
Commercial Credit Exposure by Industry (1)
Commercial Utilized
Total Commercial
Committed (2)
(Dollars in millions)
September 30 2024
December 31 2023
September 30 2024
December 31 2023
Asset managers and funds
$
110,334
$
103,138
$
178,572
$
169,318
Finance companies
71,809
62,906
105,676
89,119
Real estate (3)
72,076
73,150
97,860
100,269
Capital goods
51,380
49,698
97,693
97,044
Healthcare equipment and services
34,584
35,037
64,800
61,766
Materials
25,583
25,223
56,501
55,296
Retailing
26,952
24,561
55,240
54,523
Consumer services
28,258
27,355
53,770
49,105
Food, beverage and tobacco
23,986
23,865
53,632
49,426
Individuals and trusts
34,995
32,481
49,583
43,938
Government and public education
31,954
31,051
47,706
45,873
Commercial services and supplies
23,465
22,642
42,362
41,473
Utilities
17,472
18,610
40,807
39,481
Transportation
24,214
24,200
35,834
36,267
Energy
14,033
12,450
35,580
36,996
Technology hardware and equipment
11,156
11,951
29,504
29,160
Software and services
11,411
9,830
28,023
22,381
Global commercial banks
20,922
22,749
24,330
25,684
Media
11,897
13,033
23,648
24,908
Vehicle dealers
17,681
16,283
23,424
22,570
Consumer durables and apparel
9,380
9,184
22,197
20,732
Pharmaceuticals and biotechnology
5,229
6,852
20,497
22,169
Insurance
8,281
9,371
18,506
19,322
Telecommunication services
8,708
9,224
18,156
17,269
Automobiles and components
8,359
7,049
16,798
16,459
Food and staples retailing
7,666
7,423
13,609
12,496
Financial markets infrastructure (clearinghouses)
2,880
4,229
5,104
6,503
Religious and social organizations
2,319
2,754
4,024
4,565
Total commercial credit exposure by industry
$
716,984
$
696,299
$
1,263,436
$
1,214,112
(1)Includes U.S. small business commercial exposure.
(2)Includes the notional amount of unfunded legally binding lending commitments, net of amounts distributed (i.e., syndicated or participated) to other financial institutions. The distributed amounts were $10.3 billion at both September 30, 2024 and December 31, 2023.
(3)Industries are viewed from a variety of perspectives to best isolate the perceived risks. For purposes of this table, the real estate industry is defined based on the primary business activity of the borrowers or counterparties using operating cash flows and primary source of repayment as key factors.
Risk Mitigation
We purchase credit protection to cover the funded portion as well as the unfunded portion of certain credit exposures. To lower the cost of obtaining our desired credit protection levels, we may add credit exposure within an industry, borrower or counterparty group by selling protection.
At September 30, 2024 and December 31, 2023, net notional credit default protection purchased in our credit derivatives portfolio to hedge our funded and unfunded exposures for which we elected the fair value option, as well as certain other credit exposures, was $11.1 billion and $10.9 billion. We recorded net losses of $42 million and $58 million for the three and nine months ended September 30, 2024 compared to net losses of $23 million and $134 million for the same periods in 2023. The gains and losses on these instruments were largely offset by gains and losses on the related exposures. The Value-at-Risk (VaR) results for these exposures are included in the fair value option portfolio information in Table 38. For more information, see Trading Risk Management on page 43.
Tables 33 and 34 present the maturity profiles and the credit exposure debt ratings of the net credit default protection portfolio at September 30, 2024 and December 31, 2023.
Table 33
Net Credit Default Protection by Maturity
September 30 2024
December 31 2023
Less than or equal to one year
15
%
36
%
Greater than one year and less than or equal to five years
85
64
Total net credit default protection
100
%
100
%
Table 34
Net Credit Default Protection by Credit Exposure Debt Rating
Net Notional (1)
Percent of Total
Net Notional (1)
Percent of Total
(Dollars in millions)
September 30, 2024
December 31, 2023
Ratings (2, 3)
AAA
$
(414)
3.7
%
$
(479)
4.4
%
AA
(1,012)
9.1
(1,080)
9.9
A
(5,222)
46.9
(5,237)
48.2
BBB
(3,390)
30.5
(2,912)
26.8
BB
(642)
5.8
(698)
6.4
B
(356)
3.2
(419)
3.9
CCC and below
(92)
0.8
(52)
0.5
NR (4)
2
—
2
(0.1)
Total net credit
default protection
$
(11,126)
100.0
%
$
(10,875)
100.0
%
(1)Represents net credit default protection purchased.
(2)Ratings are refreshed on a quarterly basis.
(3)Ratings of BBB- or higher are considered to meet the definition of investment grade.
(4)NR is comprised of index positions held and any names that have not been rated.
39Bank of America
For more information on credit derivatives and counterparty credit risk valuation adjustments, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Non-U.S. Portfolio
Our non-U.S. credit and trading portfolios are subject to country risk. We define country risk as the risk of loss from unfavorable economic and political conditions, currency fluctuations, social instability and changes in government policies. A risk management framework is in place to measure, monitor and manage non-U.S. risk and exposures. In addition to the direct risk of doing business in a country, we also are exposed to indirect country risks (e.g., related to the collateral received on secured financing transactions or related to client clearing activities). These indirect exposures are managed in the normal
course of business through credit, market and operational risk governance rather than through country risk governance. For more information on our non-U.S. credit and trading portfolios, see Non-U.S. Portfolio in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K. For more information on risks related to our non-U.S. portfolio, see the Geopolitical section within Item 1A. Risk Factors of the Corporation’s 2023 Annual Report on Form 10-K.
Table 35 presents our 20 largest non-U.S. country exposures at September 30, 2024. These exposures accounted for 89 percent of our total non-U.S. exposure at both September 30, 2024 and December 31, 2023. Net country exposure for these 20 countries increased $21.5 billion in 2024 primarily driven by increases in the United Kingdom, Japan and the Netherlands.
Table 35
Top 20 Non-U.S. Countries Exposure
(Dollars in millions)
Funded Loans and Loan Equivalents
Unfunded Loan Commitments
Net Counterparty Exposure
Securities/ Other Investments
Country Exposure at September 30 2024
Hedges and Credit Default Protection
Net Country Exposure at September 30 2024
Increase (Decrease) from December 31 2023
United Kingdom
$
36,664
$
18,649
$
4,811
$
4,467
$
64,591
$
(2,152)
$
62,439
$
6,504
Germany
24,632
10,368
1,704
2,141
38,845
(5,128)
33,717
(1,938)
Canada
13,516
10,598
1,531
4,739
30,384
(567)
29,817
1,802
France
14,828
9,383
1,146
3,286
28,643
(2,087)
26,556
1,698
Japan
12,240
2,414
2,187
5,308
22,149
(748)
21,401
4,427
Australia
13,304
5,706
442
2,254
21,706
(385)
21,321
(1)
Brazil
9,464
1,416
1,009
4,104
15,993
(70)
15,923
640
India
7,807
352
992
5,452
14,603
(57)
14,546
2,621
Switzerland
5,883
4,937
293
209
11,322
(284)
11,038
1,809
Ireland
8,250
2,114
297
427
11,088
(103)
10,985
652
Netherlands
5,525
4,370
654
893
11,442
(680)
10,762
3,613
China
5,236
285
431
3,223
9,175
(234)
8,941
429
South Korea
4,764
1,412
389
2,136
8,701
(147)
8,554
94
Singapore
2,963
639
122
4,443
8,167
(32)
8,135
(2,682)
Mexico
4,493
1,883
309
1,548
8,233
(209)
8,024
(895)
Italy
4,992
2,679
342
475
8,488
(1,232)
7,256
641
Spain
2,984
1,842
98
846
5,770
(339)
5,431
(165)
Hong Kong
3,035
681
544
1,170
5,430
(63)
5,367
(485)
Indonesia
916
—
49
3,242
4,207
(31)
4,176
1,941
Sweden
1,821
2,113
96
206
4,236
(391)
3,845
831
Total top 20 non-U.S. countries exposure
$
183,317
$
81,841
$
17,446
$
50,569
$
333,173
$
(14,939)
$
318,234
$
21,536
Our largest non-U.S. country exposure at September 30, 2024 was the United Kingdom with net exposure of $62.4 billion, which increased $6.5 billion from December 31, 2023 primarily due to increased deposits with the central bank. Our second largest non-U.S. country exposure was Germany with net exposure of $33.7 billion at September 30, 2024, which decreased $1.9 billion from December 31, 2023 primarily due to lower exposure to sovereign and financial institutions.
Bank of America 40
Allowance for Credit Losses
The allowance for credit losses decreased $200 million from December 31, 2023 to $14.4 billion at September 30, 2024, which included a $49 million reserve increase and a
$249 million reserve decrease related to the consumer and commercial portfolios.
Table 36 presents an allocation of the allowance for credit losses by product type at September 30, 2024 and December 31, 2023.
Table 36
Allocation of the Allowance for Credit Losses by Product Type
Amount
Percent of Total
Percent of Loans and Leases
Outstanding (1)
Amount
Percent of Total
Percent of Loans and Leases
Outstanding (1)
(Dollars in millions)
September 30, 2024
December 31, 2023
Allowance for loan and lease losses
Residential mortgage
$
280
2.11
%
0.12
%
$
339
2.54
%
0.15
%
Home equity
29
0.22
0.11
47
0.35
0.19
Credit card
7,492
56.54
7.43
7,346
55.06
7.19
Direct/Indirect consumer
730
5.51
0.69
715
5.36
0.69
Other consumer
62
0.47
n/m
73
0.55
n/m
Total consumer
8,593
64.85
1.87
8,520
63.86
1.85
U.S. commercial (2)
2,567
19.37
0.64
2,600
19.49
0.69
Non-U.S. commercial
766
5.78
0.60
842
6.31
0.68
Commercial real estate
1,287
9.71
1.88
1,342
10.06
1.84
Commercial lease financing
38
0.29
0.25
38
0.28
0.26
Total commercial
4,658
35.15
0.76
4,822
36.14
0.82
Allowance for loan and lease losses
13,251
100.00
%
1.24
13,342
100.00
%
1.27
Reserve for unfunded lending commitments
1,100
1,209
Allowance for credit losses
$
14,351
$
14,551
(1)Ratios are calculated as allowance for loan and lease losses as a percentage of loans and leases outstanding excluding loans accounted for under the fair value option.
(2)Includes allowance for loan and lease losses for U.S. small business commercial loans of $1.2 billion and $1.0 billion at September 30, 2024 and December 31, 2023.
n/m = not meaningful
Net charge-offs for the three and nine months ended September 30, 2024 were $1.5 billion and $4.6 billion compared to $931 million and $2.6 billion for the same periods in 2023 primarily due to credit card loans and the commercial real estate office portfolio. The provision for credit losses increased $308 million to $1.5 billion and $1.1 billion to $4.4 billion for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The provision for credit losses for the current-year periods was primarily driven by credit card loans and the commercial real estate office portfolio. The provision for credit losses for the consumer portfolio, including unfunded lending commitments, decreased $93 million to $1.1 billion and $86 million to $3.2 billion for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The provision for credit losses for
the commercial portfolio, including unfunded lending commitments, increased $401 million to $417 million and $1.2 billion to $1.2 billion for the three and nine months ended September 30, 2024 compared to the same periods in 2023.
Table 37 presents a rollforward of the allowance for credit losses, including certain loan and allowance ratios for the three and nine months ended September 30, 2024 and 2023. For more information on the Corporation’s credit loss accounting policies and activity related to the allowance for credit losses, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.
41Bank of America
Table 37
Allowance for Credit Losses
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Allowance for loan and lease losses, December 31
n/a
n/a
$
13,342
$
12,682
January 1, 2023 adoption of credit loss standard
n/a
n/a
n/a
(243)
Allowance for loan and lease losses, beginning of period
$
13,238
$
12,950
$
13,342
$
12,439
Loans and leases charged off
Residential mortgage
(5)
(8)
(18)
(26)
Home equity
(10)
(7)
(16)
(18)
Credit card
(1,084)
(814)
(3,235)
(2,220)
Direct/Indirect consumer
(101)
(57)
(292)
(153)
Other consumer
(71)
(123)
(221)
(406)
Total consumer charge-offs
(1,271)
(1,009)
(3,782)
(2,823)
U.S. commercial (1)
(288)
(131)
(710)
(371)
Non-U.S. commercial
(60)
—
(61)
(31)
Commercial real estate
(180)
(44)
(762)
(139)
Commercial lease financing
(1)
(3)
(2)
(3)
Total commercial charge-offs
(529)
(178)
(1,535)
(544)
Total loans and leases charged off
(1,800)
(1,187)
(5,317)
(3,367)
Recoveries of loans and leases previously charged off
Residential mortgage
7
6
17
21
Home equity
15
21
48
60
Credit card
156
141
453
436
Direct/Indirect consumer
45
32
120
110
Other consumer
4
5
13
19
Total consumer recoveries
227
205
651
646
U.S. commercial (2)
29
44
72
92
Non-U.S. commercial
—
2
13
13
Commercial real estate
9
5
15
9
Commercial lease financing
1
—
1
—
Total commercial recoveries
39
51
101
114
Total recoveries of loans and leases previously charged off
266
256
752
760
Net charge-offs
(1,534)
(931)
(4,565)
(2,607)
Provision for loan and lease losses
1,547
1,268
4,479
3,477
Other
—
—
(5)
(22)
Allowance for loan and lease losses, September 30
13,251
13,287
13,251
13,287
Reserve for unfunded lending commitments, beginning of period
1,104
1,388
1,209
1,540
Provision for unfunded lending commitments
(5)
(34)
(110)
(187)
Other
1
(1)
1
—
Reserve for unfunded lending commitments, September 30
1,100
1,353
1,100
1,353
Allowance for credit losses, September 30
$
14,351
$
14,640
$
14,351
$
14,640
Loan and allowance ratios (3):
Loans and leases outstanding at September 30
$
1,071,628
$
1,044,899
$
1,071,628
$
1,044,899
Allowance for loan and lease losses as a percentage of total loans and leases outstanding at September 30
1.24
%
1.27
%
1.24
%
1.27
%
Consumer allowance for loan and lease losses as a percentage of total consumer loans and leases outstanding at September 30
1.87
1.78
1.87
1.78
Commercial allowance for loan and lease losses as a percentage of total commercial loans and leases outstanding at September 30
0.76
0.87
0.76
0.87
Average loans and leases outstanding
$
1,055,975
$
1,041,972
$
1,049,689
$
1,040,116
Annualized net charge-offs as a percentage of average loans and leases outstanding
0.58
%
0.35
%
0.58
%
0.34
%
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases at September 30
235
275
235
275
Ratio of the allowance for loan and lease losses at September 30 to annualized net charge-offs
2.17
3.60
2.17
3.81
Amounts included in allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases at September 30 (4)
$
8,640
$
5,330
$
8,640
$
5,330
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases, excluding the allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases at September 30 (4)
82
%
165
%
82
%
165
%
(1)Includes U.S. small business commercial charge-offs of $135 million and $383 million for the three and nine months ended September 30, 2024 compared to $94 million and $254 million for the same periods in 2023.
(2)Includes U.S. small business commercial recoveries of $11 million and $33 million for the three and nine months ended September 30, 2024 compared to $12 million and $32 million for the same periods in 2023.
(3)Ratios are calculated as allowance for loan and lease losses as a percentage of loans and leases outstanding excluding loans accounted for under the fair value option.
(4)Primarily includes amounts related to credit card and unsecured consumer lending portfolios in Consumer Banking.
n/a = not applicable
Bank of America 42
Market Risk Management
For more information on our market risk management process, see Market Risk Management in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K. For more information on market risks, see the Market section within Item 1A. Risk Factors of the Corporation’s 2023 Annual Report on Form 10-K.
Market risk is the risk that changes in market conditions may adversely impact the value of assets or liabilities, or otherwise negatively impact earnings. This risk is inherent in the financial instruments associated with our operations, primarily within our Global Markets segment. We are also exposed to these risks in other areas of the Corporation (e.g., our ALM activities). In the event of market stress, these risks could have a material impact on our results.
Trading Risk Management
To evaluate risks in our trading activities, we focus on the actual and potential volatility of revenues generated by individual positions as well as portfolios of positions. VaR is a common statistic used to measure market risk. Our primary VaR statistic is equivalent to a 99 percent confidence level, which means that for a VaR with a one-day holding period, there should not be losses in excess of VaR, on average, 99 out of 100 trading days.
Table 38 presents the total market-based portfolio VaR, which is the combination of the total covered positions (and less liquid trading positions) portfolio and the fair value option portfolio. For more information on the market risk VaR for trading activities, see Trading Risk Management in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
The total market-based portfolio VaR results in Table 38 include market risk to which we are exposed from all business segments, excluding credit valuation adjustment (CVA), DVA and related hedges. The majority of this portfolio is within the Global Markets segment.
Table 38 presents period-end, average, high and low daily trading VaR for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023 using a 99 percent confidence level. The amounts disclosed in Table 38 and Table 39 align to the view of covered positions used in the Basel 3 capital calculations. Foreign exchange and commodity positions are always considered covered positions, regardless of trading or banking treatment for the trade, except for structural foreign currency positions that are excluded with prior regulatory approval.
The average of total covered positions and less liquid trading positions portfolio VaR decreased for the three months ended September 30, 2024 compared to the prior quarter due to a reduction in interest rate risk.
Table 38
Market Risk VaR for Trading Activities
Three Months Ended
Nine Months Ended September 30
September 30, 2024
June 30, 2024
September 30, 2023
(Dollars in millions)
Period End
Average
High (1)
Low (1)
Period End
Average
High (1)
Low (1)
Period End
Average
High (1)
Low (1)
2024 Average
2023 Average
Foreign exchange
$
30
$
34
$
41
$
26
$
30
$
32
$
40
$
25
$
25
$
25
$
33
$
12
$
34
$
29
Interest rate
36
42
75
30
76
70
91
50
46
51
86
35
58
48
Credit
57
62
72
57
66
54
69
44
62
49
62
43
54
61
Equity
29
21
29
16
19
20
26
14
13
15
23
11
19
19
Commodities
11
10
16
8
10
9
12
8
10
8
10
6
10
9
Portfolio diversification
(95)
(99)
n/a
n/a
(120)
(104)
n/a
n/a
(90)
(92)
n/a
n/a
(102)
(104)
Total covered positions portfolio
68
70
88
57
81
81
99
64
66
56
74
41
73
62
Impact from less liquid exposures (2)
11
8
n/a
n/a
2
9
n/a
n/a
21
13
n/a
n/a
10
22
Total covered positions and less liquid trading positions portfolio
79
78
94
63
83
90
110
73
87
69
91
52
83
84
Fair value option loans
18
15
18
12
15
21
45
12
16
19
21
16
17
27
Fair value option hedges
11
10
11
8
8
16
27
8
10
11
13
9
11
14
Fair value option portfolio diversification
(15)
(12)
n/a
n/a
(10)
(23)
n/a
n/a
(14)
(17)
n/a
n/a
(15)
(24)
Total fair value option portfolio
14
13
14
12
13
14
24
10
12
13
14
12
13
17
Portfolio diversification
(11)
(10)
n/a
n/a
(8)
(8)
n/a
n/a
(2)
(5)
n/a
n/a
(9)
(7)
Total market-based portfolio
$
82
$
81
99
68
$
88
$
96
117
82
$
97
$
77
103
58
$
87
$
94
(1)The high and low for each portfolio may have occurred on different trading days than the high and low for the components. Therefore the impact from less liquid exposures and the amount of portfolio diversification, which is the difference between the total portfolio and the sum of the individual components, is not relevant.
(2)Impact is net of diversification effects between the covered positions and less liquid trading positions portfolios.
n/a = not applicable
43Bank of America
The following graph presents the daily covered positions and less liquid trading positions portfolio VaR for the previous five quarters, corresponding to the data in Table 38.
Additional VaR statistics produced within our single VaR model are provided in Table 39 at the same level of detail as in Table 38. Evaluating VaR with additional statistics allows for an increased understanding of the risks in the portfolio, as the historical market data used in the VaR calculation does not necessarily follow a predefined statistical distribution. Table 39 presents average trading VaR statistics at 99 percent and 95 percent confidence levels for the three months ended September 30, 2024, June 30, 2024 and September 30, 2023.
Table 39
Average Market Risk VaR for Trading Activities – 99 percent and 95 percent VaR Statistics
Three Months Ended
September 30, 2024
June 30, 2024
September 30, 2023
(Dollars in millions)
99 percent
95 percent
99 percent
95 percent
99 percent
95 percent
Foreign exchange
$
34
$
22
$
32
$
21
$
25
$
16
Interest rate
42
23
70
36
51
28
Credit
62
34
54
30
49
29
Equity
21
11
20
10
15
7
Commodities
10
6
9
5
8
5
Portfolio diversification
(99)
(60)
(104)
(63)
(92)
(53)
Total covered positions portfolio
70
36
81
39
56
32
Impact from less liquid exposures
8
3
9
6
13
6
Total covered positions and less liquid trading positions portfolio
78
39
90
45
69
38
Fair value option loans
15
9
21
13
19
11
Fair value option hedges
10
6
16
9
11
7
Fair value option portfolio diversification
(12)
(7)
(23)
(14)
(17)
(11)
Total fair value option portfolio
13
8
14
8
13
7
Portfolio diversification
(10)
(5)
(8)
(5)
(5)
(4)
Total market-based portfolio
$
81
$
42
$
96
$
48
$
77
$
41
Backtesting
The accuracy of the VaR methodology is evaluated by backtesting, which compares the daily VaR results, utilizing a one-day holding period, against a comparable subset of trading revenue. For more information on our backtesting process, see Trading Risk Management – Backtesting in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
During the three and nine months ended September 30, 2024, there were nodays where this subset of trading revenue had losses that exceeded our total covered portfolio VaR, utilizing a one-day holding period.
Total Trading-related Revenue
Total trading-related revenue, excluding brokerage fees, and CVA, DVA and funding valuation adjustment gains (losses), represents the total amount earned from trading positions, including market-based net interest income, which are taken in a diverse range of financial instruments and markets. For more
information, see Trading Risk Management – Total Trading-related Revenue in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
The following histogram is a graphic depiction of trading volatility and illustrates the daily level of trading-related revenue for the three months ended September 30, 2024 compared to the three months ended June 30, 2024 and March 31, 2024. During the three months ended September 30, 2024, positive trading-related revenue was recorded for 100 percent of the trading days, of which 98 percent were daily trading gains of over $25 million. This compares to the three months ended June 30, 2024, where positive trading-related revenue was recorded for 100 percent of the trading days, of which 95 percent were daily trading gains of over $25 million. During the three months ended March 31, 2024, positive trading-related revenue was recorded for 100 percent of the trading days, of which 97 percent were daily trading gains of over $25 million.
Bank of America 44
Trading Portfolio Stress Testing
Because the very nature of a VaR model suggests results can exceed our estimates and it is dependent on a limited historical window, we also stress test our portfolio using scenario analysis. This analysis estimates the change in the value of our trading portfolio that may result from abnormal market movements. For more information, see Trading Risk Management – Trading Portfolio Stress Testing in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
Interest Rate Risk Management for the Banking Book
The following discussion presents net interest income for banking book activities. For more information, see Interest Rate Risk Management for the Banking Book in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
Table 40 presents the spot and 12-month forward rates used in our baseline forecasts at September 30, 2024 and December 31, 2023.
Table 40
Forward Rates
Federal Funds
SOFR
10-Year SOFR
September 30, 2024
Spot rates
5.00
%
4.96
%
3.32
%
12-month forward rates
3.25
3.10
3.30
December 31, 2023
Spot rates
5.50
%
5.38
%
3.47
%
12-month forward rates
3.89
3.93
3.32
Table 41 shows the potential pretax impact to net interest income over the next 12 months from September 30, 2024 and December 31, 2023 resulting from instantaneous parallel and non-parallel shocks to the market-based forward curve. Periodically, we evaluate the scenarios presented so that they are meaningful in the context of the current rate environment.
Table 41
Estimated Banking Book Net Interest Income Sensitivity to Curve Changes
Short Rate (bps)
Long Rate (bps)
Dynamic Deposits (1)
Static Deposits (1)
Static Deposits (1)
(Dollars in billions)
September 30 2024
September 30 2024
December 31 2023
Parallel Shifts
+100 bps instantaneous shift
+100
+100
$
1.8
$
3.4
$
3.5
-100 bps instantaneous shift
-100
-100
(2.7)
(3.5)
(3.1)
+200 bps instantaneous shift
+200
+200
3.0
6.6
n/a
-200 bps instantaneous shift
-200
-200
(6.3)
(7.3)
n/a
Flatteners
Short-end instantaneous change
+100
—
1.7
3.1
3.2
Long-end instantaneous change
—
-100
(0.1)
(0.4)
(0.3)
Steepeners
Short-end instantaneous change
-100
—
(2.4)
(3.1)
(2.8)
Long-end instantaneous change
—
+100
0.2
0.4
0.3
(1)Dynamic Deposit sensitivity reflects behavioral customer deposit balance changes that could occur under various scenarios while Static Deposits assumes no deposit balance change.
n/a = not applicable
45Bank of America
We continue to be asset sensitive to a parallel upward move in interest rates, with the majority of that impact coming from the short end of the yield curve. Additionally, higher interest rates negatively impact the fair value of our debt securities classified as available for sale and adversely affect accumulated OCI and thus capital levels under the Basel 3 capital rules. Under instantaneous upward parallel shifts, the near-term adverse impact to Basel 3 capital would be reduced over time by offsetting positive impacts to net interest income generated from banking book activities. For more information on Basel 3, see Capital Management – Regulatory Capital on page 21.
As part of our ALM activities, we use securities, certain residential mortgages, and interest rate and foreign exchange derivatives in managing interest rate sensitivity. The sensitivity analysis in Table 41 assumes that we take no action in response to these rate shocks and does not assume any change in other macroeconomic variables normally correlated with changes in interest rates. Beginning in the second quarter of 2024, the sensitivity analysis incorporates potential movements in customer behavior that could result in changes in both total customer deposit balances and deposit balance mix, (e.g., interest bearing versus noninterest bearing), under the various interest rate scenarios. In higher rate scenarios, the analysis assumes that a portion of low-cost or noninterest-bearing deposits are replaced with higher yielding deposits or market-based funding. Conversely, in lower rate scenarios, the analysis assumes that a portion of higher yielding deposits or market-based funding are replaced with low-cost or noninterest-bearing deposits.
For larger interest rate scenarios, the interest rate sensitivity may behave in a non-linear manner as there are numerous estimates and assumptions, which require a high degree of judgment and are often interrelated, that could impact the outcome. Pertaining to the mortgage-backed securities and residential mortgage portfolio, if long-end interest rates were to significantly decrease over the next twelve months, for example over 200 bps, there would generally be an increase in customer prepayment behaviors with an incremental reduction to net interest income, noting that the extent of changes in customer prepayment activity can be impacted by multiple factors and is not necessarily limited to long-end interest rates. Conversely, if long-end interest rates were to significantly increase over the next twelve months, for example, over 200 bps, customer prepayments would likely modestly decrease and result in an incremental increase to net interest income. In addition, deposit pricing is rate sensitive in nature. This sensitivity is assumed to have non-linear impacts to larger short-end rate movements. In decreasing interest rate scenarios, and particularly where interest rates have decreased to small amounts, the ability to further reduce rates paid is reduced as customer rates near zero. In higher short-end rate scenarios, deposit pricing will likely increase at a faster rate, leading to incremental interest expense and reducing asset sensitivity. While the impact related to the above assumptions used in the asset sensitivity analysis can provide directional analysis on how net interest income will be impacted in changing environments, the ultimate impact is dependent upon the interrelationship of the assumptions and factors, which vary in different macroeconomic scenarios.
Economic Value of Equity
In addition to interest rate sensitivity described above, the Corporation’s management of its interest rate exposures in the banking book also considers a long-term view of interest rate sensitivity through the measurement of Economic Value of Equity (EVE). EVE captures changes in the net present value of banking book assets and liabilities under various interest rate scenarios and its impact to Tier 1 capital. Similar to net interest income, the Corporation establishes limits for EVE. EVE is largely driven by the Corporation’s longer duration fixed-rate products, such as investment securities, residential mortgages and deposits. For assets or liabilities that have no stated maturity, such as deposits, the Corporation estimates the duration for measurement purposes.
Interest Rate and Foreign Exchange Derivative Contracts
We use interest rate and foreign exchange derivative contracts in our ALM activities to manage our interest rate and foreign exchange risks. Specifically, we use those derivatives to manage both the variability in cash flows and changes in fair value of various assets and liabilities arising from those risks. Our interest rate derivative contracts are generally non-leveraged swaps tied to various benchmark interest rates and foreign exchange basis swaps, options, futures and forwards, and our foreign exchange contracts include cross-currency interest rate swaps, foreign currency futures contracts, foreign currency forward contracts and options.
The derivatives used in our ALM activities can be split into two broad categories: designated accounting hedges and other risk management derivatives. Designated accounting hedges are primarily used to manage our exposure to interest rates as described in the Interest Rate Risk Management for the Banking Book section and are included in the sensitivities presented in Table 41. The Corporation also uses foreign currency derivatives in accounting hedges to manage substantially all of the foreign exchange risk of our foreign operations. By hedging the foreign exchange risk of our foreign operations, the Corporation's market risk exposure in this area is not significant.
Risk management derivatives are predominantly used to hedge foreign exchange risks related to various foreign currency-denominated assets and liabilities and eliminate substantially all foreign currency exposures in the cash flows of the Corporation’s non-trading foreign currency-denominated financial instruments. These foreign exchange derivatives are sensitive to other market risk exposures such as cross-currency basis spreads and interest rate risk. However, as these features are not a significant component of these foreign exchange derivatives, the market risk related to this exposure is not significant. For more information on the accounting for derivatives, see Note 3 – Derivatives to the Consolidated Financial Statements.
Bank of America 46
Mortgage Banking Risk Management
We originate, fund and service mortgage loans, which subject us to credit, liquidity and interest rate risks, among others. We determine whether loans will be held for investment or held for sale at the time of commitment and manage credit and liquidity risks by selling or securitizing a portion of the loans we originate.
Changes in interest rates impact the value of interest rate lock commitments (IRLCs) and the related residential first mortgage loans held-for-sale (LHFS), as well as the value of the MSRs. Because the interest rate risks of these hedged items offset, we combine them into one overall hedged item with one combined economic hedge portfolio consisting of derivative contracts and securities. For more information on IRLCs and the related residential mortgage LHFS, see Mortgage Banking Risk Management in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K.
There were no significant gains or losses related to the change in fair value of MSRs, IRLCs and LHFS, net of gains and losses on the hedge portfolio, for the three and nine months ended September 30, 2024 and 2023. For more information on MSRs, see Note 14 – Fair Value Measurements to the Consolidated Financial Statements.
Climate Risk
Climate Risk Management
Climate risk is the risk that climate change or actions taken to mitigate climate change expose the Corporation to economic, legal/regulatory, operational or reputational harm. Climate-related risks are divided into two major categories, both of which span across the seven key risk types discussed in the Managing Risk section in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K: (1) Physical Risk: risks related to the physical impacts of climate change, driven by extreme weather events such as hurricanes and floods, as well as chronic longer-term shifts such as rising average global temperatures and sea levels, and (2) Transition Risk: risks related to the transition to a low-carbon economy, which may entail extensive policy, legal, technology and market changes.
Physical risks of climate change, such as more frequent and severe extreme weather events, can increase the Corporation’s risks, including credit risk by diminishing borrowers’ repayment capacity or collateral values, and operational risk by negatively impacting the Corporation’s facilities, employees, or vendors. Transition risks of climate change may amplify credit risks through the financial impacts of changes in policy, technology or the market on the Corporation or our counterparties. Unanticipated market changes can lead to sudden price adjustments and give rise to heightened market risk.
Reputational risk can arise if we do not meet our climate-related goals, or are perceived to be inadequately responsive to climate change.
Our approach to managing climate risk is consistent with our risk management governance structure, from senior management to our Board and its committees, including the ERC and the Corporate Governance, ESG and Sustainability Committee (CGESC) of the Board, which regularly discuss climate-related topics. The ERC oversees climate risk as set forth in our Risk Framework and Risk Appetite Statement. The CGESC is responsible for overseeing the Corporation’s environmental and sustainability-related activities and practices, and regularly reviews the Corporation’s climate-related policies and practices. Our Climate Risk Council consists of leaders across risk, Front Line Unit and control functions, and meets routinely to discuss our approach to managing climate-related risks.
Our climate risk management efforts are overseen by an officer who reports to the Chief Risk Officer. The Corporation has a Climate and Environmental Risk Management function that is responsible for overseeing climate risk management. They are responsible for establishing the Climate Risk Framework (described below) and governance structure, and providing an independent assessment of enterprise-wide climate risks.
Based on the Corporation’s Risk Framework, in 2023 we created our internal Climate Risk Framework, which addresses how the Corporation identifies, measures, monitors and controls climate risk by enhancing existing risk management processes and also includes examples of how climate risk manifests across the seven risk types. The framework details the roles and responsibilities for climate risk management across our three lines of defense (i.e., Front Line Units, Global Risk Management and Corporate Audit).
For more information on our governance framework, see the Managing Risk section in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K. For more information on climate risk, see Item 1A. Risk Factors of the Corporation’s 2023 Annual Report on Form 10-K.
Climate-related Goals and Targets
In 2021, the Corporation announced a goal of achieving net zero greenhouse gas emissions before 2050 in our financing activities, operations and supply chain (Net Zero goal). As part of this goal, we have set interim 2030 targets across our financing activities related to certain high-emitting sectors (2030 Financing Activity Emissions Targets), operations and supply chain, all of which are further supported and complemented by our 10-year goal to mobilize and deploy $1.5 trillion in sustainable finance by 2030 in support of the U.N. Sustainable Development Goals, of which $1 trillion is dedicated to supporting the transition to a low-carbon economy, including capital mobilized across clean energy sectors and tailored financial solutions for emerging areas of the low-carbon
47Bank of America
economy. In particular, we have announced 2030 Financing Activity Emissions Targets for auto manufacturing, aviation, cement, energy, iron and steel, maritime shipping and power generation sectors.
Achieving our climate--related goals and targets, including our Net Zero goal and 2030 Financing Activity Emissions Targets, may require technological advances, clearly defined roadmaps for industry sectors and better emissions data reporting. Required changes may also include new standards and public policies, including those that improve the cost of capital for the transition to a low-carbon economy, as well as strong and active engagement with customers, suppliers, investors, government officials and other stakeholders. Activities related to our climate-related goals and targets have not resulted in a significant effect on our results of operations or financial position in the relevant periods presented herein.
For more information on climate-related matters and the Corporation’s climate-related goals and targets, including the Corporation’s plans to achieve its Net Zero goal and its 2030 targets, and progress on its sustainable finance goal, see the Corporation’s website, including its 2024 Sustainability at Bank of America document. The contents of the Corporation’s website, including the 2024 Sustainability at Bank of America document, are not incorporated by reference into this Quarterly Report on Form 10-Q.
The foregoing discussion and the statements on the Corporation’s website, including in the 2024 Sustainability at Bank of America document, regarding the Corporation’s climate-related goals and targets, its approach with respect to climate risk management, and the nature and extent of climate-related risks, contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future results or performance and involve certain known and unknown risks, uncertainties and assumptions that are difficult to predict and are often beyond the Corporation’s control. Actual outcomes and results may differ materially from those expressed in, or implied by, any of these forward-looking statements.
Complex Accounting Estimates
Our significant accounting principles, are essential in understanding the MD&A. Many of our significant accounting principles require complex judgments to estimate the values of assets and liabilities. We have procedures and processes in place to facilitate making these judgments. For more information, see Complex Accounting Estimates in the MD&A of the Corporation’s 2023 Annual Report on Form 10-K and Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Bank of America 48
Non-GAAP Reconciliations
Table 42 provides reconciliations of certain non-GAAP financial measures to the most directly comparable GAAP financial measures.
Table 42
Average and Period-end Supplemental Financial Data and Reconciliations to GAAP Financial Measures (1)
2024 Quarters
2023 Quarters
Nine Months Ended September 30
(Dollars in millions)
Third
Second
First
Fourth
Third
2024
2023
Reconciliation of average shareholders’ equity to average tangible shareholders’ equity and average tangible common shareholders’ equity
Shareholders’ equity
$
294,985
$
293,403
$
292,511
$
288,618
$
284,975
$
293,638
$
281,579
Goodwill
(69,021)
(69,021)
(69,021)
(69,021)
(69,021)
(69,021)
(69,022)
Intangible assets (excluding MSRs)
(1,951)
(1,971)
(1,990)
(2,010)
(2,029)
(1,971)
(2,049)
Related deferred tax liabilities
864
869
874
886
890
869
895
Tangible shareholders’ equity
$
224,877
$
223,280
$
222,374
$
218,473
$
214,815
$
223,515
$
211,403
Preferred stock
(25,984)
(28,113)
(28,397)
(28,397)
(28,397)
(27,493)
(28,397)
Tangible common shareholders’ equity
$
198,893
$
195,167
$
193,977
$
190,076
$
186,418
$
196,022
$
183,006
Reconciliation of period-end shareholders’ equity to period-end tangible shareholders’ equity and period-end tangible common shareholders’ equity
Shareholders’ equity
$
296,512
$
293,892
$
293,552
$
291,646
$
287,064
Goodwill
(69,021)
(69,021)
(69,021)
(69,021)
(69,021)
Intangible assets (excluding MSRs)
(1,938)
(1,958)
(1,977)
(1,997)
(2,016)
Related deferred tax liabilities
859
864
869
874
886
Tangible shareholders’ equity
$
226,412
$
223,777
$
223,423
$
221,502
$
216,913
Preferred stock
(24,554)
(26,548)
(28,397)
(28,397)
(28,397)
Tangible common shareholders’ equity
$
201,858
$
197,229
$
195,026
$
193,105
$
188,516
Reconciliation of period-end assets to period-end tangible assets
Assets
$
3,324,293
$
3,257,996
$
3,273,803
$
3,180,151
$
3,153,090
Goodwill
(69,021)
(69,021)
(69,021)
(69,021)
(69,021)
Intangible assets (excluding MSRs)
(1,938)
(1,958)
(1,977)
(1,997)
(2,016)
Related deferred tax liabilities
859
864
869
874
886
Tangible assets
$
3,254,193
$
3,187,881
$
3,203,674
$
3,110,007
$
3,082,939
(1)For more information on non-GAAP financial measures and ratios we use in assessing the results of the Corporation, see Supplemental Financial Data on page 6.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
See Market Risk Management on page 43 in the MD&A and the sections referenced therein for Quantitative and Qualitative Disclosures about Market Risk.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
As of the end of the period covered by this report, the Corporation’s management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness and design of the Corporation’s disclosure controls and procedures (as that term is defined in Rule 13a-15(e) of the Exchange Act). Based upon that evaluation, the Corporation’s Chief Executive Officer and Chief Financial Officer concluded that the Corporation’s disclosure controls and procedures were effective, as of the end of the period covered by this report.
Changes in Internal Control Over Financial Reporting
There have been no changes in the Corporation’s internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the three months ended September 30, 2024, that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
49Bank of America
Part I. Financial Information
Item 1. Financial Statements
Bank of America Corporation and Subsidiaries
Consolidated Statement of Income
Three Months Ended September 30
Nine Months Ended September 30
(In millions, except per share information)
2024
2023
2024
2023
Net interest income
Interest income
$
37,491
$
33,624
$
110,630
$
94,633
Interest expense
23,524
19,245
68,929
51,648
Net interest income
13,967
14,379
41,701
42,985
Noninterest income
Fees and commissions
9,119
8,135
26,748
23,990
Market making and similar activities
3,278
3,325
10,464
11,734
Other income (loss)
(1,019)
(672)
(2,373)
(2,087)
Total noninterest income
11,378
10,788
34,839
33,637
Total revenue, net of interest expense
25,345
25,167
76,540
76,622
Provision for credit losses
1,542
1,234
4,369
3,290
Noninterest expense
Compensation and benefits
9,916
9,551
29,937
28,870
Occupancy and equipment
1,836
1,795
5,465
5,370
Information processing and communications
1,784
1,676
5,347
5,017
Product delivery and transaction related
849
880
2,591
2,726
Professional fees
723
545
1,925
1,609
Marketing
504
501
1,446
1,472
Other general operating
867
890
3,314
3,050
Total noninterest expense
16,479
15,838
50,025
48,114
Income before income taxes
7,324
8,095
22,146
25,218
Income tax expense
428
293
1,679
1,847
Net income
$
6,896
$
7,802
$
20,467
$
23,371
Preferred stock dividends
516
532
1,363
1,343
Net income applicable to common shareholders
$
6,380
$
7,270
$
19,104
$
22,028
Per common share information
Earnings
$
0.82
$
0.91
$
2.42
$
2.74
Diluted earnings
0.81
0.90
2.40
2.72
Average common shares issued and outstanding
7,818.0
8,017.1
7,894.7
8,041.3
Average diluted common shares issued and outstanding
7,902.1
8,075.9
7,965.0
8,153.4
Consolidated Statement of Comprehensive Income
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Net income
$
6,896
$
7,802
$
20,467
$
23,371
Other comprehensive income (loss), net-of-tax:
Net change in debt securities
417
(642)
444
81
Net change in debit valuation adjustments
—
(25)
(135)
(419)
Net change in derivatives
2,830
(366)
3,100
(317)
Employee benefit plan adjustments
27
6
75
25
Net change in foreign currency translation adjustments
21
(23)
(30)
(6)
Other comprehensive income (loss)
3,295
(1,050)
3,454
(636)
Comprehensive income (loss)
$
10,191
$
6,752
$
23,921
$
22,735
See accompanying Notes to Consolidated Financial Statements.
Bank of America 50
Bank of America Corporation and Subsidiaries
Consolidated Balance Sheet
September 30 2024
December 31 2023
(Dollars in millions)
Assets
Cash and due from banks
$
24,847
$
27,892
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks
270,742
305,181
Cash and cash equivalents
295,589
333,073
Time deposits placed and other short-term investments
8,151
8,346
Federal funds sold and securities borrowed or purchased under agreements to resell
(includes $176,229 and $133,053 measured at fair value)
337,706
280,624
Trading account assets (includes $181,996 and $130,815pledged as collateral)
342,135
277,354
Derivative assets
34,182
39,323
Debt securities:
Carried at fair value
325,436
276,852
Held-to-maturity, at cost (fair value $481,887 and $496,597)
567,553
594,555
Total debt securities
892,989
871,407
Loans and leases (includes $4,172and $3,569 measured at fair value)
1,075,800
1,053,732
Allowance for loan and lease losses
(13,251)
(13,342)
Loans and leases, net of allowance
1,062,549
1,040,390
Premises and equipment, net
12,033
11,855
Goodwill
69,021
69,021
Loans held-for-sale (includes $3,141 and $2,059measured at fair value)
10,351
6,002
Customer and other receivables
91,267
81,881
Other assets (includes $17,254 and $11,861measured at fair value)
168,320
160,875
Total assets
$
3,324,293
$
3,180,151
Liabilities
Deposits in U.S. offices:
Noninterest-bearing
$
498,263
$
530,619
Interest-bearing (includes $443 and $284measured at fair value)
1,308,856
1,273,904
Deposits in non-U.S. offices:
Noninterest-bearing
15,457
16,427
Interest-bearing
107,776
102,877
Total deposits
1,930,352
1,923,827
Federal funds purchased and securities loaned or sold under agreements to repurchase
(includes $243,431 and $178,609 measured at fair value)
397,958
283,887
Trading account liabilities
98,316
95,530
Derivative liabilities
43,131
43,432
Short-term borrowings (includes$6,478and $4,690measured at fair value)
38,440
32,098
Accrued expenses and other liabilities (includes $16,036 and $11,473measured at fair value
and $1,100 and $1,209 of reserve for unfunded lending commitments)
222,657
207,527
Long-term debt (includes $53,554 and $42,809 measured at fair value)
296,927
302,204
Total liabilities
3,027,781
2,888,505
Commitments and contingencies (Note 6 – Securitizations and Other Variable Interest Entities
and Note 10 – Commitments and Contingencies)
Shareholders’ equity
Preferred stock, $0.01 par value; authorized – 100,000,000shares; issued and outstanding – 3,933,917 and 4,088,099 shares
24,554
28,397
Common stock and additional paid-in capital, $0.01 par value; authorized – 12,800,000,000shares;
issued and outstanding – 7,688,767,832 and 7,895,457,665 shares
48,338
56,365
Retained earnings
237,954
224,672
Accumulated other comprehensive income (loss)
(14,334)
(17,788)
Total shareholders’ equity
296,512
291,646
Total liabilities and shareholders’ equity
$
3,324,293
$
3,180,151
Assets of consolidated variable interest entities included in total assets above (isolated to settle the liabilities of the variable interest entities)
Trading account assets
$
6,280
$
6,054
Loans and leases
19,267
18,276
Allowance for loan and lease losses
(923)
(826)
Loans and leases, net of allowance
18,344
17,450
All other assets
278
269
Total assets of consolidated variable interest entities
$
24,902
$
23,773
Liabilities of consolidated variable interest entities included in total liabilities above
Short-term borrowings (includes $0and $23 of non-recourse short-term borrowings)
$
3,542
$
2,957
Long-term debt (includes $8,873 and $8,456 of non-recourse debt)
8,873
8,456
All other liabilities (includes $22and $19 of non-recourse liabilities)
22
19
Total liabilities of consolidated variable interest entities
$
12,437
$
11,432
See accompanying Notes to Consolidated Financial Statements.
51Bank of America
Bank of America Corporation and Subsidiaries
Consolidated Statement of Changes in Shareholders’ Equity
Preferred Stock
Common Stock and Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Income (Loss)
Total Shareholders’ Equity
(In millions)
Shares
Amount
Balance, June 30, 2024
$
26,548
7,774.8
$
51,376
$
233,597
$
(17,629)
$
293,892
Net income
6,896
6,896
Net change in debt securities
417
417
Net change in derivatives
2,830
2,830
Employee benefit plan adjustments
27
27
Net change in foreign currency translation adjustments
21
21
Dividends declared:
Common
(2,021)
(2,021)
Preferred
(510)
(510)
Redemption of preferred stock
(1,994)
(6)
(2,000)
Common stock issued under employee plans, net, and other
2.2
496
(2)
494
Common stock repurchased
(88.2)
(3,534)
(3,534)
Balance, September 30, 2024
$
24,554
7,688.8
$
48,338
$
237,954
$
(14,334)
$
296,512
Balance, December 31, 2023
$
28,397
7,895.5
$
56,365
$
224,672
$
(17,788)
$
291,646
Net income
20,467
20,467
Net change in debt securities
444
444
Net change in debit valuation adjustments
(135)
(135)
Net change in derivatives
3,100
3,100
Employee benefit plan adjustments
75
75
Net change in foreign currency translation adjustments
(30)
(30)
Dividends declared:
Common
(5,818)
(5,818)
Preferred
(1,352)
(1,352)
Redemption of preferred stock
(3,843)
(11)
(3,854)
Common stock issued under employee plans, net, and other
46.6
1,542
(4)
1,538
Common stock repurchased
(253.3)
(9,569)
(9,569)
Balance, September 30, 2024
$
24,554
7,688.8
$
48,338
$
237,954
$
(14,334)
$
296,512
Balance, June 30, 2023
$
28,397
7,953.6
$
57,267
$
218,397
$
(20,742)
$
283,319
Net income
7,802
7,802
Net change in debt securities
(642)
(642)
Net change in debit valuation adjustments
(25)
(25)
Net change in derivatives
(366)
(366)
Employee benefit plan adjustments
6
6
Net change in foreign currency translation adjustments
(23)
(23)
Dividends declared:
Common
(1,919)
(1,919)
Preferred
(531)
(531)
Common stock issued under employee plans, net, and other
2.3
443
443
Common stock repurchased
(32.5)
(1,000)
(1,000)
Balance, September 30, 2023
$
28,397
7,923.4
$
56,710
$
223,749
$
(21,792)
$
287,064
Balance, December 31, 2022
$
28,397
7,996.8
$
58,953
$
207,003
$
(21,156)
$
273,197
Cumulative adjustment for adoption of credit loss accounting
standard
184
184
Net income
23,371
23,371
Net change in debt securities
81
81
Net change in debit valuation adjustments
(419)
(419)
Net change in derivatives
(317)
(317)
Employee benefit plan adjustments
25
25
Net change in foreign currency translation adjustments
(6)
(6)
Dividends declared:
Common
(5,459)
(5,459)
Preferred
(1,343)
(1,343)
Common stock issued under employee plans, net, and other
45.1
1,522
(7)
1,515
Common stock repurchased
(118.5)
(3,765)
(3,765)
Balance, September 30, 2023
$
28,397
7,923.4
$
56,710
$
223,749
$
(21,792)
$
287,064
See accompanying Notes to Consolidated Financial Statements.
Bank of America 52
Bank of America Corporation and Subsidiaries
Consolidated Statement of Cash Flows
Nine Months Ended September 30
(Dollars in millions)
2024
2023
Operating activities
Net income
$
20,467
$
23,371
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses
4,369
3,290
Losses on sales of debt securities
6
404
Depreciation and amortization
1,630
1,530
Net (accretion) amortization of discount/premium on debt securities
(354)
155
Deferred income taxes
(1,228)
(1,440)
Stock-based compensation
2,542
2,214
Loans held-for-sale:
Originations and purchases
(26,279)
(11,545)
Proceeds from sales and paydowns of loans originally classified as held for sale and instruments
from related securitization activities
21,646
10,716
Net change in:
Trading and derivative assets/liabilities
(56,685)
4,681
Other assets
(20,257)
(6,887)
Accrued expenses and other liabilities
14,581
(18,086)
Other operating activities, net
4,843
3,855
Net cash provided by (used in) operating activities
(34,719)
12,258
Investing activities
Net change in:
Time deposits placed and other short-term investments
195
(736)
Federal funds sold and securities borrowed or purchased under agreements to resell
(54,582)
(41,675)
Debt securities carried at fair value:
Proceeds from sales
52,594
94,080
Proceeds from paydowns and maturities
217,602
50,008
Purchases
(312,186)
(90,855)
Held-to-maturity debt securities:
Proceeds from paydowns and maturities
26,033
28,517
Purchases
—
(98)
Loans and leases:
Proceeds from sales of loans originally classified as held for investment and instruments
from related securitization activities
7,129
7,734
Purchases
(4,151)
(3,935)
Other changes in loans and leases, net
(29,874)
(9,973)
Other investing activities, net
(2,863)
(4,271)
Net cash provided by (used in) investing activities
(100,103)
28,796
Financing activities
Net change in:
Deposits
6,525
(45,740)
Federal funds purchased and securities loaned or sold under agreements to repurchase
114,071
105,068
Short-term borrowings
7,623
13,264
Long-term debt:
Proceeds from issuance
42,593
52,955
Retirement
(52,711)
(32,167)
Preferred stock redemption
(3,854)
—
Common stock repurchased
(9,569)
(3,765)
Cash dividends paid
(7,228)
(6,854)
Other financing activities, net
(313)
(707)
Net cash provided by financing activities
97,137
82,054
Effect of exchange rate changes on cash and cash equivalents
201
(1,585)
Net increase (decrease) in cash and cash equivalents
(37,484)
121,523
Cash and cash equivalents at January 1
333,073
230,203
Cash and cash equivalents at September 30
$
295,589
$
351,726
See accompanying Notes to Consolidated Financial Statements.
53Bank of America
Bank of America Corporation and Subsidiaries
Notes to Consolidated Financial Statements
NOTE 1 Summary of Significant Accounting Principles
Bank of America Corporation, a bank holding company and a financial holding company, provides a diverse range of financial services and products throughout the U.S. and in certain international markets. The term “the Corporation” as used herein may refer to Bank of America Corporation, individually, Bank of America Corporation and its subsidiaries, or certain of Bank of America Corporation’s subsidiaries or affiliates.
Principles of Consolidation and Basis of Presentation
The Consolidated Financial Statements include the accounts of the Corporation and its majority-owned subsidiaries and those variable interest entities (VIEs) where the Corporation is the primary beneficiary. Intercompany accounts and transactions have been eliminated. Results of operations of acquired companies are included from the dates of acquisition, and for VIEs, from the dates that the Corporation became the primary beneficiary. Assets held in an agency or fiduciary capacity are not included in the Consolidated Financial Statements. The Corporation accounts for investments in companies for which it owns a voting interest and for which it has the ability to exercise
significant influence over operating and financing decisions using the equity method of accounting. These investments, which include the Corporation’s interests in affordable housing and renewable energy partnerships, are recorded in other assets. Equity method investments are subject to impairment testing, and the Corporation’s proportionate share of income or loss is included in other income.
The preparation of the Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could materially differ from those estimates and assumptions.
These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements, and related notes thereto, of the Corporation’s 2023 Annual Report on Form 10-K.
The nature of the Corporation’s business is such that the results of any interim period are not necessarily indicative of results for a full year. In the opinion of management, all adjustments, which consist of normal recurring adjustments necessary for a fair statement of the interim period results, have been made. The Corporation evaluates subsequent events through the date of filing with the Securities and Exchange Commission (SEC).
Bank of America 54
NOTE 2Net Interest Income and Noninterest Income
The table below presents the Corporation’s net interest income and noninterest income disaggregated by revenue source for the three and nine months ended September 30, 2024 and 2023. For more information, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K. For a disaggregation of noninterest income by business segment and All Other, see Note 17 – Business Segment Information.
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Net interest income
Interest income
Loans and leases
$
15,725
$
14,830
$
46,303
$
41,897
Debt securities
6,833
4,658
19,295
14,809
Federal funds sold and securities borrowed or purchased under agreements to resell
5,196
4,888
15,530
13,555
Trading account assets
2,726
2,217
7,697
6,321
Other interest income (1)
7,011
7,031
21,805
18,051
Total interest income
37,491
33,624
110,630
94,633
Interest expense
Deposits
10,125
7,340
28,918
17,439
Short-term borrowings
8,940
7,629
26,545
22,164
Trading account liabilities
538
510
1,624
1,486
Long-term debt
3,921
3,766
11,842
10,559
Total interest expense
23,524
19,245
68,929
51,648
Net interest income
$
13,967
$
14,379
$
41,701
$
42,985
Noninterest income
Fees and commissions
Card income
Interchange fees (2)
$
1,030
$
994
$
2,984
$
2,973
Other card income
588
526
1,678
1,562
Total card income
1,618
1,520
4,662
4,535
Service charges
Deposit-related fees
1,198
1,124
3,492
3,266
Lending-related fees
354
340
1,009
972
Total service charges
1,552
1,464
4,501
4,238
Investment and brokerage services
Asset management fees
3,533
3,103
10,173
8,990
Brokerage fees
1,013
860
2,880
2,664
Total investment and brokerage services
4,546
3,963
13,053
11,654
Investment banking fees
Underwriting income
742
531
2,512
1,757
Syndication fees
274
209
886
620
Financial advisory services
387
448
1,134
1,186
Total investment banking fees
1,403
1,188
4,532
3,563
Total fees and commissions
9,119
8,135
26,748
23,990
Market making and similar activities
3,278
3,325
10,464
11,734
Other income (loss)
(1,019)
(672)
(2,373)
(2,087)
Total noninterest income
$
11,378
$
10,788
$
34,839
$
33,637
(1)Includes interest income on interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks of $4.1 billion and $4.6 billion for the three months ended September 30, 2024 and 2023, and $13.2 billion and $10.9 billion for the nine months ended September 30, 2024 and 2023.
(2)Gross interchange fees and merchant income are $3.4 billion at both the three months ended September 30, 2024 and 2023 and both are presented net of $2.4 billion of expenses for rewards and partner payments as well as certain other card costs for the same periods. Gross interchange fees and merchant income were $10.1 billion and $9.9 billion for the nine months ended September 30, 2024 and 2023 and are presented net of $7.1 billion and $7.0 billion of expenses for rewards and partner payments as well as certain other card costs for the same periods.
55Bank of America
NOTE 3 Derivatives
Derivative Balances
Derivatives are entered into on behalf of customers, for trading or to support risk management activities. Derivatives used in risk management activities include derivatives that may or may not be designated in qualifying hedge accounting relationships. Derivatives that are not designated in qualifying hedge accounting relationships are referred to as other risk management derivatives. For more information on the Corporation’s derivatives and hedging activities, see Note 1 – Summary of Significant Accounting Principles and Note 3 –
Derivatives to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K. The following tables present derivative instruments included on the Consolidated Balance Sheet in derivative assets and liabilities at September 30, 2024 and December 31, 2023. Balances are presented on a gross basis, prior to the application of counterparty and cash collateral netting. Total derivative assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements and have been reduced by cash collateral received or paid.
(1)Represents the total contract/notional amount of derivative assets and liabilities outstanding.
(2)Includes certain out-of-the-money purchased options that have a liability amount primarily due to the deferral of option premiums to the end of the contract.
(3)Includes certain out-of-the-money written options that have an asset amount primarily due to the deferral of option premiums to the end of the contract.
(4)The net derivative asset (liability) and notional amount of written credit derivatives for which the Corporation held purchased credit derivatives with identical underlying referenced names were $699 million and $484.2 billion at September 30, 2024.
(1)Represents the total contract/notional amount of derivative assets and liabilities outstanding.
(2)Includes certain out-of-the-money purchased options that have a liability amount primarily due to the deferral of option premiums to the end of the contract.
(3)Includes certain out-of-the-money written options that have an asset amount primarily due to the deferral of option premiums to the end of the contract.
(4)The net derivative asset (liability) and notional amount of written credit derivatives for which the Corporation held purchased credit derivatives with identical underlying referenced names were $520 million and $266.5 billion at December 31, 2023.
Offsetting of Derivatives
The Corporation enters into International Swaps and Derivatives Association, Inc. (ISDA) master netting agreements or similar agreements with substantially all of the Corporation’s derivative counterparties. For more information, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
The following table presents derivative instruments included in derivative assets and liabilities on the Consolidated Balance Sheet at September 30, 2024 and December 31, 2023 by primary risk (e.g., interest rate risk) and the platform, where
applicable, on which these derivatives are transacted. Balances are presented on a gross basis, prior to the application of counterparty and cash collateral netting. Total gross derivative assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements, which include reducing the balance for counterparty netting and cash collateral received or paid.
For more information on offsetting of securities financing agreements, see Note 9 – Securities Financing Agreements, Collateral and Restricted Cash.
57Bank of America
Offsetting of Derivatives (1)
Derivative Assets
Derivative Liabilities
Derivative Assets
Derivative Liabilities
(Dollars in billions)
September 30, 2024
December 31, 2023
Interest rate contracts
Over-the-counter
$
113.1
$
110.5
$
119.2
$
117.7
Exchange-traded
0.2
0.2
0.2
0.2
Over-the-counter cleared
2.3
2.0
4.4
3.3
Foreign exchange contracts
Over-the-counter
89.9
90.4
89.7
90.4
Over-the-counter cleared
0.1
0.1
0.2
0.2
Equity contracts
Over-the-counter
29.1
42.6
24.7
32.2
Exchange-traded
53.3
55.5
34.4
33.9
Commodity contracts
Over-the-counter
8.8
9.6
6.6
8.4
Exchange-traded
2.0
2.1
2.3
2.1
Over-the-counter cleared
0.3
0.4
0.4
0.5
Credit derivatives
Over-the-counter
4.9
5.2
5.7
5.6
Total gross derivative assets/liabilities, before netting
Over-the-counter
245.8
258.3
245.9
254.3
Exchange-traded
55.5
57.8
36.9
36.2
Over-the-counter cleared
2.7
2.5
5.0
4.0
Less: Legally enforceable master netting agreements and cash collateral received/paid
Over-the-counter
(216.6)
(224.4)
(212.1)
(218.9)
Exchange-traded
(54.1)
(54.1)
(35.4)
(35.4)
Over-the-counter cleared
(2.4)
(2.4)
(3.5)
(3.5)
Derivative assets/liabilities, after netting
30.9
37.7
36.8
36.7
Other gross derivative assets/liabilities (2)
3.3
5.4
2.5
6.7
Total derivative assets/liabilities
34.2
43.1
39.3
43.4
Less: Financial instruments collateral (3)
(15.3)
(16.3)
(15.5)
(13.0)
Total net derivative assets/liabilities
$
18.9
$
26.8
$
23.8
$
30.4
(1)Over-the-counter derivatives include bilateral transactions between the Corporation and a particular counterparty. Over-the-counter cleared derivatives include bilateral transactions between the Corporation and a counterparty where the transaction is cleared through a clearinghouse. Exchange-traded derivatives include listed options transacted on an exchange.
(2)Consists of derivatives entered into under master netting agreements where the enforceability of these agreements is uncertain under bankruptcy laws in some countries or industries.
(3)Amounts are limited to the derivative asset/liability balance and, accordingly, do not include excess collateral received/pledged. Financial instruments collateral includes securities collateral received or pledged and cash securities held and posted at third-party custodians that are not offset on the Consolidated Balance Sheet but shown as a reduction to derive net derivative assets and liabilities.
Derivatives Designated as Accounting Hedges
The Corporation uses various types of interest rate and foreign exchange derivative contracts to protect against changes in the fair value of its assets and liabilities due to fluctuations in interest rates and foreign exchange rates (fair value hedges). The Corporation also uses these types of contracts to protect against changes in the cash flows of its assets and liabilities, and other forecasted transactions (cash flow hedges). The Corporation hedges its net investment in consolidated non-U.S.
operations determined to have functional currencies other than the U.S. dollar using forward exchange contracts and cross-currency basis swaps, and by issuing foreign currency- denominated debt (net investment hedges).
Fair Value Hedges
The following table summarizes information related to fair value hedges for the three and nine months ended September 30, 2024 and 2023.
Bank of America 58
Gains and Losses on Derivatives and Hedged Items Designated in Fair Value Hedges
Three Months Ended September 30, 2024
Three Months Ended September 30, 2023
(Dollars in millions)
Derivative
Hedged Item
Derivative
Hedged Item
Interest rate risk on long-term debt (1)
$
6,091
$
(6,090)
$
(4,339)
$
4,299
Interest rate and foreign currency risk (2)
(576)
581
114
(113)
Interest rate risk on available-for-sale securities (3)
(6,453)
6,446
1,934
(1,927)
Price risk on commodity inventory (4)
(337)
337
410
(410)
Total
$
(1,275)
$
1,274
$
(1,881)
$
1,849
Nine Months Ended September 30, 2024
Nine Months Ended September 30, 2023
Derivative
Hedged Item
Derivative
Hedged Item
Interest rate risk on long-term debt (1)
$
2,501
$
(2,519)
$
(4,581)
$
4,510
Interest rate and foreign currency risk (2)
47
(33)
229
(225)
Interest rate risk on available-for-sale securities (3)
(3,648)
3,620
787
(795)
Price risk on commodity inventory (4)
(723)
723
582
(582)
Total
$
(1,823)
$
1,791
$
(2,983)
$
2,908
(1)Amounts are recorded in interest expense in the Consolidated Statement of Income.
(2)Represents cross-currency interest rate swaps related to available-for-sale debt securities and long-term debt. For the three and nine months ended September 30, 2024, the derivative amount includes gains (losses) of $(6) million and $11 million in interest income, $(577) million and $20 million in market making and similar activities, and $7 million and $16 million in accumulated other comprehensive income (OCI). For the same periods in 2023, the derivative amount includes gains (losses) of $21 million and $22 million in interest income, $2 million and $9 million in interest expense, $90 million and $195 million in market making and similar activities, and $1 million and $3 million in accumulated OCI. Line item totals are in the Consolidated Statement of Income and on the Consolidated Balance Sheet.
(3)Amounts are recorded in interest income in the Consolidated Statement of Income.
(4)Amounts are recorded in market making and similar activities in the Consolidated Statement of Income.
The table below summarizes the carrying value of hedged assets and liabilities that are designated in fair value hedging relationships, along with the cumulative amount of gains and losses on the hedged assets and liabilities that are included in their carrying value. There is no impact to earnings for the cumulative amount of these fair value hedging adjustments as long as the hedging relationships remain open through the
hedged period. Instead, the open hedges have the effect of synthetically converting the hedged assets and liabilities into variable-rate instruments. If an open hedge is de-designated prior to the derivative’s maturity, any cumulative fair value adjustments at the de-designation date are then amortized or accreted into earnings over the remaining life of the hedged assets or liabilities.
Designated Fair Value Hedged Assets and Liabilities
September 30, 2024
December 31, 2023
(Dollars in millions)
Carrying Value
Cumulative
Fair Value
Adjustments (1)
Carrying Value
Cumulative
Fair Value
Adjustments (1)
Long-term debt
$
122,287
$
(2,195)
$
203,986
$
(5,767)
Available-for-sale debt securities (2, 3)
232,010
1,720
134,077
(1,793)
Trading account assets (4)
3,792
288
7,475
414
(1)Increase (decrease) to carrying value.
(2)These amounts include the amortized cost of the financial assets in closed portfolios used to designate hedging relationships in which the hedged item is a stated layer that is expected to be remaining at the end of the hedging relationship (i.e. portfolio layer hedging relationship). At September 30, 2024 and December 31, 2023, the amortized cost of the closed portfolios used in these hedging relationships was $36.5 billion and $39.1 billion, of which $23.8 billion and $22.5 billion were designated in a portfolio layer hedging relationship. At September 30, 2024 and December 31, 2023, the cumulative adjustment associated with these hedging relationships was an increase of $387 million and $48 million.
(3)Carrying value represents amortized cost.
(4)Represents hedging activities related to certain commodities inventory.
At September 30, 2024 and December 31, 2023, the fair value adjustments from de-designated long-term debt hedges decreased the long-term debt carrying value by $10.9 billion and $10.5 billion. The fair value adjustments from de-designated available-for-sale (AFS) debt securities hedges decreased the AFS debt securities carrying value by $4.7 billion and $5.6 billion. The fair value adjustments are being amortized or accreted into interest over the contractual lives of the assets or liabilities, along with any premiums or discounts.
Cash Flow and Net Investment Hedges
The following table summarizes certain information related to cash flow hedges and net investment hedges for the three and nine months ended September 30, 2024 and 2023. Of the
$4.9 billion after-tax net loss ($6.6 billion pretax) on derivatives in accumulated OCI at September 30, 2024, losses of $2.4 billion after-tax ($3.1 billion pretax) related to both open and closed cash flow hedges are expected to be reclassified into earnings in the next 12 months. These net losses reclassified into earnings are expected to primarily decrease net interest income related to the respective hedged items. For open cash flow hedges, the maximum length of time over which forecasted transactions are hedged is approximately six years. For terminated cash flow hedges, the time period over which the forecasted transactions will be recognized in interest income is approximately five years, with the aggregated amount beyond this time period being insignificant.
59Bank of America
Gains and Losses on Derivatives Designated as Cash Flow and Net Investment Hedges
Gains (Losses) Recognized in Accumulated OCI on Derivatives
Gains (Losses) in Income Reclassified from Accumulated OCI
Gains (Losses) Recognized in Accumulated OCI on Derivatives
Gains (Losses) in Income Reclassified from Accumulated OCI
(Dollars in millions, amounts pretax)
Three Months Ended September 30, 2024
Nine Months Ended September 30, 2024
Cash flow hedges
Interest rate risk on variable-rate portfolios (1)
$
2,863
$
(905)
$
1,808
$
(2,301)
Price risk on forecasted MBS purchases (1)
—
(2)
—
(6)
Price risk on certain compensation plans (2)
8
8
27
25
Total
$
2,871
$
(899)
$
1,835
$
(2,282)
Net investment hedges
Foreign exchange risk (3)
$
(1,100)
$
(140)
$
292
$
(140)
Three Months Ended September 30, 2023
Nine Months Ended September 30, 2023
Cash flow hedges
Interest rate risk on variable-rate portfolios (1)
$
(737)
$
(263)
$
(1,065)
$
(612)
Price risk on forecasted MBS purchases (1)
2
—
6
—
Price risk on certain compensation plans (2)
(8)
7
28
18
Total
$
(743)
$
(256)
$
(1,031)
$
(594)
Net investment hedges
Foreign exchange risk (3)
$
802
$
133
$
334
$
136
(1)Amounts reclassified from accumulated OCI are recorded in interest income in the Consolidated Statement of Income.
(2)Amounts reclassified from accumulated OCI are recorded in compensation and benefits expense in the Consolidated Statement of Income.
(3)Amounts reclassified from accumulated OCI are recorded in other income in the Consolidated Statement of Income. For the three and nine months ended September 30, 2024, amounts excluded from effectiveness testing and recognized in market making and similar activities were gains of $72 million and $178 million. For the same periods in 2023, amounts excluded from effectiveness testing and recognized in market making and similar activities were gains of $36 million and $145 million.
Other Risk Management Derivatives
Other risk management derivatives are used by the Corporation to reduce certain risk exposures by economically hedging various assets and liabilities. The table below presents gains (losses) on these derivatives for the three and nine months ended September 30, 2024 and 2023. These gains (losses) are largely offset by the income or expense recorded on the hedged item.
Gains and Losses on Other Risk Management Derivatives
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Interest rate risk on mortgage activities (1, 2)
$
55
$
(54)
$
15
$
(51)
Credit risk on loans (2)
(15)
(7)
(30)
(47)
Interest rate and foreign currency risk on asset and liability management activities (3)
(1,221)
381
(1,048)
1,040
Price risk on certain compensation plans (4)
152
(199)
447
184
(1)Includes hedges of interest rate risk on mortgage servicing rights (MSRs) and interest rate lock commitments (IRLCs) to originate mortgage loans that will be held for sale.
(2)Gains (losses) on these derivatives are recorded in other income.
(3)Gains (losses) on these derivatives are recorded in market making and similar activities.
(4)Gains (losses) on these derivatives are recorded in compensation and benefits expense.
Transfers of Financial Assets with Risk Retained through Derivatives
The Corporation enters into certain transactions involving the transfer of financial assets that are accounted for as sales where substantially all of the economic exposure to the transferred financial assets is retained through derivatives (e.g., interest rate and/or credit), but the Corporation does not retain control over the assets transferred. At September 30, 2024 and December 31, 2023, the Corporation had transferred $3.9 billion and $4.1 billion of non-U.S. government-guaranteed mortgage-backed securities (MBS) to a third-party trust and retained economic exposure to the transferred assets through derivative contracts. In connection with these transfers, the Corporation received gross cash proceeds of $4.0 billion and $4.2 billion at the transfer dates. At September 30, 2024 and December 31, 2023, the fair value of the transferred securities was $3.9 billion and $4.1 billion.
Sales and Trading Revenue
The Corporation enters into trading derivatives to facilitate client transactions and to manage risk exposures arising from trading
account assets and liabilities. It is the Corporation’s policy to include these derivative instruments in its trading activities, which include derivatives and non-derivative cash instruments. The resulting risk from these derivatives is managed on a portfolio basis as part of the Corporation’s Global Markets business segment. For more information on sales and trading revenue, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
The following table, which includes both derivatives and non-derivative cash instruments, identifies the amounts in the respective income statement line items attributable to the Corporation’s sales and trading revenue in Global Markets, categorized by primary risk, for the three and nine months ended September 30, 2024 and 2023. This table includes debit valuation adjustment (DVA) and funding valuation adjustment (FVA) gains (losses). Global Markets results in Note 17 – Business Segment Information are presented on a fully taxable-equivalent (FTE) basis. The following table is not presented on an FTE basis.
Bank of America 60
Sales and Trading Revenue
Market making and similar activities
Net Interest Income
Other (1)
Total
Market making and similar activities
Net Interest Income
Other (1)
Total
(Dollars in millions)
Three Months Ended September 30, 2024
Nine Months Ended September 30, 2024
Interest rate risk
$
612
$
364
$
90
$
1,066
$
2,024
$
839
$
275
$
3,138
Foreign exchange risk
482
36
48
566
1,368
99
87
1,554
Equity risk
1,839
(342)
498
1,995
5,540
(1,110)
1,375
5,805
Credit risk
323
618
142
1,083
1,145
1,822
471
3,438
Other risk (2)
92
25
(159)
(42)
318
85
(190)
213
Total sales and trading revenue
$
3,348
$
701
$
619
$
4,668
$
10,395
$
1,735
$
2,018
$
14,148
Three Months Ended September 30, 2023
Nine Months Ended September 30, 2023
Interest rate risk
$
815
$
80
$
90
$
985
$
2,867
$
218
$
301
$
3,386
Foreign exchange risk
446
32
17
495
1,355
113
55
1,523
Equity risk
1,458
(218)
426
1,666
5,116
(1,566)
1,345
4,895
Credit risk
349
590
93
1,032
1,140
1,865
303
3,308
Other risk (2)
126
(11)
3
118
521
(153)
(8)
360
Total sales and trading revenue
$
3,194
$
473
$
629
$
4,296
$
10,999
$
477
$
1,996
$
13,472
(1)Represents amounts in investment and brokerage services and other income that are recorded in Global Markets and included in the definition of sales and trading revenue. Includes investment and brokerage services revenue of $562 million and $1.6 billion for the three and nine months ended September 30, 2024 compared to $474 million and $1.5 billion for the same periods in 2023.
(2)Includes commodity risk.
Credit Derivatives
The Corporation enters into credit derivatives primarily to facilitate client transactions and to manage credit risk exposures. Credit derivatives are classified as investment and non-investment grade based on the credit quality of the underlying referenced obligation. The Corporation considers ratings of BBB- or higher as investment grade. Non-investment grade includes non-rated credit derivative instruments. The Corporation discloses internal categorizations of investment
grade and non-investment grade consistent with how risk is managed for these instruments. For more information on credit derivatives, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Credit derivative instruments where the Corporation is the seller of credit protection and their expiration at September 30, 2024 and December 31, 2023 are summarized in the following table.
61Bank of America
Credit Derivative Instruments
Less than One Year
One to Three Years
Three to Five Years
Over Five Years
Total
September 30, 2024
(Dollars in millions)
Carrying Value
Credit default swaps:
Investment grade
$
—
$
1
$
17
$
26
$
44
Non-investment grade
6
147
745
460
1,358
Total
6
148
762
486
1,402
Total return swaps/options:
Investment grade
27
—
—
—
27
Non-investment grade
105
—
—
—
105
Total
132
—
—
—
132
Total credit derivatives
$
138
$
148
$
762
$
486
$
1,534
Credit-related notes:
Investment grade
$
—
$
—
$
4
$
599
$
603
Non-investment grade
4
1
20
1,151
1,176
Total credit-related notes
$
4
$
1
$
24
$
1,750
$
1,779
Maximum Payout/Notional
Credit default swaps:
Investment grade
$
40,745
$
86,391
$
214,340
$
53,247
$
394,723
Non-investment grade
15,779
32,145
60,171
11,999
120,094
Total
56,524
118,536
274,511
65,246
514,817
Total return swaps/options:
Investment grade
62,281
1,502
1,287
334
65,404
Non-investment grade
23,181
2,043
643
103
25,970
Total
85,462
3,545
1,930
437
91,374
Total credit derivatives
$
141,986
$
122,081
$
276,441
$
65,683
$
606,191
December 31, 2023
Carrying Value
Credit default swaps:
Investment grade
$
—
$
11
$
26
$
20
$
57
Non-investment grade
38
277
601
595
1,511
Total
38
288
627
615
1,568
Total return swaps/options:
Investment grade
59
—
—
—
59
Non-investment grade
149
69
56
5
279
Total
208
69
56
5
338
Total credit derivatives
$
246
$
357
$
683
$
620
$
1,906
Credit-related notes:
Investment grade
$
—
$
—
$
—
$
859
$
859
Non-investment grade
—
5
16
1,103
1,124
Total credit-related notes
$
—
$
5
$
16
$
1,962
$
1,983
Maximum Payout/Notional
Credit default swaps:
Investment grade
$
33,750
$
65,015
$
83,313
$
17,023
$
199,101
Non-investment grade
18,061
32,155
33,934
5,827
89,977
Total
51,811
97,170
117,247
22,850
289,078
Total return swaps/options:
Investment grade
40,515
1,503
1,561
23
43,602
Non-investment grade
20,694
1,414
1,907
988
25,003
Total
61,209
2,917
3,468
1,011
68,605
Total credit derivatives
$
113,020
$
100,087
$
120,715
$
23,861
$
357,683
The notional amount represents the maximum amount payable by the Corporation for most credit derivatives. However, the Corporation does not monitor its exposure to credit derivatives based solely on the notional amount because this measure does not take into consideration the probability of occurrence. As such, the notional amount is not a reliable indicator of the Corporation’s exposure to these contracts. Instead, a risk framework is used to define risk tolerances and establish limits so that certain credit risk-related losses occur within acceptable, predefined limits.
Credit-related notes in the table above include investments in securities issued by collateralized debt obligation (CDO), collateralized loan obligation (CLO) and credit-linked note
vehicles. These instruments are primarily classified as trading securities. The carrying value of these instruments equals the Corporation’s maximum exposure to loss. The Corporation is not obligated to make any payments to the entities under the terms of the securities owned.
Credit-related Contingent Features and Collateral
Certain of the Corporation’s derivative contracts contain credit risk-related contingent features, primarily in the form of ISDA master netting agreements and credit support documentation that enhance the creditworthiness of these instruments compared to other obligations of the respective counterparty with whom the Corporation has transacted. These contingent features may be for the benefit of the Corporation as well as its
Bank of America 62
counterparties with respect to changes in the Corporation’s creditworthiness and the mark-to-market exposure under the derivative transactions. At September 30, 2024 and December 31, 2023, the Corporation held cash and securities collateral of $106.5 billion and $104.1 billion and posted cash and securities collateral of $95.6 billion and $93.4 billion in the normal course of business under derivative agreements, excluding cross-product margining agreements where clients are permitted to margin on a net basis for both derivative and secured financing arrangements.
In connection with certain OTC derivative contracts and other trading agreements, the Corporation can be required to provide additional collateral or to terminate transactions with certain counterparties in the event of a downgrade of the senior debt ratings of the Corporation or certain subsidiaries. The amount of additional collateral required depends on the contract and is usually a fixed incremental amount and/or the market value of the exposure. For more information on credit-related contingent features and collateral, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
At September 30, 2024, the amount of collateral, calculated based on the terms of the contracts, that the Corporation and certain subsidiaries could be required to post to counterparties but had not yet posted to counterparties was $3.8 billion, including $2.0 billion for Bank of America, National Association (BANA).
Some counterparties are currently able to unilaterally terminate certain contracts, or the Corporation or certain subsidiaries may be required to take other action such as find a suitable replacement or obtain a guarantee. At September 30, 2024 and December 31, 2023, the liability recorded for these derivative contracts was not significant.
The following table presents the amount of additional collateral that would have been contractually required by derivative contracts and other trading agreements at September 30, 2024 if the rating agencies had downgraded their long-term senior debt ratings for the Corporation or certain subsidiaries by one incremental notch and by an additional second incremental notch. The table also presents derivative liabilities that would be subject to unilateral termination by counterparties upon downgrade of the Corporation's or certain subsidiaries’ long-term senior debt ratings.
Additional Collateral Required to be Posted and Derivative Liabilities Subject to Unilateral Termination Upon Downgrade at September 30, 2024
(Dollars in millions)
One Incremental Notch
Second Incremental Notch
Additional collateral required to be posted upon downgrade
Bank of America Corporation
$
116
$
740
Bank of America, N.A. and subsidiaries (1)
37
622
Derivative liabilities subject to unilateral termination upon downgrade
Derivative liabilities
$
6
$
64
Collateral posted
4
23
(1)Included in Bank of America Corporation collateral requirements in this table.
Valuation Adjustments on Derivatives
The table below presents credit valuation adjustment (CVA), DVA and FVA gains (losses) on derivatives (excluding the effect of any related hedge activities), which are recorded in market making and similar activities, for the three and nine months ended September 30, 2024 and 2023. For more information on the valuation adjustments on derivatives, see Note 3 – Derivatives to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Valuation Adjustments Gains (Losses) on Derivatives (1)
Three Months Ended September 30
(Dollars in millions)
2024
2023
Derivative assets (CVA)
$
(32)
$
30
Derivative assets/liabilities (FVA)
(12)
21
Derivative liabilities (DVA)
2
18
Nine Months Ended September 30
(Dollars in millions)
2024
2023
Derivative assets (CVA)
$
(1)
$
151
Derivative assets/liabilities (FVA)
(27)
4
Derivative liabilities (DVA)
(40)
(66)
(1)At September 30, 2024 and December 31, 2023, cumulative CVA reduced the derivative assets balance by $360 million and $359 million, cumulative FVA reduced the net derivative balance by $114 million and $87 million, and cumulative DVA reduced the derivative liabilities balance by $259 million and $299 million.
63Bank of America
NOTE 4 Securities
The table below presents the amortized cost, gross unrealized gains and losses, and fair value of AFS debt securities, other debt securities carried at fair value and held-to-maturity (HTM) debt securities at September 30, 2024 and December 31, 2023.
Debt Securities
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value
Amortized Cost
Gross Unrealized Gains
Gross Unrealized Losses
Fair Value
(Dollars in millions)
September 30, 2024
December 31, 2023
Available-for-sale debt securities
Mortgage-backed securities:
Agency
$
35,978
$
15
$
(1,399)
$
34,594
$
39,195
$
37
$
(1,420)
$
37,812
Agency-collateralized mortgage obligations
16,640
21
(157)
16,504
2,739
6
(201)
2,544
Commercial
19,358
78
(450)
18,986
10,909
40
(514)
10,435
Non-agency residential (1)
298
51
(53)
296
449
3
(70)
382
Total mortgage-backed securities
72,274
165
(2,059)
70,380
53,292
86
(2,205)
51,173
U.S. Treasury and government agencies
211,314
255
(1,374)
210,195
179,108
19
(1,461)
177,666
Non-U.S. securities
22,884
52
(22)
22,914
22,868
27
(20)
22,875
Other taxable securities
2,637
2
(30)
2,609
4,910
1
(76)
4,835
Tax-exempt securities
9,764
34
(177)
9,621
10,304
17
(221)
10,100
Total available-for-sale debt securities
318,873
508
(3,662)
315,719
270,482
150
(3,983)
266,649
Other debt securities carried at fair value (2)
9,555
219
(57)
9,717
10,202
56
(55)
10,203
Total debt securities carried at fair value
328,428
727
(3,719)
325,436
280,684
206
(4,038)
276,852
Held-to-maturity debt securities
Agency mortgage-backed securities
438,824
—
(69,878)
368,946
465,456
—
(78,930)
386,526
U.S. Treasury and government agencies
121,683
—
(14,929)
106,754
121,645
—
(17,963)
103,682
Other taxable securities
7,082
1
(896)
6,187
7,490
—
(1,101)
6,389
Total held-to-maturity debt securities
567,589
1
(85,703)
481,887
594,591
—
(97,994)
496,597
Total debt securities (3,4)
$
896,017
$
728
$
(89,422)
$
807,323
$
875,275
$
206
$
(102,032)
$
773,449
(1)At September 30, 2024 and December 31, 2023, the underlying collateral type included approximately 25 percent and 17 percent prime and 75 percent and 83 percent subprime.
(2)Primarily includes non-U.S. securities used to satisfy certain international regulatory requirements. Any changes in value are reported in market making and similar activities. For detail on the components, see Note 14 – Fair Value Measurements.
(3)Includes securities pledged as collateral of $195.5 billion and $204.9 billion at September 30, 2024 and December 31, 2023.
(4)The Corporation held debt securities from Fannie Mae (FNMA) and Freddie Mac (FHLMC) that each exceeded 10 percent of shareholders’ equity, with an amortized cost of $261.6 billion and $168.2 billion, and a fair value of $220.9 billion and $142.3 billion at September 30, 2024, and an amortized cost of $272.5 billion and $171.5 billion, and a fair value of $226.4 billion and $142.3 billion at December 31, 2023.
At September 30, 2024, the accumulated net unrealized loss on AFS debt securities, excluding the amount related to debt securities previously transferred to held to maturity, included in accumulated OCI was $2.3 billion, net of the related income tax benefit of $793 million. At September 30, 2024 and December 31, 2023, nonperforming AFS debt securities held by the Corporation were not significant.
At September 30, 2024 and December 31, 2023, $849.3 billion and $824.9 billion of AFS and HTM debt securities, which were predominantly U.S. agency and U.S. Treasury securities, have a zero credit loss assumption. For the same periods, the expected credit losses on the remaining $37.2 billion and $40.2 billion of AFS and HTM debt securities were insignificant. For more information on the zero credit loss assumption, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
At September 30, 2024 and December 31, 2023, the Corporation held equity securities at an aggregate fair value of $247 million and $251 million and other equity securities, as valued under the measurement alternative, at a carrying value of $460 million and $377 million, both of which are included in
other assets. At both September 30, 2024 and December 31, 2023, the Corporation also held money market investments at a fair value of $1.2 billion, which are included in time deposits placed and other short-term investments.
The gross realized gains and losses on sales of AFS debt securities for the three and nine months ended September 30, 2024 and 2023 are presented in the table below.
Gains and Losses on Sales of AFS Debt Securities
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Gross gains
$
4
$
—
$
19
$
104
Gross losses
(23)
—
(25)
(508)
Net gains (losses) on sales of AFS debt securities
$
(19)
$
—
$
(6)
$
(404)
Income tax expense (benefit) attributable to realized net gains (losses) on sales of AFS debt securities
$
(5)
$
—
$
(1)
$
(101)
Bank of America 64
The table below presents the fair value and the associated gross unrealized losses on AFS debt securities and whether these securities have had gross unrealized losses for less than 12 months or for 12 months or longer at September 30, 2024 and December 31, 2023.
Total AFS Debt Securities in a Continuous Unrealized Loss Position
Total AFS debt securities in a continuous unrealized loss position
$
37,331
$
(92)
$
102,171
$
(3,891)
$
139,502
$
(3,983)
65Bank of America
The remaining contractual maturity distribution and yields of the Corporation’s debt securities carried at fair value and HTM debt securities at September 30, 2024 are summarized in the table below. Actual duration and yields may differ as prepayments on the loans underlying the MBS or other asset-backed securities (ABS) are passed through to the Corporation.
Maturities of Debt Securities Carried at Fair Value and Held-to-maturity Debt Securities
Due in One Year or Less
Due after One Year through Five Years
Due after Five Years through Ten Years
Due after Ten Years
Total
(Dollars in millions)
Amount
Yield (1)
Amount
Yield (1)
Amount
Yield (1)
Amount
Yield (1)
Amount
Yield (1)
Amortized cost of debt securities carried at fair value
Mortgage-backed securities:
Agency
$
—
—
%
$
5
3.40
%
$
6
3.83
%
$
35,967
4.62
%
$
35,978
4.62
%
Agency-collateralized mortgage obligations
—
—
—
—
1
1.00
16,639
5.92
16,640
5.92
Commercial
119
4.02
5,187
5.02
12,091
4.11
1,973
3.37
19,370
4.28
Non-agency residential
—
—
—
—
—
—
567
11.94
567
11.94
Total mortgage-backed securities
119
4.02
5,192
5.02
12,098
4.11
55,146
5.04
72,555
4.88
U.S. Treasury and government agencies
2,819
4.64
197,391
3.87
13,450
2.78
36
3.95
213,696
3.81
Non-U.S. securities
18,915
3.39
4,962
1.84
4,194
5.01
1,705
4.44
29,776
3.42
Other taxable securities
525
6.16
1,803
5.78
234
4.25
75
2.95
2,637
5.64
Tax-exempt securities
1,018
3.13
3,577
3.65
1,031
3.15
4,138
3.84
9,764
3.62
Total amortized cost of debt securities carried at fair value
$
23,396
3.60
$
212,925
3.87
$
31,007
3.62
$
61,100
4.94
$
328,428
4.02
Amortized cost of HTM debt securities
Agency mortgage-backed securities
$
—
—
%
$
—
—
%
$
10
2.70
%
$
438,814
2.12
%
$
438,824
2.12
%
U.S. Treasury and government agencies
490
2.71
23,190
1.84
98,003
1.28
—
—
121,683
1.39
Other taxable securities
91
1.59
1,137
2.55
120
3.37
5,734
2.53
7,082
2.54
Total amortized cost of HTM debt securities
$
581
2.53
$
24,327
1.87
$
98,133
1.28
$
444,548
2.12
$
567,589
1.96
Debt securities carried at fair value
Mortgage-backed securities:
Agency
$
—
$
5
$
6
$
34,583
$
34,594
Agency-collateralized mortgage obligations
—
—
1
16,503
16,504
Commercial
118
5,149
11,940
1,790
18,997
Non-agency residential
—
2
—
560
562
Total mortgage-backed securities
118
5,156
11,947
53,436
70,657
U.S. Treasury and government agencies
2,815
196,614
13,116
34
212,579
Non-U.S. securities
19,103
4,968
4,193
1,703
29,967
Other taxable securities
525
1,799
218
70
2,612
Tax-exempt securities
1,015
3,571
1,024
4,011
9,621
Total debt securities carried at fair value
$
23,576
$
212,108
$
30,498
$
59,254
$
325,436
Fair value of HTM debt securities
Agency mortgage-backed securities
$
—
$
—
$
10
$
368,936
$
368,946
U.S. Treasury and government agencies
485
20,961
85,308
—
106,754
Other taxable securities
90
1,103
97
4,897
6,187
Total fair value of HTM debt securities
$
575
$
22,064
$
85,415
$
373,833
$
481,887
(1)The weighted-average yield is computed based on a constant effective yield over the contractual life of each security. The yield considers the contractual coupon and the amortization of premiums and accretion of discounts, excluding the effect of related open hedging derivatives.
Bank of America 66
NOTE 5Outstanding Loans and Leases and Allowance for Credit Losses
The following tables present total outstanding loans and leases and an aging analysis for the Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments, by class of financing receivables, at September 30, 2024 and December 31, 2023.
30-59 Days
Past Due (1)
60-89 Days
Past Due (1)
90 Days or More
Past Due (1)
Total Past Due 30 Days or More
Total
Current or
Less Than
30 Days
Past Due (1)
Loans Accounted for Under the Fair Value Option
Total Outstandings
(Dollars in millions)
September 30, 2024
Consumer real estate
Residential mortgage
$
1,206
$
262
$
762
$
2,230
$
225,612
$
227,842
Home equity
82
33
127
242
25,241
25,483
Credit card and other consumer
Credit card
717
540
1,306
2,563
98,278
100,841
Direct/Indirect consumer (2)
298
103
97
498
105,197
105,695
Other consumer
—
—
—
—
161
161
Total consumer
2,303
938
2,292
5,533
454,489
460,022
Consumer loans accounted for under the fair value option (3)
$
229
229
Total consumer loans and leases
2,303
938
2,292
5,533
454,489
229
460,251
Commercial
U.S. commercial
415
330
461
1,206
378,357
379,563
Non-U.S. commercial
19
23
85
127
127,611
127,738
Commercial real estate (4)
511
138
1,209
1,858
66,562
68,420
Commercial lease financing
26
20
17
63
14,929
14,992
U.S. small business commercial
186
96
186
468
20,425
20,893
Total commercial
1,157
607
1,958
3,722
607,884
611,606
Commercial loans accounted for under the fair value option (3)
3,943
3,943
Total commercial loans and leases
1,157
607
1,958
3,722
607,884
3,943
615,549
Total loans and leases (5)
$
3,460
$
1,545
$
4,250
$
9,255
$
1,062,373
$
4,172
$
1,075,800
Percentage of outstandings
0.32
%
0.14
%
0.40
%
0.86
%
98.75
%
0.39
%
100.00
%
(1)Consumer real estate loans 30-59 days past due includes fully-insured loans of $179 million and nonperforming loans of $181 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $68 million and nonperforming loans of $93 million. Consumer real estate loans 90 days or more past due includes fully-insured loans of $215 million and nonperforming loans of $674 million. Consumer real estate loans current or less than 30 days past due includes $1.6 billion, and direct/indirect consumer includes $52 million of nonperforming loans.
(2)Total outstandings primarily includes auto and specialty lending loans and leases of $54.9 billion, U.S. securities-based lending loans of $47.3 billion and non-U.S. consumer loans of $2.8 billion.
(3)Consumer loans accounted for under the fair value option includes residential mortgage loans of $63 million and home equity loans of $166 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $2.7 billion and non-U.S. commercial loans of $1.3 billion. For more information, see Note 14 – Fair Value Measurements and Note 15 – Fair Value Option.
(4)Total outstandings includes U.S. commercial real estate loans of $61.8 billion and non-U.S. commercial real estate loans of $6.6 billion.
(5)Total outstandings includes loans and leases pledged as collateral of $27.7 billion. The Corporation also pledged $302.5 billion of loans with no related outstanding borrowings to secure potential borrowing capacity with the Federal Reserve Bank and Federal Home Loan Bank.
67Bank of America
30-59 Days Past Due (1)
60-89 Days
Past Due (1)
90 Days or More Past Due (1)
Total Past Due 30 Days or More
Total
Current or
Less Than
30 Days
Past Due (1)
Loans Accounted for Under the Fair Value Option
Total Outstandings
(Dollars in millions)
December 31, 2023
Consumer real estate
Residential mortgage
$
1,177
$
302
$
829
$
2,308
$
226,095
$
228,403
Home equity
90
38
161
289
25,238
25,527
Credit card and other consumer
Credit card
680
515
1,224
2,419
99,781
102,200
Direct/Indirect consumer (2)
306
99
91
496
102,972
103,468
Other consumer
—
—
—
—
124
124
Total consumer
2,253
954
2,305
5,512
454,210
459,722
Consumer loans accounted for under the fair value option (3)
$
243
243
Total consumer loans and leases
2,253
954
2,305
5,512
454,210
243
459,965
Commercial
U.S. commercial
477
96
225
798
358,133
358,931
Non-U.S. commercial
86
21
64
171
124,410
124,581
Commercial real estate (4)
247
133
505
885
71,993
72,878
Commercial lease financing
44
8
24
76
14,778
14,854
U.S. small business commercial
166
89
184
439
18,758
19,197
Total commercial
1,020
347
1,002
2,369
588,072
590,441
Commercial loans accounted for under the fair value option (3)
3,326
3,326
Total commercial loans and leases
1,020
347
1,002
2,369
588,072
3,326
593,767
Total loans and leases (5)
$
3,273
$
1,301
$
3,307
$
7,881
$
1,042,282
$
3,569
$
1,053,732
Percentage of outstandings
0.31
%
0.12
%
0.31
%
0.75
%
98.91
%
0.34
%
100.00
%
(1)Consumer real estate loans 30-59 days past due includes fully-insured loans of $198 million and nonperforming loans of $150 million. Consumer real estate loans 60-89 days past due includes fully-insured loans of $77 million and nonperforming loans of $102 million. Consumer real estate loans 90 days or more past due includes fully-insured loans of $252 million and nonperforming loans of $738 million. Consumer real estate loans current or less than 30 days past due includes $1.6 billion, and direct/indirect consumer includes $39 million of nonperforming loans.
(2)Total outstandings primarily includes auto and specialty lending loans and leases of $53.9 billion, U.S. securities-based lending loans of $46.0 billion and non-U.S. consumer loans of $2.8 billion.
(3)Consumer loans accounted for under the fair value option includes residential mortgage loans of $66 million and home equity loans of $177 million. Commercial loans accounted for under the fair value option includes U.S. commercial loans of $2.2 billion and non-U.S. commercial loans of $1.2 billion. For more information, see Note 14 – Fair Value Measurements and Note 15 – Fair Value Option.
(4)Total outstandings includes U.S. commercial real estate loans of $66.8 billion and non-U.S. commercial real estate loans of $6.1 billion.
(5)Total outstandings includes loans and leases pledged as collateral of $33.7 billion. The Corporation also pledged $246.0 billion of loans with no related outstanding borrowings to secure potential borrowing capacity with the Federal Reserve Bank and Federal Home Loan Bank.
The Corporation has entered into long-term credit protection agreements with FNMA and FHLMC on loans totaling $8.2 billion and $8.7 billion at September 30, 2024 and December 31, 2023, providing full credit protection on residential mortgage loans that become severely delinquent. All of these loans are individually insured, and therefore the Corporation does not record an allowance for credit losses related to these loans.
Nonperforming Loans and Leases
Nonperforming loans were $5.6 billion and $5.5 billionat September 30, 2024 and December 31, 2023. Commercial nonperforming loans were $3.0 billion and $2.8 billion at September 30, 2024 and December 31, 2023 primarily driven by commercial real estate. Consumer nonperforming loans were
$2.7 billion at both September 30, 2024 and December 31, 2023, primarily comprised of residential mortgage.
The following table presents the Corporation’s nonperforming loans and leases and loans accruing past due 90 days or more at September 30, 2024 and December 31, 2023. Nonperforming loans held-for-sale (LHFS) are excluded from nonperforming loans and leases as they are recorded at either fair value or the lower of cost or fair value. For more information on the criteria for classification as nonperforming, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Bank of America 68
Credit Quality
Nonperforming Loans and Leases
Accruing Past Due 90 Days or More
(Dollars in millions)
September 30 2024
December 31 2023
September 30 2024
December 31 2023
Residential mortgage (1)
$
2,089
$
2,114
$
215
$
252
With no related allowance (2)
1,930
1,974
—
—
Home equity (1)
413
450
—
—
With no related allowance (2)
346
375
—
—
Credit Card
n/a
n/a
1,306
1,224
Direct/indirect consumer
175
148
1
2
Total consumer
2,677
2,712
1,522
1,478
U.S. commercial
699
636
219
51
Non-U.S. commercial
85
175
12
4
Commercial real estate
2,124
1,927
206
32
Commercial lease financing
18
19
5
7
U.S. small business commercial
26
16
183
184
Total commercial
2,952
2,773
625
278
Total nonperforming loans
$
5,629
$
5,485
$
2,147
$
1,756
Percentage of outstanding loans and leases
0.53
%
0.52
%
0.20
%
0.17
%
(1)Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At September 30, 2024 and December 31, 2023 residential mortgage included $114 million and $156 million of loans on which interest had been curtailed by the Federal Housing Administration (FHA), and therefore were no longer accruing interest, although principal was still insured, and $101 million and $96 million of loans on which interest was still accruing.
(2)Primarily relates to loans for which the estimated fair value of the underlying collateral less any costs to sell is greater than the amortized cost of the loans as of the reporting date.
n/a = not applicable
Credit Quality Indicators
The Corporation monitors credit quality within its Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments based on primary credit quality indicators. For more information on the portfolio segments, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K. Within the Consumer Real Estate portfolio segment, the primary credit quality indicators are refreshed loan-to-value (LTV) and refreshed Fair Isaac Corporation (FICO) score. Refreshed LTV measures the carrying value of the loan as a percentage of the value of the property securing the loan, refreshed quarterly. Home equity loans are evaluated using combined loan-to-value (CLTV), which measures the carrying value of the Corporation’s loan and available line of credit combined with any outstanding senior liens against the property as a percentage of the value of the property securing the loan, refreshed quarterly. FICO score measures the creditworthiness of the borrower based on the financial obligations of the borrower and the borrower’s credit history. FICO scores are typically refreshed quarterly or more frequently. Certain borrowers (e.g., borrowers that have had debts discharged in a bankruptcy proceeding) may not have their FICO scores updated.
FICO scores are also a primary credit quality indicator for the Credit Card and Other Consumer portfolio segment and the business card portfolio within U.S. small business commercial. Within the Commercial portfolio segment, loans are evaluated using the internal classifications of pass rated or reservable criticized as the primary credit quality indicators. The term reservable criticized refers to those commercial loans that are internally classified or listed by the Corporation as Special Mention, Substandard or Doubtful, which are asset quality categories defined by regulatory authorities. These assets have an elevated level of risk and may have a high probability of default or total loss. Pass rated refers to all loans not considered reservable criticized. In addition to these primary credit quality indicators, the Corporation uses other credit quality indicators for certain types of loans.
The following tables present certain credit quality indicators and gross charge-offs for the Corporation's Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments by year of origination, except for revolving loans and revolving loans that were modified into term loans, which are shown on an aggregate basis at September 30, 2024.
69Bank of America
Residential Mortgage – Credit Quality Indicators By Vintage
Term Loans by Origination Year
(Dollars in millions)
Total as of September 30, 2024
2024
2023
2022
2021
2020
Prior
Residential Mortgage
Refreshed LTV
Less than or equal to 90 percent
$
215,050
$
12,861
$
13,670
$
37,299
$
72,985
$
33,129
$
45,106
Greater than 90 percent but less than or equal to 100 percent
1,752
553
528
480
123
23
45
Greater than 100 percent
725
313
181
137
53
17
24
Fully-insured loans
10,315
440
201
312
3,220
2,634
3,508
Total Residential Mortgage
$
227,842
$
14,167
$
14,580
$
38,228
$
76,381
$
35,803
$
48,683
Residential Mortgage
Refreshed FICO score
Less than 620
$
2,500
$
125
$
162
$
470
$
607
$
418
$
718
Greater than or equal to 620 and less than 680
4,657
222
364
894
1,175
704
1,298
Greater than or equal to 680 and less than 740
22,362
1,443
1,644
4,072
6,341
3,494
5,368
Greater than or equal to 740
188,008
11,937
12,209
32,480
65,038
28,553
37,791
Fully-insured loans
10,315
440
201
312
3,220
2,634
3,508
Total Residential Mortgage
$
227,842
$
14,167
$
14,580
$
38,228
$
76,381
$
35,803
$
48,683
Gross charge-offs for the nine months ended September 30, 2024
$
18
$
—
$
2
$
4
$
2
$
1
$
9
Home Equity - Credit Quality Indicators
Total
Home Equity Loans and Reverse Mortgages (1)
Revolving Loans
Revolving Loans Converted to Term Loans
(Dollars in millions)
September 30, 2024
Home Equity
Refreshed LTV
Less than or equal to 90 percent
$
25,399
$
806
$
21,078
$
3,515
Greater than 90 percent but less than or equal to 100 percent
40
3
33
4
Greater than 100 percent
44
1
32
11
Total Home Equity
$
25,483
$
810
$
21,143
$
3,530
Home Equity
Refreshed FICO score
Less than 620
$
633
$
71
$
299
$
263
Greater than or equal to 620 and less than 680
1,092
86
661
345
Greater than or equal to 680 and less than 740
4,290
168
3,300
822
Greater than or equal to 740
19,468
485
16,883
2,100
Total Home Equity
$
25,483
$
810
$
21,143
$
3,530
Gross charge-offs for the nine months ended September 30, 2024
$
16
$
6
$
5
$
5
(1)Includes reverse mortgages of $510 million and home equity loans of $300 million, which are no longer originated.
Credit Card and Direct/Indirect Consumer – Credit Quality Indicators By Vintage
Direct/Indirect
Term Loans by Origination Year
Credit Card
(Dollars in millions)
Total Direct/ Indirect as of September 30, 2024
Revolving Loans
2024
2023
2022
2021
2020
Prior
Total Credit Card as of September 30, 2024
Revolving Loans
Revolving Loans Converted to Term Loans (1)
Refreshed FICO score
Less than 620
$
1,415
$
11
$
163
$
424
$
439
$
265
$
60
$
53
$
5,735
$
5,384
$
351
Greater than or equal to 620 and less than 680
2,336
9
522
757
582
314
79
73
11,452
11,133
319
Greater than or equal to 680 and less than 740
8,035
44
2,284
2,436
1,800
970
273
228
34,390
34,106
284
Greater than or equal to 740
43,274
68
14,338
12,466
8,701
4,664
1,613
1,424
49,264
49,201
63
Other internal credit
metrics (2,3)
50,635
50,133
114
53
98
64
36
137
—
—
—
Total credit card and other consumer
$
105,695
$
50,265
$
17,421
$
16,136
$
11,620
$
6,277
$
2,061
$
1,915
$
100,841
$
99,824
$
1,017
Gross charge-offs for the nine months ended September 30, 2024
$
292
$
4
$
20
$
107
$
86
$
40
$
10
$
25
$
3,235
$
3,103
$
132
(1)Represents loans that were modified into term loans.
(2)Other internal credit metrics may include delinquency status, geography or other factors.
(3)Direct/indirect consumer includes $50.1 billion of securities-based lending, which is typically supported by highly liquid collateral with market value greater than or equal to the outstanding loan balance and therefore has minimal credit risk at September 30, 2024.
Bank of America 70
Commercial – Credit Quality Indicators By Vintage (1)
Term Loans
Amortized Cost Basis by Origination Year
(Dollars in millions)
Total as of September 30, 2024
2024
2023
2022
2021
2020
Prior
Revolving Loans
U.S. Commercial
Risk ratings
Pass rated
$
366,116
$
32,114
$
36,286
$
36,234
$
22,318
$
11,309
$
35,902
$
191,953
Reservable criticized
13,447
86
814
1,007
886
388
2,044
8,222
Total U.S. Commercial
$
379,563
$
32,200
$
37,100
$
37,241
$
23,204
$
11,697
$
37,946
$
200,175
Gross charge-offs for the nine months ended September 30, 2024
$
327
$
2
$
111
$
64
$
14
$
4
$
16
$
116
Non-U.S. Commercial
Risk ratings
Pass rated
$
125,663
$
13,329
$
16,902
$
13,303
$
12,712
$
1,450
$
7,643
$
60,324
Reservable criticized
2,075
1
155
125
293
12
91
1,398
Total Non-U.S. Commercial
$
127,738
$
13,330
$
17,057
$
13,428
$
13,005
$
1,462
$
7,734
$
61,722
Gross charge-offs for the nine months ended September 30, 2024
$
61
$
—
$
41
$
20
$
—
$
—
$
—
$
—
Commercial Real Estate
Risk ratings
Pass rated
$
58,554
$
4,232
$
4,891
$
12,653
$
10,197
$
3,054
$
13,604
$
9,923
Reservable criticized
9,866
27
180
2,421
2,229
644
3,953
412
Total Commercial Real Estate
$
68,420
$
4,259
$
5,071
$
15,074
$
12,426
$
3,698
$
17,557
$
10,335
Gross charge-offs for the nine months ended September 30, 2024
$
762
$
—
$
—
$
57
$
83
$
62
$
531
$
29
Commercial Lease Financing
Risk ratings
Pass rated
$
14,748
$
2,596
$
3,823
$
2,590
$
2,072
$
966
$
2,701
$
—
Reservable criticized
244
7
53
61
38
23
62
—
Total Commercial Lease Financing
$
14,992
$
2,603
$
3,876
$
2,651
$
2,110
$
989
$
2,763
$
—
Gross charge-offs for the nine months ended September 30, 2024
$
2
$
—
$
—
$
—
$
2
$
—
$
—
$
—
U.S. Small Business Commercial (2)
Risk ratings
Pass rated
$
9,562
$
1,379
$
1,920
$
1,698
$
1,354
$
665
$
2,108
$
438
Reservable criticized
429
4
57
99
120
25
120
4
Total U.S. Small Business Commercial
$
9,991
$
1,383
$
1,977
$
1,797
$
1,474
$
690
$
2,228
$
442
Gross charge-offs for the nine months ended September 30, 2024
$
22
$
—
$
—
$
1
$
—
$
5
$
4
$
12
Total
$
600,704
$
53,775
$
65,081
$
70,191
$
52,219
$
18,536
$
68,228
$
272,674
Gross charge-offs for the nine months ended September 30, 2024
$
1,174
$
2
$
152
$
142
$
99
$
71
$
551
$
157
(1)Excludes $3.9 billion of loans accounted for under the fair value option at September 30, 2024.
(2)Excludes U.S. Small Business Card loans of $10.9 billion. Refreshed FICO scores for this portfolio are $667 million for less than 620; $1.2 billion for greater than or equal to 620 and less than 680; $3.0 billion for greater than or equal to 680 and less than 740; and $6.1 billion greater than or equal to 740. Excludes U.S. Small Business Card loans gross charge-offs of $361 million.
71Bank of America
The following tables present certain credit quality indicators for the Corporation's Consumer Real Estate, Credit Card and Other Consumer, and Commercial portfolio segments by year of origination, except for revolving loans and revolving loans that were modified into term loans, which are shown on an aggregate basis at December 31, 2023.
Residential Mortgage – Credit Quality Indicators By Vintage
Term Loans by Origination Year
(Dollars in millions)
Total as of December 31, 2023
2023
2022
2021
2020
2019
Prior
Residential Mortgage
Refreshed LTV
Less than or equal to 90 percent
$
214,661
$
15,224
$
38,225
$
76,229
$
35,072
$
17,432
$
32,479
Greater than 90 percent but less than or equal to 100 percent
1,994
698
911
286
53
25
21
Greater than 100 percent
785
264
342
100
31
14
34
Fully-insured loans
10,963
540
350
3,415
2,834
847
2,977
Total Residential Mortgage
$
228,403
$
16,726
$
39,828
$
80,030
$
37,990
$
18,318
$
35,511
Residential Mortgage
Refreshed FICO score
Less than 620
$
2,335
$
115
$
471
$
589
$
402
$
136
$
622
Greater than or equal to 620 and less than 680
4,671
359
919
1,235
777
296
1,085
Greater than or equal to 680 and less than 740
23,357
1,934
4,652
6,988
3,742
1,836
4,205
Greater than or equal to 740
187,077
13,778
33,436
67,803
30,235
15,203
26,622
Fully-insured loans
10,963
540
350
3,415
2,834
847
2,977
Total Residential Mortgage
$
228,403
$
16,726
$
39,828
$
80,030
$
37,990
$
18,318
$
35,511
Gross charge-offs for the year ended December 31, 2023
$
67
$
—
$
7
$
12
$
6
$
2
$
40
Home Equity - Credit Quality Indicators
Total
Home Equity Loans and Reverse Mortgages (1)
Revolving Loans
Revolving Loans Converted to Term Loans
(Dollars in millions)
December 31, 2023
Home Equity
Refreshed LTV
Less than or equal to 90 percent
$
25,378
$
1,051
$
20,380
$
3,947
Greater than 90 percent but less than or equal to 100 percent
61
17
35
9
Greater than 100 percent
88
35
36
17
Total Home Equity
$
25,527
$
1,103
$
20,451
$
3,973
Home Equity
Refreshed FICO score
Less than 620
$
654
$
123
$
253
$
278
Greater than or equal to 620 and less than 680
1,107
118
589
400
Greater than or equal to 680 and less than 740
4,340
240
3,156
944
Greater than or equal to 740
19,426
622
16,453
2,351
Total Home Equity
$
25,527
$
1,103
$
20,451
$
3,973
Gross charge-offs for the year ended December 31, 2023
$
36
$
4
$
21
$
11
(1)Includes reverse mortgages of $763 million and home equity loans of $340 million, which are no longer originated.
Bank of America 72
Credit Card and Direct/Indirect Consumer – Credit Quality Indicators By Vintage
Direct/Indirect
Term Loans by Origination Year
Credit Card
(Dollars in millions)
Total Direct/Indirect as of December 31, 2023
Revolving Loans
2023
2022
2021
2020
2019
Prior
Total Credit Card as of December 31, 2023
Revolving Loans
Revolving Loans Converted to Term Loans (1)
Refreshed FICO score
Less than 620
$
1,246
$
11
$
292
$
428
$
336
$
85
$
55
$
39
$
5,338
$
5,030
$
308
Greater than or equal to 620 and less than 680
2,506
11
937
799
501
121
73
64
11,623
11,345
278
Greater than or equal to 680 and less than 740
8,629
48
3,451
2,582
1,641
462
244
201
34,777
34,538
239
Greater than or equal to 740
41,656
74
16,761
11,802
7,643
2,707
1,417
1,252
50,462
50,410
52
Other internal credit
metrics (2, 3)
49,431
48,764
106
183
110
53
57
158
—
—
—
Total credit card and other consumer
$
103,468
$
48,908
$
21,547
$
15,794
$
10,231
$
3,428
$
1,846
$
1,714
$
102,200
$
101,323
$
877
Gross charge-offs for the year ended December 31, 2023
$
233
$
5
$
32
$
95
$
53
$
15
$
10
$
23
$
3,133
$
3,013
$
120
(1)Represents loans that were modified into term loans.
(2)Other internal credit metrics may include delinquency status, geography or other factors.
(3)Direct/indirect consumer includes $48.8 billion of securities-based lending, which is typically supported by highly liquid collateral with market value greater than or equal to the outstanding loan balance and therefore has minimal credit risk at December 31, 2023.
Commercial – Credit Quality Indicators By Vintage (1)
Term Loans
Amortized Cost Basis by Origination Year
(Dollars in millions)
Total as of December 31, 2023
2023
2022
2021
2020
2019
Prior
Revolving Loans
U.S. Commercial
Risk ratings
Pass rated
$
347,563
$
41,842
$
43,290
$
27,738
$
13,495
$
11,772
$
29,923
$
179,503
Reservable criticized
11,368
278
1,316
708
363
537
1,342
6,824
Total U.S. Commercial
$
358,931
$
42,120
$
44,606
$
28,446
$
13,858
$
12,309
$
31,265
$
186,327
Gross charge-offs for the year ended December 31, 2023
$
191
$
5
$
38
$
29
$
4
$
2
$
27
$
86
Non-U.S. Commercial
Risk ratings
Pass rated
$
122,931
$
17,053
$
15,810
$
15,256
$
2,405
$
2,950
$
5,485
$
63,972
Reservable criticized
1,650
50
184
294
90
158
74
800
Total Non-U.S. Commercial
$
124,581
$
17,103
$
15,994
$
15,550
$
2,495
$
3,108
$
5,559
$
64,772
Gross charge-offs for the year ended December 31, 2023
$
37
$
—
$
—
$
8
$
7
$
1
$
—
$
21
Commercial Real Estate
Risk ratings
Pass rated
$
64,150
$
4,877
$
16,147
$
11,810
$
4,026
$
7,286
$
10,127
$
9,877
Reservable criticized
8,728
134
749
1,728
782
2,132
2,794
409
Total Commercial Real Estate
$
72,878
$
5,011
$
16,896
$
13,538
$
4,808
$
9,418
$
12,921
$
10,286
Gross charge-offs for the year ended December 31, 2023
$
254
$
2
$
—
$
4
$
—
$
59
$
189
$
—
Commercial Lease Financing
Risk ratings
Pass rated
$
14,688
$
4,188
$
3,077
$
2,373
$
1,349
$
1,174
$
2,527
$
—
Reservable criticized
166
9
22
46
16
32
41
—
Total Commercial Lease Financing
$
14,854
$
4,197
$
3,099
$
2,419
$
1,365
$
1,206
$
2,568
$
—
Gross charge-offs for the year ended December 31, 2023
$
2
$
—
$
—
$
1
$
1
$
—
$
—
$
—
U.S. Small Business Commercial (2)
Risk ratings
Pass rated
$
9,031
$
1,886
$
1,830
$
1,550
$
836
$
721
$
1,780
$
428
Reservable criticized
384
6
64
95
40
63
113
3
Total U.S. Small Business Commercial
$
9,415
$
1,892
$
1,894
$
1,645
$
876
$
784
$
1,893
$
431
Gross charge-offs for the year ended December 31, 2023
$
43
$
1
$
2
$
2
$
19
$
3
$
4
$
12
Total
$
580,659
$
70,323
$
82,489
$
61,598
$
23,402
$
26,825
$
54,206
$
261,816
Gross charge-offs for the year ended December 31, 2023
$
527
$
8
$
40
$
44
$
31
$
65
$
220
$
119
(1) Excludes $3.3 billion of loans accounted for under the fair value option at December 31, 2023.
(2) Excludes U.S. Small Business Card loans of $9.8 billion. Refreshed FICO scores for this portfolio are $530 million for less than 620; $1.1 billion for greater than or equal to 620 and less than 680; $2.7 billion for greater than or equal to 680 and less than 740; and $5.5 billion greater than or equal to 740. Excludes U.S. Small Business Card loans gross charge-offs of $317 million.
73Bank of America
During the nine months ended September 30, 2024, commercial reservable criticized utilized exposure increased to $27.4 billion at September 30, 2024 from $23.3 billion (to 4.25 percent from 3.74 percent of total commercial reservable utilized exposure) at December 31, 2023, primarily driven by U.S. commercial and commercial real estate.
Loan Modifications to Borrowers in Financial Difficulty
As part of its credit risk management, the Corporation may modify a loan agreement with a borrower experiencing financial difficulties through a refinancing or restructuring of the borrower’s loan agreement (modification programs). Effective January 1, 2023, the Corporation adopted the new accounting standard on loan modifications. Accordingly, September 30, 2024 balances presented in payment status tables represent loans that were modified over the last 12 months, and September 30, 2023 balances presented in payment status tables represent loans that were modified during the first nine months of 2023.
Consumer Real Estate
The following modification programs are offered for consumer real estate loans to borrowers experiencing financial difficulties.
Forbearance and Other Payment Plans: Forbearance plans generally consist of the Corporation suspending the borrower’s payments for a defined period, with those payments then due over a defined period of time or at the conclusion of the forbearance period. The aging status of a loan is generally
frozen when it enters into a forbearance plan. If a borrower is unable to fulfill their obligations under the forbearance plans, they may be offered a trial offer or permanent modification.
Trial Offer and Permanent Modifications: Trial offer for modification plans generally consist of the Corporation offering a borrower modified loan terms that reduce their contractual payments temporarily over a three-to-four-month trial period. If the customer successfully makes the modified payments during the trial period and formally accepts the modified terms, the modified loan terms become permanent. Some borrowers may enter into permanent modifications without a trial period. In a permanent modification, the borrower’s payment terms are typically modified in more than one manner, but generally include a term extension and an interest rate reduction. At times, the permanent modification may also include principal forgiveness and/or a deferral of past due principal and interest amounts to the end of the loan term. The combinations utilized are based on modifying the terms that give the borrower an improved ability to meet the contractual obligations. The term extensions granted for residential mortgage and home equity permanent modifications vary widely and can be up to 30 years, but most are in the range of 1 to 20 years. Principal forgiveness and payment deferrals were insignificant during the three and nine months ended September 30, 2024 and 2023.
The table below provides the ending amortized cost of the Corporation’s modified consumer real estate loans for the three and nine months ended September 30, 2024 and 2023.
Consumer Real Estate - Modifications to Borrowers in Financial Difficulty
Forbearance and Other Payment Plans
Permanent Modification
Total
As a % of Financing Receivables
Forbearance and Other Payment Plans
Permanent Modification
Total
As a % of Financing Receivables
(Dollars in millions)
Three Months Ended September 30, 2024
Nine Months Ended September 30, 2024
Residential Loans
$
4
$
48
$
52
0.02
%
$
41
$
161
$
202
0.09
%
Home Equity
—
8
8
0.03
%
—
26
26
0.10
%
Total
$
4
$
56
$
60
0.02
%
$
41
$
187
$
228
0.09
%
Three Months Ended September 30, 2023
Nine Months Ended September 30, 2023
Residential Loans
$
270
$
47
$
317
0.14
%
$
437
$
128
$
565
0.25
%
Home Equity
39
9
48
0.19
64
26
90
0.35
Total
$
309
$
56
$
365
0.14
$
501
$
154
$
655
0.26
Bank of America 74
The table below presents the financial effect of modified consumer real estate loans.
Financial Effect of Modified Consumer Real Estate Loans
Three Months Ended September 30
Nine Months Ended September 30
2024
2023
2024
2023
Forbearance and Other Payment Plans
Weighted-average duration
Residential Mortgage
4 months
4 months
7 months
8 months
Home Equity
n/a
4 months
n/a
9 months
Permanent Modifications
Weighted-average Term Extension
Residential Mortgage
11.0 years
12.1 years
9.8 years
9.9 years
Home Equity
17.7 years
17.2 years
17.5 years
16.2 years
Weighted-average Interest Rate Reduction
Residential Mortgage
1.23
%
1.31
%
1.29
%
1.50
%
Home Equity
2.77
%
2.69
%
2.66
%
3.11
%
n/a = not applicable
For consumer real estate borrowers in financial difficulty that received a forbearance, trial or permanent modification, there were no commitments to lend additional funds at September 30, 2024 and 2023.
The Corporation tracks the performance of modified loans to assess effectiveness of modification programs. During the three and nine months ended September 30, 2024 and 2023,
defaults of residential and home equity loans that had been modified within 12 monthswere insignificant. The table below provides aging information as of September 30, 2024 for consumer real estate loans that were modified over the last 12 months and as of September 30, 2023 for consumer real estate loans that were modified during the first nine months of 2023.
Consumer Real Estate - Payment Status of Modifications to Borrowers in Financial Difficulty
Current
30–89 Days
Past Due
90+ Days
Past Due
Total
(Dollars in millions)
September 30, 2024
Residential mortgage
$
153
$
52
$
47
$
252
Home equity
29
2
1
32
Total
$
182
$
54
$
48
$
284
September 30, 2023
Residential mortgage
$
295
$
114
$
156
$
565
Home equity
51
11
28
90
Total
$
346
$
125
$
184
$
655
Consumer real estate foreclosed properties totaled $60 million and $83 million at September 30, 2024 and December 31, 2023. The carrying value of consumer real estate loans, including fully-insured loans, for which formal foreclosure proceedings were in process at September 30, 2024 and December 31, 2023, was $482 million and $633 million. During the nine months ended September 30, 2024 and 2023, the Corporation reclassified $73 million and $86 million of consumer real estate loans to foreclosed properties or, for properties acquired upon foreclosure of certain government-guaranteed loans (principally FHA-insured loans), to other assets. The reclassifications represent non-cash investing activities and, accordingly, are not reflected in the Consolidated Statement of Cash Flows.
Credit Card and Other Consumer
Credit card and other consumer loans are primarily modified by placing the customer on a fixed payment plan with a significantly reduced fixed interest rate, with terms ranging from 6 months to 72 months, most of which had a 60-month term at September 30, 2024. In certain circumstances, the Corporation will forgive a portion of the outstanding balance if the borrower makes payments up to a set amount. The Corporation makes modifications directly with borrowers for loans held by the Corporation (internal programs) as well as through third-party renegotiation agencies that provide solutions to customers’
entire unsecured debt structures (external programs). The September 30, 2024 amortized cost of credit card and other consumer loans that were modified through these programs during the three and nine months ended September 30, 2024 was $202 million and $534 million compared to $196 million and $455 million for the same periods in 2023. These modifications represented 0.10 percent and 0.26 percent of outstanding credit card and other consumer loans for the three and nine months ended September 30, 2024 compared to 0.10 percentand 0.22 percent for the same periods in 2023. During the three and nine months ended September 30, 2024, the financial effect of modifications resulted in a weighted-average interest rate reduction of 19.13 percent and 19.29 percent compared to 19.40 percent and 19.02 percent for the same periods in 2023, and principal forgiveness of $30 million and $88 million compared to $16 million and $41 million for the same periods in 2023.
The Corporation tracks the performance of modified loans to assess effectiveness of modification programs. During the three and nine months ended September 30, 2024 and 2023, defaults of credit card and other consumer loans that had been modified within 12 months were insignificant. At September 30, 2024, modified credit card and other consumer loans to borrowers experiencing financial difficulty over the last 12 months totaled $665 million, of which $562 million were current, $58 million were 30-89 days past due, and $45 million
75Bank of America
were greater than 90 days past due. At September 30, 2023, modified credit card and other consumer loans to borrowers experiencing financial difficulty totaled $455 million, of which $370 million were current, $47 million were 30-89 days past due, and $38 million were greater than 90 days past due.
Commercial Loans
Modifications of loans to commercial borrowers experiencing financial difficulty are designed to reduce the Corporation’s loss exposure while providing borrowers with an opportunity to work through financial difficulties, often to avoid foreclosure or bankruptcy. Each modification is unique, reflects the borrower’s
individual circumstances and is designed to benefit the borrower while mitigating the Corporation’s risk exposure. Commercial modifications are primarily term extensions and payment forbearances. Payment forbearances involve the Corporation forbearing its contractual right to collect certain payments or payment in full (maturity forbearance) for a defined period of time. Reductions in interest rates and principal forgiveness occur infrequently for commercial borrowers. Principal forgiveness may occur in connection with foreclosure, short sales or other settlement agreements, leading to termination or sale of the loan. The table below provides the ending amortized cost of commercial loans modified during the three and nine months ended September 30, 2024 and 2023.
Commercial Loans - Modifications to Borrowers in Financial Difficulty
Term Extension
Forbearances
Interest Rate Reduction
Total
As a % of Financing Receivables
Term Extension
Forbearances
Interest Rate Reduction
Total
As a % of Financing Receivables
(Dollars in millions)
Three Months Ended September 30, 2024
Nine Months Ended September 30, 2024
U.S. commercial
$
379
$
47
$
—
$
426
0.11
%
$
1,114
$
52
$
—
$
1,166
0.31
%
Non-U.S. commercial
—
—
—
—
—
13
—
—
13
0.01
Commercial real estate
874
234
—
1,108
1.62
1,238
487
36
1,761
2.57
Total
$
1,253
$
281
$
—
$
1,534
0.27
$
2,365
$
539
$
36
$
2,940
0.51
Three Months Ended September 30, 2023
Nine Months Ended September 30, 2023
U.S. commercial
$
431
$
24
$
—
$
455
0.13
%
$
768
$
33
$
—
$
801
0.22
%
Non-U.S. commercial
130
—
24
154
0.12
162
—
24
186
0.15
Commercial real estate
599
219
—
818
1.12
1,069
287
—
1,356
1.85
Total
$
1,160
$
243
$
24
$
1,427
0.26
$
1,999
$
320
$
24
$
2,343
0.42
Term extensions granted increased the weighted-average life of the impacted loans by 2.1 years and 1.8 yearsfor the three and nine months ended September 30, 2024 compared to 1.8 years for the same periods in 2023. The weighted-average duration of loan payments deferred under the Corporation’s commercial loan forbearance program was 10 months and 11 months for the three and nine months ended September 30, 2024 compared to 8 months and 9 monthsfor the same periods in 2023. The deferral period for loan payments can vary, but are mostly in the range of 8 months to 24 months. Modifications of loans to troubled borrowers for Commercial Lease Financing and U.S. Small Business Commercial were not significant during the three and nine months ended September 30, 2024 and 2023.
The Corporation tracks the performance of modified loans to assess effectiveness of modification programs. During the three and nine months ended September 30, 2024 and 2023, defaults of commercial loans that had been modified within 12 months were insignificant. The table below provides aging information as of September 30, 2024 for commercial loans that were modified over the last 12 months and as of September 30, 2023 for commercial loans that were modified during the nine months ended September 30, 2023.
Commercial - Payment Status of Modified Loans to Borrowers in Financial Difficulty
Current
30–89 Days
Past Due
90+ Days
Past Due
Total
(Dollars in millions)
September 30, 2024
U.S. Commercial
$
1,193
$
58
$
31
$
1,282
Non-U.S. Commercial
36
—
—
36
Commercial Real Estate
1,667
3
303
1,973
Total
$
2,896
$
61
$
334
$
3,291
September 30, 2023
U.S. Commercial
$
766
$
21
$
14
$
801
Non-U.S. Commercial
186
—
—
186
Commercial Real Estate
1,083
60
213
1,356
Total
$
2,035
$
81
$
227
$
2,343
For the nine months ended September 30, 2024 and 2023, the Corporation had commitments to lend $1.2 billion and $871 million to commercial borrowers experiencing financial difficulty whose loans were modified during the period.
Bank of America 76
Loans Held-for-sale
The Corporation had LHFS of $10.4 billion and $6.0 billion at September 30, 2024 and December 31, 2023. Cash and non-cash proceeds from sales and paydowns of loans originally classified as LHFS were $21.7 billion and $10.8 billion for the nine months ended September 30, 2024 and 2023. Cash used for originations and purchases of LHFS totaled $26.3 billion and $11.5 billion for the nine months ended September 30, 2024 and 2023.Also included were non-cash net transfers into LHFS of $0 and $634 million during the nine months ended September 30, 2024 and 2023.
Accrued Interest Receivable
Accrued interest receivable for loans and leases and loans held-for-sale was $4.4 billion and $4.5 billion at September 30, 2024 and December 31, 2023 and is reported in customer and other receivables on the Consolidated Balance Sheet.
Outstanding credit card loan balances include unpaid principal, interest and fees. Credit card loans are not classified as nonperforming but are charged off no later than the end of the month in which the account becomes 180 days past due, within 60 days after receipt of notification of death or bankruptcy, or upon confirmation of fraud. During the three and nine months ended September 30, 2024, the Corporation reversed $213 million and $633 million of interest and fee income against the income statement line item in which it was originally recorded upon charge-off of the principal balance of the loan compared to $152 million and $409 million for the same periods in 2023.
For the outstanding residential mortgage, home equity, direct/indirect consumer and commercial loan balances classified as nonperforming during the three and nine months ended September 30, 2024 and 2023, interest and fee income reversed at the time the loans were classified as nonperforming was not significant. For more information on the Corporation's nonperforming loan policies, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Allowance for Credit Losses
The allowance for credit losses is estimated using quantitative and qualitative methods that consider a variety of factors, such as historical loss experience, the current credit quality of the portfolio and an economic outlook over the life of the loan. Qualitative reserves cover losses that are expected but, in the Corporation's assessment, may not adequately be reflected in the quantitative methods or the economic assumptions. The Corporation incorporates forward-looking information through the use of several macroeconomic scenarios in determining the weighted economic outlook over the forecasted life of the assets. These scenarios include key macroeconomic variables such as gross domestic product, unemployment rate, real
estate prices and corporate bond spreads. The scenarios that are chosen each quarter and the weighting given to each scenario depend on a variety of factors including recent economic events, leading economic indicators, internal and third-party economist views, and industry trends. For more information on the Corporation's credit loss accounting policies including the allowance for credit losses, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
The September 30, 2024 estimate for allowance for credit losses was based on various economic scenarios, including a baseline scenario derived from consensus estimates, an adverse scenario reflecting an extended moderate recession, a downside scenario reflecting continued inflation and interest rates with minimal rate cuts, a tail risk scenario similar to the severely adverse scenario used in stress testing and an upside scenario that considers the potential for improvement above the baseline scenario. The overall weighted economic outlook of the above scenarios has improved compared to the weighted economic outlook estimated as of December 31, 2023. The weighted economic outlook assumes that the U.S. average unemployment rate will be five percent by the fourth quarter of 2025 and will decrease to just below five percent by the fourth quarter of 2026. The weighted economic outlook assumes steady growth with U.S. real gross domestic product forecasted to grow at 1.4 percent and 1.9 percent year-over-year in the fourth quarters of 2025 and 2026.
The allowance for credit losses decreased $200 million from December 31, 2023 to $14.4 billion at September 30, 2024. The change in the allowance for credit losses was comprised of a net decrease of $91 million in the allowance for loan and lease losses and a decrease of $109 million in the reserve for unfunded lending commitments. The decline in the allowance for credit losses was attributed to decreases in the commercial portfolio of $249 million and the consumer real estate portfolio of $101 million, partially offset by an increase in the credit card and other consumer portfolios of $150 million. The provision for credit losses increased $308 million to $1.5 billion, and $1.1 billion to $4.4 billion for the three and nine months ended September 30, 2024 compared to the same periods in 2023. The provision for credit losses for the current-year periods was primarily driven by credit card loans and the commercial real estate office portfolio.
Outstanding loans and leases excluding loans accounted for under the fair value option increased $21.5 billion during the nine months ended September 30, 2024 primarily driven by commercial, which increased $21.2 billion due to broad-based growth.
The changes in the allowance for credit losses, including net charge-offs and provision for loan and lease losses, are detailed in the following table.
77Bank of America
Consumer Real Estate
Credit Card and Other Consumer
Commercial
Total
(Dollars in millions)
Three Months Ended September 30, 2024
Allowance for loan and lease losses, July 1
$
347
$
8,167
$
4,724
$
13,238
Loans and leases charged off
(15)
(1,256)
(529)
(1,800)
Recoveries of loans and leases previously charged off
22
205
39
266
Net charge-offs
7
(1,051)
(490)
(1,534)
Provision for loan and lease losses
(45)
1,167
425
1,547
Other
—
1
(1)
—
Allowance for loan and lease losses, September 30
309
8,284
4,658
13,251
Reserve for unfunded lending commitments, July 1
55
—
1,049
1,104
Provision for unfunded lending commitments
3
—
(8)
(5)
Other
—
—
1
1
Reserve for unfunded lending commitments, September 30
58
—
1,042
1,100
Allowance for credit losses, September 30
$
367
$
8,284
$
5,700
$
14,351
Three Months Ended September 30, 2023
Allowance for loan and lease losses, July 1
427
7,323
5,200
12,950
Loans and leases charged off
(15)
(994)
(178)
(1,187)
Recoveries of loans and leases previously charged off
27
178
51
256
Net charge-offs
12
(816)
(127)
(931)
Provision for loan and lease losses
(28)
1,247
49
1,268
Other
1
1
(2)
—
Allowance for loan and lease losses, September 30
412
7,755
5,120
13,287
Reserve for unfunded lending commitments, July 1
86
—
1,302
1,388
Provision for unfunded lending commitments
(1)
—
(33)
(34)
Other
—
—
(1)
(1)
Reserve for unfunded lending commitments, September 30
85
—
1,268
1,353
Allowance for credit losses, September 30
$
497
$
7,755
$
6,388
$
14,640
(Dollars in millions)
Nine Months Ended September 30, 2024
Allowance for loan and lease losses, January 1
$
386
$
8,134
$
4,822
$
13,342
Loans and leases charged off
(34)
(3,748)
(1,535)
(5,317)
Recoveries of loans and leases previously charged off
65
586
101
752
Net charge-offs
31
(3,162)
(1,434)
(4,565)
Provision for loan and lease losses
(109)
3,311
1,277
4,479
Other
1
1
(7)
(5)
Allowance for loan and lease losses, September 30
309
8,284
4,658
13,251
Reserve for unfunded lending commitments, January 1
82
—
1,127
1,209
Provision for unfunded lending commitments
(24)
—
(86)
(110)
Other
—
—
1
1
Reserve for unfunded lending commitments, September 30
58
—
1,042
1,100
Allowance for credit losses, September 30
$
367
$
8,284
$
5,700
$
14,351
Nine Months Ended September 30, 2023
Allowance for loan and lease losses, December 31
$
420
$
6,817
$
5,445
$
12,682
January 1, 2023 adoption of credit loss standard
(67)
(109)
(67)
(243)
Allowance for loan and lease losses, January 1
353
6,708
5,378
12,439
Loans and leases charged off
(44)
(2,779)
(544)
(3,367)
Recoveries of loans and leases previously charged off
81
565
114
760
Net charge-offs
37
(2,214)
(430)
(2,607)
Provision for loan and lease losses
14
3,259
204
3,477
Other
8
2
(32)
(22)
Allowance for loan and lease losses, September 30
412
7,755
5,120
13,287
Reserve for unfunded lending commitments, January 1
94
—
1,446
1,540
Provision for unfunded lending commitments
(9)
—
(178)
(187)
Reserve for unfunded lending commitments, September 30
85
—
1,268
1,353
Allowance for credit losses, September 30
$
497
$
7,755
$
6,388
$
14,640
NOTE 6Securitizations and Other Variable Interest Entities
The Corporation utilizes VIEs in the ordinary course of business to support its own and its customers’ financing and investing needs. The Corporation routinely securitizes loans and debt securities using VIEs as a source of funding for the Corporation and as a means of transferring the economic risk of the loans or debt securities to third parties. The assets are transferred into a trust or other securitization vehicle such that the assets are legally isolated from the creditors of the Corporation and are not
available to satisfy its obligations. These assets can only be used to settle obligations of the trust or other securitization vehicle. The Corporation also administers, structures or invests in other VIEs including CDOs, investment vehicles and other entities. For more information on the Corporation’s use of VIEs, see Note 1 – Summary of Significant Accounting Principles and Note 6 – Securitizations and Other Variable Interest Entities to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
The tables in this Note present the assets and liabilities of consolidated and unconsolidated VIEs at September 30, 2024
Bank of America 78
and December 31, 2023 in situations where the Corporation has a loan or security interest and involvement with transferred assets or if the Corporation otherwise has an additional interest in the VIE. The tables also present the Corporation’s maximum loss exposure at September 30, 2024 and December 31, 2023 resulting from its involvement with consolidated VIEs and unconsolidated VIEs. The Corporation’s maximum loss exposure is based on the unlikely event that all of the assets in the VIEs become worthless and incorporates not only potential losses associated with assets recorded on the Consolidated Balance Sheet but also potential losses associated with off-balance sheet commitments, such as unfunded liquidity commitments and other contractual arrangements. The Corporation’s maximum loss exposure does not include losses previously recognized through write-downs of assets.
The Corporation invests in ABS, CLOs and other similar investments issued by third-party VIEs with which it has no other form of involvement other than a loan or debt security issued by the VIE. In addition, the Corporation also enters into certain commercial lending arrangements that may utilize VIEs for activities secondary to the lending arrangement, for example to hold collateral. The Corporation’s maximum loss exposure to these VIEs is the investment balances. These securities and loans are included in Note 4 – Securities or Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses and are not included in the following tables.
The Corporation did not provide financial support to consolidated or unconsolidated VIEs during the three and nine months ended September 30, 2024 or the year ended December 31, 2023 that it was not previously contractually required to provide, nor does it intend to do so.
The Corporation had liquidity commitments, including written put options and collateral value guarantees, with certain unconsolidated VIEs of $982 million and $989 million at September 30, 2024 and December 31, 2023.
First-lien Mortgage Securitizations
As part of its mortgage banking activities, the Corporation securitizes a portion of the first-lien residential mortgage loans it originates or purchases from third parties, generally in the form of residential mortgage-backed securities guaranteed by government-sponsored enterprises, FNMA and FHLMC (collectively the GSEs), or the Government National Mortgage Association (GNMA) primarily in the case of FHA-insured and U.S. Department of Veterans Affairs (VA)-guaranteed mortgage loans. Securitization usually occurs in conjunction with or shortly after origination or purchase, and the Corporation may also securitize loans held in its residential mortgage portfolio. In addition, the Corporation may, from time to time, securitize commercial mortgages it originates or purchases from other entities. The Corporation typically services the loans it securitizes. Further, the Corporation may retain beneficial interests in the securitization trusts including senior and subordinate securities and equity tranches issued by the trusts. Except as described in Note 10 – Commitments and Contingencies, the Corporation does not provide guarantees or recourse to the securitization trusts other than standard representations and warranties.
The table below summarizes select information related to first-lien mortgage securitizations for the three and nine months ended September 30, 2024 and 2023.
First-lien Mortgage Securitizations
Residential Mortgage - Agency
Commercial Mortgage
Three Months Ended September 30
Nine Months Ended September 30
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
2024
2023
2024
2023
Proceeds from loan sales (1)
$
928
$
1,220
$
3,101
$
3,475
$
1,644
$
1,167
$
8,676
$
1,764
Gains (losses) on securitizations (2)
(1)
(2)
(3)
(6)
18
33
106
35
Repurchases from securitization trusts (3)
8
10
24
24
—
—
—
—
(1)The Corporation transfers residential mortgage loans to securitizations sponsored primarily by the GSEs or GNMA in the normal course of business and primarily receives residential mortgage-backed securities in exchange. Substantially all of these securities are classified as Level 2 within the fair value hierarchy and are typically sold shortly after receipt.
(2)A majority of the first-lien residential mortgage loans securitized are initially classified as LHFS and accounted for under the fair value option. Gains recognized on these LHFS prior to securitization, which totaled $10 million and $23 million, net of hedges, during the three and nine months ended September 30, 2024 compared to $17 million and $34 million for the same periods in 2023, are not included in the table above.
(3)The Corporation may have the option to repurchase delinquent loans out of securitization trusts, which reduces the amount of servicing advances it is required to make. The Corporation may also repurchase loans from securitization trusts to perform modifications. Repurchased loans include FHA-insured mortgages collateralizing GNMA securities.
The Corporation recognizes consumer MSRs from the sale or securitization of consumer real estate loans. The unpaid principal balance of loans serviced for investors, including residential mortgage and home equity loans, totaled $85.7 billion and $93.5 billion at September 30, 2024 and 2023. Servicing fee and ancillary fee income on serviced loans was $54 million and $174 million during the three and nine months ended September 30, 2024 compared to $55 million and $187 million for the same periods in 2023. Servicing advances on serviced loans, including loans serviced for others and loans held for investment, were $1.0 billion and $1.3 billion at September 30, 2024 and December 31, 2023. For more information on MSRs, see Note 14 – Fair Value Measurements.
Home Equity Loans
The Corporation retains interests, primarily senior securities, in home equity securitization trusts to which it transferred home equity loans. In addition, the Corporation may be obligated to
provide subordinate funding to the trusts during a rapid amortization event. This obligation is included in the maximum loss exposure in the preceding table. The charges that will ultimately be recorded as a result of the rapid amortization events depend on the undrawn portion of the home equity lines of credit, performance of the loans, the amount of subsequent draws and the timing of related cash flows.
Mortgage and Home Equity Securitizations
During the three and nine months ended September 30, 2024, the Corporation deconsolidated agency residential mortgage securitization trusts with total assets of $115 million and $940 million compared to $35 million and $659 million for the same periods in 2023.
The following table summarizes select information related to mortgage and home equity securitization trusts in which the Corporation held a variable interest and had continuing involvement at September 30, 2024 and December 31, 2023.
79Bank of America
Mortgage and Home Equity Securitizations
Residential Mortgage
Non-agency
Agency
Prime and Alt-A
Subprime
Home Equity (3)
Commercial Mortgage
(Dollars in millions)
Sep 30 2024
Dec 31 2023
Sep 30 2024
Dec 31 2023
Sep 30 2024
Dec 31 2023
Sep 30 2024
Dec 31 2023
Sep 30 2024
Dec 31 2023
Unconsolidated VIEs
Maximum loss exposure (1)
$
7,737
$
8,190
$
87
$
92
$
619
$
657
$
—
$
—
$
1,556
$
1,558
On-balance sheet assets
Senior securities:
Trading account assets
$
250
$
235
$
11
$
13
$
20
$
20
$
—
$
—
$
207
$
70
Debt securities carried at fair value
2,379
2,541
—
—
300
341
—
—
—
—
Held-to-maturity securities
5,108
5,414
—
—
—
—
—
—
1,219
1,287
All other assets
—
—
2
4
24
23
—
—
37
79
Total retained positions
$
7,737
$
8,190
$
13
$
17
$
344
$
384
$
—
$
—
$
1,463
$
1,436
Principal balance outstanding (2)
$
70,513
$
76,134
$
12,994
$
13,963
$
5,038
$
4,508
$
196
$
252
$
85,274
$
80,078
Consolidated VIEs
Maximum loss exposure (1)
$
1,327
$
1,164
$
—
$
—
$
—
$
—
$
10
$
12
$
—
$
—
On-balance sheet assets
Trading account assets
$
1,327
$
1,171
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Loans and leases
—
—
—
—
—
—
24
31
—
—
Allowance for loan and lease losses
—
—
—
—
—
—
6
7
—
—
All other assets
—
—
—
—
—
—
1
1
—
—
Total assets
$
1,327
$
1,171
$
—
$
—
$
—
$
—
$
31
$
39
$
—
$
—
Total liabilities
$
—
$
7
$
—
$
—
$
—
$
—
$
21
$
27
$
—
$
—
(1)Maximum loss exposure includes obligations under loss-sharing reinsurance and other arrangements for non-agency residential mortgage and commercial mortgage securitizations, but excludes the reserve for representations and warranties obligations and corporate guarantees and also excludes servicing advances and other servicing rights and obligations. For more information, see Note 10 – Commitments and Contingencies and Note 14 – Fair Value Measurements.
(2)Principal balance outstanding includes loans where the Corporation was the transferor to securitization VIEs with which it has continuing involvement, which may include servicing the loans.
(3)For unconsolidated home equity loan VIEs, the maximum loss exposure includes outstanding trust certificates issued by trusts in rapid amortization, net of recorded reserves. For both consolidated and unconsolidated home equity loan VIEs, the maximum loss exposure excludes the reserve for representations and warranties obligations and corporate guarantees. For more information, see Note 10 – Commitments and Contingencies.
Other Asset-backed Securitizations
The following paragraphs summarize select information related to other asset-backed VIEs in which the Corporation had a variable interest at September 30, 2024 and December 31, 2023.
Credit Card and Automobile Loan Securitizations
The Corporation securitizes originated and purchased credit card and automobile loans as a source of financing. The loans are sold on a non-recourse basis to consolidated trusts. The securitizations are ongoing, whereas additional receivables will be funded into the trusts by either loan repayments or proceeds from securities issued to third parties, depending on the securitization structure. The Corporation’s continuing involvement with the securitization trusts includes servicing the receivables and holding various subordinated interests, including an undivided seller’s interest in the credit card receivables and owning certain retained interests.
At September 30, 2024 and December 31, 2023, the carrying values of the receivables in the trusts totaled $18.2 billion and $16.6 billion, which are included in loans and leases, and the carrying values of senior debt securities that were issued to third-party investors from the trusts totaled $8.3 billion and $7.8 billion, which are included in long-term debt.
Resecuritization Trusts
The Corporation transfers securities, typically MBS, into resecuritization VIEs generally at the request of customers seeking securities with specific characteristics. Generally, there are no significant ongoing activities performed in a resecuritization trust, and no single investor has the unilateral ability to liquidate the trust.
The Corporation resecuritized $4.6 billion and $11.1 billion of securities during the three and nine months ended September 30, 2024 compared to $1.8 billion and $7.6 billion
for the same periods in 2023. Securities transferred into resecuritization VIEs were measured at fair value with changes in fair value recorded in market making and similar activities prior to the resecuritization and, accordingly, no gain or loss on sale was recorded. During the three and nine months ended September 30, 2024, resecuritization proceeds included securities with an initial fair value of $1.3 billion and $2.2 billion, compared to $1.1 billion and $2.1 billion for the same periods in 2023, of which substantially all of the securities were classified as trading account assets for both periods. Substantially all of the trading account securities carried at fair value were categorized as Level 2 within the fair value hierarchy.
Customer VIEs
Customer VIEs include credit-linked, equity-linked and commodity-linked note VIEs, repackaging VIEs and asset acquisition VIEs, which are typically created on behalf of customers who wish to obtain market or credit exposure to a specific company, index, commodity or financial instrument.
The Corporation’s involvement in the VIE is limited to its loss exposure. The Corporation’s maximum loss exposure to consolidated and unconsolidated customer VIEs totaled $1.1 billion and $952 million at September 30, 2024 and December 31, 2023, including the notional amount of derivatives to which the Corporation is a counterparty, net of losses previously recorded, and the Corporation’s investment, if any, in securities issued by the VIEs.
Municipal Bond Trusts
The Corporation administers municipal bond trusts that hold highly-rated, long-term, fixed-rate municipal bonds. The trusts obtain financing by issuing floating-rate trust certificates that reprice on a weekly or other short-term basis to third-party investors.
Bank of America 80
The Corporation’s liquidity commitments to unconsolidated municipal bond trusts, including those for which the Corporation was transferor, totaled $1.8 billion and $1.7 billion at September 30, 2024 and December 31, 2023. The weighted-average remaining life of bonds held in the trusts at September 30, 2024 was 11.5 years. There were no significant write-downs or downgrades of assets or issuers during the nine months ended September 30, 2024 and 2023.
Collateralized Debt Obligation VIEs
The Corporation receives fees for structuring CDO VIEs, which hold diversified pools of fixed-income securities, typically corporate debt or ABS, which the CDO VIEs fund by issuing multiple tranches of debt and equity securities. CDOs are generally managed by third-party portfolio managers. The Corporation typically transfers assets to these CDOs, holds securities issued by the CDOs and may be a derivative counterparty to the CDOs. The Corporation’s maximum loss exposure to consolidated and unconsolidated CDOs totaled $66 million and $80 million at September 30, 2024 and December 31, 2023.
Investment VIEs
The Corporation sponsors, invests in or provides financing, which may be in connection with the sale of assets, to a variety of investment VIEs that hold loans, real estate, debt securities or other financial instruments and are designed to provide the desired investment profile to investors or the Corporation. At
September 30, 2024 and December 31, 2023, the Corporation’s consolidated investment VIEs had total assets of $3 million and $472 million. The Corporation also held investments in unconsolidated VIEs with total assets of $21.2 billion and $18.4 billion at September 30, 2024 and December 31, 2023. The Corporation’s maximum loss exposure associated with both consolidated and unconsolidated investment VIEs totaled $2.2 billion and $2.6 billion at September 30, 2024 and December 31, 2023 comprised primarily of on-balance sheet assets less non-recourse liabilities.
Leveraged Lease Trusts
The Corporation’s net investment in consolidated leveraged lease trusts totaled $1.0 billion and $1.1 billion at September 30, 2024 and December 31, 2023. The trusts hold long-lived equipment such as rail cars, power generation and distribution equipment, and commercial aircraft. The Corporation structures the trusts and holds a significant residual interest. The net investment represents the Corporation’s maximum loss exposure to the trusts in the unlikely event that the leveraged lease investments become worthless. Debt issued by the leveraged lease trusts is non-recourse to the Corporation.
The table below summarizes the maximum loss exposure and assets held by the Corporation that related to other asset-backed VIEs at September 30, 2024 and December 31, 2023.
Other Asset-backed VIEs
Credit Card and
Automobile (1)
Resecuritization Trusts and Customer VIEs
Municipal Bond Trusts and CDOs
Investment VIEs and Leveraged Lease Trusts
(Dollars in millions)
Sep 30 2024
Dec 31 2023
Sep 30 2024
Dec 31 2023
Sep 30 2024
Dec 31 2023
Sep 30 2024
Dec 31 2023
Unconsolidated VIEs
Maximum loss exposure
$
—
$
—
$
5,504
$
4,494
$
1,881
$
1,787
$
2,172
$
2,197
On-balance sheet assets
Securities (2):
Trading account assets
$
—
$
—
$
1,801
$
626
$
17
$
23
$
304
$
469
Debt securities carried at fair value
—
—
859
920
—
—
—
4
Held-to-maturity securities
—
—
2,045
2,237
—
—
—
—
Loans and leases
—
—
—
—
—
—
70
90
Allowance for loan and lease losses
—
—
—
—
—
—
(2)
(12)
All other assets
—
—
799
711
6
7
1,307
1,168
Total retained positions
$
—
$
—
$
5,504
$
4,494
$
23
$
30
$
1,679
$
1,719
Total assets of VIEs
$
—
$
—
$
16,255
$
15,862
$
6,507
$
9,279
$
21,202
$
18,398
Consolidated VIEs
Maximum loss exposure
$
9,172
$
8,127
$
668
$
1,240
$
3,770
$
3,136
$
1,060
$
1,596
On-balance sheet assets
Trading account assets
$
—
$
—
$
1,207
$
1,798
$
3,744
$
3,084
$
2
$
1
Debt securities carried at fair value
—
—
—
—
26
52
—
—
Loans and leases
18,195
16,640
—
—
—
—
1,048
1,605
Allowance for loan and lease losses
(928)
(832)
—
—
—
—
(1)
(1)
All other assets
199
163
39
38
—
—
13
15
Total assets
$
17,466
$
15,971
$
1,246
$
1,836
$
3,770
$
3,136
$
1,062
$
1,620
On-balance sheet liabilities
Short-term borrowings
$
—
$
—
$
—
$
—
$
3,542
$
2,934
$
—
$
23
Long-term debt
8,272
7,825
578
596
—
—
2
1
All other liabilities
22
19
—
—
—
—
—
—
Total liabilities
$
8,294
$
7,844
$
578
$
596
$
3,542
$
2,934
$
2
$
24
(1)At September 30, 2024 and December 31, 2023 loans and leases in the consolidated credit card trust included $4.2 billion and $3.2 billion of seller’s interest.
(2)The retained senior securities were valued using quoted market prices or observable market inputs (Level 2 of the fair value hierarchy).
Tax Credit VIEs
The Corporation holds equity investments in unconsolidated limited partnerships and similar entities that construct, own and operate affordable housing, renewable energy and certain other projects. The total assets of these unconsolidated tax credit VIEs were $82.3 billion and $84.1 billion as of September 30,
2024 and December 31, 2023. An unrelated third party is typically the general partner or managing member and has control over the significant activities of the VIE. As an investor, tax credits associated with the investments in these entities are allocated to the Corporation, as provided by the U.S. Internal Revenue Code and related regulations, and are recognized as
81Bank of America
income tax benefits in the Corporation’s Consolidated Statement of Income in the year they are earned, which varies based on the type of investments. Tax credits from investments in affordable housing are recognized ratably over a term of up to 10 years, and tax credits from renewable energy investments are recognized either at inception for transactions electing Investment Tax Credits (ITCs) or as energy is produced for transactions electing Production Tax Credits (PTCs), which is generally up to a 10-year time period. The volume and types of investments held by the Corporation will influence the amount of tax credits recognized each period.
The Corporation’s equity investments in affordable housing and other projects totaled $16.2 billion and $15.8 billion at September 30, 2024 and December 31, 2023, which included unfunded capital contributions of $7.3 billion and $7.2 billion that are probable to be paid over the next five years. The Corporation may be asked to invest additional amounts to support a troubled affordable housing project. Such additional investments have not been and are not expected to be significant. During the three and nine months ended September 30, 2024, the Corporation recognized tax credits and other tax benefits related to affordable housing equity investments of $564 million and $1.7 billion compared to $526 million and $1.6 billion for the same periods in 2023, and reported pretax losses in other income of $418 million and $1.2 billion compared to $379 million and $1.1 billion for the same periods in 2023. The Corporation’s equity investments in renewable energy totaled $13.3 billion and $14.2 billion at September 30, 2024 and December 31, 2023. In addition, the Corporation had unfunded capital contributions for renewable energy investments of $4.9 billion and $6.2 billion at September 30, 2024 and December 31, 2023, which are contingent on various conditions precedent to funding over the next two years. The Corporation’s risk of loss is generally mitigated by policies requiring the project to qualify for the expected tax credits prior to making its investment. During the three and nine months ended September 30, 2024, the Corporation recognized tax credits and other tax benefits related to renewable energy equity investments of $873 million and $2.8 billion compared to $1.3 billion and $3.4 billion for the same periods in 2023 and reported pretax losses in other income of $697 million and $2.0 billion compared to $849 million and $2.0 billion for the same periods in 2023. The Corporation may also enter into power purchase agreements with renewable energy tax credit entities.
The table below summarizes select information related to unconsolidated tax credit VIEs in which the Corporation held a variable interest at September 30, 2024 and December 31, 2023.
Unconsolidated Tax Credit VIEs
(Dollars in millions)
September 30 2024
December 31 2023
Maximum loss exposure
$
29,510
$
30,040
On-balance sheet assets
All other assets
$
29,510
$
30,040
Total
$
29,510
$
30,040
On-balance sheet liabilities
All other liabilities
$
7,357
$
7,254
Total
$
7,357
$
7,254
Total assets of VIEs
$
82,297
$
84,148
NOTE 7 Goodwill and Intangible Assets
Goodwill
The table below presents goodwill balances by business segment at September 30, 2024 and December 31, 2023. The reporting units utilized for goodwill impairment testing are the operating segments or one level below.
Goodwill
(Dollars in millions)
September 30 2024
December 31 2023
Consumer Banking
$
30,137
$
30,137
Global Wealth & Investment Management
9,677
9,677
Global Banking
24,026
24,026
Global Markets
5,181
5,181
Total goodwill
$
69,021
$
69,021
Intangible Assets
At September 30, 2024 and December 31, 2023, the net carrying value of intangible assets was $1.9 billion and $2.0 billion. At both September 30, 2024 and December 31, 2023, intangible assets included $1.6 billion of intangible assets associated with trade names, substantially all of which had an indefinite life and, accordingly, are not being amortized. Amortization of intangibles expense was $20 million for both the three months ended September 30, 2024 and 2023 and $59 million for both the nine months ended September 30, 2024 and 2023.
NOTE 8 Leases
The Corporation enters into both lessor and lessee arrangements. For more information on lease accounting, see Note 1 – Summary of Significant Accounting Principles and Note 8 – Leases to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K. For more information on lease financing receivables, see Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses.
Lessor Arrangements
The Corporation’s lessor arrangements primarily consist of operating, sales-type and direct financing leases for equipment. Lease agreements may include options to renew and for the lessee to purchase the leased equipment at the end of the lease term.
The table below presents the net investment in sales-type and direct financing leases at September 30, 2024 and December 31, 2023.
Net Investment (1)
(Dollars in millions)
September 30 2024
December 31 2023
Lease receivables
$
17,348
$
16,565
Unguaranteed residuals
2,519
2,485
Total net investment in sales-type and direct financing leases
$
19,867
$
19,050
(1)In certain cases, the Corporation obtains third-party residual value insurance to reduce its residual asset risk. The carrying value of residual assets with third-party residual value insurance for at least a portion of the asset value was $7.5 billion and $6.8 billion at September 30, 2024 and December 31, 2023.
Bank of America 82
The table below presents lease income for the three and nine months ended September 30, 2024 and 2023.
Lease Income
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Sales-type and direct financing leases
$
277
$
206
$
789
$
559
Operating leases
228
233
682
705
Total lease income
$
505
$
439
$
1,471
$
1,264
Lessee Arrangements
The Corporation's lessee arrangements predominantly consist of operating leases for premises and equipment; the Corporation's financing leases are not significant.
The table below provides information on the right-of-use assets and lease liabilities at September 30, 2024 and December 31, 2023.
Lessee Arrangements
(Dollars in millions)
September 30 2024
December 31 2023
Right-of-use assets
$
8,614
$
9,150
Lease liabilities
9,247
9,782
NOTE 9 Securities Financing Agreements, Collateral and Restricted Cash
The Corporation enters into securities financing agreements which include securities borrowed or purchased under agreements to resell and securities loaned or sold under agreements to repurchase. These financing agreements (also referred to as “matched-book transactions”) are to accommodate customers, obtain securities to cover short positions and finance inventory positions. The Corporation elects to account for certain securities financing agreements under the fair value option. For more information on the fair value option, see Note 15 – Fair Value Option.
Offsetting of Securities Financing Agreements
The Securities Financing Agreements table presents securities financing agreements included on the Consolidated Balance Sheet in federal funds sold and securities borrowed or purchased under agreements to resell, and in federal funds purchased and securities loaned or sold under agreements to repurchase at September 30, 2024 and December 31, 2023. Balances are presented on a gross basis, prior to the application of counterparty netting. Gross assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements. For more information on the offsetting of derivatives, see Note 3 – Derivatives. For more information on the securities financing agreements and the offsetting of securities financing transactions, see Note 10 – Securities Financing Agreements, Short-term Borrowings, Collateral and Restricted Cash to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Securities Financing Agreements
Gross Assets/Liabilities (1)
Amounts Offset
Net Balance Sheet Amount
Financial Instruments (2)
Net Assets/Liabilities
(Dollars in millions)
September 30, 2024
Securities borrowed or purchased under agreements to resell (3)
$
787,415
$
(449,709)
$
337,706
$
(308,690)
$
29,016
Securities loaned or sold under agreements to repurchase
$
847,667
$
(449,709)
$
397,958
$
(380,426)
$
17,532
Other (4)
13,983
—
13,983
(13,983)
—
Total
$
861,650
$
(449,709)
$
411,941
$
(394,409)
$
17,532
December 31, 2023
Securities borrowed or purchased under agreements to resell (3)
$
703,641
$
(423,017)
$
280,624
$
(257,541)
$
23,083
Securities loaned or sold under agreements to repurchase
$
706,904
$
(423,017)
$
283,887
$
(272,285)
$
11,602
Other (4)
10,066
—
10,066
(10,066)
—
Total
$
716,970
$
(423,017)
$
293,953
$
(282,351)
$
11,602
(1)Includes activity where uncertainty exists as to the enforceability of certain master netting agreements under bankruptcy laws in some countries or industries.
(2)Includes securities collateral received or pledged under repurchase or securities lending agreements where there is a legally enforceable master netting agreement. These amounts are not offset on the Consolidated Balance Sheet, but are shown as a reduction to derive a net asset or liability. Securities collateral received or pledged where the legal enforceability of the master netting agreements is uncertain is excluded from the table.
(3)Excludes repurchase activity of $14.1 billion and $8.7 billion reported in loans and leases on the Consolidated Balance Sheet for September 30, 2024 and December 31, 2023.
(4)Balance is reported in accrued expenses and other liabilities on the Consolidated Balance Sheet and relates to transactions where the Corporation acts as the lender in a securities lending agreement and receives securities that can be pledged as collateral or sold. In these transactions, the Corporation recognizes an asset at fair value, representing the securities received, and a liability, representing the obligation to return those securities.
Repurchase Agreements and Securities Loaned Transactions Accounted for as Secured Borrowings
The following tables present securities sold under agreements to repurchase and securities loaned by remaining contractual term to maturity and class of collateral pledged. Included in “Other” are transactions where the Corporation acts as the lender in a securities lending agreement and receives securities that can be pledged as collateral or sold. Certain agreements
contain a right to substitute collateral and/or terminate the agreement prior to maturity at the option of the Corporation or the counterparty. Such agreements are included in the table below based on the remaining contractual term to maturity. For more information on collateral requirements, see Note 10 – Securities Financing Agreements, Short-term Borrowings, Collateral and Restricted Cash to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
83Bank of America
Remaining Contractual Maturity
Overnight and Continuous
30 Days or Less
After 30 Days Through 90 Days
Greater than
90 Days (1)
Total
(Dollars in millions)
September 30, 2024
Securities sold under agreements to repurchase
$
323,926
$
237,173
$
91,057
$
96,004
$
748,160
Securities loaned
88,912
513
739
9,343
99,507
Other
13,983
—
—
—
13,983
Total
$
426,821
$
237,686
$
91,796
$
105,347
$
861,650
December 31, 2023
Securities sold under agreements to repurchase
$
234,974
$
228,627
$
85,176
$
75,020
$
623,797
Securities loaned
76,580
139
618
5,770
83,107
Other
10,066
—
—
—
10,066
Total
$
321,620
$
228,766
$
85,794
$
80,790
$
716,970
(1)No agreements have maturities greater than four years.
Class of Collateral Pledged
Securities Sold Under Agreements to Repurchase
Securities Loaned
Other
Total
(Dollars in millions)
September 30, 2024
U.S. government and agency securities
$
434,687
$
72
$
16
$
434,775
Corporate securities, trading loans and other
33,793
2,486
9
36,288
Equity securities
28,978
96,945
13,958
139,881
Non-U.S. sovereign debt
245,645
4
—
245,649
Mortgage trading loans and ABS
5,057
—
—
5,057
Total
$
748,160
$
99,507
$
13,983
$
861,650
December 31, 2023
U.S. government and agency securities
$
352,950
$
34
$
38
$
353,022
Corporate securities, trading loans and other
23,242
1,805
661
25,708
Equity securities
11,517
81,266
9,367
102,150
Non-U.S. sovereign debt
231,140
2
—
231,142
Mortgage trading loans and ABS
4,948
—
—
4,948
Total
$
623,797
$
83,107
$
10,066
$
716,970
Collateral
The Corporation accepts securities and loans as collateral that it is permitted by contract or practice to sell or repledge. At September 30, 2024 and December 31, 2023, the fair value of this collateral was $976.0 billion and $911.3 billion, of which $944.6 billion and $870.9 billion were sold or repledged. The primary source of this collateral is securities borrowed or purchased under agreements to resell. For more information on collateral, see Note 10 – Securities Financing Agreements, Short-term Borrowings, Collateral and Restricted Cash to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Restricted Cash
At September 30, 2024 and December 31, 2023, the Corporation held restricted cash included within cash and cash equivalents on the Consolidated Balance Sheet of $6.8 billion and $5.6 billion, predominantly related to cash segregated in compliance with securities regulations and cash held on deposit with central banks to meet reserve requirements.
NOTE 10 Commitments and Contingencies
In the normal course of business, the Corporation enters into a number of off-balance sheet commitments. These commitments expose the Corporation to varying degrees of credit and market risk and are subject to the same credit and market risk limitation reviews as those instruments recorded on the Consolidated Balance Sheet. For more information on commitments and contingencies, see Note 12 – Commitments
and Contingencies to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Credit Extension Commitments
The Corporation enters into commitments to extend credit such as loan commitments, standby letters of credit (SBLCs) and commercial letters of credit to meet the financing needs of its customers. The following table includes the notional amount of unfunded legally binding lending commitments net of amounts distributed (i.e., syndicated or participated) to other financial institutions. The distributed amounts were $10.3 billion at both September 30, 2024 and December 31, 2023. The carrying value of the Corporation’s credit extension commitments at September 30, 2024 and December 31, 2023, excluding commitments accounted for under the fair value option, was $1.1 billion and $1.2 billion, which predominantly related to the reserve for unfunded lending commitments. The carrying value of these commitments is classified in accrued expenses and other liabilities on the Consolidated Balance Sheet.
Legally binding commitments to extend credit generally have specified rates and maturities. Certain of these commitments have adverse change clauses that help to protect the Corporation against deterioration in the borrower’s ability to pay. The following table includes the notional amount of commitments of $2.5 billion and $2.6 billion at September 30, 2024 and December 31, 2023 that are accounted for under the fair value option. However, the table excludes the cumulative net fair value for these commitments of $66 million and $67 million at September 30, 2024 and December 31, 2023, which
Bank of America 84
is classified in accrued expenses and other liabilities. For more information regarding the Corporation’s loan commitments
accounted for under the fair value option, see Note 15 – Fair Value Option.
Credit Extension Commitments
Expire in One Year or Less
Expire After One Year Through Three Years
Expire After Three Years Through Five Years
Expire After Five Years
Total
(Dollars in millions)
September 30, 2024
Notional amount of credit extension commitments
Loan commitments (1)
$
124,541
$
231,044
$
188,204
$
17,446
$
561,235
Home equity lines of credit
3,451
10,393
9,264
21,620
44,728
Standby letters of credit and financial guarantees (2)
22,803
9,103
3,469
479
35,854
Letters of credit
643
160
70
44
917
Other commitments (3)
17
35
106
1,032
1,190
Legally binding commitments
151,455
250,735
201,113
40,621
643,924
Credit card lines (4)
454,383
—
—
—
454,383
Total credit extension commitments
$
605,838
$
250,735
$
201,113
$
40,621
$
1,098,307
December 31, 2023
Notional amount of credit extension commitments
Loan commitments (1)
$
124,298
$
198,818
$
193,878
$
15,386
$
532,380
Home equity lines of credit
2,775
9,182
11,195
21,975
45,127
Standby letters of credit and financial guarantees (2)
21,067
9,633
2,693
652
34,045
Letters of credit
873
207
66
29
1,175
Other commitments (3)
17
50
108
1,035
1,210
Legally binding commitments
149,030
217,890
207,940
39,077
613,937
Credit card lines (4)
440,328
—
—
—
440,328
Total credit extension commitments
$
589,358
$
217,890
$
207,940
$
39,077
$
1,054,265
(1) At September 30, 2024 and December 31, 2023, $4.0 billion and $3.1 billion of these loan commitments were held in the form of a security.
(2) The notional amounts of SBLCs and financial guarantees classified as investment grade and non-investment grade based on the credit quality of the underlying reference name within the instrument were $24.8 billion and $10.2 billion at September 30, 2024, and $23.6 billion and $9.7 billion at December 31, 2023. Amounts in the table include consumer SBLCs of $883 million and $744 million at September 30, 2024 and December 31, 2023.
(3) Primarily includes second-loss positions on lease-end residual value guarantees.
(4) Includes business card unused lines of credit.
Other Commitments
At September 30, 2024 and December 31, 2023, the Corporation had commitments to purchase loans (e.g., residential mortgage and commercial real estate) of $451 million and $822 million, which upon settlement will be included in trading account assets, loans or LHFS, and commitments to purchase commercial loans of $6.9 billion and $420 million, which upon settlement will be included in trading account assets.
At September 30, 2024 and December 31, 2023, the Corporation had commitments to enter into resale and forward-dated resale and securities borrowing agreements of $129.4 billion and $117.0 billion, and commitments to enter into forward-dated repurchase and securities lending agreements of $113.1 billion and $63.0 billion. A significant portion of these commitments will expire within the next 12 months.
At both September 30, 2024 and December 31, 2023, the Corporation had a commitment to originate or purchase up to $4.0 billion, on a rolling 12-month basis, of auto loans and leases from a strategic partner. This commitment extends through November 2026 and can be terminated with 12 months prior notice.
At September 30, 2024 and December 31, 2023, the Corporation had unfunded equity investment commitments of $444 million and $477 million.
As a Federal Reserve member bank, the Corporation is required to subscribe to a certain amount of shares issued by its Federal Reserve district bank, which pays cumulative dividends at a prescribed rate. At both September 30, 2024 and December 31, 2023, the Corporation had paid $5.4 billion for half of its subscribed shares, with the remaining half subject to call by the Federal Reserve district bank board, which the Corporation believes is remote.
Other Guarantees
Bank-owned Life Insurance Book Value Protection
The Corporation sells products that offer book value protection to insurance carriers who offer group life insurance policies to corporations, primarily banks. At September 30, 2024 and December 31, 2023, the notional amount of these guarantees totaled $3.3 billion and $3.8 billion. At September 30, 2024 and December 31, 2023, the Corporation’s maximum exposure related to these guarantees totaled $505 million and $577 million, with estimated maturity dates between 2034 and 2037.
Merchant Services
The Corporation in its role as merchant acquirer or as a sponsor of other merchant acquirers may be held liable for any reversed charges that cannot be collected from the merchants due to,
85Bank of America
among other things, merchant fraud or insolvency. If charges are properly reversed after a purchase and cannot be collected from either the merchants or merchant acquirers, the Corporation may be held liable for these reversed charges. The ability to reverse a charge is primarily governed by the applicable payment network rules and regulations, which include, but are not limited to, the type of charge, type of payment used and time limits. The total amount of transactions subject to reversal under payment network rules and regulations processed for the preceding six-month period, which was approximately $195 billion, is an estimate of the Corporation’s maximum potential exposure as of September 30, 2024. The Corporation’s risk in this area primarily relates to circumstances where a cardholder has purchased goods or services for future delivery. The Corporation mitigates this risk by requiring cash deposits, guarantees, letters of credit or other types of collateral from certain merchants. The Corporation’s reserves for contingent losses, and the losses incurred related to the merchant processing activity were not significant.
Representations and Warranties Obligations and Corporate Guarantees
For more information on representations and warranties obligations and corporate guarantees, see Note 12 – Commitments and Contingencies to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
The reserve for representations and warranties obligations and corporate guarantees was $276 million and $604 million at September 30, 2024 and December 31, 2023 and is included in accrued expenses and other liabilities on the Consolidated Balance Sheet, and the related provision is included in other income in the Consolidated Statement of Income. The representations and warranties reserve represents the Corporation’s best estimate of incurred losses, is based on its experience in previous negotiations, and is subject to judgment, a variety of assumptions and known or unknown uncertainties. Future representations and warranties losses may occur in excess of the amounts recorded for these exposures; however, the Corporation does not expect such amounts to be material to the Corporation's financial condition and liquidity. See Litigation and Regulatory Matters below for the Corporation's combined range of possible loss in excess of the reserve for representations and warranties and the accrued liability for litigation.
Fixed Income Clearing Corporation Sponsored Member Repo Program
The Corporation acts as a sponsoring member in a repo program whereby the Corporation clears certain eligible resale and repurchase agreements through the Government Securities Division of the Fixed Income Clearing Corporation on behalf of clients that are sponsored members in accordance with the Fixed Income Clearing Corporation’s rules. As part of this program, the Corporation guarantees the payment and performance of its sponsored members to the Fixed Income Clearing Corporation. The Corporation’s guarantee obligation is secured by a security interest in cash or high-quality securities collateral placed by clients with the clearinghouse and therefore, the potential for the Corporation to incur significant losses under this arrangement is remote. The Corporation’s maximum potential exposure, without taking into consideration the related collateral, was $197.7 billion and $132.5 billion at September 30, 2024 and December 31, 2023.
Other Guarantees
In the normal course of business, the Corporation periodically guarantees the obligations of its affiliates in a variety of transactions including ISDA-related transactions and non-ISDA related transactions such as commodities trading, repurchase agreements, prime brokerage agreements and other transactions.
Guarantees of Certain Long-term Debt
The Corporation, as the parent company, fully and unconditionally guarantees the securities issued by BofA Finance LLC, a consolidated finance subsidiary of the Corporation, and effectively provides for the full and unconditional guarantee of trust securities and capital securities issued by certain statutory trust companies that are 100 percent owned finance subsidiaries of the Corporation.
Other Contingencies
In 2023, the Federal Deposit Insurance Corporation (FDIC) issued a final rule to impose a special assessment to recover certain estimated losses to the Deposit Insurance Fund (DIF) arising from the closures of Silicon Valley Bank and Signature Bank. The estimated losses will be recovered through quarterly special assessments collected from certain insured depository institutions, including the Corporation, and collection began during the three months ended June 30, 2024. As of September 30, 2024 and December 31, 2023, the Corporation’s accrual for its estimated share of the FDIC special assessment was $2.2 billion and $2.1 billion. The Corporation continues to monitor the FDIC’s estimated loss to the DIF, which could affect the amount of its accrued liability.
Litigation and Regulatory Matters
The following disclosures supplement the disclosure in Note 12 – Commitments and Contingencies to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K (the prior commitments and contingencies disclosure).
In the ordinary course of business, the Corporation and its subsidiaries are routinely defendants in or parties to many pending and threatened legal, regulatory and governmental actions and proceedings. In view of the inherent difficulty of predicting the outcome of such matters, particularly where the claimants seek very large or indeterminate damages or where the matters present novel legal theories or involve a large number of parties, the Corporation generally cannot predict the eventual outcome of the pending matters, timing of the ultimate resolution of these matters, or eventual loss, fines or penalties related to each pending matter.
As a matter develops, the Corporation, in conjunction with any outside counsel handling the matter, evaluates whether such matter presents a loss contingency that is probable and estimable, and, for the matters disclosed below and in the prior commitments and contingencies disclosure, whether a loss in excess of any accrued liability is reasonably possible in future periods. Once the loss contingency is deemed to be both probable and estimable, the Corporation will establish an accrued liability and record a corresponding amount of litigation-related expense. The Corporation continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established. Excluding expenses of internal and external legal service providers, litigation and regulatory investigation-related expense of $38 million and $188 million was recognized for the three and nine months ended September 30, 2024 compared to $76 million and $442 million for the same periods in 2023.
Bank of America 86
For any matter disclosed in this Note and in the prior commitments and contingencies disclosure for which a loss in future periods is reasonably possible and estimable (whether in excess of an accrued liability or where there is no accrued liability) and for representations and warranties exposures, the Corporation’s estimated range of possible loss is $0 to $0.8 billion in excess of the accrued liability, if any, as of September 30, 2024.
The accrued liability and estimated range of possible loss are based upon currently available information and subject to significant judgment, a variety of assumptions and known and unknown uncertainties. The matters underlying the accrued liability and estimated range of possible loss are unpredictable and may change from time to time, and actual losses may vary significantly from the current estimate and accrual. The estimated range of possible loss does not represent the Corporation’s maximum loss exposure.
Information is provided below and in the prior commitments and contingencies disclosure regarding the nature of the litigation or other contingency and, where specified, associated claimed damages. Based on current knowledge, and taking into account accrued liabilities, management does not believe that loss contingencies arising from pending matters, including the matters described below and in the prior commitments and contingencies disclosure, will have a material adverse effect on the consolidated financial condition or liquidity of the Corporation. However, in light of the significant judgment, variety of assumptions and uncertainties involved in those matters, some of which are beyond the Corporation’s control, and the very large or indeterminate damages sought in some of those matters, an adverse outcome in one or more of those matters could be material to the Corporation’s business or results of operations for any particular reporting period, or cause significant reputational harm.
Bank Secrecy Act/Anti-Money Laundering and Economic Sanctions Compliance
The Corporation has been engaged with several of its federal regulators in relation to certain aspects of the Corporation’s Bank Secrecy Act/anti-money laundering and sanctions compliance programs (Programs), including transaction monitoring, training, governance, and customer due diligence. In cooperation with regulators, the Corporation has been, and plans to continue, implementing enhancements to these Programs. The Corporation is continuing discussions with its regulators about the Programs, and resolution of these discussions may include one or more public orders by the regulators. Based on these discussions, the Corporation does not expect these issues relating to the Programs will have a material adverse financial impact on the Corporation.
CFPB Inquiry Related to Processing Electronic Payments
The Corporation has been responding to an inquiry from the Consumer Financial Protection Bureau (CFPB) regarding the Corporation’s processing of electronic payments of funds through the Zelle network. The CFPB staff has initiated discussions with the Corporation to pursue a resolution of the inquiry or file an enforcement action. The Corporation is evaluating next steps, including litigation.
Deposit Insurance Assessment
On July 1, 2024, the district court judge vacated the magistrate judge’s April 2023 report and recommendation for resolving the parties’ cross-motions for summary judgment, and asked the parties to file new motions, in light of a recent Supreme Court decision. The parties subsequently filed their new summary judgment motions which are pending.
Unemployment Insurance Prepaid Cards
In connection with the multidistrict litigation (MDL) in the U.S. District Court for the Southern District of California, in response to BANA’s partial motion to dismiss, the court dismissed certain claims in the amended complaint and allowed others to proceed, including claims under the Electronic Funds Transfer Act.
NOTE 11 Shareholders’ Equity
Common Stock
Declared Quarterly Cash Dividends on Common Stock (1)
Declaration Date
Record Date
Payment Date
Dividend Per Share
October 16, 2024
December 6, 2024
December 27, 2024
$
0.26
July 24, 2024
September 6, 2024
September 27, 2024
0.26
April 25, 2024
June 7, 2024
June 28, 2024
0.24
January 31, 2024
March 1, 2024
March 29, 2024
0.24
(1) In 2024, and through October 29, 2024.
During the three and nine months ended September 30, 2024, the Corporation repurchased and retired 88 million and 253 million shares of common stock, which reduced shareholders’ equity by $3.5 billion and $9.6 billion, including excise taxes.
During the nine months ended September 30, 2024, in connection with employee stock plans, the Corporation issued 74 million shares of its common stock and, to satisfy tax withholding obligations, repurchased 28 million shares of common stock. At September 30, 2024, the Corporation had reserved 551 million unissued shares of common stock for future issuances under employee stock plans, convertible notes and preferred stock.
On October 16, 2024, the Board of Directors declared a quarterly common stock dividend of $0.26 per share.
Preferred Stock
During the three months ended September 30, 2024, June 30, 2024 and March 31, 2024, the Corporation declared $510 million, $310 million and $532 million of cash dividends on preferred stock, or a total of $1.4 billion for the nine months ended September 30, 2024. During the three months ended September 30, 2024, the Corporation fully redeemed Series X for $2.0 billion, and during the three months ended June 30, 2024, the Corporation fully redeemed Series U for $1.0 billion and Series JJ for $854 million. Additionally, on October 23, 2024, the Corporation fully redeemed Series Z for $1.4 billion. For more information on the Corporation’s preferred stock, including liquidation preference, dividend requirements and redemption period, see Note 13 – Shareholders’ Equity to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
87Bank of America
NOTE 12Accumulated Other Comprehensive Income (Loss)
The table below presents the changes in accumulated OCI after-tax for the nine months ended September 30, 2024 and 2023.
(Dollars in millions)
Debt Securities
Debit Valuation Adjustments
Derivatives
Employee
Benefit Plans
Foreign
Currency
Total
Balance, December 31, 2022
$
(2,983)
$
(881)
$
(11,935)
$
(4,309)
$
(1,048)
$
(21,156)
Net change
81
(419)
(317)
25
(6)
(636)
Balance, September 30, 2023
$
(2,902)
$
(1,300)
$
(12,252)
$
(4,284)
$
(1,054)
$
(21,792)
Balance, December 31, 2023
$
(2,410)
$
(1,567)
$
(8,016)
$
(4,748)
$
(1,047)
$
(17,788)
Net change
444
(135)
3,100
75
(30)
3,454
Balance, September 30, 2024
$
(1,966)
$
(1,702)
$
(4,916)
$
(4,673)
$
(1,077)
$
(14,334)
The table below presents the net change in fair value recorded in accumulated OCI, net realized gains and losses reclassified into earnings and other changes for each component of OCI pre- and after-tax for the nine months ended September 30, 2024 and 2023.
Pretax
Tax effect
After- tax
Pretax
Tax effect
After- tax
Nine Months Ended September 30
(Dollars in millions)
2024
2023
Debt securities:
Net increase (decrease) in fair value
$
581
$
(142)
$
439
$
(306)
$
84
$
(222)
Net realized (gains) losses reclassified into earnings (1)
6
(1)
5
404
(101)
303
Net change
587
(143)
444
98
(17)
81
Debit valuation adjustments:
Net increase (decrease) in fair value
(191)
48
(143)
(560)
136
(424)
Net realized (gains) losses reclassified into earnings (1)
12
(4)
8
7
(2)
5
Net change
(179)
44
(135)
(553)
134
(419)
Derivatives:
Net increase (decrease) in fair value
1,851
(464)
1,387
(1,027)
261
(766)
Reclassifications into earnings:
Net interest income
2,163
(542)
1,621
616
(153)
463
Market making and similar activities
146
(35)
111
—
—
—
Compensation and benefits expense
(25)
6
(19)
(18)
4
(14)
Net realized (gains) losses reclassified into earnings
2,284
(571)
1,713
598
(149)
449
Net change
4,135
(1,035)
3,100
(429)
112
(317)
Employee benefit plans:
Net actuarial losses and other reclassified into earnings (2)
98
(23)
75
36
(11)
25
Net change
98
(23)
75
36
(11)
25
Foreign currency:
Net increase (decrease) in fair value
33
(70)
(37)
80
(75)
5
Net realized (gains) losses reclassified into earnings (1)
41
(34)
7
(44)
33
(11)
Net change
74
(104)
(30)
36
(42)
(6)
Total other comprehensive income (loss)
$
4,715
$
(1,261)
$
3,454
$
(812)
$
176
$
(636)
(1) Reclassifications of pretax debt securities, DVA and foreign currency (gains) losses are recorded in other income in the Consolidated Statement of Income.
(2) Reclassifications of pretax employee benefit plan costs are recorded in other general operating expense in the Consolidated Statement of Income.
Bank of America 88
NOTE 13 Earnings Per Common Share
The calculation of earnings per common share (EPS) and diluted EPS for the three and nine months ended September 30, 2024 and 2023 is presented below. For more information on the calculation of EPS, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Three Months Ended September 30
Nine Months Ended September 30
(In millions, except per share information)
2024
2023
2024
2023
Earnings per common share
Net income
$
6,896
$
7,802
$
20,467
$
23,371
Preferred stock dividends
(516)
(532)
(1,363)
(1,343)
Net income applicable to common shareholders
$
6,380
$
7,270
$
19,104
$
22,028
Average common shares issued and outstanding
7,818.0
8,017.1
7,894.7
8,041.3
Earnings per common share
$
0.82
$
0.91
$
2.42
$
2.74
Diluted earnings per common share
Net income applicable to common shareholders
$
6,380
$
7,270
$
19,104
$
22,028
Add preferred stock dividends due to assumed conversions
—
—
—
167
Net income allocated to common shareholders
$
6,380
$
7,270
$
19,104
$
22,195
Average common shares issued and outstanding
7,818.0
8,017.1
7,894.7
8,041.3
Dilutive potential common shares (1)
84.1
58.8
70.3
112.1
Total diluted average common shares issued and outstanding
7,902.1
8,075.9
7,965.0
8,153.4
Diluted earnings per common share
$
0.81
$
0.90
$
2.40
$
2.72
(1)Includes incremental dilutive shares from preferred stock, restricted stock units, restricted stock and warrants.
For the three and nine months ended September 30, 2024 and the three months ended September 30, 2023, 62 million average dilutive potential common shares associated with the Series L preferred stock were antidilutive, whereas they were included in the diluted share count under the “if-converted” method for the nine months ended September 30, 2023.
NOTE 14 Fair Value Measurements
Under applicable accounting standards, fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Corporation determines the fair values of its financial instruments under applicable accounting standards and conducts a review of fair value hierarchy classifications on a quarterly basis. Transfers into or out of fair value hierarchy classifications are made if the significant inputs used in the financial models measuring the fair values of the assets and liabilities become unobservable or observable in the current
marketplace. During the nine months ended September 30, 2024, there were no changes to valuation approaches or techniques that had, or are expected to have, a material impact on the Corporation’s consolidated financial position or results of operations.
For more information regarding the fair value hierarchy, how the Corporation measures fair value and valuation techniques, see Note 1 – Summary of Significant Accounting Principles and Note 20 – Fair Value Measurements to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K. The Corporation accounts for certain financial instruments under the fair value option. For more information, see Note 15 – Fair Value Option.
Recurring Fair Value
Assets and liabilities carried at fair value on a recurring basis at September 30, 2024 and December 31, 2023, including financial instruments that the Corporation accounts for under the fair value option, are summarized in the following tables.
89Bank of America
September 30, 2024
Fair Value Measurements
(Dollars in millions)
Level 1
Level 2
Level 3
Netting Adjustments (1)
Assets/Liabilities at Fair Value
Assets
Time deposits placed and other short-term investments
$
1,174
$
—
$
—
$
—
$
1,174
Federal funds sold and securities borrowed or purchased under agreements to resell
—
523,687
—
(347,458)
176,229
Trading account assets:
U.S. Treasury and government agencies
61,516
154
—
—
61,670
Corporate securities, trading loans and other
—
47,761
1,800
—
49,561
Equity securities
85,151
35,041
251
—
120,443
Non-U.S. sovereign debt
13,665
40,876
341
—
54,882
Mortgage trading loans, MBS and ABS:
U.S. government-sponsored agency guaranteed
—
45,272
4
—
45,276
Mortgage trading loans, ABS and other MBS
—
9,273
1,030
—
10,303
Total trading account assets (2)
160,332
178,377
3,426
—
342,135
Derivative assets
20,477
283,198
3,652
(273,145)
34,182
AFS debt securities:
U.S. Treasury and government agencies
209,247
948
—
—
210,195
Mortgage-backed securities:
Agency
—
34,594
—
—
34,594
Agency-collateralized mortgage obligations
—
16,504
—
—
16,504
Non-agency residential
—
75
221
—
296
Commercial
—
18,793
193
—
18,986
Non-U.S. securities
1,006
21,831
77
—
22,914
Other taxable securities
—
2,609
—
—
2,609
Tax-exempt securities
—
9,621
—
—
9,621
Total AFS debt securities
210,253
104,975
491
—
315,719
Other debt securities carried at fair value:
U.S. Treasury and government agencies
2,384
—
—
—
2,384
Non-agency residential MBS
—
129
137
—
266
Non-U.S. and other securities
793
6,274
—
—
7,067
Total other debt securities carried at fair value
3,177
6,403
137
—
9,717
Loans and leases
—
4,086
86
—
4,172
Loans held-for-sale
—
2,985
156
—
3,141
Other assets (3)
11,617
3,889
1,748
—
17,254
Total assets (4)
$
407,030
$
1,107,600
$
9,696
$
(620,603)
$
903,723
Liabilities
Interest-bearing deposits in U.S. offices
$
—
$
443
$
—
$
—
$
443
Federal funds purchased and securities loaned or sold under agreements to repurchase
—
590,889
—
(347,458)
243,431
Trading account liabilities:
U.S. Treasury and government agencies
14,676
217
—
—
14,893
Equity securities
36,574
6,224
8
—
42,806
Non-U.S. sovereign debt
13,865
12,498
—
—
26,363
Corporate securities and other
—
14,173
71
—
14,244
Mortgage trading loans and ABS
—
10
—
—
10
Total trading account liabilities
65,115
33,122
79
—
98,316
Derivative liabilities
21,189
297,058
5,811
(280,927)
43,131
Short-term borrowings
—
6,478
—
—
6,478
Accrued expenses and other liabilities
12,319
3,707
10
—
16,036
Long-term debt
—
52,975
579
—
53,554
Total liabilities (4)
$
98,623
$
984,672
$
6,479
$
(628,385)
$
461,389
(1)Amounts represent the impact of legally enforceable master netting agreements and also cash collateral held or placed with the same counterparties.
(2)Includes securities with a fair value of $18.7 billion that were segregated in compliance with securities regulations or deposited with clearing organizations. This amount is included in the parenthetical disclosure on the Consolidated Balance Sheet. Trading account assets also includes certain commodities inventory of $97 million that is accounted for at the lower of cost or net realizable value, which is the current selling price less any costs to sell.
(3)Includes MSRs, which are classified as Level 3 assets, of $919 million.
(4)Total recurring Level 3 assets were 0.29 percent of total consolidated assets, and total recurring Level 3 liabilities were 0.21 percent of total consolidated liabilities.
Bank of America 90
December 31, 2023
Fair Value Measurements
(Dollars in millions)
Level 1
Level 2
Level 3
Netting Adjustments (1)
Assets/Liabilities at Fair Value
Assets
Time deposits placed and other short-term investments
$
1,181
$
—
$
—
$
—
$
1,181
Federal funds sold and securities borrowed or purchased under agreements to resell
—
436,340
—
(303,287)
133,053
Trading account assets:
U.S. Treasury and government agencies
65,160
1,963
—
—
67,123
Corporate securities, trading loans and other
—
41,462
1,689
—
43,151
Equity securities
47,431
41,380
187
—
88,998
Non-U.S. sovereign debt
5,517
21,195
396
—
27,108
Mortgage trading loans, MBS and ABS:
U.S. government-sponsored agency guaranteed
—
38,802
2
—
38,804
Mortgage trading loans, ABS and other MBS
—
10,955
1,215
—
12,170
Total trading account assets (2)
118,108
155,757
3,489
—
277,354
Derivative assets
14,676
272,244
3,422
(251,019)
39,323
AFS debt securities:
U.S. Treasury and government agencies
176,764
902
—
—
177,666
Mortgage-backed securities:
Agency
—
37,812
—
—
37,812
Agency-collateralized mortgage obligations
—
2,544
—
—
2,544
Non-agency residential
—
109
273
—
382
Commercial
—
10,435
—
—
10,435
Non-U.S. securities
1,093
21,679
103
—
22,875
Other taxable securities
—
4,835
—
—
4,835
Tax-exempt securities
—
10,100
—
—
10,100
Total AFS debt securities
177,857
88,416
376
—
266,649
Other debt securities carried at fair value:
U.S. Treasury and government agencies
1,690
—
—
—
1,690
Non-agency residential MBS
—
211
69
—
280
Non-U.S. and other securities
1,786
6,447
—
—
8,233
Total other debt securities carried at fair value
3,476
6,658
69
—
10,203
Loans and leases
—
3,476
93
—
3,569
Loans held-for-sale
—
1,895
164
—
2,059
Other assets (3)
8,052
2,152
1,657
—
11,861
Total assets (4)
$
323,350
$
966,938
$
9,270
$
(554,306)
$
745,252
Liabilities
Interest-bearing deposits in U.S. offices
$
—
$
284
$
—
$
—
$
284
Federal funds purchased and securities loaned or sold under agreements to repurchase
—
481,896
—
(303,287)
178,609
Trading account liabilities:
U.S. Treasury and government agencies
14,908
65
—
—
14,973
Equity securities
51,772
4,710
12
—
56,494
Non-U.S. sovereign debt
9,390
6,997
—
—
16,387
Corporate securities and other
—
7,637
39
—
7,676
Total trading account liabilities
76,070
19,409
51
—
95,530
Derivative liabilities
14,375
280,908
5,916
(257,767)
43,432
Short-term borrowings
—
4,680
10
—
4,690
Accrued expenses and other liabilities
8,969
2,483
21
—
11,473
Long-term debt
—
42,195
614
—
42,809
Total liabilities (4)
$
99,414
$
831,855
$
6,612
$
(561,054)
$
376,827
(1)Amounts represent the impact of legally enforceable master netting agreements and also cash collateral held or placed with the same counterparties.
(2)Includes securities with a fair value of $18.0 billion that were segregated in compliance with securities regulations or deposited with clearing organizations. This amount is included in the parenthetical disclosure on the Consolidated Balance Sheet. Trading account assets also includes certain commodities inventory of $42 million that is accounted for at the lower of cost or net realizable value, which is the current selling price less any costs to sell.
(3)Includes MSRs, which are classified as Level 3 assets, of $970 million.
(4)Total recurring Level 3 assets were 0.29 percent of total consolidated assets, and total recurring Level 3 liabilities were 0.23 percent of total consolidated liabilities.
The following tables present a reconciliation of all assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the three and nine months ended September 30, 2024 and 2023, including net realized and unrealized gains (losses) included in earnings and accumulated OCI. Transfers into Level 3 occur primarily due
to decreased price observability, and transfers out of Level 3 occur primarily due to increased price observability. Transfers occur on a regular basis for long-term debt instruments due to changes in the impact of unobservable inputs on the value of the embedded derivative in relation to the instrument as a whole.
91Bank of America
Level 3 – Fair Value Measurements (1)
Balance June 30
Total
Realized/Unrealized Gains
(Losses) in Net
Income (2)
Gains (Losses) in OCI (3)
Gross
Gross Transfers into Level 3
Gross Transfers out of Level 3
Balance September 30
Change in Unrealized Gains (Losses) in Net Income Related to Financial Instruments Still Held (2)
(Dollars in millions)
Purchases
Sales
Issuances
Settlements
Three Months Ended September 30, 2024
Trading account assets:
Corporate securities, trading loans and other
$
1,816
$
80
$
—
$
210
$
(194)
$
21
$
(282)
$
166
$
(17)
$
1,800
$
29
Equity securities
231
2
—
27
(15)
—
—
35
(29)
251
1
Non-U.S. sovereign debt
323
6
5
2
(11)
—
(3)
19
—
341
6
Mortgage trading loans, MBS and ABS
973
(33)
—
87
(68)
—
(13)
128
(40)
1,034
(32)
Total trading account assets
3,343
55
5
326
(288)
21
(298)
348
(86)
3,426
4
Net derivative assets (liabilities) (4)
(2,366)
409
—
264
(413)
—
(148)
(86)
181
(2,159)
562
AFS debt securities:
Non-agency residential MBS
133
(2)
12
—
—
—
(3)
94
(13)
221
(3)
Commercial MBS
170
—
—
25
—
—
(2)
—
—
193
—
Non-U.S. and other taxable securities
78
1
—
—
—
—
(4)
4
(2)
77
—
Total AFS debt securities
381
(1)
12
25
—
—
(9)
98
(15)
491
(3)
Other debt securities carried at fair value – Non-agency residential MBS
(1)Assets (liabilities). For assets, increase (decrease) to Level 3 and for liabilities, (increase) decrease to Level 3.
(2)Includes gains (losses) reported in earnings in the following income statement line items: Trading account assets/liabilities - market making and similar activities and other income; Net derivative assets (liabilities) - market making and similar activities and other income; AFS debt securities - other income; Other debt securities carried at fair value - other income; Loans and leases - other income; Loans held-for-sale - other income; Other assets - market making and similar activities and other income primarily related to MSRs; Short-term borrowings - market making and similar activities; Accrued expenses and other liabilities - other income; Long-term debt - market making and similar activities.
(3)Includes unrealized gains (losses) in OCI on AFS debt securities, foreign currency translation adjustments, derivatives designated in cash flow hedges and the impact of changes in the Corporation’s credit spreads on long-term debt accounted for under the fair value option. Amounts include net unrealized gains (losses) of $20 million and $(245) million related to financial instruments still held at September 30, 2024 and 2023.
(4)Net derivative assets (liabilities) include derivative assets of $3.7 billion and $4.6 billion and derivative liabilities of $5.8 billion and $9.1 billion at September 30, 2024 and 2023.
(5)Amounts represent instruments that are accounted for under the fair value option.
(6)Issuances represent loan originations and MSRs recognized following securitizations or whole-loan sales.
(7)Settlements primarily represent the net change in fair value of the MSR asset due to the recognition of modeled cash flows and the passage of time.
Bank of America 92
Level 3 – Fair Value Measurements (1)
Balance January 1
Total Realized/Unrealized Gains (Losses) in Net Income (2)
Gains
(Losses)
in OCI (3)
Gross
Gross Transfers into Level 3
Gross Transfers out of Level 3
Balance September 30
Change in Unrealized Gains (Losses) in Net Income Related to Financial Instruments Still Held (2)
(Dollars in millions)
Purchases
Sales
Issuances
Settlements
Nine Months Ended September 30, 2024
Trading account assets:
Corporate securities, trading loans and other
$
1,689
$
104
$
(3)
$
501
$
(322)
$
44
$
(748)
$
681
$
(146)
$
1,800
$
(11)
Equity securities
187
8
—
113
(52)
—
(4)
46
(47)
251
—
Non-U.S. sovereign debt
396
11
(29)
28
(16)
—
(68)
19
—
341
11
Mortgage trading loans, MBS and ABS
1,217
(56)
—
324
(539)
—
(56)
292
(148)
1,034
(76)
Total trading account assets
3,489
67
(32)
966
(929)
44
(876)
1,038
(341)
3,426
(76)
Net derivative assets (liabilities) (4)
(2,494)
915
—
758
(992)
—
(683)
(385)
722
(2,159)
(318)
AFS debt securities:
Non-agency residential MBS
273
7
59
—
—
—
(144)
156
(130)
221
5
Commercial MBS
—
(6)
1
200
—
—
(2)
—
—
193
(6)
Non-U.S. and other taxable securities
103
(6)
—
—
—
—
(18)
5
(7)
77
(2)
Total AFS debt securities
376
(5)
60
200
—
—
(164)
161
(137)
491
(3)
Other debt securities carried at fair value – Non-agency residential MBS
(1)Assets (liabilities). For assets, increase (decrease) to Level 3 and for liabilities, (increase) decrease to Level 3.
(2)Includes gains (losses) reported in earnings in the following income statement line items: Trading account assets/liabilities - market making and similar activities and other income; Net derivative assets (liabilities) - market making and similar activities and other income; AFS debt securities - other income; Other debt securities carried at fair value - other income; Loans and leases - market making and similar activities and other income; Loans held-for-sale - market making and similar activities and other income; Other assets - market making and similar activities and other income primarily related to MSRs; Short-term borrowings - market making and similar activities; Accrued expenses and other liabilities - other income; Long-term debt - market making and similar activities.
(3)Includes unrealized gains (losses) in OCI on AFS debt securities, foreign currency translation adjustments, derivatives designated in cash flow hedges and the impact of changes in the Corporation’s credit spreads on long-term debt accounted for under the fair value option. Amounts include net unrealized losses of $40 million and $332 million related to financial instruments still held at September 30, 2024 and 2023.
(4)Net derivative assets (liabilities) include derivative assets of $3.7 billion and $4.6 billion and derivative liabilities of $5.8 billion and $9.1 billion at September 30, 2024 and 2023.
(5)Amounts represent instruments that are accounted for under the fair value option.
(6)Issuances represent loan originations and MSRs recognized following securitizations or whole-loan sales.
(7)Settlements primarily represent the net change in fair value of the MSR asset due to the recognition of modeled cash flows and the passage of time.
93Bank of America
The following tables present information about significant unobservable inputs related to the Corporation’s material categories of Level 3 financial assets and liabilities at September 30, 2024 and December 31, 2023.
Quantitative Information about Level 3 Fair Value Measurements at September 30, 2024
(Dollars in millions)
Inputs
Financial Instrument
Fair Value
Valuation Technique
Significant Unobservable Inputs
Ranges of Inputs
Weighted Average (1)
Loans and Securities (2)
Instruments backed by residential real estate assets
$
594
Discounted cash flow, Market comparables
Yield
0% to 20%
8
%
Trading account assets – Mortgage trading loans, MBS and ABS
155
Prepayment speed
0% to 44% CPR
8% CPR
Loans and leases
81
Default rate
0% to 6% CDR
5% CDR
AFS debt securities – Non-agency residential
221
Price
$0 to $116
$72
Other debt securities carried at fair value – Non-agency residential
137
Loss severity
0% to 75%
26
%
Instruments backed by commercial real estate assets
$
449
Discounted cash flow
Yield
0% to 25%
10
%
Trading account assets – Corporate securities, trading loans and other
205
Price
$0 to $103
$78
Trading account assets – Mortgage trading loans, MBS and ABS
51
AFS debt securities – Commercial
193
Commercial loans, debt securities and other
$
3,002
Discounted cash flow, Market comparables
Yield
0% to 29%
15
%
Trading account assets – Corporate securities, trading loans and other
1,595
Prepayment speed
10% to 20%
15
%
Trading account assets – Non-U.S. sovereign debt
341
Default rate
3% to 4%
4
%
Trading account assets – Mortgage trading loans, MBS and ABS
828
Loss severity
35% to 40%
37
%
AFS debt securities – Non-U.S. and other taxable securities
77
Price
$0 to $157
$69
Loans and leases
5
Loans held-for-sale
156
Other assets, primarily auction rate securities
$
829
Discounted cash flow, Market comparables
Price
$10 to $95
$85
Discount rate
10
%
n/a
MSRs
$
919
Discounted cash flow
Weighted-average life, fixed rate (5)
0 to 12 years
6 years
Weighted-average life, variable rate (5)
0 to 11 years
3 years
Option-adjusted spread, fixed rate
7% to 14%
9
%
Option-adjusted spread, variable rate
9% to 15%
11
%
Structured liabilities
Long-term debt
$
(579)
Discounted cash flow, Market comparables, Industry standard derivative pricing (3)
Yield
18% to 28%
21
%
Price
$33 to $100
$91
Natural gas forward price
$2/MMBtu to $7/MMBtu
$3 /MMBtu
Net derivative assets (liabilities)
Credit derivatives
$
25
Discounted cash flow, Stochastic recovery correlation model
Credit spreads
3 to 94 bps
56 bps
Prepayment speed
15% CPR
n/a
Default rate
2% CDR
n/a
Credit correlation
24% to 65%
50
%
Price
$0 to $97
$90
Equity derivatives
$
(1,348)
Industry standard derivative pricing (3)
Equity correlation
0% to 100%
61
%
Long-dated equity volatilities
1% to 116%
33
%
Commodity derivatives
$
(694)
Discounted cash flow, Industry standard derivative pricing (3)
Natural gas forward price
$2/MMBtu to $7/MMBtu
$3 /MMBtu
Power forward price
$23 to $96
$44
Interest rate derivatives
$
(142)
Industry standard derivative pricing (4)
Correlation (IR/IR)
(35)% to 70%
49
%
Correlation (FX/IR)
(25)% to 58%
33
%
Long-dated inflation rates
(1)% to 12%
1
%
Long-dated inflation volatilities
0% to 5%
3
%
Interest rate volatilities
0% to 4%
0
%
Total net derivative assets (liabilities)
$
(2,159)
(1)For loans and securities, structured liabilities and net derivative assets (liabilities), the weighted average is calculated based upon the absolute fair value of the instruments.
(2)The categories are aggregated based upon product type, which differs from financial statement classification. The following is a reconciliation to the line items in the table on page 90: Trading account assets – Corporate securities, trading loans and other of $1.8 billion, Trading account assets – Non-U.S. sovereign debt of $341 million, Trading account assets – Mortgage trading loans, MBS and ABS of $1.0 billion, AFS debt securities of $491 million, Other debt securities carried at fair value - Non-agency residential of $137 million, Other assets, including MSRs, of $1.7 billion, Loans and leases of $86 million and LHFS of $156 million.
(3)Includes models such as Monte Carlo simulation and Black-Scholes.
(4)Includes models such as Monte Carlo simulation, Black-Scholes and other methods that model the joint dynamics of interest, inflation and foreign exchange rates.
(5)The weighted-average life is a product of changes in market rates of interest, prepayment rates and other model and cash flow assumptions.
CPR = Constant Prepayment Rate
CDR = Constant Default Rate
MMBtu = Million British thermal units
IR = Interest Rate
FX = Foreign Exchange
n/a = not applicable
Bank of America 94
Quantitative Information about Level 3 Fair Value Measurements at December 31, 2023
(Dollars in millions)
Inputs
Financial Instrument
Fair Value
Valuation Technique
Significant Unobservable Inputs
Ranges of Inputs
Weighted Average (1)
Loans and Securities (2)
Instruments backed by residential real estate assets
$
538
Discounted cash flow, Market comparables
Yield
0% to 22%
9
%
Trading account assets – Mortgage trading loans, MBS and ABS
109
Prepayment speed
1% to 42% CPR
10% CPR
Loans and leases
87
Default rate
0% to 3% CDR
1% CDR
AFS debt securities - Non-agency residential
273
Price
$0 to $115
$70
Other debt securities carried at fair value - Non-agency residential
69
Loss severity
0% to 100%
27
%
Instruments backed by commercial real estate assets
$
363
Discounted cash flow
Yield
0% to 25%
12
%
Trading account assets – Corporate securities, trading loans and other
301
Price
$0 to $100
$75
Trading account assets – Mortgage trading loans, MBS and ABS
62
Commercial loans, debt securities and other
$
3,103
Discounted cash flow, Market comparables
Yield
5% to 59%
13
%
Trading account assets – Corporate securities, trading loans and other
1,388
Prepayment speed
10% to 20%
16
%
Trading account assets – Non-U.S. sovereign debt
396
Default rate
3% to 4%
4
%
Trading account assets – Mortgage trading loans, MBS and ABS
1,046
Loss severity
35% to 40%
37
%
AFS debt securities – Non-U.S. and other taxable securities
103
Price
$0 to $157
$70
Loans and leases
6
Loans held-for-sale
164
Other assets, primarily auction rate securities
$
687
Discounted cash flow, Market comparables
Price
$10 to $95
$85
Discount rate
10%
n/a
MSRs
$
970
Discounted cash flow
Weighted-average life, fixed rate (5)
0 to 14 years
6 years
Weighted-average life, variable rate (5)
0 to 11 years
3 years
Option-adjusted spread, fixed rate
7% to 14%
9
%
Option-adjusted spread, variable rate
9% to 15%
12
%
Structured liabilities
Long-term debt
$
(614)
Discounted cash flow, Market comparables, Industry standard derivative pricing (3)
Yield
58%
n/a
Equity correlation
5% to 97%
25
%
Price
$0 to $100
$90
Natural gas forward price
$1/MMBtu to $7/MMBtu
$4/MMBtu
Net derivative assets (liabilities)
Credit derivatives
$
9
Discounted cash flow, Stochastic recovery correlation model
Credit spreads
2 to 79 bps
59 bps
Prepayment speed
15% CPR
n/a
Default rate
2% CDR
n/a
Credit correlation
22% to 62%
58
%
Price
$0 to $94
$87
Equity derivatives
$
(1,386)
Industry standard derivative pricing (3)
Equity correlation
0% to 99%
67
%
Long-dated equity volatilities
4% to 102%
34
%
Commodity derivatives
$
(633)
Discounted cash flow, Industry standard derivative pricing (3)
Natural gas forward price
$1/MMBtu to $7/MMBtu
$4/MMBtu
Power forward price
$21 to $91
$42
Interest rate derivatives
$
(484)
Industry standard derivative pricing (4)
Correlation (IR/IR)
(35)% to 89%
65
%
Correlation (FX/IR)
(25)% to 58%
35
%
Long-dated inflation rates
G(1)% to 11%
0
%
Long-dated inflation volatilities
0% to 5%
2
%
Interest rates volatilities
0% to 2%
1
%
Total net derivative assets (liabilities)
$
(2,494)
(1)For loans and securities, structured liabilities and net derivative assets (liabilities), the weighted average is calculated based upon the absolute fair value of the instruments.
(2)The categories are aggregated based upon product type, which differs from financial statement classification. The following is a reconciliation to the line items in the table on page 91: Trading account assets – Corporate securities, trading loans and other of $1.7 billion, Trading account assets – Non-U.S. sovereign debt of $396 million, Trading account assets – Mortgage trading loans, MBS and ABS of $1.2 billion, AFS debt securities of $376 million, Other debt securities carried at fair value - Non-agency residential of $69 million, Other assets, including MSRs, of $1.7 billion, Loans and leases of $93 million and LHFS of $164 million.
(3)Includes models such as Monte Carlo simulation and Black-Scholes.
(4)Includes models such as Monte Carlo simulation, Black-Scholes and other methods that model the joint dynamics of interest, inflation and foreign exchange rates.
(5)The weighted-average life is a product of changes in market rates of interest, prepayment rates and other model and cash flow assumptions.
CPR = Constant Prepayment Rate
CDR = Constant Default Rate
MMBtu = Million British thermal units
IR = Interest Rate
FX = Foreign Exchange
n/a = not applicable
95Bank of America
Uncertainty of Fair Value Measurements from Unobservable Inputs
For information on the types of instruments, valuation approaches and the impact of changes in unobservable inputs used in Level 3 measurements, see Note 20 – Fair Value Measurements to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Nonrecurring Fair Value
The Corporation holds certain assets that are measured at fair value only in certain situations (e.g., the impairment of an asset), and these measurements are referred to herein as nonrecurring. The amounts below represent assets still held as of the reporting date for which a nonrecurring fair value adjustment was recorded during the three and nine months ended September 30, 2024 and 2023.
Assets Measured at Fair Value on a Nonrecurring Basis
September 30, 2024
Three Months Ended September 30, 2024
Nine Months Ended September 30, 2024
(Dollars in millions)
Level 2
Level 3
Gains (Losses)
Assets
Loans held-for-sale
$
795
$
2,685
$
(62)
$
(160)
Loans and leases (1)
—
89
(10)
(26)
Foreclosed properties (2, 3)
—
149
(17)
(15)
Other assets (4)
1
274
—
(40)
September 30, 2023
Three Months Ended September 30, 2023
Nine Months Ended September 30, 2023
Assets
Loans held-for-sale
$
276
$
3,066
$
(28)
$
(95)
Loans and leases (1)
—
129
(15)
(36)
Foreclosed properties (2, 3)
—
44
1
(2)
Other assets (4)
31
905
(182)
(189)
(1)Includes $3 million and $7 million of losses on loans that were written down to a collateral value of zero during the three and nine months ended September 30, 2024 compared to losses of $4 million and $8 million for the same periods in 2023.
(2)Amounts are included in other assets on the Consolidated Balance Sheet and represent the carrying value of foreclosed properties that were written down subsequent to their initial classification as foreclosed properties. Losses on foreclosed properties include losses recorded during the first 90 days after transfer of a loan to foreclosed properties.
(3)Excludes $19 million and $33 million of properties acquired upon foreclosure of certain government-guaranteed loans (principally FHA-insured loans) at September 30, 2024 and 2023.
(4)Represents the fair value of certain impaired renewable energy investments.
The table below presents information about significant unobservable inputs utilized in the Corporation's nonrecurring Level 3 fair value measurements during the nine months ended September 30, 2024 and the year ended December 31, 2023.
Quantitative Information about Nonrecurring Level 3 Fair Value Measurements
Inputs
Financial Instrument
Fair Value
Valuation Technique
Significant Unobservable Inputs
Ranges of Inputs
Weighted
Average (1)
(Dollars in millions)
Nine Months Ended September 30, 2024
Loans held-for-sale
$
2,685
Pricing model
Implied yield
7% to 23%
n/a
Loans and leases (2)
89
Market comparables
OREO discount
10% to 66%
26
%
Costs to sell
8% to 24%
9
%
Other assets (3)
274
Discounted cash flow
Discount rate
7
%
n/a
Year Ended December 31, 2023
Loans held-for-sale
$
2,793
Pricing model
Implied yield
7% to 23%
n/a
Loans and leases (2)
153
Market comparables
OREO discount
10% to 66%
26
%
Costs to sell
8% to 24%
9
%
Other assets (3)
898
Discounted cash flow
Discount rate
7
%
n/a
(1)The weighted average is calculated based upon the fair value of the loans.
(2)Represents residential mortgages where the loan has been written down to the fair value of the underlying collateral.
(3)Represents the fair value of certain impaired renewable energy investments.
n/a = not applicable
NOTE 15 Fair Value Option
The Corporation elects to account for certain financial instruments under the fair value option. For more information on the primary financial instruments for which the fair value option elections have been made, see Note 21 – Fair Value Option to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K. The following tables provide information about the fair value carrying amount and the
contractual principal outstanding of assets and liabilities accounted for under the fair value option at September 30, 2024 and December 31, 2023, and information about where changes in the fair value of assets and liabilities accounted for under the fair value option are included in the Consolidated Statement of Income for the three and nine months ended September 30, 2024 and 2023.
Bank of America 96
Fair Value Option Elections
September 30, 2024
December 31, 2023
(Dollars in millions)
Fair Value Carrying Amount
Contractual Principal Outstanding
Fair Value Carrying Amount Less Unpaid Principal
Fair Value Carrying Amount
Contractual Principal Outstanding
Fair Value Carrying Amount Less Unpaid Principal
Federal funds sold and securities borrowed or purchased under agreements to resell
$
176,229
$
176,255
$
(26)
$
133,053
$
133,001
$
52
Loans reported as trading account assets (1)
9,565
15,991
(6,426)
8,377
15,580
(7,203)
Trading inventory – other
13,731
n/a
n/a
25,282
n/a
n/a
Consumer and commercial loans
4,172
4,049
123
3,569
3,618
(49)
Loans held-for-sale (1)
3,141
3,784
(643)
2,059
2,873
(814)
Other assets
3,289
n/a
n/a
1,986
n/a
n/a
Long-term deposits
443
509
(66)
284
267
17
Federal funds purchased and securities loaned or sold under agreements to repurchase
243,431
243,436
(5)
178,609
178,634
(25)
Short-term borrowings
6,478
6,501
(23)
4,690
4,694
(4)
Unfunded loan commitments
66
n/a
n/a
67
n/a
n/a
Accrued expenses and other liabilities
2,066
2,201
(135)
1,341
1,347
(6)
Long-term debt
53,554
55,209
(1,655)
42,809
46,707
(3,898)
(1)A significant portion of the loans reported as trading account assets and LHFS are distressed loans that were purchased at a deep discount to par, and the remainder are loans with a fair value near contractual principal outstanding.
n/a = not applicable
Gains (Losses) Related to Assets and Liabilities Accounted for Under the Fair Value Option
Three Months Ended September 30
2024
2023
(Dollars in millions)
Market making and similar activities
Other Income
Total
Market making and similar activities
Other Income
Total
Federal funds sold and securities borrowed or purchased under agreements to resell
$
169
$
(2)
$
167
$
45
$
(4)
$
41
Loans reported as trading account assets
72
40
112
58
—
58
Trading inventory – other (1)
539
—
539
(900)
—
(900)
Consumer and commercial loans
30
7
37
(50)
15
(35)
Loans held-for-sale (2)
—
23
23
—
(38)
(38)
Short-term borrowings
231
—
231
(1)
—
(1)
Unfunded loan commitments
—
7
7
(1)
7
6
Accrued expenses and other liabilities
13
—
13
197
—
197
Long-term debt (3)
(877)
(4)
(881)
863
(4)
859
Other (4)
(108)
(9)
(117)
(7)
3
(4)
Total
$
69
$
62
$
131
$
204
$
(21)
$
183
Nine Months Ended September 30
2024
2023
Federal funds sold and securities borrowed or purchased under agreements to resell
$
277
$
(6)
$
271
$
27
$
(12)
$
15
Loans reported as trading account assets
77
40
117
208
—
208
Trading inventory – other (1)
1,320
—
1,320
2,065
—
2,065
Consumer and commercial loans
86
26
112
(189)
56
(133)
Loans held-for-sale (2)
—
6
6
—
(22)
(22)
Short-term borrowings
304
—
304
10
—
10
Unfunded loan commitments
—
(13)
(13)
(1)
27
26
Accrued expenses and other liabilities
411
—
411
246
—
246
Long-term debt (3)
(610)
(24)
(634)
361
(27)
334
Other (4)
(192)
(16)
(208)
46
—
46
Total
$
1,673
$
13
$
1,686
$
2,773
$
22
$
2,795
(1) The gains (losses) in market making and similar activities are primarily offset by (losses) gains on trading liabilities that hedge these assets.
(2) Includes the value of IRLCs on funded loans, including those sold during the period.
(3) The net gains (losses) in market making and similar activities relate to the embedded derivatives in structured liabilities and are typically offset by (losses) gains on derivatives and securities that hedge these liabilities. For the cumulative impact of changes in the Corporation’s own credit spreads and the amount recognized in accumulated OCI, see Note 12 – Accumulated Other Comprehensive Income (Loss). For more information on how the Corporation’s own credit spread is determined, see Note 20 – Fair Value Measurements to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
(4) Includes gains (losses) on other assets, long-term deposits and federal funds purchased and securities loaned or sold under agreements to repurchase.
97Bank of America
Gains (Losses) Related to Borrower-specific Credit Risk for Assets and Liabilities Accounted for Under the Fair Value Option
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Loans reported as trading account assets
$
48
$
19
$
(16)
$
55
Consumer and commercial loans
7
5
23
41
Loans held-for-sale
7
(17)
6
(17)
Unfunded loan commitments
7
7
(13)
27
Long-term debt
—
—
(3)
—
NOTE 16 Fair Value of Financial Instruments
The following disclosures include financial instruments that are not carried at fair value or only a portion of the ending balance is carried at fair value on the Consolidated Balance Sheet. Certain loans, deposits, long-term debt, unfunded lending commitments and other financial instruments are accounted for under the fair value option. For more information, see Note 21 – Fair Value Option to the Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Fair Value of Financial Instruments
The carrying values and fair values by fair value hierarchy of certain financial instruments where only a portion of the ending balance was carried at fair value at September 30, 2024 and December 31, 2023 are presented in the table below.
Fair Value of Financial Instruments
Fair Value
Carrying Value
Level 2
Level 3
Total
(Dollars in millions)
September 30, 2024
Financial assets
Loans
$
1,041,712
$
51,661
$
979,150
$
1,030,811
Loans held-for-sale
10,351
7,478
2,873
10,351
Financial liabilities
Deposits (1)
1,930,352
1,932,749
—
1,932,749
Long-term debt
296,927
301,702
709
302,411
Commercial unfunded lending commitments (2)
1,166
56
3,462
3,518
December 31, 2023
Financial assets
Loans
$
1,020,281
$
49,311
$
949,977
$
999,288
Loans held-for-sale
6,002
3,024
2,979
6,003
Financial liabilities
Deposits (1)
1,923,827
1,925,015
—
1,925,015
Long-term debt
302,204
303,070
913
303,983
Commercial unfunded lending commitments (2)
1,275
44
3,927
3,971
(1) Includes demand deposits of $867.1 billion and $897.3 billion with no stated maturities at September 30, 2024 and December 31, 2023.
(2) The carrying value of commercial unfunded lending commitments is included in accrued expenses and other liabilities on the Consolidated Balance Sheet. The Corporation does not estimate the fair value of consumer unfunded lending commitments because, in many instances, the Corporation can reduce or cancel these commitments by providing notice to the borrower. For more information on commitments, see Note 10 – Commitments and Contingencies.
NOTE 17 Business Segment Information
The Corporation reports its results of operations through the following four business segments: Consumer Banking, Global Wealth & Investment Management,Global Banking and Global Markets, with the remaining operations recorded in All Other. For more information, see Note 23 – Business Segment Information to the Consolidated Financial Statements of the Corporation’s
2023 Annual Report on Form 10-K. The following tables present net income (loss) and the components thereto (with net interest income on an FTE basis for the business segments, All Other and the total Corporation) for the three and nine months ended September 30, 2024 and 2023, and total assets at September 30, 2024 and 2023 for each business segment, as well as All Other.
Bank of America 98
Results of Business Segments and All Other
At and for the three months ended September 30
Total Corporation (1)
Consumer Banking
Global Wealth & Investment Management
(Dollars in millions)
2024
2023
2024
2023
2024
2023
Net interest income
$
14,114
$
14,532
$
8,278
$
8,391
$
1,709
$
1,755
Noninterest income
11,378
10,788
2,140
2,081
4,053
3,566
Total revenue, net of interest expense
25,492
25,320
10,418
10,472
5,762
5,321
Provision for credit losses
1,542
1,234
1,302
1,397
7
(6)
Noninterest expense
16,479
15,838
5,534
5,256
4,340
3,950
Income before income taxes
7,471
8,248
3,582
3,819
1,415
1,377
Income tax expense
575
446
895
955
354
344
Net income
$
6,896
$
7,802
$
2,687
$
2,864
$
1,061
$
1,033
Period-end total assets
$
3,324,293
$
3,153,090
$
1,026,293
$
1,062,038
$
328,831
$
333,779
Global Banking
Global Markets
All Other
2024
2023
2024
2023
2024
2023
Net interest income
$
3,230
$
3,613
$
898
$
674
$
(1)
$
99
Noninterest income
2,604
2,590
4,732
4,268
(2,151)
(1,717)
Total revenue, net of interest expense
5,834
6,203
5,630
4,942
(2,152)
(1,618)
Provision for credit losses
229
(119)
7
(14)
(3)
(24)
Noninterest expense
2,991
2,804
3,443
3,235
171
593
Income (loss) before income taxes
2,614
3,518
2,180
1,721
(2,320)
(2,187)
Income tax expense (benefit)
719
950
632
473
(2,025)
(2,276)
Net income (loss)
$
1,895
$
2,568
$
1,548
$
1,248
$
(295)
$
89
Period-end total assets
$
650,936
$
588,578
$
958,227
$
864,792
$
360,006
$
303,903
(1)There were no material intersegment revenues.
Results of Business Segments and All Other
At and for the nine months ended September 30
Total Corporation (1)
Consumer Banking
Global Wealth & Investment Management
(Dollars in millions)
2024
2023
2024
2023
2024
2023
Net interest income
$
42,166
$
43,407
$
24,593
$
25,421
$
5,216
$
5,436
Noninterest income
34,839
33,637
6,197
6,281
11,711
10,442
Total revenue, net of interest expense
77,005
77,044
30,790
31,702
16,927
15,878
Provision for credit losses
4,369
3,290
3,733
3,753
1
32
Noninterest expense
50,025
48,114
16,473
16,182
12,803
11,942
Income before income taxes
22,611
25,640
10,584
11,767
4,123
3,904
Income tax expense
2,144
2,269
2,646
2,942
1,031
976
Net income
$
20,467
$
23,371
$
7,938
$
8,825
$
3,092
$
2,928
Period-end total assets
$
3,324,293
$
3,153,090
$
1,026,293
$
1,062,038
$
328,831
$
333,779
Global Banking
Global Markets
All Other
2024
2023
2024
2023
2024
2023
Net interest income
$
9,965
$
11,210
$
2,349
$
1,080
$
43
$
260
Noninterest income
7,902
7,658
14,623
14,359
(5,594)
(5,103)
Total revenue, net of interest expense
17,867
18,868
16,972
15,439
(5,551)
(4,843)
Provision for credit losses
693
(347)
(42)
(71)
(16)
(77)
Noninterest expense
8,902
8,563
10,421
9,935
1,426
1,492
Income before income taxes
8,272
10,652
6,593
5,575
(6,961)
(6,258)
Income tax expense
2,275
2,876
1,912
1,533
(5,720)
(6,058)
Net income (loss)
$
5,997
$
7,776
$
4,681
$
4,042
$
(1,241)
$
(200)
Period-end total assets
$
650,936
$
588,578
$
958,227
$
864,792
$
360,006
$
303,903
(1) There were no material intersegment revenues.
99Bank of America
The table below presents noninterest income and the associated components for the three and nine months ended September 30, 2024 and 2023 for each business segment, All Other and the total Corporation. For more information, see Note 2 – Net Interest Income and Noninterest Income.
Noninterest Income by Business Segment and All Other
Total Corporation
Consumer Banking
Global Wealth & Investment Management
Three Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
2024
2023
Fees and commissions:
Card income
Interchange fees
$
1,030
$
994
$
824
$
789
$
(5)
$
(5)
Other card income
588
526
578
536
14
14
Total card income
1,618
1,520
1,402
1,325
9
9
Service charges
Deposit-related fees
1,198
1,124
631
605
12
10
Lending-related fees
354
340
—
—
12
10
Total service charges
1,552
1,464
631
605
24
20
Investment and brokerage services
Asset management fees
3,533
3,103
52
51
3,482
3,054
Brokerage fees
1,013
860
28
29
392
342
Total investment and brokerage services
4,546
3,963
80
80
3,874
3,396
Investment banking fees
Underwriting income
742
531
—
—
64
45
Syndication fees
274
209
—
—
—
—
Financial advisory services
387
448
—
—
—
—
Total investment banking fees
1,403
1,188
—
—
64
45
Total fees and commissions
9,119
8,135
2,113
2,010
3,971
3,470
Market making and similar activities
3,278
3,325
5
5
35
34
Other income (loss)
(1,019)
(672)
22
66
47
62
Total noninterest income
$
11,378
$
10,788
$
2,140
$
2,081
$
4,053
$
3,566
Global Banking
Global Markets
All Other (1)
Three Months Ended September 30
2024
2023
2024
2023
2024
2023
Fees and commissions:
Card income
Interchange fees
$
197
$
194
$
14
$
16
$
—
$
—
Other card income
3
3
—
—
(7)
(27)
Total card income
200
197
14
16
(7)
(27)
Service charges
Deposit-related fees
534
490
21
19
—
—
Lending-related fees
268
264
74
66
—
—
Total service charges
802
754
95
85
—
—
Investment and brokerage services
Asset management fees
—
—
—
—
(1)
(2)
Brokerage fees
31
14
562
475
—
—
Total investment and brokerage services
31
14
562
475
(1)
(2)
Investment banking fees
Underwriting income
285
230
426
318
(33)
(62)
Syndication fees
147
117
127
92
—
—
Financial advisory services
351
396
36
53
—
(1)
Total investment banking fees
783
743
589
463
(33)
(63)
Total fees and commissions
1,816
1,708
1,260
1,039
(41)
(92)
Market making and similar activities
66
21
3,349
3,195
(177)
70
Other income (loss)
722
861
123
34
(1,933)
(1,695)
Total noninterest income
$
2,604
$
2,590
$
4,732
$
4,268
$
(2,151)
$
(1,717)
(1)All Other includes eliminations of intercompany transactions.
Bank of America 100
Noninterest Income by Business Segment and All Other
Total Corporation
Consumer Banking
Global Wealth & Investment Management
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
2024
2023
Fees and commissions:
Card income
Interchange fees
$
2,984
$
2,973
$
2,371
$
2,350
$
(16)
$
(8)
Other card income
1,678
1,562
1,664
1,590
44
41
Total card income
4,662
4,535
4,035
3,940
28
33
Service charges
Deposit-related fees
3,492
3,266
1,823
1,729
33
31
Lending-related fees
1,009
972
—
—
38
26
Total service charges
4,501
4,238
1,823
1,729
71
57
Investment and brokerage services
Asset management fees
10,173
8,990
152
147
10,028
8,848
Brokerage fees
2,880
2,664
84
83
1,153
1,037
Total investment and brokerage services
13,053
11,654
236
230
11,181
9,885
Investment banking fees
Underwriting income
2,512
1,757
—
—
184
124
Syndication fees
886
620
—
—
—
—
Financial advisory services
1,134
1,186
—
—
—
—
Total investment banking fees
4,532
3,563
—
—
184
124
Total fees and commissions
26,748
23,990
6,094
5,899
11,464
10,099
Market making and similar activities
10,464
11,734
16
15
107
100
Other income (loss)
(2,373)
(2,087)
87
367
140
243
Total noninterest income
$
34,839
$
33,637
$
6,197
$
6,281
$
11,711
$
10,442
Global Banking
Global Markets
All Other (1)
Nine Months Ended September 30
2024
2023
2024
2023
2024
2023
Fees and commissions:
Card income
Interchange fees
$
578
$
580
$
51
$
51
$
—
$
—
Other card income
8
7
—
—
(38)
(76)
Total card income
586
587
51
51
(38)
(76)
Service charges
Deposit-related fees
1,568
1,446
66
59
2
1
Lending-related fees
759
757
212
189
—
—
Total service charges
2,327
2,203
278
248
2
1
Investment and brokerage services
Asset management fees
—
—
—
—
(7)
(5)
Brokerage fees
70
37
1,573
1,507
—
—
Total investment and brokerage services
70
37
1,573
1,507
(7)
(5)
Investment banking fees
Underwriting income
1,011
742
1,453
1,016
(136)
(125)
Syndication fees
467
345
419
275
—
—
Financial advisory services
990
1,042
144
144
—
—
Total investment banking fees
2,468
2,129
2,016
1,435
(136)
(125)
Total fees and commissions
5,451
4,956
3,918
3,241
(179)
(205)
Market making and similar activities
212
135
10,397
11,002
(268)
482
Other income (loss)
2,239
2,567
308
116
(5,147)
(5,380)
Total noninterest income
$
7,902
$
7,658
$
14,623
$
14,359
$
(5,594)
$
(5,103)
(1)All other includes eliminations of intercompany transactions.
101Bank of America
The table below presents a reconciliation of the four business segments’ total revenue, net of interest expense, on an FTE basis, and net income to the Consolidated Statement of Income, and total assets to the Consolidated Balance Sheet.
Business Segment Reconciliations
Three Months Ended September 30
Nine Months Ended September 30
(Dollars in millions)
2024
2023
2024
2023
Segments’ total revenue, net of interest expense
$
27,644
$
26,938
$
82,556
$
81,887
Adjustments (1):
Asset and liability management activities
(183)
28
(323)
(404)
Liquidating businesses, eliminations and other
(1,969)
(1,646)
(5,228)
(4,439)
FTE basis adjustment
(147)
(153)
(465)
(422)
Consolidated revenue, net of interest expense
$
25,345
$
25,167
$
76,540
$
76,622
Segments’ total net income
7,191
7,713
21,708
23,571
Adjustments, net-of-tax (1):
Asset and liability management activities
(138)
16
(247)
(309)
Liquidating businesses, eliminations and other
(157)
73
(994)
109
Consolidated net income
$
6,896
$
7,802
$
20,467
$
23,371
September 30
2024
2023
Segments’ total assets
$
2,964,287
$
2,849,187
Adjustments (1):
Asset and liability management activities, including securities portfolio
1,251,025
1,185,910
Elimination of segment asset allocations to match liabilities
(953,618)
(945,715)
Other
62,599
63,708
Consolidated total assets
$
3,324,293
$
3,153,090
(1)Adjustments include consolidated income, expense and asset amounts not specifically allocated to individual business segments.
Bank of America 102
Glossary
Alt-A Mortgage –A type of U.S. mortgage that is considered riskier than A-paper, or “prime,” and less risky than “subprime,” the riskiest category. Typically, Alt-A mortgages are characterized by borrowers with less than full documentation, lower credit scores and higher LTVs.
Assets Under Management (AUM) – The total market value of assets under the investment advisory and/or discretion of GWIM which generate asset management fees based on a percentage of the assets’ market values. AUM reflects assets that are generally managed for institutional, high net worth and retail clients, and are distributed through various investment products including mutual funds, other commingled vehicles and separate accounts.
Banking Book – All on- and off-balance sheet financial instruments of the Corporation except for those positions that are held for trading purposes.
Brokerage and Other Assets– Non-discretionary client assets which are held in brokerage accounts or held for safekeeping.
Committed Credit Exposure– Any funded portion of a facility plus the unfunded portion of a facility on which the lender is legally bound to advance funds during a specified period under prescribed conditions.
Credit Derivatives – Contractual agreements that provide protection against a specified credit event on one or more referenced obligations.
Credit Valuation Adjustment (CVA) – A portfolio adjustment required to properly reflect the counterparty credit risk exposure as part of the fair value of derivative instruments.
Debit Valuation Adjustment (DVA)– A portfolio adjustment required to properly reflect the Corporation’s own credit risk exposure as part of the fair value of derivative instruments and/or structured liabilities.
Funding Valuation Adjustment (FVA)– A portfolio adjustment required to include funding costs on uncollateralized derivatives and derivatives where the Corporation is not permitted to use the collateral it receives.
Interest Rate Lock Commitment (IRLC)– Commitment with a loan applicant in which the loan terms are guaranteed for a designated period of time subject to credit approval.
Letter of Credit– A document issued on behalf of a customer to a third party promising to pay the third party upon presentation of specified documents. A letter of credit effectively substitutes the issuer’s credit for that of the customer.
Loan-to-value (LTV)– A commonly used credit quality metric. LTV is calculated as the outstanding carrying value of the loan divided by the estimated value of the property securing the loan.
Macro Products – Include currencies, interest rates and commodities products.
Margin Receivable– An extension of credit secured by eligible securities in certain brokerage accounts.
Matched Book – Repurchase and resale agreements or securities borrowed and loaned transactions where the overall asset and liability position is similar in size and/or maturity. Generally, these are entered into to accommodate customers where the Corporation earns the interest rate spread.
Mortgage Servicing Right (MSR) – The right to service a mortgage loan when the underlying loan is sold or securitized. Servicing includes collections for principal, interest and escrow payments from borrowers and accounting for and remitting principal and interest payments to investors.
Nonperforming Loans and Leases– Includes loans and leases that have been placed on nonaccrual status, including nonaccruing loans whose contractual terms have been restructured in a manner that grants a concession to a borrower experiencing financial difficulties.
Prompt Corrective Action (PCA)– A framework established by the U.S. banking regulators requiring banks to maintain certain levels of regulatory capital ratios, comprised of five categories of capitalization: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” and “critically undercapitalized.” Insured depository institutions that fail to meet certain of these capital levels are subject to increasingly strict limits on their activities, including their ability to make capital distributions, pay management compensation, grow assets and take other actions.
Subprime Loans – Although a standard industry definition for subprime loans (including subprime mortgage loans) does not exist, the Corporation defines subprime loans as specific product offerings for higher risk borrowers.
Value-at-Risk (VaR)– VaR is a model that simulates the value of a portfolio under a range of hypothetical scenarios in order to generate a distribution of potential gains and losses. VaR represents the loss the portfolio is expected to experience with a given confidence level based on historical data. A VaR model is an effective tool in estimating ranges of potential gains and losses on our trading portfolios.
103Bank of America
Key Metrics
Active Digital Banking Users –Mobile and/or online active users over the past 90 days.
Active Mobile Banking Users – Mobile active users over the past 90 days.
Book Value – Ending common shareholders’ equity divided by ending common shares outstanding.
Common Equity Ratio - Ending common shareholders’ equity divided by ending total assets.
Deposit Spread –Annualized net interest income divided by average deposits.
Dividend Payout Ratio – Common dividends declared divided by net income applicable to common shareholders.
Efficiency Ratio – Noninterest expense divided by total revenue, net of interest expense.
Gross Interest Yield – Effective annual percentage rate divided by average loans.
Net Interest Yield– Net interest income divided by average total interest-earning assets.
Operating Margin – Income before income taxes divided by total revenue, net of interest expense.
Return on Average Allocated Capital –Adjusted net income divided by allocated capital.
Return on Average Assets – Net income divided by total average assets.
Return on Average Common Shareholders’ Equity– Net income applicable to common shareholders divided by average common shareholders’ equity.
Return on Average Shareholders’ Equity– Net income divided by average shareholders’ equity.
Risk-adjusted Margin – Difference between total revenue, net of interest expense, and net credit losses divided by average loans.
Bank of America 104
Acronyms
ABS
Asset-backed securities
AFS
Available-for-sale
ALM
Asset and liability management
AUM
Assets under management
BANA
Bank of America, National Association
BHC
Bank holding company
BofAS
BofA Securities, Inc.
BofASE
BofA Securities Europe SA
bps
Basis points
CCAR
Comprehensive Capital Analysis and Review
CDO
Collateralized debt obligation
CECL
Current expected credit losses
CET1
Common equity tier 1
CFPB
Consumer Financial Protection Bureau
CFTC
Commodity Futures Trading Commission
CLO
Collateralized loan obligation
CLTV
Combined loan-to-value
CVA
Credit valuation adjustment
DIF
Deposit Insurance Fund
DVA
Debit valuation adjustment
EPS
Earnings per common share
ERC
Enterprise Risk Committee
ESG
Environmental, social and governance
FDIC
Federal Deposit Insurance Corporation
FHA
Federal Housing Administration
FHLB
Federal Home Loan Bank
FHLMC
Freddie Mac
FICC
Fixed income, currencies and commodities
FICO
Fair Isaac Corporation (credit score)
FNMA
Fannie Mae
FTE
Fully taxable-equivalent
FVA
Funding valuation adjustment
GAAP
Accounting principles generally accepted in the United States of America
GLS
Global Liquidity Sources
GNMA
Government National Mortgage Association
GRM
Global Risk Management
G-SIB
Global systemically important bank
GWIM
Global Wealth & Investment Management
HELOC
Home equity line of credit
HQLA
High Quality Liquid Assets
HTM
Held-to-maturity
IRLC
Interest rate lock commitment
ISDA
International Swaps and Derivatives Association, Inc.
LCR
Liquidity Coverage Ratio
LHFS
Loans held-for-sale
LTV
Loan-to-value
MBS
Mortgage-backed securities
MD&A
Management’s Discussion and Analysis of Financial Condition and Results of Operations
MLI
Merrill Lynch International
MLPF&S
Merrill Lynch, Pierce, Fenner & Smith Incorporated
MSA
Metropolitan Statistical Area
MSR
Mortgage servicing right
NSFR
Net Stable Funding Ratio
OCI
Other comprehensive income
OREO
Other real estate owned
PCA
Prompt Corrective Action
RWA
Risk-weighted assets
SBLC
Standby letter of credit
SCB
Stress capital buffer
SEC
Securities and Exchange Commission
SLR
Supplementary leverage ratio
SOFR
Secured Overnight Financing Rate
TLAC
Total loss-absorbing capacity
VA
U.S. Department of Veterans Affairs
VaR
Value-at-Risk
VIE
Variable interest entity
105Bank of America
Part II. Other Information
Bank of America Corporation and Subsidiaries
Item 1. Legal Proceedings
See Litigation and Regulatory Matters in Note 10 – Commitments and Contingencies to the Consolidated Financial Statements, which is incorporated by reference in this Item 1, for litigation and regulatory disclosure that supplements the disclosure in Note 12 – Commitments and Contingencies to the
Consolidated Financial Statements of the Corporation’s 2023 Annual Report on Form 10-K.
Item 1A. Risk Factors
There are no material changes from the risk factors set forth under Part 1, Item 1A. Risk Factors of the Corporation’s 2023 Annual Report on Form 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
The table below presents share repurchase activity for the three months ended September 30, 2024. The primary source of funds for cash distributions by the Corporation to its shareholders is dividends received from its banking subsidiaries. Each of the banking subsidiaries is subject to various regulatory policies and requirements relating to the payment of dividends, including requirements to maintain capital above regulatory minimums. All of the Corporation’s preferred stock outstanding has preference over the Corporation’s common stock with respect to payment of dividends.
(Dollars in millions, except per share information; shares in thousands)
Total Common Shares Repurchased (1,2)
Weighted-Average Per Share Price
Total Shares
Purchased as
Part of Publicly
Announced Programs (2)
Remaining Buyback
Authority Amounts (3)
July 1 - 31, 2024
18,876
$
42.86
18,852
$
5,942
August 1 - 31, 2024 (4)
45,284
38.96
43,696
23,389
September 1 - 30, 2024
25,664
39.92
25,644
22,375
Three months ended September 30, 2024
89,824
40.05
88,192
(1)Includes 1.6 million shares of the Corporation’s common stock acquired by the Corporation in connection with satisfaction of tax withholding obligations on vested restricted stock or restricted stock units and certain forfeitures and terminations of employment-related awards and for potential re-issuance to certain employees under equity incentive plans.
(2)In October 2021, the Corporation’s Board of Directors (Board) authorized the repurchase of up to $25 billion of common stock over time (2021 Authorization). Additionally, the Board authorized repurchases to offset shares awarded under equity-based compensation plans. In September 2023, the Board modified the 2021 Authorization, effective October 1, 2023, to include repurchases to offset shares awarded under equity-based compensation plans when determining the remaining repurchase authority (2023 Authorization, and together with the 2021 Authorization, the Modified Authorization). On July 24, 2024, the Board authorized a $25 billion common stock repurchase program, effective August 1, 2024 (2024 Authorization), to replace the Modified Authorization, which expired on August 1, 2024. During the three months ended September 30, 2024, pursuant to the Board’s authorizations, the Corporation repurchased approximately 88 million shares, or $3.5 billion, of its common stock, including repurchases to offset shares awarded under equity-based compensation plans. For more information, see Capital Management – CCAR and Capital Planning in the MD&A on page 21 and Note 11 – Shareholders’ Equity to the Consolidated Financial Statements.
(3)The remaining buyback authority amount for July reflects the remaining buyback authority amount under the Modified Authorization. The remaining buyback authority amounts for August and September reflect the remaining buyback authority amount under the 2024 Authorization.
(4)Total Common Shares Repurchased and Total Shares Repurchased as Part of Publicly Announced Programs include 1.8 million shares repurchased pursuant to the Modified Authorization.
The Corporation did not have any unregistered sales of equity securities during the three months ended September 30, 2024.
Item 5. Other Information
Trading Arrangements
During the fiscal quarter ended September 30, 2024, none of the Corporation’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended) adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (in each case, as defined in Item 408 of Regulation S-K) for the purchase or sale of the Corporation’s securities.
Disclosure Pursuant to Section 13(r) of the Securities Exchange Act of 1934
Pursuant to Section 13(r) of the Exchange Act, an issuer is required to disclose in its annual or quarterly reports, as applicable, whether it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with individuals or entities designated pursuant to certain Executive Orders. Disclosure may be required even where the activities, transactions or dealings were conducted in
compliance with applicable law. Except as set forth below, as of the date of this Quarterly Report on Form 10-Q, the Corporation is not aware of any other activity, transaction or dealing by any of its affiliates during the quarter ended September 30, 2024 that requires disclosure under Section 13(r) of the Exchange Act.
During the third quarter of 2024, Bank of America, National Association (BANA), a U.S. subsidiary of Bank of America Corporation, processed 62 authorized wire payments totaling $8,268,181 pursuant to a general license issued by the U.S. Department of the Treasury’s Office of Foreign Assets Control regarding Afghanistan or governing institutions in Afghanistan. These payments for two BANA clients were processed to Afghan state-owned banks, which are subject to Executive Order 13224. 61 of the 62 authorized wire payments originated from one BANA client using two accounts. There was no measurable gross revenue or net profit to the Corporation relating to these transactions, except nominal fees received by BANA for processing payments. The Corporation may in the future engage in similar transactions for its clients to the extent permitted by U.S. law.
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
(1)Filed herewith.
(2)Furnished herewith. This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
(3)The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
