April 29, 2022 - 10-Q: Quarterly report pursuant to Section 13 or 15(d)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from to

Commission file number:

1-6523

Exact name of registrant as specified in its charter:

Bank of America Corporation

State or other jurisdiction of incorporation or organization:

Delaware

IRS Employer Identification No.:

56-0906609

Address of principal executive offices:

Bank of America Corporate Center

100 N. Tryon Street

Charlotte, North Carolina 28255

Registrant’s telephone number, including area code:

(704) 386-5681

Former name, former address and former fiscal year, if changed since last report:

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	BAC	New York Stock Exchange
Depositary Shares, each representing a 1/1,000th interest in a share	BAC PrE	New York Stock Exchange
of Floating Rate Non-Cumulative Preferred Stock, Series E
Depositary Shares, each representing a 1/1,000th interest in a share	BAC PrB	New York Stock Exchange
of 6.000% Non-Cumulative Preferred Stock, Series GG
Depositary Shares, each representing a 1/1,000th interest in a share	BAC PrK	New York Stock Exchange
of 5.875% Non-Cumulative Preferred Stock, Series HH
7.25% Non-Cumulative Perpetual Convertible Preferred Stock, Series L	BAC PrL	New York Stock Exchange
Depositary Shares, each representing a 1/1,200th interest in a share	BML PrG	New York Stock Exchange
of Bank of America Corporation Floating Rate
Non-Cumulative Preferred Stock, Series 1


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Depositary Shares, each representing a 1/1,200th interest in a share	BML PrH	New York Stock Exchange
of Bank of America Corporation Floating Rate
Non-Cumulative Preferred Stock, Series 2
Depositary Shares, each representing a 1/1,200th interest in a share	BML PrJ	New York Stock Exchange
of Bank of America Corporation Floating Rate
Non-Cumulative Preferred Stock, Series 4
Depositary Shares, each representing a 1/1,200th interest in a share	BML PrL	New York Stock Exchange
of Bank of America Corporation Floating Rate
Non-Cumulative Preferred Stock, Series 5
Floating Rate Preferred Hybrid Income Term Securities of BAC Capital	BAC/PF	New York Stock Exchange
Trust XIII (and the guarantee related thereto)
5.63% Fixed to Floating Rate Preferred Hybrid Income Term Securities	BAC/PG	New York Stock Exchange
of BAC Capital Trust XIV (and the guarantee related thereto)
Income Capital Obligation Notes initially due December 15, 2066 of	MER PrK	New York Stock Exchange
Bank of America Corporation
Senior Medium-Term Notes, Series A, Step Up Callable Notes, due	BAC/31B	New York Stock Exchange
November 28, 2031 of BofA Finance LLC (and the guarantee
of the Registrant with respect thereto)
Depositary Shares, each representing a 1/1,000th interest in a share of	BAC PrM	New York Stock Exchange
5.375% Non-Cumulative Preferred Stock, Series KK
Depositary Shares, each representing a 1/1,000th interest in a share	BAC PrN	New York Stock Exchange
of 5.000% Non-Cumulative Preferred Stock, Series LL
Depositary Shares, each representing a 1/1,000th interest in a share of	BAC PrO	New York Stock Exchange
4.375% Non-Cumulative Preferred Stock, Series NN
Depositary Shares, each representing a 1/1,000th interest in a share of	BAC PrP	New York Stock Exchange
4.125% Non-Cumulative Preferred Stock, Series PP
Depositary Shares, each representing a 1/1,000th interest in a share of	BAC PrQ	New York Stock Exchange
4.250% Non-Cumulative Preferred Stock, Series QQ
Depositary Shares, each representing a 1/1,000th interest in a share	BAC PrS	New York Stock Exchange
of 4.750% Non-Cumulative Preferred Stock, Series SS

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).

Yes ☐ No ☑

On April 28, 2022, there were 8,056,881,363 shares of Bank of America Corporation Common Stock outstanding.

Bank of America Corporation and Subsidiaries

March 31, 2022

Form 10-Q

INDEX

Part I. Financial Information


Item 1. Financial Statements						Page
Consolidated Statement of Income						44
Consolidated Statement of Comprehensive Income						44
Consolidated Balance Sheet						45
Consolidated Statement of Changes in Shareholders’ Equity						46
Consolidated Statement of Cash Flows						47
Notes to Consolidated Financial Statements						48
Note 1 – Summary of Significant Accounting Principles						48
Note 2 – Net Interest Income and Noninterest Income						49
Note 3 – Derivatives						50
Note 4 – Securities						57
Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses						60

Note 6 – Securitizations and Other Variable Interest Entities						70
Note 7 – Goodwill and Intangible Assets						74
Note 8 – Leases						74
Note 9 – Securities Financing Agreements and Restricted Cash						75
Note 10 – Commitments and Contingencies						76
Note 11 – Shareholders’ Equity						79
Note 12 – Accumulated Other Comprehensive Income (Loss)						79
Note 13 – Earnings Per Common Share						80

Note 1 4 – Fair Value Measurements						80
Note 15 – Fair Value Option						86
Note 16 – Fair Value of Financial Instruments						87
Note 17 – Business Segment Information						88
Glossary						91
Acronyms						93



Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Executive Summary						3
Recent Developments						3
Financial Highlights						4

Supplemental Financial Data						5
Business Segment Operations						9
Consumer Banking						9
Global Wealth & Investment Management						12
Global Banking						14
Global Markets						16

All Other						17
Managing Risk						18

Capital Management						18
Liquidity Risk						22
Credit Risk Management						25
Consumer Portfolio Credit Risk Management						25
Commercial Portfolio Credit Risk Management						30
Non-U.S. Portfolio						36

Allowance for Credit Losses						37
Market Risk Management						39
Trading Risk Management						39
Interest Rate Risk Management for the Banking Book						41
Mortgage Banking Risk Management						41



Climate Risk Management						42
Complex Accounting Estimates						42
Non-GAAP Reconciliations						43

Item 3. Quantitative and Qualitative Disclosures about Market Risk						43
Item 4. Controls and Procedures						43


1 Bank of America

Part II. Other Information


Item 1. Legal Proceedings						94
Item 1A. Risk Factors						94
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds						94
Item 5. Other Information						94
Item 6. Exhibits						95
Signature						95

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, provision for credit losses, expenses, efficiency ratio, capital measures, strategy, 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 2021 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 resulting from pending or future litigation and regulatory investigations, proceedings and enforcement actions, including as a result of our participation in and execution of government programs related to the Coronavirus Disease 2019 (COVID-19) pandemic, such as the processing of unemployment benefits for California and certain other states; 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 the London Interbank Offered Rate and other 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, inflation, currency exchange rates, economic conditions, trade policies and tensions, including tariffs, and potential geopolitical instability; the impact of the interest rate and inflationary environment on the Corporation’s business, financial condition and results of operations; 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 the economic recovery 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; 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 the Coronavirus Aid, Relief, and Economic Security Act and any similar or related rules and regulations; a failure or disruption in or breach of the Corporation’s operational or security systems or infrastructure, or those of third parties, including as a result of cyberattacks or campaigns; 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 any future federal government shutdown and uncertainty regarding the federal government’s debt limit or changes in fiscal, monetary or regulatory policy; the emergence of widespread health emergencies or pandemics, including the magnitude and duration of the COVID-19 pandemic and its impact on the U.S. and/or global financial market conditions and our business, results of operations, financial condition and prospects; the impact of


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natural disasters, extreme weather events, military conflict (including the Russia/Ukraine conflict 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, “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 March 31, 2022, the Corporation had $3.2 trillion in assets and a headcount of approximately 208,000 employees.

As of March 31, 2022, we served clients through operations across the U.S., its territories and approximately 35 countries. Our retail banking footprint covers all major markets in the U.S., and we serve approximately 67 million consumer and small business clients with approximately 4,100 retail financial centers, approximately 16,000 ATMs, and leading digital banking platforms (www.bankofamerica.com) with approximately 42 million active users, including approximately 34 million active mobile users. We offer industry-leading support to approximately three million small business households. Our GWIM businesses, with client balances of $3.7 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 the Investor Relations portion of our website, 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

Russia/Ukraine Conflict

Due to the Russia/Ukraine conflict, there has been significant volatility in financial markets and commodities markets. In addition, multiple jurisdictions have implemented various economic sanctions on select Russian government and military leaders, financial institutions, business leaders and the Central Bank of Russia. The government of Russia has also implemented economic sanctions on certain non-Russian institutions and prevented outflows of selected currencies from Russia.

At March 31, 2022, our direct net country exposure to Russia was $759 million, which primarily consisted of outstanding loans and leases totaling $679 million. All of our loans to Russian counterparties have been downgraded and reported as reservable criticized exposure, with their expected credit losses incorporated into our estimate of the allowance for credit losses. At March 31, 2022, our net country exposure to Ukraine was not significant. For more information on our Russian exposure, see Credit Risk Management on page 25.

While the Corporation’s direct exposure to Russia is limited, the potential duration and impact of the Russia/Ukraine conflict and sanctions regime, including the impact of future sanctions, on global markets, institutions and macroeconomic conditions generally, as well as other future possible geopolitical consequences arising from the current conflict, remain uncertain. Episodes of economic and market volatility and pressure on supply chains and inflation may continue to occur and could worsen if the conflict persists or increases in severity. As a result, the Corporation's businesses, results of operations and financial position could be adversely affected by any of these factors directly or indirectly arising from the Russia/Ukraine conflict. For more information on the risks related to the Russia/Ukraine conflict, see the Market and Geopolitical sections within Item 1A. Risk Factors of the Corporation’s 2021 Annual Report on Form 10-K.

Capital Management

On April 27, 2022, the Corporation announced that the Board of Directors (the Board) declared a quarterly cash common stock dividend of $0.21 per share, payable on June 24, 2022 to shareholders of record as of June 3, 2022.

For more information on our capital resources, see Capital Management on page 18.


3 Bank of America

LIBOR and Other Benchmark Rates

Immediately after December 31, 2021, ICE Benchmark Administration (IBA) ceased publishing British Pound Sterling (GBP), Euro, Swiss Franc, and Japanese Yen (JPY) London Interbank Offered Rate (LIBOR) settings and one-week and two-month U.S. dollar (USD) LIBOR settings. However, certain GBP and JPY LIBOR settings that became no longer representative of the underlying market that such rates sought to measure are being published using a modified calculation (i.e., on a “synthetic” basis). The remaining USD LIBOR settings (i.e., overnight, one month, three month, six month and 12 month) will cease or become non-representative immediately after June 30, 2023.

The Corporation continues to execute its enterprise-wide transition program with respect to Interbank Offered Rates. The Corporation has ceased entering into new contracts that use USD LIBOR as a reference rate, subject to certain exceptions permitted under the supervisory guidance issued by the Federal Reserve, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC). The Corporation also continues to monitor a variety of market scenarios as part of its transition efforts, including risks associated with insufficient preparation by individual market participants or the overall market ecosystem, ability of market participants to transition away from impacted benchmarks, and access and demand by clients and market participants to liquidity in certain products, including LIBOR products.

As previously disclosed, the Corporation has remediated a significant majority of its notional contractual exposure to LIBOR products referencing USD LIBOR settings ceasing or becoming non-representative immediately after June 30, 2023 (i.e., updated to include fallback provisions to alternative reference rates (ARRs), e.g., the Secured Overnight Financing Rate for USD LIBOR, based on market-driven protocols, regulatory guidance, and industry-recommended fallback provisions and related mechanisms). The remaining non-remediated USD LIBOR exposure, a majority of which is made up of derivatives and commercial loans, represents a small minority of outstanding USD LIBOR notional contractual exposure of the Corporation and will require active dialogue with clients to modify the contracts. For any residual exposures after June 2023 that continue to have no fallback provisions, the Corporation is assessing and planning to leverage relevant contractual and statutory solutions, including the Adjustable Interest Rate (LIBOR) Act, enacted in March 2022 at the federal level in the U.S., and other relevant legislation, to transition such exposure to ARRs.

For more information on the expected replacement of LIBOR and other benchmark rates, see Executive Summary – Recent Developments – LIBOR and Other Benchmark Rates in the MD&A and Item 1A. Risk Factors – Other of the Corporation’s 2021 Annual Report on Form 10-K.

Financial Highlights



Table 1	Summary Income Statement and Selected Financial Data

		Three Months Ended March 31
(Dollars in millions, except per share information)		2022			2021
Income statement
Net interest income		$	11,572		$	10,197
Noninterest income		11,656			12,624
Total revenue, net of interest expense		23,228			22,821
Provision for credit losses		30			(1,860)
Noninterest expense		15,319			15,515
Income before income taxes		7,879			9,166
Income tax expense		812			1,116
Net income		7,067			8,050
Preferred stock dividends		467			490
Net income applicable to common shareholders		$	6,600		$	7,560

Per common share information
Earnings		$	0.81		$	0.87
Diluted earnings		0.80			0.86
Dividends paid		0.21			0.18
Performance ratios
Return on average assets (1)		0.89		%	1.13		%
Return on average common shareholders’ equity (1)		11.02			12.28
Return on average tangible common shareholders’ equity (2)		15.51			17.08
Efficiency ratio (1)		65.95			67.98
		March 31 2022			December 31 2021

Balance sheet
Total loans and leases		$	993,145		$	979,124
Total assets		3,238,223			3,169,495
Total deposits		2,072,409			2,064,446
Total liabilities		2,971,606			2,899,429
Total common shareholders’ equity		239,480			245,358
Total shareholders’ equity		266,617			270,066

(1)For definitions, see Key Metrics on page 92.

(2)Return on average tangible common shareholders’ equity is a non-GAAP financial measure. For more information and a corresponding reconciliation to the most closely related financial measures defined by accounting principles generally accepted in the United States of America (GAAP), see Non-GAAP Reconciliations on page 43.

Net income was $7.1 billion, or $0.80 per diluted share, for the three months ended March 31, 2022 compared to $8.1 billion, or $0.86 per diluted share, for the same period in 2021. The decrease in net income was primarily due to an increase in the provision for credit losses and lower noninterest income, partially offset by higher net interest income and lower noninterest expense.

Total assets increased $68.7 billion from December 31, 2021 to $3.2 trillion primarily due to higher trading account assets and federal funds sold and securities borrowed under agreements to resell to support Global Markets client activity, as well as loan growth.


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Total liabilities increased $72.2 billion from December 31, 2021 to $3.0 trillion primarily driven by an increase in federal funds purchased and securities loaned under agreements to repurchase, accrued expenses and other liabilities and trading account liabilities due to increased activity in Global Markets.

Shareholders’ equity decreased $3.4 billion from December 31, 2021 primarily due to market value decreases on derivatives and debt securities and returns of capital to shareholders through common stock repurchases and common and preferred stock dividends, partially offset by net income and the issuance of preferred stock.

Net Interest Income

Net interest income increased $1.4 billion to $11.6 billion for the three months ended March 31, 2022 compared to the same period in 2021. Net interest yield on a fully taxable-equivalent (FTE) basis increased 1 basis point (bp) to 1.69 percent. The increase in net interest income was primarily driven by the deployment of cash from deposit inflows into debt securities, loan growth and lower premium amortization, partially offset by a decrease in the acceleration of net capitalized loan fees due to Paycheck Protection Program (PPP) loan forgiveness. For more information on net interest yield and the FTE basis, see Supplemental Financial Data on page 5, and for more information on interest rate risk management, see Interest Rate Risk Management for the Banking Book on page 41.

Noninterest Income



Table 2	Noninterest Income

		Three Months Ended March 31
(Dollars in millions)		2022		2021
Fees and commissions:
Card income		$	1,403	$	1,435
Service charges		1,833		1,792
Investment and brokerage services		4,292		4,063
Investment banking fees		1,457		2,246
Total fees and commissions		8,985		9,536
Market making and similar activities		3,238		3,529


Other income		(567)		(441)

Total noninterest income		$	11,656	$	12,624

Noninterest income decreased $968 million to $11.7 billion for the three months ended March 31, 2022 compared to the same period in 2021. The following highlights the significant changes.

● Investment and brokerage services increased $229 million primarily driven by the impacts of higher market valuations and assets under management (AUM) flows, partially offset by declines in AUM pricing.

● Investment banking fees decreased $789 million primarily driven by lower equity issuance and debt issuance fees, partially offset by higher advisory fees.

● Market making and similar activities decreased $291 million primarily driven by a weaker performance in Fixed Income, Currencies and Commodities (FICC). The decrease was due to gains in commodities in the prior-year period for a weather-related event and a weaker trading environment for credit products in the current-year period, partially offset by improved performance across macro products, increased client activity and a strong trading performance in Equity derivatives.

● Other income decreased $126 million primarily due to certain valuation adjustments.

Provision for Credit Losses

The provision for credit losses increased $1.9 billion to $30 million for the three months ended March 31, 2022 compared to a benefit of $1.9 billion in the same period in 2021. The increase was primarily due to asset quality improvement offset by a reserve build related to Russian exposure and loan growth, compared to the impact of the improved macroeconomic outlook in the prior-year period. For more information on the provision for credit losses, see Allowance for Credit Losses on page 37.

Noninterest Expense



Table 3	Noninterest Expense

		Three Months Ended March 31
(Dollars in millions)		2022		2021
Compensation and benefits		$	9,482	$	9,736
Occupancy and equipment		1,760		1,830
Information processing and communications		1,540		1,425
Product delivery and transaction related		933		977
Marketing		397		371
Professional fees		450		403
Other general operating		757		773
Total noninterest expense		$	15,319	$	15,515

Noninterest expense decreased $196 million to $15.3 billion for the three months ended March 31, 2022 compared to the same period in 2021. The prior-year period included the acceleration of expenses due to incentive compensation award changes and an impairment charge for real estate rationalization. In addition, the current-year period included lower net Coronavirus Disease 2019 (COVID-19) costs, partially offset by continued investment in the business.

Income Tax Expense



Table 4	Income Tax Expense

		Three Months Ended March 31
(Dollars in millions)		2022			2021
Income before income taxes		$	7,879		$	9,166
Income tax expense		812			1,116
Effective tax rate		10.3		%	12.2		%

The effective tax rates for the three months ended March 31, 2022 and 2021 were primarily driven by our recurring tax preference benefits that mainly consist of tax credits from ESG investments in affordable housing and renewable energy. Absent the ESG tax credits, the effective tax rates would have been approximately 24 percent and 23 percent, respectively.

Supplemental Financial Data

Non-GAAP Financial Measures

In this 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


5 Bank of America

for GAAP financial measures and may not be defined or calculated the same way as non-GAAP financial measures used by other companies.

We view net interest income and related ratios and analyses on an FTE basis, which when presented on a consolidated basis are non-GAAP financial measures. 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 43.

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 92.

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 9.


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Table 5	Selected Quarterly Financial Data

		2022 Quarter			2021 Quarters
(In millions, except per share information)		First			Fourth			Third			Second			First
Income statement
Net interest income		$	11,572		$	11,410		$	11,094		$	10,233		$	10,197
Noninterest income		11,656			10,650			11,672			11,233			12,624
Total revenue, net of interest expense		23,228			22,060			22,766			21,466			22,821
Provision for credit losses		30			(489)			(624)			(1,621)			(1,860)
Noninterest expense		15,319			14,731			14,440			15,045			15,515
Income before income taxes		7,879			7,818			8,950			8,042			9,166
Income tax expense		812			805			1,259			(1,182)			1,116
Net income		7,067			7,013			7,691			9,224			8,050
Net income applicable to common shareholders		6,600			6,773			7,260			8,964			7,560
Average common shares issued and outstanding		8,136.8			8,226.5			8,430.7			8,620.8			8,700.1
Average diluted common shares issued and outstanding		8,202.1			8,304.7			8,492.8			8,735.5			8,755.6
Performance ratios
Return on average assets (1)		0.89		%	0.88		%	0.99		%	1.23		%	1.13		%
Four-quarter trailing return on average assets (2)		0.99			1.05			1.04			0.97			0.79
Return on average common shareholders’ equity (1)		11.02			10.90			11.43			14.33			12.28
Return on average tangible common shareholders’ equity (3)		15.51			15.25			15.85			19.90			17.08
Return on average shareholders’ equity (1)		10.64			10.27			11.08			13.47			11.91
Return on average tangible shareholders’ equity (3)		14.40			13.87			14.87			18.11			16.01
Total ending equity to total ending assets		8.23			8.52			8.83			9.15			9.23
Total average equity to total average assets		8.40			8.56			8.95			9.11			9.52
Dividend payout (1)		25.86			25.33			24.10			17.25			20.68
Per common share data
Earnings		$	0.81		$	0.82		$	0.86		$	1.04		$	0.87
Diluted earnings		0.80			0.82			0.85			1.03			0.86
Dividends paid		0.21			0.21			0.21			0.18			0.18
Book value (1)		29.70			30.37			30.22			29.89			29.07
Tangible book value (3)		20.99			21.68			21.69			21.61			20.90




Market capitalization		$	332,320		$	359,383		$	349,841		$	349,925		$	332,337
Average balance sheet
Total loans and leases		$	977,793		$	945,062		$	920,509		$	907,900		$	907,723
Total assets		3,207,702			3,164,118			3,076,452			3,015,113			2,879,221
Total deposits		2,045,811			2,017,223			1,942,705			1,888,834			1,805,747
Long-term debt		246,042			248,525			248,988			232,034			220,836
Common shareholders’ equity		242,865			246,519			252,043			250,948			249,648
Total shareholders’ equity		269,309			270,883			275,484			274,632			274,047
Asset quality
Allowance for credit losses (4)		$	13,483		$	13,843		$	14,693		$	15,782		$	17,997
Nonperforming loans, leases and foreclosed properties (5)		4,778			4,697			4,831			5,031			5,299
Allowance for loan and lease losses as a percentage of total loans and leases outstanding (5)		1.23		%	1.28		%	1.43		%	1.55		%	1.80		%
Allowance for loan and lease losses as a percentage of total nonperforming loans and leases (5)		262			271			279			287			313
Net charge-offs		$	392		$	362		$	463		$	595		$	823
Annualized net charge-offs as a percentage of average loans and leases outstanding (5)		0.16		%	0.15		%	0.20		%	0.27		%	0.37		%







Capital ratios at period end (6)

Common equity tier 1 capital		10.4		%	10.6		%	11.1		%	11.5		%	11.8		%

Tier 1 capital		12.0			12.1			12.6			13.0			13.3
Total capital		14.0			14.1			14.7			15.1			15.6
Tier 1 leverage		6.3			6.4			6.6			6.9			7.2
Supplementary leverage ratio		5.4			5.5			5.6			5.9			7.0
Tangible equity (3)		6.2			6.4			6.7			7.0			7.0
Tangible common equity (3)		5.3			5.7			5.9			6.2			6.2
Total loss-absorbing capacity and long-term debt metrics
Total loss-absorbing capacity to risk-weighted assets		27.2		%	26.9		%	27.7		%	27.7		%	26.8		%
Total loss-absorbing capacity to supplementary leverage exposure		12.2			12.1			12.4			12.5			14.1
Eligible long-term debt to risk-weighted assets		14.4			14.1			14.4			14.1			13.0
Eligible long-term debt to supplementary leverage exposure		6.5			6.3			6.4			6.3			6.8

(1)For definitions, see Key Metrics on page 92.

(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 5 and Non-GAAP Reconciliations on page 43.

(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 30 and corresponding Table 24 and Commercial Portfolio Credit Risk Management – Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity on page 34 and corresponding Table 31.

(6)For more information, including which approach is used to assess capital adequacy, see Capital Management on page 18.


7 Bank 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)		First Quarter 2022						First Quarter 2021
Earning assets
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks		$	244,971	$	86	0.14	%	$	278,098	$	29	0.04	%
Time deposits placed and other short-term investments		9,253		12		0.52		8,742		4		0.18
Federal funds sold and securities borrowed or purchased under agreements to resell (2)		299,404		(7)		(0.01)		249,985		(7)		(0.01)
Trading account assets		151,969		1,096		2.92		145,089		885		2.47
Debt securities		975,656		3,838		1.58		788,638		2,745		1.41
Loans and leases (3)
Residential mortgage		223,979		1,525		2.73		219,005		1,529		2.80
Home equity		27,784		220		3.21		33,634		281		3.38
Credit card		78,409		1,940		10.03		74,165		1,947		10.65

Direct/Indirect and other consumer		104,632		579		2.25		91,430		559		2.48

Total consumer		434,804		4,264		3.96		418,234		4,316		4.17
U.S. commercial		346,510		2,127		2.49		322,010		2,051		2.58
Non-U.S. commercial		118,767		504		1.72		90,904		409		1.83
Commercial real estate (4)		63,065		387		2.49		59,736		365		2.48
Commercial lease financing		14,647		106		2.92		16,839		132		3.15
Total commercial		542,989		3,124		2.33		489,489		2,957		2.45
Total loans and leases		977,793		7,388		3.06		907,723		7,273		3.24
Other earning assets		120,798		587		1.97		103,650		577		2.26
Total earning assets		2,779,844		13,000		1.89		2,481,925		11,506		1.87
Cash and due from banks		28,082						33,925
Other assets, less allowance for loan and lease losses		399,776						363,371
Total assets		$	3,207,702					$	2,879,221
Interest-bearing liabilities
U.S. interest-bearing deposits

Demand and money market deposits		$	1,001,184	$	80	0.03	%	$	889,793	$	77	0.04	%

Time and savings deposits		163,981		40		0.10		158,575		51		0.13
Total U.S. interest-bearing deposits		1,165,165		120		0.04		1,048,368		128		0.05




Non-U.S. interest-bearing deposits		81,879		44		0.22		81,966		5		0.02
Total interest-bearing deposits		1,247,044		164		0.05		1,130,334		133		0.05
Federal funds purchased and securities loaned or sold under agreements to repurchase (5)		217,152		79		0.15		193,325		111		0.23
Short-term borrowings and other interest-bearing liabilities (2, 5)		126,454		(191)		(0.61)		99,911		(190)		(0.77)
Trading account liabilities		64,240		364		2.30		42,923		246		2.32
Long-term debt		246,042		906		1.50		220,836		898		1.65
Total interest-bearing liabilities		1,900,932		1,322		0.28		1,687,329		1,198		0.29
Noninterest-bearing sources
Noninterest-bearing deposits		798,767						675,413
Other liabilities (6)		238,694						242,432
Shareholders’ equity		269,309						274,047
Total liabilities and shareholders’ equity		$	3,207,702					$	2,879,221
Net interest spread						1.61	%					1.58	%
Impact of noninterest-bearing sources						0.08						0.10
Net interest income/yield on earning assets (7)				$	11,678	1.69	%			$	10,308	1.68	%

(1)Includes the impact of interest rate risk management contracts. For more information, see Interest Rate Risk Management for the Banking Book on page 41.

(2)For more information on negative interest, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.

(3)Nonperforming loans are included in the respective average loan balances. Income on these nonperforming loans is generally recognized on a cost recovery basis.

(4)Includes U.S. commercial real estate loans of $58.5 billion and $56.6 billion, and non-U.S. commercial real estate loans of $4.5 billion and $3.1 billion for the first quarter of 2022 and 2021.

(5)Certain prior-period amounts have been reclassified to conform to current period presentation.

(6)Includes $30.2 billion and $31.3 billion of structured notes and liabilities for the first quarter of 2022 and 2021.

(7)Net interest income includes FTE adjustments of $106 million and $111 million for the first quarter of 2022 and 2021.


						Bank of America 8

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 2021 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. Our internal risk-based capital models use a risk-adjusted methodology incorporating each segment’s credit, market, interest rate, business and operational risk components. For more information on the nature of these risks, see Managing Risk on page 18. 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 5, and for reconciliations to consolidated total revenue, net income and period-end total assets, see Note 17 – Business Segment Information to 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, customer trends and business growth.

Consumer Banking



	Deposits						Consumer Lending						Total Consumer Banking
	Three Months Ended March 31
(Dollars in millions)	2022			2021			2022			2021			2022			2021			% Change
Net interest income	$	4,052		$	3,278		$	2,628		$	2,642		$	6,680		$	5,920		13	%
Noninterest income:
Card income	(8)			(5)			1,193			1,194			1,185			1,189			—
Service charges	843			830			1			1			844			831			2
All other income	68			73			36			56			104			129			(19)
Total noninterest income	903			898			1,230			1,251			2,133			2,149			(1)
Total revenue, net of interest expense	4,955			4,176			3,858			3,893			8,813			8,069			9

Provision for credit losses	73			74			(125)			(691)			(52)			(617)			(92)
Noninterest expense	3,008			3,209			1,913			1,922			4,921			5,131			(4)
Income before income taxes	1,874			893			2,070			2,662			3,944			3,555			11
Income tax expense	459			219			507			652			966			871			11
Net income	$	1,415		$	674		$	1,563		$	2,010		$	2,978		$	2,684		11

Effective tax rate (1)													24.5		%	24.5		%

Net interest yield	1.56		%	1.46		%	3.79		%	3.74		%	2.48			2.51
Return on average allocated capital	44			23			23			31			30			28
Efficiency ratio	60.71			76.87			49.58			49.34			55.84			63.59

Balance Sheet
	Three Months Ended March 31
Average	2022			2021			2022			2021			2022			2021			% Change


Total loans and leases	$	4,215		$	4,607		$	279,853		$	286,284		$	284,068		$	290,891		(2)	%
Total earning assets (2)	1,050,490			912,135			281,255			286,720			1,092,742			957,112			14
Total assets (2)	1,084,343			950,803			287,660			290,709			1,133,001			999,769			13
Total deposits	1,050,247			917,319			5,853			6,818			1,056,100			924,137			14
Allocated capital	13,000			12,000			27,000			26,500			40,000			38,500			4


Period end	March 31 2022			December 31 2021			March 31 2022			December 31 2021			March 31 2022			December 31 2021			% Change
Total loans and leases	$	4,165		$	4,206		$	282,157		$	282,305		$	286,322		$	286,511		—	%
Total earning assets (2)	1,083,664			1,048,009			284,069			282,850			1,125,963			1,090,331			3
Total assets (2)	1,117,241			1,082,449			290,972			289,220			1,166,443			1,131,142			3
Total deposits	1,082,885			1,049,085			6,055			5,910			1,088,940			1,054,995			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.


9 Bank of America

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 2021 Annual Report on Form 10-K.

Consumer Banking Results

Net income for Consumer Banking increased $294 million to $3.0 billion during the three months ended March 31, 2022 compared to the same period in 2021 due to higher revenue and lower noninterest expense, partially offset by a lower benefit in the provision for credit losses. Net interest income increased $760 million to $6.7 billion primarily due to the benefit of higher deposit balances and the allocation of asset and liability management (ALM) results, partially offset by a decrease in the acceleration of net capitalized loan fees due to PPP loan forgiveness. Noninterest income decreased $16 million to $2.1 billion primarily driven by changes to overdraft services, lower mortgage banking income, the allocation of ALM results and lower card income, partially offset by higher other service charges due to increased client activity.

The benefit in the provision for credit losses decreased $565 million to $52 million primarily due to the impact of the improved macroeconomic outlook in the prior-year period. Noninterest expense decreased $210 million to $4.9 billion primarily driven by an impairment charge for real estate rationalization in the prior-year period, partially offset by continued investments for business growth and increased client activity.

The return on average allocated capital was 30 percent, up from 28 percent, driven by higher net income, partially offset by an increase in allocated capital. For more information on capital allocated to the business segments, see Business Segment Operations on page 9.

Deposits

Net income for Deposits increased $741 million to $1.4 billion due to higher revenue and lower noninterest expense. Net interest income increased $774 million to $4.1 billion primarily due to the allocation of ALM results and the benefit of higher

deposit balances. Noninterest income increased $5 million to $903 million primarily driven by higher other service charges due to increased client activity and investment and brokerage fees, largely offset by changes to overdraft services and the allocation of ALM results.

Noninterest expense decreased $201 million to $3.0 billion primarily driven by an impairment charge for real estate rationalization in the prior-year period, partially offset by continued investments for business growth and increased client activity.

Average deposits increased $132.9 billion to $1.1 trillion primarily due to net inflows of $79.1 billion in checking and $51.1 billion in money market savings largely driven by strong organic growth.

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 March 31
		2022		2021
Total deposit spreads (excludes noninterest costs) (1)		1.65%		1.73%

Period End
Consumer investment assets (in millions) (2)		$	357,593	$	324,479
Active digital banking users (in thousands) (3)		42,269		40,286
Active mobile banking users (in thousands) (4)		33,589		31,487
Financial centers		4,056		4,324
ATMs		15,959		16,905

(1)Includes deposits held in Consumer Lending.

(2)Includes client brokerage assets, deposit sweep balances 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 $33.1 billion to $357.6 billion driven by client flows and market performance. Active mobile banking users increased approximately two million, reflecting continuing changes in our customers’ banking preferences. We had a net decrease of 268 financial centers and 946 ATMs as we continue to optimize our consumer banking network.


						Bank of America 10

Consumer Lending

Net income for Consumer Lending decreased $447 million to $1.6 billion primarily due to a lower benefit in the provision for credit losses. Net interest income declined $14 million to $2.6 billion primarily due to a decrease in the acceleration of net capitalized loan fees due to PPP loan forgiveness, largely offset by the allocation of ALM results. Noninterest income decreased $21 million to $1.2 billion primarily driven by lower mortgage banking income.

The benefit in the provision for credit losses decreased $566 million to $125 million primarily due to the impact of the improved macroeconomic outlook in the prior-year period.

Average loans decreased $6.4 billion to $279.9 billion primarily driven by a decline in PPP loans, partially offset by an increase in credit card loans.

The table below 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.



Key Statistics – Consumer Lending

	Three Months Ended March 31
(Dollars in millions)	2022			2021
Total credit card (1)
Gross interest yield (2)	9.90		%	10.52		%
Risk-adjusted margin (3)	10.40			9.29
New accounts (in thousands)	977			674
Purchase volumes	$	80,914		$	64,591
Debit card purchase volumes	$	117,584		$	107,907

(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 March 31, 2022, the total risk-adjusted margin increased 111 basis points (bps) compared to the same period in 2021 primarily driven by lower net credit losses, partially offset by lower net interest margin and lower fee income. Total credit card purchase volumes increased $16.3 billion to $80.9 billion as spending continued to recover, with improvements across all categories. Debit card purchase volumes increased $9.7 billion to $117.6 billion due to continued growth in spending.



Key Statistics – Loan Production (1)

	Three Months Ended March 31
(Dollars in millions)	2022		2021
Consumer Banking:
First mortgage	$	8,116	$	9,182
Home equity	1,725		410
Total (2):
First mortgage	$	16,353	$	15,233
Home equity	2,040		503

(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 and the total Corporation decreased $1.1 billion and increased $1.1 billion during the three months ended March 31, 2022 compared to the same period in 2021 primarily driven by changes in demand.

Home equity production in Consumer Banking and the total Corporation increased $1.3 billion and $1.5 billion during the three months ended March 31, 2022 primarily driven by higher demand.


11 Bank of America

Global Wealth & Investment Management



	Three Months Ended March 31
(Dollars in millions)	2022			2021			% Change
Net interest income	$	1,668		$	1,331		25	%
Noninterest income:
Investment and brokerage services	3,654			3,391			8
All other income	154			249			(38)
Total noninterest income	3,808			3,640			5
Total revenue, net of interest expense	5,476			4,971			10

Provision for credit losses	(41)			(65)			(37)
Noninterest expense	4,015			3,867			4
Income before income taxes	1,502			1,169			28
Income tax expense	368			286			29
Net income	$	1,134		$	883		28

Effective tax rate	24.5		%	24.5		%

Net interest yield	1.62			1.50
Return on average allocated capital	26			22

Efficiency ratio	73.31			77.79

Balance Sheet
	Three Months Ended March 31

Average	2022			2021			% Change
Total loans and leases	$	210,937		$	188,495		12	%
Total earning assets	418,248			360,099			16
Total assets	431,040			372,594			16
Total deposits	384,902			326,370			18
Allocated capital	17,500			16,500			6

Period end	March 31 2022			December 31 2021			% Change
Total loans and leases	$	214,273		$	208,971		3	%
Total earning assets	419,903			425,112			(1)
Total assets	433,122			438,275			(1)
Total deposits	385,288			390,143			(1)

GWIM consists of two primary businesses: Merrill Wealth Management and Bank of America Private Bank. For more information about GWIM, see Business Segment Operations in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.

Net income for GWIM increased $251 million to $1.1 billion driven by higher revenue, partially offset by higher noninterest expense. The operating margin was 27 percent compared to 24 percent a year ago.

Net interest income increased $337 million to $1.7 billion driven by the benefits of deposit and loan growth.

Noninterest income, which primarily includes investment and brokerage services income, increased $168 million to $3.8 billion primarily due to the impacts of higher market valuations and positive AUM flows, partially offset by declines in AUM pricing.

Noninterest expense increased $148 million to $4.0 billion primarily driven by higher revenue-related incentives.

The return on average allocated capital was 26 percent, up from 22 percent, due to higher net income, partially offset by an increase in allocated capital. For more information on capital allocated to the business segments, see Business Segment Operations on page 9.

Average loans increased $22.4 billion to $210.9 billion primarily driven by securities-based lending, residential mortgage and custom lending. Average deposits increased $58.5 billion to $384.9 billion primarily driven by inflows from new and existing accounts.

Merrill Wealth Management revenue of $4.6 billion increased 10 percent primarily driven by higher asset management fees and the benefits of deposit and loan growth.

Bank of America Private Bank revenue of $887 million increased 13 percent driven by the benefits of deposit and loan growth and higher market valuations.


						Bank of America 12



Key Indicators and Metrics

	Three Months Ended March 31
(Dollars in millions)		2022		2021
Revenue by Business
Merrill Wealth Management		$	4,589	$	4,185
Bank of America Private Bank		887		786

Total revenue, net of interest expense		$	5,476	$	4,971

Client Balances by Business, at period end
Merrill Wealth Management		$	3,116,052	$	2,922,770
Bank of America Private Bank		598,100		557,569

Total client balances		$	3,714,152	$	3,480,339

Client Balances by Type, at period end


Assets under management		$	1,571,605	$	1,467,487
Brokerage and other assets		1,592,802		1,535,424

Deposits		385,288		333,254
Loans and leases (1)		217,461		192,725
Less: Managed deposits in assets under management		(53,004)		(48,551)
Total client balances		$	3,714,152	$	3,480,339

Assets Under Management Rollforward
Assets under management, beginning of period		$	1,638,782	$	1,408,465


Net client flows		15,537		18,208
Market valuation/other		(82,714)		40,814
Total assets under management, end of period		$	1,571,605	$	1,467,487


Total wealth advisors, at period end (2)		18,571		19,808

(1)Includes margin receivables which are classified in customer and other receivables on the Consolidated Balance Sheet.

(2)Includes advisors across all wealth management businesses in GWIM and Consumer Banking.

Client Balances

Client balances increased $233.8 billion, or seven percent, to $3.7 trillion at March 31, 2022 compared to March 31, 2021. The increase in client balances was primarily due to positive client flows and higher market valuations.


13 Bank of America

Global Banking



	Three Months Ended March 31
(Dollars in millions)	2022			2021			% Change
Net interest income	$	2,344		$	1,980		18	%
Noninterest income:
Service charges	886			847			5
Investment banking fees	880			1,172			(25)
All other income	1,084			634			71
Total noninterest income	2,850			2,653			7
Total revenue, net of interest expense	5,194			4,633			12

Provision for credit losses	165			(1,126)			n/m
Noninterest expense	2,683			2,782			(4)
Income before income taxes	2,346			2,977			(21)
Income tax expense	622			804			(23)
Net income	$	1,724		$	2,173		(21)

Effective tax rate	26.5		%	27.0		%

Net interest yield	1.68			1.56
Return on average allocated capital	16			21
Efficiency ratio	51.65			60.04

Balance Sheet

	Three Months Ended March 31
Average	2022			2021			% Change
Total loans and leases	$	358,807		$	330,107		9	%
Total earning assets	566,277			515,880			10
Total assets	630,517			576,145			9
Total deposits	539,912			487,034			11
Allocated capital	44,500			42,500			5

Period end	March 31 2022			December 31 2021			% Change
Total loans and leases	$	367,423		$	352,933		4	%
Total earning assets	558,639			574,583			(3)
Total assets	623,168			638,131			(2)
Total deposits	533,820			551,752			(3)

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 offices and client relationship teams. For more information about Global Banking, see Business Segment Operations in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.

Net income for Global Banking decreased $449 million to $1.7 billion for the three months ended March 31, 2022 compared to the same period in 2021 driven by higher provision for credit losses, partially offset by higher revenue and lower noninterest expense.

Net interest income increased $364 million to $2.3 billion primarily due to the allocation of ALM results and the benefit of higher deposit and loan balances, partially offset by lower credit and deposit spreads.

Noninterest income increased $197 million to $2.9 billion driven by growth in ESG investment activities, partially offset by lower investment banking fees. In addition, the prior-year period included weather-related impairment charges on certain renewable energy investments.

The provision for credit losses increased $1.3 billion to $165 million primarily due to a reserve build driven by Russian exposure and loan growth compared to a benefit in the provision for credit losses of $1.1 billion in the prior-year period due to the improved macroeconomic outlook.

Noninterest expense decreased $99 million to $2.7 billion, as the prior-year period included an acceleration of expenses due to incentive compensation award changes, partially offset by continued investment in the business.

The return on average allocated capital was 16 percent, down from 21 percent, due to lower net income and higher allocated capital. For more information on capital allocated to the business segments, see Business Segment Operations on page 9.

Global Corporate, Global Commercial and Business Banking

The following table and discussion present a summary of the results, which exclude certain investment banking and PPP activities in Global Banking.


						Bank of America 14



Global Corporate, Global Commercial and Business Banking














	Global Corporate Banking				Global Commercial Banking				Business Banking				Total
	Three Months Ended March 31
(Dollars in millions)	2022		2021		2022		2021		2022		2021		2022		2021
Revenue
Business Lending	$	1,060	$	654	$	993	$	898	$	58	$	55	$	2,111	$	1,607
Global Transaction Services (1)	949		711		896		772		243		222		2,088		1,705
Total revenue, net of interest expense	$	2,009	$	1,365	$	1,889	$	1,670	$	301	$	277	$	4,199	$	3,312

Balance Sheet

Average
Total loans and leases	$	166,994	$	148,237	$	177,483	$	160,309	$	12,837	$	13,001	$	357,314	$	321,547
Total deposits (1)	257,903		229,925		223,741		203,777		58,268		53,309		539,912		487,011

Period end
Total loans and leases	$	174,134	$	148,914	$	179,253	$	155,842	$	12,794	$	12,813	$	366,181	$	317,569
Total deposits (1)	255,694		242,923		219,462		207,810		58,660		55,248		533,816		505,981

(1)Prior periods have been revised to conform to current-period presentation.

Business Lending revenue increased $504 million for the three months ended March 31, 2022 compared to the same period in 2021 primarily due to ESG investment activities and the benefit of higher loan balances, partially offset by lower credit spreads. In addition, the prior-year period included weather-related impairment charges on certain renewable energy investments.

Global Transaction Services revenue increased $383 million driven by the allocation of ALM results and the benefit of higher deposit balances, partially offset by lower deposit spreads.

Average loans and leases increased 11 percent due to higher client demand. Average deposits increased 11 percent due to continued portfolio growth.

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.



Investment Banking Fees

		Global Banking	Total Corporation
	Three Months Ended March 31

(Dollars in millions)			2022		2021		2022		2021
Products
Advisory			$	439	$	357	$	473	$	400
Debt issuance			359		423		831		988
Equity issuance			82		392		225		900
Gross investment banking fees			880		1,172		1,529		2,288
Self-led deals			(29)		(17)		(72)		(42)
Total investment banking fees			$	851	$	1,155	$	1,457	$	2,246

Total Corporation investment banking fees of $1.5 billion, which exclude self-led deals and are primarily included within Global Banking and Global Markets, decreased 35 percent for the three months ended March 31, 2022 compared to the same period in 2021 primarily driven by lower equity issuance and debt issuance fees, partially offset by higher advisory fees.


15 Bank of America

Global Markets



	Three Months Ended March 31
(Dollars in millions)	2022			2021			% Change
Net interest income	$	993		$	990		—	%
Noninterest income:
Investment and brokerage services	545			560			(3)
Investment banking fees	582			981			(41)
Market making and similar activities	3,190			3,470			(8)
All other income	(18)			197			(109)
Total noninterest income	4,299			5,208			(17)
Total revenue, net of interest expense	5,292			6,198			(15)

Provision for credit losses	5			(5)			n/m
Noninterest expense	3,117			3,427			(9)
Income before income taxes	2,170			2,776			(22)
Income tax expense	575			722			(20)
Net income	$	1,595		$	2,054		(22)

Effective tax rate	26.5		%	26.0		%

Return on average allocated capital	15			22
Efficiency ratio	58.90			55.29

Balance Sheet
	Three Months Ended March 31
	2022			2021			% Change

Average
Trading-related assets:
Trading account securities	$	301,285		$	265,181		14	%
Reverse repurchases	138,581			99,886			39
Securities borrowed	114,468			89,253			28
Derivative assets	41,820			47,469			(12)
Total trading-related assets	596,154			501,789			19
Total loans and leases	108,576			77,415			40
Total earning assets	610,926			495,324			23
Total assets	858,719			723,264			19
Total deposits	44,393			53,852			(18)
Allocated capital	42,500			38,000			12

Period end	March 31 2022			December 31 2021			% Change


Total trading-related assets	$	616,811		$	491,160		26	%
Total loans and leases	110,037			114,846			(4)
Total earning assets	609,290			561,135			9
Total assets	883,304			747,794			18
Total deposits	43,371			46,374			(6)

n/m = not meaningful

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 2021 Annual Report on Form 10-K.

The following explanations for current period-over-period changes 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 5.

Net income for Global Markets decreased $459 million to $1.6 billion for the three months ended March 31, 2022 compared to the same period in 2021. Net DVA gains were $69 million compared to losses of $2 million in 2021. Excluding net DVA, net income decreased $513 million to $1.5 billion. These decreases were primarily driven by lower revenue, partially offset by lower noninterest expense.

Revenue decreased $906 million to $5.3 billion primarily driven by lower investment banking fees and sales and trading revenue. Sales and trading revenue decreased $359 million, and excluding net DVA, decreased $430 million. These decreases were driven by lower revenue in FICC, partially offset by higher revenue in Equities.

Noninterest expense decreased $310 million to 3.1 billion primarily driven by the realignment of a liquidating business activity from Global Markets to All Other in the fourth quarter of 2021. In addition, the prior-year period included an acceleration of expenses from incentive compensation award changes.

Average total assets increased $135.5 billion to $858.7 billion for the three months ended March 31, 2022 compared to same period in 2021 driven by higher levels of inventory and loan growth in FICC as well as higher client balances in Equities. Period-end total assets increased $135.5 billion from December 31, 2021 to $883.3 billion driven by higher levels of inventory in FICC and increased hedging of client activity with stock positions relative to derivatives in Equities.


						Bank of America 16

The return on average allocated capital was 15 percent, down from 22 percent, reflecting lower net income and an increase in allocated capital. For more information on capital allocated to the business segments, see Business Segment Operations on page 9.

Sales and Trading Revenue

For a description of sales and trading revenue, see Business Segment Operations in the MD&A of the Corporation’s 2021

Annual Report on Form 10-K. The table below 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 present sales and trading revenue, excluding net DVA, which is a non-GAAP financial measure. For more information on net DVA, see Supplemental Financial Data on page 5.



Sales and Trading Revenue (1, 2, 3)

	Three Months Ended March 31
(Dollars in millions)	2022		2021
Sales and trading revenue
Fixed income, currencies and commodities	$	2,708	$	3,242
Equities	2,011		1,836
Total sales and trading revenue	$	4,719	$	5,078

Sales and trading revenue, excluding net DVA (4)
Fixed income, currencies and commodities	$	2,648	$	3,251
Equities	2,002		1,829
Total sales and trading revenue, excluding net DVA	$	4,650	$	5,080

(1)For more information on sales and trading revenue, see Note 3 – Derivatives to the Consolidated Financial Statements.

(2)Includes FTE adjustments of $93 million and $73 million for the three months ended March 31, 2022 and 2021.

(3) Includes Global Banking sales and trading revenue of $179 million and $104 million for the three months ended March 31, 2022 and 2021.

(4) FICC and Equities sales and trading revenue, excluding net DVA, is a non-GAAP financial measure. FICC net DVA gains (losses) were $60 million and $(9) million for the three months ended March 31, 2022 and 2021. Equities net DVA gains were $9 million and $7 million for the three months ended March 31, 2022 and 2021.

FICC revenue decreased $603 million for the three months ended March 31, 2022 compared to the same period in 2021 driven by gains in commodities in the prior-year period for a weather-related event and a weaker trading environment for credit products in the current-year period, partially offset by improved performance across macro products. Equities revenue increased $173 million driven by increased client activity and a strong trading performance in derivatives.

All Other



	Three Months Ended March 31
(Dollars in millions)	2022		2021		% Change
Net interest income	$	(7)	$	87	(108)	%





Noninterest income (loss)	(1,434)		(1,026)		40
Total revenue, net of interest expense	(1,441)		(939)		53

Provision for credit losses	(47)		(47)		—


Noninterest expense	583		308		89
Loss before income taxes	(1,977)		(1,200)		65
Income tax benefit	(1,613)		(1,456)		11
Net income (loss)	$	(364)	$	256	n/m

Balance Sheet

	Three Months Ended March 31

Average	2022		2021		% Change
Total loans and leases	$	15,405	$	20,815	(26)	%
Total assets (1)	154,425		207,449		(26)
Total deposits	20,504		14,354		43

Period end	March 31 2022		December 31 2021		% Change





Total loans and leases	$	15,090	$	15,863	(5)	%

Total assets (1)	132,186		214,153		(38)
Total deposits	20,990		21,182		(1)

(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 $1.2 trillion and $1.0 trillion for the three months ended March 31, 2022 and 2021, and period-end allocated assets were $1.2 trillion at both March 31, 2022 and December 31, 2021.

n/m = not meaningful


17 Bank of America

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.

Net income decreased $620 million to a loss of $364 million due to lower revenue and higher noninterest expense.

Revenue decreased $502 million primarily due to higher partnership losses for ESG investments.

Noninterest expense increased $275 million primarily due to the realignment of a liquidating business activity from Global Markets to All Other in the fourth quarter of 2021.

The income tax benefit increased $157 million primarily reflecting increased tax preference benefits related to ESG investment activity. Both periods included income tax benefit adjustments to eliminate the FTE treatment of certain tax credits recorded in Global Banking.

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 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 set of measures for senior management and the Board to clearly indicate the level of risk we are willing to take in alignment with our strategic and capital plans and ensure that the Corporation’s risk profile remains aligned with our risk appetite. Our risk appetite is formally articulated in the Risk Appetite Statement, which includes both qualitative components and quantitative limits that are reviewed and approved by the Board at least annually.

For more information about the Corporation’s risks related to the COVID-19 pandemic (the pandemic), see Item 1A. Risk Factors – Coronavirus Disease of the Corporation’s 2021 Annual Report on Form 10-K. These pandemic-related risks are being managed within our Risk Framework and supporting risk management programs.

For more information on our Risk Framework, our 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 2021 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, including related regulatory requirements, see

Capital Management in the MD&A of the Corporation’s 2021 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 the Comprehensive Capital Analysis and Review (CCAR) capital plan. Based on the results of our 2021 CCAR capital plan and related supervisory stress tests, we are subject to a 2.5 percent stress capital buffer (SCB) from October 1, 2021 through September 30, 2022. Our Common equity tier 1 (CET1) capital ratio under the Standardized approach must remain above 9.5 percent during this period in order to avoid restrictions on capital distributions and discretionary bonus payments. In April 2022, we submitted our 2022 CCAR capital plan and related supervisory stress tests. The Federal Reserve will disclose CCAR capital plan supervisory stress test results by June 30, 2022.

In October 2021, the Board renewed the Corporation’s $25 billion common stock repurchase program previously announced in April 2021. The Board’s authorization replaced the previous program. As with the April authorization, the Board also authorized common stock repurchases to offset shares awarded under the Corporation’s equity-based compensation plans. Pursuant to the Board’s authorizations, during the first quarter of 2022, we repurchased $2.6 billion of common stock, including repurchases to offset shares awarded under equity-based compensation plans.

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 financial services holding company, 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 approach that yields the lower ratio is used to assess capital adequacy, including under the PCA framework. As of March 31, 2022, the CET1, Tier 1 capital and Total capital ratios for the Corporation were lower under the Standardized approach.

Minimum Capital Requirements

In order to avoid restrictions on capital distributions and discretionary bonus payments, 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. The Corporation's CET1 capital ratio must be a minimum of 9.5 percent under both the Standardized and Advanced approaches.


						Bank of America 18

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. The Corporation’s G-SIB surcharge, which is higher under Method 2, is expected to increase to 3.0 percent on January 1, 2024 unless its surcharge calculated as of December 31, 2022 is lower than 3.0 percent.

The current SCB of 2.5 percent, which remains effective from October 1, 2021 through September 30, 2022, could change based on results of the 2022 CCAR capital plan and related supervisory stress tests that we submitted in April 2022.

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. Our insured depository institution subsidiaries are required to maintain a minimum 6.0 percent SLR to be considered well capitalized under the PCA framework.

Capital Composition and Ratios

Table 7 presents Bank of America Corporation’s capital ratios and related information in accordance with Basel 3 Standardized and Advanced approaches as measured at March 31, 2022 and December 31, 2021. For the periods presented herein, the Corporation met the definition of well capitalized under current regulatory requirements.



Table 7	Bank of America Corporation Regulatory Capital under Basel 3


		Standardized Approach (1)			Advanced Approaches (1)			Regulatory Minimum (2)
(Dollars in millions, except as noted)		March 31, 2022
Risk-based capital metrics:
Common equity tier 1 capital		$	169,874		$	169,874
Tier 1 capital		197,007			197,007
Total capital (3)		229,186			222,481
Risk-weighted assets (in billions)		1,639			1,416
Common equity tier 1 capital ratio		10.4		%	12.0		%	9.5	%
Tier 1 capital ratio		12.0			13.9			11.0
Total capital ratio		14.0			15.7			13.0

Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)		$	3,130		$	3,130
Tier 1 leverage ratio		6.3		%	6.3		%	4.0

Supplementary leverage exposure (in billions)					$	3,662
Supplementary leverage ratio					5.4		%	5.0

		December 31, 2021
Risk-based capital metrics:
Common equity tier 1 capital		$	171,759		$	171,759
Tier 1 capital		196,465			196,465
Total capital (3)		227,592			220,616
Risk-weighted assets (in billions)		1,618			1,399
Common equity tier 1 capital ratio		10.6		%	12.3		%	9.5	%
Tier 1 capital ratio		12.1			14.0			11.0
Total capital ratio		14.1			15.8			13.0

Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)		$	3,087		$	3,087
Tier 1 leverage ratio		6.4		%	6.4		%	4.0

Supplementary leverage exposure (in billions)					$	3,604
Supplementary leverage ratio					5.5		%	5.0

(1)Capital ratios as of March 31, 2022 and December 31, 2021 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.

(2)The capital conservation buffer and G-SIB surcharge were 2.5 percent at both March 31, 2022 and December 31, 2021. At both March 31, 2022 and December 31, 2021, the Corporation's SCB of 2.5 percent was applied in place of the capital conservation buffer under the Standardized approach. The countercyclical capital buffer for both periods was zero. The CET1 capital regulatory minimum is the sum of the CET1 capital ratio minimum of 4.5 percent, our G-SIB surcharge of 2.5 percent and our SCB or the capital conservation buffer, as applicable, of 2.5 percent. 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.


19 Bank of America

At March 31, 2022, CET1 capital was $169.9 billion, a decrease of $1.9 billion from December 31, 2021, driven by common stock repurchases, dividends and increases in net unrealized losses on available-for-sale (AFS) debt securities included in accumulated other comprehensive income (OCI), partially offset by earnings. Tier 1 capital increased $542 million primarily driven by non-cumulative perpetual preferred stock issuances, partially offset by the same factors as CET1 capital. Total capital under the Standardized approach increased $1.6 billion primarily driven by the same factors driving the increase

in Tier 1 capital, subordinated debt issuances and an increase in the adjusted allowance for credit losses included in Tier 2 capital. RWA under the Standardized approach, which yielded the lower CET1 capital ratio at March 31, 2022, increased $21.1 billion during the three months ended March 31, 2022 to $1,639 billion primarily due to loan growth and client activity in Global Markets. Supplementary leverage exposure at March 31, 2022 increased $58.1 billion primarily due to on and off-balance sheet growth in Global Markets. Table 8 shows the capital composition at March 31, 2022 and December 31, 2021.



Table 8	Capital Composition under Basel 3


(Dollars in millions)		March 31 2022		December 31 2021

Total common shareholders’ equity		$	239,480	$	245,358
CECL transitional amount (1)		1,881		2,508
Goodwill, net of related deferred tax liabilities		(68,641)		(68,641)
Deferred tax assets arising from net operating loss and tax credit carryforwards		(7,843)		(7,743)
Intangibles, other than mortgage servicing rights, net of related deferred tax liabilities		(1,589)		(1,605)
Defined benefit pension plan net assets		(1,248)		(1,261)
Cumulative unrealized net (gain) loss related to changes in fair value of financial liabilities attributable to own creditworthiness, net-of-tax		1,047		1,400
Accumulated net (gain) loss on certain cash flow hedges (2)		7,049		1,870
Other		(262)		(127)
Common equity tier 1 capital		169,874		171,759
Qualifying preferred stock, net of issuance cost		27,136		24,707
Other		(3)		(1)
Tier 1 capital		197,007		196,465
Tier 2 capital instruments		21,737		20,750
Qualifying allowance for credit losses (3)		11,000		10,534
Other		(558)		(157)
Total capital under the Standardized approach		229,186		227,592
Adjustment in qualifying allowance for credit losses under the Advanced approaches (3)		(6,705)		(6,976)
Total capital under the Advanced approaches		$	222,481	$	220,616

(1)December 31, 2021 includes the impact of the Corporation's adoption of the CECL accounting standard on January 1, 2020 and 25 percent of the increase in reserves since the initial adoption. March 31, 2022 includes 75 percent of the transition provision’s impact as of December 31, 2021.

(2)Includes amounts in accumulated other comprehensive income 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 9 shows the components of RWA as measured under Basel 3 at March 31, 2022 and December 31, 2021.



Table 9	Risk-weighted Assets under Basel 3

		Standardized Approach		Advanced Approaches		Standardized Approach		Advanced Approaches


(Dollars in billions)		March 31, 2022				December 31, 2021
Credit risk		$	1,564	$	917	$	1,549	$	913
Market risk		75		75		69		69
Operational risk		n/a		378		n/a		378
Risks related to credit valuation adjustments		n/a		46		n/a		39
Total risk-weighted assets		$	1,639	$	1,416	$	1,618	$	1,399

n/a = not applicable


						Bank of America 20

Bank of America, N.A. Regulatory Capital

Table 10 presents regulatory capital information for BANA in accordance with Basel 3 Standardized and Advanced approaches as measured at March 31, 2022 and December 31, 2021. BANA met the definition of well capitalized under the PCA framework for both periods.



Table 10	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)		March 31, 2022
Risk-based capital metrics:
Common equity tier 1 capital		$	179,640		$	179,640
Tier 1 capital		179,640			179,640
Total capital (3)		192,230			185,789
Risk-weighted assets (in billions)		1,375			1,056
Common equity tier 1 capital ratio		13.1		%	17.0		%	7.0	%
Tier 1 capital ratio		13.1			17.0			8.5
Total capital ratio		14.0			17.6			10.5

Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)		$	2,436		$	2,436
Tier 1 leverage ratio		7.4		%	7.4		%	5.0

Supplementary leverage exposure (in billions)					$	2,860
Supplementary leverage ratio					6.3		%	6.0

		December 31, 2021
Risk-based capital metrics:
Common equity tier 1 capital		$	182,526		$	182,526
Tier 1 capital		182,526			182,526
Total capital (3)		194,773			188,091
Risk-weighted assets (in billions)		1,352			1,048
Common equity tier 1 capital ratio		13.5		%	17.4		%	7.0	%
Tier 1 capital ratio		13.5			17.4			8.5
Total capital ratio		14.4			17.9			10.5

Leverage-based metrics:
Adjusted quarterly average assets (in billions) (4)		$	2,414		$	2,414
Tier 1 leverage ratio		7.6		%	7.6		%	5.0

Supplementary leverage exposure (in billions)					$	2,824
Supplementary leverage ratio					6.5		%	6.0

(2)Risk-based capital regulatory minimums at both March 31, 2022 and December 31, 2021 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.

(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. Table 11 presents the Corporation's TLAC and long-term debt ratios and related information as of March 31, 2022 and December 31, 2021.


21 Bank of America



Table 11	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)		March 31, 2022
Total eligible balance		$	445,385				$	236,828
Percentage of risk-weighted assets (4)		27.2		%	22.0	%	14.4		%	8.5	%
Percentage of supplementary leverage exposure		12.2			9.5		6.5			4.5

		December 31, 2021
Total eligible balance		$	435,904				$	227,714
Percentage of risk-weighted assets (4)		26.9		%	22.0	%	14.1		%	8.5	%
Percentage of supplementary leverage exposure		12.1			9.5		6.3			4.5

(1)As of March 31, 2022 and December 31, 2021, TLAC ratios are calculated using the regulatory capital rule that allows a five-year transition period related to the adoption of CECL.

(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 an additional 2.5 percent requirement based on the Corporation’s Method 2 G-SIB surcharge. The long-term debt leverage exposure regulatory minimum is 4.5 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 March 31, 2022 and December 31, 2021.

Regulatory Developments

For information on regulatory developments, see Capital Management – Regulatory Developments in the MD&A of the Corporation’s 2021 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), Merrill Lynch Professional Clearing Corp. (MLPCC) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (MLPF&S). The Corporation's principal European broker-dealer subsidiaries 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 minimum capital requirements as an alternative net capital broker-dealer under Rule 15c3-1e, and MLPCC and MLPF&S compute their minimum capital requirements in accordance with the alternative standard under Rule 15c3-1. BofAS and MLPCC are also registered as futures commission merchants and are 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 March 31, 2022, BofAS had tentative net capital of $17.2 billion. BofAS also had regulatory net capital of $14.4 billion, which exceeded the minimum requirement of $4.0 billion.

MLPCC is a fully-guaranteed subsidiary of BofAS and provides clearing and settlement services as well as prime brokerage and arranged financing services for institutional clients. At March 31, 2022, MLPCC’s regulatory net capital of $7.7 billion exceeded the minimum requirement of $1.4 billion.

MLPF&S provides retail services. At March 31, 2022, MLPF&S' regulatory net capital was $6.0 billion, which exceeded the minimum requirement of $183 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 March 31, 2022, MLI’s capital resources were $33.5 billion, which exceeded the minimum Pillar 1 requirement of $13.3 billion. BofASE, a French investment firm, is regulated by the Autorité de Contrôle Prudentiel et de Résolution and the Autorité des Marchés Financiers, and is subject to certain regulatory capital requirements. At March 31, 2022, BofASE's capital resources were $7.6 billion, which exceeded the minimum Pillar 1 requirement of $3.3 billion.

In addition, MLI and BofASE became conditionally registered with the SEC as security-based swap dealers in the fourth quarter of 2021, and maintained net liquid assets at March 31, 2022 that exceeded the applicable minimum requirements under the Exchange Act.

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 the market fluctuation from the pandemic. For more information on the risks of the pandemic, see Item 1A. Risk Factors – Coronavirus Disease of the Corporation’s 2021 Annual Report on Form 10-K.

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 liquidity requirements, maximizes access to funding sources, minimizes borrowing costs and facilitates timely responses to


						Bank of America 22

liquidity events. 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 2021 Annual Report on Form 10-K.

NB Holdings Corporation

The parent company, 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 company assets not required to satisfy anticipated near-term expenditures to NB Holdings. The parent company 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 company would be resolved under the U.S. Bankruptcy Code.

Global Liquidity Sources and Other Unencumbered Assets

Table 12 presents average Global Liquidity Sources (GLS) for the three months ended March 31, 2022 and December 31, 2021.



Table 12	Average Global Liquidity Sources


		Three Months Ended

(Dollars in billions)		March 31 2022		December 31 2021
Bank entities		$	957	$	1,006
Nonbank and other entities (1)		152		152
Total Average Global Liquidity Sources		$	1,109	$	1,158

(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 $339 billion and $322 billion at March 31, 2022 and December 31, 2021. 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 company or nonbank subsidiaries may be subject to prior regulatory approval.

Liquidity is also held in nonbank entities, including the parent, NB Holdings and other regulated entities. The parent company 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 company 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 13 presents the composition of average GLS for the three months ended March 31, 2022 and December 31, 2021.



Table 13	Average Global Liquidity Sources Composition

		Three Months Ended


(Dollars in billions)		March 31 2022		December 31 2021
Cash on deposit		$	243	$	259
U.S. Treasury securities		265		278
U.S. agency securities, mortgage-backed securities, and other investment-grade securities		585		606
Non-U.S. government securities		16		15
Total Average Global Liquidity Sources		$	1,109	$	1,158

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 $616 billion and $617 billion for the three months ended March 31, 2022 and December 31, 2021. For the same periods, the average consolidated LCR was 116 percent and 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 company 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 2021 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 March 31, 2022, the Corporation and its insured depository institutions were in compliance with this requirement.

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 totaled $2.1 trillion at both March 31, 2022 and December 31, 2021.


23 Bank of America

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.

Long-term Debt

During the three months ended March 31, 2022, we issued $21.1 billion of long-term debt consisting of $17.2 billion of notes issued by Bank of America Corporation, substantially all of which was TLAC compliant, $546 million of notes issued by

Bank of America, N.A. and $3.4 billion of other debt, which is primarily structured liabilities.

During the three months ended March 31, 2022, we had total long-term debt maturities and redemptions in the aggregate of $8.2 billion consisting of $4.8 billion for Bank of America Corporation, $2.3 billion for Bank of America, N.A. and $1.1 billion of other debt. Table 14 presents the carrying value of aggregate annual contractual maturities of long-term debt at March 31, 2022.



Table 14	Long-term Debt by Maturity

(Dollars in millions)		Remainder of 2022		2023		2024		2025		2026		Thereafter		Total
Bank of America Corporation
Senior notes (1)		$	2,007	$	20,131	$	22,934	$	23,230	$	21,065	$	121,928	$	211,295
Senior structured notes		1,362		537		405		438		774		10,129		13,645
Subordinated notes		—		—		3,244		5,247		5,035		12,989		26,515
Junior subordinated notes		—		—		—		—		—		742		742
Total Bank of America Corporation		3,369		20,668		26,583		28,915		26,874		145,788		252,197
Bank of America, N.A.
Senior notes		—		1,574		—		—		—		—		1,574
Subordinated notes		—		—		—		—		—		1,670		1,670
Advances from Federal Home Loan Banks		201		501		—		16		10		60		788
Securitizations and other Bank VIEs (2)		1,255		992		1,000		1		—		—		3,248
Other		68		391		16		20		7		88		590
Total Bank of America, N.A.		1,524		3,458		1,016		37		17		1,818		7,870
Other debt
Structured Liabilities		2,676		3,539		1,943		1,442		1,540		7,231		18,371
Nonbank VIEs (2)		1		43		—		—		1		227		272

Total other debt		2,677		3,582		1,943		1,442		1,541		7,458		18,643
Total long-term debt		$	7,570	$	27,708	$	29,542	$	30,394	$	28,432	$	155,064	$	278,710

(1)Total includes $180.3 billion of outstanding notes that are both TLAC eligible and callable one year before their stated maturities, including $11.9 billion during the remainder of 2022, and $16.7 billion, $19.7 billion, $18.3 billion and $16.9 billion during each year of 2023 through 2026, respectively, and $96.8 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 2021 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 $1.4 billion to $278.7 billion during the three months ended March 31, 2022, primarily due to debt valuation adjustments, maturities and redemptions, partially offset by debt issuances. 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 three months ended March 31, 2022, we issued $2.7 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 2021 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 41.

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 15 presents the Corporation’s current long-term/short-term senior debt ratings and outlooks expressed by the rating agencies.

The ratings 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 2021 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 2021 Annual Report on Form 10-K.


						Bank of America 24

Table 15

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

P-1

Positive

A-

A-2

Positive

AA-

F1+

Stable

Bank of America, N.A.

Aa2

P-1

Positive

A+

A-1

Positive

F1+

Stable

Bank of America Europe Designated Activity Company

A+

A-1

Positive

F1+

Stable

Merrill Lynch, Pierce, Fenner & Smith Incorporated

A+

A-1

Positive

F1+

Stable

BofA Securities, Inc.

A+

A-1

Positive

F1+

Stable

Merrill Lynch International

A+

A-1

Positive

F1+

Stable

BofA Securities Europe SA

A+

A-1

Positive

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 March 31, 2022. 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 2021 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 2021 Annual Report on Form 10-K.

Credit Risk Management

For information on our credit risk management activities, see Consumer Portfolio Credit Risk Management below, Commercial Portfolio Credit Risk Management on page 30, Non-U.S. Portfolio on page 36, Allowance for Credit Losses on page 37, and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.

During the three months ended March 31, 2022, asset quality continued to improve. Consumer net charge-offs remained near historic lows and commercial non-performing loans and reservable criticized utilized exposure decreased, which was partially offset by an increase in reservable criticized exposure associated with our direct exposure to Russia as a result of the Russia/Ukraine conflict. While there have been signs of relief from the pandemic, uncertainty remains about the

timing and strength of the economy’s recovery, which could be hampered by broader economic impacts as a result of the current geopolitical situation, supply chain disruptions and inflationary pressures 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 three months ended March 31, 2022, the U.S. unemployment rate continued to decline and home prices increased. During the three months ended March 31, 2022, net charge-offs decreased $353 million to $340 million primarily driven by lower credit card losses, as loss rates remained near historic lows. During the three months ended March 31, 2022, nonperforming loans increased primarily due to loans with expired payment deferrals that were modified as troubled debt restructurings (TDRs) during the quarter.

The consumer allowance for loan and lease losses decreased $318 million during the three months ended March 31, 2022 to $6.7 billion. For more information, see Allowance for Credit Losses on page 37.

For more information on our accounting policies regarding delinquencies, nonperforming status, charge-offs and TDRs for the consumer portfolio, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.


25 Bank of America

Table 16 presents our outstanding consumer loans and leases, consumer nonperforming loans and accruing consumer loans past due 90 days or more.



Table 16	Consumer Credit Quality

		Outstandings				Nonperforming						Accruing Past Due 90 Days or More


(Dollars in millions)		March 31 2022		December 31 2021		March 31 2022			December 31 2021			March 31 2022			December 31 2021
Residential mortgage (1)		$	226,030	$	221,963	$	2,422		$	2,284		$	574		$	634
Home equity		26,936		27,935		615			630			—			—
Credit card		79,356		81,438		n/a			n/a			492			487
Direct/Indirect consumer (2)		105,754		103,560		67			75			11			11
Other consumer		205		190		—			—			—			—
Consumer loans excluding loans accounted for under the fair value option		$	438,281	$	435,086	$	3,104		$	2,989		$	1,077		$	1,132
Loans accounted for under the fair value option (3)		568		618
Total consumer loans and leases		$	438,849	$	435,704
Percentage of outstanding consumer loans and leases (4)		n/a		n/a		0.71		%	0.69		%	0.25		%	0.26		%
Percentage of outstanding consumer loans and leases, excluding fully-insured loan portfolios (4)		n/a		n/a		0.73			0.71			0.12			0.12

(1)Residential mortgage loans accruing past due 90 days or more are fully-insured loans. At March 31, 2022 and December 31, 2021, residential mortgage includes $468 million and $444 million of loans on which interest had been curtailed by the Federal Housing Administration, and therefore were no longer accruing interest, although principal was still insured, and $106 million and $190 million of loans on which interest was still accruing.

(2)Outstandings primarily include auto and specialty lending loans and leases of $49.7 billion and $48.5 billion, U.S. securities-based lending loans of $51.9 billion and $51.1 billion and non-U.S. consumer loans of $3.2 billion and $3.0 billion at March 31, 2022 and December 31, 2021.

(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 March 31, 2022 and December 31, 2021, $19 million and $21 million of loans accounted for under the fair value option were past due 90 days or more and not accruing interest.

n/a = not applicable

Table 17 presents net charge-offs and related ratios for consumer loans and leases.



Table 17	Consumer Net Charge-offs and Related Ratios

			Net Charge-offs				Net Charge-off Ratios (1)
		Three Months Ended March 31

(Dollars in millions)			2022		2021		2022		2021
Residential mortgage			$	(10)	$	(4)	(0.02)	%	(0.01)	%
Home equity			(30)		(35)		(0.44)		(0.42)
Credit card			297		634		1.53		3.47

Direct/Indirect consumer			4		31		0.02		0.14
Other consumer			79		67		n/m		n/m
Total			$	340	$	693	0.32		0.67

(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 52 percent of consumer loans and leases at March 31, 2022. Approximately 51 percent of the residential mortgage portfolio was in Consumer Banking and 43 percent was in GWIM. The remaining portion was in All Other.

Outstanding balances in the residential mortgage portfolio increased $4.1 billion during the three months ended March 31, 2022 as originations were partially offset by paydowns.

At March 31, 2022 and December 31, 2021, the residential mortgage portfolio included $12.4 billion and $12.7 billion of outstanding fully-insured loans, of which $2.1 billion and $2.2 billion had Federal Housing Administration (FHA) insurance, with the remainder protected by Fannie Mae long-term standby agreements.

Table 18 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 26



Table 18	Residential Mortgage – Key Credit Statistics

		Reported Basis (1)						Excluding Fully-insured Loans (1)


(Dollars in millions)		March 31 2022			December 31 2021			March 31 2022			December 31 2021
Outstandings		$	226,030		$	221,963		$	213,619		$	209,259
Accruing past due 30 days or more		1,528			1,753			712			866
Accruing past due 90 days or more		574			634			—			—
Nonperforming loans (2)		2,422			2,284			2,422			2,284
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		2			2			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 which primarily consist of collateral-dependent TDRs, including those that have been discharged in Chapter 7 bankruptcy and loans that have not yet demonstrated a sustained period of payment performance following a TDR.

Nonperforming outstanding balances in the residential mortgage portfolio increased $138 million during the three months ended March 31, 2022 primarily due to loans with expired payment deferrals that were modified as TDRs during the quarter. Of the nonperforming residential mortgage loans at March 31, 2022, $1.4 billion, or 59 percent, were current on contractual payments. Loans accruing past due 30 days or more decreased $154 million.

Net recoveries of $10 million for the three months ended March 31, 2022 remained relatively unchanged compared to the same period in 2021.

Of the $213.6 billion in total residential mortgage loans outstanding at March 31, 2022, 27 percent were originated as interest-only loans. The outstanding balance of interest-only residential mortgage loans that have entered the amortization period was $4.5 billion, or eight percent, at March 31, 2022. Residential mortgage loans that have entered the amortization period generally experienced a higher rate of early stage delinquencies and nonperforming status compared to the residential mortgage portfolio as a whole. At March 31, 2022, $37 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 $712 million or less than one percent, for the entire residential mortgage portfolio. In addition, at March 31, 2022, $264 million, or six percent, of outstanding interest-only residential mortgage loans that had entered the amortization period were nonperforming, of which $98 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 to ten years. Approximately 93 percent of these loans that have yet to enter the amortization period will not be required to make a fully-amortizing payment until 2025 or later.

Table 19 presents outstandings, nonperforming loans and net charge-offs by certain state concentrations for the residential mortgage portfolio. The Los Angeles-Long Beach-Santa Ana Metropolitan Statistical Area (MSA) within California represented 14 percent and 15 percent of outstandings at March 31, 2022 and December 31, 2021. In the New York area, the New York-Northern New Jersey-Long Island MSA made up 15 percent of outstandings at both March 31, 2022 and December 31, 2021.



Table 19	Residential Mortgage State Concentrations

		Outstandings (1)				Nonperforming (1)					Net Charge-offs
		March 31 2022		December 31 2021		March 31 2022		December 31 2021		Three Months Ended March 31
(Dollars in millions)											2022		2021


California		$	79,407	$	77,819	$	735	$	693		$	(3)	$	(2)
New York		25,432		24,975		381		358			—		2
Florida		14,421		13,883		165		158			(1)		(2)
Texas		9,185		9,002		92		86			—		—
New Jersey		8,813		8,723		121		117			—		—
Other		76,361		74,857		928		872			(6)		(2)
Residential mortgage loans		$	213,619	$	209,259	$	2,422	$	2,284		$	(10)	$	(4)
Fully-insured loan portfolio		12,411		12,704

Total residential mortgage loan portfolio		$	226,030	$	221,963

(1)Outstandings and nonperforming loans exclude loans accounted for under the fair value option.

Home Equity

At March 31, 2022, 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 March 31, 2022, 80 percent of the home equity portfolio was in Consumer Banking, 11 percent was in All Other and the remainder of the portfolio was primarily in GWIM. Outstanding

balances in the home equity portfolio decreased $1.0 billion during the three months ended March 31, 2022 primarily due to paydowns outpacing draws on existing lines and new originations. Of the total home equity portfolio at March 31, 2022 and December 31, 2021, $11.8 billion and $12.2 billion, or 44 percent, were in first-lien positions. At March 31, 2022, 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 17 percent of our total home equity portfolio.


27 Bank of America

Unused HELOCs totaled $40.9 billion and $40.5 billion at March 31, 2022 and December 31, 2021. The HELOC utilization rate was 38 percent and 39 percent at March 31, 2022 and December 31, 2021.

Table 20 presents certain home equity portfolio key credit statistics.



Table 20	Home Equity – Key Credit Statistics (1)




(Dollars in millions)							March 31 2022		December 31 2021
Outstandings							$	26,936	$	27,935
Accruing past due 30 days or more				111		157
Nonperforming loans (2)							615		630
Percent of portfolio
Refreshed CLTV greater than 90 but less than or equal to 100		—	%	—	%
Refreshed CLTV greater than 100				1		1
Refreshed FICO below 620							3		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 which primarily consist of collateral-dependent TDRs, including those that have been discharged in Chapter 7 bankruptcy, junior-lien loans where the underlying first lien is 90 days or more past due, as well as loans that have not yet demonstrated a sustained period of payment performance following a TDR.

Nonperforming outstanding balances in the home equity portfolio remained relatively flat at $615 million during the three months ended March 31, 2022. Of the nonperforming home equity loans at March 31, 2022, $256 million, or 42 percent, were current on contractual payments. In addition, $228 million, or 37 percent of nonperforming home equity loans 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 decreased $46 million during the three months ended March 31, 2022.

Net recoveries decreased $5 million to $30 million for the three months ended March 31, 2022 compared to the same period in 2021.

Of the $26.9 billion in total home equity portfolio outstandings at March 31, 2022, as shown in Table 20, 14 percent require interest-only payments. The outstanding balance of HELOCs that have reached the end of their draw period and have entered the amortization period was $6.3 billion at March 31, 2022. 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 March 31,

2022, $71 million, or one percent, of outstanding HELOCs that had entered the amortization period were accruing past due 30 days or more. In addition, at March 31, 2022, $455 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 three months ended March 31, 2022, 18 percent of these customers with an outstanding balance did not pay any principal on their HELOCs.

Table 21 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 13 percent of the outstanding home equity portfolio at both March 31, 2022 and December 31, 2021. The Los Angeles-Long Beach-Santa Ana MSA within California made up 11 percent and 10 percent of the outstanding home equity portfolio at March 31, 2022 and December 31, 2021.



Table 21	Home Equity State Concentrations

		Outstandings (1)				Nonperforming (1)					Net Charge-offs


		March 31 2022		December 31 2021		March 31 2022		December 31 2021		Three Months Ended March 31
(Dollars in millions)											2022		2021
California		$	7,395	$	7,600	$	145	$	140		$	(6)	$	(12)
Florida		2,844		2,977		70		78			(7)		(6)
New Jersey		2,176		2,259		68		69			(2)		(2)
New York		1,987		2,072		100		96			(2)		(3)
Massachusetts		1,363		1,422		29		32			(1)		1
Other		11,171		11,605		203		215			(12)		(13)
Total home equity loan portfolio		$	26,936	$	27,935	$	615	$	630		$	(30)	$	(35)

(1)Outstandings and nonperforming loans exclude loans accounted for under the fair value option.

Credit Card

At March 31, 2022, 97 percent of the credit card portfolio was managed in Consumer Banking with the remainder in GWIM. Outstandings in the credit card portfolio decreased $2.1 billion during the three months ended March 31, 2022 to $79.4 billion primarily driven by the transfer of a $1.6 billion affinity card loan portfolio to held for sale in anticipation of its sale later in 2022. Net charge-offs decreased $337 million to $297 million during the three months ended March 31, 2022 compared to the same period in 2021 as loss rates remained near historic lows. In

addition, the prior-year period included charge-offs associated with deferrals that expired in 2020. Credit card loans 30 days and 90 days or more past due and still accruing interest remained relatively flat at $1.0 billion and $492 million at March 31, 2022.

Unused lines of credit for credit card decreased to $357.1 billion at March 31, 2022 from $361.2 billion at December 31, 2021.

Table 22 presents certain state concentrations for the credit card portfolio.


						Bank of America 28



Table 22	Credit Card State Concentrations

		Outstandings				Accruing Past Due 90 Days or More					Net Charge-offs


		March 31 2022		December 31 2021		March 31 2022		December 31 2021		Three Months Ended March 31
(Dollars in millions)											2022		2021
California		$	12,848	$	13,076	$	85	$	82		$	50	$	119
Florida		8,032		8,046		68		71			42		91
Texas		6,869		6,894		48		47			27		58
New York		4,580		4,725		38		35			22		54
Washington		4,073		4,080		14		13			7		15
Other		42,954		44,617		239		239			149		297
Total credit card portfolio		$	79,356	$	81,438	$	492	$	487		$	297	$	634

Direct/Indirect Consumer

At March 31, 2022, 47 percent of the direct/indirect portfolio was included in Consumer Banking (consumer auto and recreational vehicle lending) and 53 percent was included in GWIM (principally securities-based lending loans). Outstandings

in the direct/indirect portfolio increased by $2.2 billion at March 31, 2022 to $105.8 billion driven by growth in our auto portfolio and client demand for liquidity in securities-based lending.

Table 23 presents certain state concentrations for the direct/indirect consumer loan portfolio.



Table 23	Direct/Indirect State Concentrations

		Outstandings				Accruing Past Due 90 Days or More					Net Charge-offs


		March 31 2022		December 31 2021		March 31 2022		December 31 2021		Three Months Ended March 31
(Dollars in millions)											2022		2021

California		$	15,395	$	15,061	$	2	$	2		$	1	$	7
Florida		13,845		13,352		1		1			1		3
Texas		9,747		9,505		2		2			1		5
New York		7,959		7,802		1		1			—		3
New Jersey		4,315		4,228		—		—			—		—
Other		54,493		53,612		5		5			1		13
Total direct/indirect loan portfolio		$	105,754	$	103,560	$	11	$	11		$	4	$	31

Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity

Table 24 presents nonperforming consumer loans, leases and foreclosed properties activity for the three months ended March 31, 2022 and 2021. During the three months ended March 31, 2022, nonperforming consumer loans increased $115 million to $3.1 billion primarily due to loans with expired payment deferrals that were modified in TDRs during the quarter.

At March 31, 2022, $836 million, or 27 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 March 31, 2022, $1.7 billion, or 56 percent of nonperforming consumer loans were modified and are now current after successful trial periods, or are current loans classified as nonperforming loans in accordance with applicable policies.

Foreclosed properties increased $17 million during the three months ended March 31, 2022 to $118 million. Nonperforming loans also include certain loans that have been modified in TDRs where economic concessions have been granted to borrowers experiencing financial difficulties.


29 Bank of America



Table 24	Nonperforming Consumer Loans, Leases and Foreclosed Properties Activity

		Three Months Ended March 31
(Dollars in millions)			2022			2021
Nonperforming loans and leases, January 1			$	2,989		$	2,725
Additions			644			851
Reductions:
Paydowns and payoffs			(175)			(123)
Sales			(131)			(1)
Returns to performing status (1)			(202)			(347)
Charge-offs			(15)			(12)
Transfers to foreclosed properties			(6)			(2)

Total net additions to nonperforming loans and leases			115			366
Total nonperforming loans and leases, March 31			3,104			3,091
Foreclosed properties, March 31 (2)			118			101
Nonperforming consumer loans, leases and foreclosed properties, March 31			$	3,222		$	3,192
Nonperforming consumer loans and leases as a percentage of outstanding consumer loans and leases (3)			0.71		%	0.75		%
Nonperforming consumer loans, leases and foreclosed properties as a percentage of outstanding consumer loans, leases and foreclosed properties (3)			0.74			0.78

(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)Foreclosed property balances do not include properties insured by certain government-guaranteed loans, principally FHA-insured, of $61 million and $87 million at March 31, 2022 and 2021.

(3)Outstanding consumer loans and leases exclude loans accounted for under the fair value option.

Table 25 presents TDRs for the consumer real estate portfolio. Performing TDR balances are excluded from nonperforming loans and leases in Table 24.



Table 25	Consumer Real Estate Troubled Debt Restructurings

		March 31, 2022						December 31, 2021
(Dollars in millions)		Nonperforming		Performing		Total		Nonperforming		Performing		Total
Residential mortgage (1, 2)		$	1,697	$	2,181	$	3,878	$	1,498	$	2,278	$	3,776
Home equity (3)		277		622		899		254		652		906
Total consumer real estate troubled debt restructurings		$	1,974	$	2,803	$	4,777	$	1,752	$	2,930	$	4,682

(1)At March 31, 2022 and December 31, 2021, residential mortgage TDRs deemed collateral dependent totaled $1.8 billion and $1.6 billion, and included $1.6 billion and $1.4 billion of loans classified as nonperforming and $267 million and $279 million of loans classified as performing.

(2)At both March 31, 2022 and December 31, 2021, residential mortgage performing TDRs include $1.2 billion of loans that were fully-insured.

(3)At March 31, 2022 and December 31, 2021, home equity TDRs deemed collateral dependent totaled $383 million and $370 million, and include $243 million and $222 million of loans classified as nonperforming and $140 million and $148 million of loans classified as performing.

In addition to modifying consumer real estate loans, we work with customers who are experiencing financial difficulty by modifying credit card and other consumer loans. Credit card and other consumer loan modifications generally involve a reduction in the customer’s interest rate on the account and placing the customer on a fixed payment plan not exceeding 60 months.

Modifications of credit card and other consumer loans are made through programs utilizing direct customer contact, but may also utilize external programs. At March 31, 2022 and December 31, 2021, our credit card and other consumer TDR portfolio was $646 million and $672 million, of which $572 million and $599 million were current or less than 30 days past due under the modified terms.

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, 33 and 36 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 33

and Commercial Portfolio Credit Risk Management – Industry Concentrations on page 34.

For more information on our accounting policies regarding delinquencies, nonperforming status, net charge-offs and TDRs for the commercial portfolio, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.

Commercial Credit Portfolio

During the three months ended March 31, 2022, commercial credit quality improved as charge-offs, nonperforming commercial loans and reservable criticized utilized exposure declined during this period. Due to the ongoing Russia/Ukraine conflict, all of the $759 million of direct exposure to Russian counterparties has been downgraded and reported as reservable criticized exposure, and expected credit losses have been incorporated into our estimate of the allowance for credit losses. Outstanding commercial loans and leases increased $10.9 billion during the three months ended March 31, 2022 due to growth in commercial and industrial, primarily in Global Banking. This increase was partially offset by lower U.S. small business commercial loans due to repayments of PPP loans by the Small Business Administration (SBA) under the terms of the program. For more information on PPP loans, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.


						Bank of America 30

Credit quality of commercial real estate borrowers continued to stabilize in many sectors as economies have continued to reopen and pandemic-impacted sectors continue to recover. However, many real estate markets, while improving, are still experiencing some disruptions in demand, supply chain challenges and tenant difficulties. Demand for office space is uncertain as companies evaluate space needs with employment models that utilize a mix of remote and conventional office use.

The commercial allowance for loan and lease losses remained relatively flat at $5.4 billion, as asset quality improvements were offset by a reserve build related to Russian exposure and loan growth. For more information, see Allowance for Credit Losses on page 37.

Total commercial utilized credit exposure increased $20.5 billion during the three months ended March 31, 2022 to

$674.0 billion primarily driven by derivative assets and higher loans and leases. 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 March 31, 2022 and 56 percent at December 31, 2021.

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)		March 31 2022		December 31 2021		March 31 2022		December 31 2021		March 31 2022		December 31 2021
Loans and leases		$	554,296	$	543,420	$	472,231	$	454,256	$	1,026,527	$	997,676
Derivative assets (5)		48,231		35,344		—		—		48,231		35,344
Standby letters of credit and financial guarantees		34,430		34,389		1,216		639		35,646		35,028
Debt securities and other investments		22,247		19,427		3,415		4,638		25,662		24,065
Loans held-for-sale		7,057		13,185		16,296		16,581		23,353		29,766
Operating leases		5,778		5,935		—		—		5,778		5,935
Commercial letters of credit		1,444		1,176		85		247		1,529		1,423
Other		556		652		—		—		556		652
Total		$	674,039	$	653,528	$	493,243	$	476,361	$	1,167,282	$	1,129,889

(1)Commercial utilized exposure includes loans of $6.5 billion and $7.2 billion accounted for under the fair value option at March 31, 2022 and December 31, 2021.

(2)Commercial unfunded exposure includes commitments accounted for under the fair value option with a notional amount of $3.9 billion and $4.8 billion at March 31, 2022 and December 31, 2021.

(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 $11.0 billion and $10.7 billion at March 31, 2022 and December 31, 2021.

(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 $34.1 billion and $30.8 billion at March 31, 2022 and December 31, 2021. Not reflected in utilized and committed exposure is additional non-cash derivative collateral held of $46.4 billion and $44.8 billion at March 31, 2022 and December 31, 2021, which consists primarily of other marketable securities.

Nonperforming commercial loans decreased $57 million. Table 27 presents our commercial loans and leases portfolio and related credit quality information at March 31, 2022 and December 31, 2021.



Table 27	Commercial Credit Quality

		Outstandings				Nonperforming				Accruing Past Due 90 Days or More

(Dollars in millions)		March 31 2022		December 31 2021		March 31 2022		December 31 2021		March 31 2022		December 31 2021
Commercial and industrial:
U.S. commercial		$	330,973	$	325,936	$	818	$	825	$	195	$	171
Non-U.S. commercial		122,267		113,266		268		268		49		19
Total commercial and industrial		453,240		439,202		1,086		1,093		244		190
Commercial real estate		62,533		63,009		361		382		17		40
Commercial lease financing		14,008		14,825		54		80		14		8
		529,781		517,036		1,501		1,555		275		238
U.S. small business commercial (1)		17,972		19,183		20		23		321		87
Commercial loans excluding loans accounted for under the fair value option		$	547,753	$	536,219	$	1,521	$	1,578	$	596	$	325
Loans accounted for under the fair value option (2)		6,543		7,201
Total commercial loans and leases		$	554,296	$	543,420

(1)Includes card-related products.

(2)Commercial loans accounted for under the fair value option include U.S. commercial of $4.0 billion and $4.6 billion and non-U.S. commercial of $2.6 billion at both March 31, 2022 and December 31, 2021. For more information on the fair value option, see Note 15 – Fair Value Option to the Consolidated Financial Statements.


31 Bank of America

Table 28 presents net charge-offs and related ratios for our commercial loans and leases for the three months ended March 31, 2022 and 2021.



Table 28	Commercial Net Charge-offs and Related Ratios

			Net Charge-offs				Net Charge-off Ratios (1)
		Three Months Ended March 31

(Dollars in millions)			2022		2021		2022		2021
Commercial and industrial:
U.S. commercial			$	(14)	$	12	(0.02)	%	0.02	%
Non-U.S. commercial			1		26		—		0.12
Total commercial and industrial			(13)		38		(0.01)		0.04
Commercial real estate			23		11		0.15		0.07

			10		49		0.01		0.04
U.S. small business commercial			42		81		0.94		0.89
Total commercial			$	52	$	130	0.04		0.11

(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 decreased $1.7 billion during the three months ended March 31, 2022, which was broad-based across industries. At March 31, 2022 and December 31, 2021, 86 percent and 87 percent of commercial reservable criticized utilized exposure was secured.



Table 29	Commercial Reservable Criticized Utilized Exposure (1, 2)




(Dollars in millions)		March 31, 2022				December 31, 2021
Commercial and industrial:
U.S. commercial		$	10,369	2.88	%	$	11,327	3.20	%
Non-U.S. commercial		3,180		2.48		2,582		2.17
Total commercial and industrial		13,549		2.78		13,909		2.94
Commercial real estate		6,303		9.85		7,572		11.72
Commercial lease financing		365		2.60		387		2.61
		20,217		3.57		21,868		3.96
U.S. small business commercial		465		2.59		513		2.67
Total commercial reservable criticized utilized exposure		$	20,682	3.54		$	22,381	3.91

(1)Total commercial reservable criticized utilized exposure includes loans and leases of $19.8 billion and $21.2 billion and commercial letters of credit of $930 million and $1.2 billion at March 31, 2022 and December 31, 2021.

(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 March 31, 2022, 65 percent of the U.S. commercial loan portfolio, excluding small business, was managed in Global Banking, 19 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 $5.0 billion, or two percent, during the three months ended March 31, 2022 primarily driven by Global Banking. Reservable criticized utilized exposure decreased $958 million, or eight percent, driven by decreases across a broad range of industries.

Non-U.S. Commercial

At March 31, 2022, 68 percent of the non-U.S. commercial loan portfolio was managed in Global Banking, 31 percent in Global Markets and the remainder in GWIM. Non-U.S. commercial loans increased $9.0 billion, or eight percent, during the three months ended March 31, 2022 primarily in Global Banking and Global Markets. Reservable criticized utilized exposure increased $598 million, or 23 percent, due to downgrades for direct exposure to Russian counterparties. For information on the non-U.S. commercial portfolio, see Non-U.S. Portfolio on page 36. For

more information on the Russia/Ukraine conflict, see Recent Developments on page 3.

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 $476 million, or one percent, during the three months ended March 31, 2022 to $62.5 billion due to paydowns outpacing new originations. Reservable criticized utilized exposure decreased $1.3 billion, or 17 percent, primarily driven by Hotels due to improving vacancy rates and reduced travel restrictions. The portfolio remains diversified across property types and geographic regions. California represented the largest state concentration at 20 percent and 21 percent of the commercial real estate portfolio at March 31, 2022 and December 31, 2021. The commercial real estate portfolio is predominantly managed in Global Banking and consists of loans made primarily to public and private developers, and commercial real estate firms.

During the three months ended March 31, 2022, we continued to see low default rates and varying degrees of improvement in certain geographic regions and property types of the portfolio. 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


						Bank of America 32

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)		March 31 2022		December 31 2021
By Geographic Region
Northeast		$	14,566	$	14,318
California		12,770		13,145
Southwest		7,668		7,510
Southeast		6,743		6,758
Florida		4,462		4,367
Midwest		3,262		3,221
Illinois		2,782		2,878
Midsouth		2,580		2,289
Northwest		1,597		1,709
Non-U.S.		4,279		4,760
Other		1,824		2,054
Total outstanding commercial real estate loans		$	62,533	$	63,009
By Property Type
Non-residential
Office		$	17,769	$	18,309
Industrial / Warehouse		10,749		10,749
Multi-family rental		8,292		8,173
Shopping centers /Retail		6,463		6,502
Hotel / Motels		5,549		5,932
Unsecured		3,168		3,178
Multi-use		2,180		1,835

Other		6,971		7,238
Total non-residential		61,141		61,916
Residential		1,392		1,093
Total outstanding commercial real estate loans		$	62,533	$	63,009

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, and includes $3.0 billion and $4.7 billion of PPP loans outstanding at March 31, 2022 and December 31, 2021. The decline of $1.7 billion in PPP loans during the three months ended March 31, 2022 was due to repayment of the loans by the SBA under the terms of the program. Excluding PPP, credit card-related products were 53 percent and 50 percent of the U.S. small business commercial portfolio at March 31, 2022 and December 31, 2021 and represented all of the net charge-offs for the three months ended March 31, 2022 compared to 90 percent for the three months ended March 31, 2021. The increase of $234 million in accruing past due 90 days or more for the three months ended March 31, 2022 was driven by PPP loans, which are fully guaranteed by the SBA.

Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity

Table 31 presents the nonperforming commercial loans, leases and foreclosed properties activity during the three months ended March 31, 2022 and 2021. Nonperforming loans do not include loans accounted for under the fair value option. During the three months ended March 31, 2022, nonperforming commercial loans and leases decreased $57 million to $1.5 billion. At March 31, 2022, 90 percent of commercial nonperforming loans, leases and foreclosed properties were secured and 54 percent were contractually current. Commercial nonperforming loans were carried at 90 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.


33 Bank of America



Table 31	Nonperforming Commercial Loans, Leases and Foreclosed Properties Activity (1, 2)

		Three Months Ended March 31
(Dollars in millions)			2022			2021
Nonperforming loans and leases, January 1			$	1,578		$	2,227
Additions			183			472


Reductions:
Paydowns			(159)			(312)
Sales			(25)			(22)
Returns to performing status (3)			(5)			(28)
Charge-offs			(12)			(78)

Transfers to loans held-for-sale			(39)			(188)
Total net reductions to nonperforming loans and leases			(57)			(156)
Total nonperforming loans and leases, March 31			1,521			2,071






Foreclosed properties, March 31			35			36
Nonperforming commercial loans, leases and foreclosed properties, March 31			$	1,556		$	2,107
Nonperforming commercial loans and leases as a percentage of outstanding commercial loans and leases (4)			0.28		%	0.43		%
Nonperforming commercial loans, leases and foreclosed properties as a percentage of outstanding commercial loans, leases and foreclosed properties (4)			0.28			0.43

(1)Balances do not include nonperforming loans held-for-sale of $336 million and $384 million at March 31, 2022 and 2021.

(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, or when the loan otherwise becomes well-secured and is in the process of collection. TDRs are generally classified as performing after a sustained period of demonstrated payment performance.

(4)Outstanding commercial loans exclude loans accounted for under the fair value option.

Table 32 presents our commercial TDRs by product type and performing status. U.S. small business commercial TDRs are comprised of renegotiated small business card loans and small business loans. The renegotiated small business card loans are not classified as nonperforming as they are charged off no later

than the end of the month in which the loan becomes 180 days past due. Commercial TDRs increased $506 million, or 27 percent, during the three months ended March 31, 2022 primarily due to commercial real estate loans with expired payment deferrals that were modified as TDRs during the quarter.



Table 32	Commercial Troubled Debt Restructurings

		March 31, 2022						December 31, 2021
(Dollars in millions)		Nonperforming		Performing		Total		Nonperforming		Performing		Total
Commercial and industrial:
U.S. commercial		$	386	$	791	$	1,177	$	359	$	685	$	1,044
Non-U.S. commercial		62		16		78		72		8		80
Total commercial and industrial		448		807		1,255		431		693		1,124
Commercial real estate		270		788		1,058		244		437		681
Commercial lease financing		46		7		53		50		7		57
		764		1,602		2,366		725		1,137		1,862
U.S. small business commercial		—		40		40		—		38		38
Total commercial troubled debt restructurings		$	764	$	1,642	$	2,406	$	725	$	1,175	$	1,900

Industry Concentrations

Table 33 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.

Our commercial credit exposure is diversified across a broad range of industries. Total commercial committed exposure increased $37.4 billion, or three percent, during the three months ended March 31, 2022 to $1.2 trillion. The increase in commercial committed exposure was concentrated in Asset managers and funds and Materials.

For information on industry limits, see Commercial Portfolio Credit Risk Management – Industry Concentrations in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K.

Asset managers and funds, our largest industry concentration with committed exposure of $159.0 billion,

increased $22.1 billion, or 16 percent, during the three months ended March 31, 2022, which was primarily driven by secured investment-grade exposures.

Real estate, our second largest industry concentration with committed exposure of $93.9 billion, decreased $2.3 billion, or two percent, during the three months ended March 31, 2022. For more information on the commercial real estate and related portfolios, see Commercial Portfolio Credit Risk Management – Commercial Real Estate on page 32.

Capital goods, our third largest industry concentration with committed exposure of $85.9 billion, increased $1.6 billion, or two percent during the three months ended March 31, 2022.

While the U.S. and global economies have shown signs of relief from the pandemic, uncertainty remains as a result of geopolitical and inflationary pressures, and a number of industries will likely continue to be adversely impacted due to these conditions. 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 34



Table 33	Commercial Credit Exposure by Industry (1)

		Commercial Utilized				Total Commercial Committed (2)

(Dollars in millions)		March 31 2022		December 31 2021		March 31 2022		December 31 2021
Asset managers & funds		$	102,558	$	89,786	$	158,973	$	136,914
Real estate (3)		67,211		69,384		93,888		96,202
Capital goods		44,545		42,784		85,942		84,293
Finance companies		50,559		59,327		76,101		86,009
Materials		27,570		25,133		60,017		53,652
Healthcare equipment and services		33,164		32,003		58,264		58,195
Retailing		26,678		24,514		51,557		50,816
Government & public education		35,212		37,597		49,213		50,066
Consumer services		27,045		28,172		47,344		48,052
Food, beverage and tobacco		23,332		21,584		46,566		45,419
Commercial services and supplies		20,818		22,390		42,809		42,451
Individuals and trusts		29,340		29,752		38,961		39,869
Utilities		18,908		17,082		38,178		36,855
Energy		16,770		14,217		36,001		34,136
Transportation		21,268		21,079		32,034		32,015
Software and services		12,075		10,663		30,195		27,643
Media		11,693		12,495		27,525		26,318
Technology hardware and equipment		10,551		10,159		26,479		26,910
Global commercial banks		25,092		20,062		26,234		21,390
Consumer durables and apparel		10,989		9,740		22,089		21,226
Vehicle dealers		11,438		11,030		20,381		15,678
Pharmaceuticals and biotechnology		6,175		5,608		19,093		19,439
Telecommunication services		10,500		10,056		18,453		21,270
Insurance		6,784		5,743		18,120		14,323
Automobiles and components		9,195		9,236		17,782		17,052
Food and staples retailing		7,304		6,902		12,772		12,226
Financial markets infrastructure (clearinghouses)		4,359		3,876		6,966		6,076
Religious and social organizations		2,906		3,154		5,345		5,394

Total commercial credit exposure by industry		$	674,039	$	653,528	$	1,167,282	$	1,129,889

(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 $11.0 billion and $10.7 billion at March 31, 2022 and December 31, 2021.

(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 March 31, 2022 and December 31, 2021, 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 $3.4 billion and $2.6 billion. We recorded net losses of $9 million for the three months ended March 31, 2022 compared to net losses of $36 million for same period in 2021. 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 39. For more information, see Trading Risk Management on page 39.

Tables 34 and 35 present the maturity profiles and the credit exposure debt ratings of the net credit default protection portfolio at March 31, 2022 and December 31, 2021.



Table 34	Net Credit Default Protection by Maturity


		March 31 2022		December 31 2021
Less than or equal to one year		29	%	34	%
Greater than one year and less than or equal to five years		56		62
Greater than five years		15		4
Total net credit default protection		100	%	100	%



Table 35	Net Credit Default Protection by Credit Exposure Debt Rating

		Net Notional (1)		Percent of Total		Net Notional (1)		Percent of Total


(Dollars in millions)		March 31, 2022				December 31, 2021
Ratings (2, 3)


A		$	(400)	11.8	%	$	(350)	13.4	%
BBB		(786)		23.3		(710)		27.1
BB		(990)		29.3		(809)		30.9
B		(732)		21.7		(659)		25.2
CCC and below		(93)		2.8		(35)		1.3
NR (4)		(376)		11.1		(55)		2.1
Total net credit default protection		$	(3,377)	100.0	%	$	(2,618)	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.


35 Bank 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 2021 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 2021 Annual Report on Form 10-K.

Table 36 presents our 20 largest non-U.S. country exposures at March 31, 2022. These exposures accounted for 90 percent and 89 percent of our total non-U.S. exposure at March 31, 2022 and December 31, 2021. Net country exposure for these 20 countries increased $36.9 billion during the three months ended March 31, 2022 primarily driven by increases in the United Kingdom, Japan and Germany, partially offset by reductions in Canada and Italy.



Table 36	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 March 31 2022		Hedges and Credit Default Protection		Net Country Exposure at March 31 2022		Increase (Decrease) from December 31 2021
United Kingdom		$	40,668	$	18,840	$	7,447	$	2,308	$	69,263	$	(1,293)	$	67,970	$	13,001
Germany		27,446		8,504		2,259		2,202		40,411		(896)		39,515		5,690
Japan		19,920		1,567		2,462		5,102		29,051		(835)		28,216		10,954
France		12,162		8,932		1,314		3,637		26,045		(894)		25,151		244
Canada		9,175		9,615		1,532		3,533		23,855		(572)		23,283		(3,028)
Australia		10,940		7,125		555		3,081		21,701		(297)		21,404		100
Brazil		7,338		1,372		845		4,147		13,702		(190)		13,512		762
China		9,903		548		1,433		1,411		13,295		(333)		12,962		380
Singapore		4,540		620		299		6,708		12,167		(58)		12,109		1,444
Netherlands		5,588		4,651		1,024		907		12,170		(609)		11,561		1,965
India		7,412		351		507		2,326		10,596		(153)		10,443		1,812
Switzerland		5,934		3,762		342		380		10,418		(201)		10,217		1,642
South Korea		6,125		709		713		1,786		9,333		(143)		9,190		1,038
Hong Kong		5,495		505		333		1,137		7,470		(36)		7,434		107
Ireland		5,902		1,034		215		379		7,530		(170)		7,360		1,821
Mexico		4,314		1,390		162		1,065		6,931		(201)		6,730		268
Spain		2,333		1,574		685		1,316		5,908		(139)		5,769		(151)
Belgium		2,495		1,456		342		667		4,960		(237)		4,723		(308)
Italy		2,520		1,168		438		411		4,537		(526)		4,011		(1,193)
Sweden		1,361		1,318		480		412		3,571		(200)		3,371		397
Total top 20 non-U.S. countries exposure		$	191,571	$	75,041	$	23,387	$	42,915	$	332,914	$	(7,983)	$	324,931	$	36,945

Our largest non-U.S. country exposure at March 31, 2022 was the United Kingdom with net exposure of $68.0 billion, which represents a $13.0 billion increase from December 31, 2021. Our second largest non-U.S. country exposure was Germany with net exposure of $39.5 billion at March 31, 2022, a $5.7 billion increase from December 31, 2021. The increase in both of these countries was primarily driven by an increase in deposits with central banks.


						Bank of America 36

Allowance for Credit Losses

The allowance for credit losses decreased $360 million from December 31, 2021 to $13.5 billion at March 31, 2022, which included a $323 million reserve decrease related to the consumer portfolio and a $37 million reserve decrease related to the commercial portfolio. The decrease in the allowance was

primarily driven by credit quality improvement, offset by a reserve build related to Russian exposure and loan growth.

Table 37 presents an allocation of the allowance for credit losses by product type at March 31, 2022 and December 31, 2021.



Table 37	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)		March 31, 2022						December 31, 2021
Allowance for loan and lease losses
Residential mortgage		$	301	2.49	%	0.13	%		$	351	2.83	%	0.16	%
Home equity		172		1.42		0.64			206		1.66		0.74
Credit card		5,684		46.97		7.16			5,907		47.70		7.25

Direct/Indirect consumer		512		4.23		0.48			523		4.22		0.51
Other consumer		46		0.38		n/m			46		0.37		n/m
Total consumer		6,715		55.49		1.53			7,033		56.78		1.62
U.S. commercial (2)		2,966		24.50		0.85			3,019		24.37		0.87
Non-U.S. commercial		1,155		9.54		0.94			975		7.87		0.86
Commercial real estate		1,218		10.06		1.95			1,292		10.43		2.05
Commercial lease financing		50		0.41		0.36			68		0.55		0.46
Total commercial		5,389		44.51		0.98			5,354		43.22		1.00
Allowance for loan and lease losses		12,104		100.00	%	1.23			12,387		100.00	%	1.28


Reserve for unfunded lending commitments		1,379							1,456
Allowance for credit losses		$	13,483						$	13,843

(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 $1.0 billion and $1.2 billion at March 31, 2022 and December 31, 2021.

n/m = not meaningful

Net charge-offs for the three months ended March 31, 2022 were $392 million compared to $823 million for the same period in 2021 driven by decreases across most products. The provision for credit losses increased $1.9 billion to an expense of $30 million for the three months ended March 31, 2022 compared to the same period in 2021. The allowance for credit losses had a reserve release of $360 million for the three months ended March 31, 2022, primarily driven by credit quality improvements. The provision for credit losses for the consumer portfolio, including unfunded lending commitments, increased $770 million to an expense of $14 million for the three months ended March 31, 2022 compared to the same period in 2021. The provision for credit losses for the commercial portfolio,

including unfunded lending commitments, increased $1.1 billion to an expense of $16 million for the three months ended March 31, 2022 compared to the same period in 2021.

Table 38 presents a rollforward of the allowance for credit losses, including certain loan and allowance ratios for the three months ended March 31, 2022 and 2021. 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 2021 Annual Report on Form 10-K and Note 5 – Outstanding Loans and Leases and Allowance for Credit Losses to the Consolidated Financial Statements.


37 Bank of America



Table 38	Allowance for Credit Losses

		Three Months Ended March 31
(Dollars in millions)			2022			2021


Allowance for loan and lease losses, January 1			$	12,387		$	18,802
Loans and leases charged off
Residential mortgage			(10)			(9)
Home equity			(13)			(6)
Credit card			(473)			(800)
Direct/Indirect consumer			(62)			(102)
Other consumer			(84)			(75)
Total consumer charge-offs			(642)			(992)
U.S. commercial (1)			(67)			(156)
Non-U.S. commercial			(2)			(26)
Commercial real estate			(23)			(12)

Total commercial charge-offs			(92)			(194)
Total loans and leases charged off			(734)			(1,186)
Recoveries of loans and leases previously charged off
Residential mortgage			20			13
Home equity			43			41
Credit card			176			166
Direct/Indirect consumer			58			71
Other consumer			5			8
Total consumer recoveries			302			299
U.S. commercial (2)			39			63
Non-U.S. commercial			1			—
Commercial real estate			—			1

Total commercial recoveries			40			64
Total recoveries of loans and leases previously charged off			342			363
Net charge-offs			(392)			(823)

Provision for loan and lease losses			108			(1,811)
Other			1			—
Allowance for loan and lease losses, March 31			12,104			16,168




Reserve for unfunded lending commitments, January 1			1,456			1,878
Provision for unfunded lending commitments			(78)			(49)
Other			1			—
Reserve for unfunded lending commitments, March 31			1,379			1,829
Allowance for credit losses, March 31			$	13,483		$	17,997

Loan and allowance ratios (3) :
Loans and leases outstanding at March 31			$	986,034		$	896,085
Allowance for loan and lease losses as a percentage of total loans and leases outstanding at March 31			1.23		%	1.80		%
Consumer allowance for loan and lease losses as a percentage of total consumer loans and leases outstanding at March 31			1.53			2.10
Commercial allowance for loan and lease losses as a percentage of total commercial loans and leases outstanding at March 31			0.98			1.55
Average loans and leases outstanding			$	970,491		$	901,587
Annualized net charge-offs as a percentage of average loans and leases outstanding			0.16		%	0.37		%

Allowance for loan and lease losses as a percentage of total nonperforming loans and leases at March 31			262			313
Ratio of the allowance for loan and lease losses at March 31 to annualized net charge-offs			7.62			4.85

Amounts included in allowance for loan and lease losses for loans and leases that are excluded from nonperforming loans and leases at March 31 (4)			$	6,646		$	8,710
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 March 31 (4)			118		%	144		%

(1)Includes U.S. small business commercial charge-offs of $56 million and $101 million for the three months ended March 31, 2022 and 2021.

(2)Includes U.S. small business commercial recoveries of $14 million and $20 million for the three months ended March 31, 2022 and 2021.

(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.


						Bank of America 38

Market Risk Management

For more information on our market risk management process, see Market Risk Management in the MD&A of the Corporation’s 2021 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 39 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 2021 Annual Report on Form 10-K.

The total market-based portfolio VaR results in Table 39 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 39 presents period-end, average, high and low daily trading VaR for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021 using a 99 percent confidence level. The amounts disclosed in Table 39 and Table 40 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 increased for the three months ended March 31, 2022 compared to the prior quarter primarily due to decreased diversification benefit across Equities and FICC and increased FX exposures through market making activities.



Table 39	Market Risk VaR for Trading Activities

		Three Months Ended

		March 31, 2022								December 31, 2021								March 31, 2021
(Dollars in millions)		Period End		Average		High (1)		Low (1)		Period End		Average		High (1)		Low (1)		Period End		Average		High (1)		Low (1)
Foreign exchange		$	20	$	18	$	24	$	13	$	11	$	9	$	13	$	6	$	13	$	10	$	17	$	5
Interest rate		49		36		56		25		54		35		57		16		53		35		53		18
Credit		55		64		71		52		73		73		84		65		58		64		82		53
Equity		23		23		28		19		21		25		34		20		22		24		35		19
Commodities		13		10		18		7		6		8		11		5		4		9		28		4
Portfolio diversification		(99)		(95)		—		—		(114)		(101)		—		—		(96)		(90)		—		—
Total covered positions portfolio		61		56		69		48		51		49		65		36		54		52		85		34
Impact from less liquid exposures (2)		17		23		—		—		8		14		—		—		9		22		—		—
Total covered positions and less liquid trading positions portfolio		78		79		135		61		59		63		102		46		63		74		125		47
Fair value option loans		63		54		63		45		51		50		65		41		48		56		64		37
Fair value option hedges		22		18		22		16		15		16		18		14		15		13		16		11
Fair value option portfolio diversification		(51)		(35)		—		—		(27)		(29)		—		—		(33)		(24)		—		—
Total fair value option portfolio		34		37		41		31		39		37		42		30		30		45		53		30
Portfolio diversification		(18)		(19)		—		—		(24)		(20)		—		—		(19)		(1)		—		—
Total market-based portfolio		$	94	$	97	153		70		$	74	$	80	161		54		$	74	$	118	169		62

(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.

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 39.


39 Bank of America

Additional VaR statistics produced within our single VaR model are provided in Table 40 at the same level of detail as in Table 39. 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 40 presents average trading VaR statistics at 99 percent and 95 percent confidence levels for the three months ended March 31, 2022, December 31, 2021 and March 31, 2021.



Table 40	Average Market Risk VaR for Trading Activities – 99 percent and 95 percent VaR Statistics


		Three Months Ended
		March 31, 2022				December 31, 2021				March 31, 2021
(Dollars in millions)		99 percent		95 percent		99 percent		95 percent		99 percent		95 percent
Foreign exchange		$	18	$	12	$	9	$	6	$	10	$	6
Interest rate		36		16		35		17		35		17
Credit		64		27		73		23		64		18
Equity		23		13		25		11		24		12
Commodities		10		6		8		4		9		4
Portfolio diversification		(95)		(47)		(101)		(36)		(90)		(34)
Total covered positions portfolio		56		27		49		25		52		23
Impact from less liquid exposures		23		3		14		1		22		3
Total covered positions and less liquid trading positions portfolio		79		30		63		26		74		26
Fair value option loans		54		14		50		13		56		14
Fair value option hedges		18		10		16		9		13		7
Fair value option portfolio diversification		(35)		(12)		(29)		(10)		(24)		(6)
Total fair value option portfolio		37		12		37		12		45		15
Portfolio diversification		(19)		(8)		(20)		(8)		(1)		(8)
Total market-based portfolio		$	97	$	34	$	80	$	30	$	118	$	33

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 2021 Annual Report on Form 10-K.

During the three months ended March 31, 2022, there were no days 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 2021 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 March 31, 2022 compared to the three months ended December 31, 2021. During the three months ended March 31, 2022, 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. This compares to the three months ended December 31, 2021 where positive trading-related revenue was recorded for 92 percent of the trading days, of which 67 percent were daily trading gains of over $25 million, and the largest loss was $45 million.

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 2021 Annual Report on Form 10-K.


						Bank of America 40

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 2021 Annual Report on Form 10-K.

Table 41 presents the spot and 12-month forward rates used in our baseline forecasts at March 31, 2022 and December 31, 2021.



Table 41	Forward Rates

		March 31, 2022
		Federal Funds		Three-month LIBOR		10-Year Swap
Spot rates		0.50	%	0.96	%	2.41	%
12-month forward rates		3.00		3.11		2.47

		December 31, 2021
Spot rates		0.25	%	0.21	%	1.58	%
12-month forward rates		1.00		1.07		1.84

Table 42 shows the pretax impact to forecasted net interest income over the next 12 months from March 31, 2022 and December 31, 2021 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. The interest rate scenarios also assume U.S. dollar rates are floored at zero.

During the three months ended March 31, 2022, the overall decrease in asset sensitivity of our balance sheet to Up-rate and Down-rate scenarios was primarily due to an increase in long-end rates. 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 other comprehensive income 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 the banking book activities. For more information on Basel 3, see Capital Management – Regulatory Capital on page 18.



Table 42	Estimated Banking Book Net Interest Income Sensitivity to Curve Changes

		Short Rate (bps)	Long Rate (bps)

(Dollars in millions)				March 31, 2022		December 31, 2021

Parallel Shifts
+100 bps instantaneous shift		+100	+100	$	5,383	$	6,542
-25 bps instantaneous shift		-25	-25	(1,424)		(2,092)
Flatteners
Short-end instantaneous change		+100	—	4,856		4,982
Long-end instantaneous change		—	-25	(162)		(735)
Steepeners
Short-end instantaneous change		-25	—	(1,259)		(1,344)
Long-end instantaneous change		—	+100	554		1,646

The sensitivity analysis in Table 42 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. 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 behavior of our deposits portfolio in the baseline forecast and in alternate interest rate scenarios is a key assumption in our projected estimates of net interest income. The sensitivity analysis in Table 42 assumes no change in deposit portfolio size or mix from the baseline forecast in alternate rate environments. In higher rate scenarios, any customer activity resulting in the replacement of low-cost or noninterest-bearing deposits with higher yielding deposits or market-based funding would reduce our benefit in those scenarios.

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 42. 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 insignificant.

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 insignificant. For more information on the accounting for derivatives, see Note 3 – Derivatives to the Consolidated Financial Statements.

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


41 Bank of America

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 2021 Annual Report on Form 10-K.

During the three months ended March 31, 2022 and 2021, we recorded gains of $14 million and $13 million related to the change in fair value of MSRs, IRLCs and LHFS, net of gains and losses on the hedge portfolio. For more information on MSRs, see Note 14 – Fair Value Measurements to the Consolidated Financial Statements.

Climate Risk Management

Climate-related risks are divided into two major categories: (1) risks related to the transition to a low-carbon economy, which may entail extensive policy, legal, technology and market changes, and (2) 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. These changes and events can have broad impacts on operations, supply chains, distribution networks, customers and markets and are otherwise referred to, respectively, as transition risk and physical risk. These risks can impact both financial and nonfinancial risk types. The impacts of transition risk can lead to and amplify credit risk or market risk by reducing our customers’ operating income or the value of their assets as well as expose us to reputational and/or litigation risk due to increased regulatory scrutiny or negative public sentiment. Physical risk can lead to increased credit risk by diminishing borrowers’ repayment capacity or impacting the value of collateral. In addition, it could pose increased operational risk to our facilities and people.

In 2021, we publicly announced our goal to achieve net zero greenhouse gas emissions in our financing activities, operations and supply chain before 2050 (Net Zero Goal). We also committed to set emission reduction targets for 2030. In connection with this commitment, on April 13, 2022, we published our first targets to reduce emissions by 2030 associated with our financing activities in the auto manufacturing, energy and power generation sectors (2030 Targets). These reduction targets are intended to align with the goal to limit warming to 1.5 degrees Celsius.

We plan to disclose our 2019 financed emissions baseline for our auto manufacturing, energy and power generation sectors along with 2020 data in our 2022 Task Force for Climate-related Financial Disclosures (TCFD) Report that we expect to publish in the Fall of 2022. We also plan to disclose the financed emissions for our entire business loan portfolio in 2023.

Achieving our Net Zero Goal and 2030 Targets will require technological advances, clearly defined roadmaps for industry sectors, public policies, including those that improve the cost of capital for net zero transition and better emissions data reporting, as well as ongoing, strong and active engagement with clients, suppliers, investors, government officials and other stakeholders.

Given the extended period of these and other climate-related goals we have established, our initiatives have not resulted in a significant effect on our results of operations or financial condition in the relevant periods presented herein, and are not expected to have a significant effect on our results of operations or financial condition in the near-term.

For more information on our governance framework and climate risk management process, see the Managing Risk and Climate Risk Management sections in the MD&A of the Corporation’s 2021 Annual Report on Form 10-K. For more information on climate risk, see Item 1A. Risk Factors – Other of the Corporation’s 2021 Annual Report on Form 10-K. For more information about climate-related matters and the Corporation’s climate-related goals and commitments, including our plans to achieve our Net Zero Goal and progress on our sustainable finance goals, see the Corporation’s website and the 2021 Annual Report to shareholders available on the Investor Relations portion of our website. The contents of the Corporation’s website and the 2021 Annual Report to shareholders are not incorporated by reference into this Quarterly Report on Form 10-Q.

The foregoing discussion and our discussion in the 2021 Annual Report to shareholders regarding our goals and commitments with respect to climate risk management, including environmental transition considerations, include “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 2021 Annual Report on Form 10-K and Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.


						Bank of America 42

Non-GAAP Reconciliations

Table 43 provides reconciliations of certain non-GAAP financial measures to the most closely related GAAP financial measures.



Table 43	Period-end and Average Supplemental Financial Data and Reconciliations to GAAP Financial Measures (1)

		Period-end				Average

		March 31 2022		December 31 2021		Three Months Ended March 31
(Dollars in millions)						2022		2021













































Shareholders’ equity		$	266,617	$	270,066	$	269,309	$	274,047
Goodwill		(69,022)		(69,022)		(69,022)		(68,951)
Intangible assets (excluding MSRs)		(2,133)		(2,153)		(2,146)		(2,146)
Related deferred tax liabilities		926		929		929		920
Tangible shareholders’ equity		$	196,388	$	199,820	$	199,070	$	203,870
Preferred stock		(27,137)		(24,708)		(26,444)		(24,399)
Tangible common shareholders’ equity		$	169,251	$	175,112	$	172,626	$	179,471

Total assets		$	3,238,223	$	3,169,495
Goodwill		(69,022)		(69,022)
Intangible assets (excluding MSRs)		(2,133)		(2,153)
Related deferred tax liabilities		926		929
Tangible assets		$	3,167,994	$	3,099,249

(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 5.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

See Market Risk Management on page 39 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 March 31, 2022, that have materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.


43 Bank of America

Part I. Financial Information

Item 1. Financial Statements

Bank of America Corporation and Subsidiaries



Consolidated Statement of Income

	Three Months Ended March 31
(In millions, except per share information)		2022		2021
Net interest income
Interest income		$	12,894	$	11,395
Interest expense		1,322		1,198
Net interest income		11,572		10,197

Noninterest income
Fees and commissions		8,985		9,536
Market making and similar activities		3,238		3,529
Other income		(567)		(441)
Total noninterest income		11,656		12,624
Total revenue, net of interest expense		23,228		22,821

Provision for credit losses		30		(1,860)

Noninterest expense
Compensation and benefits		9,482		9,736
Occupancy and equipment		1,760		1,830
Information processing and communications		1,540		1,425
Product delivery and transaction related		933		977
Marketing		397		371
Professional fees		450		403
Other general operating		757		773


Total noninterest expense		15,319		15,515
Income before income taxes		7,879		9,166
Income tax expense		812		1,116
Net income		$	7,067	$	8,050
Preferred stock dividends		467		490
Net income applicable to common shareholders		$	6,600	$	7,560

Per common share information
Earnings		$	0.81	$	0.87
Diluted earnings		0.80		0.86

Average common shares issued and outstanding		8,136.8		8,700.1
Average diluted common shares issued and outstanding		8,202.1		8,755.6



Consolidated Statement of Comprehensive Income

	Three Months Ended March 31
(Dollars in millions)		2022		2021
Net income		$	7,067	$	8,050
Other comprehensive income (loss), net-of-tax:
Net change in debt securities		(3,447)		(840)
Net change in debit valuation adjustments		261		116
Net change in derivatives		(5,179)		(1,114)
Employee benefit plan adjustments		24		51
Net change in foreign currency translation adjustments		28		(29)
Other comprehensive income (loss)		(8,313)		(1,816)
Comprehensive income (loss)		$	(1,246)	$	6,234

See accompanying Notes to Consolidated Financial Statements.


						Bank of America 44

Bank of America Corporation and Subsidiaries



Consolidated Balance Sheet

		March 31 2022		December 31 2021
(Dollars in millions)
Assets
Cash and due from banks		$	29,769	$	29,222
Interest-bearing deposits with the Federal Reserve, non-U.S. central banks and other banks		244,165		318,999
Cash and cash equivalents		273,934		348,221
Time deposits placed and other short-term investments		5,645		7,144
Federal funds sold and securities borrowed or purchased under agreements to resell (includes $174,685 and $150,665 measured at fair value)		302,108		250,720
Trading account assets (includes $118,191 and $103,434 pledged as collateral)		313,400		247,080
Derivative assets		48,231		35,344
Debt securities:
Carried at fair value		297,700		308,073
Held-to-maturity, at cost (fair value – $620,876 and $665,890)		672,180		674,554
Total debt securities		969,880		982,627
Loans and leases (includes $7,111 and $7,819 measured at fair value)		993,145		979,124
Allowance for loan and lease losses		(12,104)		(12,387)
Loans and leases, net of allowance		981,041		966,737
Premises and equipment, net		10,820		10,833
Goodwill		69,022		69,022
Loans held-for-sale (includes $3,203 and $4,455 measured at fair value)		10,270		15,635
Customer and other receivables		83,622		72,263
Other assets (includes $12,807 and $12,144 measured at fair value)		170,250		163,869
Total assets		$	3,238,223	$	3,169,495

Liabilities
Deposits in U.S. offices:
Noninterest-bearing		$	787,045	$	784,189
Interest-bearing (includes $446 and $408 measured at fair value)		1,178,451		1,165,914
Deposits in non-U.S. offices:
Noninterest-bearing		27,589		27,457
Interest-bearing		79,324		86,886
Total deposits		2,072,409		2,064,446
Federal funds purchased and securities loaned or sold under agreements to repurchase (includes $155,239 and $139,641 measured at fair value)		214,685		192,329
Trading account liabilities		117,122		100,690
Derivative liabilities		44,266		37,675
Short-term borrowings (includes $3,487 and $4,279 measured at fair value)		24,789		23,753
Accrued expenses and other liabilities (includes $12,053 and $11,489 measured at fair value and $1,379 and $1,456 of reserve for unfunded lending commitments)		219,625		200,419
Long-term debt (includes $30,459 and $29,708 measured at fair value)		278,710		280,117
Total liabilities		2,971,606		2,899,429
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 – 100,000,000 shares; issued and outstanding – 4,037,686 and 3,939,686 shares		27,137		24,708
Common stock and additional paid-in capital, $0.01 par value; authorized – 12,800,000,000 shares; issued and outstanding – 8,062,102,236 and 8,077,831,463 shares		59,968		62,398
Retained earnings		192,929		188,064
Accumulated other comprehensive income (loss)		(13,417)		(5,104)

Total shareholders’ equity		266,617		270,066
Total liabilities and shareholders’ equity		$	3,238,223	$	3,169,495

	Assets of consolidated variable interest entities included in total assets above (isolated to settle the liabilities of the variable interest entities)
	Trading account assets	$	2,160	$	5,004


	Loans and leases	15,946		17,135
	Allowance for loan and lease losses	(880)		(958)
	Loans and leases, net of allowance	15,066		16,177

	All other assets	417		189
	Total assets of consolidated variable interest entities	$	17,643	$	21,370
	Liabilities of consolidated variable interest entities included in total liabilities above
	Short-term borrowings (includes $32 and $51 of non-recourse short-term borrowings)	$	228	$	247
	Long-term debt (includes $3,557 and $3,587 of non-recourse debt)	3,557		3,587
	All other liabilities (includes $5 and $7 of non-recourse liabilities)	6		7
	Total liabilities of consolidated variable interest entities	$	3,791	$	3,841

See accompanying Notes to Consolidated Financial Statements.


45 Bank 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, December 31, 2020	$	24,510	8,650.8	$	85,982	$	164,088	$	(1,656)	$	272,924

Net income						8,050				8,050
Net change in debt securities								(840)		(840)
Net change in debit valuation adjustments								116		116
Net change in derivatives								(1,114)		(1,114)
Employee benefit plan adjustments								51		51
Net change in foreign currency translation adjustments								(29)		(29)
Dividends declared:
Common						(1,563)				(1,563)
Preferred						(490)				(490)
Issuance of preferred stock	902									902
Redemption of preferred stock	(1,093)									(1,093)
Common stock issued under employee plans, net, and other			40.0	559		(3)				556
Common stock repurchased			(101.1)	(3,470)						(3,470)
Balance, March 31, 2021	$	24,319	8,589.7	$	83,071	$	170,082	$	(3,472)	$	274,000
Balance, December 31, 2021	$	24,708	8,077.8	$	62,398	$	188,064	$	(5,104)	$	270,066

Net income						7,067				7,067
Net change in debt securities								(3,447)		(3,447)
Net change in debit valuation adjustments								261		261
Net change in derivatives								(5,179)		(5,179)
Employee benefit plan adjustments								24		24
Net change in foreign currency translation adjustments								28		28
Dividends declared:
Common						(1,706)				(1,706)
Preferred						(467)				(467)
Issuance of preferred stock	2,429									2,429


Common stock issued under employee plans, net, and other			41.7	220		(29)				191
Common stock repurchased			(57.4)	(2,650)						(2,650)
Balance, March 31, 2022	$	27,137	8,062.1	$	59,968	$	192,929	$	(13,417)	$	266,617

See accompanying Notes to Consolidated Financial Statements.


						Bank of America 46

Bank of America Corporation and Subsidiaries



Consolidated Statement of Cash Flows

	Three Months Ended March 31

(Dollars in millions)	2022		2021
Operating activities
Net income	$	7,067	$	8,050
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for credit losses	30		(1,860)
Gains on sales of debt securities	(7)		—
Depreciation and amortization	494		461
Net amortization of premium/discount on debt securities	905		1,530
Deferred income taxes	47		566
Stock-based compensation	739		853

Loans held-for-sale:
Originations and purchases	(6,832)		(8,253)
Proceeds from sales and paydowns of loans originally classified as held for sale and instruments from related securitization activities	12,934		9,383
Net change in:
Trading and derivative assets/liabilities	(64,939)		(53,756)
Other assets	(14,876)		(23,477)
Accrued expenses and other liabilities	19,820		12,186
Other operating activities, net	(812)		1,989
Net cash used in operating activities	(45,430)		(52,328)
Investing activities
Net change in:
Time deposits placed and other short-term investments	1,499		(1,313)
Federal funds sold and securities borrowed or purchased under agreements to resell	(51,388)		44,911
Debt securities carried at fair value:
Proceeds from sales	2,341		491
Proceeds from paydowns and maturities	29,654		37,105
Purchases	(35,661)		(79,075)
Held-to-maturity debt securities:
Proceeds from paydowns and maturities	21,496		31,703
Purchases	(19,599)		(169,930)
Loans and leases:
Proceeds from sales of loans originally classified as held for investment and instruments from related securitization activities	2,042		2,263
Purchases	(1,624)		(1,053)
Other changes in loans and leases, net	(16,193)		22,585
Other investing activities, net	(975)		(767)
Net cash used in investing activities	(68,408)		(113,080)
Financing activities
Net change in:
Deposits	7,878		89,458
Federal funds purchased and securities loaned or sold under agreements to repurchase	22,356		29,120
Short-term borrowings	1,036		2,403
Long-term debt:
Proceeds from issuance	21,123		13,132
Retirement	(8,241)		(13,991)
Preferred stock:
Proceeds from issuance	2,429		902
Redemption	—		(1,093)
Common stock repurchased	(2,650)		(3,470)
Cash dividends paid	(2,222)		(2,114)
Other financing activities, net	(823)		(720)
Net cash provided by financing activities	40,886		113,627
Effect of exchange rate changes on cash and cash equivalents	(1,335)		(2,581)
Net decrease in cash and cash equivalents	(74,287)		(54,362)
Cash and cash equivalents at January 1	348,221		380,463
Cash and cash equivalents at March 31	$	273,934	$	326,101

See accompanying Notes to Consolidated Financial Statements.


47 Bank 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 2021 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. Certain prior-period amounts have been reclassified to conform to current period presentation.

Accounting Standards Issued and Not Yet Adopted

Hedge Accounting

The FASB issued a new accounting standard effective on January 1, 2023, with early adoption permitted, that makes targeted improvements to the application of the fair value hedge accounting guidance for closed portfolios of financial assets. Upon adoption, the application of these hedge strategies would be applied prospectively.

Financial Instruments – Credit Losses

The FASB amended the accounting and disclosure requirements for expected credit losses by removing the recognition and measurement guidance on troubled debt restructurings (TDRs) and enhancing certain disclosures. The amendments are effective on January 1, 2023 with early adoption permitted. The effects of this change on the Corporation’s financial statements have not yet been determined, but are not expected to have a material impact on its consolidated financial position, results of operations or disclosures in the Notes to the Consolidated Financial Statements.


						Bank of America 48

NOTE 2 Net 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 months ended March 31, 2022 and 2021. For more information, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 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 March 31
(Dollars in millions)		2022		2021
Net interest income
Interest income
Loans and leases		$	7,352	$	7,234
Debt securities		3,823		2,730
Federal funds sold and securities borrowed or purchased under agreements to resell (1)		(7)		(7)
Trading account assets		1,081		872
Other interest income		645		566
Total interest income		12,894		11,395

Interest expense
Deposits		164		133
Short-term borrowings (1)		(112)		(79)
Trading account liabilities		364		246
Long-term debt		906		898
Total interest expense		1,322		1,198
Net interest income		$	11,572	$	10,197

Noninterest income
Fees and commissions
Card income
Interchange fees (2)		$	935	$	1,067
Other card income		468		368
Total card income		1,403		1,435
Service charges
Deposit-related fees		1,530		1,495
Lending-related fees		303		297
Total service charges		1,833		1,792
Investment and brokerage services
Asset management fees		3,286		3,002
Brokerage fees		1,006		1,061
Total investment and brokerage services		4,292		4,063
Investment banking fees
Underwriting income		672		1,546
Syndication fees		312		300
Financial advisory services		473		400
Total investment banking fees		1,457		2,246
Total fees and commissions		8,985		9,536
Market making and similar activities		3,238		3,529
Other income (loss)		(567)		(441)
Total noninterest income		$	11,656	$	12,624

(1)For more information on negative interest, see Note 1 – Summary of Significant Accounting Principles to the Consolidated Financial Statements of the Corporation’s 2021 Annual Report on Form 10-K.

(2)Gross interchange fees and merchant income were $2.9 billion and $2.5 billion for the three months ended March 31, 2022 and 2021 and are presented net of $2.0 billion and $1.4 billion of expenses for rewards and partner payments as well as certain other card costs for the same periods.


49 Bank 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 2021 Annual Report on Form 10-K. The following tables present derivative instruments included on the Consolidated Balance Sheet in derivative assets and liabilities at March 31, 2022 and December 31, 2021. 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.



			March 31, 2022
			Gross Derivative Assets						Gross Derivative Liabilities
(Dollars in billions)	Contract/ Notional (1)		Trading and Other Risk Management Derivatives		Qualifying Accounting Hedges		Total		Trading and Other Risk Management Derivatives		Qualifying Accounting Hedges		Total
Interest rate contracts
Swaps	$	23,716.6	$	133.4	$	12.3	$	145.7	$	130.1	$	16.0	$	146.1
Futures and forwards	4,547.3		8.9		—		8.9		8.4		—		8.4
Written options	1,696.9		—		—		—		34.4		—		34.4
Purchased options	1,658.7		37.7		—		37.7		—		—		—
Foreign exchange contracts
Swaps	1,453.0		33.6		0.3		33.9		33.3		0.3		33.6
Spot, futures and forwards	5,124.9		53.4		0.3		53.7		52.8		0.3		53.1
Written options	420.4		—		—		—		6.5		—		6.5
Purchased options	365.0		6.3		—		6.3		—		—		—
Equity contracts
Swaps	421.9		13.5		—		13.5		14.1		—		14.1
Futures and forwards	124.3		5.1		—		5.1		1.5		—		1.5
Written options	815.7		—		—		—		58.5		—		58.5
Purchased options	711.0		51.7		—		51.7		—		—		—
Commodity contracts
Swaps	55.9		6.5		—		6.5		9.8		—		9.8
Futures and forwards	142.7		2.8		—		2.8		1.9		0.6		2.5
Written options	62.7		—		—		—		5.3		—		5.3
Purchased options	53.7		6.7		—		6.7		—		—		—
Credit derivatives (2)
Purchased credit derivatives:
Credit default swaps	356.3		3.5		—		3.5		4.1		—		4.1
Total return swaps/options	133.7		2.1		—		2.1		1.6		—		1.6
Written credit derivatives:
Credit default swaps	338.4		3.8		—		3.8		2.9		—		2.9
Total return swaps/options	119.8		0.7		—		0.7		0.8		—		0.8
Gross derivative assets/liabilities			$	369.7	$	12.9	$	382.6	$	366.0	$	17.2	$	383.2
Less: Legally enforceable master netting agreements							(300.3)						(300.3)
Less: Cash collateral received/paid							(34.1)						(38.6)
Total derivative assets/liabilities							$	48.2					$	44.3

(1)Represents the total contract/notional amount of derivative assets and liabilities outstanding.

(2)The net derivative asset and notional amount of written credit derivatives for which the Corporation held purchased credit derivatives with identical underlying referenced names were $707 million and $317.2 billion at March 31, 2022.


						Bank of America 50



			December 31, 2021
			Gross Derivative Assets						Gross Derivative Liabilities
(Dollars in billions)	Contract/ Notional (1)		Trading and Other Risk Management Derivatives		Qualifying Accounting Hedges		Total		Trading and Other Risk Management Derivatives		Qualifying Accounting Hedges		Total
Interest rate contracts
Swaps	$	18,068.1	$	150.5	$	8.9	$	159.4	$	156.4	$	4.4	$	160.8
Futures and forwards	2,243.2		1.1		—		1.1		1.0		—		1.0
Written options	1,616.1		—		—		—		28.8		—		28.8
Purchased options	1,673.6		33.1		—		33.1		—		—		—
Foreign exchange contracts
Swaps	1,420.9		28.6		0.2		28.8		30.5		0.2		30.7
Spot, futures and forwards	4,087.2		37.1		0.3		37.4		37.7		0.2		37.9
Written options	287.2		—		—		—		4.1		—		4.1
Purchased options	267.6		4.1		—		4.1		—		—		—
Equity contracts
Swaps	443.8		12.3		—		12.3		14.5		—		14.5
Futures and forwards	113.3		0.5		—		0.5		1.7		—		1.7
Written options	737.7		—		—		—		58.5		—		58.5
Purchased options	657.0		55.9		—		55.9		—		—		—
Commodity contracts
Swaps	47.7		3.1		—		3.1		6.0		—		6.0
Futures and forwards	101.5		2.3		—		2.3		0.3		1.1		1.4
Written options	44.4		—		—		—		2.6		—		2.6
Purchased options	38.3		3.2		—		3.2		—		—		—
Credit derivatives (2)
Purchased credit derivatives:
Credit default swaps	297.0		1.9		—		1.9		4.3		—		4.3
Total return swaps/options	85.3		0.2		—		0.2		1.1		—		1.1
Written credit derivatives:
Credit default swaps	279.8		4.2		—		4.2		1.6		—		1.6
Total return swaps/options	85.3		0.9		—		0.9		0.5		—		0.5
Gross derivative assets/liabilities			$	339.0	$	9.4	$	348.4	$	349.6	$	5.9	$	355.5
Less: Legally enforceable master netting agreements							(282.3)						(282.3)
Less: Cash collateral received/paid							(30.8)						(35.5)
Total derivative assets/liabilities							$	35.3					$	37.7

(1)Represents the total contract/notional amount of derivative assets and liabilities outstanding.

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 2021 Annual Report on Form 10-K.

The following table presents derivative instruments included in derivative assets and liabilities on the Consolidated Balance Sheet at March 31, 2022 and December 31, 2021 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 and Restricted Cash.


51 Bank of America



Offsetting of Derivatives (1)

	Derivative Assets		Derivative Liabilities		Derivative Assets		Derivative Liabilities
(Dollars in billions)	March 31, 2022				December 31, 2021
Interest rate contracts
Over-the-counter	$	158.8	$	152.9	$	171.3	$	166.3
Exchange-traded	0.5		0.2		0.2		—
Over-the-counter cleared	32.8		33.5		22.6		22.5
Foreign exchange contracts
Over-the-counter	90.4		90.8		67.9		70.5
Over-the-counter cleared	1.2		1.2		1.1		1.1
Equity contracts
Over-the-counter	28.4		28.2		29.2		32.9
Exchange-traded	41.1		40.6		38.3		38.4
Commodity contracts
Over-the-counter	11.5		13.9		6.1		7.6
Exchange-traded	3.2		3.0		1.4		1.3
Over-the-counter cleared	0.2		0.2		0.1		0.1
Credit derivatives
Over-the-counter	8.1		7.0		5.2		5.3
Over-the-counter cleared	1.9		2.0		1.8		1.8
Total gross derivative assets/liabilities, before netting
Over-the-counter	297.2		292.8		279.7		282.6
Exchange-traded	44.8		43.8		39.9		39.7
Over-the-counter cleared	36.1		36.9		25.6		25.5
Less: Legally enforceable master netting agreements and cash collateral received/paid
Over-the-counter	(258.0)		(262.0)		(250.3)		(254.6)
Exchange-traded	(41.9)		(41.9)		(37.8)		(37.8)
Over-the-counter cleared	(34.5)		(35.0)		(25.0)		(25.4)
Derivative assets/liabilities, after netting	43.7		34.6		32.1		30.0
Other gross derivative assets/liabilities (2)	4.5		9.7		3.2		7.7
Total derivative assets/liabilities	48.2		44.3		35.3		37.7
Less: Financial instruments collateral (3)	(14.2)		(8.4)		(11.8)		(10.6)
Total net derivative assets/liabilities	$	34.0	$	35.9	$	23.5	$	27.1

(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 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 table below summarizes information related to fair value hedges for the three months ended March 31, 2022 and 2021.



Gains and Losses on Derivatives Designated as Fair Value Hedges

	Three Months Ended March 31
	2022				2021
(Dollars in millions)	Derivative		Hedged Item		Derivative		Hedged Item

Interest rate risk on long-term debt (1)	$	(11,034)	$	11,219	$	(8,063)	$	8,002
Interest rate and foreign currency risk on long-term debt (2)	(9)		8		(28)		26
Interest rate risk on available-for-sale securities (3)	9,585		(9,668)		5,241		(5,150)

Total	$	(1,458)	$	1,559	$	(2,850)	$	2,878

(1)Amounts are recorded in interest expense in the Consolidated Statement of Income.

(2)For the three months ended March 31, 2022, and 2021, the derivative amount includes gains (losses) of $(21) million and $(34) million in interest expense, $14 million and $8 million in market making and similar activities, and $(2) million and $(2) million in accumulated other comprehensive income (OCI), respectively. 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.


						Bank of America 52

The table below summarizes the carrying value of hedged assets and liabilities that are designated and qualifying in fair value hedging relationships along with the cumulative amount of fair value hedging adjustments included in the carrying value that have been recorded in the current hedging relationships. These fair value hedging adjustments are open basis adjustments that are not subject to amortization as long as the hedging relationship remains designated.



Designated Fair Value Hedged Assets and Liabilities

	March 31, 2022				December 31, 2021
(Dollars in millions)	Carrying Value		Cumulative Fair Value Adjustments (1)		Carrying Value		Cumulative Fair Value Adjustments (1)

Long-term debt (2)	$	181,212	$	(6,968)	$	181,745	$	3,987
Available-for-sale debt securities (2, 3, 4)	203,697		(10,118)		209,038		(2,294)
Trading account assets (5)	10,601		283		2,067		32

(1)Increase (decrease) to carrying value.

(2)At March 31, 2022 and December 31, 2021, the cumulative fair value adjustments remaining on long-term debt and available-for-sale debt securities from discontinued hedging relationships resulted in an increase in the related liability of $1.3 billion and $1.5 billion and a decrease in the related asset of $4.2 billion and $1.0 billion, which are being amortized over the remaining contractual life of the de-designated hedged items.

(3)These amounts include the amortized cost of the prepayable financial assets used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship (i.e. last-of-layer hedging relationship). At March 31, 2022 and December 31, 2021, the amortized cost of the closed portfolios used in these hedging relationships was $19.5 billion and $21.1 billion, of which $6.2 billion and $6.9 billion was designated in the last-of-layer hedging relationship. At March 31, 2022 and December 31, 2021 the cumulative adjustment associated with these hedging relationships was a decrease of $370 million and $172 million.

(4)Carrying value represents amortized cost.

(5)Represents hedging activities related to certain commodities inventory.

Cash Flow and Net Investment Hedges

The table below summarizes certain information related to cash flow hedges and net investment hedges for the three months ended March 31, 2022 and 2021. Of the $7.1 billion after-tax net loss ($9.4 billion pretax) on derivatives in accumulated OCI at March 31, 2022, losses of $1.0 billion after-tax ($1.4 billion pretax) related to both open and terminated 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 terminated cash flow hedges, the time period over which the majority of the forecasted transactions are hedged is approximately three years, with a maximum length of time for certain forecasted transactions of 14 years.



Gains and Losses on Derivatives Designated as Cash Flow and Net Investment Hedges

					Three Months Ended March 31
					2022				2021
(Dollars in millions, amounts pretax)	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

Cash flow hedges
Interest rate risk on variable-rate assets (1)					$	(6,774)	$	(8)	$	(1,057)	$	37
Price risk on forecasted MBS purchases (1)					(90)		3		(393)		9
Price risk on certain compensation plans (2)					(27)		12		24		12
Total					$	(6,891)	$	7	$	(1,426)	$	58
Net investment hedges
Foreign exchange risk (3)					$	219	$	—	$	727	$	—

(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 months ended March 31, 2022 and 2021, amounts excluded from effectiveness testing and recognized in market making and similar activities were losses of $74 million and $2 million.


53 Bank of America

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 months ended March 31, 2022 and 2021. 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 March 31
(Dollars in millions)	2022		2021
Interest rate risk on mortgage activities (1, 2)	$	(147)	$	(171)
Credit risk on loans (2)	(3)		(17)
Interest rate and foreign currency risk on asset and liability management activities (3)	1,310		1,261
Price risk on certain compensation plans (4)	(335)		280

(1)Includes hedges of interest rate risk on mortgage servicing rights and interest rate lock commitments 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 both March 31, 2022 and December 31, 2021, the Corporation had transferred $4.8 billion of non-U.S. government-guaranteed mortgage-backed securities 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 $4.8 billion at the transfer dates. At both March 31, 2022 and December 31, 2021, the fair value of the transferred securities was $5.0 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 2021 Annual Report on Form 10-K.

The table below, 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 months ended March 31, 2022 and 2021. 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 table below is not presented on an FTE basis.



Sales and Trading Revenue

	Market Making and Similar Activities		Net Interest Income		Other (1)		Total
(Dollars in millions)	Three Months Ended March 31, 2022
Interest rate risk	$	589	$	452	$	69	$	1,110
Foreign exchange risk	507		(17)		1		491
Equity risk	1,564		(60)		501		2,005
Credit risk	239		476		14		729
Other risk (2)	291		(33)		33		291
Total sales and trading revenue	$

Form: 10-Q

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